LAUSR

Abstract Extended producer responsibility (EPR) is important to achieve a sustainable recycling-oriented circular economy system because EPR can guarantee that recycling companies obtain average profit margins. A unique Waste Electrical and Electronic Equipment (WEEE) fund system was implemented in China in 2012. However, the fund system encountered a dilemma: it cannot pay for itself. A Fund Balance Analysis Model is built to estimate the accumulated government fund deficit. The result shows that the deficit will grow to $33.0 billion from 2012 to 2030. A new fund operation mode, which adds the consumer pay part, is established in this study. This mode uses 5 years as a fund adjustment time interval and the period of 2015–2050 is divided into 7 intervals. According to the time sequence, a gradually increasing fund collection standard, which is easy for consumers to adopt, is determined to achieve a sustainable fund system. Given that the Electrical and Electronic Equipment sales quantity in China is obviously higher than the formally dismantled WEEE in recent years, the funds collected will be higher than subsidies, and a fund pool will be formed in the early stage. This fund pool plays an important role in the establishment of sustainable fund operations as it will continue to provide a capital source for the fund appreciation in the ensuing years. The incentive problem of eco-design can be easily solved by this new mode because China's government plays a strong role in the WEEE fund operation and can directly reward the producers that meet the eco-design requirements. Additionally, this mode is very convenient for addressing external factors, such as the eco-design and trans-boundary trade, with a few changes in the fund collection standard.