Addressing the environmental impacts of products

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Addressing the environmental impacts of products

• What can be done?

Dr. Andrius Plepys International Institute for
Industrial Environmental EconomicsLund University
March 2006
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A three-perspective overview

• Policy perspective
• Engineering perspective
• Business perspective

Baumann, H., F. Boons, et al. (2002). "Mapping
the green product development field engineering,
policy and business perspectives." Journal of
Cleaner Production 10(5) 409-425.
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Policy perspective

• 1. Closing material loops (diminishing the
  impacts of existing products).
• 2. Reducing toxicity, dispersion and exposure
  (new products with less impact, reducing exposure
  (WM) etc.)
• 4. Consumption altering needs (diminishing
  levels of consumption).
• 5. Specific policy instruments
• - direct regulatory
• - voluntary
• - economic
• - informative

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Engineering perspective

• Life Cycle Design/
• Design for Environment/
• Design for Sustainability
• i.e. Design for X

• Frameworks
• Strategies
• Qualitative tools
• Quantitative tools

• Material selection/substitution
• Product lifecycle extension
• Dematerialisation

Checklists and guidelines rating and ranking
tools
LCA (main) Other (MFA, EF, I/O, etc. etc.)
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Business perspective

• Green decision-making
• Green marketing
• Greening lifestyles
• Alternative business models

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Examples of important policy principles
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General Principles of Environmental Protection

• Precautionary principle
• Prevention principle and waste management
  hierarchy
• Toxics substitution
• BAT and BAT-NEEC
• Polluter pays

by Thomas Lindhqvist, IIIEE/LU
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1. Precautionary Principle

• to act prudently when there is sufficient
  scientific evidence and where action can be
  justified on reasonable judgements of cost
  effectiveness and where inaction could lead to
  potential irreversibility or demonstrate harm to
  the defenders and future generations.

• Areas where used
• very toxic chemicals
• Bio-accumulative substances
• long lived substances appearing to be modifying
  ecosystems
• Sweden, EU and Rio

by Thomas Lindhqvist, IIIEE/LU
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Problems with precaution

• Ecosystems are complex, science cannot be exact
  here
• In the face of uncertainty better to be safe than
  sorry ?
• Known costs (high) but unclear benefits
• Practical constrains

by Thomas Lindhqvist, IIIEE/LU
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Risk assessment

• The notion of acceptable risk which risks to
  reduce and by how much?
• Does not call into question the activity
  generating the risk in the first place.
• Appeals to scientific neutrality. Who defines
  what risk is acceptable?
• Discussion between industry and regulators with
  little public scrutiny.

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Assessing risk

• Risk
• Hazard Exposure Probability

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2. Waste Management Hierarchy
Makes senseMost preferred
Waste of resourcesLeast preferred
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3. Principle of Substitution

• If functionally equivalent, but less toxic or
  environmentally damaging alternative exists, it
  should be chosen provided that it does not lead
  to significantly greater costs
• Primarily used for chemicals
• Difficulties of determining what is functionally
  equivalent

by Thomas Lindhqvist, IIIEE/LU
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4. BAT

• Best Available Technology (pollution control
  technology or production technology)
• Firms should adopt the best commercially
  available technology to reduce environmental
  impacts.
• This goes for pollution control technology, i.e.
  filters, primarily but sometimes the term is used
  even for production technology.

by Thomas Lindhqvist, IIIEE/LU
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BAT critique and problems

• In practice a balance between the economic
  viability of the firm, comparison with the
  industrial sector or branch, environmental
  benefit.
• Some sort of cost-benefit analysis here.

• Who defines what is best?
• Easy for the regulator, who knows the filters.
• Negotiations between the regulator and industry,
  public is out.

by Thomas Lindhqvist, IIIEE/LU
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BAT-NEEC

• Best Available Technology notEntailing Excessive
  Cost
• Cousin to the original BAT, places much more
  weight on the CBA calculus.

by Thomas Lindhqvist, IIIEE/LU
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5. Polluter Pays Principle

• The one who pollutes should pay the consequences
• Discussion on who is the polluter producers or
  consumers who use the products

by Thomas Lindhqvist, IIIEE/LU
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PPPs dillemas

• The one who pollutes should pay the consequences
• Who is the polluter? - producer or product
  consumer?

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types of policy instruments for environmental
regulation
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Forms of Policy Instruments

• Regulatory (administrative or directive-based)
  instruments
• Economic (incentive-based) instruments
• Informative (information-based) instruments

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Regulatory instruments

• Regulatory (administrative or directive-based)
  instruments specify what various actors are
  allowed to do, or not allowed to do, and how
  certain activities should be conducted

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Economic Instruments

• Economic (incentive-based) instruments create
  positive or negative incentives for certain
  activities by adjusting the financial conditions
  surrounding those activities

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Economic Instruments

• Environmental charges and taxes
• Marketable permits
• Subsidy removal
• Liability rules
• Deposit-refund systems
• Green public procurement

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Informative Instruments

• Informative (information-based) instruments are
  based on the assumption that actors are not
  rational because a lack of knowledge or
  awareness, and are aimed at compensating this
  deficiency by providing better information

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Informative Instruments

• Public awareness activities
• Education
• Pollution Release and Transfer Registers
• Eco-labelling
• Cleaner Production awards

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Regulatory instruments

• Bans of specified substances
• Permits
• Ambient standards

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Evolution of policy interventions

• From command and control policy intervention
• Through economic instruments
• To voluntary, incentive-based policies

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Evolution of Environmental Policyin OECD
Countries
Hybrid Approaches
Market Instruments

• Industry / Gov. co-operation
• Negotiated agreements
• Co-regulatory mechanisms
• Life-cycle analysis
• Demand-side management
• Social instruments
• Education Information
• Sustainable Development

• Taxes and charges
• Tradable permits
• Pricing policies
• Subsidies
• Liability reform
• Multi-media
• Polluter pays

Command Control
Efficiency

• Permits
• Standards specified
• Single media
• End-of-pipe
• Confrontational

1970s
1980s
1990s
(adapted from Long, B in UNEP/IE - Vol 17(4))
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Policy Instruments

• Regulatory
• i.e. legal requirements and prohibitions etc.
• Economic
• i.e. taxes, fees etc.
• Informative
• i.e. environmental labelling, EIA, etc.

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Range of Instruments for Environmental Policy
Pollutant Release and Transfer Registers
Public Information / Education
Environmental reporting
Demand side management
Environmental charges
Ambient standards
Negotiated Agreements
Awards / Recognition
Marketable permits
Eco Audits / EMS
Life cycle analysis
Product Labelling
Subsidy removals
Trade restrictions
Liability reforms
Permits
Bans
Directive-based regulation
Information-based strategies
Incentive-based strategies
CORRECTS LACK OF INFORMATION
MANDATES SPECIFIC BEHAVIOUR
CHANGES INCENTIVES
(Adapted from Long B, OECD, 1997)
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Instruments and ToolsMandatory vs.
VoluntaryEnforcement
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Env. Policy Tools the Nature of Government
Industry (public-private) interaction
High p-p interaction
Rule-making by consensus
Co-regulation
Obligatory
Voluntary
Level of Obligation
Degree of Interaction (negotiation)
Self-regulation
Command--control regulation
Low public-private interaction
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Negotiated Environmental Agreements

• Agreements that are reached following a process
  of negotiation between public sector and industry
  (business)
• The results are commitments that are formally
  recognised by governmental authorities,
• and are subject to a sanction and/or a positive
  incentive,
• with a view to achieving certain agreed
  objectives for improved environmental performance
  by the business sector

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Dillemas

• Which type of intervention?
• Level of Regulation or Obligation
• Level Public-Private Interaction
• Control and monitoring costs
• Enforcement
• International trade and other political issues