Printreg Archive
Impetus for P2 in the Private Sector


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From: Wayne Pferdehirt (pferdehi@epd.engr.wisc.edu)
Date: Fri Jul 24 1998 - 17:18:38 CDT


I thought some Printech/Printreg users might be Interested in seeing
this discussion of the difference between "command and control" and
vigorous regulations, and the effects of each on motivating
pollution prevention. The message was forwarded from the National
Pollution Prevention Roundtable listserv. Reactions?
-Wayne

------- Forwarded Message Follows -------
Date: Fri, 24 Jul 1998 15:17:49 -0400
From: LENA FERRIS <FERRIS.LENA@epamail.epa.gov>

Jim Boyd asked me to forward to this message to you!

Susan McLaughlin
Program Manager, EPA's Environmental Accounting Project
www.epa.gov/opptintr/acctg
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Subject: Impetus for P2 in the private sector
>From boyd@rff.org (Jim Boyd)

As the author of a paper that has recently been discussed on this
listserve I would like to weigh in with some comments on the direction
the discussion has taken.

Tom Eggert provided a nice summary of a report I have recently
completed called "Searching for the Profit in Pollution Prevention:
Case Studies in the Corporate Evaluation of P2 Opportunities."
(Downloadable at http://www.rff.org/disc_papers/1998.htm ) The study
looked at real world P2 projects that in some way failed. The overall
conclusion was that firms are making rational P2 investment decisions.
 Using financial, accounting, and strategic analysis the study shows
that when the P2 projects failed it was because they were simply
unprofitable. The study's second purpose is to explain why P2 might
not be profitable and suggest ways in which it might be made more so.
Not surprisingly, some of these explanations relate to the influence
of regulation as a P2 driver.

This is where Tom Eggert focused his comments, by urging us to think
of the ways in which stronger regulatory enforcement can promote the
P2-profitability connection. Mark Dorfman responded in turn, with a
call for command and control regulations and mandatory public
reporting of chemical material flows.

I would like to join the discussion by emphasizing a central
conclusion I would hope people would draw from the study: namely, that
vigorous regulation is central to the promotion of P2, but that
vigorous regulation should not be equated with "command and control"
regulation.

First, the DuPont case suggests that a transport-related command and
control regulation was one of the important BARRIERS to P2. Second,
the focus of "tougher" regulation should not be on DuPont in that
case, but on small firms (the potential demanders of DuPont's P2
product) who all too often evade monitoring and enforcement. Is
better enforcement of small firms an example of "command and control?"
 Not necessarily. If I can torture a metaphor, we can hand out
"speeding tickets" without telling businesses what kinds of cars to
drive. Command and control regulation implies a particularly rigid
form of compliance (compliance with BAT standards, etc.) Making sure
small businesses don't pour their chemicals down the drain requires
monitoring and enforcement and the appropriate pricing of disposal,
not narrowly defined technology requirements.

The overall punchline of the analysis is that we should think about
how we can have tough FLEXIBLE regulation and to outline a set of
reasons why this approach is likely to better harness the profit
motive to drive P2.

While I don't want to minimize the practical difficulties associated
with flexible, performance-based regulation, I think that the
promotion of P2 is most fruitfully pursued that way. Consider a
firm's motivation to do "environmental accounting." Why should a firm
collect and analyze environmental data if it is constrained by the
government in terms of the technologies and practices it can use to
reduce pollution? They're going to have to do what they're going to
have to do, why analyze the problem? In contrast, performance-related
regulations create a significant incentive for firms to collect and
analyze this kind of data. After all, flexible regulation will allow
firms the flexibility to pursue alternative options, options with
financial value to them. The way to find win-win solutions is to
allow the private sector the freedom to implement innovate control
strategies.

In my personal opinion, as long as we have the mindset that compliance
flexibility equals weak regulation we are going to be shooting P2 in
the foot. Instead, regulation needs to focus more on methods that
guarantee tough performance goals while at the same time unleashing -
via flexibility - the private sector's ability to innovate toward true
win-win P2 opportunities.

"Command and control" is not a term that effectively describes that
kind of regulation.

Jim Boyd

Research Fellow
Resources for the Future
1616 P St., NW
Washington, DC 20036
boyd@rff.org
(202)328-5013

**********************************************************
Wayne P. Pferdehirt, P.E., AICP
U. of Wis., Solid & Hazardous Waste Education Center
610 Langdon Street, Room 532, Madison, WI 53703-1195
Phone: 608/265-2361 Fax: 608/262-6250
pferdehi@epd.engr.wisc.edu
**********************************************************


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