Profits in Waste Reduction

1. Profits in Waste Reduction David Livengood Oregon State University Business School Class May 10, 2005

2. An Overview of Oregon DEQ Protecting Oregon’s Air, Land & Water

3. Environmental Priorities • Deliver Excellence in Performance & Product • Protect Oregon’s Water • Protect Human Health & the Environment from Toxics • Involve Oregonians in Solving Environmental Problems

4. Hazardous Waste Management: An Historical View Pollution Prevention Planning Compliance/ Enforcement CriminalInvestigations Beyond Waste Compliance Assistance PBTs RCRA Corrective Action (cleanup) EPP Education/ Outreach Sustainability Closure Rules Environmental Justice Permitting (TSDs) Toxics Reduction Technical Assistance 90’s 80’s 00’s

5. Where does pollution come from?

6. Wastes’ Externalities • Societal costs excluded in pricing • Temptation to cut costs at society’s expense to undermine competition and improve profits. Socialize the risk and privatize the reward. • Pollution with diffuse or delayed health impacts from carcinogens and endocrine disruptors in emissions, foods and products

7. Regulatory Permits Bans Moral/Perception Labeling Recognition Public perception Financial Venture capital Subsidies Technical Assistance Tax or fee structure Speed Product Stewardship Types of Incentives

8. Why start with regulations? • Regulations, especially when complex, detailed, tedious, redundant, difficult to read, seemingly ongoing and certainly time-consuming, are a disincentive • Regulations, or threat of them, are often needed to drive adoption of incentives, such as voluntary reduction programs

9. Proscriptive Regulations Strengths and Weaknesses + Certainty: They do what you tell them to + Our rivers don’t ignite anymore - Inflexible: inhibits innovation - No incentive to go beyond mere compliance - Compliance generally not without harm - Reactive, focusing on what we don’t want - May slow down facility upgrades - Outside of air regulations, the benefits don’t exceed the costs by much

10. Proscriptive Regulations (cont.) Uses Achieves a foundation performance or protection, such as for landfills, air and water emissions, and hazardous waste If burdensome enough, regulatory exemptions become an incentive, such as CEG and redesign

11. Performance-based regulations Strengths and Weaknesses + Flexible + Can be proactive • Removes the business’ certainty of knowing they are complying Uses Permits, exemptions or exclusions

12. Bans Strengths and Weaknesses + Eliminates the activity or product - At least one business sector will hate you + Problem ripples through supply chain - opportunity to make good instead of less bad - What will replace the banned item? - Need an alternative to have political will for change - Reactive; no substitute for the precautionary principle Uses Blindly creating or using in our economy - DDT, CFCs

13. Labeling Strengths and Weaknesses + Can shift consumer behavior + Can be a powerful niche market - Public has to care - Often costs more at time of purchase - Corporate resistance Uses Product or technology is preferable alternative (e.g., Energy Star, dolphin-free tuna)

14. Public Perception & Recognition Strengths and Weaknesses + Positive image for company or individual + Appeals to human want for acceptance and praise • Rarely trumps money? More effective with consumers than companies? • Appeals most to the people we wish to change least Uses Help market a business or have individuals feel better about themselves (litter reporting, waste reduction)

15. Venture Capital Strengths and Weaknesses + You buy what you want + Can reflect a public/private partnership + Once the ball is rolling, it should be self-sustaining - Costs money, though not necessarily much Uses Establishing new technologies (anaerobic digestion)

16. Subsidies or Fines Strengths and Weaknesses + Promotes desired outcome + Has a built-in awareness component - Costs a little money - Doesn’t remove the bad choices Uses Changing individual behavior: encouraging the use of consumer technology (hybrid cars, energy efficient windows and appliances, mulching mowers)

17. Technical Assistance Strengths and Weaknesses + Friendly; good PR + Prevents waste and saves business’ money - Takes time - Limited reach Uses Occupational, environmental

18. Tax Bad Things So They Cost More Strengths and Weaknesses + Universal reach – up and down the supply chain, greens and browns, everyone you don’t have time to meet + Promotes better choices by consumers and businesses + Business ingenuity is applied to finding alternatives + Phase in to ease the pain - Near-universal resistance • Can be awkward at the state or local level Uses Examples: Hazardous substance tax and gas tax anywhere but USA – send revenue to affected agency

19. Permit Fee Structure Strengths and Weaknesses + Can base fee upon emissions, creating incentive to eliminate emissions + Businesses can decide to reduce emissions cost effectively - Fee revenue becomes unstable, but if less waste is created presumably there’s less need for us to regulate it Uses Service has negative side effects (e.g., recycling versus land disposal)

20. Catch Limits or Cap & Trade Strengths and Weaknesses + Establishes maximum emissions or catch level + Can reduce emissions cost effectively (competition for right to pollute or harvest) - May result in local concentrations of ill effects Uses: Emissions (SOx) or fish catch

21. Speed – Regulatory Streamlining Strengths and Weaknesses + Rewards good behavior • Limited applications Uses Whenever we can make a process faster (e.g., permitting, reporting)

22. Product Stewardship Strengths and Weaknesses + Reframes manufacturing, promotes business awareness and responsibility + Financially rewards businesses that think closed-loop + Stops making problems for others (consumers, govt.) + Promotes technical nutrient cycling, not down-grading + Companies have embraced this for financial and ethical reasons - Often requires prospect of regulation to adopt standards Uses Composite products (e.g., electronics, cars)

23. Diverted 4,000 gallons of contaminated water annually Gained knowledge Applied to become an EcoBiz Case Study: Star Automotive & Import Services

24. Case Study: Rejuvenation, Inc. • Reduced air emissions by 75% - eliminated air permit • Decreased sewer discharge by 30,000 gallons per year • Reduced operating costs significantly • Affecting up-stream supplier in China • Uses EMS

25. Incentives Can Do Much More • Tools that can go beyond compliance towards sustainability • Have strengths and weaknesses, but tend to offer greater flexibility, cost-effectiveness, and a reason to rethink processes and eliminate wastes • Can correct market failures, channeling capitalism’s power to align better with ecological and human systems

26. Contact Information David Livengood, Toxics Use & Hazardous Waste Reduction Coordinator Oregon DEQ 811 SW 6th Avenue Portland OR 97204 503-229-5181 livengood.david@deq.state.or.us www.deq.state.or.us