The demonstration projects were created to supply the "real-world" experience while the policy clusters and the many study papers they produced contributed to the intellectual vitality of the Eco-Efficiency Task Force.

The findings of the demonstration projects and policy clusters do not represent a consensus of thought among Task Force members. They were used for discussion purposes only.

DEMONSTRATION PROJECTS

AUTOMOBILE MANUFACTURING

Purpose

Methods

The life-cycle methodology was applied to the General Motors (GM) Lake Orion Assembly Facility located in Orion, Michigan. The Team looked both in the paint booth at the Orion plant for improvements as well as "upstream" where the paint is actually manufactured. The Team gathered data on key environmental inputs such as raw material, energy, and water; and outputs such as air pollution, sludge and filter cakes, and water and organic solvent effluent from equipment cleaning.

Findings of the Auto Team

Through the engineering analysis, the Team found several ways to save money and reduce emissions. For example, by using water in the painting process twice, rather than once, the cost of waste water treatment at the plant could be reduced by 8 percent and the amount of water needing treatment could be reduced significantly.[17] The Team found that substitutes to the current types of paints used could result in decreased air, water and waste emissions. Water-based, rather than solvent-based paints, and the next generation of powder paints were all investigated by the Team. In addition to the engineering analysis of material, water, and energy inputs and outputs, the Team assessed the plant's programs for environmental management, pollution prevention, chemical management systems, and vehicle design.

The Team also analyzed how much energy it takes to paint a car. GM identified opportunities to reduce energy usage and the costs and emissions associated with it. Fifteen alterations to the plant's paint shop were identified and several of these are now under consideration. Four of these have been projected to save enough energy to pay back the cost of making. the alteration within one year. If these four changes are made, air emissions associated with acid rain and urban smog will be reduced. In this case, it is projected that 51 tons of sulfur dioxide and 75 tons of nitrogen oxide emissions will be avoided.[18]

Most compelling of the Team's findings was the need for an alternative system of environmental regulation. This system would be designed to redirect resources currently devoted toward compliance into higher return investments such as re-engineering, pollution prevention, and efficiency improvements.

The Team's Alternative Regulatory System (ARS), developed through consensus of the Auto Team, enjoyed broad support of the Task Force members and the Council members. The proposal provided the basis for the Eco-Efficiency Task Force's Policy Recommendation 1: Environmental Management System. This policy was also adopted by the full Council under the theme of "A New System for A New Century."

Recommendations

• Implement an "alternative regulatory system" on a plant-specific basis in order to redirect the resources currently devoted to compliance toward innovative re-engineering, pollution prevention, and efficiency improvements.

• Improve material use tracking and accounting mechanisms within and between companies in order to facilitate and advance pollution prevention.

• Broaden the scope of environmental management by involving a life-cycle perspective in order to understand the full impacts and costs of auto manufacturing and to arrive at an optimal plan to improve the sustainability of auto manufacturing.

• Integrate environmental management into central business planning and systems in order to facilitate "eco-efficient" manufacturing.

• Assess and improve the environmental aspect of supplier relationships.

• Develop industry-specific collaborative efforts to develop the necessary life-cycle data base and inventories.

• Combine energy planning with environmental management and merge both into existing best management practices, thereby harnessing the "efficiency" drivers at work in industry today in service of sustainable development.

CHEMICAL OPERATIONS

Purpose

The task of the Chemical Operations Project Team was to identify opportunities to improve the environmental performance of US. chemical companies without thwarting innovation or competition.

Methods

The Team planned to develop further these policy options in an experimental and highly participatory roundtable format that would include representatives of the entire chemical sector. It became apparent, however, that this generalized approach was inappropriate for such a multifaceted and diverse industry.

Instead, the Team learned, the industry could be better understood if divided and studied by type of manufacturing operation, of which there are two: continuous and batch. Continuous operations are used in chemical plants in which millions of pounds of a single commodity or of closely related products are produced annually. Batch operations are used in specialty plants which produce a multiplicity of custom products. These batch plants are typically smaller than commodity operations and are characterized by the ability to respond quickly to new customer specifications.

Understanding this basic division within the chemical industry, the Team convened two separate roundtable discussions to analyze policy options. In addition to corporate and plant-level managers, participants included representatives from government and the environmental community. The first roundtable, focusing on continuous/commodity manufacturing, took place in Houston, Texas and the second, focusing on batch/specialty operations, in Newark, New Jersey.

Findings

In some cases, the roundtable revealed, companies are reluctant or unable to make eco-efficient improvements because of the dominant regulatory orientation toward compliance and deadlines rather than toward overall environmental performance and risk reduction. According to one large chemical company in Texas, for every seven people working on environmental compliance, they have three people working on prevention.

In another example of regulatory barriers to eco-efficiency, a Louisiana chemical plant testified it was unable to undertake pollution prevention improvements because the only way of achieving the numerical standards in the governing regulations was through end-of-pipe treatment. The plant's own preferred approach--source reduction--would avoid a media-transfer (as contaminant is transferred from water to land) that the plant now must undertake in order to comply with regulatory standards. In this case, compliance with existing effluent guidelines for clean water prevented a cleaner and cheaper approach.

Recommendations

The Team made the following recommendations to the full Task Force:

• Create more flexible, effective environmental standards that are based on environmental risk and sound science, focused on entities' enviromnental performance, written clearly and concisely, and drafted with a multi-media and facility-wide focus.

• Create environmental programs that allow more flexible implementation and operation, with a focus on promoting good environmental performance through flexible permit programs, compliance assistance, and increased delegation to the states.

• Encourage greater communication and understanding among stakeholders to build trust by establishing formal mechanisms for ongoing dialogue and public involvement.

• Establish tangible rewards for facilities that operate at high environmental performance levels, such as permit review prioritization, less burdensome monitoring and recordkeeping requirements, and public acknowledgment of facilities' high performance.

• Establish industry-wide incentives and promote the use of certain tools that encourage facilities to continuously improve their eco-efficiency through the use of marketable pollution credits and the promotion of research and development into eco-efficient technologies.

CLEANING PRODUCT STEWARDSHIP

Purpose

Methods

Findings

Often information flow is the most significant barrier to eco-efficiency in the cleaning products industry. Within their product development units, manufacturers and methodologies to compare the environmental preferability and efficacy of alternative products and processes. Once a product is manufactured, environmental information needs to be relayed adequately between each link in the chain of commerce, from maker to purchaser to end-user. For instance, information on safe and effective use of products may not reach the cleaning personnel, or if it does, may not be in a useful form. Directions for use, pasted on bulk containers, may not be transferred to the spray bottles actually employed by staff to apply a product. Directions may be printed in a language the user does not understand.

In many industry sectors, the price signal provides a strong incentive for reducing the volume of material luse. In the commercial cleaning products industry this is not so. Dollars spent on cleaning agents typically have little effect on overall profitability, so little financial incentive exists to minimize their use. It appears that in some cases greater environmental improvement comes not from reducing the amount of cleaning agents used, but in reducing hot water and other components of the cleaning process.

The Team also found that complications within the current regulatory system may stifle the adoption of eco-efficient practices. Inconsistent, confusing, or redundant regulations could be minimized with better communication and more participatory goal setting among local, state, and federal governments.

Recommendations

The Team made the following recommendation to the full Task Force:

• Create a partnership to promote eco-efficiency. An industry-led coalition should be formed that would review the eco-efficiency of building cleaning processes in order to develop and implement a plan for extending eco-efficiency throughout the chain of commerce. The coalition should include members from the entire building cleaning chain of commerce and should base its work on the life-cycle perspective.

• Improve communication to provide exchange of information on environmental, health, and safety issues between cleaning personnel and the rest of the chain of commerce.

• Reform regulations to promote better eco-efficiency. Regulations should be nationally consistent and performance oriented, and should lend appropriate consideration to the full product life-cycle.

• Promote the development and implementation of building maintenance manager programs to reduce the environmental, health, and safety impacts of building cleaning processes.

Eco-Industrial Parks

Purpose

The concept of an eco-industrial park stems from the emerging discipline of industrial ecology. This new spin on old science suggests that industrial activities are interconnected just as individual organisms are in biological systems. In the industrial setting, waste from one process becomes food for the next, enabling optimal energy and material efficiency utilization throughout the system.

By collectively managing environmental and energy issues, eco-industrial park members seek to enhance their environmental and economic performance and, as a result, achieve a combined benefit that is greater than the benefits each company would realize from optimizing only its individual performance.

Methods

Findings of the Eco-Industrial Park Team

The Team also determined that environmental regulations regarding clean-up liability for past or present contamination may lead to the deterioration of abandoned properties rather than encourage the redevelopment of such "brownfield" sites. Liability risk was also found to be a significant concern of prospective eco-industrial park business tenants. Specifically, potential businesses are concerned that common waste treatment systems operating within a park system may give rise to joint and several liability under Superfund regulations.[19]

Other regulatory barriers to the development of eco-industrial parks steam from inflexibility in permitting procedures. A systems approach to development requires a new definition of source -- no longer is a discrete facility the unit of inquiry, but rather a system of interconnected, symbiotic facilities.

The Team also identified limited access to capital as an obstacle to the proliferation of ecologically designed industrial parks. This occurs because some of the potential benefits of investing in an ecological industrial park such as greater resource efficiencies and reduced environmental emissions are undervalued in existing loan qualification ratios. Inadequate infrastructure is also a barrier to the rapid development of these environmentally-designed business complexes.

Site Descriptions

Baltimore, Maryland, Fairfield Eco-Industrial Park

The park will utilize closed-loop production/operation systems to maximize resource use and minimize environmental degradation. The system's hub will be a resource recovery plant where waste tires will be removed and processed, and the steel cycled back to Bethlehem Steel, located across the harbor. Cooperating with Cornell University's Work and Environment Initiative, park management will ensure that the best human resource and industrial relations practices are used within the park.

Brownsville, Texas/Matamoros, Mexico

The first phase of the project is a quantitative analysis of the anticipated economic and environmental benefits of co-locating manufacturing facilities, or locating them in close enough proximity to physically share material inputs and outputs, reduce transportation costs, and jointly manage the park. The second phase involves testing the model at the site.

City of Cape Charles/Northampton County, Virginia

The EIP will house agriculture, aquaculture, and food processing plants that will cycle the byproducts of one industry into the raw materials for another.

Chattanooga, Tennessee

In an effort to make a business out of its environmental leadership, the city has been exploring the development of eco-industrial parks in the context of an overall economic, environmental, and social revitalization plaln. RiverValley Partners, the city's economic development organization, surveyed existing and prospective businesses and identified the need for a diversity of development options, which included reclaiming "brownfield" sites in the inner city, new industrial parks that reinvent the traditional notion of industrial parks, and zero emissions/eco-industrial parks that pair manufacturing facilities in an almost symbiotic relationship.

Recommendations

The Team made the following policy recommendations for consideration by the full Task Force:

• Environmental regulatory systems must be flexible enough to allow park participants to trade their waste products so that environmental goals can be reached in the most cost-effective way for the entire park.

• Federal, state, and local governments should coordinate and streamline their regulatory requirements.

• One-stop networks or centers should be established so that communities interested in developing EIPs can easily obtain regulatory, technical, and financial assistance information concerning federal, state, and local requirements.

• Environmental goals for EIPs should be developed through a participatory process involving all community stakeholders.

• Market incentives should be used widely in the encouragement and management of eco-industrial parks to enable cost-effective environmental protection within parks.

• Barriers to investment in eco-industrial parks, including liability and capital access, must be removed to promote ecologically sound park development.

• Information must flow openly between industry, government, and the community.

Lithographic Printing and Other Small Business

Purpose

The task of the Printers/Small Business Team was to identify policy changes that could reduce such conflict and help small businesses meet or exceed their environmental and health protection responsibilities while at the same time improving their economic competitiveness.

Methods

The Great Printers Project, sponsored by the Environmental Defense Fund, Council of Great Lakes Governors, and Printing Industries of America, focused on the lithographic printing industry in the Great Lakes Region;

The Sustainable Industry Project, sponsored by the Environmental Protection Agency, looked at photo-imaging, metal-finishing, and thermoset plastics manufacturing; and

The Small Business Forum on Regulatory Reform, an interagency effort coordinated by the Small Business Administration and Office of Management and Budget, considered the chemicals and metals, restaurants, food processing, trucking, and environmental disposal and recycling services industries.

Despite the variety of sponsors and industries, these projects resulted in strikingly similar findings on how to improve environmental and competitive performance in all nine small business sectors studied.

Findings

This lack of compliance assistance reduces the environmental performance of small businesses. They are often unsure about the applicability of multiple federal, state, and local regulations, and the arcane language of regulations exacerbates this problem. Businesses may simply not understand the core regulatory requirements and how to comply, much less how to exceed those requirements.

The Team found small businesses using their limited resources to decipher new environmental rules and to report redundant information. These resources could better be devoted to pollution prevention and source reduction efforts. However, a lack of technical expertise further hinders adoptions of these eco-efficient practices.

A related finding is that a piecemeal and medium-specific regulatory structure often results in piecemeal, medium-specific solutions. If firms were instead presented with their regulatory requirements simultaneously, they would be more likely to find solutions to more than one regulatory requirement at a time. This would improve the cost-effectiveness of small business compliance efforts.

One innovative compliance aid, developed by the Great Printers Project, is a software program that walks print shop owners and managers through all the regulatory requirements and illustrates possible pollution prevention options.

Access to the capital needed for environmental improvements can also be problematic for small businesses. Conventional leaders may view small businesses as inherently risky and may fear potential liabilities associated with underwriting new techniques or technologies.

The Team found that businesses often have a limited understanding of the environmental impact of their operations. Their attention is necessarily devoted to tohe demands of their customers, which usually are not governed by environmental considerations. At the same time, suppliers often lack an understanding of the needs of their small business customers regarding environmentally superior products.

Finally, the Team found that good environmental performance on the part of small businesses is neither recognized nor rewarded. There is a lack of positive incentives for firms to improve their environmental performance or to go "beyond compliance" (i.e., beyond the minimum environmental regulatory requirements).

Recommendations

The Small Business Team recommendations are:

• Improve regulatory effectiveness. Federal, state, and local officials can make the regulatory process more effective by:

  blocking piecemeal legislation designed for large facilities and focused on specific environmental media, which can hinder coordination among EPA prograrm offices and among federal agencies on regulatory issues;

  communicating regulatory information in plain English and organizing regulations by industry operation rather than by environmental statutes; and

  avoiding redundancies, inconsistencies, and confusion in reporting and permitting requirements.

• Use enforcement to improve performance. Enforcement is not the end; it is the means to improve environmental performance. Federal and state enforcement efforts can be made more efficient and effective as incentives to better performance by:

  targeting the facilities with the worst problems;

  familiarizing inspectors with the industry they are inspecting;

  conducting multi-media, multi-program inspections; and

  exploring innovative ways to level the playing field between states.

• Use the customer service approach. Federal and state agencies should adopt a customer service approach when implementing pollution prevention and compliance assistance activities. Though the product of multiple levels of government and of other intersted parties, the assistance and informatioin small business customers receive should be provided in a unified manner.

• Participatory goal setting. Companies, regulators, and environmental organizations should work together to define environmental performance goals for industries. Participatory goal setting that results in consistent, accepted standards for environmental performance, is a pathway to environmental improvement, and can also be a potent marketing tool for companies.

• Improve communication "upstream" and "downstream." Improved communication among suppliers/distributors, manufacturers, and end-users/customers encourages environmentally sound prodoucts and practices by:

  helping businesses better understand how to minimize the environmental impact of their job specifications; and

  helping suppliers understand and address the environmental needs of manufacturers.

Pollution Prevention Pilot Project

Core group members include the Natural Resources Defense Council, Amoco Corporation, Dow Chemical Company, Rayonier, Monsanto Company, and the New Jersey Department of Environmental Protection.

[17] Ibid., p. 28.

[18] Ibid., p. 24.

[19] Joint and several liability under the Comprehensive Environmental Response, Compensationm and Liability Act (CERCLA), or "Superfund," means that companies may be found liable for entire cleanup costs even if only contributing to a portion of the problem.

[20] "Bubbling" derives its unusual name from the treatment of multiple emission points as if they were contained within an imaginary bubble, regulating only the amount leaving the bubble. Currently used in the Clean Air and Clean Water Acts, these bubbles can be extended to include not only emission points within the same facilities, but emission points in facilities owned by other entities as well.

[21] Small Business Administration Economic Research Division.

[22] US Department of Commerce, Bureau of the Census, Census of Manufacturing (Washington, DC: Government Printing Office, 1995), p.13.