Flexibility In Cutting Toxic Releases Yields Dividends

September 04, 1998

CHAMPAIGN, Ill. - Changes in federal regulation giving chemical companies flexibility in deciding how to reduce toxic pollution are producing measurable results, according to researchers at the University of Illinois.

Economists Madhu Khanna and Lisa Damon studied the impact of the 33/50 program started by the Environmental Protection Agency (EPA) in 1991 to encourage firms to reduce their pollution emissions ­ by 33 percent by 1992 and by 50 percent by 1995. The voluntary program gave companies flexibility to determine how to reduce 17 highly toxic chemicals.

The EPA has since hailed the program as a success based on pollution reductions of 46 percent compared with the level shown in the 1988 Toxic Release Inventory.

In their independent sampling of chemical companies, Khanna and Damon found that the EPA's results were inflated by including pollution reductions that took place between 1988 and 1991 before the voluntary program began.

Nevertheless, sampled participants did reduce their overall releases by 41 percent between 1991 and 1993, and had a significantly better record in pollution reduction than chemical companies not participating in the program. The figures were adjusted to equalize size and other variables between participating and non-participating companies.

Their findings suggest that the new environmental initiatives "have been effective in motivating corporations to undertake self-regulated efforts to improve their environmental performance," Khanna and Damon concluded in a paper published by the U. of I. Program in Environmental and Resource Economics.

Moreover, the 33/50 program led to a positive change in the composition of wastes. "Firms have reduced their on-site releases and increased off-site transfers for recycling, energy recovery and treatment. This change is likely to lower the net risks associated with toxic waste generation."

Looking at the question of costs, the researchers found that participating chemical companies had lower average earnings in the three years studied than non-participating companies. However, they concluded that the immediate costs of the program would be offset by reduced future liabilities and savings due to increased efficiency.

The threat of possible liabilities under the Superfund Act was a strong motivator for many companies to participate in the voluntary program, they noted, adding that "voluntary initiatives alone are unlikely by themselves to generate the desired changed in corporate behavior."Khanna and Damon concluded that "credible penalties" must be levied against companies that make little or no effort to clean up toxic wastes. "New generation policy initiatives should be regarded as complements to rather than substitutes for mandatory environmental regulation."

###




University of Illinois at Urbana-Champaign

Related Chemical Companies Articles from Brightsurf:

Hackers targeting companies that fake corporate responsibility
A new study found some hackers aren't in it for the money; they want to expose firms that engage in phony philanthropy.

C&EN names top 50 chemical companies
After being dethroned last year, German chemical giant BASF is once again number one in C&EN's annual Global Top 50 list of chemical companies for 2019.

New research reveals pharma companies are more profitable than most S&P 500 companies
Large pharmaceutical companies are more profitable than most companies in the S&P 500 according to a study published in the Journal of the American Medical Association.

Profits of large pharmaceutical companies compared to other large public companies
Data from annual financial reports were used to compare the profitability of 35 large pharmaceutical companies with 357 companies in the S&P 500 Index from 2000 to 2018.

Pesticide companies leverage regulations for financial gains
Some pesticide companies may put profit ahead of protecting the public from potential harms.

Software companies follow the skills and move where the staff are
Software companies are more likely to base their operations in locations where skilled potential recruits already work -- rather than staff moving to new areas for fresh opportunities.

Companies' political leanings influence engagement with activists
Liberal-leaning companies are more likely to work in concert with the demands of activists of all kinds than conservative-leaning companies, according to researchers at Penn State and the University of Washington.

Insurance companies: Want to steal your competitors' customers?
Researchers from the United States published new research in the INFORMS journal Marketing Science (Editor's note: The source of this research is INFORMS), which sheds light on just how much it may take for the companies to profitably 'steal' customers from their competitors.

Many NHS partnerships with drug companies are out of public sight
NHS organisations are entering into working partnerships with drug companies, but they are not making the details, and even existence, of many of these deals available to the public, reveals an investigation by The BMJ today

Companies with more financial analysts produce more and better-quality patents
Long-term growth in profits depends significantly on firms' investment in innovation activities.

Read More: Chemical Companies News and Chemical Companies Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.