ECONOMIC INCENTIVES

Economic-incentive instruments are regulations that encourage behavior through price signals rather than
through explicit instructions on pollution control levels or methods. These policy instruments, such as
tradable permits and pollution charges, have been described as "harnessing market forces," because if they
are properly implemented, they encourage firms to undertake pollution control efforts that are in their
financial self-interest and that will collectively meet policy goals.
▪ ECONOMIC INCENTIVES
▪ Economic-incentive instruments have captured the attention of environmental policy makers in
recent years because of the potential advantages they offer over traditional command-and-control
approaches.
▪ ECONOMIC INCENTIVES
In theory, properly designed and implemented economic-incentive instruments allow any desired level of
pollution cleanup to be realized at the lowest possible overall cost to society, because they provide
incentives for the greatest reductions in pollution by those firms that can achieve these reductions most
cheaply. Rather than equalizing pollution levels among firms, economic-incentive instruments equalize the
incremental amount that firms spend to reduce their pollution (their marginal abatement costs).
FIVE CATEGORIES OF ECONOMIC INCENTIVES INSTRUMENTS
1. POLLUTION CHARGE SYSTEMS
assess a fee or tax on the among of pollution a firm generates.
2. TRADABLE PERMITS
can achieve the same cost-minimizing allocation of the pollution control burden as a charge
system, while avoiding the problem of uncertain responses by firms.
3. DEPOSIT REFUND SYSTEM
consumers pay a surcharge when purchasing potentially polluting products and areceive a
rebate when returning the the product to an approved center for recycling or proper disposal.
4. REDUCING MARKET BARRIERS
can also help to curb pollution, since, in some cases, substantial gains can be made in
environmental protection simply by removing existing government-mandated barriers to market
activity.
5. ELIMINATION OF GOVERNMENT SUBSIDIES
can be a powerful economic incentive for environmental protection, because some
subsidies promote inefficient and environmentally unsound economic development.
PHILIPPINE ENVIRONMENTAL POLICIES
With the belief that successful environmental governance would mean allowing industries to achieve
profitability while at the same time meeting environmental regulations in a practical manner, the DENR
has since crafted new mechanisms that capitalize on the industry’s initiative to self-regulate. In contrast to
its previous command-and-control attitude, the DENR now believes that a successful environmental
compliance program is one that delicately balances enforcement and encouragement – a right mix of carrots
and sticks.
By cultivating a sense of trust, social accountability and increased environmental awareness in the
private sector, the DENR is gradually transforming its stance from merely being a regulator to that of a
partner. Thus, recent DENR programs advocating the adoption of the Environmental Management System
(EMS), cleaner production practices, pollution prevention programs, phased approach to compliance, and
greater transparency in reporting environmental performance, among others, are meant to solicit the
involvement of the business community in solving the major environmental problems in the country
Market-based instruments (MBIs) are now widely regarded as both philosophic and practical
approaches to environmental legislations .Recent regulations such as the Philippine Clean Air Act (PCAA)
of 1999 and the Clean Water Act (CWA) of 2004 promote the use of market-based or economic policy
instruments such as transfer of funds between polluters and the community (derived from taxes, subsidies,
and effluent charges) and the creation of markets for pollution emissions such as marketable/tradable
permits.
▪ REFERENCES
▪ https://www.geothermal-energy.org/pdf/IGAstandard/WGC/2005/0305.pdf
▪ https://www.belfercenter.org/publication/economic-incentives-environmental-regulation

WHAT IS LIFE CYCLE ASSESSMENT?

Life-cycle assessment (LCA, also known as life-cycle analysis, ecobalance, and cradle-to-grave
analysis) is a technique to assess environmental impacts associated with all the stages of a product's life
from raw material extraction through materials processing, manufacture, distribution, use, repair and
maintenance, and disposal or recycling. Designers use this process to help critique their products. LCAs
can help avoid a narrow outlook on environmental concerns by:

 Compiling an inventory of relevant energy and material inputs and environmental releases;
 Evaluating the potential impacts associated with identified inputs and releases;
 Interpreting the results to help make a more informed decision.

The Life Cycle Assessment

GOALS AND PURPOSE OF LIFE CYCLE ASSESSMENT

The goal of LCA is to compare the full range of environmental effects assignable to products and services
by quantifying all inputs and outputs of material flows and assessing how these material flows affect the
environment. This information is used to improve processes, support policy and provide a sound basis for
informed decisions.

The term life cycle refers to the notion that a fair, holistic assessment requires the assessment of raw-
material production, manufacture, distribution, use and disposal including all intervening transportation
steps necessary or caused by the product's existence.

TWO MAIN TYPES OF LCA

Attributional LCAs seek to establish (or attribute) the burdens associated with the production and use of
a product, or with a specific service or process, at a point in time (typically the recent past).

Consequential LCAs seek to identify the environmental consequences of a decision or a proposed

change in a system under study (oriented to the future), which means that market and economic
implications of a decision may have to be taken into account.

PHASES OF LIFE CYCLE ASSESSMENT

According to the ISO 14040 and 14044 standards, a Life Cycle Assessment is carried out in four distinct
phases as illustrated in the figure shown to the right. The phases are often interdependent in that the
results of one phase will inform how other phases are completed
Phases of Life Cycle Assessment (Left) and its Applications (Right)
1. GOAL AND SCOPE
An LCA starts with an explicit statement of the goal and scope of the study, which sets out the
context of the study and explains how and to whom the results are to be communicated. This is a
key step and the ISO standards require that the goal and scope of an LCA be clearly defined and
consistent with the intended application. The goal and scope document therefore includes
technical details that guide subsequent work. The following are included in the phase of goal and
scope.

FUNCTIONAL UNIT defines what precisely is being studied and quantifies the service
delivered by the product system, providing a reference to which the inputs and outputs can be
related.

SYSTEM BOUBDARIES are delimitations of which processes that should be included in the
analysis of a product system.

ALLOCATION METHOD is used to partition the environmental load of a process when

several products or functions share the same process.

IMPACT CATEGORIES chosen for example human toxicity, smog, global

warming, eutrophication.

2. LIFE CYCLE INVENTORY

Life Cycle Inventory (LCI) analysis involves creating an inventory of flows from and to nature
for a product system. Inventory flows include inputs of water, energy, and raw materials, and
releases to air, land, and water.
 To develop the inventory, a flow model of the technical system is constructed using data on
inputs and outputs. The flow model is typically illustrated with a flow chart that includes the
activities that are going to be assessed in the relevant supply chain and gives a clear picture of the
technical system boundaries. The input and output data needed for the construction of the model
are collected for all activities within the system boundary, including from the supply chain
(referred to as inputs from the technosphere).

The Life Cycle Inventory

3. LIFE CYCLE IMPACT ASSESSMENT

Inventory analysis is followed by impact assessment. This phase of LCA is aimed at evaluating
the significance of potential environmental impacts based on the LCI flow results. Classical life cycle
impact assessment (LCIA) consists of the following mandatory elements:

 selection of impact categories, category indicators, and characterization models;

 the classification stage
 impact measurement

DIVISION OF IMPPACT ASSESSMENT

"First Impacts" include extraction of raw materials, manufacturing (conversion of raw materials into a
product), transportation of the product to a market or site, construction/installation, and the beginning of
the use or occupancy.

Use impacts include physical impacts of operating the product or facility (such as energy, water, etc.),
maintenance, renovation and repairs (required to continue to use the product or facility).

End of life impacts include demolition and processing of waste or recyclable materials.
 4. INTERPRETATION

Life Cycle Interpretation is a systematic technique to identify, quantify, check, and evaluate
information from the results of the life cycle inventory and/or the life cycle impact assessment. The
results from the inventory analysis and impact assessment are summarized during the interpretation phase.
The outcome of the interpretation phase is a set of conclusions and recommendations for the study.
According to ISO 14040:2006, the interpretation should include:

 identification of significant issues based on the results of the LCI and LCIA phases of an LCA;
 evaluation of the study;
 conclusions, limitations and recommendations

References: www.pre-sustainability.com

POLLUTION PREVENTION: VOLUME REDUCTION & RECYCLING

WHAT IS POLLUTION PREVENTION?
-Pollution prevention (P2) is any practice that reduces, eliminates, or prevents pollution at its sources.
- Pollution prevention (P2) , a.k.a as “source reduction”.
-Reducing the amount of pollution produced means less waste to control, treat, or dispose of.
-Less pollution means less hazards posed to public health and the environment.

STEPS IN MINIMIZING
EFFECT OF INDUSTRIAL WASTES
WASTE VOLUME REDUCTION
-Waste volume reduction is an important issue in terms of both preserving the global environment and
alleviating the burden on incinerators and other waste disposal facilities.
-“Minimize waste generation, maximize recycling of wastes that are generated, and properly dispose of
wastes that cannot be recycled.”
SOLID WASTE VOLUME REDUCTION
-Solid waste volume reduction can take place at several points in the waste management process.
 Compaction of waste materials after source separation is useful for two reasons. Compaction
prepares waste for efficient transport by truck, boat or rail car to landfills or other waste disposal
facilities. Compacted waste takes up less space in a landfill, thereby extending the life of the
landfill.

 Composting is another volume reduction technique that can divert large volumes of waste
material from the waste stream. Leaves, grass clippings and tree prunings can be reduced in
volume through an active composting process both in the backyard and in municipal composting
yards.

 Incineration is a waste volume reduction technique. The burning of solid waste can reduce the
volume by 95% . It is a waste treatment process that involves the combustion of organic
substances contained in waste materials.

 Recycling diverts large volumes of materials from the waste stream to a manufacturing process.
Glass, plastic, paper, cardboard, and other clean, source-separated materials are well-suited for
use in the manufacture of new products.

REFERENCES:
https://www.encyclopedia.com/environment/encyclopedias-almanacs-transcripts-and-maps/solid-
waste-volume-reduction
http://ghangrekar.com/wp-content/uploads/2016/02/02-Waste-minimization.pdf
C. CLEANER PRODUCTION
C.1. Definition
Cleaner production (CP) is a preventative approach to managing the environmental impacts of
business processes and products. CP uses changes in technology, processes, resources or practices to
reduce waste, environmental and health risks; minimize environmental damage; use energy and resources
more efficiently; increase business profitability and competitiveness; and increase the efficiency of
production processes. Cleaner production is applicable to all businesses, regardless of size or type.
C.2. Main Features
Cleaner production is an ongoing process that can be applied to production processes; products;
or services; or it can be extend to cover the entire lifecycle of a product or service. Some cleaner
production techniques include:

 Changes in technology  Changes in waste use

 Changes in input materials  Changes in maintenance
 Changes in operating practices  Changes in packaging
 Changes in product design

Cleaner production is related to other sustainability concepts such as eco-efficiency; environmental sound
technologies; life cycle assessment; green procurement and zero emissions. For cleaner production to
succeed, senior management support, staff awareness and participation, and staff input is required.
The impetus behind cleaner production includes:

 reduction of operation or pollution  corporate environmental plans or

license fees; policies;
 regulations;  cost savings; and
 corporate image;  product bans.
Barriers to implementing a CP program include:

 lack of finances (perceived or real);

 low environmental awareness or concern
of the organization;
 lack of organizational support;
 lack of human resources; and
 limited access to appropriate
technology.
The CP technique employed by organizations differs, however, the basic CP process is:
1. Planning and organization - organization are made aware of the CP process, stakeholder input sort, CP
team formed, environmental policy reviewed or written, and budgets and program created.
2. Assessment - material inputs and outputs identified and assessed, current processes and costs assessed,
environmental and health impacts reviewed, CP options identified.
3. Feasibility analysis - each CP option is assessed for its environmental impact and its technological and
economic viability, final CP option selected.
4. Implementation - selected CP option is implemented and a monitoring and evaluation program
established.
5. Continuation - regular audits conducted and findings feed back into the decision-making process,
stakeholders informed of progress and gains.
C.3. Case Studies and Examples
1. Orange Juice
An orange juice manufacturer in Australia was drying its waste orange peels and selling them as
stock feed. However, the drying process created 4 million tons of effluent a month, which was causing
environmental problems. After assessing the problem, it was found that some of the effluent components,
namely citrus oil and sugar, could be captured and sold. A technological investment of AU $1,000,000
resulted in an AU $450,000 saving in waste disposal costs per year and an income of AU $250,000 from
sales of citrus oil and molasses.
2. Lead Acid Batteries
Through funding provided by the United States Agency for International Development, a Tunisia
Lead Acid Battery manufacturer saved over US $2.2 million in two years from an investment of US
$400,000. Through the implementation of 19 pollution prevention options, the cost of treating chemicals
was reduced by 66%; the cost associated with future pollution prevention technology was reduced by
33%; employee health was improved; energy and water consumption were reduced; less lead was
required in the process; and wastewater quality was improved.
C.4. Stakeholders
Key stakeholders are the organization's management and staff; suppliers; and end users. Other
stakeholders include government; non-government organizations; business associations; and research
institutions.
Many international organizations are involved in preventive policy development and actively
participating in the programs focusing on cleaner production and preventing pollution.
International Organizations

 The United Nations Environment Program (UNEP)

UNEP is one of the main international players. Every two years, UNEP organizes global High-
Level Seminars on CP. UNEP is also the initiator of the International Declaration on CP. Furthermore, it
has carried out work on CP financing, and has been coordinating the worldwide program of National CP
Centers, together with UNIDO.
  The United Nations Industrial Development Organization (UNIDO)
UNIDO initiated together with UNEP the worldwide National CP Centre Program in 1994.
UNIDO is responsible for overall administration, local liaison, and provision of industrial technical
expertise, especially for sectorial industrial demonstrations. Both organizations are also providing
expertise on training, information and policy analysis.

 Organization for Economic Cooperation and Development (OECD)

OECD is involved in promoting sound environmental management practices in many member
and non-member countries. The OECD coordinated the drafting of a Policy Statement on Environmental
Management in Enterprises in Central and Eastern Europe and NIS. The Working Party on Pollution
Prevention and Control has published a Guide on Strategic Waste Prevention.
Target Sectors
The program targets at industry sectors which-

 involve production processes resulting in substantial emission of air pollutants

 use large quantities of potentially environmentally damaging chemicals or materials

 consume large quantities of fuel and energy

 have a good potential for achieving environmental improvement

Priority for funding support will be given to companies with factories belonging to any of the
following targeted industries:

 Food and beverage

 Chemical Products
 Textiles
 Paper/product manufacturing
 Printing and publishing
 Non-metallic mineral products
 Metal and metal products
 Furniture
C.5. Scale of Operation
Cleaner production is best implemented at the operation or business scale.

Reference:
http://www.gdrc.org/sustdev/concepts/02-c-prod.html
https://www.cleanerproduction.hk/en_project2a.asp?fbclid=IwAR0DVnGsoxmq4HZ-GEpbMh1zRMdiA-
XXP-BQlvyXxMwesXvMSRtokm6q-Pk