Implementing Pollution Prevention: Incentives and Irrationalities

Abstract

Widespread pollution prevention will turn on creative use of incentives, since prevention means decentralized changes in raw materials, products, production processes and disposal practices—in short, new ways of doing business—that are difficult to achieve through information transfer or regulatory mandates alone. But past experience with incentives and the context in which these approaches are used will shape both regulators’ attitudes and industry willingness to respond. Thus the choice of incentive mechanism (s) may well determine the extent to which “prevention” is implemented—as well as the extent to which implementation yields environmentally-sound rather than perverse results. Approaches now being debated could produce such perverse effects by treating recyclables as pollution and assuming all reductions towards zero are equally desirable, regardless of net risks reduced or costs incurred by waste generators. Another alternative— tradeable permits progressively reducing the amount of waste received by disposal facilities—could help agencies think through such consequences, force needed decisions on how much “prevention” of which “pollution” is appropriate, and encourage investment to reduce commercial as well as municipal waste. This alternative implies that the criteria for “appropriate prevention” are reduction in waste needing disposal and in overall environmental impact; that recycling should be equated with source reduction in waste management hierarchies, not placed on a lower rung; and that Air Toxics provisions of the pending Clean Air Act may require some adjustments if prevention is not to be aborted by the threat that voluntary reduction steps will become national requirements, for existing sources as well as new ones.