ENVIRONMENTAL QUALITY OBJECTIVE AND GOALS

POLICIES ON DEVELOPMENTAL PROJECTS AND THEIR IMPACTS

Dr.Kurian Joseph

1.0 1.0 INTRODUCTION

Industry continues to be a major cause of environmental problems, both globally and

locally. It has a strong influence on both the local environmental situation and quality of
life. In recent years, the serious impact of municipal operations on the state of local
environment has also attracted attention. Over the past decades, the industrialized nations
have responded to pollution and environmental degradation in five characteristic ways:

• By not recognizing—or ignoring—the problem of environmental pollution;

• By diluting or dispersing pollution, so that its effects are less harmful or apparent;
• By seeking to control pollution and wastes (the end-of-pipe or pollution control
approach);
• By trying to develop and improve environmental technology that will help close
the loops in material flow streams during the production process, and facilitate
reuse and recycling, and
• Most recently, by implementing Cleaner Production through the prevention of
pollution and waste generation at source.

In the past, command and control methods were widely used by environmental
agencies until their disadvantages became apparent. Traditional pollution control
solutions proved less effective than they initially appeared, and there came a point
beyond which further requirements became prohibitively expensive. More often than not,
end-of-pipe technology simply shifted waste or pollutants from one environmental
medium to another, as in the case of air and water pollution control devices that produced
concentrated hazardous waste for leaking landfills. The most significant disadvantages of
the command and control method is that firstly, it does not allow companies to explore
other, cheaper ways to reduce pollution, and secondly that enforcement is both
complicated and expensive because of the need for a strong and qualified administration.

2.0 2.0 DEVELOPMENTAL POLICY AND ENVIRONMENT

A precise definition of the term ‘policy’ is a somewhat elusive task. There are a
range of definitions, but most imply a “set of principles and directives that guide the
decisions of an organization”. An organization can mean a business, an association, a
university, a political party, or even a group of private individuals. Some common
definitions of a “policy” include:

• Everything that a Government decides to do, or not do, as the case may be;
• A set of interrelated decisions, including identifying the objectives and tools to
achieve them, taken by political actors to address a specific issue;
• A plan or course of action, of a Government, political party, or a business,
intended to determine and influence decisions and actions;
 • A set of principles and directives that guide the decisions of an organization.

Actions taken by government officials in response to problems and issues raised

through the political system are known as “public policy”. However, “policy” is not
equivalent to “regulations” or “a legal framework”, since they represent only one of a
number of possible tools for policy implementation. Other tools include economic
incentives, information and education, etc.

A Government’s task is to provide the framework for, and ensure the implementation of,
sound and sustainable environmental management practices. A realistic, coherent and
implementable national policy on Cleaner Production brings a variety of benefits,
including:

• Decreased pollution and the conservation of natural resources

• Improved public health, both by minimizing acute health problems and chronic
diseases at the workplace, and by avoiding the risk of environmental emergencies;
• Less adversarial enforcement of legislation
• CP policy can include incentives for industry to apply CP as a part of compliance
• Economic savings and enhanced competitiveness of national industry.
• This can manifest itself as macroeconomic savings (e.g. electricity, fuel, water,
natural resources); facilitation of sound business development; improved
competitiveness of local enterprises; and increasing the performance of non-
manufacturing sectors (e.g. services,

Cleaner Production principles may be integrated into a range of policies, including:

• Industrial development policy;

• Foreign trade policy/customs policy;
• Investment promotion policy;
• Fiscal policy and tax regimes;
• Environmental policy;
• Energy and transport policy;
• Agricultural policy;
• Education and science and technology policy;
• Health policy.

Frequently, economic or sectoral policies continue to be drafted without taking into

account sustainability. In some cases, policies are outright indifferent to environmental
impacts that are seen as the price to be paid for economic development. Emphasis should
be placed on integrating preventive approaches within traditionally nonenvironmental
policy areas including industrial development, agriculture, energy policy, finance and
education and research.

This goal can be achieved in a number of ways:

 Improving the efficiency and competitiveness of enterprises through the adoption
of CP can be included in sectoral policies related to specific industries (e.g. agriculture,
manufacturing, food processing). Energy efficiency can be applied across all sectors with
special prominence in energy policy. Resource pricing is a key factor, since subsidies can
damage the environment by encouraging overproduction and the wasteful use of inputs.
Environmental considerations in can successfully be integrated into the modernization of
an existing industrial base, access to more efficient technologies and privatization.
Agriculture is one of the sectors of the economy where failure to integrate environmental
and economic policies is often most evident. Soil and water quality, biodiversity and rural
amenities are all affected by policy decisions on agriculture, such as subsidies for
fertilizers, pesticides or water. An important step towards integration is to identify the
impact on the environment of economic support measures, such as subsidies. Economic
development and investment promotion policy can create financial incentives for
productivity and efficiency, including tax incentives and penalties, and removing
subsidies for input materials of production, such as water, energy and raw minerals.
Investment promotion may include preferential treatment for companies that comply with
the highlevel environmental standards applied in their home countries. Economic
instruments such as taxes, charges and transferable permits are important, as they can be
used both for pollution control and natural-resource management, by creating incentives
that bring rational economic behaviour into line with environmental goals.
3 CLEANER POLICY DEVELOPMENT

In general, the Cleaner policy development cycle consists of four distinct stages as
depicted in Figure 1.

Figure 1 Cleaner policy development

First and foremost, it does not belong to any single government institution. It is a
crosscutting, multisectoral issue that needs to be integrated into various sectoral policies.
Relevant activities may include, for instance, industrial development, institutional
capacity development, education and promoting policy dialogue. Environmental and
relevant non-environmental agencies may need to be strengthened, especially in their CP
capacities.
It is useful to keep in mind that prevention and good design right from the start is three to
five times cheaper than retrofitting. The Basic conditions for CP policy development
include

• Political will and the interest of stakeholders;

• General environmental awareness and pressure of public opinion;
• Policy continuity and stability;
• Broad local ownership of the process and support at the highest level;
• Market conditions and ownership that encourage a reduction in production
costs;

Some of the common barriers to Cleaner policy development include:

• Low environmental awareness and regulatory pressure;

• Lack of public pressure on industry and government;
• Tenuous relationship between the main stakeholders;
• Low level of CP awareness among decision makers;
• Environmental regulations that do not promote CP and preventive measures

A policy instrument is a tool or mechanism used as a means to achieve specified

objectives. It is important to select the right policy instruments when preparing an action
plan and programmes. The “right” instruments mean those appropriate to the conditions
of the country, level of institutional development and the policy objectives.

Since the inception of environmental policy, the predominant strategy for pollution
control has generally been through the use of regulatory instruments, where a public
authority sets standards and then inspects, monitors and enforces compliance to these
standards, punishing transgressions with formal legal sanctions. These regulations may,
for example, specify an environmental goal—such as the reduction of carbon dioxide
emissions by a specified date—or they may mandate the use of a particular technology or
process. Such an approach gives the regulator maximum authority to control where and
how resources will be allocated in order to achieve environmental objectives, and it
provides the regulator with a reasonable degree of predictability as to the extent pollution
levels will be reduced. There are certain situations where regulatory instruments may be
seen as the most appropriate and effective means of achieving a desired environmental
outcome, an example being the control of hazardous materials through specified
restrictions or banning.

The second method that can be used to promote pollution prevention or a cleaner
production policy is the market-based approach, using so-called “economic instruments”.
In this case, preventing pollution is promoted through economic incentives or financial
penalties rather than simply through action enforced by the Government. Marketable
permits, green procurement guidelines promoting “cleaner” products, or customs and tax
breaks for pro-environmental investments are examples of a market-based approach. In
some cases, a market-based approach is initiated by the Government, but then left in the
hands of economic markets. Market-based instruments show some theoretical advantages
compared to command-and-control regulations in achieving environmental goals and
economic efficiency simultaneously.

Taxes, fees and charges may be used to promote Cleaner Production practices by raising
the costs of unwanted outputs, or by providing incentives to promote the more efficient
use of natural resources. In some instances, it may be appropriate for the revenues from
these instruments to be used to support CP activities, further stimulating preventive
approaches. One significant constraint against the more widespread adoption of market-
based instruments is that it is often not politically feasible to set taxes at a sufficiently
high level to achieve the desired environmental goals.

4.0 ENVIRONMENTAL NORMS AND REGULATIONS

Historically, the most widespread approach to environmental pollution has been the
setting of standards, i.e. the command-and-control approach. This approach relies on
standards of various types to bring about improvements in environmental quality. In
general, a standard is simply a mandated level of performance that is enforced in law. An
emission standard is a maximum rate of emissions that is legally allowed. The idea
behind a standard is, if you want people not to do something, simply pass a law that
makes it illegal, then send out the authorities to enforce the law. A leading problem with
standard setting is the question of cost-effectiveness and enforcing compliance.

In direct regulations, the policy maker may specify a desired outcome or condition, such
as a maximum level of emissions from a pollution source (emissions standard), or a
maximum ambient concentration of a particular pollutant (ambient standard). Example of
the former include regulations on the maximum allowed value of Biochemical Oxygen
Demand (BOD5) and total suspended solids in waste water discharged to water bodies;
examples of the latter include the allowable concentration of air pollutants in a residential
area, or noise levels at the workplace.
Alternatively, a policy maker can prescribe a specific technical means to achieve the
required outcome (technology-based standard). This type of direct regulation uses
detailed technological standards to obligate a polluter to use a specific type of machinery,
pollution control equipment, or process specifications. Best Available Technology is an
example where a technology-based standard would be used. Another policy tool is a
performance-based standard, which focuses on the quality of a facility’s operation by
requiring certain equipment maintenance or housekeeping procedures.

Direct regulation may also prohibit, limit, or phase out the use or release of a chemical
compound. The imposition of a ban—or defined phase-out schedule—for a particular
product or substance is an authoritarian means of promoting Cleaner Production. This
may be implemented through application of the product-choice (or substitution) principle.
Some examples include the prohibition of the use of certain pesticides (e.g. DDT), the
ban on the use of products containing cadmium, or the elimination of ozone-depleting
substances such as chlorofluorocarbons.
The sustainable management of natural resources can be promoted by limiting and
regulating extraction activities, or requiring compensating measures. This approach was
used for the first time in the case of lost fish catches resulting from overfishing. On a
national level, it is commonly used in connection with forestry, e.g. requiring
reforestation efforts in the wake of commercial woodcutting.

Liability payments are made to compensate for the damage caused by a polluting activity.
Such payments can be made to the victims of chronic or accidental pollution or to the
government. Environmental liabilities with a potentially strong financial impact that a
company may face include:
• Environmental fees/taxes for the “use of the environment” charged by the state or
local administration;
• Environmental fines assessed in case of non-compliance, or even closure or
suspension of activities on environmental grounds;
• Cost of implementing environmental measures required by authorities for a
company to continue operations;
• Cost of implementing environmental clean-up programmes, both on-site and off-
site;
• Compensation paid to third parties that suffered as a result of environmental
damage;
• Compensation paid to employees whose health was damaged (e.g. exposure to
lead or asbestos);
• Potential costs of dealing with the consequences of changing environmental
regulations (e.g. waste substances that may be declared hazardous in the future).

Several countries have found that enforcing strict liability, where firms are held
responsible for all and any environmental damage they cause (even if they have fulfilled
their legal obligations and have exercised due environmental diligence) often leads
companies to try to minimize their risks and take preventive measures. The success of
liability systems depends on the nature of the enforcement and legal system of the
country.

Extended Producer Responsibility(EPR) aims to introduce environmental improvements

throughout the life cycle of a product by making the manufacturer responsible for various
aspects of the product’s life cycle. The basic principle is to extend the responsibilities of
the manufacturer beyond how the particular item is produced or what performance
standards it meets, to include typically the return, recycling and final disposal of the
product. Shifting responsibility for the end-of-life management of products from
consumers and waste management authorities to manufacturers makes the manufacturers
more aware of the issues related to the end-of-life management of their products. This
feedback loop between the downstream (waste management) and the upstream (design of
products) lies at the core of the EPR principle and is instrumental in improving the design
of product and product systems, with the aim of reducing the environmental impact of the
product’s life cycle.
Under an EPR programme, producers bear a number of responsibilities such as the cost
of the end-of life management of their products (financial responsibility), involvement in
the physical return of their products (physical responsibility) and informing waste
managers of the content of their waste (informative responsibility). Concrete examples of
these responsibilities include: return of end-of-life products; the establishment of returned
goods sites/infrastructure for the end-of-life management of products; meeting recycling
targets; the environmentally sound treatment of end-of-life products (physical and/or
financial); the ban of the use of certain materials; and information to consumers on the
content of the products. Concrete ways of fulfilling responsibilities assigned to respective
parties are often left in the hands of producers who are assumed to do it in the most cost-
effective manner.

Demand-side management (DSM) is a tool that aims at controlling the need for a certain
product and/or stimulating a more favourable distribution of demand peaks. This
instrument is traditionally employed by electric utilities to influence consumer behaviour
through varying prices of electricity.DSM programmes have a variety of objectives:

• Energy-efficiency programmes reduce energy use, both during peak and off-peak
periods, typically without affecting the quality of services provided. Such
programmes use technologically more advanced equipment to provide the same,
or higher, level of services (e.g.lighting, heating, cooling, drive power or building
shell) with less electricity;
• Peak load reduction programmes focus on reducing the load on a utility’s system
during periods of peak power consumption, or in selected areas of the
transmission and distribution grid. This category includes interruptible load
tariffs, time-of-use rates, direct load control and other load management
programmes;
• Load shape flexibility can be achieved by programmes that modify prices, cycle
equipment, or interrupt service in response to specific changes in power costs or
resource availability. These approaches include real-time pricing and time-of-use
rates for pricing periods that have flexible hours. They also may include
interruptible load tariffs, direct load control, and other load management
programmes when those activities are not limited to peak load periods;
• Load building programmes are designed to increase the use of electrical
equipment or shift electricity consumption from peak to off-peak hours, thereby
increasing total electricity sales. This category includes programmes that increase
load during off-peak periods as well as programmes that introduce new electric
technologies and processes.

The following example explains the problem in practical terms. Take a power plant that is
environmentally inefficient at its maximum capacity or, for that matter, does not have
sufficient capacity to satisfy the peak demand of all consumers. In order to minimize the
unchecked growth of demand at the traditional peak hours, the price of electricity may be
set high for that period, and low for periods where the demand is minimal (e.g. late at
night). In this way, an industrial plant may schedule its non-essential energy consuming
operations for the low-demand, low-price time.
Demand side management programmes comprise the planning, implementation and
monitoring activities of electrical utilities that are designed to encourage consumers to
modify their level and pattern of electricity usage. This same approach, even if not called
DSM, is used in the tariff structure of the telecommunications sector and on a pilot basis
in water supply utilities.

Harmful subsidies refer to all forms of financial support that artificially distort the price
of resources or goods. Subsidies for natural resources are widely used to stimulate
economic development. All have the effect that the user pays less than the market price
for commodities such as energy, land, water and wood. While some subsidies are useful
for stimulating economic or social development, protecting dependent communities or
reducing dependence on imported resources, they can also encourage uneconomic
practices and lead to severe environmental degradation. Included are subsidies in the
sectors of transport, energy and agriculture, which may have a distortional effect from an
environmental policy point of view. For instance, the cost of water and electricity can be
subsidized by the Government, to improve the competitiveness of local industry. Without
crop supports, farmers would be less likely to overuse fertilizers and pesticides, a major
source of water pollution. Without road transport subsidies, traffic congestion, urban air
pollution and carbon dioxide emissions could be significantly reduced worldwide. And
without energy subsidies, energy prices would rise, encouraging the use of more efficient
vehicles and industrial equipment and reducing pollutant emissions. In some countries,
there are also subsidies for the import of second-hand equipment, which may encourage
the purchase of outdated and inefficient technologies.

Government agencies and public institutions are major purchasers of a wide variety of
goods and services. Some estimate that up to 20 per cent of purchases in any country
involve the use of public funding. As a result, specifications for government purchasing
tend to have a significant effect on how suppliers design their products and their
characteristics. The Government has an opportunity to influence its suppliers towards the
use of technologies for Cleaner Production and products by means of its purchasing
behaviour, specifications for goods and a simple statement declaring that the promotion
of Cleaner Production and products is government policy.