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Implementing Cleaner Production 137
Box 1. Examples of Cleaner Production pended solids. Three specific investments were rec-
ommended, at a total cost of US $11 million and with
China payback periods of 14–24 months.
completion of the audits or investigations. This ous industry and governmental efforts have
figure is increasing as experience is gained in been made in the United States and Europe.
designing programs and overcoming barriers to The emphasis in developing countries has been
implementation. For example, in focused, sus- on providing access to the necessary technical
tained programs, it appears to be possible to ob- expertise to identify CP opportunities, princi-
tain implementation of 30–50% of recommended pally through the establishment of Cleaner Pro-
measures, representing more or less the full set duction Centers. Several major initiatives are
of no- or low-cost improvements.2 under way, supported by the UNEP, UNIDO, and
bilateral agencies.
Promotion of CP
World Bank Experience
Pollution prevention has been around for some
time (Dow Chemical’s 3P program in the United Experience within the World Bank has been in-
States is now 20 years old). Over this period, vari- creasing, with the focus on assisting country gov-
138 IMPLEMENTING POLICIES: INDUSTRIAL POLLUTION MANAGEMENT
ernments to promote and develop the use of CP • A credible enforcement system to provide
in industry. Prevention of industrial pollution backbone for the regulations
was included in the Metropolitan Environmen- • Targeted measures to assist enterprises in
tal Improvement Program (MEIP) in the cities of adopting cleaner production.
Beijing, Manila, and Mumbai. The first major
project was in China, and a significant program Enterprise Characteristics
has been completed in the Philippines. CP ele-
ments are now increasingly being included in a Firms respond in different ways to the incentives
number of World Bank industrial and environ- provided by the government and by the market.
mental projects (for example, in Bolivia, India, It is possible to suggest two extreme types of firm
Mexico, and Tunisia). that have different characteristics and require
different approaches.
Critical Success Factors At one end of the spectrum are enterprises that
are operating in a highly differentiated market
Two major issues have to be addressed in devel-
in which product quality is important. Such firms
oping an effective CP program.
focus on quality, product improvement, and
• External incentives. An appropriate government brand and company image. They typically have
policy and regulatory framework must be in high-quality management, are responsive to ex-
place to provide effective incentives for firms ternal changes, and concentrate on revenue en-
to adopt cleaner production. hancement. These firms can be characterized as
• Response of the firms. In many cases, firms are dynamic, in a literal sense, because their processes
slow or incapable of responding to the incen- and methods have to evolve continually if the
tives, and it may be appropriate to assist the enterprises are to maintain their position in com-
firms to adjust. The approaches adopted will petitive markets.
vary considerably, depending on the charac- At the other end of the spectrum are firms that
teristics of the sector and of the firms involved. can be characterized as static because their pro-
cesses and markets change very slowly. Included
It must be emphasized that CP is only one of a
in this category are small firms that are price tak-
number of possible components of a government
ers in a mature industry. They use traditional and
industry and environment strategy, and it is only
relatively simple production methods, focus on
one of the approaches that an enterprise can
cost minimization, are often undercapitalized,
adopt to improve its environmental and finan-
and lack depth in management. This group in-
cial performance.
cludes many of the traditional polluting sectors
such as electroplating and tanning.
Appropriate Government Framework
Large state-owned enterprises (SOEs), espe-
cially in heavy industry, can also often be char-
A number of key characteristics of the govern-
acterized as static. They typically operate in mono-
ment framework required for the promotion of
polistic markets, and their management is
CP have been identified:
frequently extremely bureaucratic. A classic ex-
• A broad macroeconomic context that sets real ample of failure to take advantage of CP opportu-
resource prices, encourages investment in new nities is provided by a major state-owned chemical
technology, and supports an orientation to- plant in Sub-Saharan Africa, as described in Box 2.
ward export markets, thus providing strong The approaches required to introduce and dis-
incentives seminate new processes are very different in dy-
• A predictable and flexible regulatory regime namic and in static firms. Information and
under which predictability will encourage in- incentives will be most effective in the dynamic
vestment in pollution management and flex- enterprises. Static enterprises require a blunter
ibility will allow enterprises to adopt the most approach because the management is typically
cost-effective solutions much less responsive to incentives.
Implementing Cleaner Production 139
Many, although by no means all, SOEs are static, Build Consensus and Support
in the sense used here. They are inefficient, as a
result of lack of competition and of hard budget All the players—environment and industry min-
constraints and because management priorities istries, industrial associations (including suppli-
rarely include efficient use of resources. Such ers and subcontractors), union or labor
enterprises are typically significant polluters, organizations, and relevant civic and environ-
with large opportunities for CP gains. mental groups—must be involved. Table 1 lists
Restructuring or privatization of such SOEs key players and what their roles could be.
should include audits to identify CP opportuni- It is crucial that the private sector be involved
ties. Experience demonstrates, however, that new in the process in the early stages because of the
140 IMPLEMENTING POLICIES: INDUSTRIAL POLLUTION MANAGEMENT
Environment ministry Establish environmental objectives; design Establish clear framework of long-term en-
regulations; negotiate sector agreements. vironmental objectives and requirements.
Industry ministry Mobilize sectors and identify necessary re- Identify and promote appropriate technol-
sources. ogy; support improvements in management.
Finance ministry Review resource pricing and incentives; Consider environmental objectives in de-
support discharge fees and similar instru- signing fiscal instruments for industrial pro-
ments. motion.
Local government Negotiate site-specific agreements that ad- Ensure that infrastructure exists that encour-
dress environment, employment, and lo- ages cleaner industry (waste disposal and
cal concerns within a sector framework. recycling, educated work force, etc.).
Broadly based busi- Accept and promote the concepts of Identify and build links with relevant over-
ness organizations cleaner production; support sector initia- seas organizations and firms; advise busi-
tives; encourage involvement of financial ness on suitability of incoming technologies;
institutions; sponsor management im- promote development of indigenous firms to
provement. provide services in CP.
Sector associations Accept and promote concepts of CP and Provide advice and support for the adop-
cooperate in identification of technologies tion of appropriate new technologies and
that are locally relevant to the sector. management approaches.
Trade unions Assist in identification of issues and op- Promote continued training of work force in
portunities: upgrade work-force skills. necessary skills and attitudes.
Academic institutions Provide independent advice; conduct re- Develop technical and management skills
search on local problems. to drive local initiatives in clean technology.
Suppliers Provide advice on alternative equipment Develop cleaner alternatives.
and materials.
NGOs Transmit local community viewpoints and Mobilize public support for improvements
priorities; assist in monitoring progress; and new techniques; encourage informed
reach firms and groups that are outside wider debate on issues and options.
the structured industry associations.
World Bank and other Assist in designing and planning schemes; Assist in developing industrial policy and
multilateral financial provide technical assistance and access promoting transfer of information and tech-
institutions to funding. nologies; facilitate dialogue between public
and private sectors.
direct impacts on industry and because of the becoming less relevant, and improvement in one
potential role that the private sector can play in often brings benefits to both (Box 3).
initiating and developing process and opera-
tional changes to achieve CP goals. It is impor- Set Clear Objectives
tant to aim for high-level commitment from
industry, as well-intentioned operatives at the In order to concentrate efforts and to pave the
bottom of the management system have limited way for the important short-term successes that
influence. can establish the credibility of a program, the fo-
It is also essential to involve the work force in cus should be on a small number of specific tech-
the program. The distinction between the work- nical objectives that are relevant, feasible, and
ing environment and the general environment is measurable.
Implementing Cleaner Production 141
• Establishment of a successful fund is complex bitious than simply achieving a minimum num-
and time consuming and requires high-level ber of CP projects. At the very least, a CP cam-
involvement from environmental and indus- paign can be used as a starting point for
try authorities. identifying and monitoring environmental prob-
• Any subsidy or grant component is best used lems, for developing the technical analysis and
to assist in identification of opportunities and the business plans required, and for building con-
preparation of detailed proposals. Finance for fidence between the government, enterprises,
the actual investments should be as close to and bankers.
commercial rates as possible, to avoid distort-
ing investment decisions. Governments’ Role in Promotion
• The routine operation of the finance facilities
can be contracted to commercial banks. Expe- The development of capability in industrial man-
rience to date, however, has been poor, with agement at a national level should be supported,
the rate spread available and the volume of together with the capacity of the government to
business often insufficient to ensure serious in- influence the direction of technology cooperation.
volvement by the banks. CP is essentially a subset of good management
• The main obstacle in finance appears to be not practices and perhaps is best supported in this
lack of funds but rather the difficulty in turn- broader context.
ing engineering reports into financial propos-
als. Overcoming this shortcoming will require
World Bank Involvement
assistance to enterprises in learning how to
prepare proposals and training of bankers to
be more receptive to requests for environmen- The World Bank can support the objectives of
tal funding. cleaner production in a number of ways:
• Care must be taken so that the availability of • It can continue to stress the need to achieve
finance does not attract relatively high-cost CP real economic levels of resource prices, includ-
proposals and distract the enterprise manage- ing fees and charges.
ment from mundane but more cost-effective • Good practices in ecoefficiency, in its many as-
housekeeping and management changes; pects, should be required in projects funded
• In many cases, the initial sums required are directly by the World Bank.
often small, perhaps a few thousand dollars. • The development of capability in industrial
Very simple procedures must apply to such management at a national level should be
loans if the transaction costs are not to be pro- supported, together with the capacity of the
hibitive. There is a need to develop mecha- government to influence the direction of tech-
nisms that will allow financiers to accept nology cooperation.
greater risk with such small loans, perhaps • Assistance might be provided to specific local
through unusual endorsement procedures or or national CP initiatives and organizations,
by developing a portfolio approach that will through their use as specialist consultants or
absorb the inevitable nonperforming loans. by assisting such organizations to become self-
supporting.
The Broader Context • The World Bank may have a particular role
in assisting in the increased productivity and
As noted, CP is only one element in improving environmental performance of the small-
industrial environmental performance. Never- scale and informal sectors, where adoption
theless, developing and implementing a CP pro- of improved methods is often very uneven
gram can be an effective context for developing and where the social issues are especially im-
environmental awareness and building the nec- portant.
essary skills to undertake a wider range of envi- • The World Bank can provide funding for CP
ronmental improvements. For this reason, a projects, but its greatest contribution might be
government strategy for CP should be more am- in the design of such funds and in environ-
Implementing Cleaner Production 143
mental awareness raising and training for the ous Wastes include the establishment of re-
commercial banks and other financial interme- gional centers in Central America that would
diaries. provide advice, particularly related to waste
• Information exchange and networking are minimization.
critical. The World Bank may help, but it is not • The UNEP Industry and Environment office
obvious that it should take the lead. in Paris has been the leader in the promotion
of CP. It publishes a Cleaner Production news-
Additional Resources letter and a range of related documents. The
address is:
A wide range of activities is under way, and it is UNEP IE
not possible to provide a comprehensive list. Tour Mirabeau
Much of the basic work has been carried out by 39-43 quai Andre Citroen
international and bilateral agencies, which 75739 Paris CEDEX 15, France
should be the first point of reference for further Telephone: 33-1-44-37-14-50
information. For example: Fax: 33-1-44-37-14-54
• A joint UNEP/UNIDO program is establish- • World Bank work on CP in Asia has been co-
ing National Cleaner Production Centers ordinated through the CP unit in the Asia Tech-
(NCPC) to provide a focal point for CP efforts. nical Department. General advice on the
Centers are being set up in China, the Czech implementation of CP can be obtained from
Republic, India, Indonesia, Mexico, the Slovak the Environment Department through the
Republic, Tanzania, and Zimbabwe, and sev- Technology and Pollution Policy Unit.
eral others are under negotiation.
• The EP3 Program, funded by USAID, has set Notes
up local operations providing technical assis-
tance and carrying out audits in Chile, Egypt, 1. Reported figures for the textile industry in one
and Tunisia. Other initiatives have been pro- South American country indicate that 38% of the plants
posed, for example, in Bolivia. have treatment systems installed but that more than
• Bilateral donors are financing a range of CP half of these were not operating properly, reducing the
effective share of plants with treatment to about 17%.
efforts, including waste minimization audits
2. Examples include the Dutch PROGRES project,
and provision of technical assistance. For ex-
the World Bank China CP project, and Norwegian/
ample the Norwegian and U.S. governments USAID programs in Central and Eastern Europe.
are supporting a major program in Central 3. It is notable that the Norwegian CP program in
Europe. Poland is reported to have put 20% of its effort into
• Efforts under the Basel Convention on Con- economic and financial training rather than technical
trol of Transboundary Movement of Hazard- analysis.