WC Archive

Why would companies want more regulation? Much of it is a desire for consistency, a "level playing field." Companies doing business in both more-regulated and less-regulated areas often find that meeting multiple rules can be costly. Greater regulation can end up being less of an issue than diverse regulation. This is one of the reasons that even the CEO of Duke Energy called for federal carbon taxes -- so as to avoid 50 different state tax schemes.

Many businesses are starting to see environmental regulations as a trigger for savings, rather than as a cost. some biz end up shifting to higher-standard goods generally, as they often find that the efforts to make a product more recyclable or rely less on toxic substances can lower production costs. As we noted back in February, many companies shifting material use to meet the EU standards are finding that it gives them an opportunity to re-examine their entire production process, for the better:

Designers also try to reduce the number of parts or materials used in a single product, making it simpler to sort and recycle."Four years ago, we did a survey of our usage of plastic resin," Thompson said. "We were using way too many grades of polystyrene. We standardized on a limited number."A 1984 Panasonic television, for instance, had 13 types of plastics, 39 plastic parts and took 140 seconds to take apart. The 2000 model contained just two types of plastic, eight plastic parts and took 78 seconds to disassemble.

Once companies start to see the benefit of adapting to environmental regulation, some find that it makes sense to meet even more stringent standards well before tighter rules are scheduled to kick in. Daimler-Benz, for example, is already ahead of the curve on meeting EU standards:

In 2007, networks set up by carmakers in the European Union must be ready to accept all scrap vehicles, regardless of age, at no cost to the car's last owner. In 2015, the portion of each vehicle that should be recycled increases to 95 percent.

Despite the complexity of construction and wide variety of materials in new vehicles, reducing potential waste to just 5 percent can be accomplished without the need for technological breakthroughs. For instance, the 2007 Mercedes-Benz S-Class sedan, which made its debut at the Frankfurt auto show last week, will comply with the 2015 regulation, the company said. The car was designed with recyclability as a goal, with materials selected for ease of processing from the beginning of its development.

And, of course, some companies find it simplest to fight. As Grist recently noted, the aggressiveness of the EU environmental regulations is a bit much for some US companies:

The law [REACH] has had chemical companies and their allies in a blue funk for some time. Thomas Donohue, president of the U.S. Chamber of Commerce, made his feelings known recently with typical American tact: "We're going to sue the hell out of them on some of this stuff."

Even if such lawsuits temporarily prevail, it's a losing battle. We're now starting to see more environmental regulations at the state level in the US, from electronic waste "take back" laws to appliance efficiency regulations. In 2005 alone, nine states adopted appliance and device efficiency standards, and four more have pending action -- see p. 6 in this presentation from the California Energy Commission's John Wilson (PDF). Although California has been particularly assertive in this arena, the states of the US Northeast are also very active.

The necessary transition to cradle-to-cradle and zero waste manufacturing isn't going to be easy, and some steps may end up being expensive enough initially to cause concern about relative competitiveness against those who don't shift. Such a transition requires a great deal of thought and planning; ultimately, the role of regulation is to provide both space and direction for companies moving towards a bright green model.