Manual on the Development of Cleaner Production Policies ... - Unido

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DEVELOPMENT OF CP POLICY MODULE 4: POLICY TOOLS AND INSTRUMENTS In Latin America, some progress has also been made as a result of voluntary agreements. Examples are the coffee entrepreneurs in Costa Rica and the programme of alcohol addition to gasoline in Brazil, demonstrating that strict regulation of resource use may not be the most efficient way of fostering technological change. EXAMPLE Voluntary agreements and greenhouse gases Voluntary actions on the part of industry, Governments and organizations are achieving small, but measurable reductions in the emission of greenhouse gases. The 2001 studies presented by the World Energy Council and UNEP indicate that the number of new clean energy schemes, government initiatives and renewable energy projects will save each year the equivalent of 1 billion tons of carbon dioxide up until the year 2005. This saving is the equivalent of more than 3 per cent in greenhouse gases emitted in 2000. http://cleanerproduction.curtin.edu.au/ Public education campaigns Public education campaigns have traditionally focused on general environmental awareness. However, recently an increasing number of major educational campaigns are held on reducing waste generation, promoting recycling and the consumption of non-polluting products. In Latin America, more and more initiatives are promoting the efficient use of energy and water, e.g. radio spots on energy savings in Costa Rica. While many initiatives continue to use the traditional media (books, flyers, media of communication), more and more resources are available on the Internet. http://dmoz.org/Science/Environment/Pollution_Prevention_and_Recycling/ SLIDE: Avoid barriers created by new policy instruments Environmental policy instruments supporting end-of-pipe measures can sometimes work against CP and the preventive approach. Example: tax write-offs, or financial support for environmental measures tend to promote “traditional” end-of-pipe control measures. In this slide, note that there is a potential risk with some environmental policy instruments insomuch as they are geared to support end-of-pipe instruments and may work against the preventive approach. Economic instruments, in particular, must be carefully examined to ensure that they do not directly or indirectly discourage investments in Cleaner Production and technology modernization. Background Environmental policy instruments such as financial subsidies (low-interest loans, direct grants, or preferential tax treatment etc.), can be targeted to specific industries in order to stimulate technological PAGE 112
DEVELOPMENT OF CP POLICY MODULE 4: POLICY TOOLS AND INSTRUMENTS development. Governments can introduce policy incentives that reduce the capital cost of the CP investment (tax credit or import tax exemption, for example) or increase the operational benefits of the CP investment (e.g. by the rational pricing of natural resources, environmental charges, lower value added tax on cleaner/more efficient products, etc.). It is important to examine carefully the way that subsidies work to ensure that that they do not create perverse incentives for environmentally counterproductive behaviour. Low-interest loans are often available for pollution control equipment, but not for CP or technology modernization (the latter is considered technological change and not eligible for soft loans). This may explicitly encourage endof-pipe controls over process change investments. A standard economic instrument such as accelerated depreciation allowances may act as an unintended barrier to Cleaner Technology investment by favouring the retention of fully-depreciated assets over reinvestment. Another example is that while the intent of a water pollution charge may be to reduce pollution, it may increase pollution if it is based on effluent concentrations. When deciding on environmental policy in general, and on the choice of instruments in particular, it is, therefore, crucial to consider potential negative impacts of the proposed approach. Ultimately, the idea is to avoid creating distortions or barriers to CP through new instruments. PAGE 113
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Manual on the Development of Cleaner Production Policies ... - Unido

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