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The Development Economics Research
Group
The World BankJune 2001
Six Years of Collaboration
Philippines
China
Mexico
Colombia
India
Brazil
Indonesia
The Development Economics Research
Group
The World BankJune 2001
Regulators The Law
Plants
• Regulatory Standard
Traditional regulatory model
But in DCs, environmental regulator have difficulties
• Limited Human and Technical Resources
• Limited Information and Analytical Capacity
• Little Political Support
A standard conclusion…. • There is nothing the regulator can do.
And polluters have a good time.
A standard conclusion…. • There is nothing the regulator can do.
And polluters have a good time.
Another standard conclusion…. • The country will have to reach higher levels of
income before seeing the environment improving.
Challenges these standard conclusions: It does not have to be like
that.
Three Approaches That Work
(Without Sacrificing Growth)
• Pollution Charges / Economic incentives
• Public Disclosure
• Environmental Management
Public Disclosure Systems
Indonesia
Philippines
Mexico
Current
India
NGOs
Plants
Community
Informal Regulation
Elements
• Power• Social Norms• Negotiations
Plants Elements
• Reputation• Credit• Profits
Consumers
Investors
Markets
Markets as Regulators
Bad News
0
10000
20000
30000
40000
50000
60000
Date
Stoc
k P
rice
in M
exic
an P
esos
Mexico: Government fines Kimberly-Clarkfor a water pollution violation.
5/18
/92
5/20
/92
5/22
/92
5/26
/92 5/
28/9
2
6/01
/92
6/05
/92
6/09
/92
6/11
/92
6/15
/92
6/17
/92
Good News
10.0015.00
20.0025.00
30.0035.0040.00
45.0050.00
55.0060.00
Date
Sto
ck P
rice
in P
hil
ipp
ine
Pes
os
Philippines: Regulatory authority highlights San Miguel Corporation’s environmental commitmentand the installation of pollution control equipment.
1/25
/91
1/31
/91
2/06
/91
2/18
/91
2/22
/91
2/26
/91
3/06
/91
3/12
/91
3/18
/91
3/22
/91
2/12
/91
Some Impacts of Public Information
Citizens NGO’s Consumers Investors
Media Pressure
Reputation Personal
Contact
Demonstrations Direct
Negotiations Political
Pressure
Product Choices
Price Sensitivity
Lending Liability
Stock Valuation
Chemical Release Inventories
• Publicly available (publications; online)
• Focus on toxics, not regulated pollutants
• Provide detail on releases, but not risks
• Include a broad spectrum of toxicity
• Take no position on environmental impact
• Leave interpretation to others
– e.g., www.scorecard.org
Interpreting theUS Toxic Release Inventory
Toxic Polluters in Baltimore
SouthBaltimore
FMC Corp
Benjamin FranklinMiddle School
Who’s Next Door?
Facility I nformation1996 Facility Name: FMC CORP.
Current Envirofacts Facility Name: FMC CORP.Mailing Address: 1701 E. PATAPSCO AVE., BALTIMORE, MD 21226
Public Contact: J ACKIE SILVERPhone: (410) 355-6400
SIC Code: 28 Chemicals And Allied ProductsFacility Status:
1996 Parent Company: FMC CORP.Current Envirofacts Parent Company: FMC CORP.
Latitude: 39.23Longitude: -76.58
Facilities are encouraged to respond to the information presented in Scorecard
1996 Rankings: Major Chemical Releases or Waste Generation at This Facility*
In 1996, this facility ranked in the top 20% of all facilities in the US in terms of cancer hazards
In 1996, this facility ranked in the top 20% of all facilities in the state in termsof
air releases of suspected gastrointestinal or liver toxicants air releases of suspected respiratory toxicants air releases of suspected skin or sense organ toxicants total air releases
FMC’s Plant
1996 TRI Pollution Releases Sorted by Health Effect*Air Releases
(Pounds from TRIsources)
Recognized Carcinogens 22,310Suspected Carcinogens 475Suspected Cardiovascular or BloodToxicants
26,760
Recognized Developmental Toxicants 1,347Suspected Developmental Toxicants 25,445Suspected Endocrine Toxicants 391Suspected Immunotoxicants 2,289Suspected Kidney Toxicants 26,795Suspected Gastrointestinal or LiverToxicants
75,977
Suspected Neurotoxicants 51,366Suspected Reproductive Toxicants 3,128Suspected Respiratory Toxicants 53,725Suspected Skin or Sense Organ Toxicants 53,571
FMC’s Response to TRI?Toxic Releases, 1988-1996
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1988 1990 1992 1994 1996
Lbs
A+
B
D
F
A
Indonesia’s PROPER
BAPEDAL’s Five-Color
System
GREEN
BLUE
RED
BLACK•No pollution control effort,•Serious environmental damages
•Clean technology, waste minimization, pollution prevention
•Efforts don’t meet standards
•Efforts meet minimum standards
•Above standards & good maintenance, housekeeping
GOLD
PERFORMANCE CRITERIAPERFORMANCE LEVELS
Very Good
Compliant
Non-Compliant
Very Poor
PROPER: FIRST RATINGS
-100
-80
-60
-40
-20
0
20
40
60
80
PROPER RATINGS:% CHANGE AFTER 18 MONTHS
Jun-95 Dec-95 Dec-96Jun-95 Dec-95 Dec-96
32% 39%47%
62%
58%
47%
•Green factories increased from 4 (2%) to 7 (4%)
•Black factories decreased from 6 (3%) to 3 (3%)
•Overall compliance rate increased from 34% to 50%
Average BOD Conc. (187 fac.)
154 mg/L
1995 1996
268 mg/L43%
Reduction
Impact of PROPER on Ratings and PollutionImpact of PROPER on Ratings and Pollution
Blue & Green Red & Black
PHILIPPINES ECOWATCH RESULTS
ECOWATCHRATINGS
World Class
Very Good
Compliant
Non-Compliant
Very Poor
APRIL 1997 NOVEMBER 1998
3 Broad Results • The conventional policy discussion focuses on State/Factory
interaction as determinant of performance. This discussion is too narrow.
• Interaction and pressure of various agents explain a plant environmental performance: regulators, communities, markets.
• Communities and markets need timely and accurate information to play their role.
State
Markets Community
The New Model:Multiple Agents, Multiple Incentives
• Focus on Information Products
• Orchestrate, Don’t Dictate
• Increase Community Involvement
• Learn From Policy Experiments
New Approachesto Pollution
ControlMultiple Agents,
Multiple Incentives
For More Information:www.worldbank.org/nipr
International Workshop on Public Information Disclosure
Jiangsu EPB
The World Bank
Nanjing, June 21-22, 2001
Implementation Issues
•Selection of Polluters
•Contents
•Performance Benchmarks
•Rule of Aggregation
• Data Collection and Verification
•Disclosure Strategy
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