The Judgment of Garbage: End-of-Pipe Treatment and Waste Reduction

Many scholars have argued that systems for treating waste impede organizations from preventing waste in the first place. They theorize that end-of-pipe (EOP) treatment diminishes the incentive to avoid creating waste in the production process and obscures the information necessary to devise prevention techniques. This prediction has been widely accepted, influencing both policy and practice, despite both a lack of supporting empirical evidence and the existence of a counterprediction. In this paper, we use data describing U.S. manufacturing establishments from 1991 to 2005 to test the connection between EOP treatment and waste reduction. Our findings show that EOP treatment is associated with an initial jump in reported waste, followed by ongoing reduction. We analyze these results by exploring mechanisms that may drive this relationship. For practitioners, our paper provides critical guidance about strategies for reducing waste. For scholars of environmental management, our paper provides new insight on when facilities accomplish “source reduction” of process waste. For broader management theories of operations and organizational design, our analysis provides new insight on boundary conditions for extrapolation from existing theories. Finally, our paper provides new guidance for the formulation of effective regulatory policy. This paper was accepted by Christian Terwiesch, operations management.