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Searching for the Profit in Pollution Prevention: Case Studies in the Corporate Evaluation of Environmental Opportunities

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  • Boyd, James

Abstract

The concept of pollution prevention, or "P2," signifies a new, proactive environmental mindset that targets the causes, rather than the consequences, of polluting activity. While anecdotal evidence suggests that P2 opportunities exist and that many have been pursued, there is also the perception that the pace of P2 is far too slow. To explore that claim--and to shed light on barriers to P2 innovation--this paper presents case studies of industrial P2 projects that were in some way unsuccessful. While based on a very limited sample, the evidence contradicts the view that firms suffer from organizational weaknesses that make them unable to appreciate the financial benefits of P2 investments. Instead, the projects foundered because of significant unresolved technical difficulties, marketing challenges, and regulatory barriers. Based on evidence from the cases, the paper concludes with a discussion of environmental policy reforms likely to promote P2 innovation.

Suggested Citation

  • Boyd, James, 1998. "Searching for the Profit in Pollution Prevention: Case Studies in the Corporate Evaluation of Environmental Opportunities," Discussion Papers 10614, Resources for the Future.
    • Handle: RePEc:ags:rffdps:10614
    DOI: 10.22004/ag.econ.10614
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    References listed on IDEAS

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    1. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    2. Rick Antle & Gary D. Eppen, 1985. "Capital Rationing and Organizational Slack in Capital Budgeting," Management Science, INFORMS, vol. 31(2), pages 163-174, February.
    3. Bengt Holmstrom & Joan Ricart i Costa, 1986. "Managerial Incentives and Capital Management," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(4), pages 835-860.
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    Cited by:

    1. Bahar Erbas & David Abler, 2008. "Environmental Policy with Endogenous Technology from a Game Theoretic Perspective: The Case of the US Pulp and Paper Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(3), pages 425-444, July.
    2. Thomas P. Lyon & John W. Maxwell, 1999. "Corporate environmental strategies as tools to influence regulation," Business Strategy and the Environment, Wiley Blackwell, vol. 8(3), pages 189-196, May.
    3. J. P. Richards & G. A. Glegg & S. Cullinane, 2004. "Implementing chemicals policy: leaders or laggards?," Business Strategy and the Environment, Wiley Blackwell, vol. 13(6), pages 388-402, November.
    4. Eva Regnier & Craig Tovey, 2007. "Time horizons of environmental versus non‐environmental costs: evidence from US tort lawsuits," Business Strategy and the Environment, Wiley Blackwell, vol. 16(4), pages 249-265, May.
    5. Boyd, James, 1998. "The Benefits of Improved Environmental Accounting: An Economic Framework to Identify Priorities," Discussion Papers 10609, Resources for the Future.
    6. Lucia Silva‐Gao, 2012. "The Disclosure of Environmental Capital Expenditures: Evidence from the Electric Utility Sector in the USA," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 19(4), pages 240-252, July.
    7. Dorothy Wood & Donald G. Ross, 2006. "Environmental social controls and capital investments: Australian evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 46(4), pages 677-695, December.
    8. Donald G. Ross & Dorothy Wood, 2008. "Do environmental social controls matter to Australian capital investment decision‐making?," Business Strategy and the Environment, Wiley Blackwell, vol. 17(5), pages 294-303, July.
    9. Boyd, James & Manson, Cynthia, 2011. "Attributing Benefits to Voluntary Programs in EPA’s Office of Resource Conservation and Recovery: Challenges and Options," RFF Working Paper Series dp-11-09, Resources for the Future.
    10. Keith Brouhle & Charles Griffiths & Ann Wolverton, 2004. "The Use of Voluntary Approaches for Environmental Policymaking in the U.S," NCEE Working Paper Series 200405, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised May 2004.
    11. Dowlatabadi, Hadi & Boyd, David R. & MacDonald, Jamie, 2004. "Model, Model on the Screen, What's the Cost of Going Green?," Discussion Papers 10806, Resources for the Future.
    12. Dowlatabadi, Hadi & Boyd, David & MacDonald, Jamie, 2004. "Model, Model on the Screen, What's the Cost of Going Green?," RFF Working Paper Series dp-04-17, Resources for the Future.

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    Environmental Economics and Policy;

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