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Environmentally Sound Technologies for the Future for the future
1. Dr Steve Halls
UNEP IETC
The Role of Environmentally
Sound Technologies in
Building a Sustainable Future
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Objective of the Presentation
• to facilitate discussion about mechanisms and
approaches for assessing environmental
performance and promoting the adoption and use
of ESTs
• to examine the critical factors that influence
decisions regarding the adoption and use of ESTs,
including the roles of governments, corporations
and the financial community.
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Outline of this presentation:
• Background
• Assessing and Evaluating EST Performance
• Transparent Reporting of Environmental
Performance Information
• Linking Financial and Environmental
Performance
• Environmental Performance Indicators
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• Balancing Voluntary Measures within a
Regulatory Framework
• Other Policy Drivers and Management Tools
• The Assessment and Verification Process
• Conclusions.
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Essential elements of ESTs
Continuous
Services Humans
Preventive Risk
Reduction
Integrated
(air, water, land)
Products
and Process Environ-
ment
Strategy
for
Sustainable
Solutions
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• Encouraging the adoption and use of
ESTs is difficult
• Decisions are usually based on
financial criteria. Environmental
considerations are usually limited to
impact assessments and/or emissions
standards.
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• ESTs require
– new and creative ways of thinking about
products and processes and the continuous
application of strategies to minimise the
generation of wastes and emissions
– mechanisms for innovation and technological
development which reduce negative impacts on
the envaironment
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• Promoting ESTs requires effective
strategies to direct capital towards
local industries and financial
institutions willing to employ
environmentally sound technologies
and practices.
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What are the benefits of ESTs?
Reduced costs / Improved competitiveness
Quality improvements
New market opportunities
Improved working conditions
Enhanced public image
Ease of compliance
Reduced environmental impacts
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• Prevailing attitudes
– End-of-pipe mentality
– Lack of importance given to the environment
• Resistance to change
• Lack of information
• Institutional barriers
• Economic barriers
• Technical barriers
Barriers to ESTs:
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• ESTs can be economically attractive due
to reduced costs of input materials,
energy and water, and waste treatment
and disposal, as well as better output
quality.
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• However, the payback periods for
environmentally sound technologies can
be longer than for more conventional
types of investment.
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• The investment community spends
considerable time and money to
maximize returns over short investment
periods. Environmental factors are
generally viewed within the context of
liability.
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• Environmentally sound technologies and practices
which go beyond compliance usually receive limited
attention in the valuation process.
• This is also the case for many of the beneficial
ecosystem services provided by nature itself.
• Consequently, the business rationale for and expected
financial outcomes associated with environmentally
sound technologies are seldom emphasized.
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Environmental performance of ESTs is not
well understood.
• inadequacy of information and
decision support tools
• complexity of factors that influence
decisions.
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• Linking environmental practices and
programs to commercial success in a
financially credible manner can have
profound implications for how
environmental performance information
is collected, analyzed and
communicated.
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Promoting the Adoption and Use of ESTs
OUTCOME: Economically viable, environmentally appropriate investments and
improvements in environmental quality
CHALLENGE:
the adoption and use
of ESTs
ECONOMIC
CRITERIA
SOLUTION: effective
assessment and reporting
of economic and
environmental
performance
ENVIRONMENTAL
CRITERIA
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Users of Environmental Performance Information
• primary expectation is that the information
reported should be a reasonable
representative of reality
• providers of information should be
accountable for reporting in a meaningful
way.
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• Information must be sufficiently
frequent, complete and reliable for
stakeholders to assess on a timely basis
the extent to which their expectations of
performance and impact are being
satisfied.
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• Unaccounted for costs include the costs to society
of various forms of environmental degradation or
depletion of natural resources. Equally
overlooked are the benefits of ecosystem services
which arise as a result of the adaptive and
assimilative capacity of nature itself.
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• Financial performance measures alone send
incomplete signals to the marketplace
regarding sustainability of the
environmental capital base.
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One option would be to provide financial
stakeholders with environmental
performance information that is:
• relevant
• reliable
• timely
• comparable between organizations
• as verifiable as the financial information
to which they are accustomed.
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Environmental Performance Indicators
An Environmental Performance Indicator
(EPI) measures and indicates some aspect of
environmental performance and can serve as
an important reporting and evaluation tool.
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Quantitative EPIs
• Absolute EPIs report the basic data with little or no
manipulation (e.g., total energy consumed/year).
• Relative EPIs are normalized to some aspect of
production outputs, inputs, or a previous year (e.g.,
total energy consumed/barrel of oil produced/year).
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Two prerequisites to make
environmental considerations a routine
part of investment and lending decisions
• a clear, quantifiable link must be made between
environmental and financial performance
• a standardized framework to guide reporting.
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A unified reporting framework that embraces
transparency, comparability and
completeness should include a minimum set
of four environmental performance
indicators:
• materials use
• energy consumption
• non-product output
• pollutant releases.
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Life Cycle Assessment
Life Cycle Assessment (LCA) attempts to
determine the environmental impact of a product
or service through all its life cycle stages:
• extracting and processing raw materials
• manufacturing
• transportation and distribution
• use/reuse
• recycling and waste management.
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Productivity and Energy Intensity
Organizations in several countries have
already implemented indicators for material
productivity and energy intensity.
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Valuation of Ecosystem Services
• the conditions and processes through
which natural ecosystems sustain and
fulfil life.
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Many of the services provided by ecosystems
are usually external to the decision-making
process. As a result, the habitats that support
complex ecosystems tend to be taken for
granted, marginalized or priced too low in the
absence of public intervention, since the
inherent social and environmental benefits are
not considered.
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Public awareness of the value of these
ecosystem benefits is essential for the
development and implementation of policies
for the protection of important habitats. It is
therefore important to determine the value of
these services, especially in relation to ESTs.
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Balancing Voluntary Measures within a
Regulatory Framework
Greater clarification of existing environmental
rules and regulations and better coordination and
harmonization with international standards
requires both voluntary approaches and a
regulatory framework.
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Voluntary initiatives require clear,
measurable objectives, baselines and
targets to inform decision-makers and to
provide a basis for monitoring, evaluation
and reporting.
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Voluntary Initiatives
• can be implemented as sector-based initiatives
• can serve as a complement to other policy
levers, including regulation and market forces,
providing innovative, more flexible
approaches in meeting existing or potential
policy requirements.
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Voluntary Initiatives - Strengths
• Market-based
• Benefits for participants
• Potential for partnerships
• Flexibility
• Spillover effects
• Opportunities for significant
environmental results
• Potentially lower costs than regulations.
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Consideration must also be given to the
factors which encourage or impede
progress. These include the existence of
incentives to action, motivation, drivers,
barriers to progress and the presence of
disincentives.
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It is important for voluntary initiatives
to be:
• performance-based
• transparent in design and operation
• developed and implemented in a
participatory and equitable manner.
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Regulations can also help structure markets.
• voluntary emissions trading activities
• voluntary measures that directly address product
design (e.g., by regulating the use of certain
resource intensive materials and processes)
• environmental attributes of products (e.g.,
pollution prevention planning requirements, and
user pay and extended producer responsibility
policies).
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Regulations
• encourage EST innovations by setting the
environmental standards to be met without
specifying the technologies to be employed
• encourage industries to initiate voluntary
measures based on efficient, economical and
environmentally responsible approaches that
support sustainable development objectives.
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Marketplace Policies
• help ensure a fair and efficient marketplace,
and promote an economic climate conducive
to continued innovation and growth.
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Procurement
Governments and corporations help create
markets for emerging technologies through their
procurement policies, R&D, demonstrate
technology, establish performance benchmarks,
and encourage training can help accelerate the
development and application of environmentally
sound technologies.
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Capital Budgeting
• shifts the emphasis of capital budgeting
towards ESTs
• includes the use of management accounting
systems, techniques and practices which take
into account environmental costs and
benefits for projects that incorporate ESTs.
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Governments can also introduce policy
incentives to:
• reduce the capital costs of ESTs (e.g., through
tax credits)
• increase the operational benefits of these
investments (e.g., by rational pricing of
natural resources, environmental levies,
preferential taxation, etc.).
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Environmental Management Systems
• An Environmental Management System (EMS)
provides a systematic way to ensure environmental
issues are managed consistently and systematically
throughout an organization.
• An EMS can also assist an organization
comprehensively address environmental issues and
obtain greater credibility with government and
customers.
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EMS and Continuous Improvement
Organizational
Objectives
Environmental
Objectives
Sustainable
Solutions
EMS
Intervention
Continuous learning,
innovation and
improvement
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Environmental Impact Assessment
and Project Planning
An important planning and decision-making tool
used by governments and companies in striving to
achieve sustainable development objectives by
identifying, assessing, and where possible, planning
to minimize these effects before irreversible
decisions are made.
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Technical Assistance
Accelerate and enhance the use of "best practices" and
environmentally sound technologies, including the
adoption of newly developed technologies that are not
yet in widespread use.
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Examples of technical assistance:
• the development and implementation of
life cycle costing methods
• supplier databases
• technical demonstrations
• procurement strategies.
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The Assessment and Verification Process
• Independent third parties can provide some
assurance as to whether the reported
information satisfies the criteria established to
reflect expectations about that information.
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Assessment and Verification Involves:
• dialogue and consultation with and among users
• consensus as to what is reasonable to expect in terms of
assurance and verification, and the means of obtaining
this
• verifying conformity.
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Voluntary Mandatory
Self-
Assessment
• Corporate Environmental Reports
• Self-Labelling
• Self-Declarations
• Hazard Warning Labels
• Information Disclosures on
Regulated Substances
Third Party
Assessment
• Environmental Technology
Verification (ETV)
• Environmental Labelling Generated
by Third Parties
• ISO Certification
• Testing and Inspection for
Regulatory Compliance
Some Environmental Performance
Assessment Approaches
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Advantages of third party assessment and
review include
• reduced uncertainty
• transparency and
• enhanced market acceptance.
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Monitoring
• The data acquisition process for a project,
technology, process, sector or within an
organization.
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Auditing
• The checking of data through internal
mechanisms (to evaluate a technology,
project, process, or an organization) or
through external mechanisms (to report
an achieved value or level of
performance).
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Verification
• The output of an external, third party entity,
having independently evaluated internal
data and undertaken sufficient quality
assurance and control to validate the data.
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Certification
• The output of an external, third party
agency, having independently evaluated
conformity or compliance with specific
requirements set out in particular standards.
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Accreditation
• The role of a recognized, independent
authority to set performance standards for
certification entities.
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The Need for International Standards
Well-defined, internationally agreed and
harmonized standards for social and public
policy issues, such as the protection of
privacy, preservation of the environment, and
the promotion of health and safety, serve to
positively shape society.
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Mutual Recognition Agreements (MRAs)
between and among accreditation and certification
organizations can help to address these issues in
some markets by reducing redundant testing and
certification procedures, thereby lowering costs,
reducing delays and expanding trade
opportunities.
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Verification
Verification is the process of determining,
through application of guidelines or pre-
determined criteria and, substantiated by
investigation, statistical analysis and other means,
that a program, project or technology is
technically sound and will produce the results
described in a performance claim.
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Not an isolated process
It is part of a larger system that includes
monitoring, auditing, certification and
accreditation.
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• Credibility - The process should involve credible organisations
working in conjunction with internationally recognized bodies
that accredit competent organizations to verify and certify.
• Transparency - The process should be open and transparent with
information shared amongst interested parties.
• Compatibility - Verification guidelines should to be relevant to
national and international applications.
• Continuous Improvement - The verification system should be
designed to accommodate continuous improvement, taking into
account new, emerging information and knowledge.
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Certification
• Certification adds value because it is based
on the results of tests, inspections and audits
carried out by a competent (i.e., accredited or
registered) third party.
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Two types of certification
• Product certification – attests that a
technology, product or process complies
with specifications set out in particular
standards
• Organizational certification – demonstrates
that an organization’s services, policies and
procedures conform to specific
requirements set out in particular standards.
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Accreditation
• Accreditation is the means that an
authoritative body uses to give formal
recognition that an organization is competent
to carry out certain tasks.
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1. The inadequacy of information and
decision support tools used to quantify
and qualify the merits of environmentally
sound technologies represents a
significant challenge.
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2. The effectiveness of ESTs depends on
having broad-based, expert input into
their development, adoption and ongoing
monitoring. Governments, the private
sector and citizens must be involved.
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3. Systems for collecting, synthesizing
and feeding back information and
knowledge must be developed and
maintained.
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4. Decision makers require transparent,
credible information on which to base
their decisions. Third party performance
assessment mechanisms such as
verification and certification provide a
means of addressing this need.
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5. Well-defined, properly applied
standards and verification processes can
enhance the effectiveness and
compatibility of different mechanisms
and approaches for assessing
environmental performance and
encouraging the adoption and use of
ESTs.
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6. Continuous review and evaluation of
the effectiveness of standardization and
verification processes can contribute to
the creation of an effective system that is
responsive to changing social, economic
and political realities.