product stewardship: incorporating incentives for design for environment psi forum – june 2009

Pamela Brody-HeineEco Stewardship Strategies

“Design for Environment (DfE) is a general concept that refers to a variety of design approaches that attempt to reduce the overall environmental impact of a product, process or service, where environmental impacts are considered across its life cycle.”

Wikipedia

Eco Stewardship Strategies

“Product Stewardship" is a principle that directs all those involved in the life cycle of a product to take shared responsibility for reducing the health and environmental impacts that result from the production, use, and end-of-life management of the product.


Product stewardship has traditionally focused on end-of-life (EOL) management

Assumed that DfE incentives were embedded in product stewardship/producer responsibility programs, and would be effective

Open question - does producer responsibility (for EOL) truly incentivize DfE?

Most can agree that DfE incentives could be improved!


Question facing the Oregon DEQ as they drafted their Product Stewardship Framework legislation

Small research effort - Design for Environment Incentives: Opportunities within Oregon’s Product Stewardship Framework

The Project Team• Pamela Brody-Heine/Eco Stewardship Strategies

• Wayne Rifer/Rifer Environmental/Green Electronics Council

• Neha Patel


• Research purpose – to explore incentive mechanisms the can be used by government to motivate producers to implement improvements in the environmental design of products.

• So, we asked the following questions:

• Where is DfE explicitly included in product stewardship legislation, programs and/or systems?

• How is the incentive structured?

• Is the incentive working?Eco Stewardship Strategies

Stewardship Ontario - Ontario's Waste Diversion Act Green Dot, Packaging Recovery Organization (PRO) Europe U.K. Waste and Resources Action Program (WRAP) Retail

Innovation Program European Union Integrated Product Policy (IPP) Pilot Projects European Union Eco- Design Directive for Energy Using

Products (EuP) Massachusetts Toxics Use Reduction Act (TURA) Oregon Toxics Use and Hazardous Waste Reduction Program California Green Chemistry Initiative City of San Francisco Regulation Determining Acceptable

Alternatives to Arsenic Treated Wood Illinois Electronic Products Recycling and Reuse Act (SB2313)

Not an exhaustive list!Eco Stewardship Strategies

Contract specification examples such as:◦ Federal government EPEAT requirement◦ King County recycled-content paper◦ South Korea packaging design criteria

Price preference examples such as:◦ State of Alaska recycled-content products◦ King County recycled paper products and re-

refined lubricating oil Eco-Labels and Certifications such as:

◦ EPEAT◦ Ecologo


Must provide three essential functions: Environmental Improvement Objectives –

Clearly define the objectives; the desired outcome in terms of specific improved product environmental performance

Measurement Method – Provide a method of measuring the product characteristics, or the producer’s behavior, in relation to the environmental improvement objectives

Motivational Reward – Institute a set of conditions or consequences that will motivate the producer


Direct Benefit – A financial or other benefit/liability that directly accrues to the producer

Indirect Benefit – A financial or other benefit that is a consequence of improving environmental design, but does not accrue directly to the producer

Marketplace Benefit – An advantage (or disadvantage) in the volume of sales or price

Reputational Benefit – An enhancement of (or detraction from) the producer’s reputation

Threat of Legislation – Avoidance of law or regulation

Based on this research, these incentives have demonstrated the greatest potential:

1.Green purchasing (marketplace benefit)

2.Differential product fees (direct benefit)

3.Stakeholder engagement (reputational benefit)

4.Reporting/disclosure (reputational benefits)

5.Eco-labels/certifications (marketplace benefits)


Promote green purchasing throughout the state government, higher education, and public and private institutions.

Government purchasing could call out specific desired product characteristics or rely on eco-labels.


Essential Functions of an Incentive Mechanism

Example - Paint

Environmental Improvement Objectives

Reduce VOCs in paint. Government purchasing would specify a maximum threshold for VOCs in indoor paint.

Measurement Method Producers would either self-declare that their products do not exceed the threshold, or must provide test data to demonstrate that.

Motivational Reward Only those paint manufacturers with paint under the specified VOC threshold will be able to be a supplier the government.


A variable fee structure

Needs to be logically traced to an incentive

Often linked to activity based costing (cost to recycle, recovery amounts, etc.) and/or types and quantity of material used

Could also be linked to use of an eco-label, degree of transparency in reporting or ingredient disclosure, commitment to a voluntary agreement on DfE



Example - Carpet


1. Increase carpet-to-carpet recycling, motivating manufacturers to incorporate design for recycling considerations.

2. Increase availability of environmentally preferable carpet to consumers.

Measurement Method 1. Producers report the percent of post consumer recycled carpet content in the new carpet.

2. Certification to NSF-140, Sustainable Carpet Assessment Standard

Motivational Reward An internalized 1 cent fee per yard of carpet sold into the state as a registration fee for mandated participation in a product stewardship program. The fee could be waived/reduced for carpet sold that:

Contains a minimum level of post consumer recycled carpet content, and/or

Is certified to NSF-140, Sustainable Carpet Assessment Standard.


Voluntary stakeholder processes to develop voluntary agreements for design and manufacturing improvements (e.g. substance restrictions, reporting and disclosure requirements)

Incentivize manufacturers to improve DfE by exposing their design decisions to the light of day

Could be coupled with differentiated fees



Example - Lamps


Reduce mercury in fluorescent lamps

Measurement Method Using a stakeholder process, develop a set of targets for manufacturers of mercury-containing lamps to reduce mercury.

Motivational Reward An outcome of the stakeholder process could be an annual report and press release that identifies each producer’s progress in phasing out mercury in lamps.

An annual award could also be presented to the producer who makes the most progress.


Producers provide information to consumers regarding the environmental characteristics of their products

Include reporting through mandatory disclosure, or use of an eco-label or product certification

Market will then incentivize the production and design of environmentally preferable products



Example - Any product


Reduce the environmental, health and safety impacts of products throughout their life cycle, such as, impact on climate change, presence of toxic substances, energy efficiency during use, resource utilization, and recyclability

Measurement Method For selected appropriate products, product stewardship systems could include a requirement that all producers shall declare the environmental, health and safety performance of their products to consumers. They could do so by:

Reporting of selected indicators,

Demonstrating conformance to an eco-label, or

Certification to a standard

Motivational Reward Consumer choice will incentivize the production and design of environmentally preferable products.


Expand on the research – perhaps there are more examples and opportunities for DfE incentives

Look for ways to include DfE incentives in legislation and programs

An Opportunity for the Product An Opportunity for the Product Stewardship CommunityStewardship Community



Contact

Pamela Brody-Heine


[email protected]

541-633-7254

product stewardship: incorporating incentives for design for environment psi forum – june 2009

Documents

product characteristics

environmental impacts

dfe incentives

environment dfe

overall environmental

life management

life cycle

life eol management