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Enquete Commission of the German 7 Bundestag on the "Protection of Humanity and the Environmenty' (ed.) 1

Shaping Industrial Society CCf 3 - 9 t

Prospects for Sustainable Management of Substance Chains and Material Flows

A,

Fxonomica Verlag

Enquete Commission of the German Bundestag on the "Protection of Humanity and the Environment" (ed.)

Shaping Industrial Society Prospects for Sustainable Management of Substance Chains and Material Flows

Shaping Industrial Society Prospects for Sustainable Management of Substance Chains and Material Flows

Abridged Version of the report submitted by the German Bundestag's Enquete Commission on the "Protection of Humanity and the Environment - Assessment Criteria and Prospects for Environmentally Sound Product Cycles in Industrial Society"

(Decision adopted at the meeting held on 5 September 1994)

Economica Verlag, Bonn

Die Deutsche Bibliothek - CIP-Einheitsaufnahme

Shaping industrial society : prospects for sustainable management of substance chains and material flows ; abridged version of the report submitted by the German Bundestag's Enquete commission on the "Pro- tection of Humanity and the Enviroment - Assessment Criteria an Pros- pects for Environmentally Sound Product Cycles in Industrial Society" ; (decision adopted at the meeting held on 5 September 19941. [Enquete Commission.of the German Bundestag on the "Protection of Humanity and the Enviroment" (ed.). Transl. into Engl. by: Wolfgang Fehlberg and Monica Ulloa-Fehlberg]. - Bonn : Economica Verl., 1995

(Enquente-Berichte und -Studied Dt. Ausg. u. d. T.: Die Industriegesellschaft gestalten

ISBN 3-87081-374-1 NE: Fehlberg, Wolfgang [Ubers.]; Deutschland / Enquete-Kommission

Schutz des Menschen und der Umwelt - Bewertungskriterien und Perspektiven fiir Umweltvertragliche Stoffkreislaufe in der Industrie- gesellschaft.

The Report entitled "Shaping Industrial Society - Prospects for Sustain- able Management of Substance Chains and Material Flows" has also been published as a special edition by the German Bundestag. Number of the official publication (in German): 12/8260.

Cover pictures by: Bavaria, The Image Bank Translated into English by Wolfgang Fehlberg (aiic) and Monica Ulloa-Fehlberg

1995 Economica Verlag GmbH, Bonn Typesetting by: Computersatz Bonn GmbH Printed by: FARBO Druck & Grafik Team, Koln Cover design by: Dieter Schulz

ISBN 3-87081-374-1

This publication is printed on 100 % recycled paper

Preface

"The secret to achieving major and radical change is to find the small step which is at the same time a strategic step because it will entail further steps towards a better reality. B is no use, therefove, to ridicule the imperfections of today's veal- i t y and to pveadz the ideal as the goal of our every-day life."

(Gustav Heinemann i n a speech delivered to the German Bundestag on 1 'July 1969)

At the end of its work during the 12th legislative period, the Enquete Commission is presenting a second report which represents a further step in the-.direction of creating a national economy oriented towards ecological criteria.

From the onset, the members of the Commission were in full agreement about the sustainable development model, while there were diverging views with regard to the approach to be adopted in order to achieve sustainable development. It is no surprise therefore - in view of the desired structural changes to be initiated - that the Enquete Commission initially limited itself to a critical assessment of the instruments to be applied in order to attain the objectives defined, while it has not yet submitted any final recommendations. After all, the Commission had been asked to consider not only ecological but also economic and social criteria at the same time.

What will a future environmentally sound industrial society look like? What environmental objectives are we pursuing in Germany for this purpose? How should the economic and social objectives be defined? What instruments of information do we need in order to attain these objectives? What use are analyses of entire substance chains, including the recovery of raw materials and their processing up to the manufacturing of finished products, as well as their recycling or disposal?

These and other questions have been answered to a limited extent only in the present report. However, the Commission was able to give more detailed answers to other questions. One of these questions which the Commission dealt with in great depth is the role and relevance of the various players involved in the product chain, extending from the production phase to the recycling or disposal of products. How much responsibility the various players directly involved are willing to assume has a major impact on this restructuring process. This means that responsibility for products will have to be assumed by all the players, ranging from producers to retailers. Even banks and insurance companies are indirectly involved in this chain. Consumers and workers can also considerably foster the restructuring of the economy by using their demand power and by participating in decision-making processes in companies. For this purpose, it is indispensable for the players to have information which will enable them to make ecologically sustainable decisions.

What then is the function of Government in this restructuring process? Its role tends to be more creative, i.e. Government will have to create the appropriate setting. Provisions for specific cases, regulatory orders or prohibitions should not be at the top of the list of options for action. In- stead, market instruments should be used in order to ensure that prices reflect the ecological truth. The use of natural resources must be include& as a factor in the cost accounting of companies. The approaches which can be adopted to this end include not only an ecoloiical tax reform but also permits or liability concepts. These and other instruments will have to be studied by the Enquete Commmission during the next legislative period.

The fact that the Commission members were unanimous in their assessments - with very few exceptions - has motivated them to want to continue their work. For this reason, the Enquete Commission has proposed unanimously that an enquete commission should be established in the 13th legislative period to continue the work that has been begun. The Commission has also defined some of the issues to be dealt with.

If the work of the Commission is continued and if it is accompanied by the broadest possible discussion at all levels of society, this will give all of us an opportunity to develop strategies aimed at making both intergenerational and intragenerational equity a model for a forward- looking policy. Nowhere does one get a clearer idea of what "One Earth" means than if one thinks intensively about how to increase the efficiency of our use of resources and energy, and about the question as to how we can shape our industrial society in future in such a way that it

can serve as a model for the non-industrialised and less industrialised countries, so that we can jointly satisfy our needs in the framework of a new prosperity model and at the same time leave a sustainable world and equal development opportunities to our children and our children's children.

Bonn, 20 June 1994

Ernst Schwanhold, Member of the German Bundestag Chairman of the Enquete Commission on the

"Protection of Humanity and the Environment"

VII

Composition of the Enquete Commission on the "Protection of Humanity and the Environment"

Members

Ernst Schwanhold, Member of the German Bundestag (SPD), Chairman Erich G. Fritz, Member of the German Bundestag (CDU/CSU), Deputy Chairman Professor Dr Immo Lieberoth, Member of the German Bundestag (CDU/CSU) Dr Manfred Lischewski, Member of the German Bundestag (CDU/CSU) Ulrich Petzold, Member of the German Bundestag (CDU/CSU) Professor Dr Norbert Rieder, Member of the German Bundestag (CDU/CSU) Wolfgang Zoller, Member of the German Bundestag (CDU/CSU) Thea Bock, Member of the German Bundestag (SPD) Ulla Burchardt, Member of the German Bundestag (SPD) Marion Caspers-Merk, Member of the German Bundestag (SPD) Reinhard Weis, Member of the German Bundestag (SPD) Dr Klaus Rohl, Member of the German Bundestag (F.D.P.) Professor Dr Jurgen Starnick, Member of the German Bundestag (F.D.P.) Ingeborg Philipp, Member of the German Bundestag (PDS/Linke Liste Group) Dr Klaus-Dieter Feige, Member of the German Bundestag (BUNDNIS / DIE GRUNEN Group)

Professor Dr Holger Bonus Professor Dr Klaus Fischwasser Dr Henning Friege Professor Dr Fritz Hartmann Frimmel Professor Dr Georges M. Fulgraff Professor Dr Helmut Greim Dr Rainer Grieghammer Dr Martin Held

Professor Dr Joachim Klein Professor Dr Paul Klemmer Dip1.-Ing. Dr Adolf von Ropenack Dr Wilfried Sahm Professor Dr Gunter Streibel Jurgen Walter Professor Dr Reinhard Zellner

Secretariat

Friedhelm Dreyling (Director) Dorte Bernhardt Thomas Broszinski Dr Peter Biichler Claudia Engelhardt Ellen Frings Dr Karl Otto Henseling Dr Wolfgang Linden Dr Gisela Luck Barbara Bodde Elisabeth Fischer Christiane Kahlert Ilke Benkel

Table of Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1 The Enquete Commission's Background and Mandate . . . . . . 3

2 Organisational Structure and Methodological Approach . . . . 5

3 Models for a Materials Control Policy . . . . . . . . . . . . . . . . . . . . . 8

. . . . . . . . . . . . . . . . . . . . . 4 Examples of Material Flow Analyses 19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Assessment of Material Flows 37

. . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Substance Chain Management 52

. . . . . . . . . . . . . . . . . . 7 Instruments of a Materials Control Policy 65

8 Recommendation to Continue the Enquete Commission's . . . . . . . . . . . . . . . . . Work During the Next Legislative Period 81

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Introduction

The report entitled "Shaping Industvial Society" (Bundestag Document 12/8260), which was presented by the Enquete Commission on the "Protection of Humanity and the Environment - Assessment Criteria and Prospects for Environmentally Sound Product Cycles in Industrial Society" on 20 June 1994, marks the end of the Commission's work during the 12th legislative period. After two-and-a-half years of extensive stocktaking of challenges and options for action in the field of materials control policy, the report now presents "prospects for sustainable management of substance chains and material flows" (the subtitle of this report).

While committees of inquiry are established by the German Bundestag whenever there is a need to scrutinise and investigate cases of misman- agement, enquete commissions are used as a parliamentary institution to study more complex issues in a cooperative approach which involves the participation of both scientists and practitioners.

The abridged version of the report summarises the Commission's key findings with regard to a blueprint for a future materials control policy. The term "materials control policy" encompasses all of the policies which are pursued with the aim of influencing not only the types of raw materials recovered, as well as their scope and their use, but also the treatment and storage of waste; in order to safeguard a long-term supply of resources for our economy, in view of the finite nature of resources and the limited load-bearing capacity of the environmental media.

1 The Enquete Commission's Background and Mandate

Raw material sources and natural sinks are limited. According to the "Club of Rome", growth is nowadays limited by the environment's limited absorption capacity: in fact, emissions of substances released to the water, the soil and the air have reached such levels that the very basis of our economic and social life is at stake (Meadows et al., 1992). The Enquete Commission is convinced that there is a need for a sustainable materials control policy because environmental risks keep growing in magnitude despite the vast array of legal regulations already in force and despite the manifest success achieved on specific issues. The scope of the problems to be solved can be illustrated by the following catch- words: greenhouse effect, depletion of the life-protecting stratospheric ozone layer, marine pollution, soil degradation, as well as loss of species and biotope diversity. The new environmental burdens also involve new risks for human life, for animate and inanimate nature, as well as for cultural and other goods. Many of these problems are due, to some extent, to our economic system, our exploitation and use of resources, as well as the types and the quantity of waste we produce. The effects which are caused by these problems jeopardise not only the economic but also the social prerequisites for future generations to live and sur- vive economically. Individual citizens usually fail to see these implications because, as producers or consumers, they get into touch with only very few stages of the entire multi-phase and often global life cycles of materials and products. Only an overview of the entire production cycle - beginning with the extraction of raw materials, extending to the production and consumption of products, and including their disposal - will provide insights into the type and the scope of the burdens which the environment is exposed to in a given context.

At its 77th session on 14 February 1992, the 12th German Bundestag adopted a motion tabled by the parliamentary group of the Social Democratic Party (Bundestag Document 12/1951) calling for the establishment of an Enquete Commission on the "Protection of Humanity and the Environment - Assessment Criteria and Prospects for Environmen- tally Sound Product Cycles in Industrial Society". The Commission was given the mandate to develop prospects for a sustainable industrial society by conducting a holistic and systematic analysis of the fundamental threats prevailing. The establishment of this parliamentary enquete commission did two things: it broadened the scope of the energy policy debate which began in the 1970s, and it initiated a discussion in the German Parliament on the outlines of a future materials control policy and sustainable management of substance chains and material flows.

Any future materials control policy will have to take into consideration that the various types of uses of the environment and the level of intensity of this use are closely interrelated with economic and social structures and developments. Two aspects will have to be considered when devising models and strategies for an ecological structural change: the adaptive capacity of the economic and social system, and the limited possibilities of using the environment.

In the German Bundestag's decision to establish the Enquete Commis- sion, the Commission's mandate is defined as follows (Bundestag Docu- ment 12/1951): - To identify the most important problems involved in industrial sub-

stance cycles, including their historical background, and to propose possible solutions;

- To develop scientifically founded and socially acceptable assessment criteria for comparative life-cycle analyses;

- To assess applications, larger substance groups and finished products, both from the perspective of the manufacturing and processing industries, and from the perspective of the final consumer;

- To describe potential alternative development scenarios for the pro- . duction, processing and disposal of substances (paths for the future),

taking into consideration technical, economic, ecological and social parameters;

- To intensify the chemical and industrial policy dialogue in order to improve the conditions for reaching a consensus in society;

- To submit to the German Bundestag recommendations for legislative and political action."

2 Organisational Structure and Methodological Approach

In order to be able to cope with the substantial scope of the work involved, the Enquete Commission decided to set up working groups, hold public and non-public hearings, and conduct an extensive study programme (Enquete Commission on the "Protection of Humanity and the Environment" (ed.) "Umweltvertragliches Stoffstrommanagement - Konzepte - Instrumente - Bewertung - Anwendungsbereiche", 1994).

In terms of methodology, the Enquete Commission adopted two approaches to attain its objective of developing assessment criteria and prospects with regard to environmentally sound substance cycles and material flows. One approach was based on the concept of sustainable development as the overriding model of materials control policy (Chap- ter 3 "Models for a Materials Control Policy"). In addition to pursuing this deductive approach, the Commission also adopted an inductive approach in the context of which it studied examples of material flows in order to obtain findings about ecological, economic and social interdependencies (see chart). The examples selected by the Commission for its material flow analyses included cadmium (a heavy metal), benzene (a carcinogenic hydrocarbon) and substitutes for chlorofluorocarbons (CFCs), in particular the new CFC substitute R 134a. In addition, the Commission studied three more complex fields of application for material flow analyses, i.e. textiles/clothing, mobility and chlorine chemistry (Chapter 4 "Examples of Material Flow Analyses").

In Chapter 5 ("Assessment of Material Flows"), the Enquete Commission discusses the definition of preservation and restructuring objectives and the development of assessment criteria. Verifiable criteria for the assessment of materials control policy options require not only a consensus on normative objectives (i.e. models) but also an examination of their adequacy and practicability. The model of sustainable development makes it necessary for material flows and material conversions to be,assessed on the basis of ecological, economic and social criteria.

In Chapter 6 (Substance Chain Management), the Enquete Commission specifies its views about proactive substance chain management at all levels of responsibility. The purpose of substance chain management is to put into practice the model of sustainable development and the findings from analyses of specific material flows.

In Chapter 7, finally, the Enquete Commission examines the question as to what "instruments of materials control policy" can be used to promote and disseminate substance chain management. The instruments discussed in this context include regulatory, economic, as well as voluntary

and informational instruments. The Enquete Commission draws attention to a need for reforms while at the same time emphasising the need for increasingly using economic instruments which help to allocate the costs incurred by the consumption of environmental resources to the beneficiaries, ranging from producers to consumers. However, the Commission has not been able in the short period of time at its disposal to develop proposals for specific instruments or for a set of measures. Nevertheless, the Commission describes fields in which there is a high- priority need for research and action.

The Commission concludes its report in Chapter 8 by submitting a "Re- commendation to Continue the Enquete Commission's Work During the Next Legislative Period" to the German Bundestag.

Inductive and Deductive Method for the Development of Assessment Criteria

Inductive and deductive methodsfor the development of assessment criteria, as well as recommendations and actions (Enquete Commission on the 'T'rotection ofHumanity and the Environment': 1993)

3 Models for a Materials Control Policy

In its search for suitable models for a materials control policy, the En- quete Commission used the sustainable development concept as a basis. This concept was the core idea of the report "Our Common Future" published by the World Commission on Environment and Development (Brundlandt Commission) in 1987 (WCED, 1987). This concept was further developed at the United Nations Conference on Environment and Development which was held in Rio de Janeiro in 1992. Sustainable development elements were also included and substantiated in the "Fifth Environmental Programme of the European Union for Sustainable and Environmentally Sound Development".

The sustainable development concept is a suitable model for a materials control policy because it links up environmental policy and development policy aspects, approaching them from a global perspective. Hence, it helps solve a fundamental problem of any materials control policy: it must pay attention not only to the economic and social relevance of global flows of substances and products but also to their effects on the environment.

The concept of sustainable development is based on the realisation that the conditions for economic activities will deteriorate more and more in future if the natural resources underlying these activities continue to be destroyed at the present rate. By exploiting non-renewable raw materials, humanity keeps consuming resources. It is almost like making with- drawals from the Earth's limited "savings account" without ever making any deposits. At the same time, humanity is using certain renewable resources above and beyond their renewal capacity. The Earth's limited absorption capacity is overtaxed by emissions and waste volumes, leading to consequential ecological costs which are no longer tolerable (Klemmer, 1994). For economists, the discussion about the fundamental rules described below is tantamount to a renaissance of nature as a factor in the production function concept (Biervert/Held, 1994).

The supply of resources and the absorption of residuals are seen as irre- placeable functions of nature which are the prerequisites for economic activities. The preservation of this natural capital or natural capital stock is a key element of sustainable development. Unlike current approaches, the natural capital stock should at least be kept at a constant level if future generations are not to suffer from shortages of natural resources or a deterioration of environmental quality. First and foremost, however, sustainable development means preserving the vital functions of the environment.

Fundamental rules

The concrete implementation of the sustainable development model has far-reaching implications. Based on the need to preserve the natural capital stock, it is possible to define the following fundamental rules for the management of substances:

(1) The depletion rates of renewable resources should not exceed their renewal rates. This is tantamount to the demand to preserve the ecology's efficiency, i.e. (at least) to safeguard the ecological real capital as defined in terms of its functions.

(2) Consumption of non-renewable resources should be limited to levels at which they can either be replaced by physically or function- ally equivalent renewable resources or at which consumption can be offset by increasing the productivity of renewable or non-renewable resources.

(3) Inputs of substances to the environment should be orientated towards the maximum absorption capacity of environmental media, taking into consideration all their functions, not least their "hidden" and more sensitive regulating functions.

(4) There must be a balanced ratio between the time scale of man-made inputs to, or interventions in, the environment and the time scale of

. the natural processes which are relevant for the reaction capacity of the environment.

A criterion often applied in the context of the fivst fundamental rule mentioned above, according to which the use of renewable resources should be limited by their renewal rates, is yield. However, yield is much too limited a criterion for a system-oriented ecological assessment. In addition, the negative effects of the various cultivation systems applied must also be taken into account (groundwater contamination, loss of species, etc.). For this reason, assessments must be based on a comprehensive system concept within a well-defined scope.

The renewability of resources referred to in the first fundamental rule is not a fixed property. Instead, it depends to a large extent on the intensity and the type of use. A case in point is the use of natural soil productivity. In this context, the overall use of areas and the quality of the use per area unit must be seen as being interconnected. The ecological effects of intensive farming will have to be considered as well as the problems resulting from an excessive use of the overall area available, in particular in terms of species diversity.

The second fundamental rule is aimed at triggering innovations which reduce dependence on non-renewable resources and continuously increase the share of renewable resources. At the same time, it is important to ensure that, in all of the specific measures and innovations introduced, more efficient use of resources will not be offset by quantitative growth. The general objective should be to decouple economic development from the consumption of non-renewable resources. Slowing down the rate of increase in the consumption of non-renewable resources is a necessary first step, but in the long term it will not be sufficient by itself. The final objective must be to reduce the absolute consumption of non- rewable resources, while taking into consideration the implications for the national economy. This can be achieved by finding substitutes for resources currently used and by the advent of further, more advanced innovations. The second fundamental rule underlines the key role played by innovations - i.e. the creative extension of current possibilities - in the sustainable development concept. However, not each and every innovation means progress as defined in the sustainable development model.

The third fundamental rule is a particulary important prerequisite for sustainable development because experience over the past few years has made it increasingly clear that excessive burdens imposed on the environment's capacity to absorb man-made emissions pose a more imme- diate and greater threat to the natural resources which sustain our economic life than the depletion of non-renewable resources. It seems that we are reaching the limits to the load-bearing capacity of the natural production system before any shortages of resources. Indicators for specific substances or materials (e.g. "critical loads" or "critical levels") will have to be supplemented by other indicators such as spatial or area- related criteria (e.g. "ecological footprints" or "critical structural changes").

The fourth fundamental rule relates the time scales of human interventions to those of natural reactive processes. A key element in this context is the fact that the processes occurring in animate and inanimate nature follow typical and discrete time scales, ranging from seconds to cen- turies or millenia. In addition, the environment must not be regarded as a static system frozen in a permanent, stationary equilibrium. Both abiotic and biotic processes are mostly in a quasi reversible floating equilibrium which is superseded by the irreversible process of temporal evolution. For this reason, particular attention will have to be paid to persistent substances or substances which have an irreversible impact on human health or the environment.

The fundamental rules mentioned above underline the key role of the sustainable development model regarding the use of materials. These rules add concrete substance to the model, and thus provide guidance for innovations and improvements in the field of materials management. Trying to operationalise and specify these fundamental rules does not mean that these rules can be used to derive precisely defined and clear-cut instructions for action. Instead, these rules indicate the direction to be followed by more concrete actions, and they show which effects of economic activities will have to be borne in mind from the perspective of materials control policy if the preconditions for these economic activities are to be preserved over time.

In order to develop politically acceptable concepts, it will be necessary not only to further operationalise the fundamental rules mentioned above, but also to specify the development policy component of the model, and to clarify the economic, ecological and social objectives and their interdependencies. It is only in connection with development policy questions and issues, and with the economic, ecological and social objectives to be pursued, that the fundamental rules derived from the model of sustainable development can lead to recommendations for action in the field of materials control policy.

Materials control policy encompasses all measures which can be adopted to control the types and scope of materials made available, the use of these materials, and the treatment and storage of waste, in order to safeguard the long-term supply of materials for the economy, against the background of the limited nature of resources and the limited load- bearing capacity of the environmental media.

Objectives of a Materials Control Policy

Humanity is facing a divide. There is a growing realisation that the available environmental resources - and in particular the environment's absorption capacity - are limited. The possibilities for using these resources are also limited. It has become clear that there are interactions with economic and social crises. There will only be a way out of this di- lemma, which jeopardises humanity's survival, if we see the economy, the environment and social compensation as one entity, and if we include all three aspects on an equal footing in our planning of political and economic actions, instead of playing them off against one another.

The ecological objectives of a materials control policy should be primarily designed to give answers to environmental problems which have taken on alarming proportions despite strong regulatory interventions and

manifest success in individual cases. In the past, society has paid too little attention to many of the ecological effects of production and consumption.

In order to develop binding guidelines for attaining ecological objectives in the framework of substance chain management, environmental objectives should be defined at various levels. Environmental objectives are political objectives which are compromises between environmental quality objectives on the one hand, and economic and social objectives as well as technical and logistic aspects on the other. In addition to developing global environmental objectives, priority must be given to defining national environmental objectives such as the objectives laid down in the 1989 National Environmental Policy Plan (NEPP) in the Netherlands. The time horizons envisaged for the implementation of these environmental objectives must be realistic. National environmental objectives will have to be supplemented by regional objectives in order to give due account to regional differences in terms of use and pollution levels of various environmental potentials.

The primary economic objectives of a materials control policy oriented towards the model of sustainable development are to preserve the natural resources that humanity's survival depends upon and to maintain the functioning capacity of the economy by adapting it to structural change. The adaptive capacity of the economy appears to be safeguarded when: - the general economic conditions remain predictable, thus providing a

reliable basis for economic decisions; - entrepreneurial room for manoeuvre is preserved, i.e. if less direct

rules and regulations are imposed by Government, and if instead a general setting is created which leaves the task of adaptation to each individual company and which provides clear-cut economic incentives for introducing environmentally sound economic practices;

- the limited adaptive capacity of industry, private households and government is taken into consideration with regard to the pace of the envisaged structural ecological change;

- environmental policy is predictable in terms of the instruments used, due to the definition of binding long-term ecological objectives and staged plans, so that misallocations and investment risks can be avoided; and

- in-company innovation processes in the framework of structural change are not excessively hampered by bureaucratic barriers.

Particular attention must be drawn to the need for preventing major distortion of international competition by harmonising environmental pol-

icies at international level and by introducing countermeasures wherever environmental dumping occurs.

The sustainable development model also includes social objectives which primarily relate to development opportunities and intragenerational distribution equity. The objective of intergenerational distribution equity is aimed at including the interests of future generations in the model. The aim is to enable a democratic society to evolve into a "sustainable society" by means of sustainable social development.

In order to take into consideration not only the ecological and economic objectives of a materials control policy but also its social objectives, it is necessary to define the preconditions, objectives and implementation instruments needed to achieve the transition from a high-volume to a high-value economy. Since there are bound to be classical conflicts in the triangle of economic, ecological and social objectives, it is important to find a balance between these three objectives. Many decisions have to be made in the absence of certainty, and in retrospect, many of these decisions will turn out to have been wrong. However, refraining from taking any action whatever or wanting everything to happen immediately is even less promising than trying to estimate the proportions of a development in whose course human and natural resources will have to be carefully and sensitively reconciled with one another.

The question as to whether an instrument or a measure is socially acceptable depends largely on its acceptance. Acceptance, in turn, depends largely on the process of communication but also on a consensus in society in terms of tolerating certain risks in view of the benefits involved. Social acceptance must be allowed to grow and develop. To what extent this will be possible is dependent on various factors: the types of communication chosen, the scope and openness of the communication process, and the insights provided into the problems associated with sustainable development.

Materials Control Policy, Development Policy and Population Growth

Global environmental change - brought about in particular by man- made impacts on the climate - involves serious and unpredictable risks. In conjunction with the consequences of the population explosion, underdevelopment, indebtedness, global migration, and emerging regional tensions, environmental change will give rise to threats of un- precedented proportions. These will lead to conflict scenarios which will require new global solutions.

Development policy concepts and projects are highly inadequate means for dealing with the problems confronting humanity, due to the persistent, excessive use of environmental resources. To date, no environmental factor has been integrated in the Human Development Index (HDI) which is used to assess the development of a given country. Neither the destruction of the environment (which reduces economic potentials) nor the consumption of non-renewable resources has been included as an input variable. The HDI does not take into account the problem of rapidly growing material flows which will be intolerable in the long run.

The Enquete Commission feels that there is an urgent need to develop environmental indicators to supplement the HDI. A development policy oriented towards sustainability would require indicators, for instance, for the high losses incurred by developing countries due to deforesta- tion and soil degradation. Between 1971 and 1984, Indonesia lost ap- prox. US$38 billion, i.e. about 9 percent of its gross national product. In addition, it is also necessary to identify the consumption of non-renewable resources (in particular in the highly developed countries) and to develop indicators for the recycling of products. An equitable and sustainable development on our planet only seems possible if regional differences with regard to the consumption of resources do not surpass an tolerable level. The status quo - i.e. with 20 percent of the world population consuming 80 percent of the resources -is certainly not sustainable. The industrialised nations will have to play a key role in adapting material flows to the general ecological conditions prevailing world- wide. It will be important for them, on the one hand, to change consumption patterns, and on the other hand, to increase the efficiency of their use of resources. At the same time, major importance will have to be attached to fostering adaptable technology development so that it will be possible to produce the desired technological solutions which will permit a change of course towards the path of sustainable development.

Another important issue in a development policy geared towards sustainability is that of the impact of environmental protection and environmental standards on international trade. This problem was not dealt with in the wording of the treaty adopted on 15 April 1994 during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). However, in their declaration on the conclusion of the agreement, the ministers pointed out that the GATT Committee on Trade and Environment should be given the possibility during the current negoti- ations on the shape and form of the new World Trade Organisation (WTO) to give greater weight to environmental questions in internation-

a1 trade. In the past, a country's abstention from environmental protection measures has never been regarded as a subsidy as defined in Art. XVI GATT; however, this is in conflict with the Rio Agreement.

The demographic development will be a key factor in the move towards a sustainable development path. If one considers that - if the current trend was extrapolated - the world population would increase to close to 10 billion people during the next 30 years and possibly to 15 billion human beings within the next 40 years, the mathematical leeway which the current generation has with regard to the use of resources is reduced substantially. This gives rise to the question as to what population policy objectives and strategies will have to be developed and implemented in order to keep the growth of the world population at an order of magnitude which will be compatible with sustainable development.

Without involving the risk of leading to a complete collapse of ecological systems, an ecological change of course on the part of the industrialised nations would provide the developing countries with the "pollution leeway" which they need in order to achieve economic growth and to finance their social development. And this, in turn, is a prerequisite for decreasing birth rates.

Strategic Approaches to a Materials Control Policy

Sustainable development requires the integration of environmental protection in the socially oriented market economy and the latter's development into an ecologically and socially oriented market economy. The structural ecological change needed for this purpose can be achieved by means of proactive measures on the part of the players involved (for more details see Chapter 6) and by an appropriate setting created by governments.

The implementation of this strategy can be based on objectives and concepts which have evolved in the past few years in the context of the development of environmental management and in the course the discussion on waste management and chemicals policy. These objectives and concepts can be seen as approaches to substance chain management and materials control policy. They include: - the concept of integrating environmental protection in production

processes and in products; - the principle of ecological design; - orientation towards Nature and the fundamental principles of its con-

version of substances;

- giving higher priority to waste avoidance than to the recycling or safe treatment and disposal of waste;

- the regulatory idea associated with the term "life-cycle management";

- designing products to make them suitable for recycling;

- the promotion and development of recyclable materials;

- the promotion of environmentally sound innovations; and

- product responsibility.

These practical principles must be observed if we want environmentally sound economic practices; these principles are prerequisites for a sustainable development. A common feature which they share is the high relative importance attached to innovations, and hence, to research and development. Research and development will have to make major contributions towards implementing and operationalising models for a sustainable development with regard to the management of substances.

What is needed - above and beyond the promotion of scientific environmental research - is more intensive interdisciplinary research oriented towards identifying problems and their solutions and developing options for action. These may be technological, administrative or socio- economic actions, or combinations thereof. Technological innovations will have to be supported by changes in the values of producers and consumers, oriented towards a greater willingness to show innovative behaviour vis-a-vis technological and structural innovations.

The purpose of introducing environmental management is to integrate environmental protection in all the fields of activity, operations, products and production processes of a company. At company level, environmental management encompasses all levels of plant organisation and leads to an integrated overall management system. Environmental management means continuously optimising a company's entire product line in accordance with specific environmental aspects, e.g. by designing products to be recyclable, by integrating environmental protection in products and production processes, by optimising transport, by reducing waste in terms of both quantity and quality, by promoting employ- ee involvement, and by means of external communications.

While environmental management is focused on the specific location of a company and on its various effects on the environment, the focus of substance chain management is on analysing specific substance chains or material flows "from cradle to grave". Substance chain management is aimed at systematically and efficiently influencing entire substance chains. Due to the fact that ecologically relevant substance chains span

several companies and industries, substance chain management usually involves several players, interacting in various ways. In addition to the economic players, there is also Government and indirectly involved players. The role of government in substance chain management - as in environmental management - will be limited to defining environmental (quality) objectives and creating the general setting.

Changes in Values and Lifestyles

Any attempts at moving closer towards the model of sustainable development by means of structural ecological change call for changes in production and consumption patterns which in the medium and long term will lead to - and will have to be based upon - profound changes in values. Government could not and should not do anything to impose changes in attitudes and concrete behaviour. However, a long-term policy can support such changes. School education and vocational training are also of key importance in this context. What can be observed currently is that certain new patterns of behaviour and changes in consumer behaviour are being acquired and practised. In retrospect, such changes in lifestyles can be interpreted as changes in mentality.

Changes in patterns of behaviour can already be observed among consumers, in particular in the younger generation and in the middle classes of society. These changes manifest themselves primarily in changing quality standards in terms of the demand for natural food products and textiles, or in the decision to abstain from using motor cars as the principal mode of transport in large cities.

The objective must be to find a happy medium between an ascetic lifestyle and a lifestyle of permissive convenience. Changing one's way of life means enjoying life more consciously; it does not mean having to live without any enjoyment whatsoever. It is not true that only itchy clothes and sandals are environmentally sound. Sustainable lifestyles should not be associated with renunciation but with enjoyment; they should not be seen in grey, but in all colours of Nature; they should not be linked with prohibitions but with a positive attitude towards life and sensual pleasures. This will enable us to gain the support of a majority for life and for the survival of humanity.

Changes in behaviour can also be observed in the fields of manufacturing and trade. Environmental protection has been a concern of the top management level for many years. Although it takes time for environmental management and proactive entrepreneurial action to become more widespread, and although representatives of associations com-

plain about exaggerated and non-harmonised environmental policies, many companies have already set examples by taking initiatives on their own.

The search for sustainable lifestyles is accompanied by a search for a corresponding ethical foundation. In many statements made on global sustainable development, there is agreement on one point: the required ecological restructuring of the economy will not be conceivable without changes in current value systems.

4 Examples of Material Flow Analyses

On the basis of examples of material flow analyses carried out from an ecological, economic and social perspective, the Enquete Commission made assessments and recommendations for an integrated substance chain management system. In addition, the Commission also wanted to confirm the viability of the theoretical models (Chapter 3) by examining their efficiency in concrete fields of application; conversely, the examples of applications provided useful hints for the theoretical concepts.

Against this background, the Enquete Commission studied the flows of ' cadmium, benzene and R 134a, as well as the material flows in more complex fields of application (textiles/clothing and mobility), and in the chlorine production sector.

The reasons for the Enquete Commission's choice of examples and for its recommendations for action are outlined below. More detailed data on the material flows studied and statements with regard to the respec- tive assessment criteria and major problems can be found in the Enquete Commission's two reports (Enquete Commission on the "Protection of Humanity and the Environment", 1993 and 1994).

Cadmium

Cadmium was chosen as one of the first test cases because sufficient data are available on this metal, and because of its clear-cut toxicological assessment and its Jack of degradability. Cadmium is a heavy metal which is found everywhere and which is a natural component in many raw materials and natural resources. In its interim report, the Enquete Commission analysed the entire cadmium flow, relative to 1986 (old federal states), and depicted it in the form of a volume flow chart.

In its interim report, the Enquete Commission proposed that man-made cadmium inputs to the environment should be reduced by means of effective substance chain management. This applies in particular to farmland. More specifically, the Commission made the following recommendations:

- Extraction from the material flow The zinc industry must not lose its role as a sink for primary and secondary cadmium. For this reason, the cadmium metal which cannot be sold by the zinc industry should be disposed of in a non-bio- available form by public authorities, free of charge for the industry.

- Prohibitions The use of cadmium should be prohibited in sectors in which it is not possible to develop effective recycling channels. Such restrictive measures should be announced in time.

- Compulsory labelling, take-back and recycling In future, the use of cadmium in consumer products should be contingent on compulsory labelling, return and take-back, separate . collection and recycling. Cadmium recycling should be documented and regularly verified. It will be the task of producers, retailers and importers to develop the logistics required for such a recycling system. It is hard to imagine that it will be possible to recycle nickel- cadmium batteries without imposing a significant deposit. Battery-powered products should be designed in such a way that it is possible to take out the batteries. The highest cadmium exposure for human beings is currently caused by smoking. Consumers should be informed about this fact by proper labelling.

- Reducing cadmium inputs fiom fertilisers and sewage sludges The amount of phosphate fertilisers should be limited to what is abso- lutely necessary. Corresponding computer software programmes have been developed to optimise phosphate fertiliser consumption in agriculture. In the medium term, the question of whether cadmium can be removed from raw phosphates should also be examined. The application of sewage sludge should be monitored by means of the same methods.

In addition, the Enquete Commission proposes that the measures initiated to reduce emissions and to monitor cadmium flows should be con- sistently continued.

Benzene

The Enquete Commission chose benzene as a test case for a carcinogenic substance. As a general rule, the risks involved in the use of benzene because of its toxicity must of course be traded off against its benefits as a feedstock for the chemical industry and its inevitable production in the course of petroleum processing. The purpose of analysing the benzene flow is to show what can be done to reduce risks. Since the use of benzene depends not least on the exposed persons' awareness and their acceptance of its risks to human health, the Commission also studied the question as to whether there was any public awareness of benzene- related health risks, and under what conditions the public was willing to accept these risks. The Enquete Commission's interim report provides a

detailed account of the material flow analysis and of the Commission's recommendations for action.

Since benzene is a carcinogenic substance, there can be no concentration below which there are no risks to human health. In fact, from a health perspective, benzene exposure levels are far too high - in particular at workplaces involving the handling of motor fuels (service stations, motorcar workshops, etc.) and in conurbations due to motor vehicle traffic. The Commission feels that there is an urgent need to introduce a number of measures designed to reduce benzene exposure. The recommendations for action submitted by the Enquete Commission refer to various points in the benzene flow:

- Reducing the amount of benzene automatically produced by pursuing a long- term policy aimed at reducing fuel consumption: This can be achieved by reducing total mileages driven and by increasing the fuel economy of engines, etc.

- Reducing the amount of benzene released to the ecosphere by reducing the benzene content of carburettor fuel to I 1 percent by volume: This can be achieved by introducing more efficient catalytic converters and compulsory inspections, and by reducing the benzene limit to 2.5 pg per litre in the ordinance pursuant to Section 40 (2) of the Bundesim- missionsschutzgesetz (Federal Ambient Pollution Control Act); in addition, it is mandatory (under the 21. Bundesimmissionschutzverordnung (21st Federal Ambient Pollution Control Ordinance) to use fuel vapour recovery systems when filling or draining benzene and fuels, and to ensure absorption of fuel vapours in tanks and tank sealings.

- Reducing benzene intake by the human organism by improving occupational safety: This can be achieved by the use of breathing apparatus and pro- tective clothing at workplaces, by providing information to workers exposed to benzene, and by strictly applying relevant occupational safety provisions. Benzene exposure levels of car mechanics should be reduced by using benzene substitutes (where possible) and by reducing the benzene content of carburettor fuel.

The awareness of both the public at large and exposed workers with regard to benzene-related risks to human health is low. This relatively low perception of the benzene risk in the general public is probably due to the fact that this risk is mainly due to motor-car traffic. Providing detailed information to exposed persons is therefore a multisectoral rnea- sure aimed at reducing benzene-related risks. Such information is a precondition for a conscious and responsible use of benzene or benzene- containing fuels.

The instruments available to assess the health effects of carcinogenic substances in general and to define corresponding limits can be described as highly unreliable. So far, no attempts have been made yet in the Federal Republic of Germany to find a consensus on consciously accepting a cancer risk. It would only be possible to rule out all of the benzene-related risks to human health if we discontinued using all the substances which involve the production of benzene; however, this is currently not practicable. If it is not possible completely to prevent benzene exposure of human beings and the environment, such exposure should at least be reduced to a minimum.

R 134a and Other CFC Substitutes

The Enquete Commission selected the hydrofluorocarbon R 134a as a test case for a material flow analysis because of the current discussion about finding substitutes for chlorofluorocarbons (CFCs). R 134a is a chlorine-free hydrofluorocarbon (HFC), which is a candidate substitute for CFCs. This example illustrates how difficult it is to weigh the pros and cons involved in substitution processes against the background of pressing environmental problems. R 134a is a substitute which would permit a rapid phase-out of the production and use of ozone-depleting CFCs, while at the same time adding to the greenhouse effect; for this reason, R 134a is subject to a critical and controversial debate among the interested public.

The analysis of the R 134a flow served several purposes. On the one hand, the analysis was intended to provide experience with a relatively complex material flow which fans out after the consumption phase. On this basis, the Commission wanted to identify those points in the material flow at which it would be possible to take action to reduce the harmful ecological effects of R 134a emissions. On the other hand, the example of R 134a offers the possibility to examine entrepreneurial and political decisions or processes involved in the selection of substitutes.

The Enquete Commission's recommendations regarding the use of R 134a and other CFC substitutes are designed to attain two objectives: to ensure that there will be a rapid global phase-out of the production and use of CFCs in order to protect the stratospheric ozone layer, and to limit the greenhouse effect.

These objectives give rise to the following demands: CFCs should be replaced as soon as possible by R 134a and other substitutes, R 134a emissions should be limited, and the energy consumption involved in application technologies should be reduced. There were diverging views

among the members of the Enquete Commission with regard to the question as to whether the use of R 134a should be discontinued only in , "open" applications (e.g. sprays and foams) or in "open" and "semi- open" product lines (e.g. car air-conditioning systems). There was also no agreement with regard to the question as to whether, in the context of the choice of suitable substance chain management instruments, the utility of R 134a - in particular, when used in car air-conditioners - should be weighed against the ecological damage it causes.

The members of the Enquete Commission did not agree on the instruments which would be suitable to implement the objectives and strategies defined. The following instruments were proposed to ensure that there will be a flow of information between industry and authorities: voluntary restraint commitments on the part of industry; the adoption of a legal regulation aimed at monitoring production, import, export and recycling volumes; and the introduction of a reporting duty in the Umwelt- statistikgesetz (Environmental Statistics Act).

Instruments designed to reduce the greenhouse effect include: a voluntary commitment on the part of industry to develop comprehensive recovery and recycling concepts; making it compulsory for manufacturers and sellers to take back used products; defining specific targets for processing industries in terms of recycling rates, emissions, and operating energy consumption.

No agreement was achieved with regard to the need for other instruments such as taxes, levies, and the inclusion of fluorocarbons (FCs) in the Climate Convention with a separate protocol to be added on R 134a.

A major reason behind this choice of topic was the rather emotional public debate on the whole issue of textiles/clothing, highlighted in the public eye by such slogans as "poison in the wardrobe" and "why our clothes make us ill". As a result, a number of ideas had been developed for labelling textiles. The fact that, despite the high level of public interest, the material flow involved had not yet been monitored systematically was a particular challenge for the Enquete Commission. The relevant statistics and data available are almost exclusively of an economic nature. They are not even sufficient for a systematic analysis of the value-added chain.

Findings Obtained from the Material Flow Analysis

The first step required when carring out an in-depth analysis is identifying the various stages of the primary chain, i.e. the material flow in which the fibre is directly involved. The primary chain is distinguished from the secondary chains which lead to the production of materials processed in the primary chain.

The Commission also found out that specific detailed findings along the primary chain are not as important for detecting weak points as the methodological approach adopted. This approach does not consist in conducting a segmented study of a detailed aspect; instead, the entire material flow is analysed in terms of ecological, economic and social aspects. In the textile chain, for instance, the important role played by transport was only recognised because the Commission considered the entire material flow and tried to relate the various stages with one another.

While the amount of data available is of considerable importance for the assessment process, the present example has shown that it is not sufficient simply to compile all the data available if one wants to detect weak points that are inherent in the system.

Substance chains are never organised by the substances themselves; instead, they develop due to the actions of various players. For this reason, it is not sufficient to analyse the properties of the substances involved; the reasons why the various players act the way they do must also be taken into consideration. Had this aspect not been considered in the present example, it would not have been possible to understand the problems involved in the information barriers that exist between the various stages of the textile chain, and to develop potential solutions.

The analysis should also include a review of the structure of the companies involved. In the textiles/clothing sector, for instance, the chain of players tends to be heterogeneous and not very hierarchical, i.e. the production process includes a wide variety of players, ranging from very large corporate groups to small and medium-sized enterprises.

In addition, an analysis of the legal setting prevailing at national, EU and international level has also proven to be useful.

Recommendations

The Enquete Commission has submitted a large number of detailed recommendations which refer to specific weak points in the textile chain. These include an initiative aimed at developing international

minimum standards on "good cultivation practice for natural fibres" and "good finishing practice for textiles"; establishing a clearing-house designed to develop an ecological classification of finishes (textile auxiliaries, dyestuffs) at national and EU level, etc. In addition, the Enquete commission has also presented more general recommendations which are outlined below:

(1) Communications within the textile chain The textile chain is an example of a complex product line involving a large number of substance chains. While some information is exchanged between the various stages of the textile chain, there is still ample room for improving the information flow.

The Enquete Commission welcomes initiatives taken by players in the textile chain to provide information about ecological and health- related aspects across the entire product line, and to improve this information so as to place greater emphasis on ecological and health aspects in the production process (initiatives taken by distributors and garment manufacturers). This also includes criteria for purchasing and quality controls to ensure compliance with product requirements.

In addition, the Enquete Commission also recommends that incentives should be created for the voluntary establishment of an "information provider in the textile chain" to promote current initiatives in the fields of environmental and health protection. Furthermore, the Commission recommends that it should be examined whether the economic players in the textile chain should be obliged to introduce accompanying documents for their products.

(2) Consumer information and transparency According to the legal provisions currently in force, both the percen- tage shares of fibres used and care instructions must be mentioned on the labels of garments. For many years, there has been a discussion about extending the scope of information to be provided on labels. In this context, there is a need for greater transparency in order to enable consumers consciously to include ecological and health- related considerations in their decisions on garments, in addition to other aspects such as fashion, price, etc.

The Enquete Commission calls upon the German Federal Govern- ment to take an initiative aimed at including more consumer- relevant information - in the interest of the model of sustainable development - in the pending amendment to the EU directive on textile labelling.

The Enquete Commission feels that eco-labels are a suitable instrument for consumer information, providing that some major aspects are taken into consideration. Most importantly, there should not be an abundance of extremely different labels in the market, because experience has shown that this tends to reduce the transparency for consumers. The Enquete Commission welcomes the efforts made to develop a single "EU eco-label for textilesr' protected by law. This label covers not only consumer-relevant aspects but also environmentally relevant matters; in addition, due to its life-cycle approach, it takes into consideration not only requirements with regard to products or specific substances but also more general criteria relating to entire production processes.

(3) Research and innovation

The players involved in the textile chain are already innovative in a variety of ways (e.g. improving the efficiency of the use of resources and energy in the various processing stages; increasing the shares of dyestuffs and textile auxiliaries in the total number of new substances applied, etc.). However, the data compiled and processed by the Enquete Commission in the context of this example has also clearly shown that research and innovation efforts have so far been oriented towards certain specific stages in the textile chain, and that there is a need for further research and innovations with regard to other major aspects.

The Enquete Commission welcomes the research and innovation efforts made by the players in the textile chain. In addition, the Com- mission recommends that, in the interest of integrated environmental protection, innovations for new production processes and products aimed at further increasing the efficiency of the use of resources and energy should be promoted. Research and development efforts made to improve the recyclability of input materials and water, and studies on substitutes for problematic dyestuffs, etc. can be mentioned as examples in this context.

(4) Consumer behaviour

At the end of the day, the consumers have the final say about a product because they decide whether, or not, they want to buy it. For this reason, great importance must be attached to providing proper education and advice to consumers, and hence, to increasing their awareness.

The Enquete Commission also proposes that criteria for environmentally sound and sustainable procurement should increasingly be

taken into account when public-sector contracts are awarded, since the behaviour of public authorities is a model followed by others.

Mobility

Mobility - as a potential field of application - encompasses a considerable proportion of all material and energy flows in the Federal Republic of Germany. Hence, it plays a major role for the national economy and for environmental policy. The mobility sector essentially comprises the production, the use and the disposal of vehicles including the traffic routes used by these vehicles. In 1990, motor vehicle manufacturing alone accounted for close to 13 percent of the gross domestic product in Germany's old federal states. Roughly every sixth job is directly or indirectly dependent on the automobile market. Passenger and goods transport volumes as well as the length of the traffic network are likely to keep rising in the next 10 or 20 years - with a corresponding impact on the consumption of resources and the material flows needed to provide mobility. The current population of about 40 million passenger cars in the Federal Republic of Germany can already be described as the largest "rolling stock of natural resources".

However, the substantial ecological problems encountered in the transport sector were one of the main reasons for the Enquete Commission to select this field of application, with the aim of identifying, analysing and assessing a representative part of the material flows. In terms of the substance, the commission's interest was focused on the resource and energy flows caused by passenger cars and railway facilities in the field of passenger transport, and by lorries, railway wagons and inland waterway barges in the field of goods transport. The use of various materials (also with a view to reducing weight), the recycling of vehicles, and the development of dioxin during scrap processing were also studied by the Commission.

In the course of its study, the Commission found out that the data required were to a large extent either not available or not made available. Without a sufficient data base, it is not possible to conduct a satisfactory material flow analysis.

Despite all the uncertainties due to the difficulties involved in collecting the data and due to their incompleteness, the Enquete Commission has come to the conclusion that, among the modes of transport studied, the railway is the most efficient mode of transport in terms of resource consumption (material-intensity and energy-intensity), in the fields of both passenger and goods transport. Inland waterway barges are primarily

characterised by their low specific energy consumption, while passenger cars and lorries showed the highest resource consumption, not only in specific but also in absolute terms. With regard to material efficiency - i.e. the consumption of materials such as steel or plastics per passenger-kilometer or tonne-kilometer - the results for motorised road transport as compared to rail transport are even poorer than the energy efficiency data. The main factor responsible for the high material efficiency of rail transport is the longer service life of rail vehicles. It is more difficult to compare the corresponding infrastructure facilities; however, the construction of complex railway tracks such as those needed for the ICE trains is obviously more material-intensive than building new sections for Germany's network of motorways. Based on the findings obtained to date, the Enquete Commission has come to the conclusion that motorised road transport offers the greatest potentials for reducing the consumption of resources.

In order to implement the model of sustainable development, it is necessary to achieve considerable reductions in the resource and energy consumption caused by mobility, and in the associated emissions of pollutants and exhaust gases which add to the greenhouse effect. To this effect, the Enquete Commission proposes four strategies in the following order of priority:

(1) Traffic avoidance

(2) Shifting traffic to the more efficient modes of transport

(3) Improving thef low of traffic

(4) Reducing the material-intensity and energy-intensity along the product line of vehicles

According to the Enquete Commission, it is wrong for the discussion to be focused on the last point mentioned above, as is currently the case: The two top priorities should be to avoid traffic and to use the more efficient modes of transport. Technological improvements will only become effective in an overall setting of incentives for ecological improvements. In addition, it is necessary to achieve a logistic opfimisation of all modes of transport, aimed in particular at creating more effective links among them. This indirect substance chain management will help to avoid return trips without freight and insufficient utilisation of capacity. At the same time, it will help directly to increase the efficiency of the resource and energy flows induced by the need for mobility, and to improve their long-term effectiveness, and hence their sustainability.

In. the context of its considerations with regard to indirect substance chain management for the mobility sector, the Enquete Commission has 'developed a variety of transport policy suggestions, including:

- a reduction of the separation of people's homes and their workpIaces

- the promotion of municipal public passenger transport systems as well as bicycle and pedestrian transport, instead of the current promotion of motorised private transport

- the promotion of car pools - the introduction of a progressive, output-dependent tax for private

passenger cars - the improvement of intermodal goods transport, inter alia by means

of traffic management and information technology

- the introduction of a singIe'tax on commercial vehicles in the EU, oriented towards the costs incurred by the national economy

- the coverage of the external costs by the users of a given transport system.

Furthermore, for direct substance chain management, there is a considerable potential to reduce the material-intensity and the energy intensity along the vehicle product line, in particular for passenger cars. Reduc- tions can primarily be achieved by changing the sizes of vehicles and their drives, by introducing light-weight models, and by improving the recovery of materials from scrapped vehicles and re-using them in new vehicles.

However, there is also room for improvement with regard to railways and inland waterway barges. The long service lives of the equipment used for these modes of transport - which are positive from the perspective of materials control policy - can pose problems because this may delay innovations such as the use of novel technologies which reduce the consumption of energy and materials.

In order to counteract the current trend in the passenger car sector - which is to offset technological advantages (e.g. light weight, low drag coefficient) by installing additional units and increasing the rated speeds of cars - several regulatory and economic instruments can be combined (e.g. absorbing the vehicle license tax in the mineral oil tax across the EU, and the introduction of fuel consumption fleet limits). In order to improve recycling rates, levies can be imposed on sellers (manufacturers or importers) in the form of a deposit refund system. The last owner of a vehicle should be obliged to return his vehicle, and the manufacturer or a company commissioned by the manufacturer for

this purpose should be obliged to take back the vehicle. If the costs of disposal had to be borne by the last owner, this might give rise to considerable problems in terms of implementation and should therefore be avoided.

The current recycling practice for scrapped passenger cars - which essentially is limited to recovering the steel from the vehicle scrap - is still unsatisfactory. If the recycling rate of scrapped vehicles is to be improved, the following requirements must be met: the variety of the materials used should be reduced; all materials should be labelled; more secondary materials should be used; no pollutants should be produced; and the exchangeabiliv of vehicle sub-assemblies and components should be improved. This would help not only to reduce the consumption of resources but also to control the constantly rising amounts of light shredder waste (incineration of hazardous waste). In addition, it is necessary to optimise the disassembly of scrapped passenger cars, which currently is done manually. There are two factors which hamper improvements in the design of motor vehicles to facilitate their recycling: a trend towards decreasing vertical integration, in particular for road vehicles; and the increasing use of global sourcing in this industry. In order to solve these problems in the framework of substance chain management of vehicle manufacturing, there is still a considerable need for coordinating the activities of the various players involved.

Chlorine Chemistry

The Enquete Commission selected chlorine chemistry as a production sector to be studied in the course of its material flow analyses, not only because it is a key sector of the chemical industry but also because the Commission deliberately wanted to tackle a topic which has been the subject of a controversial debate for many years. About 60 percent of the sales of chemical products are directly or indirectly linked with chlorine. As a production sector, chlorine chemistry accounts for a turnover of ap- prox. DM 100 billion and for 350,000 jobs. Most of the by-products and complementary products associated with the production of chlorine are used to synthesise other products, so that a complex integrated system has evolved in the course of the years. About 3 million tonnes of primary chlorine are annually added to the chlorine flow in the Federal Republic of Germany - with a downward trend observed in recent years.

On the one hand, the specific properties of organic compounds due to chlorine open a broad range of potential applications; on the other hand, they give rise to critical assessments of specific chlorine compounds or

groups of compounds in terms of their impact on human health and the environment. This becomes manifest mainly in two areas: first of all, in the field of chlorine-containing production residues; and secondly, in the field of chlorine-based finished products which are relevant to emissions and exposure. In this context, the changes in regional or global climate structures induced by increases in the concentrations of certain chlorine compounds are a cause of considerable concern. It is particularly important in this context that the development of dioxins should be minimised.

While a number of measures have been adopted in recent years to relieve the situation, the Enquete commission still feels that there is a fundamental need to keep the chlorine flows within a closed integrated production and application system, and to avoid open releases to the environment of organic chlorine products which are associated with an identifiable risk of exposure. There is disagreement with regard to the question as to whether emissions of organic chlorine compounds should also be avoided in the case of compounds which have not yet been sufficiently studied or in cases of diverging assessments with regard to potentially harmful effects.

The Enquete Commission selected three chlorine production or application areas from various specific perspectives for a more in-depth analysis and submitted recommendations for action for these three areas: (1) polyvinyl chloride (PVC) (2) chlorinated hydrocarbons (C-HCs) (3) propylene oxide (PO)

Polyvinyl Chloride (PVC)

Since PVC accounts for a large proportion of the primary chlorine con- sumed, its production plays a particular role in the context of the chlorine flow. In the Federal Republic of Germany, about 30 percent of the primary chlorine produced is used for the production of PVC.

The discussion on PVC and its alternatives is focused on emissions released during the production, recycling and incineration of PVC; the development of dioxin when PVC products burn; the impact of PVC production, processing, use and recycling on human health; the accumulation of PVC in the technosphere; and the future waste problem which can already be anticipated today. In the medium term, the 12 million tonnes of PVC which are currently in use will produce between 420,000 tonnes and 1 million tolines of waste per year. The Enquete

Commission has examined the disposal strategies currently available: materials recycling, i.e. re-using scrapped products for manufacturing new products of the same product group; chlorine recycling, i.e. inciner- ating used products to recover hydrochloric acid to be re-used in the manufacturing of new PVC products; and the incineration of PVC together with domestic waste. Disposing of PVC waste in landfills can only be seen as short-term solution since this will be prohibited in the Federal Republic of Germany as of 31 December 2004 at the latest, pursuant to the Technische Anleitung Siedlzlngsabfall (Technical Guideline on Residential Waste). Since the members of the Enquete Commission did not agree on all points during their comparison of the various disposal strategies available, the Commission supplemented its majority recommendations by minority views.

Against the background of the waste problem associated with PVC, the Commission proposes that the range of possibilities fou recycling PVC should be broadened. In this context, priority should be given to the ecologically and economically optimum recycling mode. For many PVC products, it is likely that this will be the recycling of materials, while chlorine recycling will be a necessary supplement in addition to materials recycling.

A minority of Commission members give clear priority to materials recycling: They feel that substitutes should be found for short-lived PVC products, as well as for those long-lived PVC products for which materials recycling is not possible at acceptable costs, and for composites of PVC and other materials.

The Enquete Commission unanimously recommends that compulsory labelling should be introduced for all plastic products in order to support the collection logistics.

The costs of the disposal and recycling of PVC and its substitutes should be included in the prices of the products concerned in order to relieve the cost burden to be borne by public authorities. A minority group of Commission members suggest that the establishment of a recycling guarantee fund, into which compensatory payments would have to be made for each sale of a new product, would ensure the recycling of long- lived PVC products and its financing, for many years to come.

Finally, the Enquete Commission generally recommends that one should abstain from adding new cadmium to PVC and that the development of substitute products for lead-based stabilisers should be accel- erated.

Chlorinated Hydrocarbons (C-HCs)

From the group of chlorinated hydrocarbons, the Enquete Commission selected dichloromethane, tetrachloroethylene, trichloroethylene and 1,1,1-trichloroethane. Some C-HCs are ecologically relevant because of their adverse effects on human health, their diffuse distribution and their persistence in the environment, as well as their high mobility in soilseand in the groundwater. In addition, cleaning up many historical pollution sites, most of which have been identified by now, will cause a considerable financial burden.

In the past few years, the volume of C-HC solvents used has declined substantially. While as much as 180,000 tonnes were used in the Federal Republic of Germany in 1986, this figure had dropped to about 63,500 tonnes in 1992. This has been mainly due to increased recycling and the substitution of acgueous systems for C-HC solvents, imposed by the 2. Bundesimmissionsschutzvevovdnung (Second Federal Ambient Pollution Control Ordinance). Applying this ordinance at European level would not only be desirable for ecological reasons, but it would also considerably improve the marketing opportunities for low-emission plants beyond the borders of the Federal Republic of Germany.

Emissions due to the use of C-HC solvents should be minimised by con- sistently closing the C-HC cycles or by means of substitution. In the two sectors examined by the Enquete Commission (dry cleaning and metal surface degreasing), it should be possible to continue using C-HCs in largely closed systems. Solvent producers, machine and equipment manufacturers, recycling companies and chemical distributors have prepared the ground for minimising emissions of all kinds by means of restructuring measures.

Since the use of vedistillates is making slow progress in the Federal Republic of Germany, the relevant standards and quality requirements should be reviewed in order to find out whether they may hamper the use of redistillates.

The Enquete Commission feels that substitutes for C-HC solvents should be introduced wherever manifestly less problematic substances with similarly good application properties are available. C-HC solvents used in open systems should be rapidly replaced by alternatives. For this purpose, catalogues of alternative substances should, where necessary, be developed and updated.

Past experience has shown that there is a need for a standardised docu- mentation of solvent flows which will have to be made available to the

authorities upon request. More effective enforcement, and hence, more consistent application of existing legal provisions, are major requirements for minimising environmental pollution due to C-HC solvents.

Propylene Oxide (PO)

Propylene oxide (PO) is a feedstock for the production of polyurethgnes, a group of plastics of growing importance. At present, there are two processes for the production of propylene oxide: the chlorohydrin process and the oxiran process (chlorine-free). A chlorine-free catalytic oxidation process is currently being developed. In the Federal Republic of Germany, exclusive use is made of the chlorohydrin process which has attracted criticism because it involves the development of toxic by-products (dichloropropane and dichlorodiisopropyl ether) and because large amounts of salt are discharged into fresh water resources. In the next few years, new investment cycles will begin in the propylene oxide industry. The key issue examined by the Enquete Commission was the question as to whether an introduction of chlorine-fuee production processes will make ecological and economic sense. So far, no comparison has been made on the basis of life-cycle analyses. From an ecological perspective, the information available does not suggest that either of the two production processes is superior to the other. The question of whether preference is given to one or the other production process has so far been determined by economic and business management factors. The marketability of styrene and tertiary butyl alcohol (successor product: MTBE), as well as various infrastructural conditions play a key role in this context. The Enquete Commission recommends that it should be examined whether the oxiran process or the catalytic oxidation process could be a viable alternative for a production site in Germany's new federal states if polyurethane demand continues to rise.

Since the importance of polyurethanes will grow in future, the Enquete Commission recommends that it should be examined whether improved polyurethane recycling - at acceptable costs - can lead to a substantial reduction of propylene oxide demand, and hence of chlorine consumption.

Dialogue on Chemicals Policy

The Enquete Commission has tried to introduce some sobriety into the controversial debate about the problems and benefits of chlorine chemistry. The Commission unanimously supports a "partial conversion" of chlorine chemistry by using alternative technologies or substances,

where this is ecologically necessary and economically and socially acceptable. However, in practice these general concepts can be assessed in very different manners. Developing consensual criteria is one of the most urgent tasks facing our society. With regard to chlorine chemistry, this will require:

- The development of a deeper ecological understanding of the material flows generated by chlorine chemistry, and of their effects on human health and the environment For this purpose, the international nature of chlorine flows - including the directly related flows of caustic soda solution - has to be known and borne in mind. Because of the changes achieved and because of the decline which has already occurred in the consumption of elemental chlorine, there is a need for a new equilibrium to establish itself between alkali production, the hydrogen chloride market and the production of primary chlorine. This equilibrium can only be found in an international context, and it must be systematically pursued.

- Further optimisation of chlorine production processes and products with a view to integrating environmental protection Reducing emissions, reducing the input of resources and energy, further improving the energy standard

- The development and application of rosters for a better assessment of the effects of certain products and product groups on human health and the environment The two key input variables are a product's mode of action on the one hand, and its ecologically relevant exposure potential on the other.

- An assessment of chlorine products whose ecological hazard potential has been identified on the basis of virtually the same criteria which are generally applied to chemical substances and products.

The Enquete Commission recommends that comparative studies should be conducted on alternative development paths for materials management, taking into consideration ecological, economic, social and technological aspects, whenever:

- a high ecological risk has been identified and more favourable alternatives are available,

- the industry involved plays an important role for the national economy, and restructuring processes - or their absence - can lead to massive economic and social upheavals,

- there has been a fundamental controversy about certain sectors of materials management among the various groups in society, so that there

is considerable uncertainty about future legislative decisions and about the market behaviour of consumers.

Despite the controversy about whether chlorine chemistry should be given priority over other topics, the Enquete Commission emphatically supports a continuation of the dialogue on chemicals policy.

5 Assessment of Material Flows

In its assessment of material flows, the Enquete Commission was guided by the overriding objective of "protecting humanity and the environment". The Enquete Commission adopted two approaches to comply with its mandate of developing assessment criteria for substance chain management oriented towards the model of sustainable development. The first of these approaches was inductive, i.e. based on analysing and assessing examples of specific substances and potential fields of application; the second was deductive, aimed at substantiating the model of sustainable development in a general context.

The assessment process proposed by the Enquete Commission is com- posed of the following six steps: ( I ) Defining the fundamental rules of sustainable development (Chapter 3 ) (2) Defining the preservation and restructuring objectives (3) Developing assessment criteria (qualitative description of problem ar-

eas) (4) Deriving indicators and parameters (quantitative assessment basis in

terms of materials and systems) (5) Assessment with regard to specific preservation and restructuring objec-

tives ( 6 ) Assessment by weighting and setting priorities, taking into considera-

tion damage and benefits

After some introductory comments, steps (2) to (6) of the assessment process will be described below.

The Relationship between Man and Nature

Man's self-image of his relationship with nature has a major bearing on his system of values. The key factor in, this context is man's self-image not only as an integral part of nature but also as a social and cultural animal.

Man's role as an integral part of nature is mainly chatacterised by two aspects. On the one hand, man depends on the preservation of the Earth's natural resources and on the long-term functioning of natural systems for his survival. On the other hand, man is able - more than any other creature - to modify non-human nature. All human activities in- terfere with natural processes. Our increasing scientific and technological knowledge plays an ambivalent role in this context: For part of humanity, this knowledge provides completely new opportunities for

organising their lives. At the same time, human activities cut deeper and deeper into natural processes and thus have a growing impact in terms of time and space with increasing technological feasibility.

Our economic activities must be guided by the desire in the long term to pay attention to the time scales of the ecological system in the context of the time scales of the economic system, and to achieve a balance between the two systems in order to avoid overstressing our natural resources.

Facts, Fiction, Uncertainties

There are limits to man's ability to identify and assess interdependencies because man only perceives - and can only perceive - segments of reality which are limited in terms of time and space (time/space categories according to Kant). Another limiting factor is the complexity of the systems studied. Above and beyond these cognitive limitations, man's knowledge of the effects of substances on natural systems is only fragmentary. Identifying the effects of material flows on ecosystems is possible to a limited extent only; an integrated analysis of all the ecological, economic and social aspects involved is even more difficult.

Since our knowledge is limited, there is a need for developing prevention criteria which take into consideration the persistence and the irreversibility of substances or systems. At the same time, a principle of prevention - when defined in such a way - obliges all the players involved continuously to update their knowledge about the effects of material flows.

Preservation and Restructuring Objectives, and the Assessment Pro- cess

Based on the model of sustainable development, the Enquete Commis- sion distinguishes between three categories of objectives: ecological objectives, economic objectives, and social objectives. The model of sustainable development combines these three objectives with one another: Sustain- able development can only be achieved if we recognise and preserve the role of natural resources as the basis of our economic activities, and hence in the long term as an essential prerequisite to adequate prosperity which helps to preserve social peace. There are numerous interdependencies - both antagonistic and synergistic in nature - between these three categories of objectives. Hence, the following subdivision into ecological, economic and social aspects is merely an attempt to pursue a

more abstract approach in order to systematise interdependencies and to create categories of assessment criteria for material flows and relevant measures. Only this summary approach - weighing up the three categories of objectives - leads to an integrated perspective of the overall objective. o

While ecological assessment criteria have already been largely defined and operationalised by other assessment bodies, economic and social objectives have so far been taken into consideration only in exceptional cases in terms of their form and substance in the context of substance- related provisions. In order to include economic and social objectives in decisions, the most important measure is to define assessment criteria for thes; objectives as soon as possible. The Enquete Commission has already taken the first few steps to that effect. However, when trying to define concrete assessment criteria, the Commission found out that often there is considerable room for interpretation (e.g. when it comes to attributing a certain number of jobs to a given product unit, or when determining external effects). It is important to identify such room for interpretation and factors of uncertainty.

The Enquete Commission distinguishes between preservation and restructuring objectives because environmental policy is not only aimed at preserving a given condition but it must also try to make use of the scope for change. The Enquete Commission feels that assessment criteria are not only designed to assess impacts on sensitive areas or test setups (as is often the case in the context of substances or technologies); instead, assessment criteria may also be used for other purposes:

- to identify acceptance thresholds (acceptance criteria), - to weight preservation and restructuring objectives or impacts

(weighting criteria),

- to describe and weight utility aspects (utility criteria), and - to deal with unknown areas and uncertainties (prevention criteria)

The Enquete Commission has defined preservation and restructuring objectives for the three areas of interest (ecological, economic and social aspects) (see Tables 1 to 3), and has already begun to operationalise these objectives in the form of assessment criteria and indicators or parameters. In its work, the Commission has made most progress with regard to the ecological objective. In this field, the commission has defined not only the first four steps of the assessment process (see above) but it has also worked out proposals for the fifth step - the assessment of specific preservation and restructuring criteria by comparing the current status with normative standards. The progress made by the

Enquete Commission with regard to developing a differentiated approach to dealing with the economic and social objectives is not com- parable to its progress in the ecological sector.

In the ecological sector, the Enquete Commission has selected two general concepts: human health and functioning ecosystems, as determined by both abiotic and biotic factors. Operationalising assessment criteria has proven to be more difficult for biotic processes than for abiotic processes.

In the fourth step of the assessment process, it is possible to assign indicators and parameters to the various assessment criteria. Indicators and parameters which refer to organisms or the structure and functioning of ecosystems can be subsumed under the term "ecotoxicology". Systemic approaches towards assessing ecotoxicity have been rather rare to date. There are two parameters or indicators which deserve special emphasis in the context of prevention: irreversibility as a property of systems, and persistence as a property of substances.

The fifth step consists of an assessment of environmental pollution in terms of the adverse effects it has on a given preservation or restructuring objective. For this purpose, the identifiable or predictable effects are compared with suitable standards. Defining reference standards is primarily a normative process, more than in the case of parameters and indicators. Scientists, industry, trade unions, parliaments, authorities as well as environmental and consumer organisations all have to be involved in the discussion process to define commonly agreed upon environmental quality objectives.

The Enquete Commission also defined preservation and restructuring objectives for the economic and social sectors, although these objectives are not as differentiated as those developed for the ecological sector. The Commission did not get very far, for instance, in defining parameters and indicators, and in resolving questions with regard to the assessment of specific preservation and restructuring objectives and their weighting (steps 4 to 6 of the assessment process).

Economic pvesevvation and vestvuctuving objectives can be derived from two roots: the preservation of the natural capital stock and the preservation of economic functioning capacity. Preserving our natural resources is a precondition for safeguarding the basis for our economic activities in the long term, and hence, it is a prerequisite to achieving adequate prosperity. This means that some ecological objectives are at the same time fundamental economic preservation and restructuring objectives. The objectives "conservation of resources" and "preservation of species di-

versity" or "preservation of the diversity of genetic resources" are cases in point. The second root takes into consideration aspects which have to be borne in mind when using integrated substance chain management instruments and which are designed to prevent large-scale economic crises.

Between these two roots, there are some important points of contact in terms of substance. This can be illustrated by using the example of "sustainable economic growth" as a restructuring objective: In economic policy, reference is usually made to "adequate economic growth", in line with traditional growth theory and the so-called "magic rectangle". This economic objective has to be further developed in the framework of the overriding model for a materials control policy. In the context of the sustainable development model, "adequate" also means that the preservation of the natural capital stock also has to be taken into consideration. As a result, ecological aspects become an integral part of economic policy.

Like the economic sector, the social sectov derives its relevance from two different lines of argument: On the one hand, sustainable social development of a democratic society ("sustainable society") is as important a pre- ,

requisite for safeguarding our quality of life in the long term as the preservation of our natural resources. A society which destroys its ecological resources at the same time is destroying the very basis of its economic ex- istence. A functioning economy - based on a sufficiently equitable distribution - provides adequate material prosperity for the individual. Freely developing one's own individual "life design" is only possible once a certain level of prosperity has been achieved. In this context, there is a clear interdependence between the three types of objectives.

On the other hand, the social sector is also a major key to attaining the ecological objectives of the sustainable development model. In democratic countries, an effective environmental policy can only be pursued if it is accepted by broad segments of the population. For this reason, it is necessary when trying to gain support for environmental policy measures to allow social structures a given period of time for adjustment, as in the case of economic changes. In this context, the three factors which have the greatest impact on the level of acceptance are the values held in society, its culture of discussion and debate, and the individual's ability to learn. In an unbiased social climate, for instance, it is conceivable that new lifestyles may evolve which will replace the current focus on success and consumption by a new definition of quality of life, thereby creating acceptance for measures designed to preserve our natural resources.

Table 1: Ecological Preservation and Restructuring Objectives, as well as De- rived Assessment Criteria and Indcators

2. Preservation and Restructuring Objectives

3. Assessment Criteria

4. Indicator/Parameter 4.1 substance- 4.2 systemic

related

5. Assessment in comparison with

Human Health

-public health - personal health

allergies cancer incid- ence disease death

acute/ mean life chronic expectancy toxicity mortality immuno- (cancer/ toxicity: cardio- mutagenicity vascular carcino- disease) genicity terato- genicity

international standard (WHO) of normal life expectancy

I Ecosystem structure1 I I I Abiotic -integrity of

atmosphere/air

-integrity of surface water groundwater

-integrity of soil

Biotic -species diversity /

genetic pool

-ecosystem stability water

air pollution/ photosmog ozone hole

eutrophication nitrification

acidification

heavy metal contamination soil wear

loss of species/ reduction of genetic diversity

perturbance of ecological equilibrium

hydro- ozone con- carbon/NO, centration concentra- ozone tions depletion ODP per year

eutrophi- drinking cation water potential contami- nitrate con- nation centration

ozone limit

natural ozone concentration

drinking water critical load limit (EU)

heavy metal concentration erosion

sealing

acidification pH gradient potential

species- decrease in related DNA ecotoxity: variance LD50

critical load limit

aquatic aquatic ecotoxicity: ecotoxicity: LC50 shift in

species

natural range

PEC-NEC ratio natural site- related population

-ecosystem stability soil

-ecosystem stability flora

perturbance of ecological equilibrium

changing vegetation zones

PEC population dynamics

terrestrial terrestrial ecotoxicity: ecotoxicity: PEC changes in

microbial population

regional loss of species

PEC-NEC ratio natural site- related microbial population

natural vegetation

Ecosystem ~unctioni

Abiotic -climate stability

Biotic - sustainable

(production) function water

- sustainable (production) function soil

-sustainable plant growth

- recreational function of landscape

greenhouse effect

fish mortality

reduced yield

forest die-back

loss of nature

hectare yield per year

GWP temperature rise per year

Lcso reduced fish population

normal yield

ecologically sustainable rate of increase

natural population

I Other Factors I I I

trace gas crown concentra- thinning tions needle loss

healthy tree population

-conservation of resources

odour noise

persistence irreversibility

Table 2: Economic Preservation and Restructuring Objectives, as well as Derived Economic Assessment Criteria and Indicators

Preservation/Restructuring Economic Assessment CriteriaIIndicators Objectives

Freedom and development opportunities Health Mobility

I Personal Level I

Social security

I

Educational opportunities

Economic Stabilitv

Human Development Index (HDI) Contractual freedom, etc. Indicators according to WHO Attainability of important destinations Satisfaction of basic needs (indicators for accessibility of workplaces, schools, shops, basic supplies, etc.) Old-age poverty, emergencies, etc. (indicators for provision for old age, provision for unforeseen emergencies, etc.) Education stratified in accordance with family

' background, sex, etc. (indicators for illiteracy, availability of schools, permeability of schools etc.)

Sustainable economic growth

Monetary stability

Foreign trade balance Employment stability/ approaching full employment Competitiveness

Steadiness of economic development

Ecological national product (approaches towards environmentally oriented national accounts, rates of change of ecologically adjusted GNP) Inflation (inflation rates per unit of time and economic area under review) Foreign trade balance (rates of change) Unemployment (unemployment rate relative to total potential workforce, etc.) Labour market ups and downs (changes in unemployment rate) Monopolisation (market shares per sector or relevant market, critical variables) International competitiveness Cyclical upswings and downturns (variations of GNP or of ecologically adjusted GNP) Structural upheavals, time profiles of industry indicators in the economic area under review

Preservation and Further Development of Market Economy Structures

Conservation of resources/ preservation of natural capital on the input side

I

Diversity of industries L

Excessive use of renewable resources (operationalising the first fundamental rule of sustainable development) Excessive use of non-renewable resources purely for the purpose of consumption (operationalising the second fundamental rule) Loss of species and reduction of the genetic pool (indicators: ratio of average natural evolution to man-made loss of species) Loss of industries, structural predominance (industry indicators for each economic area under review)

I Diversity of companies

Diversity of skills

Reduction of spectrum of company sizes (indicators for the distribution of company size classes, etc.) Overaging of companies and corporate structures Reduction of the spectrum of skills (indicators in particular with regard to relatively new skills

Preservation and Further Development of Market Economy Efficiency

Preserving the assimilation capacity of natural sinks Preserving the natural capital on the output side

Innovation capacity

Stability

Excessive use of sinks (operationalising the third fundamental rule of sustainable development)

Status quo defense (not only output indicators such as R&D investments but also indicators from patents statistics; share of new materials which meet requirements of fundamental rules, etc.)

Susceptibility to crises or lack of economic resilience

Table 3: Social Preservation and Restructuring Objectives, as well as Derived Assessment Criteria and Indicators

Preservation/Restructuring Economic Assessment Criteria/Indicators Objectives

I Protection of Health / 1 - Physical health

- Social preconditions for mental health

Basic material needs

Quality of work

Social recognition and social dignity

Opportunities for developing one's own personal design of life

- Satisfaction of , basic needs

Status of human health (public health, personal health)

Work or income

Job safety/stress; development opportunities; occupation according to aptitude

Meaningful occupation, recognition

Degree of self-determination (changes in social and economic environment at an acceptable pace for human beings; preserving one's learning and communication skills, etc.); equal rights for old and young people, and for men and women

Housing, food, and clothing

Preservation/Restructuring Objectives

I Protection of social stabilit

- Preservation of peace

- Equitable distribution and equal opportunity

- Social security

- Opportunities of participation

Protection of society's development and functioning capacity

- Cultural diversity

- Diversity of social structures

- Social cooperation

- Education and information available

Economic Assessment Criteria/Indicators

Susceptibility to crises (dual use, etc.)

Social tensions; access to education

Reliability of social security (sickness, age, emergencies)

Level of participation (opportunities for participation and influence at governmental level, collective bargaining rights, codetermination possibilities at company level)

Tolerance, freedom of religion (ability to integrate minorities, etc.)

Latitude for various forms of life; possibilities of organising oneself in society

Communication quality; level of polarisation (insurmountable conflicts of interest, incompatible ideologies, lacking ability to compromise); intergenerational compact; principle of solidarity

Ability and willingness to learn

Weighting Preservation and Restructuring Objectives, Giving Due Consideration to the Damage Caused and the Benefits Gained

In the last step in the assessment process, the benefits and the damage- associated with particular activities are weighted. The Enquete Com- mission distinguishes between the following types of assessment: a comparison between similar effects which various substances have on a given preservation or restructuring objective; and prioritising competing preservation and restructuring objectives in terms of the damage and the benefits associated.

Both comparative assessments of similar effects of various substances and decisions about possible alternative uses and regulatory action involve the question of the relative importance of specific substances when compared to others with equivalent effects. Such comparisons can be used as a basis for prioritising various measures designed to reduce exposure.

A particularly common practical problem in the field of environmental protection is having to prioritise specific preservation and restructuring objectives with regard to competing objectives. This is an issue which typically arises in connection with decisions on substitution processes. As a general rule, the assessment should take account of the impact of activities in terms of time and space, and of the current impacts on the environment.

Based on criteria such as geographical scope, change over time, half-life of reversibility, and degree of irreversibility, it is possible to compare the various preservation and restructuring objectives with one another. However, these criteria cannot be used to assign priority rankings among the various preservation and restructuring objectives.

When weighing the pros and cons of specific options, one of the criteria to be considered is a more efficient use of resources. As a matter of principle, priority should be given to preventive measures designed to reduce damage which is foreseeable in the long term. However, it would be foolish to discuss preventive measures in the face of an acute threat.

Risklbenefit analyses have been common practice in the fields of pharmaceutical products, as well as pesticides and insecticides for a long time. When registering new drugs, for instance, the benefit of a given drug (its medical efficacy) is compared with the risk it involves for human health (side-effects). In addition, doctors and patients assess the opportunities and risks of new medication on an individual basis.

According to an expert report which was drawn up on behalf of the En- quete Commission, any materials control policy objective must be assessed against the background of three principles: adequacy, necessi- ty, and reasonableness (Rehbinder, 1994, p. 11 ff.). The application of the efficacy test stipulated in German provisions on pharmaceutical products, for instance, is limited to potentially noxious substances. However, a test of the relative need for, and benefit of, new compounds (comparison with alternative compounds or technologies, to be seen as a type of chemicals service) - which is stipulated, for instance, in German legislation on chemicals - can be applied to all substances. Doubts about the justification of such a broad application are based not only on the enor- mous effort and expense associated with such a test because of the large number of substances to be examined, but also on market economy considerations. According to Rehbinder, a test of the absolute need for, and benefits of, a given substance should only be considered in cases where there is an obvious imbalance between risks and benefits.

There are two aspects which play an important role when it comes to weighing benefits and harm or benefits and risks: the perception and the acceptance of risks. The level of risk acceptance depends on various factors: the impact of a given effect in terms of time and space, the potential for disaster, the controllability by those affected, and the level of volun- tariness involved in accepting a given risk. The acceptance of environmental risks is also influenced by the risk/benefit balance. If there is an imbalance between risks and benefits, this often leads to a lack of risk acceptance. These factors are as real as estimates of the probability of occurrence of specific events. Hence, it is understandable that risk acceptance varies, depending on the extent to which individuals are affected.

This suggests that the involvement of the public in decision-making processes has a major impact on the acceptance of measures which are relevant to substance chains or material flows. Scepticism vis-A-vis planned measures which will have an impact on the environment and lack of risk acceptance are evidence of the fact that many citizens feel that bureaucracy and technological environmental changes intervene in their personal lives without having a chance of being involved in decision-making processes.

There is a need for a fundamental debate about the risk to be accepted in our society. The Enquete Commission feels that a discourse is a suitable instrument for finding a consensus, determining the level of acceptance and identifying any points where views differ. A discourse makes it possible to reduce polarisation in the debate about risks and to broaden one's perspective above and beyond one's own interests.

Need for Research

The Enquete Commission has developed the assessment process for material flows outlined above, and it has taken the first steps in order operationalise this concept. However, additional work is needed in this area.

A prerequisite to operationalising preservation and restructuring objectives, as well as assessment criteria, is to measure effects by means of indicatouslparameteus, and to define reference variables or standards in the most objective way possible.

In this context - and based on findings obtained to date - the Commis- sion has developed much clearer views with regard to ecological objectives than with reference to economic and social objectives. This imbalance gives rise to the need for important research on how to implement the model.

Nevertheless, there are also many open questions with regard to health- related and ecological objectives: (1) In the field of h u m a n health, there is a need for more methodological

research, in particular with regard to health sciences ("public health). It is also necessary systematically to increase the promotion of local specialised research not only at universities but also in other institutions, and to pursue this research over a long period of time.

(2) In the field of ecological objectives, a key area of research is ecotoxicology. The Enquete Commission recommends that a specific research programme should be drawn up for this purpose. A primary methodological issue is the development of scientifically well- founded reference variables to define concentrations, pollution loads or structures.

(3) There is also considerable need for research with regard to the speed and the development of distribution equilibriums of pollutants between environmental compartments, and with regard to the rate of biotic decomposition in water and in soils.

(4) Particular attention should be paid to research projects on environmental dynamics and the velocities of relevant processes, going beyond the rather static approach which has prevailed to date.

(5) Irrespective of the difficult issue of how to objectify a "natural condition", it is necessary to promote concepts designed to define reference values. There are three concepts that seem particularly suitable in this context: critical level, critical load, and critical structure. A

reliable data base is a necessary precondition for the assessment practice.

There is also considerable need for research with regard to the systematic selection of monitoring parameters and monitoring points or areas, as well as their national and international harmo- nisation.

(6) Particular importance will have to be attached to further improving the mathematical models because they are indispensable for analysing and predicting the behaviour of complex systems.

(7) In addition, it is necessary to convey as much up-to-date knowledge as possible. New structures will have to be developed for this purpose at universities.

Another important field for research is "risk communication".

Recommendations

Against the background of the progress made to date with regard to the assessment of material flows, the Enquete Commission submits the following recommendations: - Whenever decisions are made about the use of substances and sub-

stance chain management, attention should be paid not only to human health and ecological objectives but also - and explicitly - to economic and social objectives.

- In order to optimise and support integrated assessment methods, the Enquete Commission recommends that ecological, economic and social preservation and restructuring objectives - as well as indicators derived from them - should be optimised. For this purpose, it is also recom- mendable to define national environmental objectives.

- Great importance must be attached to promoting methods for developing consensus-oriented weighing, discussion and decision-making processes.

- In order to take into consideration inevitable limits to our knowledge, and in view of the risk that effects on large-scale dynamic ecological systems and on human health may become manifest with a certain time delay, particular attention must be paid to prevention criteria.

- These prevention criteria will have to be complemented by an obligation to improve the current status of knowledge, as expressed in the En- quete Commission's other recommendations.

- The discussion about the acceptance of substance-related risks in our industrial society should be actively encouraged. The results of this discussion process are an indispensable basis for the responsible institutions to build a better "foundation" for the assessment methods described.

- The assessment methods should be further developed (integrated assessment method) so as to provide comprehensive coverage of the six fundamental assessment steps outlined earlier.

- Assessment methods organised by institutions themselves and substance management initiatives should be supported because such steps lead to greater involvement of society.

- In an integrated assessment concept, risks are involved in many decisions, either directly or indirectly. Risk research, which encompasses not only risk assessment but also risk communication, should help to reduce this fundamental societal problem.

- Progress in the field of ecotoxicology (e.g. in the framework of a priority programme of the Deutsche Forschungsgemeinsckafi (DFG - German Research Association) should be systematically promoted.

6 Substance Chain Management

Definition

Substance chain management is the answer to the change in the environmental policy paradigm which occurred in the late 1980s. There was a growing realisation that there were limits to environmental policies which were organised in terms of the various environmental media and which were oriented towards emissions, plants and single substances. There was a shift of focus from single substances to entire fields of application, from production to products, and from production plants to product lines. As a result, greater emphasis was placed on more systemic material flow descriptions and more complex product analyses, often described as "from cradle to grave". This change in perspective will have to go hand in hand with a reorientation in the field of environmental protection, involving the replacement of reactive by proactive policies. Substance chain management is an approach designed to make headway towards the objective of sustainable development, in conjunction with environmental management at company level and in the framework of suitable materials control instruments.

In the course of the discussion about how to implement the model of sustainable economic development, there are some fundamental rules which have become accepted in terms of their concept and substance. Based on these fundamental rules, the Enquete Commission refers to the active process of managing the use of substances at all levels of responsibility as "substance chain management". In the context of materials control policy, the term "management" also implies that substance chains or material flows can be guided along an environmentally sounder course by implementing corresponding changes in the general conditions prevailing. In a market economy, this general setting should be designed in such a way that the market forces help promote sustainable development.

Man-made substance chains or material flows can intervene in the environment in a variety of interconnected ways. Depending on their use and combinations with other substances, the substance chains which accompany a product during its life cycle can have widely varying effects. A systematic inclusion of these different effects (and thus of currently externalised costs) in economic decision-making processes requires a material flow analysis which begins before materials ever reach the factory's gate and end long after the product has left the factory, and which in addition has to take into consideration numerous interconnections. When defined in the manner described above, substance chain

management therefore goes far beyond the classical in-plant system of material flow management.

More and more companies and their associations are aware of the need for integrated management which includes not only traditional management aspects (i.e. maintaining competitiveness and attaining cor~orate objectives) but also ecological aspects.

The attitude of the responsible manager is particularly important since substance chain management (i.e. influencing material flows) depends on the competence of the decision-makers involved. Attitudes of man- agers are determined by the criteria for environmental management. The knowledge required for taking informed decisions must not be limited to the top management level; instead, it must pervade all levels of an organisation in the context of an exchange of information, from top to bottom and vice versa. This activity is referred to as direct substance chain management. ,

Whether a particular player (e.g. a company) is successful in the field of substance chain management depends - to a large extent - on the company's access to information, its cooperation with other players, and the general conditions prevailing. The wide variety of different types of information required for systematic substance chain management must be provided by the players themselves and also by third parties operating at national and international level. In this context, involvement of, and cooperation with, external players must extend beyond an exchange of information, because any substance chain interventions by one player usually have a direct impact on other players. Substance chain management is therefore the result of many contributions from a variety of players involved in the chain.

The primary responsibility of government in this context is to create a suitable general setting. This includes the definition of environmental objectives; influencing the general economic conditions prevailing; promoting education, research and development to this effect; supporting communication and cooperation processes; as well as facilitating the provision of information in the interest of the common good if the players themselves are unable to organise this exchange of information on their own. Shaping this general setting is referred to as indirect substance chain management.

Direct government interventions should be guided by the principle of prevention; hence, they should be limited to substances which can be highly hazardous to human health or to the environment.

In a nutshell, substance chain management can be described as follows:

Managing the substance chains of the players involved means influencing substance systems in a systematic, responsible, holistic and efficient manner. The objectives pursued in this context include both ecological and economic objectives, while also taking into consideration social aspects. The objectives are developed either at company level, or among the players involved in a substance chain, or at governmental level.

Efficiency is always of primary importance. Government creates the general preconditions (e.g. in the form environmental objectives) while industry is the actual player which constantly interacts with other play-

'

ers in a market system. However, this is an iterative process, i.e. it requires mutual understanding and a mutual exchange of information.

Aside from government and industry, many other players are involved in substance chain management - players whose actions and behaviour affect material flows, but who are not involved in systematic substance chain management as defined above. This group includes trading companies, associations, trade unions and consumers, with each of them playing a different role and pursuing different objectives in substance chain management. There is no such thing as a single approach to substance chain management. However, some steps in the course of substance chain management can be generalised because they apply equally to all types of potential fields of application.

Substance Chain Management Methodology

The Enquete Commission developed the various steps involved in substance chain management on the basis of the methodology used for life- cycle analyses. These steps apply equally to all the various players involved in substance chain management (governmental bodies at federal, state and loval level, companies, associations, etc.) and to all levels of material flow problems (global, national, regional, local), even if the emphasis and the depth of analysis will vary from case to case. In practice, substance chain management must be viewed and applied as an interative process.

Steps Involved in Substance Chain Management

Objectives: Ecological, Economic, Social I

Definition of Objectives

I Definition of prior~ties for measures

b

I

Strategy Development

Selecting operat~ons/measures

Analyslng the Impact of measures

Assessement and dec~s~ons on measures

b

Implementation and Efficiency Control

Material Flow Analysis

Substance analys~s: select~on of relevant materlal flows

Structural analysls of material flows

Quant~f~cat~on of mater~al flows

Steps involved in substance chain management; based on: Prognos, 1994, p. 14

)

Material Flow Assessement

Operatlonallslng objectives: lndlcators (e.g. critlcal loads)

Variance comparison (based on ~nd~cators)

(1) Definition of objectives: The first step is to define the objectives to be attained and the substance chains or material flows to be analysed. At the same time, the general conditions currently prevailing and their variability will have to be determined.

(2) Material flow analysis: The purpose of analysing the material flow is to provide a solid foundation for the ensuing steps in substance chain management. This step is used to identify the relevant material flows (substance analysis), as well as the processes and players involved (structural analysis), and to quantify the volumes of substances removed from and released to the environment (quantification). A major charac- teristic of material flow analyses is that they are as comprehensive and holistic as possible. This means that such analyses are not neces- sarily focused on emissions of specific pollutants or from specific plants; instead, they concentrate on entire material flows and on- relevant interactions between substance and product flows. Not all the material flows associated with a given process or product can - or should be - analysed. With this concept, the environmental problem perspective is no longer limited to isolated environmental media (air, soil, water). The figures and facts obtained on the basis of material flow analyses first of all describe the status quo; however, such a description also provides important ideas for future measures. In addition, material flow analyses can also serve as a framework for predictions or scenarios of future developments.

(3) Material flow assessment: Assessing materials flows against the background of specific preservation and restructuring objectives and weighing up these various categories of objectives (ecological, economic, and social) makes it possible to make motivated decisions with regard to prioritising and weighting potential options in substance chain management.

(4) Strategy development: The purpose of strategy development is to identify the set of measures which is most efficient with regard to influencing material flows in accordance with the objectives defined. This means that corresponding assessment criteria will have to be available to estimate the effects of the instruments and measures chosen.

(5) Implementation and efficiency control: The measures chosen are implemented either at the environmental policy level (e.g. by introducing corresponding legislation) or at

company level (e.g. by investing in improved plants). In addition, there seems to be a need for feedback with regard to the actual effects achieved by means of the measures implemented; such efficiency control can lead to a revision of the measures planned for future implementation.

The Role of the Players Involved in Substance Chain Management

Substance chain management is the result of many contributions from various players. There is no such thing as a "centralised substance chain manager". Substance chain management lies partly in the realm of governmental responsibility, but it is primarily the responsibility of manufacturing companies, trading firms, and other enterprises.

In his expert report entitled "Akteure, Entscheidungen und Informatio- nen im Stoffstrommanagement" (Players, Decisions and Information in Substance C Chain Management; 1994, p. 20), which de Man submitted to the Enquete Commission, he subdivided the players involved into five groups:

(1) Economic players w h o have a direct impact o n substance chains: Substance chain management in this context primarily refers to the activities of those players who are directly involved in controlling substance chains or material flows. These are players who operate plants, make decisions on production processes, and - more indirectly - players who develop products and who develop and build plants. These players may be departments or individuals in manufacturing companies (company owners, members of the supervisory boards, employees of companies in the chemicals, metal-working and electrical industries, etc.).

(2) Economic players whose decisions affect other players' decisions o n substances: The purchasing and assortment decisions made by trade affect many substance chains. The substance chain management practised by trade is an indirect type of management which can motivate direct substance chain management. This also applies to the activities of other players (e.g. banks, insurance companies), many of whom have only a very indirect impact on direct substance chain management.

(3) Economic players w h o define the general sett ing for the substance chain managenzent of a n indus t ry or a n interrelated production sector (industry associations, commodities cartels, etc.):

Industry association structures are of interest for substance chain management if they can create a favourable setting for substance chain management in companies. This may involve centralising information systems and know-how or overcoming problems associated with competition among companies or the allocation of costs among companies. In addition to traditional horizontal associations, vertically organised structures can play a stimulating role in substance chain management.

(4) Governmental or administrative players who define tlze general setting for the economic players' substance chain management (legislative, judiciary): The substance chain management of these players (i.e. in this case the management of the general conditions for the management of substance chains) refers to activities which facilitate or promote direct substance chain management.

(5) Other players who try to exert influence on the substance chain management of all the other players: These players include consumer organisations, environmental associations, trade unions and, where applicable, players dealing with questions of standardisation.

With their buying behaviour and consumption patterns, consumers have an impact on substance chains although they do usually not make their purchasing decisions deliberately in order to influence substance chains.

Cooperation and Exchange of Information

Because of the open nature of substance chain management, great importance must be attached to cooperation and an exchange of information among the players potentially involved in shaping materials control policies. Cooperation among the various players involved in the chain may be necessary because of requirements imposed by players at the end of the chain (trade, consumers) or because of changes in the production processes of substance manufacturers, or because of targets imposed by government.

Since the main purpose of substance chain management is to prepare the ground for decision-making, it is essential that information is available and that this information is exchanged among the players. Hence, one of the tasks of the players indirectly involved in substance chain management (associations, trade, banks, insurance companies, environmental and consumer organisations, etc.) and of government is to provi-

de the information required to the parties involved and to facilitate an exchange of this information. Well-documented substance chain data are an indispensable prerequisite to any assessment of environmental impacts. For this reason, all the players directly involved in substance chain management must be obliged to keep records and provide information in the context of an in-company accounting system for problematic substances. These data are needed as a basis for determining each company's contribution towards substance chain management; in addition, they guarantee the flow of information along the chain of players; and - where necessary - these data have to be made accessible (usually in an aggregated form) to governmental institutions and to the public.

The activities of properly legitimated institutions involving the participation of society's various groups (e.g. industry and its apex organisations, the trade unions, environmental and consumer organisations, science), which prepare the ground for the definition of environmental objectives, should be coordinated and, where necessary, broadened in their scope. This requires the most reliable information available: not only on the substance chain system, as well as its effects on the structure and the functions of the environment, but also on interconnections between the social and economic system and the substance chain system, i.e. information on the interactions of the various players in society, and on the way in which they control substance chains.

A Proactive Approach

Because of the complexity of substance chains, the players directly involved are bound to have more knowledge about detailed issues. Hence, it is ecologically more effective and economically more efficient to let the companies concerned act independently in the framework of objectives and duties defined by political bodies instead of government imposing specific provisions to deal with each and every aspect. For this reason, substance chain mangement requires companies with foresight, companies which "act proactively". Companies are called upon to anticipate developments by "identifying and assessing potential future problems, risks or damage before public authorities have sufficient information to become active themselves, or by going beyond the requirements imposed by governmental agencies" (Fiilgraff/Reiche in Schen- kel/Storm, 1990, p. 104).

The Charter for Sustainable Development of the International Chamber of Commerce (ICC), as well as the chemical industry's "Responsible

Care Programme" and the objectives and activities of associations of environmentally oriented companies such as the Bund junger Unternehmer (BJU - Federation of Young Entrepreneurs), the Bundesdeutscher Ar- beitskreis fiir UmweltbewuGtes Management (B.A.U.M. - German Association for Environmentally Conscious Management), future and Unternekmensgriin (Corporate Green) - all these activities indicate that there is growing willingness on the part of companies to to adopt a proactive approach.

Government should reward and encourage proactive economic players by creating a suitable general setting. By laying down environmental objectives, politicians define expectations which the economic players have to live up to in their actions. Proactive behaviour on the part of companies can also be seen as a response to political objectives which initially are set without specifying the instruments to be used for their implementation. Proactive companies act before governments acts, and thus can make governmental action superfluous. However, government must reserve itself the option of using the means at its disposal in order to enforce objectives which are accepted in society and deemed necessary, while allowing for necessary adjustment periods. The instruments to be applied then will have to be designed in such a way that they create an incentive for companies to anticipate governmental measures by acting proactively.

Conclusions Drawn from the Material Flow Analysis Test Cases

The purpose of analysing the material flows chosen as examples (see Chapter 4) was to develop assessment criteria and prospects for a sustainable management of material flows. The particular and general findings obtained from the analysis of the examples with regard to substance chain management can be outlined as follows: - The analysis of the test cases (cadmium, benzene, R 134a) has shown

that generally speaking, substance chain management (5-stage model) is a suitable method for identifying weak points and developing options for action. Even in cases where the data available are inadequate (re- vealing gaps) substance chain management is likely a method which can be successfully applied or which can help to identify plausible implementation options.

- For more complex fields of application (e.g. textiles/clothing), if is necessary to go through the various steps of substance chain management several times. A first run through all the steps serves the purpose of developing an overview of the substance chain system involved, the interrela-

tions among the various players and the general conditions prevailing in order to identify major problems and areas for action. On the basis of the broad overview, it is then possible to set priorities with regard to the problems and the areas for action to be selected for which implementation-oriented substance chain management options should be developed. In this context, the aim is to reduce the level of complexity while preserving the major interdependencies. Only a few isolated methods are currently available to identify priorities (e.g. analysis of weak points). As soon as the area to be studied has been sufficiently reduced in complexity (e.g. by reducing it to the finishing stage or by restricting it to the cultivation of a specific type of fibre), the substance chain management methodology can be applied in the same manner as in the case of the single substances which were analysed.

- The loss of information along the product line proved to be a major obstacle for the implementation of substance chain management , even in the case of the relatively simple analyses of single substances (i.e. cadmium, benzene and R 1344. The low compatibility of information on substances and products was identified as a major cause of information problems in the context of substance chain management. While substance-related information is available on the first few stages of a product line (e.g. consumption of raw or basic materials, by-products, emissions, etc.), most of the information available on the stages close to the finished product are specific to the products concerned (product volumes, sales volume, etc.). These problems can only be partially solved. However, the flow of information can be substantially improved. The Enquete Commission has presented many proposals for improving the flow of information with regard to the test cases analysed (e.g. for textiles/clothing: introducing documents accompanying products, checklists for an ecological product assessment, environmental labels). However, the aim must not be to pass on as much information as possible but to pass on the right information to the right player at the right time. The quality assurance systems developed by manufacturing companies offer an opportunity for mastering this challenge. For this purpose, data on the ecological quality of substances and products should be added to the information currently captured by quality assurance systems.

- The analysis of the substances and fields of application selected has also confirmed that the information needed for substance chain management is not limited to scientific and technological data; instead, there is also a need for economic, legal and organisational data. So, in addition to analysing the substance chain, it is also necessary to analyse the players involved in a given product line (chain of players as well as cor-

porate structures) and the legal setting as well as the economic efficiency of the measures initiated.

- The experience gained with the application of substance chain management in the examples analysed suggests that there is no need to develop new or specific instruments for materials control policy. What is needed instead is a mix of instruments capable of solving the specific problems associated with a given substance chain, satisfying the needs of the various players involved, meeting the requirements

. of integrated production and interdependent (international) trade relations, and of the prevailing legal setting. In this context, informational and organisational instruments as well as economic incentives tend to play a particularly important role.

Relevance of Life-Cycle and Product-Line Analyses to Substance Chain Management

In its interim report, the Enquete Commission provided a detailed overview of life-cycle and product-line analyses (Enquete Commission on the "Protection of Humanity and the Environment", 1993, p. 72 ff.). Many of the hopes and fears as well as controversial points in the environmental policy debate are projected on life-cycle and product-line analyses as substitutes, although these hopes and fears actually have more to do with general substance chain management. While life-cycle and product-line analyses are important additions supplementing the set of instruments available, they are not a panacea for all environmental policy problems.

The optimisation of product lines by means of life-cycle analyses plays an important role in substance chain management.

In its interim report, the Enquete Commission gave a detailed account of the state of the art of this methodology. From the perspective of the Enquete Commission, the inventory standardisation process, which is being prepared by the Deutsches Institut fir Normung (DIN - German Standards Institute) or the International Standards Organisation (ISO) and the Society for Environmental Toxicology and Chemistry (SETAC), has been satisfactory to date. However, the development of an assessment system for life-cycle analyses has not been satisfactory so far. The assessment models presented to date are either too aggregated ("eco-point model"), or they are not operational for market decisions ("material intensity per service unit", Schmidt-Bleek, 19941, or they are insuffiently operational ("qualitative argumentative assessment"). The Enquete Commission supports the development of an

assessment system which is based on previously defined environmental objectives.

The methodological controversy between life-cycle analyses and product-line analyses is not very fruitful, and it has become irrelevant due to practical developments. In some past and current projects carried out on behalf of industry, economic and social aspects have been analysed in addition to conducting life-cycle analyses. Further methodological and practical work will be needed to improve the analysis of socio- economic aspects.

The inventories which have been compiled by industry to date (e.g. the European records on the major plastic materials) are important data bases. There is disagreement among the members of the Enquete Com- mission with regard to the question as to whether, in addition, life-cycle analyses should be carried out systematically for the most important basic modules or product groups.

Collecting data for life-cycle analyses causes great difficulties because there are no general rules on data access. The same approach adopted with regard to substance chain management should generally be applied to decentralised corporate and governmental information systems.

Recommendations

The Enquete Commission feels that the following steps are necessary to introduce substance chain management: - The legislator should establish a clear legislative context for substance

chain management. In particular, the legislator should develop environmental objectives with regard to the use of substances, define materials control policy requirements based on these objectives, and specify general provisions and rules of conduct.

- The environmental objectives to be defined by government should be guided by the model of sustainable development, and the task of defining these objectives should be tackled immediately. Relevant groups of society should be involved in the development of national environmental objectives. In addition, international preparatory activities which have been carried out in other countries (Netherlands, Sweden, Switzerland, etc.) should also be taken into consideration.

- Substance chain management is a suitable instrument for implementing the materials control requirements based on the environmental objectives defined. i

In order to allow the substance chain management concepts discussed by the Enquete Commission to rnaterialise, particular attention will have to be paid to optimising the methods used for ovganisiizg chains of players and decision-makiizg pvocesses by means of problem areas and fields of application. For this purpose, it will be necessary to develop not only models for the description of relevant segments of substance chain systems but also - and more importantly - models of cooperation among the players involved in a production chain, and of cooperation between government and chains of players.

- Infovinatioiz systems available for substance chain management should include not only the technological and scientific data relating to a given substance chain system but also - and most importantly - iizfov- mation about the playevs involved and the altevnative options available. For this purpose, current governmental information systems should be re- formed by adding information relevant to materials control policy. The development of decentralised information systems for substance chain management purposes should be facilitated by defining standards and by offering governmental support (i.e. financial resources and know-how). Quality assurance systems should be developed for this purpose, and measures should be adopted to promote the implementation of in-company eco-audits, in particular for small and medium-sized enterprises.

- T h e pvovision of infovnzation, as zuell as labelling and vecovd-keeping will have to be made compulsory for the players so that they can implement substance chain management.

- In order to create an international environment which is suitable for substance chain management, efforts should be made by the German Federal Government to establish alz international m i n i m u m standard (e.g. in the framework of the World Trade Organisation (WTO), or when granting Hermes export credit guarantees, or when carrying development policy projects). Enforcing international environmental standards should be a primary national objective in the context of the development of WTO.

7 Instruments of a Materials Control Policy

Measures which are designed to help attain the objectives of environmental policy are referred to as instruments of environmental policy.

Instruments of a materials control policy must be assessed against the background of specific objectives pursued in the context of sustainable materials management. There is no controversy as to what the fundamental objective is: to reduce the risks involved in producing and using potentially hazardozrs szrbstances. Two types of instrument can be primarily used to attain this objective: regulatory instruments and liability provisions. Regulatory action is believed to offer the advantage that it usually leads to inevitable and direct reductions of pollutant emissions. Its disadvantage is that existing provisions are not always fully implemented and that the way in which environmental policy objectives are attained is mostly inefficient.

There was also unanimity among the members of the Enquete Commis- sion with regard to another environmental objective: the interrzalisation of external effects. This objective can be paraphrased as follows: "The ecological truth has to be reflected by prices". A major requirement for environmental policy in an ecologically and socially oriented market economy is to curtail possibilities of using the environment as a cost-effective production factor and as a consumer good. The curtail- ment of such possibilities can be achieved by increasing the prices to be paid so that the prices reflect the scarcity and the high value of ecological resources. The Enquete Commission feels that when instruments are selected, it should always be examined whether the controlling function of the markets can be improved.

Only some members of the Enquete Commission support another environmental objective: a general vedzrction of material flows. The advocates of this objective suggest that this objective should be attained reducing the use of materials, by minimising the volume of pollutants in circulation, and by reducing the material intensity of processes, in particular in industrialised nations. In addition to examining economic instruments and voluntary measures, it is also necessary in this context to study the proposal of introducing a General Materials Law which would include not only pollution control provisions but also framework guidelines for using substance and material flows in a manner which conserves resources and preserves sinks.

One of the key responsibilities of government is to define environmental (quality) objectives and framework conditions. Another function of government - in addition to defining environmental (quality) objectives - is

to motivate the other players by creating suitable framework conditions which encourage other players to become involved in ecologically oriented substance chain management. Relying on the voluntary commitment of the various players will not be sufficient to solve the pressing problems prevailing in this area. Government should be frank and clear in explaining the aims of its environmental policy, i.e. to preserve and improve the natural environment. It is the task of government in this context to define the legal and economic setting for the use of natural resources. Within this framework, the government will have to provide incentives encouraging the various players involved to adopt an environmentally sound behaviour, based on their own responsibility. For this purpose, it will be necessary to impose increasingly strict ecological requirements - regularly and in a predictable manner - and to translate these requirements into market signals. Instead of being an instrument of crisis management, environmental policy should be predictable and precautionary in nature; and instead of being geared towards specific measures, it should be guided by broader objectives.

Distinction between Instruments

Instruments of materials control policy can be classified on the basis of a variety of critiera. In literature, there is no single system of classification. Liability provisions, for instance, are either categorised as regulatory action or as an economic instrument.

With regard to the selection of instruments, the Enquete Commission has examined three strategic options, and it has commissioned corresponding studies on whose findings the following chapters are based. Three types of instrument were examined: - Regulatory instruments were studied with a view to harmonising envir-

onmental law (in particular provisions related to substances), as well as an orientation of environmental law towards overarching aspects applying to all media and product lines, and with a view to elimin- ating shortcomings in the implementation of regulatory instruments.

- Economic instruments can primarily be used in order to internalise external costs. At the same time, such instruments stimulate the market players' own interest in an ecological orientation of production and consumption.

- Voluntary and informational instruments can help to promote proactive behaviour on the part of the various market players.

Regulatory instruments

Regulatory instruments are the traditional tools of environmental law which are still being used overwhelmingly today. Generally speaking, regulatory environmental law encompasses provisions on chemical substances and products, as well as provisions on environmental media and plants. In practice, a wide variety of regulatory instruments have evolved, which differ in terms of the approach, the timing and the intensity of governmental interventions.

Regulatory instruments include rules and prohibitions. Rules usually prescribe a certain behaviour, a certain technology, etc. Prohibitions, on the other hand, merely rule out certain types of behaviour, substances, technologies, etc.; hence, prohibitions often leave more leeway than rules. Under certain circumstances, prohibitions can therefore be more compatible with a market economy system than rules. Any violations of rules or prohibitions are subject to public law sanctions.

Any future precautionary environmental policy will have to continue to rely on regulatory instruments such as rules and prohibitions. From a macroeconomic perspective, regulatory instruments must be assessed in a differentiated manner. On the one hand, regulatory instruments - in particular prohibitions which are classical instruments used to restrict room for manoeuvre in the interest of protecting third parties - have to be used to prevent or limit damage or to limit or reduce certain types of damage which are undesirable for society. On the other hand, regulatory instruments tend to be inefficient whenever it is necessary to allocate uses of the environment (which have an impact on environmental media but which have been accepted by the majority of society) to the parties interested; because regulatory instruments do not provide any incentives to make use of decentralised knowledge, and because the more general their application the less they will help to attain the objective of macroeconomic cost-effectiveness. If regulatory instruments are used in a differentiated manner, it is possible to get closer to this objective of increasing the cost-effectiveness of the use of instruments. Before banning the use of specific substances - thus going beyond the fundamental values and procedural standards generally accepted in society - there is a need for detailed cost-benefit analyses (Rehbinder, 1994, p. 66).

In contrast to the approach it adopted towards economic and voluntary informational (proactive) instruments, the Enquete Commission did not study the various regulatory instruments in greater detail, except for the Chemikaliengesetz (German Chemicals Act) and the Bundesimmisions- schutzgesetz (Ambient Pollution Control Act). A systematic analysis of

the entire legislation describing all the provisions and assessing their impacts would not have been possible because of the complexity and the abundance of provisions in this field. However, the studies conducted by Liibbe-Wolff, Muller and Rehbinder on behalf of the Enquete Com- mission have provided clear indications of shortcomings with regard to the implementation of these provisions, and they have also offered pre- liminary analyses.

The disadvantage of rules and prohibitions usually is that they cause adverse economic side-effects, in particular cost-ineffectiveness and inadequate enforcement of these instruments. In addition, regulatory instruments provide only limited incentives for polluters to reduce their pollution above and beyond the level stipulated by governmental authorities; perhaps such instruments do not even provide an incentive to comply with governmental standards in a more cost-effective manner than in the past.

Examples of rules designed to reduce pollution include obligations to take back products at the end of their service lives, often combined with an obligation to return products, in order to reduce material flow volumes or to prevent waste. Hence, producers/sellers of products are obliged to take back their products once these products reach the end of their useful lives. Additional material flow volume targets defined by regulatory authorities are rules which oblige companies to introduce environmentally sounder production methods.

Regulatory instruments are particularly suitable for warding off dangers or controlling pollutants, bearing in mind that the cost-effectiveness of such measures is limited, while their effects are usually easy to predict. In fact, they have already achieved a drastic reduction of emissions. However, environmental policies which predominantly rely on regulatory measures can lead to distortion of competition at international level. In spite of all the criticism voiced with regard to regulatory measures, one should not forget that there is no other instrument which can help to optimise our management of thousands of pollutants.

From an ecological perspective, the use of regulatory instruments offers advantages insofar as they ensure that politically defined environmental quality objectives will be attained - providing that they are properly implemented and enfgrced. However, proper implementation and enforcement cannot be taken for granted, in particular with regard to regulatory instruments. The advantage which regulatory instruments offer to companies is that they are predictable unless there are changes in the "state of the art" imposed from outside. Rights to use the environment -

once granted - will persist unless they are replaced by new limits imposed by governmental authorities on the basis of new findings about pollution loads, or they are rescinded by court decisions.

In expert reports drawn up by Ewers and Brenck, Rehbinder, Liibbe- Wolff and Miiller on behalf of the Enquete Commission, the authors have examined shortcomings observed in substance-related environmental provisions as well as shortcomings with regard to the implementation and enforcement of provisions governing environmental media and plants, and materials control policy. The results of these studies are outlined below.

According to Rehbinder (1994, pp. 27-31), current legal provisions on pollutants neglect substance-related aspects while emphasising technology and media-related aspects. What is lacking is a strategy designed to prevent indirect emissions of hazardous substances via products and to reduce the use of substances; the only exceptions in this context are: the Wasch- und Reinigungsrnittelgesetz (Detergents and Cleaners Act) and the Chernikaliengesetz (Chemicals Act). In addition, there are major shortcomings in the provisions on pollutants when it comes to the protection of soils. Conservation of resources is an aspect which is taken into consideration in a few sectors only, e.g. in provisions on the protection of mountainous regions, forest areas and water resources (Rehbinder, 1994, pp. 34-37). According to Mrs Lubbe-Wolff (1994, pp. 78-112), the factors which hamper proper implementation of provisions include the principle of discretion (authorities decide whether or not they should intervene), the lack of clear-cut enforcement requirements, highly discre- tionary deadlines for adaptation and modernisation (tolerance deadlines), a variety of legal uncertainties due to the predominance of vague general clauses (e.g. "adverse environmental impacts", "state of the art", "required").

According to Rehbinder, both general considerations and the shortcomings observed in legal provisions governing chemical substances can be used as a basis to define objectives for a general materials control policy. Rehbinder proposed the following ranking of objectives with regard to pollutants (1994, p. 7 f.):

- to reduce material flows (i.e. the volume and the number of circulat- ing pollutants);

- to reduce inputs and emissions of pollutants by means of closed cycles, recycling or re-use, and environmentally sound use of substances, depending on the type and purpose of the substances involved;

- to ensure the degradability of released substances; - to create transparency with regard to hazardous properties, applica-

tions and substance chains.

Rehbinder specified the following priorities (1994, p. 11) for resources and substances which are released in relatively large volumes or with a certain delay and which have a global impact:

- reducing emission volumes by means of management, reducing the materials input per product, increasing the lifetimes of products and increasing the efficiency of the use of materials if there is a considerable shortage or if environmental media are subjected to critical loads, and

- creating transparency with regard to material cycles, material use, and material flows.

The members of the Enquete Commission did not achieve agreement on all the points listed above.

In the framework of the study designed to identify shortcomings with regard to the implementation of legal regulations relating to material flows, the authors also examined whether there was a need for deregulation in order to avoid misguided developments and "aberrations of cent- ral planning" in legislation. Industry, in particular, expects the government to reduce legal and administrative obstacles to innovations and to pursue a consistent policy of deregulating licensing procedures in order to improve conditions for advances in terms of the high level of environmental protection achieved.

In her study, Liibbe-Wolff clearly distinguishes between a simplification of legislation involving the abandonment of the environmental objectives concerned (deregulation) and an improvement of efficiency while maintaining the same objectives (reregulation) (1994, p. 156 ff.). Gener- ally speaking, the following options are available for the purpose of reregulation:

- using instruments or regulatory methods which are easier to implement;

- making full use of possibilities to simplify legal and administrative provisions and to jettison superfluous ballast, e.g. by decreasing the specificity of environmental provisions and by defining targets instead of the means to attain them;

- simplifying legislation by reducing the need for coordination between the authorities and the addressees of the provisions to be implemented; and

- allowing more scope for agreements with public authorities and for voluntary commitments.

External interests (e.g. of the general public and of workers) in the implementation of such provisions should be made use of for two reasons: (1) operators and authorities tend to be less motivated to implement such provisions, and (2) "the public is highly interested in the compliance with environmental provisions" (Liibbe-Wolff, 1994, p. 214). This interest can and should be used to promote implementation; the most important instruments to be used for this purpose are public disclosure and rights of legal action.

Rehbinder's proposal for a reform of materials control law is based on the definition of environmental objectives or quantitative targets for specific substances, as developed to some extent in the Dutch National Envi- ronmental Policy Plan. However, Rehbinder feels that it is important that the definition and enforcement of targets should not be left to the purely political process; instead, legally relevant targets should be defined by means of a structured discussion process whose results should have an impact on subsequent, more specific decisions (Rehbinder, 1994, p. 47). Rehbinder suggests that, to this end, the scope of the Chemi- kaliengesetz (Chemicals Act) currently in force should be broadened so that it would become a Stoffgesefz (Substances and Materials Act). This broader act would cover fundamental duties of all the players involved in the production life-cycle with regard to specific pollutants or substances, as well as procedural rules, making it compulsory, for instance, for all the relevant authorities to cooperate and stipulating the establishment of cooperation bodies.

The studies conducted on behalf of the Enquete Commission have shown that there is scope for improving the implementation of all environmental provisions by introducing the principle of legality, by specifying clear implementation requirements and by introducing general clauses in time or at the same time. Furthermore, environmental provisions could be implemented more effectively if they were less specific, if targets were defined instead of the means to attain them, and if stricter sanctions were imposed on criminal and administrative offences. Broad- ening the range of powers of workers' representatives and giving more decision-making powers to environmental inspectors at company level - as an integral part of a concept of assigning more responsibility to companies - could help to set the course toward sustainable development.

Economic Instruments

The purpose of economic instruments is to see to it that the limited scope (defined by government) for using environmental resources is reflected in prices, thus permitting an economically more efficient coordination of the demand for, and the supply of, environmental resources. This is achieved by imposing additional costs in the form of taxes, levies, permits, etc., and by inducing environmentally oriented profits (in the case of permits). The legal and administrative provisions in force have to be taken into consideration when applying economic instruments. Econo- mic instruments are expected to have a dynamic effect. The players concerned should be continously motivated to develop efficient processes designed to reduce pollution loads. The use of economic instruments has been discussed for quite some time.

There is one category of environmental policy instruments aimed at internalising external effects which has been mentioned most frequently and for a long time: environmental levies. In fiscal terms, environmental levies include eco-taxes, special levies, charges and contributions which differ with regard to whether, or not, the revenue generated is ear- marked, and with regard to the purposes for which such revenue is ear- marked (SRU, 1994, Fig. 1.18, p. 151). More strictly speaking, the purpose of levies is to create incentives for reducing pollution loads.

In terms of their approach, environmental levies can be related to products, production processes, emissions or ambient pollution. Environ- mental levies are payments imposed under public law by the government in order to enforce environmental interests. With regard to the purposes of such levies, a rough distinction can be made between non- fiscal and fiscal functions. The former - referred to as control-oriented levies - are mainly aimed at influencing environmentally relevant patterns of behaviour and production processes in order to reduce emission volumes, curtail the use of environmentally harmful products, etc. The latter group of levies - those with a fiscal function - mainly are mainly ai&ed at building up public funds.

Environmental levies are designed to impose a governmental price tag on the use of environmental resources. In the theoretical ideal case of the "pigou tax", the level of the levies imposed reflects the costs of the adverse external effects caused, i.e. costs which are not included in the cal- culations of industrial polluters but which have to be borne by third parties without any compensation. In practice, however, it is not possible to master the information and assessment problems involved. Unless their function is purely fiscal, levies are therefore applied on the basis of

standard-price approach. This means that -as in the case of regulatory instruments - a politically motivated environmental standard is defined, and a price is then imposed for the use of the environment in order to attain this very standard. The assessment base can be emission volumes, product quantities, inputs of substances and materials, production processes, etc. The question of whether the input to a process, the process itself or its output will be chosen as the target for implementing a quality standard defined by environmental policy is decided on a case-by-case basis. The broader the definition of the assessment base (i.e. if products are used as a basis for imposing a levy on a specific pollutant), the less precise the controlling effect and the greater the risk of direct interventions in the production, distribution and use of products (which would go beyond the politically defined scope of environmental policy actions). Assessments which are based on points that are upstream from the actual source of harm to the environment can only be justified if it is not possible to identify the direct source or if there is a close relationship between the point chosen and the direct source of harm.

The Enquete Commission dealt with the plea in favour of an ecological tax reform entitled "Wirtschafts- und Lebensstandort Deutschland" (Germany: an attractive business location and place to live); two Com- mission members were involved in the drafting of this document (Bo- nus, Dahlmanns, Meissner and Walter, 1994). In the recent past, the discussion has increasingly been focused on the provision of stronger tax incentives (whereby a greater fiscal burden would be imposed on environmentally harmful behaviour, while behaviour that is particularly friendly to the environment would be rewarded by means of a reduced fiscal burden) as an important element of market economy solutions.

This proposal is based on the assumption that, in the interest of reducing unemployment and improving environmental protection, there is a need for fundamentally redefining and reorganising conventional taxes. The advocates of this proposal feel that the current tax system is condu- cive to unemployment and environmental destruction, and that it pre- vents the creation of more profitable jobs by making the use of labour and capital expensive, i.e. less profitable. And they argue that this tax system is harmful to the environment because it largely fails to use the option of environmental taxes or levies in order to attach a visible price to scarce resources and sinks, thereby ensuring that economical use will be made of these resources and sinks.

Furthermore, the authors of this document suggest that the ecologically sustainable reform of the tax system should at the same time be economically viable and socially acceptable. They feel that in the long run it

would be useful to replace the current taxation system by another system which should be based - much more than the current one - on ecological concerns. However, the total tax revenue should not be increased; i.e. whenever a new tax is introduced, a traditional tax yielding a large amount of revenue should be reduced by the same amount or al- together abolished. In this context, all taxes should be reviewed. The local business tax, which is payable by only a fraction of all companies (mainly large-scale enterprises), could be reduced and instead be replaced by ecological taxes. In addition, the authors argue that the use of labour in production is systematically made more expensive by corporate income and payroll taxes which therefore have an inherently adverse impact on employment. Since these taxes are neither economically viable nor ecologically sustainable, they should be partially replaced, however, while retaining their social acceptance.

For this reason, the authors believe that there is a need for a "division of labour among the various types of tax" in the framework of an environmentally sound taxation system. In this context, the authors of the proposal feel that eco-taxes (i.e. taxes based on ecologically relevant parameters such as noise and pollution) should be designed to have environmental policy control functions. Redistribution - i.e. the social component which the authors consider to be necessary - should be left to other instruments which are more suitable for this purpose. An ecological reorganisation of the tax system would be based on price solutions. This means that the government would not fix quantitative quotas but prices for the use of the environment. In this context, the legislator should fix the prices against the background of given quantitative targets. According to the proposal, price concepts are ecologically less effective than quantitative concepts; however, they are easier to handle politically because it is plausible for the population that one cannot have environmental protection "for free". Price concepts make it possible to introduce transitional arrangements so that the adjustment to environmental objectives will not be too abrupt for those concerned. This flex- ibility is a major advantage. For this reason, one should not be confused by the long time period which is typically required for the implementation of price concepts because has no adverse impact on the effectiveness of such concepts.

Certain quarters of industry have expressed fundamental criticism vis- A-vis proposals aimed at an ecological reorganisation of the taxation system. While they think that the idea of changing the structure of fiscal burdens is theoretically interesting, they are convinced that for a practical implementation of this idea, it would be necessary to overcome

numerous doubts expressed for regulatory, fiscal and distribution- related reasons.

According to the concept of permits (licences), the government as the "owner" of the environmental media will determine the tolerable extent to which the environment can be used, and based on the extent defined, the government will issue tradeable permits entitling their holders to use the environment. The market players can then freely trade these permits in the market, i.e. the final distribution of the permits will be left to the market. The market price (the price of the permits) which will evolve will determine whether a given player will opt for using the environment or for avoiding such use. Hence, the price of the permit will reflect scarcity.

While the fact that the number of permits available is politically determined and that the price of the permits is determined via the market are advantages of such a concept vis-2-vis the use of regulatory instruments, both these facts are at the same time a major obstacle to the implementation of such a concept (SRU, 1994, No. 342).

Concepts involving permits are a suitable instrument for internalising external effects. In addition to defining admissible uses of the environment, such concepts require an exact specification of personal property rights in the context of emissions. In terms of their ecological effectiveness, permits are superior to other concepts because they fix the total maximum loads directly, and not indirectly. Together with levies and liability provisions, they can help to meet the criteria of static and dynamic economic efficiency, which is something that regulatory concepts cannot do (see above). In many cases, the applicability of permit concepts is limited because of the small size of markets or trading volumes. Currently, major preconditions for the introduction of such concepts are met primarily with regard to C02 emissions.

In order to introduce permits, it is necessary to define a fixed quantitative target which should be ecologically motivated. In their report drawn up for the Enquete Commission, Ewers and Brenck (1994, p. 136) point out that permits are dynamically inefficient unless several stages are included. Theoretically, permits will not lead to a change in total emission volumes; they only help to optimise the costs involved in avoiding environmental usage. Emissions will only be reduced if government imposes more stringent requirements or if various phases of progressive emission reductions are defined from the very beginning.

In summary, it can be concluded that tradeable permits are generally suitable for resources and for substances which are released in relative-

ly large volumes and whose emissions are delayed and have global effects. However, the use of permits is contingent on the following conditions: A specific environmental objective or emission reduction target must be defined, and it must be easy to identify emissions, either by measuring or by other methods. The emission target should be sufficiently high, and it should be possible to reduce it in the course of time if this is desired. In addition, the first permits will probably have to be issued free of charge for reasons of acceptance, and it will be necessary to combat the risk of inadequate market penetration. The effort involved in implementing the permit concepts proposed to date is relatively substantial, although it varies from case to case. However, these concepts do not involve the issue of "genuine" permits; instead, they tend to be- regulatory requirements systems which permit an intra-company and inter-company exchange of emission rights. Such compensation concepts have been developed primarily because of a lack of political support for permit concepts.

Envivonmental liability law generally has two functions: to provide compensation for damage caused and to prevent damage, which is in the interest of potential perpetrators. Liability provisions define the form and the extent to which perpetrators have to provide compensation for the damage they have caused. Liability provisions are interesting economic instruments of materials control policy because they encourage potential perpetrators to consider the effects which their own actions can have on third parties when making decisions. Whenever liability provisions are applied in the context of environmental policy, their main purpose is not to provide compensation for damage but to provide an incentive for potentially liable parties to take precautions designed to prevent or reduce damage. When seen against this background, Liibbe-Wolff suggests that liability provisions can be a means to internalise external effects or - more precisely - to internalise the responsibility for the consequences of the actions of players (1994, p. 135).

If polluters are obliged to provide compensation for all the damage they have caused, their liability is referred to as "absolute liability". If polluters are not liable for damage caused providing they have practised due diligence (as defined by a public authoritiy), their liability is referred to as "fault-based liability". In the latter case, polluters will not have to bear the full costs of their actions so that the intensity of polluting activities may be greater than in cases where the actions of polluters are subject to absolute liability. In addition, absolute liability provides con- tinuous incentives for users of the environment to continue to reduce emission levels and the probability of an onset of damage and, where

possible, also the scope of potential damage because this will help to reduce the overall costs to be expected.

In principle, if liability provisions are combined with regulatory instruments, they can help to influence emissions. Effective environmental liability law - based on absolute liability and the reversal of the burden of proof - is an important market economy instrument.

According to the reports prepared by experts on behalf of the Enquete Commission, environmental liability law is a suitable means to control pollutants but not resources and substances which are released in relatively large volumes and whose emissions are delayed and have global effects. With regard to the Umwelthaftungsgesetz (Environmental Liability Act) currently in force, Ewers and Brenck, as well as Fiihr and Liibbe-Wolff agreed that the effectiveness of this law was substantially weakened by the reversal of the burden of proof during normal operation of plants, the lack of joint and several liability, the limitation of liability, the restriction to certain plants and equipment, and the fact that the law does not apply to certain substances.

What all deposit refund systems have in common is that each potential polluter must make a deposit which will be refunded if certain requirements are met. If one analyses the various systems in terms of the points which they are aimed at in the cause-effect chain, one can distinguish three types of deposit refund system: There are classical deposit systems for products such as beverage containers or batteries. In deposit refund systems relating to substances or products, polluters lose their entitle- ment to a refund of their deposit as soon as the substances concerned are released to the environment or the products involved are disposed of in a way which is considered to be undesirable. The deposit to be made must cover the entire volume of substances or products introduced into the economy; this deposit will be refunded if proof is presented that the products concerned have been disposed of in a way which is considered to be tolerable in the broadest sense. Because of the possible refund of the deposits, they have to be paid for emissions only; hence, these deposits are an indirect levy on emissions.

In impact-related deposit refund systems (environmental bonds), however, refund entitlements are lost only if there is a certain environmental impact or if a given environmental objective is not achieved. Impact- related deposit refund systems, which create a claim under civil law of the state vis-a-vis companies, are a special case of liability-based systems and of retroactive regulation. Under certain circumstances, they can make sense because they broaden the scope of goods to be protected under liability law to include environmental goods.

Informational and Voluntary Activities

All the instruments described above - i.e. regulatory and economic instruments - are applied after potential hazards to human health and the environment are identified and - at least in some cases - after damage occurs. However, there are also a number of environmental protection activities which are initiated before damage occurs and before risks are scientifically corroborated. These activities are primarily based on information and are usually voluntary.

In the field of environmental protection, industry should act instead of just reacting, if for no other reason because environmental policy can usually not intervene until after the introduction of a product or substance, and often years will pass before major damage is manifest or de- tectable. For this reason, Fiilgraff and Reiche feel that companies should adopt a proactive ("timely") approach to environmental protection - an approach which is aimed at anticipating potential hazards and damage (Schenkel/Storm, 1990, p. 104).

Bearing this in mind, the Enquete Commission has asked experts to study not only regulatory and economic instruments but also informational and voluntary activities. The broad range of such activities which are initiated before having recourse to legal provisions is presented by a report entitled "Ansatze fur proaktive Strategien zur Vermeidung von Um- weltbelastungen im internationalen Vergleich" (International Comparison of Approaches Towards Proactive Strategies Aimed at Preventing En- vironmental Pollution) (Fuhr, 1994). When describing these instruments, the Enquete Commission prefers to use the expression "informational and voluntary activities" instead of "proactive strategies". For the Enquete Commission, the activities involved are designed to foster active efforts aimed at preventive environmental protection, without the presence of any legal requirements to this effect.

Informational and voluntary activities are centered around the process of decision-making in companies. Other players involved include public purchasing officers and consumers. Since the activities of companies are greatly affected by the general conditions prevailing, it is up to government to send sufficiently clear control signals while leaving enough leeway for innovative action. The obligation to abide by national objectives defined as legal standards can be interpreted as an implementation of this strategy in the broadest sense. The examples mentioned by Fuhr in this context include the National Environmental Plan of The Nether- lands and the United States' 33/50 Programme (Fuhr, 1994, pp. 41 f. and 134 f.).

Information can be provided either by the private sector, or it can be used as a governmental envivonmental policy instvument. In the former case, this instrument is used mainly to improve the sales prospects of products and to increase the acceptance of production processes and products. While such an instrument may also be abused, it has its justification because it can also help to eliminate information gaps. If information is used as an instrument of gcvernmental environmental policy, it has a dual role: First of all, it helps to execute rules, primarily those that involve compulsory labelling requirements. In addition, information has the supple- mentary function of explaining details about the application of other environmental policy instruments.

Most of the instruments discussed above are voluntary in nature. Many initiatives and activities adopted by companies and industry in the context of "proactive environmental protection" are voluntary and - in some cases - spontaneous. The same applies to industry agreements and voluntary commitments in the field of environmental protection (usually based on consultations with the government); normally, they are voluntary. Such arrangements can be interpreted as barter transactions between public authorities and polluting market players: industry promises to adopt measures designed to reduce environmental pollution, and in return, governmental agencies abstain from regulatory action. However, such barter transactions will only be successful if they offer benefits to both sides. For industry, the benefits involved include the fact that industry's know-how and views are incorporated in the agreements made, and that industry's room for private-sector decision- making remains intact within the framework agreed upon. The benefits for public authorities include the fact that there is no need for lengthy and complex legislative procedures so that usually political objectives can be quickly translated into practice. Since the results of such agreements are based on a consensus, there is no risk of shortcomings in the implementation of such agreements.

The Enquete Commission studied the following informational and voluntary instruments:

- in-company environmental management and environmental reporting systems (including life-cycle and product-line analyses),

- cooperative ventures (in specific industries, voluntary commitments, between companies and local residents),

- ecological services and adjustments in trade,

- environmental information for consumers, and

- environmental education.

Indirect Effects of Other Policy and Regulatory Fields on Material Flows

In all policy fields, there is a variety of legal provisions, infrastructural measures, as well as fiscal privileges and subsidies which can increase and accelerate material and energy flows, although some of these measures may also have the opposite effect. Under the model of sustainable development, increasing attention will in future have to be paid to policy and regulatory fields which are not directly geared to the environment and to human health.

In its study of mobility as a potential field of application, the Enquete Commission found out that there are a large number of rules and provisions in the fields of transport policy, regional planning, and structural policy which directly affect mobility, and hence, material and energy flows. There is a legal requirement, for instance, to establish a given number of parking spaces when constructing residential and commercial buildings, shops, etc. (compulsory provision of parking facilities). This provision has a direct impact on the number of passenger cars and on traffic volumes. Material and energy flows are also strongly affected by less detailed provisions of tax laws, as currently interpreted. As the law stands, the provision of parking facilities for company employees, for instance, is not interpreted as a monetary advantage as defined in the German income tax law. On the other hand, courts have ruled that job tickets handed out to employees are subject to a lump-sum tax. It is obvious that the general legal setting has a direct impact on the individual's choice of transport, which in turn affects energy and material flows, as well as resulting emissions and other effects on the environment and human health. Likewise, technical standards and rules adopted for safety reasons - applied, for instance, during inspections of vehicles to establish whether they are fit for road use - have a direct impact on the service lives of vehicles, and hence, on material and energy flows.

In summary, there is a need for systematically and continuously orient- ating policy and regulatory fields (in addition to using the instruments which have an intended direct impact on material and energy flows) to the model of sustainable development. This can be compared to financing which imposes the same requirements on all sectors. For any measure envisaged - be it a law, an infrastructural or a regulatory action - it is imperative to specify the costs which this measure will cause. In future, it should also be obligatory to specify whether a given measure will provide an incentive for increasing and accelerating material and energy flows, or whether it will provide incentives with the opposite effect.

8 Recommendation to Continue the Enquete Commission's Work During the Next Legislative Period

During the two-and-a-half years of its work, the Enquete Commission on the "Protection of Humanity and the Environment - Assessment Criteria and Prospects for Environmentally Sound Product Cycles in In- dustrial Society" has worked on major parts of the mandate given to it in the decision of the German Bundestag to establish this Commission.

In its work, the Enquete Commission has covered the following fields: the development of fundamental rules (oriented towards the sustainable development model) for the use of substances and materials; the role of nature as a limiting production factor for economic development; the description of economic, ecological and social criteria for sustainable development; the drafting of a substance chain management concept as an innovation-oriented strategy designed to overcome environmentally induced shortages; and the analysis of suitablk general political and economic conditions and instruments. The Commission has focused on the fields mentioned above by picking up and expanding on conceptual approaches which emanated from environmental and development policy discussions at national and international level, and by studying concrete examples. However, in the short period of time available to the Commis- sion, it has not been possible to produce satisfactory, well-founded results for any of the key fields of study.

The Commission has only just started to fulfill its task (which was part of its mandate) to develop models and paths for the future development of the management of materials in an industrial society, taking into consideration ecological, economic and social criteria.

With regard to the choice, the weighting and the application of the instruments of materials control policy described above, the Enquete Com- mission has not yet been able to conduct an in-depth discussion. One of the reasons why this has not been possible yet is to be seen in the fact that materials control instruments and environmental objectives which are oriented towards the sustainable development model and towards ecological, economic and social goals must be related to one another. When pursuing environmental objectives, attention must also be paid to economic and social aspects. The Commission has only just started to discuss environmental objectives in the field of materials control policy. Nevertheless, it is possible to outline certain priority fields for research and action.

The Commission proposes to the German Bundestag that the work it has begun should be continued during the next legislative period by concen- trating on the following areas: - Developing environmental objectives (e.g. emission reduction targets)

to serve as a frame of reference for substance chain management and materials control policy

- Operationalising fundamental rules for a sustainable management of substances and materials

- Specifying, operationalising and weighting ecological, economic and social assessment criteria to permit effective and efficient decision- making processes in the context of substance chain management and materials control policy

- Optimising (in conceptual terms and by means of examples) assessment and management methods for a substance chain management system applying to all the players involved, with special consideration given to approache$ based on discourse and cooperation

- Examining and optimising the potential applications of life-cycle, material flow, and product-line analyses

- Developing strategies aimed at promoting innovative production processes, products and structures which help to conserve resources and prevent emissions

- Assessing options for action and the economic, regulatory and informational instruments to be applied in order to foster innovative substance chain management and to translate environmental objectives into practice

- Examining and defining concrete details of an ecological tax reform aimed at implementing the model of sustainable developmer.t, and submitting correponding recommendations

- Developing scenarios for the implementation of the overriding model of sustainable development, including an analysis of the genesis of non-sustainable consumption patterns and life-styles

- Describing the innovations in society as well as the changes in values and in decision-making patterns which will be required to facilitate sustainable development

References

Biervert, B.; M. Held (1994): Veranderungen im Naturverstandnis der ~konomik; in: Das Naturverstandnis der Okonomik - Beitrage zur Ethikdebatte in den Wirtschaftswissen- schaften. B. Biervert, M. Held (ed.), Frankfurt/M., New York.

Bonus, H.; et al. (1994): Wirtschafts- und Lebensstandort Deutschland - Elemente okolo- gisch-sozialer Marktwirtschaft. IG Chemie-Papier-Keramik (ed.), Hanover.

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Enquete-Kommission des Deutschen Bundestages "Schutz des Menschen und der Umwelt" (ed.) (1994): "Die Industriegesellschaft gestalten - Perspektiven fur einen nachhaltigen Umgang mit Stoff- und Materialstromen". Bonn.

Ewers, H.-J.; A. Brenck (1994): Divergenz zwischen Stoff- und Wertstromen - ~konomische Losungen des Problems der Gefahrlichkeit von Stoffen; in: Umweltvertragliches Stoff- strommanagement - Konzepte - Instrumente - Bewertung - Anwendungsbereiche. Stu- dien im Auftrag der Enquete-Kommission des Deutschen Bundestages "Schutz des Men- schen und der Umwelt" (ed.), vol. 2, Bonn.

Fuhr, M. (1994): Ansatze fiir proaktive Strategien zur Vermeidung von Umweltbelastungen im internationalen Vergleich; in: Umweltvertragliches Stoffstrommanagement - Konzep- te - Instrumente - Bewertung - Anwendungsbereiche. Studien im Auftrag der Enquete- Kommission des Deutschen Bundestages "Schutz des Menschen und der Umwelt" (ed.), vol. 2, Bonn.

Fiilgraff, G.; J. Reiche (1990): Proaktiver Umweltschutz, in: Umwelt, Technik, ~ e c h t . W. Schenkel, P.-C. Storm (ed.), Berlin.

Klemmer, P. (1994): Sustainable Development - Die wirtschafts- und gesellschaftspolitische Perspektive - Ressourcen und Umweltschutz um jeden Preis?; in: Sustainable Develop- ment - Leitziel auf dem Weg in das 21. ~ahrhundert. G. Voss (ed.), Cologne.

Kiimmerer, K. (1994): Systemare Betrachtungen in der ~kotoxikologie. Zeitschrift fLir Um- weltwissenschaften und Schadstofforschung, Umweltchem. bkotox. 6 (1).

Lubbe-Wolff, G. (1994): Modernisierung des umweltbezogenen Ordnungsrechts; in: Um- weltvertragliches Stoffstrommanagement - Konzepte - Instrumente - Bewertung - An- wendungsbereiche. Studien im Autrag der Enquete-Kommission des Deutschen Bundes- tages "Schutz des Menschen und der Umwelt" (ed.), vol. 2, Bonn.

Man, R. de (1994): Erfassung von Stoffstromen aus naturwissenschaftlicher und wirtschafts- wissenschaftlicher Sicht - Akteure, Entscheidungen und Informationen im Stoffstromma- nagement; in: Umweltvertragliches Stoffstrommanagement - Konzepte - Instrumente - Bewertung - Anwendungsbereiche. Studien im Auftrag der Enquete-Kommission des Deutschen Bundestages "Schutz des Menschen und der Umwelt" (ed.), vol. 1, Bonn.

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strumente - Bewertung - Anwendunsbereicl~e. Studien im Auftrag der Enquete-Kommis- sion des Deutschen Bundestages "Schutz des Menschen und der Umwelt" (ed.), vol. 1, Bonn.

Rehbinder, E. (1994): Konzeption eines in sich geschlossenen Stoffrechts, in: Umweltvertrag- liches Stoffstrommanagement - Konzepte - Instrumente - Bewertung - Anwendungsbe- reiche. Studien im Auftrag der Enquete-Koinmission des Deutschen Bundestages "Schutz des Menschen und der Umwelt" (ed.), vol. 2, Bonn.

Schmidt-Bleek, F. (1994): Wieviel Umwelt braucht der Mensch? - Mips, das Mag k r okolo- gisches Wirtschaften. Birkhauser, Basle.

SRU - Rat von Sachverstandigen fur Umweltfragen (1994): Umweltgutachten 1994 - Fiir eine dauerhaft umweltgerechte Entwicklung. Deutscher Bundestag (ed.), Doc. No. 12/6995, Bonn.

WCED - World Commission on Environment and Development (1987): Our Common Future (The Brundtland Report). Oxford.

The 12th German Bundestags Enquete Commission on the "Protection of Humanity and the Environment" has been the first parliamentary body which was given the mandate to develop visions of a sustainable industrial society by comprehensively and systematically studying the threats to the foundations of society

Only a comprehensive vien- of a product's entire life-cycle - starting with the recovery of raw materials and including production, consumption and disposal - will provide insights into the types and the scope of pollution involved. So in a way, products are frozen material flows on their wav from raw material sources to natural sinks of substances. Manufacturers, commercial enterprises, distributors and consumers all share responsibility for these products, and thus they are also responsible for developing environmentally sound material flows. There are two key conditions for an ecological modemisation of our industrial society: The

.'required structural changes in our economy will not make headway unless there are clearly defined emironmental objectives. Information on material flows helps identifji pollution and develop options for preventive action designed to protect the environment.

'Definition ofpriorities, more market, and a holistic perspective - at long last, a parliamentary body has spelled out for politicians and business leaders what .

should be done and what should be avoided. The addressees will find it diEcult ' to put all o f this into practice. lbluddling one> w-ay through is easier but involves a higher price ...

h order to be sustainable, the economy and the ecology will hav-e to become much more interdependent in a social(y- acceptable manner - bv achieving an ecological modernisa tion o f our economy; bj- deliberatell. controlling potentially harmhl substance chains and material flows, and bj- chinpg our values and adopting neu- lifisqles ...

-Vat only parliamentarians, but also scientists, representatives o f ecologrcal associations, trade unionists and business representatives - all o f them present in the Commission - have t h u ~ cooperated to develop a blueprint for an efficient environmental policy:"

(DIE ZEITF. 9. Sept. 1994)

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