5 industry and environmental responsibility - prosus · 5 industry and environmental responsibility...

5 Industry and Environmental ResponsibilityFrom Proactive to Reactive Public Policies1

Audun Ruud

Introduction

The focus of the current chapter is the relationship between government and industry with respect to influencing industry’s impact on the natural environment. The starting point is an observation from the report from the World Commission on Environment and Development (WCED), which states that: “It [industry] has the power to enhance or degrade the environment” (WCED 1987: 206). In White Paper 46 (MoE 1989), the Government proposed initiatives to the Norwegian Parliament to follow up the requests made by the WCED. In Chapter 10 of this document, a variety of industrial policy measures were proposed. White Paper 46 (ibid.: 101) states that: “[Industrial] ... changes must be adjusted to the objectives of sustainable development. There is still time. By initiating changes now, abrupt and more costly changes can be avoided in the future”. The Government identified three different strategies for industrial environmental change: (1) changes in product technologies, (2) changes in production technologies, and (3) increased pollution control. White Paper 46 referred to increased pollution control as the most common strategy to combat hazardous industrial discharges to air or water, but this, however does not eliminate the sources of polluting emissions. Consequently, White Paper 46 concluded that changes in product and production technologies that alter consumption and production structures would also be necessary if industry was to contribute to sustainable development (ibid.: 102). To pursue the necessary changes, the Government proposed a total of seven policy measures:

1. Development of environmental technologies2. Application of environmental taxes 3. Financial support to stimulate corporate environmental improvements4. Direct regulation in accordance with the Pollution Control Act5. Industrial recycling and reuse6. National system for hazardous waste treatment7. Environmental labelling of environmentally friendly and hazardous goods In this chapter, we will use these policy measures as “internal criteria” to evaluate the political efforts taken by the Norwegian Government to increase industry’s contribution to sustainable development. In the subsequent section, we will specify the approach by introducing the concept of eco-efficiency versus eco-effectiveness. These concepts may enable a better and relevant understanding of the profound challenge

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of promoting sustainable industrial development. The use of eco-effectiveness as an external evaluation criterion may also illustrate the imperative for political environmental governance to seek solutions beyond sector-specific national interests.

Significant eco-efficient industrial improvements are made through changes in product and process technologies, as well as pollution control. However, with explicit reference to the environmental action plan of the Ministry of Trade and Industry (MoTI 2001) for the period 2001-2005, we argue that public efforts to promote industrial change towards sustainable development have changed from being proactive to reactive. A coordinated national plan for sustainable (industrial) development is missing. The Norwegian Government seems to be moving from taking national eco-effectiveness seriously to a total focus on eco-efficiency in a global context.

The Environmental Efficiency of Industrial Activities in Norway

An increasing number of Norwegian firms are involved in foreign commercial operations, either through exports or investments (Hveem et al. 2001), and promising environmental changes are even documented at affiliated units in less developed countries (Ruud 2002a; 2002b). However, few public initiatives have been proposed by the Government to improve the environmental performance of Norwegian com-mercial activities abroad.2 Consequently, to evaluate political efforts made by the Norwegian Government to strengthen industrial environmental performance, this chapter limits the focus to firms operating in Norway. This also enables a better comparison of political efforts towards other national sectors subject to analysis in this volume.

The WCED urged the promotion of environmentally sound and resource efficient industrial practices (WCED 1987: 222). By the early 1990s, the business community had responded by launching the concept of eco-efficiency - producing more with less - as the most appropriate remedy for achieving sustainable development (Schmidheiny 1992). However, the idea that preventing pollution and avoiding waste pays off financially was not new. In 1975, the US based corporation 3M initiated its Pollution Prevention Pays (3P) programme that later generated significant, mutually supportive, environmental and financial gains.3 Ten years later, Dow Chemicals followed suit with its Waste Reduction Always Pays (WRAP) programme that further triggered increased corporate interest in connecting a concern for financial bottom-lines with environmental initiatives.4 However, it was with the launching of the book Changing Course (Schmidheiny 1992) that the concept of eco-efficiency was formally introduced to a broader audience of policy makers. By documenting the changing relationship between environmental pressures and economic growth, firms could be better prepared to disseminate their relative contribution to sustainable development (WBCSD 1996).

The eco-efficiency approach, however, does not in itself question the relevance and quality of the industrial activity in relation to the need and requirement to fulfil the objective of sustainable development. What is needed is an increased focus on eco-effectiveness as a reflection of the total, accumulated environmental impact caused by industrial activities. The concept of eco-effectiveness complements the economic value orientation of eco-efficiency (Schaltegger & Sturm 1998). The difference between

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eco-efficiency and eco-effectiveness can be illustrated using traditional economic reasoning. A firm will normally achieve significant economic gains from strengthening the distribution system by increasing the number of products that agents can sell within a given period of time. However, if the firm has a negative contribution margin on the production cost per product, compared to current market prices, strengthened distribution will only lead to bankruptcy. This will be the final outcome, as the more products the firm sells, the higher its losses will be. Many firms with an inadequate accounting system have fallen victim to this type of efficiency trap (Dyllick & Hockerts 2002). When eco-efficiency is promoted - without any concern for eco-effectiveness - economic agents run a similar risk of fuelling rather than reducing total ecological degradation throughout the lifecycle of a product. The contribution to sustainable development is thus negative.

More efficient cars reduce the cost of driving a car. Today, however, the majority of the world’s population cannot afford to use cars to meet their needs for individual mobility. Thus, the more efficient cars become, the cheaper they become, allowing more customers to use them. This might very well backfire, through so-called rebound effects, as the number of cars and kilometres driven will increase. In order to avoid negative rebound effects caused by the increase in total kilometres driven, in addition to relative technical improvements, an appropriate sustainable development policy must focus on the absolute amount of mobility induced carbon dioxide (CO2) emissions worldwide. This must be linked to necessary changes in product technologies that may even demand changes to industrial structures. At present, car manufacturers are promoting interesting innovations, but to become part of a sustainable solution, the focus ought to be shifted from fossil fuel efficiency gains to the eco-effectiveness of, for instance, solar powered fuel cells. Such a shift can make a significant contribution to sustainable development.

Norway has made a significant contribution through the TH!NK project – electric cars originally developed by the Norwegian company PIVCO, but currently 100 per cent owned by the Ford Motor Company.5 The reference to eco-effectiveness concerning mobility and the role of business, however, only illuminates the need to extend political environmental perspectives beyond specific environmental improve-ments achieved. Car manufacturers, in common with other industries, are responding to political regulations. However, it is a prime task for any government – including that of Norway – to co-ordinate industrial initiatives in such a way that corporate environmen-tal improvement efforts are made compatible with the long-term needs for promoting sustainable development. White Paper 46 did not refer explicitly to eco-effectiveness, however, the Government made explicit references to sustainable development as a core term of reference in promoting industrial changes in Norway.

Attempts to Follow Up the WCED

Through strategies related to product innovation, changes in production methods, and increased pollution control, the Government argued in White Paper 46 that Norwegian industry could contribute to sustainable development. A total of seven policy measures were proposed:

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1. Development of Environmental TechnologiesAccording to White Paper 46, environmental technologies include the development of new product and service technologies, cleaner production, as well as pollution control technologies. Pollution control can create clean production, but increasingly the focus is reoriented towards cleaner production. Specific measures were proposed to eliminate environmental problems at source. First of all, research should be stimulated through the inclusion of environmental criteria in the project appraisals performed by the research councils. In addition, the volume of environmental research and development should be encouraged through increased public funding, either through grants or credits. Finally, White Paper 46 underlined a need to coordinate future relevant environmental efforts. However, specific environmental measures should be made separate from general public initiatives to stimulate industrial and/or technological development. Integration of environmental initiatives into general concerns regarding industrial development could easily undermine, and even eliminate, environmental objectives (Abrahamsen 2002).6

2. Application of Environmental Taxes White Paper 46 was presented in the wake of the signing of the Montreal Protocol of 1987, which was aimed at phasing-out ozone depleting substances. As a first measure, the Government proposed a product tax on imports of CFC gases. White Paper 46 also referred to the proposed environmental tax on lead-based batteries, but implementation had been postponed due to the on-going negotiations with the European Community (the predecessor to the European Union - EU). The use of environmental taxes to influence production processes, however, was still treated in a very embryonic way. However, subsequent proposals on CO2 taxation led to environmental taxes being one of the major and most controversial environmental policy debates of the 1990s.

3. Financial Support to Stimulate Corporate Environmental ImprovementsPublic subsidized loans had been granted to those firms asked to strengthen end-of-pipe pollution control, but few efforts had been made to stimulate changes in product and process technologies to create cleaner production activities.7 White Paper 46 underlined the need to support the polluter pays principle.8 However, it was acknowledged that previous financial schemes had not moved industrial structures towards sustainable development. Consequently, cleaner production funding was proposed, both to develop demonstration projects related to successful development of cleaner production and to strengthen technical environmental assessment of pollution intensive processing activities.

4. Direct Regulation in Accordance with the Pollution Control ActFinancial support to stimulate cleaner production was combined with regulatory control in accordance with the discharge permits granted pursuant to the Pollution Control Act of 1981. Almost all pollution activity in Norway is based on individual permits issued by the Norwegian Pollution Control Authority (SFT) or the county environmental agencies. By the late 1980s, however, many firms did not comply with the discharge permits granted (MoE 1989). Consequently, the Government wanted to strengthen public control while incentives for self-control were enhanced. Through direct control and financing schemes, regulatory “whips” and motivating “carrots”

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should be pursued simultaneously. Such a combined approach was perceived to be a prerequisite for promoting the necessary changes towards cleaner production and sustainable development.

5. Industrial Recycling and ReuseWhite Paper 46 argued strongly for a strengthening of industrial recycling and reuse, however, in accordance with the reasoning behind cleaner production, focus was also placed on the total generation of wastes. A public commission was proposed. One of the principal objectives of this commission was to identify factors that could limit waste generation at source. The Commission was also asked to suggest policy tools to promote product reuse. Thirdly, the Commission should identify factors that could promote recycling in an energy efficient manner. Finally, the Commission should identify factors that could strengthen waste management and final disposal in general. Achievement was linked to the development of environmental technologies.

6. National System for Hazardous Waste TreatmentDuring the late 1980s, concern over hazardous waste management grew strongly as no national system existed for the treatment of such wastes. At the same time, documentation came to light revealing that Norwegian corporate maritime interests were involved in transfers of hazardous wastes to Western African countries where no proper treatment processes were in place.9 Even in Norway, waste disappeared, or that stored/deposited at industrial facilities represented a potential hazard as leaks could seep into adjacent waterways and/or groundwater.

7. Environmental Labelling of Environmentally Friendly and Hazardous GoodsAmong other final measures, eco-labelling is only briefly referred to in White Paper 46. Stronger references were made to the need to strengthen mandatory product declaration for firms marketing hazardous products, particularly chemicals. This was to be made in accordance with the Product Control Act of 1977, which was aimed at preventing products from causing damage to health or disturbance of the environment.

We have referred to Norwegian political efforts to strengthen industrial contribution to sustainable development – defined as enhancement of eco-effectiveness. These policy measures will be subject to further analysis in the concluding part of this chapter. Firstly, however, some significant changes in regulatory public tendencies must be documented, because these changes can influence the public capacity to strengthen industrial eco-effectiveness.

Changing Political Signals and the Role of Industry

The Norwegian Government made significant efforts during the preparatory phases of the United Nations Conference on Environment and Development (UNCED). In 1990, a regional “prep-com” was hosted in Bergen, and in a separate roundtable conference, the role of business and industry was discussed.10 The industry-related debates of the Bergen Conference – at least through the interpretation reflected at

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the Second World Industry Conference on Environmental Management (ICC 1991) – however, indicated that the perception of the role of industry concerning the promotion of sustainable development was changing.

One example is the growing reluctance to discuss the role of business in reducing over-consumption. The focus of the Bergen Conference was rather on environmental concerns in less developed countries. This was also triggered by the Bhopal tragedy.11 Nevertheless, a more forthcoming expectation of what industry and business could provide through self-regulation was formulated both at the prep-com meeting in Bergen and in Chapter 30 of Agenda 21 (UN 1993), agreed upon at the Rio Conference in 1992. In an interview in Norsk Hydro’s Profil Magazine of August 1991, however, Umberto Colombo, the Director of the Italian research institute ENEA stated as follows:

I believe that industry must learn that good environmental performance pays in the long run. But governments must contribute with guidelines, because it is not the job of industry to create a cleaner environment [my italics]. The task of industry is to earn money for the shareholders, promote employment opportunities and comply with environmental regulations (Profil 1991: 11).

This statement was made by the person that coordinated WCED’s work on industry and the environment that later became Chapter 8 in the final report, Our Common Future (WCED 1987). As reflected in the industry chapter of Norway’s proposed follow-up of WCED (White Paper 46), a relatively clear opinion on regulatory roles prevailed. The Government will set the objectives, guidelines, and standards; industry is expected to follow these decisions. Gradually, during the prep-com leading up to UNCED in 1992 however, the perceived roles became somewhat more blurred.

Colombo’s argument reflects the historical fact that the most instrumental factor encouraging a strengthening of environmental behaviour among firms has been formal political regulation. Firms were forced to comply with environmental regulations (Ashford 1993). At the beginning of the 1990s, a strategic reorientation emerged (Roome 1998; Welford 1996). There was a growing belief among public decision-makers in promoting market oriented solutions. Environmental taxes were increasingly proposed. However, the use of administrative measures was also complemented with cooperative agreements and invitations to corporate self-regulation (Andrews 1994; Glasbergen 1998). This also became the case for Norway.

The implicit reasoning, however, that administrative, regulatory environmental measures have a negative impact on corporate competitiveness, is not only too general, it can even be an inadequate and misleading approach. Based on particular sector studies in the US,12 Porter and van der Linde (1995) argued that compliance with strict home-country legislation could create new market opportunities and increase resource productivity and innovation for the firms being forced to comply with regulatory requirements. Thus, by applying a more dynamic long-term perspective, Porter and van der Linde (ibid.) emphasised the possible compatibility between environmental regula-tions and firms’ economic performance:

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Table 1. Four corporate environmental options induced by regulatory enforcement

The argument of Porter and van de Linde (1995) is in line with option four in table 1: “green and competitive”. However, there are three other options presented in table 1 regarding the impact of environmental regulation on a firm’s economic performance. Option three, “low-hanging fruit”, involves a static, more short-term perspective, in which the recognition of environmental demands has become inevitable. However, the developments of capabilities are limited to “the picking of low-hanging fruit”. Rather than pursuing efforts that may lead to a long-term green and competitive performance, radical technological changes are postponed – even if these are known to be necessary to create sustainable development through the promotion of industrial eco-effectiveness.

Traditionally, changes in corporate environmental performance have been made through green burdens (option one in table 1) that may later have been converted into a greening of industry through forced green internalisation (option 2 in table 1). Both these options, however, are initially quite harmful to economic performance. However, in several sectors, forced green internalisation has later been converted into economically beneficial results. One example is the case of fluoride emissions from Norwegian primary aluminium plants. During the early 1970s, negative environmental impact on flora and fauna triggered Norwegian pollution control authorities to set maximum emission targets for fluorides per tonne aluminium produced.13 Significant reductions were made as the industry complied with the regulatory requirement.14 Data from the SFT shows, however, that since 1992 fluoride emissions from all aluminium smelters have been further reduced by approximately 50 per cent.15 These reductions have been achieved without further restrictions in discharge permits. Nevertheless, areas that had been totally destroyed are now becoming fertile and green.16 Pollution control triggered environmental initiatives that have also been beneficial for economic performance in terms of reduced expenditure on fluorides. The crucial question, however, is whether public policies have pursued economically beneficial outcomes through short-term, static measures of “picking of low-hanging fruit” or through more long-term strategies that may create green and competitive commercial activities. This question leads us to the dynamics between national political efforts to promote eco-effectiveness versus global efforts to promote eco-efficiency, a central concern for those promoting sustainable industrial development.

Harmful to economic Beneficial to economic performance performance

Static – short term 1. Green Burden 3. Low-hanging fruitsperspective

Dynamic – long term 2. Forced green internalisation 4. Green and competitive

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The Interpretation by Industry of Agenda 21

White Paper 13 (MoE 1992) gives an excellent summary of UNCED, the Rio Declaration, Agenda 21, the conventions on climate and biodiversity, as well as the principles for sustainable forestry. References are made to Norway and Norwegian challenges, but most of the relatively limited industry specific references are concerned with global challenges and implications for less developed countries. As stated in Agenda 21, Chapter 30, Strengthening the Role of Business and Industry:

Business and industry, including transnational corporations, should recognize environmental management as among the highest priorities and as a key determinant to sustainable development. Some enlightened leaders of enterprises ... are increasingly taking voluntary initiatives, promoting and implementing self-regulation and greater responsibility in ensuring that activities have minimal impact on human health and the environment (UN 1993: 237).

The objectives specified in Chapter 30 are related to the programme areas: (A) Promotion of cleaner production, and (B) Promotion of responsible entrepreneurship. The objective of programme area A is to “... increase efficiency of resource utilization, including the reuse and recycling of residues and to reduce the quantity of waste discharge per unit of economic output (ibid.: 238). The objectives of programme area B is to: “... encourage the concept of stewardship in the management and utilization of natural resources” and to “... increase the number of entrepreneurs engaged in enterprises that subscribe to and implement sustainable development policies (ibid. 239).

The Norwegian Government refers to Agenda 21 as an accord allowing the use of any kind of policy instruments, but underlines the importance of applying economic instruments that create corporate incentives to change productive activities in “the right direction” (MoE 1992: 81). While White Paper 46 (MoE 1989) was quite clear regarding the explicit challenge of promoting sustainable industrial development (what we have operationalised as the differences between eco-efficiency and eco-effectiveness), the reasoning of White Paper 13 is more blurred.

White Paper 13 refers to a proposal to include environmental reporting requirements as part of the financial legislation. However, general concerns regarding sustainable development and the necessary structural changes referred to in White Paper 46 have been replaced by preferences for modifying “business as usual”. This can easily be related to the strategy of “picking low-hanging fruit”. White Paper 13 states: “The firm’s own initiatives will probably be the most important contribution to more environmentally sound production” (MoE 1992: 82).

As an industrial policy concern no reference is made to sustainable development in White Paper 13. Despite the title, this was also the case for White Paper 58, Environmental Policy for Sustainable Development, which formulated the major policy concerns in the following manner (MoE 1997: 103):

Industry is requested to ensure that the material resource use, energy use, and environmental impact throughout the lifecycle (from production, via distribution and use, to waste disposal) are significantly reduced…. Norwegian industry is requested to take a lead in further development of this type of tool.. Furthermore, it is requested to use modes of transport that generate low environmental and resource loads during the transport of goods to and from the industry” [my italics].

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It is interesting to see the explicit references to lifecycle analyses. However, no connections to eco-effectiveness are made, despite the fact that the Government remains concerned with the contribution of industry to sustainable development. Perhaps it has something to do with the regulatory approach chosen?

To illustrate the change in regulatory priorities of the Norwegian Government, we will discuss the voluntary climate agreement of 1997 with the aluminium industry. In White Paper 58, published one month prior to the somewhat secret signing of this climate agreement, the Government stressed that a strengthened political focus on self-regulation did not signify that the public responsibility to introduce necessary regulatory tools has been weakened (MoE 1997: 103). Nevertheless, the climate agreement came as a surprise to the public and to most of the members of the Norwegian Parliament, who had previously agreed upon a national strategy for combating emissions of greenhouse gases.17

A Voluntary Climate Agreement for Aluminium

Political efforts have been made by Norwegian governments to develop regulatory instruments for curbing emissions in Norway and stimulate changes in production and consumption patterns. White Paper 46 announced the introduction of environmental taxes, and, in 1989, the Norwegian Parliament established a national goal for stabilising CO2 at the 1989 level by the year 2000. A CO2 tax on petrol and mineral oil was introduced in the budget for 1991, and, in October 1991, the CO2 tax was extended to Continental Shelf operations. However, studies document that there is a striking discrepancy between rhetoric and the realities of environmental policy implementation during the 1990s (Langhelle 2000; Reitan 1998), and that this was also the case for public efforts to combat greenhouse gas emissions through CO2 taxation. Several sectors, particularly those using carbon as a reduction material in processing, were exempted. According to Reitan (1998), policies were not implemented because politi-cians became more concerned for employment issues and questions concerning the competitiveness of industry.

The primary aluminium plants employ only two per thousand of the Norwegian work force and contribute less than one per cent of Gross National Product. The seven Norwegian smelters emit five per cent of total Norwegian CO2 emissions, equivalent to their share of Norwegian export revenues.18 The Sustainable Economy Project of ProSus argued, in accordance with the Green Tax Commission (GTC), that politically motivated exemptions from CO2 taxation ought to be removed (Government of Norway 1996a: 9). However, the aluminium industry would suffer financially and plants could be closed down. To justify a fiscal exemption, the industry proposed a clever strategy that even created a reduction in greenhouse gas emissions by 50 per cent in relation to the 1990 emissions, by the end of the year 2000. The political and democratic challenge, however, was the fact that the Ministry of the Environment (MoE), headed by Thorbjørn Berntsen, did not inform Parliament of the negotiations leading up to the voluntary climate agreement that also cemented a fiscal exemption from CO2 taxation.

On 9 July 1997, this voluntary agreement on the reduction of greenhouse gas emissions was signed between the MoE and the seven primary aluminium smelters located in Norway. While referring to national commitments towards the Kyoto

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Protocol, the agreement underlined the opportunities individual supporting states have when implementing joint obligations regarding the emission and removal of all greenhouse gases. The EU argued strongly that the Kyoto Protocol ought to focus explicitly on CO2 emissions, as this is undoubtedly the major source of climate change caused by humans.19 This is still a priority of the EU as reflected in the proposed emission trading scheme. A similar focus on CO2 emissions only was also the initial political concern of Norway. The national CO2 target defined by Parliament clearly reflects this (Reitan 1998). However, convinced by the arguments provided by the aluminium industry during the climate negotiations, the Norwegian Government insisted that an extended and more comprehensive approach to greenhouse gases had to be taken (Dovland 2000).20 Despite reluctance from the EU, such an extended approach was agreed upon by the parties signing the climate convention in Kyoto in 1997, the Kyoto Protocol.

The comprehensive approach included in the Kyoto Protocol created new oppor-tunities for the primary aluminium producers in Norway. Greenhouse gases consist of a variety of pollutants with a variety of long-term impacts on climate change. This is referred to as “different global warming potentials”.21 In contrast to CO2 emissions, perfluorcarbons (PFCs) are only generated during primary aluminium production in Norway.22 While total PFC emissions in 1999 only represented two per cent of total greenhouse gas emissions, compared to CO2 emissions representing 75 per cent, the relative global warming potential of PFC emissions is significantly higher than that of CO2. Thus, the Norwegian aluminium industry is responsible for a significant share of CO2 emissions. However, with the climate agreement that the Norwegian Government accepted, substantial reductions in greenhouse gas emission could be achieved without addressing the CO2 challenge. This can be illustrated as follows:

Table 2. Major greenhouse gas emissions from aluminium plants

Source: The Norwegian Pollutant Release and Transfer Register

As shown in table 2, in 1990, total CO2 emissions were 1.6 million tonnes compared to total PFC emissions of 459 tonnes. In 1999, CO2 emission had grown to 1.8 million tonnes, while PFC emissions had been reduced to 170 tonnes. However, as shown in the bottom line of table 2, CO2 equivalent emissions of the PFC volumes were significantly reduced. The volume of 459 tonnes of PFC gases emitted in 1990 equals 3 million tonnes of CO2 in terms of global warming potential. By 1999, PFC emissions had been further reduced to 169 tonnes, equivalent to 1.1 million tonnes of CO2. Consequently, despite the fact that Norwegian primary aluminium producers increased CO2 emissions by 200,000 tonnes, table 2 shows that the industry reduced total greenhouse gas emissions by 1.7 million tonnes and further improvements are expected.23 Despite

Emissions at primary aluminium plants 1990 1999

CO2 emissions 1.6 MT 1.8 MT

PFC emissions 459 tonnes 170 tonnes

CO2 equivalent PFC emissions 3 MT 1.1 MT

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national efforts to curb greenhouse gas emissions and the implementation of the CO2 tax in other sectors, this environmental achievement is significantly better, despite fiscal regulatory exemptions. The Government appears to have found an efficient way of combating greenhouse gas emissions. To a certain extent this is correct, however the specific processing characteristics of primary aluminium production make the story somewhat more complicated.

In 1886, Charles Martin Hall and Paul Lois Toussaint Héroult dissolved alumina, refined from bauxite ore, into molten cryolite and extracted aluminium by electrolysis. Despite subsequent technological changes, the 1886 invention seems to have sealed the fate of primary aluminium production technology, at least when it comes to CO2 emissions. The recycling opportunities for aluminium are enormous. This is mainly due to the “energy bank” included in the metal. However, the flip side of this advantage is the energy requirement in the production of primary aluminium. Given current technological options, for each kilo of primary aluminium produced, 12 to 15 kilowatts of electricity is required. Aluminium is consequently regarded by some observers as “congealed electricity” (Young 1992).

The industry seems to be continuously searching for new and better applications for aluminium metal. This should be acknowledged. Compared to the reasoning of White Paper 46, changes in product technologies are being pursued, creating significant potential for environmental improvement in consumption patterns through the increased use of light metals. The case of reduced fluoride emissions also confirms that significant improvements have been achieved through increased pollution control. There are initiatives currently being taken to replace carbon as a reduction material in the electrolysis process that produces primary aluminium. However, even at the brand new smelter being built at Sunndalsøra, old Hall-Héroult based carbon technology is used. It is the best available technology worldwide. Nevertheless, for each kilo of primary aluminium produced, a minimum of 1.6 kilos of CO2 is emitted into the atmosphere. Currently, no cost-efficient mode of controlling CO2 emissions exists. This is also reflected in the political propensity to not price these emissions through CO2 taxation.24 Rather, the voluntary climate agreement was pursued to give significant environmental achievements both in absolute and relative terms.

From Proactive to Reactive Public Policies?

Voluntary agreements are also used to strengthen waste management. An evaluation report describes the achievements made during the 1990s as cost-efficient, enabling strong public governance through the use of dynamic policy tools (Hjellnes COWI 2000). National eco-effective outcomes were replaced with a concern for the eco-efficiency of primary aluminium producers. A relevant question to ask is whether environmental achievement through voluntary agreements concerning waste management has resulted in increased concern for a national eco-effective waste policy.

To seek knowledge concerning the industrial environmental achievements made during the 1990s, the MoE commissioned a study of 12 industrial sectors (Rud et.al 2000). The study measured the changes in the eco-efficiency of polluting atmospheric emissions compared to the industrial value added. Development was generally found to

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be positive. As many as 2/3 of the industrial sectors showed a positive development, as atmospheric emissions had been reduced relatively more than the growth in gross production value. Improvements have apparently been made. The question is whether these improvements also contributed to sustainable development in terms of strengthened eco-effectiveness.

Recently, the Organisation for Economic Co-operation and Development (OECD) published an environmental performance review of Norway. The report gives a nuanced picture of what Norway has achieved during the 1990s. An explicit reference is made to the national emission targets for stabilizing CO2 emissions. The report states: “GHG emissions are now nearly 10 % above the Norwegian commitment for 2008-12 under the Kyoto Protocol. Only weak decoupling of CO2 emissions from GDP [Gross domestic product] has been achieved” (OECD 2001: 96). The OECD recommends the Norwegian Government to assess the economic rational for exempting some emitters from paying the full rate of CO2 tax.

Nevertheless, industrial environmental performance is improving, but what has been the role of public policy? To evaluate the public efforts to promote industrial contributions to sustainable development, we will return to the policy measures proposed in White Paper 46. Efforts during the 1990 have shown, however, that several of these policy measures are interlinked. Consequently, the subsequent analysis will be regrouped into four policy areas:

– Stimulation of cleaner production through strengthened pollution control and financial support

– Application of environmental taxes – Stimulation of industrial recycling and reuse– Environmental labelling of environmentally friendly and hazardous goods

Stimulation of Cleaner Production through Strengthened Pollution Control and Financial Support

The pulp and paper manufacturer, Saugbruksforeningen, in Halden was founded in 1859. In 1989 it became part of Norske Skog at a time when the pollution control authorities had threatened to withdraw discharge permits unless radical improvements in environmental performance were initiated. This required significant investment, and during the 1990s, according to Norske Skog, the mill of Saugbrugsforeningen invested almost NOK 4 billion in a new paper machine called PM6, a new boiler, and a major re-build of PM5. Public funding was provided to secure employment opportunities as well as environmental protection. As a consequence, Norske Skog promoted a radical industrial transformation. Today, the Iddefjord has been declared clean, and Saugbrugsforeningen is currently one of the largest and most modern paper production units in the world.25

Triggered by White Paper 46, the Government launched a national campaign for cleaner production. Programmes to support the development of environmental technology were supported by the MoE and Ministry of Industry and Energy. At the same time, two comprehensive research and development (R&D) programmes, EKSPOMIL and FORFOR, were funded and organised by the Research Council of

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Norway. The objective of the programmes was to increase the competitiveness of Norwegian companies by increasing productivity while reducing the environmental impact and develop technology and management. No explicit reference is made to eco-effectiveness, but concern for total volumes and general environmental degradation are referred to in the publicly funded campaign co-ordinated by SFT.

With annual public funding of NOK 50 million between 1991 and 1995, the national campaign for cleaner production triggered demonstration projects of industrial cases in which environmental improvements could be obtained by implementing a cleaner production strategy at plant level.26 These environmental improvements were further disseminated to other companies. Finally, increased efforts were made to promote technical environmental assessments of pollution-intensive industries, both with the aim of documenting current emissions, but, more importantly, to pursue cleaner production improvements. Assessments were made of around 300 companies (Abrahamsen 2002).

In 1995, a survey of 224 firms that had been offered a technical environmental assessment was undertaken to identify the results and lessons learned from the campaign (Aasen and Onsager 1995). The overall response from most of the firms responding was that the assessments benefited the companies economically, through lower expenditure from reduced use of production input and/or more efficient use of these inputs. At the same time, emissions were lowered because wastes were reduced.27 About 39 per cent of the companies reduced discharges to water by more than 20 per cent. These firms had also reduced production waste and hazardous waste. Ten per cent of the surveyed firms had reduced waste and discharges by more than 50 per cent. Only 9 per cent stated that the assessments had not led to improvement of the environment.

Despite promising results, in 1995, the Government decided to discontinue the cleaner production campaign. Later, White Paper 58 announced the establishment of an environmental fund (“Statens miljøfond”) to stimulate development of environmen-tal technologies. There are references to cleaner production and lifecycle analysis, but the joint initiatives to promote cleaner production via active use of targeted public funds have been discontinued, at least with public policies playing a proactive role. Subsequently, the environmental fund proposed in White Paper 58 has also been discontinued, as have the most recent targeted funds in the research council, the FUNN programme. As a consequence, with the exception of the prospect of tax deductions, cleaner production is currently assumed to be promoted by industries themselves. Rather than forcing industry to promote cleaner production, as in the case of Saugbruksforeningen, requests such as those referred to in White Paper 58, are increasingly made. An initiative such as GRIP, the Foundation for Sustainable Production and Consumption established by the MoE, is quite symptomatic of current political preferences. GRIP is an appropriate and promising public initiative, but all initiatives are governed by business interests.28 No references are made to regulatory requirements such as those that forced Saugbruks-foreningen to become one of the largest and most modern paper production units in the world.

Another very promising initiative subsequently supported by the MoE is the Eco-Lighthouse Program (“Miljøfyrtårnet”) for environmental certification of small and middle-sized companies in Norway.29 In a way, the public funding resembles the support for the Cleaner Production Campaign. However, while explicit public efforts were previously made to coordinate technical environmental assessments with the individual discharge permits granted to firms making the assessments, the municipali-

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ties involved in the Eco-Lighthouse Program are merely issuing environmental certificates without any further legal reference to the Pollution Control Act. Certifica-tion can be performed by public agents, but is increasingly carried out by private consultants. Environmental politics has been privatised. Clear proof of the changing regulatory approach is the decision as per 2002 that firms certified in accordance with environmental management schemes like the EMAS or ISO 14000 should be subject to less stringent environmental control by pollution control authorities (Dagens Næringsliv 2001).30

Application of Environmental Taxes

Porter and van der Linde (1995) referred to the fact that in the case of various US industrial sectors, the promotion of green and competitive commercial strategies often required forced green internalisation that was initially harmful to economic performance. As reflected in the radical improvements regarding fluoride emissions, this has also been the case in Norway. These efforts, however, assume that industry has alternative technological options available to make necessary changes to internalize short-term environmental costs. This was the case for all the sectors studied by Porter and van der Linde (ibid.), and this is also the case for many processing industries in Norway.

According to White Paper 58, the Government wished to improve the tax system so that it would become more profitable for firms to be environmentally conscious: “industrial policies will be developed within the context of sustainable development” (MoE 1997: 30). This stands in contrast to the more theoretical reasoning of the GTC. The GTC was appointed by the Government in December 1994 at the direct request of Parliament during the debate on the state budget for 1995. A major objective of this commission was to discuss the role of fiscal measures in promoting increased employment and an improved environment in the long run (Government of Norway 1996a: 9). The GTC argued quite convincingly that Norway as a nation could create a double dividend of both enhanced economic growth and environmental protection through extended CO2 taxation to all polluters (Rasmussen 1997). However, such an extended fiscal approach would have been financially detrimental to those industries not having short-term opportunities to replace processing technologies causing CO2 emissions – particularly the primary aluminium industry.

The Government of Gro Harlem Brundtland – the well know Chair of the WCED – had been required by Parliament (as part of negotiations over the national budget) to appoint the GTC. When the arguments for the “double dividend” became more manifest through a proposed extension of fiscal taxation, the Brundtland Government appointed another commission and asked it to propose a strategy for green and competitive industries without changing the current tax system. This work was presented in an official Norwegian report (NOU) in 1996, entitled Competition, Knowledge and Environment (Government of Norway 1996b: 23). The report was formulated by a commission of 12 members, of which almost all represented industry and business. This commission, officially entitled the Industry Structure Commission (ISC) – (næringsstrukturutvalget), had no representatives from the MoE, the research com-munity, or environmental NGOs. In contrast, of the 16 members of the GTC, only 2

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came directly from industry and business. The National Council of Trade Unions (LO) was represented, as were several NGOs, and research institutes, and seven members came from a broad spectre of public bodies, in addition to the MoTI, including the Ministry of Finance (MoF), MoE, and Ministry of Transport.

The ISC proposed a number of very interesting and valid suggestions that enabled a better comprehension of current industrial environmental challenges. Practical examples were provided in a work that was significantly more micro-level focussed towards the challenge of sustainable development. This stands in striking contrast to the more macro-level based approach of the GTC. The ISC argued that, in the long run, there are no serious conflicts between a reasonable industrial policy and what it refers to as a “good environmental policy”. Consequently, to promote sustainable development, the Commission did not perceive any need for forced structural changes in the composition and performance of Norwegian industry.

Despite the micro perspective, the ISC, in common with the GTC, argued that, in contrast to direct regulations and discharge permits, fiscal instruments allow regulated firms to make decisions that are more in accordance with corporate commercial strategies. In principle the Commission supports fiscal environmental measures because incentives could be created to develop and use product and process technologies that are more environmentally sound and cost-efficient. However, in contrast to the GTC, the ISC argued strongly for a further continuation of the Cleaner Production Campaign with targeted public funding to particular plants or sectors.

The climate issue is also referred to, and the ISC underlined that voluntary agreements should include precise and time-specific targets, and that “the polluter-pays principle should be respected”. Perhaps even more interesting is the subsequent statement that “such [voluntary] agreements must not ... challenge the authority of the Norwegian Parliament to determine tax and other fiscal measures” (Government of Norway 1996b, Section 1.3.7). Nevertheless, in the subsequent recommendation, the Commission resembles an “Anti-tax Commission” since it emphasises that specific Norwegian fiscal tools should be avoided. Environmental challenges that are global, such as the climate-change issue, should be solved globally. An introduction of particular fiscal tools in Norway (such as a CO2 tax) would only create an industrial exodus to pollution havens. According to the ISC, such a development would neither benefit the environment nor employment in Norway. This stands in striking contrast to the better known reasoning presented by the GTC.

Nevertheless, the extended fiscal approach was not applied.31 The macro reasoning of GTC, that could have strengthened national eco-effectiveness in combating greenhouse gas emissions, was increasingly replaced by a total governmental focus on eco-efficiency in a regional and global context. As subsequently underlined by the Stoltenberg Government in its environmental statement: “Norwegian industry must have opera-tional conditions that lead to environmental initiatives and investments that become part of corporate self-interest” (MoE 2001: 13).

Stimulation of Industrial Recycling and Reuse32

In its environmental statement of 2000 the Stoltenberg Government also presented its waste policy in which several goals were proposed. Firstly, accumulated quantities of waste shall be significantly less than the economic growth. Secondly, the volume

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of final waste disposal shall be reduced to approximately 25 per cent of total waste accumulated. Thirdly, the Government argued for a further stimulation of recycling schemes. As a final policy goal, the Government argued that all hazardous waste should be treated properly. To achieve these policy goals, in White Paper 44 (Moe 1992), the Government proposed a variety of measures that were a direct result of proposals included in White Paper 46 (Moe 1989). The first objective regarding the accumulation of total wastes can be directly related to the debate on eco-effectiveness. The third objective regarding recycling is rather related to eco-efficiency and relative improvements, without taking into account the total quantities of waste being generated.

During 1994-95 a number of voluntary waste agreements were established with specific branch organisations and individual firms to pursue the waste management objectives. The agreements were related to brown paper, cardboard, plastics, metals, drinks packaging ,and glass. In all these areas, voluntary agreements have stimulated the establishment of particular coordinating bodies. They were established with strong political and financial support from the MoE. Examples of such coordinating bodies, aimed at fulfilling the waste policy objectives, are Norsk Resy,33 Plastretur,34 RENAS,35 Norsk returkartong,36 Norsk GlassGjenvinning,37 and Norsk Resirk.38

The establishment of this variety of recycling schemes has been pursued through voluntary agreements. However, management of all wastes are regulated in accordance with a variety of regulatory schemes, such as the regulation on sorting, storing, and supply of recycling of brown card-board paper of 1994, storage and treatment of hazardous wastes of 1999, and taxation on drinking containers of 2000.

As a corporation, Tomra has a clearly defined commercial mission: “Helping the world recycle”, but the commercial success of their reverse vending machines (RVM) requires public regulatory assistance. According to Tomra, a total of 289.1 billion light metal containers were used in 2000, but no recycling of these cans will be achieved without a deposit system agreed upon by political authorities. Consequently, regulatory measures are needed to promote more sustainable changes in production and consumption patterns. There are valid energy related arguments against glass recycling schemes, but, as “congealed electricity”, few question the positive ecological impacts of recycling aluminium. Nevertheless, for many years the Government did not support the eco-efficiency arguments provided by firms such as Tomra. The Government remained concerned with short-term oriented employment figures among glass manufacturers that later moved to Sweden. Then, Norway decided to follow the measures included in White Paper 46 through the introduction of a common recycling system for all types of containers, including aluminium cans. Deposits were introduced, and the recycling of aluminium cans was strongly promoted through Norsk Resirk A/S.

Promising efforts have been made, but with explicit reference to the chosen external criteria concerning sustainable development, the environmental authorities ought to be more concerned about the general increase in waste volumes. A prime concern of White Paper 46, and repeated in subsequent public policy papers, has been to reduce the total volume of waste generated. However, this requires a reduction in volumes. To achieve eco-effective improvement in Norway’s waste volumes, policy efforts should rather be taken to reduce waste generated at source than to find more efficient ways of recycling or depositing growing volumes.

The focus of the Government is rather more on relative eco-efficiency and traditional pollution control. A survey analysing the economic efficiency of the

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voluntary agreements concerning recycling of packaging materials, including containers, concluded that agreements have been efficient both in terms of cost savings, governance and the general dynamics of promoting enhanced recycling (Hjellnes COWI 2000). Little, however, is said with reference to the alarming fact that the volume of waste is growing.39 Most recent initiatives seem to return to previous end-of-pipe solutions. On 6 June 2002, the Government presented new regulations concerning disposal of waste (SFT 2002). It promises that new regulations concerning organic waste may reduce greenhouse gas emissions. However, unless total volumes are questioned, we are merely trying to repair dynamics that do not make an industrial contribution to sustainable development. That aside, promising public policy efforts can be documented.

In 1998, Norway was the first country to adopt an Extended Producer Responsibility (EPR) system in relation to electrical and electronic equipment. This is coordinated by RENAS. On 31 May 2002, the Government proposed an extension of the EPR to waste management in general.40 Industry and business will be asked to assume direct responsibility for recycling and proper waste disposals. This will trigger greater competition in waste management and final treatment, but at the same time, waste policy is becoming privatised. Growing volumes are not questioned. Actually, and in contrast to previous prime concerns, increasing waste volumes will represent new business opportunities for waste managing firms. Eco-efficiency may well be triggered, but not eco-effectiveness. A remaining challenge is the fact that many industrial actors do not support recycling schemes such as Norsk Resy or Plastretur. However, such schemes are dependent on commitments for funding from industrial actors generating wastes. Traditionally, free riders were handled by public entities. It remains unclear just how industrial waste management actors will increase overall industrial compliance concerning recycling schemes, not to mention the overall challenge of reducing the accumulation of waste. The Government is increasingly requesting industrial actors to find appropriate solutions. Eco-efficiency is thus promoted, but national eco-effectiveness is reduced.

Environmental Labelling of Environmentally Friendly and Hazardous Goods

In 1989, the Nordic Council of Ministers decided to introduce a common eco-label in the Nordic region – the Swan. In Norway, Parliament established a foundation to handle eco-labelling. By the end of 2000, a total of 971 products had been licensed to use the Swan eco-label.41 The granting of eco-labels refers to an assessment of the total environmental effect generated during the lifecycle of the product in question. Again, no efforts are made to judge the total number of products sold in a market. Besides, this is not legally binding, and the eco-labelling initiatives stand in striking contrast to forced product declarations. In 2000, §3a of the Product Control Act was introduced as a precautionary measure, in which those marketing hazardous chemicals were asked to substitute compounds with less hazardous ones.

The authorities argue for the need to strengthen the regulative requirements in terms of product declaration in such a way that consumers know what they are buying. Transparency should be stimulated, and in the case of chemicals and hazardous

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products, legal measures are used to force industry to change production and marketing procedures. Again, no references are made to eco-effectiveness and total volumes, but at least concerns are expressed in terms of changing consumption and production patterns through the use of legal policy tools. The same authorities, however, are not equally concerned with imposing regulative requirements to stimulate greener consumption. The cleaner production campaign has been substituted with requests to business and industry to extend their responsibility. The eco-labelling programmes are applied to new products, but the authorities do not seem interested in making further effort to stimulate changes in consumption and production patterns. This has been left to the market.

Conclusion: A Need for Public Policies beyond Sector-Specific Interests

To strengthen sector integration, the MoTI has responded to the proposal included in White Paper 58 to formulate an environmental action plan for the period 2001 to 2005 (MoTI 2001). The plan clearly illustrates our argument that the Government is currently sending new political signals concerning the role of industry. As stated: “The initiatives taken by industry and business to promote change will represent a significant factor in influencing the development towards sustainable development” (ibid.: 17). Explicit references are made to eco-efficiency. However, neither the concept of eco-effectiveness nor total ecological volumes in general is referred to. The focus of the Ministry’s environmental action plan generally reflects the industry specific reasoning initiated in White Paper 13, i.e. leaving it more to business to find appropriate solutions. This approach also reflects a global political trend of preferring market based solutions and inviting the business community to pursue environmental efforts beyond regulatory requirements and formal public control. It is called partnerships. The UN-initiated Global Compact42 may be a relevant international reference, while the effort of promoting recycling through the LOOP initiative is a relevant national one.43

The Norwegian authorities are inviting corporate interests to fulfil environmental objectives. However, despite an active involvement by the MoE, the political authorities are leaving most of the strategic decision-making regarding governance for sustainable waste development to actors with strong sector-specific self-interests. This is not necessarily hampering radical technological change. The Cleaner Production Campaign and the case of Saugbruksforeningen, receiving significant public financial and political support, confirm quite clearly that strong and consistent sector-specific public efforts create significant changes.

Extended environmental taxation of processing industries such as primary aluminium production have been debated within and outside the Norwegian Parliament, but the authorities have decided to pursue environmental change through other means. Regulatory requirements are complemented, and even replaced, by requests and public petitions. Nevertheless, legal tools are still used on an extensive scale to promote industrial environmental change. Pursuant to the Pollution Control Act, specific industries are requested to clean up emissions that are violating granted discharge permits. Most of these efforts, however, are concentrated on clean-ups

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through end-of-pipe measures. Currently, there seems to be relatively less focus on the changes in product and process technologies envisioned in White Paper 46. However, promising alternative efforts have recently been made.

In White Paper 13, the Government outlined that all commercial firms be requested to submit specific environmental disclosures as part of the annual reporting from the board of directors. This was later followed up in White Paper 58, and finally implemented as §3-3, fourth section of the revised Accounting Act of 1998. The aim of the legislation is to ask the board of directors in any commercial firm subject to external auditing requirements to submit an annual environmental statement as part of the annual report. Through strengthened environmental focus upon the lifecycle of products, it is believed that environmental issues in general will become a more central parameter in corporate strategic decision-making. There nevertheless appears to remain a significant potential for improvement. The Norwegian Confederation for Business and Industry (NHO) is strongly supportive of a strengthening of corporate environmental disclosures, but has not worked consistently to motivate firms to comply with the legal reporting requirements included in the Accounting Act of 1998. Neither have specific policy measures been introduced by the MoF. Consequently, for the majority of Norwegian firms, corporate environmental disclosures are not disseminated in accordance with the mandatory requirements defined in the Accounting Act (Ruud 2002c).44

Nevertheless, eco-efficiency gains are being made. More is produced with less, and, compared to other sectors in Norway; the local environmental performance of Norwegian industry has improved both in relative and absolute terms. This has even been achieved without any fiscal regulatory control. For primary aluminium producers with no feasible alternative technological options available, an extended carbon tax would merely represent additional expenditures. At the same time, no public efforts are being made to use carbon tax revenue to fund necessary technological industrial changes such as targeting industry specific CO2 taxes to stimulate CO2 emission reduction in industry. This is currently what has been done with respect to sulphur Dioxide (SO2) taxes, as these are reallocated into a Sulphur Fund that also aims to stimulate necessary technological industrial changes.45 However, this requires active public involvement beyond the debate on environmental taxation, seemingly primarily treated as a general source of public revenues. This request for better targeting of environmental taxes is an imperative for strengthened public involvement regardless of whether the concern is global eco-efficiency or national eco-effectiveness.

The need for more active public involvement is also the case in waste management. The recycling industry creates a lot of value-added activities and new jobs. Nevertheless, the question still remains as to whether promising corporate efforts to recycle wastes will promote sustainable development in accordance with the external evaluation criteria of eco-effectiveness. A more proactive public policy is needed. Such a policy needs to strike a proper balance between national efforts to promote eco-effectiveness and global eco-efficiency gains. Environmental politics towards sustainable development seems to be limited to win-win options increasingly formulated and implemented by sector-specific interests. This may be a sensible solution as long as other non-industrial sectors of Norwegian society do not make a significant relative contribution. Some Norwegian firms are responding. However, the initial national efforts reflected in White Paper 46 of taking eco-effectiveness seriously ought to be followed up with more than the focus on eco-efficiency in a regional and

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global context. Interesting attempts are currently being made by the current Government to revitalize a national climate policy. However, the proactive public approach ought to be extended to follow up the Cleaner Production Campaign, to assist firms potentially capable of becoming green and competitive to pursue strategies that go beyond the traditional and easier propensity to merely pick low-hanging fruit.

Notes 1 This chapter would have been significantly less nuanced without active and dedicated

contributions from Rolf Marstrander, Terje Kronen and Uno Abrahamsen. 2 The Norwegian Guarantee Institute for Export Credits has issued an Environmental

Bill (miljøplakat), but this has not been extended to exporters in general. Despite a convincing proposal made by the Norwegian NGO community to establish an ombudsman for Norwegian commercial activities abroad, this has not been officially considered by the authorities. Apart from industry-related efforts included in Norwegian developmental assistance, Norwegian foreign economic policy normally remains delinked from Norwegian environmental concerns, at least when we study specific commercial projects controlled by Norwegian firms.

3 For further details on the 3P programme of 3M, see URL: http://www.3m.com/about3m/environment/index.jhtml

4 For further details on the current relevant WRAP efforts by Dow, see URL: http://www.dow.com/environment/goal2005.html

5 For further details on TH!NK, see URL: http://www.thinkmobility.com/aboutUs.asp?TID=600512.

6 Abrahamsen is currently project manager, Division Environmental and Safety Technology, National Institute of Technology, but at that time directly involved in the cleaner production campaign co-ordinated by SFT.

7 Since 1992, cleaner production has been a central focus area for UNEP’s work on environmental management strategies and tools.

8 The polluter pays principle refers to efforts of obliging those economic actors causing environmental degradation to pay and/or compensate for the damages that they have caused.

9 This also triggered the work on the Basel Convention in which the Norwegian Government took a strong stand in proposing trade bans on hazardous wastes between OECD and non-OECD countries.

10 There is no separate official documentation from the specific Bergen Roundtable Conference on industry and business. However, in the conference report from the Second World Industry Conference on Environmental Management, held in Rotterdam in April 1991, explicit references are made to the Bergen Roundtable on the role of business in promoting sustainable development (ICC 1991). These references have been the source of my interpretation and analysis concerning the Roundtable Conference in 1990.

11 In December 1984 the US based Union Carbide Corp. was responsible for the death of several thousands and severe injuries of several hundreds of thousands of people in the Indian city of Bhopal, Madhya Pradesh. This was caused by poisonous emissions of isocyanides. For further details, see Gladwin (1987).

12 The sectors studied by Porter and van der Linde were: paint and coatings, refrigerators, printing ink, dry cell batteries, computers and electronic components, and chlorinated organic releases from the pulp and paper industry.

13 The average emission level prior to 1980 was more than five kg per tonne aluminium produced (SSB 1994: 118).

14 In 1985, the industry was requested to half fluoride emissions by 1994. Dons and Beck (1993) estimated the average emission in 1992 to be less than 0.5 kg per tonne aluminium produced.

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15 In one case, Sør Norge Aluminium (Søral), during a joint venture between Norsk Hydro and Alcan between 1992 and 1999, fluoride emissions were reduced from 0.7 kg to 0.4 kg fluoride per tonne aluminium produced. For further details on fluoride emission levels, see URL: http://www.sft.no/bmi/. For further details on Søral, see URL: http://www.soral.no/

16 For further verification, the aluminium industry initiated a series of studies focussed on various environmental impacts caused by primary aluminium production. The final report, completed in 1994, focussed especially on fluoride emissions. Chapter 6 in particular, written by Horntvedt and Øyen (1994), illustrates quite clearly actual impacts and relative improvement on adjacent vegetation.

17 See also the chapter by Hovden and Lindseth in this volume. 18 For further details on greenhouse gas emission from the particular smelter see the

Norwegian Pollutant and Transfer Register (PRTR), URL: http://www.sft.no/bmi/Main/english.asp. For further details on macro-economic figures, see Statistics Norway, URL; http://www.ssb.no/english/

19 See also the chapter by Hovden and Lindseth in this volume. 20 Dovland represents the MoE and was chief negotiator of the Norwegian delegation.

According to Rolf Marstrander, currently affiliated with ProSus, but who, as Environmental Director of Hydro Aluminium, participated actively in the industrial delegation, the justification for proposing the comprehensive approach had been provided by industry.

21 There are a total of six different greenhouse gases, with huge differences in terms of global warming potential. To facilitate a comparison of different greenhouse gases, CO2 equivalent emissions are calculated. With a 100 years time horizon, CO2 equivalents are established by conversions to values comparable with the effects on the climate from CO2 emissions.

22 There are two different PFC gases generated at primary aluminium smelters: tetrafluoromethane, CF4, with a global warming potential of 6,500, and hexafluoromethane, C2F6, with a global warming potential of 9,200 times CO2 emissions. In the subsequent discussion we will focus on CF4, as this greenhouse gas represent the major environmental challenge.

23 According to the voluntary agreement of 1997, CO2 equivalent emissions will be further reduced by 55 per cent, compared to 1990 levels, within 2005.

24 Primary aluminium producers do pay CO2 tax on mineral oil and other fossil fuels used for energy generating purposes. However, with respect to the polluter pays principle, this payment represents only a marginal share of the CO2 that is emitted, due to the use of carbon anodes, during the electrolysis producing primary aluminium.

25 For further details on the environmental policy of Norske Skog, see URL: http://www.norske-skog.com/dt_mainallatonce_about.asp

26 According to Uno Abrahamsen, relevant examples of such demonstration projects were recovery of sulphur at Statoil’s Slagentangen oil refinery and strengthened control of nitrogen at Norsk Hydro’s Glomfjord fertilizer plant.

27 The response rate was remarkably high, as 216 out of 224 firms returned the questionnaire. 28 For further details, see URL: http://www.grip.no/ 29 For further details, see URL: http://www.krkom.no/fyrtaarn/ 30 According to SFT, it is assumed that those firms certifying environmental management

systems in accordance with the EMAS or the ISO 14000 series also promote continuous improvements in environmental performance. The statement is referred to in an article in Norwegian financial newspaper Dagens Næringsliv 14 November 2001, in which findings from England indicate that EMAS certified firms in general do not perform environmen-tally better than non-certified firms.

31 See also the chapter by Nordskag in this volume. 32 The policy measure on hazardous waste management is not further discussed, as efforts are

functioning well. Despite initial financial problems, current rules are enforced and industrial actors are striving to achieve proper handling, collection, transport, and treatment. This is also reported on an annual basis. For further information, see URL: http://www.norsas.no/norsas/main.nsf

33 For further information on recycling efforts concerning brown paper, see URL: http://www.resy.no/default2.html

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34 On recycling of plastics, see URL: http://www.plastretur.no/ 35 On recycling of electrical and electronic equipment, see URL: http://www.renas.no/ 36 On recycling of drinking cardboards, see URL: http://www.returkartong.no/ 37 On recycling of glass, see URL: http://www.glassgjenvinning.no/ 38 On recycling of containers, including aluminium, see URL: http://www.resirk.no/

default.asp?side=11 39 For further details on the growth of total waste accumulated, see White Paper 24, Chapter

8 (MoE 2001). 40 For further details, see URL: http://odin.dep.no/md/norsk/aktuelt/pressem/022051-

070050/index-dok000-b-n-a.html 41 For further details on eco-labelling in Norway, see URL: http://www.ecolabel.no/Engelsk/

main.html 42 According to the principles included in the Global Compact, the Secretary General of the

UN asks world business to support a precautionary approach to environmental challenges (Principle 7), undertake initiatives to promote greater environmental responsibility (Principle 8), and encourage development and diffusion of environmentally friendly technologies (Principle 9). A total of nine principles are included in the UN Global Compact, focusing on human rights, labour issues, and environmental protection. For further details, see URL: http://www.unglobalcompact.org/.

43 For further details, see URL: http://www.loop.no/ 44 In accordance with the Parliamentary decision, the Accounting Act of 1998 will be

evaluated during the fall of 2002. It is still unclear, however, whether the major financial stakeholders asked to participate in this evaluation will be concerned with the documented anomalies regarding environmental reporting.

45 According to the Federation of Norwegian Process Industries (PIL), the agreement will trigger significant reductions well within the national commitments of the Gothenburg Protocol – the Convention on Long-Range Transboundary Air Pollution of 1999. The Protocol calls for cuts in sulphur dioxide (SO2), nitrogen oxide (NOx), volatile organic compounds (VOCs), and ammonia (NH4) emissions from their 1990 levels by 2010. In the Norwegian Sulphur Agreement, the SO2 tax is substituted with a commitment to pay an equivalent amount into a so-called Sulphur Fund. The actual functioning of this sulphur agreement, signed on 16 January 2002, is still somewhat unclear with respect to whether firms actually will promote cleaner production, and whether they will actually pay the same amount for pollution control on SO2 compared to the previous SO2 tax. Most of the efforts seem to be oriented towards traditional end-of-pipe control measures rather than promotion of cleaner production.

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