This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.


'Toxic Gumbo': A New Platform for Environmentalists

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Strategic Forecasting


'Toxic Gumbo': A New Platform for Environmentalists
By Bart Mongoven

One of the many terms that Hurricane Katrina has made popular in the American lexicon is the phrase "toxic gumbo" -- referring to the mix of sewage, industrial chemicals and other pollutants that presumably were swirling in the waters engulfing New Orleans after the levees broke on Lake Pontchartrain. The question in the wake of the hurricane was not whether the rising waters were dirty, but just how dirty.

Testing thus far shows that the waters are indeed full of raw sewage and microorganisms that spread infection and disease. There is a film on the surface of the water, consisting of oil and gasoline that is leaking from cars, boats, trucks and anything else that uses an internal combustion engine, and household chemicals have been released into the waters as well. But as yet, there is no evidence that the centerpiece of the "toxic gumbo" fear -- major toxic leakage from the dozens of industrial facilities that line the Mississippi River from the Gulf coast to Baton Rouge -- has materialized.

Just as Katrina will be a major factor in discussions on energy policy and disaster preparedness, it likely will play a major role in shaping crucial realms of environmental regulation as well. It was clear even before the flood that Katrina would have an impact on the debates over environmental management and regulations. But if it is proven that there were no major industrial accidents following the hurricane, the debates that emerge in the coming months will not be those that were anticipated at the beginning of the crisis -- in other words, the debates will not be about the impact of industrial accidents. Instead, in the short term, the chemical and refining industries actually might come out looking pretty good in the aftermath of Katrina. Over the longer term, however, the sediment the floodwaters leave throughout Louisiana might bring new questions about chemicals to the public's attention.

That major facilities remain intact, and appear not to have dumped tons of toxics into the environment, shows that industry has established environmental management systems (EMS) that work even under extreme conditions. EMS -- which can be thought of essentially as applying widely accepted business principles to environmental protection issues -- is used by most major industrial facilities to, at the very least, ensure compliance with environmental regulations. EMS includes such processes as identifying crucial environmental issues; establishing corporate policies and objectives; determining how to achieve these objectives; implementing strategies; and periodically reviewing both performance and the process itself. These management systems guide day-to-day operations and also govern how facilities prepare for disasters and respond to emergencies.

So far, it appears there have been no massive environmental management failures by industrial facilities in the hurricane zone. If this holds, the implications for future debates and discussions of chemicals will be numerous.

First and foremost, it should give communities near industrial facilities some confidence that the nearby plants are well-managed. Community relations is an increasingly important issue for major facilities -- particularly in the Gulf Coast region, where some living near industrial plants harbor significant distrust of state and local regulators. In this region, a number of local organizations have been actively demanding that facilities adhere to higher standards for environmental performance and compliance than they currently do. These local citizen groups, skeptical of both corporate and official reassurances that industrial emissions are not hazardous, have taken to testing the local air and water themselves. They keep tabs on "upsets" such as flaring and other irregularities, and they report their findings to lawyers and to government at all levels. The solid performance by industry during and after Katrina is not likely to stifle these demands for more stringent EMS standards, but the apparent lack of catastrophic problems should provide some context for communities trying to judge just how safe the local facility really is.

Further, the absence of major industrial incidents in Louisiana will raise the level of attention that industry and government give to environmental management standards. It is particularly difficult for government to regulate disaster preparedness among industrial facilities, but Katrina shows that it can be done effectively with EMS. The government does not have the resources to tailor its management systems on a facility-by-facility basis, and it likely would be inefficient and ineffective for government to implement a command-and-control management system that anticipates Katrina-like situations. But the government can, and to some extent does already, encourage industry to adopt EMS systems. The lack of Katrina-related industrial pollution will increase the level of consideration given to the most influential EMS standards, particularly ISO-14001, and EMS may emerge with an increased role codified in environmental regulations.

If the current assessment holds, then, what we likely will find in the near future is that fears of "toxic gumbo" were overwrought: The bulk of the water pollution problem does not stem from toxic chemicals found at dangerous, poorly managed facilities, but from organic waste that will decompose over the coming weeks and eventually dissipate. Over time, however, will come the realization that, given the absence of industrial leaks, the relatively small amounts of toxic chemicals that were in the water are the stuff of daily modern life, not exotic substances used in obscure industrial processes. Chlorinated pesticides, brominated flame retardants used in furniture and electronics, mercury in cars and all the rest that is being deposited in the soil are not industrial leaks, but merely the chemicals that surround us at all times.

We do not expect these chemicals will be found in such dangerous amounts that there will be calls to turn swathes of the flood-stricken region into Superfund sites. But the soil, when eventually drained of floodwater, will contain the chemicals that most of us keep under the kitchen sink -- and this could strengthen calls to examine the chemicals used in daily commerce.

The public discussions resulting from what we learn about the toxicity of the New Orleans floodwaters will have two main thrusts -- one specific to Louisiana, the other more national and social in scope.

First, there will be questions about how to rebuild Louisiana communities in a way that minimizes the chances of another flooding disaster, but also in a way that minimizes the ancillary problems -- such as the toxic releases. Despite the apparent lack of significant industrial breaches, any neighborhoods that have been rendered uninhabitable and that are near industrial facilities likely would be rebuilt farther away from those facilities. Many communities -- most famously Norco, Louisiana -- have petitioned in recent years to have entire neighborhoods moved away from refineries and other plants. If similarly situated neighborhoods are to be rebuilt, they likely will be moved.

Second, many activists will use the presence of toxics in the water and soil to argue for as much environmentally safe design and technology as possible in reconstruction efforts. Remembering the fears of "toxic gumbo," those debating the minutiae of rebuilding of Louisiana communities will search for ways to limit the use of environmentally harmful materials or building methods use as few toxic materials as possible. The so-called "green building" movement -- which predates Katrina by a decade -- likely will benefit from this push in the coming months, as unprecedented levels of new construction are commissioned, amid a policy atmosphere still suffused with fears of toxins in the environment.

More broadly, as researchers determine what chemicals are being deposited in the soil across Louisiana, the public will be presented with a unique glimpse of just how many chemicals are involved in our daily lives. Environmentalists can be expected to emphasize that the data from soil samples indicates an unhealthy reliance on chemicals in everyday products. There already are a number of groups and coalitions calling for electronics, cars, building materials, cosmetics and other consumer products to be reformulated, to use the smallest possible amounts of hazardous chemicals. These groups' arguments will surface as soil samples show what has been deposited in Louisiana, but the groups will not use this information to argue that the region's industrial facilities must be shut down. Instead, they will point to the soil and argue that the products in people's homes should not contain so many toxic chemicals that, released from the bottles, batteries and fabrics that normally contain them, they could render the land "contaminated."

Environmental activists have used national disasters as a platform for their messages before -- such as in the aftermath of the World Trade Center destruction, which coated much of New York City in toxic dust. However, calls for the reduction of toxics in buildings and consumer products in the wake of the Sept. 11 attacks were ill-timed -- they came far too soon after the event -- and were poorly justified; thus, they did not result in policy change. Katrina, however, was a natural disaster that has elicited very different emotions among populace: Americans are much more questioning of their government and themselves in the wake of this event than they were after the Sept. 11 strikes, and, as a result, national politics are shifting.

For the environmental movement, the outstanding question now is whether the public will come to view the chemicals in Louisiana's soil as an acceptable cost of modern life or as an indicator that the country has been short-sighted in its choices.

Greening the books: The environment may yet appear in the accounts of companies and countries

Greening the books
Sep 15th 2005 | NEW YORK
From The Economist print edition

The environment may yet appear in the accounts of companies and countries

COSTA RICA'S environment minister, Carlos Manuel Rodríguez, has a plan to make people take his kind more seriously: “We need to learn the language of finance and economics, and demonstrate the economic benefits of the environment.” When he said it this week at a UN gathering, the room burst out laughing.

But his notion may not be that outlandish. Costa Rica is already a leader in recognising the “ecosystem services” provided to the broader economy by healthy watersheds, unmolested forests and so on. And this week, the World Bank has joined Mr Rodriguez's side by publishing a report arguing that current measures of a country's economic welfare, such as gross national product, are inadequate since they ignore the value of a country's natural assets.

When national accounts are expanded to include not only “produced” wealth (goods and services), but also intangibles (such as knowledge) and especially natural wealth, they reveal some interesting patterns. Natural capital makes up a big part of the wealth of the poorest, but not the richest. That, argues the report, makes it all the more important for governments in poor countries to manage their natural resources wisely. Alas, many do not.

To be clear, the bank's boffins, led by Kirk Hamilton, do not argue that nature should be fenced off and development quashed. The point is the wise use of natural assets. After all, the world's rich countries were once poor, and they used their natural resources to help themselves grow. As they got richer, they raised environmental standards, reforested denuded lands and so on. America, much maligned by greens, nonetheless earns strong marks for its overall management of natural assets. Many poor countries, by contrast, are squandering their natural capital.

The United Nations Environment Programme added its voice in a separate report on market greenery also released this week. This analysis argues that well-directed investments in the environment (such as terracing agricultural land to slow erosion) often have payback rates of three dollars or more for every dollar invested. It also makes the claim that, if the price of greenhouse-gas emissions (measured as the weight of carbon in carbon dioxide) stays above $30 a tonne, then countries will find it cheaper to conserve forests as carbon “sinks” than to chop them down.

Governments have slowly started to take account of natural capital, but whether they will shift the basis of national accounts as the World Bank suggests is more doubtful. Margaret Beckett, Britain's environment secretary, is sceptical. While supporting the idea of valuing ecosystem services, she expresses doubt about whether Britain will move from conventional GDP measures to “green GDP” anytime soon. She has, however, thrown her weight behind a project that has similar objectives to the World Bank's but is aimed at corporate, rather than national, accounting methods. The Carbon Disclosure Project (CDP), a coalition of big institutional investors, aims to force companies to list the true (but often hidden) liabilities they may face from global warming among their financial disclosures.

The scheme started out in a small way in Britain about five years ago, but has grown to become the world's biggest register of corporate greenhouse-gas emissions. The CDP makes these data available free for all to see. The hope is that even in America, where there is no federal law forcing cuts in carbon-dioxide emissions, the transparency that the project provides will help mobilise companies to act—if only to appease the CDP's members, who control an impressive $21 trillion in assets.

In time, Mrs Beckett argues, firms that act on emissions may see ways of developing business as well as avoiding costs. She points to General Electric's recently launched “Eco-magination” campaign, which is meant to profit from low-emission technologies, as an example. Who knows? If all environment ministers abandon tree hugging in favour of such talk of profit and loss, then Mr Rodríguez's dreams may yet come true.