This report was commissioned by Environment Australia to identify the barriers and motivators and drivers to the adoption of cleaner production by industry, and subsequently, to recommend a cleaner production policy strategy. In particular, the report makes specific references to the needs of small business, the potential for sector specific approaches and the role of regulation.
Cleaner production holds out the promise of improving the environmental performance of industry while at the same time improving a firm's bottom line. If this is true, then it would be expected that firms would be rushing to implement it. And yet, despite a shortage of concrete data, there is a general consensus that, in Australia at least, the widespread adoption of cleaner production remains a largely unfulfilled ambition.
In consulting with a wide range of industry representatives, it became clear that the majority of barriers to cleaner production confronted by firms could be placed into one of two categories: those that were internal to the firm and those that were external to the firm. Accordingly, the report identifies the major barriers to cleaner production as follows:
- A lack of information and expertise
- A low awareness of environmental issues
- Competing business priorities, in particular, the pressure for short term profits
- Bounded rationality in decision making processes
- Financial obstacles
- Lack of communication in firms
- Middle management inertia
- Labour force obstacles
- Difficulty in implementing cleaner technology
- The failure of existing regulatory approaches
- Difficulty in accessing cleaner technology
- Difficulty in accessing external finance
- Perverse economic incentives
- An absence of markets for recycled goods
- Economic cycles
- The potential motivators and drivers for the adoption of cleaner production by industry are many and varied.
They too can be categorised as either internal or external. Key motivators and drivers identified in the report are:
Internal motivators and drivers:
- Environmental management systems and continuous improvement
- Voluntary initiatives
- Environmental leadership
- Corporate environmental reports
- Environmental accounting
- Improvements in productivity
External motivators and drivers:
- Innovative regulation and pollution prevention
- Negotiated self-regulation
- Economic incentives
- Codes of practice
- Education and training
- Industry networking
- Buyer supplier relations
- Financial institutions
- Community perceptions and involvement
- Environmental auditors
- Green consumers
- International trade incentives
The report highlights, on the basis of industry consultations and literature reviews, the most important barriers, motivators and drivers of cleaner production common to all industry. Primary barriers identified were: a lack of information and expertise, particularly among smaller firms; a resistance to cultural change on the part of management; competing business priorities, especially the pressure for short term profits; and the high cost of new, cleaner technology.
Primary motivators and drivers identified were: government regulation; the ability to share information through networking and business partnerships, and access to external expertise, particularly for smaller firms; the desire to maintain good community relations, particularly for larger firms; the convergence of more efficient production processes with sophisticated cleaner production processes, such as environmental management systems; and access to financial incentives for investment in new, cleaner technology.
Recognising the substantial differences that exist between firms and sectors, the report also provides a more detailed analysis and informal ranking of barriers, motivators and drivers in six industry sectors. The six sectors are: pulp and paper; electrical and electronic engineering; chemicals; metal finishing; metal manufacturing; and automotive.
A substantive part of the report is devoted to providing a sophisticated and comprehensive set of policy recommendation to encourage the widespread adoption of cleaner production by industry. These recommendation are specifically designed to remove the barriers, and harness the motivators and drivers, identified in the earlier sections of the report.
In particular, the recommendations aim to cast government in the role of facilitator or catalyst, rather than relying on overtly interventionist policies. This can be achieved by the government developing strategic partnerships with industry, and by harnessing the power of commercial and non-commercial third parties. There remains, however, a role for government as environmental regulator, if only to step in when other measures fail. In this regard, the report makes a number of recommendations for the transformation of regulation from rigid and inflexible forms to those which are much more innovative and provide ongoing incentives for cleaner production.
The recommendations have been grouped under the following policy clusters: (i) the role of information strategies; (ii) changing corporate culture; (iii) the role of economic instruments; (iv) Êthe role of third parties; (v) the role of industry; and (vi) the role of regulation.
Finally, the report identifies additional measures that might used to address the particular requirements of smaller firms, and as requested, advances a sector-specific cleaner production strategy.