Turning waste into treasure: the tax argument to revisit pollution and waste management
Key points to remember
Legislation at both federal and state level tends towards increased regulatory action regarding pollution and waste generation; companies must take the lead to avoid costly ramifications
Modernizing thinking about pollution and waste management can lead to a company policy that reduces waste generated by emissions, packaging and electronics, in order to be aligned with the concerns of investors and consumers. .
Companies that devote time and resources to reducing pollution and waste should benefit from a number of government programs and incentives
In a changing regulatory landscape that prioritizes climate change, and with an increased focus on integrating environmental, social and governance (ESG) concepts into business practices, it is essential that every company assesses its management policy. pollution and waste to not only reduce its carbon footprint, but also to capitalize on cost reduction strategies, economic opportunities and available incentives.
ESG awareness, coupled with the stricter environmental regulatory framework put in place by the Biden administration, and also observed at the state level, should lead every company to proactively approach its pollution and pollution management policy. waste in order to avoid costly ramifications in the long term. . Failure to appreciate the importance that a sound pollution and waste management policy can offer will likely result in a financial setback resulting from future compliance costs, in addition to scrutiny by the investor and the consumer socially aware that will undoubtedly affect your business results. There are countless strategies that can be adopted to tackle pollution and waste generation, but here we offer some simple concepts that can have an impact and contribute to the success of your business.
Modernize thinking on pollution and waste management
With the green energy revolution, a good pollution and waste management policy should no longer be seen as a simple reduction of âwasteâ generated by daily operational activities, but should rather have the dual objective of reducing waste. pollution and sustainability, which can be addressed. through policies to reduce emissions, the creation of waste from physical packaging and the proper disposal of electronic waste.
The generation of waste from emissions is so vast that reduction measures can be approached in many ways, some of which may be obvious, while others are not as traditional. For example, a smart building can serve the dual purpose of providing not only useful construction services to keep employees comfortable and productive, but at the lowest cost to a company’s operations and the environment. Optimizing building systems to match occupancy patterns and energy use to pull from power grids only when needed can immediately reduce emissions and daily operating costs without impacting productivity workers.
In addition to buildings and structures, emission reductions can be achieved through upgrades and the use of alternative fuel vehicles that reduce the waste emissions generated by your business and lower the costs of maintenance and repair. power over the life of a vehicle. These savings can be even greater when you consider the conversion costs associated with an entire fleet of vehicles. Additionally, and particularly relevant in the midst of the COVID-19 pandemic forcing a large portion of the workforce to work from home, a telecommuting policy can reduce costs and emissions while maintaining worker productivity.
In addition, and depending on the nature of your business, there are opportunities where renewable energy can also be generated from the production of emission waste. As regulations continue to focus on reducing emissions targets and increasing penalties for non-compliance, these simple steps can have an immediate impact on your business bottom line.
Packaging and material waste
Another objective of the company’s pollution and waste management policy should be the integration of sustainable packaging and waste reduction concepts in products sold to the public and used in the workplace. Investors and consumers alike are paying more attention to products that fit into a circular economy in which products are expected to never reach a landfill. The environmental risks associated with manufacturing virgin-source products may not be reflected in current pricing systems, but certainly will be reflected in the future with regulations and measures on carbon pricing such as plastic bans on carbon. single use and taxes on packaging, not to mention reduced demand from modern industry. Consumer concerned about ESG.
Therefore, it is essential that companies reassess their allocation of commodity costs to align with foreseeable regulatory changes and consumer demand for sustainable packaging. Companies should look to create packaging from materials that are recyclable in the circular direction rather than linear and compostable to support a closed loop system. These strategies can be achieved by using post-consumer recycled content rather than virgin content and bio-based materials in packaging. For the workplace, another easy-to-implement virgin source reduction measure is the use of post-consumer paper waste and a preference for electronic delivery methods where available.
The increased dependence and demand for newer, better and faster technologies has led to an emerging problem, namely the increase in the production of electronic waste. Electronic waste is generally defined as a range of electronic devices that have ceased to be of value to their users and include everyday devices (e.g. refrigerators, microwaves and air conditioners), information technology equipment (eg mainframe computers, computers, laptops and cell phones) and consumer equipment (eg radios, televisions and camcorders). Electronic devices are made from materials that are toxic to the environment, such as heavy metals and chemicals, and often leak into the environment when not disposed of properly.
Since the formal recycling of electronic waste is expensive, companies can adopt policies to limit the generation of electronic waste, such as repairing and reusing electronic devices and products for a second life. Additionally, companies should practice dismantling products prior to disposal to identify second-life markets available for device components that cannot be reused internally. For example, the second life battery market is a billion dollar industry that can reuse batteries used on electronic vehicles to continue efforts and maintain a closed loop system.
Businesses can benefit from a redesigned pollution and waste management policy for a multitude of reasons other than the simple cost savings associated with compliance. There are many market-based economic incentives for companies that are also committed to reducing their emissions and waste. For example, tradable permit systems, which limit the amount of pollution that a company or group of companies can produce, offer companies the option of reducing their own emissions or buying “allowances” from others. companies that have reduced below required levels. There are two types of these programs currently in use across the country: Emission Reduction Credit (CER) based systems and capped allowance systems. ERCs allow polluters to receive credits in the event of a significant reduction, while capped quota systems allow companies to sell part of their pollution quotas as they reduce their production. Additionally, there are a number of grants available for businesses that engage in environmentally friendly activities such as grants, low interest loans, and favorable tax treatment, to name a few. -a. Another benefit of prioritizing waste management and pollution reduction is that companies avoid the high fees that come with high pollution levels. These fees can take the form of pollution taxes, water user fees, and solid waste disposal fees, among others. It is up to each company to review and reconsider its pollution and waste production policies to determine whether public benefits are available.
Environmental concerns are at the forefront of national consciousness and will continue to be at the forefront of government policies, investments and consumer spending as we see more and more examples of the impacts of climate change in our daily life. The ramifications of a poor ESG assessment on the part of the socially conscious investor and consumer can be drastic. As environmental regulations become more stringent, companies with sound pollution and waste management policies will be able to minimize disruption due to government interference, reap the priority financial benefits of the investor. and consumers aware of ESG criteria and capitalize on available public programs and incentives.
* The author was assisted by Colin M. Jackson, law clerk and student at the University of Buffalo.