Abstract
In 1991 USAID launched the Environmental Pollution Prevention Project (EP3), designed to reduce industrial pollution by introducing cleaner industrial production processes and by reducing and reclaiming industrial waste while saving money for industrial firms. This report evaluates the EP3 program in Chile, the first country in which the program was implemented. The evaluation found a number of achievements. For example, nearly 2,500 people received training in industrial pollution prevention, and a cadre of private sector pollution engineering consultants were created. EP3 completed 26 pollution prevention diagnostic assessments (PPDAs) at individual factories. The PPDAs showed it was possible to save money while reducing pollution. The assessment recommendations required a one-time investment of $1.4 million by the industrial firms, but that investment generated annual savings of $1.9 million. Savings continued every year for many of the companies. Pollution was reduced by 32%. The evaluation also found several problems. The project failed to institutionalize its efforts, so once USAID funding ended, both sustainability and replication lapsed. The project also faltered because Chile lacked effective environmental regulations. Without the pressure of environmental fines, many companies were reluctant to invest in pollution prevention. The following lessons were learned: (1) A pilot effort is an excellent way to experiment and test ideas and methods, but should include a plan to scale up, disseminate, and sustain successful approaches to ensure that benefits continue after USAID assistance ends. EP3 in Chile lacked such an institutional arrangement. (2) EP3 helped companies reduce pollution, increase profits, and improve their competitive position. But participating firms were reluctant to share the newly learned techniques with competitors. Replication will not take place if it reveals trade secrets. A program needs to develop ways to replicate generic pollution prevention approaches. (3) Pollution prevention efforts stand a better chance of success if they identify and work with the more progressive and better managed firms. Good factory managers understand costs, product development, and marketing. (4) It is important to be ahead of the wave, but if a pollution prevention program is too far ahead of a country's environmental consciousness, benefits will be limited. If pollution laws are not in place, a pollution prevention program may need to help a country develop environmental policies and regulations before it undertakes to persuade industry to adopt pollution prevention measures. (5) Cost savings alone may be insufficient to induce companies to adopt waste minimization and pollution prevention programs. While both the carrot (cost savings) and stick (regulations) are important in motivating companies to take action, regulations and fines clearly command the attention of factory managers and create demand for pollution prevention measures. (6) A program cannot hope to reach all firms directly, but needs an intermediary to spread the message. A demonstration project cannot hope to succeed with a retail approach, i.e., dealing with one firm at a time. Impact will be greatest when an institutional structure (such as an industrial trade association or a clean-production center) exists to disseminate pollution prevention findings throughout an industry.