Corporations are increasingly trying to get ahead of the regulatory curve by reducing their use of hazardous chemicals through sustainability planning and goal setting. A prime example in your own industry comes from Southwire.

As you likely know, this company is a progressive wire and cable manufacturer based in Carrollton, Georgia. In 2008 the company set an ambitious goal of eliminating lead additives from all of their products, and began using sustainability as a framework through which every aspect of the business was viewed.^[1]

The Toxic Substances Control Act (TSCA) currently oversees the 82,000-pluschemicals currently in the market. Under TSCA, the U.S. Environmental Protection Agency (EPA) must meet stringent requirements in order to prove that a chemical poses a health threat and needs to be restricted or banned. This differs significantly from the EU’s REACH regulations under which the manufacturers are responsible for proving that their products are safe.^[2]

In October 2009, EPA administrator Lisa Jackson announced the core principles that outline the Obama Administration’s goals for chemical management. The principles, which are intended to help Congress reform TSCA, are as follows:^[3]

• Chemicals should be reviewed against risk-based safety standards based on sound science and protective of human health and the environment

• Manufacturers should provide EPA with the necessary information to conclude that new and existing chemicals are safe and do not endanger public health or the environment

• EPA should have clear authority to take risk management actions when chemicals do not meet the safety standard, with flexibility to take into account sensitive subpopulations, costs, social benefits, equity and other relevant considerations

• Manufacturers and EPA should assess and act on priority chemicals, both existing and new, in a timely manner

• Green Chemistry should be encouraged and provisions assuring Transparency and Public Access to Information should be strengthened

• EPA should be given a sustained source of funding for implementation

[1] Winn Wise, personal interview, February 23, 2009.

[2] http://www.GreenerDesign.com/news/2009/03/02/chemical-industry-health-and-environment-groups-push-us- 

toxics-law-reform accessed October 14, 2009.

[3] http://yosemite.epa.gov/opa/admpress.nsf/0/D07993FDCF801C2285257640005D27A6 accessed October 14, 2009.

The recent passage of H.R. 2454 (also known as the Waxman-Markey bill or American Clean Energy and Security Act of 2009), raises concerns about the costs of climate change mitigation. Energy efficiency investments are one of the more promising prospects for mitigating such changes because they are cost effective and relatively straightforward to implement. The American Council for an Energy-Efficient Economy (ACEEE) recently released a study that highlights the potential for energy efficiency investments to dramatically reduce greenhouse gas emissions (GHG) while having a net positive impact on the economy. “The Positive Economics of Climate Change Policies: What the Historical Evidence Can Tell Us”, by John A. “Skip” Laitner, suggests that most evaluations of climate change policies underestimate the cost-effectiveness of energy efficiency.

This conclusion is supported by findings from related reports. McKinsey & Company’s 2009 report, ”Unlocking Energy Efficiency in the U.S. Economy”, found that energy efficiency technologies have a $170 billion annual market potential. A 2008 report by Lazard, an international financial advisory and asset management firm, found that the levelized (average lifetime) cost of energy efficiency improvements ranges from zero to five cents per kWh.

Given these findings, the ACEEE analysis of energy efficiency economics concludes that these investments have a return on investment range of 10 to 25%. This means that in as little as four years energy efficiency investments can pay for themselves. From that point on, energy savings can help households and businesses improve their bottom lines. By 2050, ACEEE estimates that energy efficiency investments could cut energy bills in half for U.S. consumers and businesses and reduce carbon emissions by as much as 7,167 megatons. As a point of reference, the U.S. released 7,150 megatons of greenhouse gas emissions in 2007.^[1]

Another important benefit of energy efficiency investments is potential job growth. These investments will replace energy intensive economic activities with labor intensive economic activities. This finding is supported by the work of Professor David Roland-Holst at the University of California. After studying the macroeconomic implications of California’s innovative energy policies, he found that efficiency programs have created about 1.5 million full-time jobs with a payroll of $45 billion while saving about $56 billion since 1972.^[2]

These findings support the business case for energy efficiency investments and may eventually help electrical distributors sell energy management projects, by encouraging more money to flow to these investments. Please refer to NAED’s Findings in Brief: The Green Market: Trends, Breakthroughs & Business Opportunities for more information.

[1] http://epa.gov/climatechange/emissions/downloads/2009GHGFastFacts.pdf accessed August 10, 2009

[2] Roland-Holst, David. “Energy Efficiency, Innovation, and Job Creation in California.” Palo Alto, California, Next 10, 2008. Available at: http://www.nextten.org/next10/publications/research_eeijc.html.