Evaluation of the Effectiveness
of Pollution Prevention Planning in NJ
II. Key Results
Although the findings of this study indicate generally
that planning was successful, not all elements of planning
were a success, nor did all facilities benefit equally from
planning. Unless otherwise stated, these findings and conclusions
apply to the 115 facilities visited by HRA and NJDEP. An association
or correlation between planning factors and measures indicates
that the relationship is statistically significant to the
95 percent confidence level. See Section III for a discussion
of plan completeness and plan quality.
II.A. Analysis of Findings
II.A.1. Elements of Pollution Prevention Plans
Detailed, process-level materials accounting is the main feature
of the New Jersey Planning Rule. Facilities are required to
provide materials accounting data for each process and quantify
sources of NPO within each process. Clearly, the process-level
materials accounting requirement was successful in terms of
plans produced. Only 25 percent of facilities had tracked
NPO per unit product in some form before planning was required,
and usually in the form of process-level yield, so for many
facilities, the New Jersey plan was their first efficiency
The more knowledge
about how NPO is generated within processes, the better
the end product - in this case, the facility's pollution
NPO generation to individual sources within each process
was associated with more complete plans and larger average
percent NPO reduction goals. The average NPO reduction
goal was 15.6 percent for facilities that attributed NPO
to individual sources vs. 8.4 percent for those that did
Facilities that had tracked NPO per unit
product prior to planning set percent use reduction goals
slightly higher than facilities that had not tracked NPO
per unit product prior to planning.
to achieve this aim. Beyond this, however, completing
the cost analysis was not associated with greater reduction
goals (plan quality and completeness used cost analyses as
part of their criteria, and so could not be tested). Facilities
perceived the cost analysis to be too difficult and unnecessary.
The main stumbling block seemed to be in calculating cost
savings for personnel assigned to environmental tasks: Since
these employees would still be working at the facility, it
was difficult to postulate cost savings from reducing their
time spent on environmental activities.
The planning rule
currently requires facilities to do a complete cost analysis
of all processes at the facility, including those not targeted
for reduction. The intention was to provide facilities with
a different view of NPO generation: in terms of what it costs
them, not just the amounts generated (the largest NPO streams
may not cost the facilities the most money to manage, and
this information might cause the facilities to target different
processes than they would using amounts of NPO). It should
be stated from the outset that nearly half of the facilities
(48 percent) did not do a complete cost analysis as required
in the rule, so the cost requirement failed,
Although one-third of the 48 facilities visited by
HRA thought that assigning environmental costs to NPO generation
within each process as required by the planning regulation
was the most difficult part of completing their plans, 11
of the 21 facilities that did a financial analysis of NPO
generation (52 percent) stated that the analysis yielded
a different picture of NPO generation than other NPO analyses.
However, none of these facilities reported targeting different
processes or selecting different reduction options based
on their environmental costs.
latitude given facilities by NJDEP in preparing their plans
should be counted as a success, both in simplifying the planning
process and in the completeness, quality, and percent reduction
goals in the plans themselves.
- Attributing environmental costs to each process was
not associated with greater percent reduction goals.
- When facilities calculated cost savings from reduction
options, they mostly calculated raw material cost savings,
not savings in environmental costs.
- Calculating environmental cost savings beyond those
required in the plan was not associated with more complete
plans or greater reduction goals.
Jersey gave facilities significant latitude in completing
two parts of the planning process - grouping of processes
and/or sources and targeting on the basis of use, NPO, or
releases - and facilities took advantage of this latitude
with no negative effects on plan completeness, plan quality,
or percent reduction goals.
Seventy-four percent of the
115 facilities grouped processes or NPO sources, and 73
percent of these reported that grouping reduced the number
of processes and sources that had to be examined in planning.
For the 48 facilities visited by HRA, 67 percent grouped
processes or NPO sources, and 81 percent of these reported
that grouping reduced the number of processes for planning
purposes. Also, 72 percent of the facilities visited by
HRA that opted for grouping reported that grouping saved
them time or money in the planning process.
For all facilities,
targeting 90 percent or more of use, NPO, or releases was
associated with a larger average percent use reduction goal,
as opposed to not targeting (i.e., planning for all processes)
or selecting processes that comprised less than 90 percent
of use, NPO, or releases (use reduction goals of 2.6 percent
vs. 1.5 and 1.6 percent, respectively).
Virtually none of the 115
facilities seemed to use targeting as a way to avoid developing
reduction options on processes that are important or used
targeting on use or releases to "hide" processes
with large amounts of NPO.
II.A.2. Previous Planning and Reduction Activities
pollution prevention plans created under the New Jersey planning
rule are significantly different from environmental plans
created prior to the planning requirement, since none of the
planning factors examined in this study - previous pollution
prevention planning, formal environmental planning, and business
reviews which included environmental costs - showed any association
with plan quality, completeness, or reduction goals. If there
is a learning curve for planning activities as there appears
to be for source reduction activities (see below), then one
would expect to see that previous planning activities had
some effect on facilities' plans. Since they did not, this
finding reinforces the view that process-level scrutiny in
the New Jersey planning rule is both effective and different
from previous planning activities.
A majority of the 48 HRA facilities reported
previous environmental planning activities, including waste
minimization planning, pollution prevention planning, and
business reviews which included environmental elements.
Interestingly, facilities that had undertaken source
reduction activities prior to planning created greater reduction
goals in their plans. This finding has several implications
with regard to planning and source reduction activities. First,
there may be a learning curve associated with source reduction,
so that facilities become better at spotting opportunities
once they've learned more about source reduction by undertaking
source reduction activities. This conclusion is supported
by the fact that more facilities described previous source
reduction activities to HRA in interviews than reported source
reduction activities on state and federal reporting forms
(see Section II.A.4). Many of these reduction activities were
in fact source reduction, although the facilities may not
have considered them to be source reduction when filling out
the forms, mainly when the result was unintended or the activity
concentrated on chemicals other than those for which the source
reductions were primarily achieved. Another possible explanation
is that facilities may be more familiar with source reduction
in general as more guidance has become available from industry
associations, government, and NGOs - in other words, a rising
tide floats all boats.
- Of the 48 HRA facilities, 83 percent had undertaken some
form of environmental planning in the seven-year period
prior to being interviewed. Almost two-thirds (62 percent)
had undertaken waste minimization planning, and over one-half
(56 percent) had undertaken some form of pollution prevention
planning, either alone or in the context of other planning.
Facilities with no pollution prevention planning prior to
the New Jersey requirement constituted 44 percent, and 17
percent of facilities had no experience with environmental
- Almost 60 percent of facilities interviewed had undertaken
business reviews that included environmental costs over
the previous seven-year period, and 46 percent had some
formalized approach to environmental planning, as opposed
to strictly responding to compliance requirements or emergency
- Although prior pollution prevention experience was associated
with better planning measures such as completeness and increased
average percent reduction goals, prior planning experience
was not. Of the three planning factors tested - previous
calculation of environmental costs in business reviews,
formal environmental plans (as opposed to one-time responses
to emergencies or compliance requirements), and previous
facility-wide plans - none was associated with more complete
plans, better plans, or increased percent reduction goals.
The major conclusion arising from this finding is that source
reduction opportunities are still plentiful, even for facilities
that have undertaken previous source reduction activities.
If, as some industry associations claim, facilities had exhausted
the "low-hanging fruit" and now required more capital
investment for diminishing returns in reduction projects,
it would follow that facilities that had undertaken previous
source reduction activities would also find fewer opportunities
in their plans. The planning rule does not require facilities
to create non-zero reduction goals, and 47 percent of all
reduction goals submitted to NJDEP on plan summary forms were
zero. The fact that facilities identified source reduction
goals through planning beyond the activities already undertaken
indicates that many source reduction opportunities still exist.
It may also imply that future reductions will increase as
a result of the planning requirement.
pollution prevention experience was helpful in creating
- For the 115 facilities visited by HRA and NJDEP, undertaking
source reduction activities prior to planning (as reported
on New Jersey DEQ-114 forms and U.S. TRI Form Rs) was associated
with more complete plans and larger average percent use
and NPO reduction goals. That is, facilities that had previously
reported source reduction activities on state and federal
reporting forms were more likely to have more complete plans
and larger average percent use and NPO reduction goals than
facilities that had not previously reported source reduction
activities (percent use reduction goals of 2.7 percent vs.
0.8 percent and percent NPO reduction goals of 15.3 percent
vs. 2.1 percent).
- HRA also asked its 48 facilities if they had undertaken
source reduction in the past five years. More facilities
described source reduction projects to HRA than had reported
source reduction activities on state and federal reporting
forms. For these facilities, previous source reduction activities
were associated with more complete plans and better plans.
II.A.3. Pollution Prevention Goals
Percent NPO reduction goals set by facilities in their
pollution prevention plans are, on average, much higher than
previously reported reduction projections. HRA examined facilities'
1991 and 1992 DEQ-114 forms, looking at projections for reductions
in NPO by source reduction over a five-year period and comparing
them to reduction goals in their plan summaries. Facilities
reduction goals over twice as great in their plans as they
had projected on their earlier DEQ-114 forms. Although it
can be argued that these reduction projections are not "goals"
per se in the way that planning requires facilities
to make reduction goals and that they may be conservative
estimates of reductions, they do represent facilities' ideas
of what they expected to achieve by source reduction (see
Section III.D for an explanation of the limitations of the
It might also be argued that facilities were climbing the
learning curve for source reduction in 1991 and 1992 and may
have come up with greater goals in 1993 and beyond without
required planning. However, nearly one-third of facilities
also reported that planning caused them to examine more processes
than they would have without planning. Two-thirds reported
identifying more reduction options and setting higher reduction
goals through planning, indicating that the planning process
was key to setting those higher goals.
All facilities projected
greater percent reductions in NPO, on average, in their
pollution prevention plans than they did in their DEQ-114
reports prior to such plans.
- Fourteen of the 48 facilities visited by HRA (29 percent)
stated that planning was a spur to examine more processes,
identify new reduction options, or make greater reduction
goals than they would have without the planning requirement.
- Thirty-two facilities (67 percent of those visited by
HRA) reported that they identified some or all of their
reduction options through planning. Identifying reduction
options through the planning process was associated with
greater average percent NPO reduction goals in the pollution
prevention plans than finding no new options through planning
(18.7 percent vs. 3.7 percent).
- Of the 115 facilities visited by HRA and NJDEP, facilities
projected percent NPO reductions at least twice as great
on average in their plans as they had previously reported
to New Jersey on their DEQ-114 forms (19.0 percent vs. 8.1
percent), and the differences in percent reduction goals
were statistically significant at the 95% confidence level.
- Overall, NPO reductions projected by all 405 facilities
that submitted plan summaries to NJDEP by July 1, 1994,
were similarly greater on average after required planning
(20.0 percent vs. 7.7 percent), and the differences in percent
reduction goals were also statistically significant at the
95% confidence level.
II.A.4. General Outcomes of Planning
appears to have been more effective for facilities generating
larger amounts of NPO and facilities with a higher NPO/use
ratio. This is not surprising - it makes sense that facilities
generating greater amounts of NPO would find greater percent
reductions, and generating more NPO might necessitate better
internal accounting procedures that would also lead to greater
plan completeness. A higher NPO/use ratio indicates that more
of a given material on site ends up as NPO, therefore less
is consumed in process or shipped in product. Typically, these
types of applications where this occurs - coating, degreasing,
cleanup, etc. - are more amenable to reduction options with
more immediate results than those requiring reformulation.
set higher percent reduction goals, as well as producing
more complete and better plans.
More facilities than
not found planning worthwhile. Realistically, facility planners
were reluctant to denigrate the results of a process that
took their time and effort, although those who did were outspoken
about it. Finding planning worthwhile was associated with
greater reduction goals for the 115 facilities, begging the
question of which came first - setting greater reduction goals
and deciding that it was a good experience or deciding that
planning was a worthwhile activity no matter what the outcome.
Finding planning worthwhile did not correlate with a more
complete or better plan, so it is difficult to say that prior
attitudes toward planning affected the outcome. More importantly,
facilities found other benefits to planning beyond creating
the plan itself, indicating that their finding planning worthwhile
- Facilities that generated more than 2.0 million pounds
of NPO in 1992 set slightly higher percentage use reduction
goals in their plans than facilities that generated less
than 2.0 million pounds of NPO, and the difference was statistically
significant to the 95% confidence level. The 2.0 million
pound level reflects a natural break in the DEQ-114 database
for 1992 rather than an arbitrary NPO level for facility
classification. (see III.A.)
- Facilities for which more than 25 percent of chemical
use ends up as NPO also set higher use reduction goals than
facilities with an NPO/use ratio less than 0.25.
While 52 percent of the facilities
visited by HRA stated that planning activities took key
personnel away from important activities, 63 percent of
facilities believed that planning was worthwhile and had
made important contributions to facility operations.
NJDEP's preliminary results indicated
that planning paid for itself eight-fold, including administrative
costs of the program by the Department. HRA also found that
planning pays for itself. There are two ways to calculate
planning costs: taking facility dollar estimates of planning
costs as is or taking facility time estimates and multiplying
them by an average salary. Facility dollar estimates usually
have a time and salary component in them unless the plan was
prepared by consultants, in which case facilities reported
the amount paid to the consultant. Dollar costs of planning
as reported by facilities were always higher than costs calculated
by average salary. Either method of calculating cost shows
that average planning costs, while not exactly trivial, reflected
the time necessary to gather process level materials accounting
data, since these data were unavailable at most facilities
prior to planning. HRA found a higher average planning cost
than NJDEP - not unexpected, since HRA examined more large
facilities as a percentage of total visits than NJDEP.
- Seventeen facilities (35 percent) stated that planning
increased their awareness of operations, including processes,
NPO generation, and individual sources of NPO. For six facilities
(17 percent), the New Jersey plan was the first facility-wide
examination of NPO other than required reporting they had
done. Two facilities also stated that the New Jersey plan
was the first facility-wide long-term plan done on site.
- Seven facilities (15 percent) stated that they could use
the pollution prevention plan as background information
to convince management to fund source reduction projects.
- Other benefits recounted by facilities included increased
employee good will and an increased pace of reduction compared
to previous reduction activities.
It is important to mention that most facilities calculated
only the direct savings in raw material costs for their reduction
projects (see II.A.1, above). Since it was difficult for facilities
to quantify environmental cost savings, and even more difficult
to quantify the other benefits of planning, estimates of cost
savings are probably low.
Facility site visits provided the
opportunity to gain insight into facilities' conceptions of
pollution prevention and their practices in data reporting.
It is safe to say that there is still learning about pollution
prevention and reporting to be done.
facilities visited found a net cost savings in their
plans, while 46 of 115 facilities (40 percent) found no
net cost savings.
Fifty-three percent of the 115
- Twenty-eight of 115 facilities were able to calculate
their annual cost savings, for a total of $7.1 million.
These figures yield an average of just under $254,000 in
- Averaging the $7.1 million in savings for the 61 facilities
that found a net cost savings in their plans yields an average
annual savings of $116,000.
- Averaging the $7.1 million in savings for the 107 facilities
that could definitely state that they either did or did
not find savings in their plans results in an average annual
savings of just over $66,000 per facility.
- Eight of the 48 HRA facilities had calculated the costs/amounts
of both capital investment and annual cost savings. These
eight facilities together showed a total capital investment
of $7.2 million and a total annual return of $1.7 million,
for an average payback period of 4.2 years.
- Potential capital investment to complete all of the projects
in facilities' plans ranged from zero to $19.0 million for
the 48 HRA facilities (nearly half of the facilities visited
by HRA were large, generating more than 2.0 million pounds
of NPO in 1992). Eight facilities stated that no capital
investment would be required.
Although some facilities
spent a great deal of time and money on their pollution
prevention plans, the average cost of planning was less
than the average annual savings per facility found through
planning, including those facilities that found no cost
- The 49 of 115 facilities that could place a dollar figure
on the cost of their planning spent an average of $35,000
- The 95 of 115 facilities that could quantify the amount
of time necessary to prepare their plans spent, on average,
6.5 weeks of one person's time to develop the plan. Taking
an average salary of $50 per hour yields an average planning
cost of $13,000 per facility.
- Twenty-three of the 48 facilities visited by HRA stated
that their time or cost estimate for preparing the plan
included time for research and development and for personnel
other than environmental or management staff.
facilities still include all waste management activities
in their corporate definitions of pollution prevention and
may not recognize reduction projects as source reduction
activities. However, virtually no facilities included reduction
projects in their pollution prevention plans that were not
- Thirty-eight percent of the facilities visited by HRA
include activities other than source reduction and in-process
recovery in their corporate definitions of pollution prevention,
although this figure is down from 59 percent five years
- While 83 percent of facilities described to HRA real source
reduction projects implemented before planning was required,
only 60 percent reported undertaking source reduction activities
on state and federal reporting forms.
Often, facilities have one person
completing federal TRI forms and another person completing
state DEQ-114 forms. Even when the same person or group
of people complete both sets of forms, inconsistencies occur,
both within the DEQ-114 forms and between the two sets of
- Thirty percent of facilities visited by HRA and NJDEP
had data discrepancies between TRI and DEQ-114 reporting.
- Fourteen percent of facilities had an imbalance between
inputs and outputs on DEQ-114 forms.
- Forty-eight percent of the 115 facilities found incorrect
DEQ-114 or TRI data either through the site visit or the
As a result of the
planning requirement, many facilities examined processes that
would not ordinarily have been examined, investigated new
reduction options, and, on average, set reduction goals that
far outstripped other reduction projections made before planning
These benefits included inventories of
processes that would not previously examined, greater understanding
of processes, and a background/cost/benefit framework to propose
capital investment projects.
The heart of materials accounting
- attributing NPO to individual sources within a process -
was key to successful planning, especially in terms of setting
higher reduction goals.
that had undertaken source reduction activities prior to planning
set greater percent reduction goals in their plans, even though
setting no further pollution prevention goals was an option.
Since most facilities did
not perform a cost analysis as specified in the planning rule,
the cost analysis requirement could not achieve its purpose.
In addition, those facilities that did undertake the full
cost analysis did not appear to benefit more than those that
didn't in terms of creating a better plan or greater reduction
goals. Although eliminating the cost analysis requirement
is one option in response to this finding, a more productive
approach might be to modify the requirement to include cost
analyses for targeted processes only in the form of complete
cost analyses for reduction options (Part II of the plan requires
facilities to compare the environmental costs of reduction
options to those of the original process). It makes sense
to include Part II cost analyses, since facilities would have
to do a cost comparison to receive funds for reduction projects.
guidance document provides useful information on beginning
total cost accounting, and NJDEP offered facilities software
to assist them in preparing that portion of their plan, facilities
might benefit from "real world" examples. Fifty-two
percent of facilities visited by HRA stated that planning
took key personnel away from "important" activities
- that is, productive activities - but they did not make the
connection between this effect and the value of time recaptured
from reductions that lead to decreased reporting, labeling,
manifesting, etc. "I get paid anyway," was the most
common response. Similarly, although some facilities were
willing to undertake source reduction projects that did not
meet their normal cost criteria because they would demonstrate
the facilities' commitment to pollution prevention, plant
personnel were reluctant to attempt to place a dollar value
on those benefits.
appeared to be less effective for facilities with smaller
amounts of NPO. Many are reluctant to "tamper" with
operations that are running well and are profitable, even
though small reductions in NPO generation can provide cost
Most facilities visited by HRA gained
concrete information about pollution prevention and/or data
reporting during the visit itself, both as described in the
findings above and in terms of general information. NJDEP
staff reported the same experience. At least one-sixth of
the facilities visited by HRA were unaware of changes to TRI
reporting thresholds that provided added incentives to reduce
NPO generation to less than 500 pounds per year per chemical.
As facilities explore more pollution prevention options, even
more reporting issues will arise.