Industrial Pollution Prevention Trends in New Jersey
December 1996 - Michael Aucott - Debra Wachspress - Jeanne Herb

Recommendations for Further Study and Action
The reasons why NPO is being reduced in New Jersey, but not in the U.S. as a whole, should be explored. Possible factors include: 1)New Jersey's history of strict environmental laws coupled with vigorous enforcement; 2) the fact that chemical throughput reporting has been required in NJ since 1987; 3) the pollution prevention focus in NJ since at least late 80’s; 4) the possibility that economically marginal processes generate NPO at a higher rate and that the shut-down of marginal processes has been more pronounced in NJ than in the U.S.; and 5) that the NPO reduction trends are more a function of type of industry than other factors, and that New Jersey’s preponderance of chemical industries, especially those in the pharmaceutical and specialty chemicals sectors , is somehow conducive to nonproduct output reduction.

The strong association in New Jersey between those groups of facilities with (long-term) upward trends in value added and (recent) downward trends in NPO, discussed earlier, should also be explored. Possible causal factors include: 1) the possibility that the investment or other costs of reducing NPO mean that only profitable companies can do it; 2) the possibility that reducing NPO saves companies money and helps make them profitable; 3) the possibility that the intelligent, progressive management which leads to growth in value added also leads to reductions in NPO; and 4) that some type of artifact associated with type of business (see item 5, above) is also operating. It may be that all of above factors are involved, or more. However, if one factor is significantly more important than others, its identification could have major implications. A complicating factor in this analysis is the present relatively broad, inexact nature of classifying facilities, which has been highlighted by NJDEP’s finding that the correspondence between a facility’s SIC code and its actual activities is often poor.

It should be stressed that the problem is not the SIC code system itself but, rather, its application to a purpose that was not part of its original design. The SIC code system was designed as a tool for economic and labor statistical analysis, not for environmental regulatory purposes. The classification problems identified in the NJDEP analysis point to the need to search for methods to improve the functioning of the SIC classification system or to develop an alternate, better, classification system. The former might be accomplished via a greater state presence in the field for confirming, reviewing, and tracking the accuracy of facilities’ SIC codes. The latter might be accomplished by developing better ways to characterize industry than SIC codes. Candidates for classification methods could be process and chemical-specific identifiers such as those reported on Section C of Plan Summaries.