Principle 14: Access to information

Sharing of Innovation on Pollution and Recycling: The Case of Eco-Patent Commons

Date posted: 
Nov 29 2009

Technologies that promote pollution control and prevention, recycling, and energy efficiency have already been developed by many industries and companies. These technologies and practices were products of the research and development efforts by industries. There are benefits to be derived from sharing of these technologies. However, some of these technologies are considered to contribute to the competitive advantage of companies.

Responsible Party: 
Regulated Community
I. Objectives or Impact: 

Various technologies and practices to protect the environment have already been developed in many countries. These practices include energy conservation via improved energy efficiency, pollution prevention, and recycling. Interestingly, these practices have shown to be effective and in fact are embraced by the private sector. One of the barriers though is that these practices are considered to be a private asset. Companies may not be willing to share these technologies so as to preserve competitive advantage in terms of cost efficiency. Given this scenario, other countries or companies would not be able to access these successful and deemed effective technologies. However, it is recognized that certain patents on environment practices may not be a source of competitive advantage. These technologies can create greater benefits if recognized as a “common commodity”. Innovation, similar to that attained in the open source technology market, may be had if such commodity is accessible to other parties. The practice aims at encouraging various forms of innovations that will improve efficient use of resources in producing manufactured commodities. Innovations geared towards proper disposal of wastes are also encouraged.

II. Description of the Good Practice (Outputs): 

The Eco-Patent Common was conceived in Switzerland and New York by the World Business Council for Sustainable Development. Its aim is to make certain technologies accessible to potential users, specifically those who would not be able to afford royalty payments. The identified “commons” will be in a searchable website hosted by the World Business Council for Sustainable Development (WBCSD). It will be dependent on pledges made by participating companies. Practices that can be pledged would be those pertaining to (1) energy conservation, (2) pollution prevention, (3) use of environmentally preferable inputs and materials, (4) materials reduction, and (5) recycling.

Currently, the WBCSD brings together 200 international companies with a common commitment of pushing for sustainable development though the sharing of good technologies and disposal practices.  Members are drawn from 30 countries and 20 industrial sectors. 

 

III. Outcomes or Results: 

The establishment of the Eco-Patent Common is expected to benefit both the contributors and the users. Participation in the Eco-Patent will likely produce global recognition for businesses pursuing activities and innovations geared towards sustainable development. At the same time, by making a practice or technology accessible, it can be a catalyst for further innovation by other users. Also, as opposed to making the innovation public or open to all, the eco-patent would still give the contributor a certain amount of control. The contributor can terminate use if users will assert patents against the contributor. As of date, various companies pledged to support the Eco-Patent Commons. IBM, Nokia, and Sony were among the first group of companies that gave commitment to the Eco-Patent Commons. Recently, Xerox, DuPont, and Bosch pledged their support to the endeavor. The newly pledged patents include technology that converts non-recyclable plastics into fertilizers, automotive technologies that would enable efficient fuel consumption, and technologies that enable recycling of optical discs.

A. Policy Framework: 

Laws of participating countries need to be harmonized to jointly recognize the possibility of participating in the Eco-Patent endeavor. Agreements, especially between private sector contributors and users, pertaining to use, scope, termination, and other conditions of use need to be spelled out clearly.

B. Budgetary and Financial Requirements: 

(not applicable)

C. Human Resources: 

In promoting this endeavor, various expertise would be required. In particular, an over-all body composed of experts from various fields need to be established. Particularly, experts on international law and Intellectual Property Rights might be needed.

D. Material Resources: 

The entire system might also be information-intensive. A sole unit devoted to collecting, cataloguing, disseminating, and monitoring the flow of technology contributions need to be established.

E. Institutional Support: 

The endeavor was made possible due to the support and commitment extended by the private sector. With novel technologies, financial support from the government might also be required. This endeavor will also be heavy on government involvement, since laws on IPR and patents need to be harmonized. Inputs and linkage with the World Intellectual Property Office (WIPO) might be required

F. Planning, Scheduling or Sequencing of Activities: 

(not applicable)

V. Further Information: 

World Business Council for Sustainable Development (www.wbcsd.org)

Promotion of Cleaner Production in the PRC

Date posted: 
Nov 17 2008

Industrial growth is the primary driver for the rapid development of China. However, the growth experienced in the industrial sector was accompanied by heavy consumption of resources, resulting to generation of pollution. Interestingly, large firms were not solely responsible for the generated pollution in the country. Small and medium-scale enterprises (SMEs) located in villages and towns also contributed to the pollution problem. The pace of development and the growth of the industries put pressure in China’s resource use. Air pollution also is a threat due to coal combustion.

Responsible Party: 
Compliance
I. Objectives or Impact: 

Industrial growth is the primary driver for the rapid development of China. However, the growth experienced in the industrial sector was accompanied by heavy consumption of resources, resulting to generation of pollution. Interestingly, large firms were not solely responsible for the generated pollution in the country. Small and medium-scale enterprises (SMEs) located in villages and towns also contributed to the pollution problem. The pace of development and the growth of the industries put pressure in China’s resource use. Air pollution also is a threat due to coal combustion.

The Cleaner Production Law promotes cleaner production, efficiency of the utilization rate of resources, and reduction and avoidance of generation of pollutants. The law mainly addresses the problems caused by overuse of resources due to utilization of outdated technologies and facilities. The law particularly helps small and medium-scale enterprises to shift production practices. This is quite important in the country since SMEs play an important role in economic development. However, these firms also have a substantial share in industrial pollution loads.

The law also identifies the key role of local governments in providing solution to the problem. This is quite critical since SMEs are more often than not, are clustered together. Most of the SMEs are township and village enterprises which uses outdated technologies and facilities.

II. Description of the Good Practice (Outputs): 

The Cleaner Production program is touted as the key strategy for achieving sustainable development. The application of the program started from the conduct of demonstration projects in industrial sectors. The program also has a long history in the country. It started laying foundation by focusing on the introduction of the methodology, personnel training, and demonstration. This initial phase extended from 1992 to 1997. From 1998 to 2002, efforts were geared towards the study and formulation of the law.

From the policy formulated, it was identified to use compulsory mechanisms. This came in the form of direct restriction of toxic and harmful substances, particularly for SMEs. It also required the industry to adopt waste abatement plans and release environment reports.

Support mechanisms were also provided by the law. This came in the form of provision of expertise, information, technologies, and funding for cleaner production practices. Various incentives are given to firms in order to induce them to shift production practices. Products produced from wastes and materials reclaimed from wastes benefit from reduced taxation or exemption from value-added tax. Costs incurred for cleaner production auditing and training are also allowed to be booked as operating costs for the firms. Funds from the Small and Medium-Sized Enterprise Development Fund are also set aside to support cleaner production for SMEs. In some provinces, R&D programs supportive of cleaner production are given priority in application of bank loans.

III. Outcomes or Results: 

Interestingly, in provinces where the local economy is more developed, firms responded positively on economic incentives. In some provinces and cities, more stringent regulations are required because of the severity of environment problems. There are a number of cases where firms and enterprises failing national standards on environmental standards become compliant given the clean production law. Firms initially started with pursuing cleaner production by looking at end-of-pipe treatment. Eventually, some firms realized that disposal costs increases production costs and creates negative image for the entire company.

One firm, HeNan Lotus Monosodium Glutamate Group Limited, showed gains on profit margins when it adopted cleaner production techniques. Initially, pollution control was pursued via end-of-pipe treatment efforts. Eventually, the firm combined this effort with material substitution and recycling. Interestingly, the procedure they applied for end-treatment resulted to the production of solid fertilizers which yields considerable profit for the company (annual profit of RMB 280 million yuan).

The firm also integrated environment targets in the production management level. Bonuses are distributed according to conditions of cleaner productions. Specifically, with outstanding achievements, staff bonuses can be elevated by five percent. On the other hand, non-attainment of environment targets results to cutting down of bonus by one percent and five percent for staff and leaders respectively.

IV. Essential Elements for Success: 

Policy Framework: Enabling Policy, Regulation, Inter-agency/Multiparty Agreements

The Cleaner Production law is a product of careful promotion, awareness campaigns, and demonstration projects.  In its initial stage, cleaner production was integrated with the existing environment policies of the country.  Support from the regional and local Environment Bureaus was solicited.  Modified policies supportive of cleaner production were also introduced, namely: policy on environmental impact assessment and pollution discharge licensing system. 

Provinces also promoted cleaner production by pursuing supporting activities at the local level.  These activities came in the form of establishment of funds for cleaner production processes, setting evaluation standards, promotion of the use of environmental labels in products, IECs, and offering of tax and price incentives.

Human Resources and Skills

Since the cleaner production promotes eventual shift of production approaches, training and awareness raising were conducted on the earlier stages.  Training programs came in the form of demonstration projects.  These primarily targets managers and technical staff directly involved in the production management.  Cooperation with other countries during the demonstration projects was present during the demonstration projects. 
   
Material and Resources & Institutional Support

Since a shift of production techniques can be costly for a firm, support for cleaner production efforts is necessary.  The establishment of funding mechanisms supportive of cleaner production is necessary.  Tax and price incentives play a key role in assisting firms.  Economic departments and local governments also adopted policies that encourage cleaner production.  Specific endeavors like material replacement, conventional technologies process innovation, solid fertilizer production, and methane utilization are encouraged.

V. Further Information: 

Tianzhu Zhang and Jining Chen. Promoting Cleaner Production in China. 2008 (http://www.chinacp.com/EN/PolicyDetail.aspx?id=41)

Case Studies of Cleaner Production in China http://www.chinacp.com/EN/Case.aspx

Cleaner Production in China (Environmental Legislation) http://www.chinacp.com/EN/PolicyDetail.aspx?tp=Law&id=38

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