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Economic Incentives: P2 Opportunities
Table of Contents
Background and Overview
Reasons for Economic Incentives
Developing and Implementing Economic Incentives
Types of Economic Incentives
(NEW!) Focus on Renewable Energy Incentives
P2 Opportunities
Where To Go for P2 Help
Complete List of Links

Essential Links:

Environmental Policies for the New Millenium (pdf)
A conference paper discussing general principles in how to implement economic incentives.

There are many opportunities to utilize the flexible and cost-effective benefits of economic incentives into pollution prevention efforts. Listed below are pollution prevention topics of concern, along with some examples and sources of how economic incentives were used to address the issues.

Topic Area

Incentive Example

Air quality and climate change initiatives

The Clean Air Act of 1990 successfully used a marketable permit system to reduce sulfur dioxide emissions. Annual savings to electricity ratepayers nationally, when compared to the previous traditional approach, range from 50-80%, resulting in savings of about $1-6 billion annually. (See Resources for the Future).

The U.S. Department of Commerce and U.S. Patent and Trade Office's Green Technology (USPTO) Pilot Program allows expedited review for applications pertaining to environmental quality, energy conservation, development of renewable energy resources, and greenhouse gas emission reduction. The pilot is geared toward 3,000 of the most promising patents that could drastically alter the way energy is utilized and lead to vast job creation. Additionally, USPTO's efforts will help improve speed to market of green technologies, which is an essential component in emerging green markets. The program runs through December 31, 2011.

Brownfields development

The Environmental Protection Agency's Brownfields Cleanup and Redevelopment program gave out over $100 million in 2004 to encourage redevelopment and revitalization of brownfields. Brownfields are former industrial properties where expansion, redevelopment, or reuse is complicated by real or perceived contamination. These grants can pay for site assessment, cleanup and the establishment of revolving loan funds. Success stories can be found all over the country. In Houston, nearly 1,000 acres of brownfields have been cleaned up for various community uses, including a major league ballpark, a golf course, a performing arts center, an aquarium, an entertainment complex, and 1,000 new housing units.

In addition to grants, EPA's Brownfields Program website has information on tax incentives, financing tools, pilots, and other programs.

Ecosystem conservation

The Public Benefit Rating System & Timber Land Programs is a land tax program in Jefferson and King Counties, Washington. This innovative system determines property taxes on a point system that rewards property owners with a lower tax rate if they preserve or restore open space features, such as salmon and wildlife habitat and stream buffers, and timber lands. The incentive of a lower property tax promotes a disincentive to exploit the land's development potential.

The Conservation Reserve Program (CRP) is a voluntary program for agricultural landowners. Through CRP, farmers can receive annual rental payments and cost-share assistance to establish long-term, resource conserving vegetation on eligible farmland. Participants enroll in CRP contracts for 10 to 15 years.

Energy management

Seattle City Light's Energy Smart Services offers financial incentives to help medium and large businesses reduce electricity use and save money. These incentives can range as high as 70% of the installation cost, shortening the payback on energy efficiency investments and help improve a business's bottom line.

The Oregon Department of Energy utilizes the innovative Energy Services Performance Contracting program to stimulate energy conservation projects. An energy savings performance contract is an agreement between an energy services company (ESCO) and a building owner. The owner uses the energy cost savings of a specific project to reimburse the ESCO and to pay off the loan that financed the energy conservation projects. Virtually any project that saves energy or produces energy can use an energy savings performance contract. Typical projects have included energy management control systems, HVAC equipment, high efficiency lighting, variable speed drives, insulation, and window replacement.

Environmental performance or product certifications / Recognition programs

EcoBiz is an Oregon-based business certification program that recognizes businesses for adopting exceptional environmental business practices. Currently, EcoBiz certifications are available for automotive services and landscaping; more than 100 auto body shops and 13 landscaping businesses are certified through this program. The EcoBiz Program serves as a practical model for municipalities seeking to meet Oregon's SB737 requirement in target sectors, while obtaining additional environmental and financial benefits. PPRC's dedicated staff currently performs outreach and technical support for EcoBiz in partnership with Clean Water Services in Washington County, and plans to extend EcoBiz outreach to additional sectors across Oregon.

EnviroStars was created in King County, Washington, and provides assistance and incentives for small, local businesses to reduce hazardous materials and waste to protect public health, municipal systems, and the environment. The program reinforces safer and healthier business practices and creates economic value for local business through recognition of best practices. EnviroStars is a consortium of government agencies and partnership organizations licensed to provide EnviroStars certification, and the program has been adopted in Jefferson, Kitsap, Pierce, Spokane, and Whatcom Counties.

Product labeling schemes allow certified products that meet a program's standards to be labeled with their logo and posted on the program website. Earning a label from a credible program may increase sales of products. Three widely known and credible programs are GreenSeal, Ecologo (Canada) and U.S. EPA's Design for the Environment (DfE) Safer Product Labeling Program.

Colorado's Environmental Leadership Program is a statewide environmental recognition and reward program. This program rewards businesses and organizations with incentives such as recognition, regulatory flexibility, public-private partnerships, networking and technical assistance in exchange for going beyond compliance.

Get on the Map is a Seattle campaign that uses an online map neighborhoods to publicly recognize businesses taking actions to cut waste, save water, and reduce pollution.  The more actions a business takes, the darker shade of green on the map. Actions and accomplishments are reviewed by the Resource Venture, a program of Seattle Public Utilities.

Environmental Insurance

Pollution Prevention (P2) and safety improvements may allow for reduced insurance costs.

Tiz's Door Sales in Everett, Washington manufactures finished wood products for home remodeling and new construction. Worker safety concerns and fire/explosion risks led the business to reduce air emissions from painting and coating operations. These investments generated major savings in both material use and disposal costs. After these aggressive P2 efforts, annual insurance costs at Tiz's Door Sales dropped by over $34,000 per year. The costs of workers' compensation coverage, health insurance premiums, and conventional property insurance were reduced. Tiz's Door Sales has reduced its potential environmental liability to the point that environmental insurance is not needed. See:

Environmental management systems

As part of the voluntary Michigan Clean Corporate Citizen program, companies must demonstrate that they have a strong and effective environmental management system in place. The EMS must include identification of environmental impacts, self-initiated compliance audits, public participation, a strong and clear statement of the company's commitment to environmental excellence, and environmental training for employees. Companies that demonstrate they have such an EMS, as well as demonstrating a strong compliance and pollution prevention program, are eligible for flexibility in air permitting as well as expedited permit processing.

Green building

Since 1999, the state of New York has given more than $92 million in federal and State funds to provide assistance for projects dealing with more than 137 million square feet of building space in the State. They offer design and construction services or assistance, and the New York State Green Building Tax Credit provides for tax credits to owners and tenants of eligible buildings and tenant spaces which meet certain "green" standards. These standards increase energy efficiency, improve indoor air quality, and reduce the environmental impacts of large commercial and residential buildings in New York State.

Green purchasing

The IRS offers a federal tax credit of $500-4000 for the purchase of a new energy-efficient hybrid, alternative-fuel or electric vehicles. Many states and municipalities also have separate credits or benefits for purchasing these vehicles. See:

Hazardous waste management

Hundreds of King County, Washington businesses have benefited from the Voucher Incentive Program (VIP), a subsidy provided by King County Local Hazardous Waste Management Program. Businesses partner with waste management consultants to reduce the amount of chemicals going down the drain, into landfills, on the ground and into the air. Commitment to long-term change can earn a company 50% matching funds for every dollar wisely spent on hazardous materials management, up to a ceiling of $500.

P2 technology and product development

Oregon promotes the purchase of P2 equipment by offering a tax credit up to 50 percent of the certified cost of the equipment. Rhode Island also encourages the use of "source reduction equipment" by offering refunds on the sales tax on the purchase of such equipment when certified by the State.

Regulatory compliance and integration

Florida's Department of Environmental Protection has taken an "ecosystem management" approach that offers "team permitting" as an alternative to traditional permitting. Applicants who need to receive permits from multiple agencies can agree to have team permits known as "ecosystem management agreements." In exchange, the applicants must have exemplary compliance records and must demonstrate that this approach will result in a "net ecosystem benefit" to the affected ecosystem and a reduction in overall risks to human health and the environment. This program has resulted in increased permit flexibility, expedited permit processing, alternative monitoring and reporting requirements, cooperative inspections and hundreds of thousands of dollars in savings for private sector participants.

Sector specific P2

The Environmental Protection Agency's Voluntary Advanced Technology Incentives Program encourages paper mills to install advanced P2 technologies or make process changes that would further reduce toxic pollutant releases to surface waters and air, beyond the requirements. In exchange, the mills can defer their compliance for both the air standards and water discharge permit limits.

Water quality / Stormwater

The Lower Boise River Project, initiated by the U.S. Environmental Protection Agency - Region 10 (EPA) and Idaho Department of Environmental Quality, examines how effluent trading can help improve water quality and lower the overall cost of meeting pollutant-reduction objectives established by water quality management plans known as Total Maximum Daily Loads (TMDLs). Participation in the project included wide representation from federal, state, and local agencies with water-quality responsibilities, agriculture, municipalities, industry, and the environmental community.

Seattle Public Utilities offers a Stormwater Facility Credit Program - to recognize privately-owned systems that reduce stormwater flow and/or provide water quality treatment, which help lessen the impact to the City's stormwater system, creeks, lakes, or Puget Sound. Properties that qualify receive a reduction in their annual drainage fees.


The Topic Hub™ is a product of the Pollution Prevention Resource Exchange (P2Rx)

The Economic Incentives Topic Hub™ was developed by:

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Hub Last Updated: 10/17/2014