I was recently invited to write for GreenBiz.com’s The Right Chemistry Blog. I chose to focus on the economic opportunity for California inherent in the Safer Consumer Product regulations. Check it out here.
Why California is leading the way on chemical policy reform
California is in the last stages of promulgatinggroundbreaking regulations that will require manufacturers to seek safer alternatives to potentially harmful chemicals in consumer products. These regulations come after four years of animated discussion and unprecedented input, extending to thousands of comments submitted by a broad range of stakeholders.
As the regulations come closer to fruition, however, the standard arguments are surfacing about their potential impact on the state’s economy, including comparisons to the economic impacts of the European Union’s REACH chemical regulation, which came into effect in June 2007.
It is therefore probably worth noting that no less an entity than German chemical giant BASF stated in September of this year that REACH was “worth the money.” In the same report, CEFIC, the European Chemical Industry Council, stated that while it is too early to see any impact on innovation, it expects that REACH “will indeed benefit human health and the environment.”
More importantly, however, it behooves us to remember at this juncture why California, other states such as Maine and Washington, and a sizeable national and global movement are pushing for chemicals policy reform. The externalized costs to society of chemical use are large and growing. On the flip side, the potential to grow a green economy is already here; one example is B or Benefit corporations. B Corps are a new type of corporation which uses the power of business to solve social and environmental problems. More on that shortly.
The Costs of Chemical Exposure
It has been difficult, at best, to put hard numbers on the externalized costs to society of human health and environmental impacts of industrial chemical use. Clearly this is another data gap we need to start to fill; our best data are at least a decade old. However, even conservative estimates of disease burden and costs based on a handful of diseases with clear linkages to environmental exposures are already in the billions of dollars. Overall estimated costs of exposure to toxic substances in 2001 were estimated at $568 billion to $793 billion per year for Canada and the United States combined. As a contextual reminder, California constitutes 13 percent of the U.S. economy.
Next page: The top public health concerns of our time
If that isn’t enough to give you pause, consider this: Environmental exposures to chemicals have been highlighted as contributing factors in the top public health concerns of our time, including obesity, heart disease, infertility and childhood developmental problems. A few of these are highlighted below.
- The World Health Organization estimates that globally 44 percent of asthma, 16 percent of cardiovascular disease and 19 percent of all cancers can be attributed to environmental exposures.
- The childhood prevalence of asthma more than doubled from 1980 to 1996, from 3.6 percent to 7.5 percent. While not all exposures result from chemicals in consumer products, in Nov. 2011,California’s Department of Public Health highlighted recent research that links asthma with exposure to cleaning products, and other literature clearly links asthma and other diseases to consumer product exposure.
- In 2008 estimated national annual costs were $76.6 billion for lead poisoning, prenatal methyl mercury exposure, childhood cancer, asthma, intellectual disability, autism and attention deficit hyperactivity disorder (ADHD).
- Incidence of childhood cancers increased by 28 percent from 1974 to 1998, a span of 25 years, especially acute lymphoblastic leukemia, central nervous system tumors and non-Hodgkin’s lymphoma.
The good news is environmental exposures to chemicals are the public-health factor about which we can actually do something in fairly short order. Regulations are one part of the strategy, creating a backstop for the worst impacts. As it turns out, they’re a good investment. In 2011 the Federal Office of Management and Budget submitted a regular report to Congress that estimated that investment in health, safety and environmental regulations in the last decade has yielded a return on investment of 300-700 percent. The costs associated with those regulations were in the $44 to 63 billion range and benefits at federal, state, local and tribal levels estimated at $132 to $655 billion.
Building a Sustainable Economic Engine for California
Another part of the strategy comes from the marketplace. In Oct. 2011, Governor Brown signed B or benefit corporation legislation in California. Two hundred of the more than 600 existing B Corporations are located in California. Questions around disclosure of chemicals in a product’s life cycle are being incorporated into the latest version of the B Impact Assessment, but B Corps and other companies have already created profitable businesses without chemicals of concern.
These include nationally known consumer product companies such as Badger Balm and Seventh Generation in Vermont, and EO Products, Method and Elemental Herbs in California. California-based B Corp apparel companies include Clary Sage Organics, Indigenous Designs, and Oaklandish. B Corps span the consumer product market, from paper supplier New Leaf Paper, to stainless steel water bottle purveyorKleen Kanteen, and provider of compostable products WorldCentric. Other California companies profiting from green chemistry were featured in Environment California’s 2010 report, Green Chemistry at Work.
Under current regulatory structures, innovative companies are often challenged to get their safer alternative products to market because existing regulations do not ask if a potentially hazardous chemical is necessaryin a consumer product or if there’s a better way to achieve the required performance. The California Safer Consumer Product regulations have the ability to send a clear signal to the market that there is a huge potential market in green chemistry in California.
Not only is it is possible, it is absolutely vital for us to build a new economy where goods and services that we all utilize can be provided by companies that are profitable while providing social and environmental good. California has led the country before, from environmental regulation and energy efficiency in the 1970s to entirely new sectors of the economy in the 1990s. We can do it again.
Photocollage by GreenBiz Group