Over the past several years it has become quite clear that ‘industry’ has been shifting towards the conveyance of an image of being ‘green’ and a greater sense of corporate social responsibility. Despite this, the vast majority of corporate decisions that are made are analyzed simply through the lens of short-term cost or profitability. Coupled with the fact that green premiums are fairly nebulous (http://www.hbs.edu/faculty/conferences/2014-launching-the-star-lab/Documents/HainmuellerHiscox_AEJ.pdf), this provides one with more questions than answers as to how to convince businesses that the long-term financial viability of their firms is directly in line with the environmental outcomes caused by their operations. In my research on the desalination industry, more often than not I encounter references to the impacts that these plants are having on local marine ecosystems and environments. In order to better understand how to calculate the financial benefits of minimizing these impacts, then, it is useful to analyze the history of two industries: waste and paper.
Throughout the history of the United States environmental regulations have, in general, trended in only direction: greater stringency. The waste industry, epitomizing such trends, didn’t even become a true industry until the late 19th century. In 1873, a cholera epidemic caused by direct waste disposal killed over 3,000 people in the Mississippi valley (http://www.deq.state.ok.us/lpdnew/wastehistory/wastehistory.htm). In 1934, the Supreme Court of the United States forbid the untreated dumping of municipal waste into water bodies. And, over the next 80 years, various laws limiting waste disposal in terms of quality and location have driven the industry into greater self-regulation, increased environmental costs but eventually, recognition as a necessary and helpful public good for society.
Similarly, the paper mill industry has traditionally been recognized as the one of the greatest polluters in developed countries (http://mercatus.org/sites/default/files/Regulations-Pulp-Paper-Industry.pdf). With a number of impacts on the environment, environmental regulators have attempted since the early 1970s to mitigate issues as wide ranging as deforestation, air pollution, water pollution, waste, chlorine discharge, and sulfur emissions. In order to deal with such concerns, congressional measures such as the Clean Water Act, Clean Air Act, and Endangered Species Act provided the framework through which the first regulations were placed on the industry. Since then, other more specified mandates have been added such as the Clean Air Act’s Maximum Allowable Controllable Technology (MACT) and recently the Great Lakes Restoration Initiative. With each additional regulation placed upon the industry, the costs to the industry have gone up and the fines have increased (http://www.lesspollution.org/ip_history.html)
As these regulations has been implemented, the waste and paper mill industries have incurred millions of dollars in costs and fines as they moved towards a more sustainable means of business. Today, in the desalination industry, regulations in place to monitor the carbon emissions, intake valves, and brine discharges are adopted from other industries and fail to take into account the unique nature of desalination operations. In no way does this mean that desalination is a technology that shouldn’t be utilized in providing a drought-proof water resource. Instead, desalination plant developers and owners should look towards being a first-mover with regards to adopting ‘green’ or more sustainable technologies. As the government shifts towards greater adoption of this technology, and as the environmental impacts become more well-known, there will undoubtedly be a shift towards implementation of stricter regulations and methodologies. By adopting sustainable technologies today, the desalination market can take control of their own destiny, conveying the best practices that should be adopted going forward, and saving themselves significant amounts of capital along the way.
Desalination is a technology that is ripe for further expansion as droughts worsen and water supplies dwindle. It is important for companies to understand the environmental impacts of the products they provide and utilize this knowledge in order to improve their product offering and ensure future profits.