Spending money to comply with local, state and federal environmental regulations is just part of the cost of doing business for most finishers, and some might disagree with the assertion made in the headline of this column. Still, most shops want to be responsible environmental stewards and would agree that minimizing output of potentially hazardous chemicals into the environment is a good thing.
But how much do you think manufacturers in the U.S. spend each year on pollution prevention and waste treatment? Would you believe more than $26 billion?
That’s the estimated cost according to a U.S. Census report titled Pollution Abatement Costs and Expenditures (PACE): 2005. The document (you can download a copy at http://yosemite.epa.gov/ee/epa/eed.nsf/pages/pace2005.html) says U.S. manufacturers spent $5.9 billion dollars on capital expenditures and $20.7 billion dollars on operating costs for pollution prevention and treatment in 2005, the most recent year for which even estimated expenditures are available.
That may sound like a lot, but it’s a relative bargain according to the U.S. Environmental Protection Agency. The numbers represent less than 5% of total new capital expenditures and less than 1% of total revenue for manufacturers, respectively.
Based on data collected in 2006 using a survey and guidelines developed by EPA, the 2005 estimates are extrapolated from a sample of approximately 20,000 manufacturers with 20 or more employees. The report breaks out details on pollution abatement expenditures by type of pollution media—air, water and solid waste—and abatement activity by industry and state. Reported costs include capital and operating costs for treatment/capture, prevention, recycling and disposal, plus depreciation of pollution abatement equipment.
Of the $5.9 billion in capital expenditures, nearly $3.9 billion was attributed to equipment for air emissions abatement, $1.4 billion to water discharge abatement and $677 million to solid waste.
On the operating cost side, air emissions accounted for $8.6 billion in expenditures, water $6.7 billion and solid waste $5.3 billion. More than $4 billion of operating costs was attributed to salaries, wages and benefits; $5.7 billion to energy costs; $2.8 billion to materials and supplies; $5.2 billion to contract work, leasing and other purchased services; and $2.8 billion to depreciation.
Industries with the highest capital expenditures in 2005 were Petroleum and Coal Products Manufacturing with more than $1.7 billion Chemical Manufacturing with nearly $1.3 billion. The same industries had the highest operating costs, with the Chemical industry slightly outpacing Petroleum and Coal $5.2 billion to $3.7 billion.
It’s difficult to break out how much of these costs are borne by finishers. Without question, most shops pay their fair share for pollution control and waste treatment, and most, while always trying to reduce costs, wouldn’t have it any other way. Protecting the environment for future generations is too important to do otherwise.