By Rob Watson, Chief Science Officer, EcoHub LLC; Founder & Co-Chair, SWEEP Steering Committee
All markets can be transformed through the artful application of market rules and incentives that reward sustainability and penalize waste and inefficiency. The solid waste industry is no exception.
Based on my 30 years of experience in international environmental advocacy and business, including founding the LEED Green Building Rating System, I developed a framework for Market Transformation that can substantially hasten the transition and improve the environmental performance of key industries.
Market transformation requires both regulatory push and market pull. Just like an elevator requires a fixed cab and a motor to move passengers up and down, market transformation requires mandatory standards to define the industry and establish minimum acceptable performance, plus voluntary standards to recognize and encourage the best performers. For maximum effectiveness, voluntary and mandatory standards should be developed and implemented in parallel.
Both standards and market-based approaches are necessary, but neither is sufficient by itself. When developed jointly and in coordination, it is our experience that the end result is at least threefold greater than a course of action that emphasizes one approach to the exclusion of the other. Indeed, both mandatory and voluntary approaches are market transformation tools that are complementary, not exclusive.
The figure below shows the structure of the market transformation framework. Because “the chain breaks at its weakest link,” there are certain prerequisites that must exist for market transformation to occur. These are the five key elements:
- An overarching strategic plan that articulates goals, timing, resources, etc. for transforming the market;
- The development and passage of enabling legislation that allows regulations and other industry-focused programs and incentives to be implemented;
- A regulatory track that establishes, implements and enforces mandatory minimum performance standards for the infrastructure and/or activities in question;
- A parallel market driven track that has voluntary standards that are applied to the same elements as the regulatory track, but at a higher level of environmental performance, consistent with the objectives of the strategic plan;
- Both the regulatory and market-driven tracks need a capable and respected structure of administration and enforcement to be in place. Answers regarding questions about how to comply must be delivered clearly and by people who are competent and respected. Similarly, clear rules and fair enforcement by experienced professionals is also crucial.
- In addition, a means for continuous improvement—both in the performance targets and in the administration and enforcement of those targets—must be in place.
- Supporting activities and institutions that facilitate and enhance the development and implementation of both the mandatory and market driven performance tracks. These activities, combined with the parallel tracks, help build a reasonably available supply of physical materials and equipment necessary to build and operate the infrastructure and/or activity at both the mandatory minimum and all or most of the best practice performance level.
If the first four components are like the pistons and drive train of an automobile, this final element is like the motor oil and gasoline to make everything run, and run smoothly.
The Market Transformation framework encompasses seven semi-sequential steps that are each reinforced by six supporting elements, as summarized in the following tables. In future blog pieces, we will be expanding on how this market transformation framework generally and SWEEP in particular can be applied to moving the solid waste market toward sustainable materials management.
| Market Transformation Step | Purpose & Description |
| 1. Strategic Market Development Plan | Outlines legislation, standards, demonstration projects and continuous improvement steps plus ways the six supporting elements can reinforce them. |
| 2. Enabling Legislation | Ensures that responsible entities (both organizations and individuals) are empowered to set and fulfill standards and targets, as well as provide incentives. |
| 3. Technical Demonstration Projects | Small-scale projects that demonstrate what is achievable as a mandatory minimum, as well as through best practice. Emphasis is on demonstrating technical feasibility and gathering performance information. |
| 4. Standards | Complementary mandatory minimum and voluntary best practice standards should be developed. SWEEP would fall into the latter category. |
| 5. Pilot-Scale Implementation | Pilot-scale implementation emphasizes administration and enforcement over technical achievement. |
| 6. Full-Scale Launch | Full-scale launch of a mandatory standard is much more difficult than opening a voluntary standard to the full market. |
| 7. Continuous Improvement | Both the enabling legislation (or ordinance) and the standards should have provisions for regular, continuous improvement. |
The chain breaks at its weakest link and the following supporting elements reinforce the above steps to ensure that they develop and are implemented as effectively as possible.
| Supporting Element | Purpose & Description |
| Indicators | Success needs to be defined before it can be measured. Then it needs to be measured so it can be managed. |
| Training Programs | Trained and accredited professionals are needed to develop, implement and enforce standards as well as projects and programs that emerge from the market transformation process. |
| Procurement Policies | Private and public procurement policies send important market signals and reinforce the demand for market transformation toward sustainability. |
| Incentives | Early Adopter incentives promote adoption of mandatory standards, while Beyond Market incentives accelerate adoption of voluntary standards. Incentives can be both monetary and non-monetary. |
| Industry Development | Professional and trade associations are important players in developing, promoting and implementing market transformation. |
| Public Education | Public education and awareness building helps grow markets and increase uptake of better practices. |