The Asbestos Debacle

Society and industry are diligently working to find better solutions through waste

reduction, recycling and reuse, but what is the plan for hazardous materials, such as

asbestos, in buildings and property?

Known as the miracle mineral, asbestos was used for its resiliency against chemical

attack and its excellent tensile strength and superior fire-proofing characteristics. The

material was used in 3,000 to 5,000 products from the early 1800s through the 1970s.

Recognizing the effects of asbestos on human health, the U.S. Public Health Service

recommended guidelines on asbestos exposure as early as 1938.

The start of World War II accelerated the expansion of existing military bases, building

new bases and government facilities, and amplified shipbuilding, all of which used

asbestos. The government also bought and stored raw asbestos in silos around the country, in case it became unavailable.

Obviously, Public Health Service recommendations were ignored then and many years

into the future.

Ubiquitous, asbestos containing materials (ACM) were installed in American factories,

electric utilities and generating plants, schools, homes, and process industry during the

20th century, causing about than 4,000 deaths a year in the United States, making asbestos exposure the deadliest industrial tragedy in American history.

The U.S. EPA says an estimated 27 million people were exposed to asbestos in the

workplace between the years of 1940 though the 1970s. As long as asbestos is in the built

environment, the exposure will continue.

Asbestos remains one of the costliest environmental challenges facing the United States. Because it was so widely used and permeates our environment, asbestos continues to cost

millions of dollars a year for remediation, millions in medical and legal expenses

resulting from asbestosis and Mesothelioma, and multi-millions of dollars to American

industry and government related to regulatory enforcement and compliance. The tiny

fibers also have resulted in a record number of corporate bankruptcies. All these costs

have been borne by the taxpayers, who have had no relief.

A worker removing asbestos from buildings must protect against inhaling the cancer causing fibers.

Negative externality (the theory that those who make a decision do not have to pay the

negative cost and effect of that decision) is the best way to describe the asbestos debacle. Companies that were aware of the dangers of asbestos early on continued to profit. Their

legacy includes:

• Superfund site cleanups as well as brownfield site grants,
• U.S. courts flooded with asbestos-related litigation, and
• Medical and financial costs paid by taxpayers.

Society can abate negative externality in several ways. The producer or owner must pay

the costs of these hazardous material releases and inevitable cleanups or the producer

must pay environmental taxes, both of which negatively affect the bottom line. The best

approach for business is to eliminate the release before it occurs.

Under the Comprehensive Environmental Response, Compensation, and Liability Act

(CERCLA), the law designates the owner of the site from which ACM is removed as a

Potentially Responsible Party that is subject to strict, joint and several perpetual liability

that could lead to incalculable-unmitigated cleanup costs, even if the material or waste

was deposited before the measure was enacted.

Environmental groups have sued and won against the U.S. Environmental Protection

Agency, requiring it to enforce Section 108(b) of CERCLA. In that section, companies

must prove financial assurance requirements for hazardous releases by acceptable

financial vehicle, such as guarantee, surety bond, stand by letter of credit, insurance, self

or insurance company generated, all with terms and language incorporated and approved

by EPA and carried out by National Enforcement Initiatives. In short, you will protect

your bottom line if you prove to EPA that you can pay for the cleanup of hazardous and

regulated waste releases years in the future. You also should be aware that EPA supports

the reinstatement of the environmental tax.

By enforcing these regulations, EPA is making it cheaper to treat hazardous and regulated

waste onsite to end liability than to landfill, which carries perpetual-incalculable liability.

Besides CERCLA, asbestos is regulated as a solid waste under the Resource

Conservation and Recovery Act, as a building material under the Toxic Substance

Control Act, and as an airborne contaminant under the National Emission Standards for

Hazardous Air Pollutants program in accordance with the Clean Air Act. The agency also

limits effluent discharges for asbestos fibers in water under the Clean Water Act.

The immediate costs of the regulations to a company's bottom line should drive a

practical and astute CEO to require his or her environmental department heads to find

EPA-approved environmental technologies that can eliminate hazardous and regulated

wastes releases once and for all. The success of this action would help alleviate the

regulatory burden, increase the bottom line, solidify stockholder position and steady

stock worth.