Environmentally preferable products (EPPs) are desirable because these do not leave adverse impacts on the environment and natural resources. While several EPPs can be consumed and traded, a number of concerns still have to be addressed. This issue attempts to identify the problems related to its development. Recommendations on how to fully realize the benefits of EPPs follow.natural resources and environment, environmentally preferable products

Israel, Danilo C.

Nayve, Corazon M.

Trabajo, Frances Myra

English

Research Papers in Economics

Notes Policy
February 1997
Philippine Institute
for Development Studies
PIDS Policy Notes are observations/analy-
ses written by PIDS researchers on certain policy
issues. The treatise is wholistic in approach, and
like the PIDS Executive Memo, it aims to pro-
vide useful inputs for decisionmaking.
The author is Research Fellow at the In-
stitute. The views expressed are those of the
author and do not necessarily reflect those of
PIDS or any of the study's sponsors.
No. 97-02
Promoting
Environmentally Preferable Products
for Sustainable Development
Environmentally preferable products (EPPs) are goods whose produc-
tion and/or utilization have important environmental advantages over substitute
products or the traditional products currently sold in the market. Hence, in the
context of sustainable development, the promotion of EPPs is seen as a potential
avenue for addressing environmental problems.
The purpose of this Notes is to summarize the findings of a recent research
on EPPs in the Philippines. The objectives of this research were:
j to identify EPPs developed  by  government institutions;
j to identify problems related to their development; and
j to suggest recommendations that would address the problems and ef-
fect EPPs’ full development in the country.
Summary of Environmentally Preferable Products
As of 1994, at least 37 EPPs have been developed by various
government research institutions (see Tables 1.a, 1.b, and 1.c).
These products are classified into five groups: agriculture-based,
forestry-based, fishery-based, industry-based and other products
according to input use.
The research and development of 31 of these EPPs were fully
financed by local funds while those of the others were foreign-funded,
either fully or partially. The technologies used in the development
of 17 EPPs were originally developed in the country while those of
Danilo C. Israelolicy   Notes P
2
February 1997
Table 1.a
Summary of Characteristics of Environmentally Preferable Products in the Philippines
(as of 1994)
Product FPRDI FNRI ITDI BIOTECH PCARRD PCAMRD NAAP ATI NTA PTRI PCA Total
Classification
Agriculture-based 3 4 5 2 1 0 1 1 3  1 0 21
Forestry-based 2 0 0 0 0 0 0 0 0 0 1 3
Fishery-based 0 2 1 0 0 0 0 0 0 0 0 3
Industry-based 1 0 0 5 0 0 0 0 0 0 0 6
Other products 0 0 3 0 0 1 0 0 0 0 0 4
Total 6 6 9 7 1 1 1 1 3 1 1 37
Notes:
FPRDI = Forest Products Research and Development Institute
FNRI = Food and Nutrition Research Institute
ITDI = Industrial Technology Development Institute
BIOTECH = National Institute of Biotechnology and Applied Microbiology
PCARRD = Philippine Council for Agriculture, Forestry and Natural Resources Research and Development
PCAMRD = Philippine Council for Aquatic and Marine Research and Development
NAAP = National Azolla Action Program
ATI = Agricultural Training Institute
NTA = National Tobacco Administration
PTRI = Philippine Textile Research Institute
PCA = Philippine Coconut Authority
20 others were based from other
countries’ refined technologies.
The products were also in
various degrees of  development.
Some 11 EPPs were still being
developed, five were already
pilot-tested, four were ready for
commercialization, 14 were al-
ready sold in local markets and
only one was being exported.
The production of 23 EPPs
was generally labor-intensive while
that of six others was capital-
intensive. The rest were both
labor- and capital-intensive. The
environmental advantages of these
products may be drawn from these
facts: 65 percent of these prod-
ucts use waste byproducts, 87
percent have nonpollutive pro-
cesses, and all of the EPPs have
nonpollutive utilization.
To summarize, the following
can be said about EPPs in the
Philippines:
j There is a number of
EPPs which can be or are already
produced in the country.
j Many of these products
can be produced using locally
available and labor-intensive tech-
nologies.
Problems in EPP Development
As much as it is desirable to
develop EPPs fully, there are,
however, major constraints to be
addressed. In general, the prob-
lems depend on the research and
development stages of these prod-
ucts.olicy   Notes P
3
February 1997
Source of Research Source of Original
Funding Technology Stage of Development
Product Local Foreign Both Local Foreign Product Pilot To be Com- Commercialized
Classification Development Testing mercialized Locally Exported Not
Sold Known
Agriculture-based 17 3 1 11 10 8 2 3 5 1 3
Forestry-based 2 1 0 0 3 0 0 0 3 0 0
Fishery-based 3 0 0 3 0 2 1 0 0 0 0
Industry-based 6 0 0 1 5 0 1 1 4 0 0
Other products 3 0 1 2 2 1 1 0 2 0 0
Total 31 4 2 17 20 11 5 4 14 1 3
Table 1.b
Summary of Characteristics of Environmentally Preferable Products in the Philippines
In the early development
stage, the critical obstacle is inad-
equate funding support for EPP
research. This problem is per-
ceived as a result of the lack of
government appreciation of the
Product Input Intensity Environmental Qualities
Classification Capital- Labor- Both Waste Nonpollutive- Nonpollutive
Intensive Intensive User Generating Consumption
Production Process
Table 1.c
Summary of Characteristics of Environmentally Preferable
Products in the Philippines
Agriculture-based 4 13 4 17 17 21
Forestry-based 0 0 3 3 2 3
Fishery-based 0 3 0 1 3 3
Industry-based 2 4 0 1 6 6
Other products 0 3 1 2 4 4
Total 6 23 8 24 32 37
possible role that EPPs can
play in environmental pro-
tection efforts of the coun-
try.
For EPPs that are
ready for commercializa-
tion, a major problem is the
lack of prospective inves-
tors. For capital-intensive
EPPs, in particular, large
investment outlays are
needed and the necessary
production tools, machines
and equipment can only be
purchased from other coun-
tries at prohibitive prices.
The major problem of
EPPs which are already
commercialized is weak market
demand due to the lack of recog-
nition by potential buyers. This
problem is made worse by theolicy   Notes P
4
February 1997
presence of market substitutes
which are well-recognized by con-
sumers. Still another problem for
EPPs is their inability to break into
the foreign market mainly due to
the fact that EPP investors are neo-
phytes in the business and have
no previous experience in the ex-
port business.
Recommendations
Given the problems above,
it is imperative that changes be
made if the full potential of EPPs
is to be realized. In this regard,
the following actions are recom-
mended:
j To address inadequate
funding, apppropriate government
agencies need to exert efforts in
raising financial support for EPP
research and development. For
instance, if the government can-
not directly provide additional
funds, it should actively promote
private sector investment or en-
courage the participation of inter-
providing certain incentives to pro-
ducers.
j To strengthen the weak
market for commercialized EPPs,
intensive domestic product promo-
tion must be exerted. Further-
more, a concerted effort between
the government and the private
sector is needed to develop export
markets for these products. In par-
ticular, the government can en-
courage producers of EPPs by
providing them with special privi-
leges apart from the regular incen-
tives offered to exporters while the
private sector can provide poten-
tial EPP exporters with informa-
tion on the nuances of the export
business.
In conclusion, the study
strongly argues that the national
government should play a leading
role in the development of EPPs
in the country through the provi-
sion of tangible assistance, includ-
ing financial support for research
and promotion, and incentives to
the emerging EPP subsector.  4
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For further information, please contact
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Philippine Institute for Development Studies
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E-mail: jliguton@pidsnet.pids.gov.ph
national donor organizations in
EPP resesarch and development.
j Lack of investors may be
addressed through good product
promotion among the busines sec-
tor. This involves convincing po-
tential investors and consumers of
the merits of EPPs as alternative
products. The government must
therefore look for effective ways
to conduct said promotion. For in-
stance, the responsible units either
within the Department of Science
and Technology or Department of
Trade and Industry should be
more active in “selling” these
products.
j As to the problem of
high-priced imported equipments,
the government may consider the
possibility of imposing lower tar-
iffs on EPP equipments so that the
domestic prices will decrease. Fur-
thermore, the government can en-
courage the growth of local pro-
duction of these equipments by

Promoting Environmentally Preferable Products for Sustainable Development

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