Cross-border Environmental Management and the Informal Sector: The Ciudad Juárez Brickmakers' Project

Abstract

Abstract The considerable difficulties associated with cross-border environmental managementare compounded when polluters are unlicensed micro-enterprises such as auto repair shops andtraditional brick kilns; such firms are virtually impossible to regulate in theconventional manner. This paper describes an example of an innovative and promisingapproach to the problem: the Cd. Juarez Brickmakers' Project, a private-sector-led, binationalinitiative aimed at abating highly polluting emissions from Cd. Juarez's approximately 350informal brick kilns. We draw three lessons from the Project's history. First, private-sector-ledcross-border initiatives can work -- indeed they may be more effective than public sectorinitiatives -- but they require strong public sector support. Second, necessary conditions foreffective environmental management in the informal sector include enlisting the cooperation oflocal unions and political organizations, relying upon peer monitoring among informal firms,and providing inducements to offset compliance costs. Ineffective strategies include promotingtoo-advanced and therefore inappropriate technologies and intervening in informal markets.And finally, the history of the Brickmakers' Project suggests that, in volatile developingeconomies, even well designed voluntary market-based environmental initiatives in the informalsector are bound to be fragile.Key words: US-Mexican border, informal sector, environment, brickmakingJEL Classification Nos.: O17, O54, L61, Q25, Q28