Pollution Control in the Informal Sector: The Ciudad Juarez Brickmakers' Project

Abstract

Low-technology unlicensed micro-enterprises known as firms are a significant source of pollution in developing countries that are virtually impossible to regulate in the conventional manner. This paper describes an example of an innovative and promising approach to the problem: the Ciudad Juarez Brickmakers' Project, a private-sector-led initiative aimed at abating highly polluting emissions from Ciudad Juarez, Mexico's approximately 300 informal brick kilns. We draw four lessons from the Project's history. First, private-sector-led initiatives can work -indeed they may be more effective than public sector initiatives -but they require strong public sector support. Second, necessary conditions for effective environmental management in the informal sector include enlisting the cooperation of local organizations, relying upon peer monitoring, and offsetting compliance costs. Ineffective strategies include promoting too-advanced technologies and intervening in informal markets. Third, pollution control strategies that provide the greatest environmental benefits may be less appropriate than low-cost intermediate strategies. Finally, in volatile developing economies, market-based environmental initiatives in the informal sector are bound to be fragile.