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This report, “Environmental Industries in Maine: Opportunities for Development and Policy Support” by Carla Dickstein (June 1994), examines Maine’s environmental industries. The study, funded by The Aspen Institute’s Rural Economic Policy Program, aims to inform state policy on supporting these emerging industries as a targeted economic development strategy. Key findings include:
- Definition: Environmental industries are broadly defined as firms involved in energy and natural resource conservation, pollution reduction/prevention, waste disposal/recycling, environmental restoration, or the production of “environmentally safe” products.
- Drivers: Regulation (or its threat) is the primary driver of environmental markets, though this also makes investment subject to policy uncertainties.
- Growth: While industry growth rates declined after a peak in 1988-1989 due to recession and cutbacks, they still exceeded the national economic growth rate. Overall growth was projected to average around 4% over the next five years from 1993.
- Dominant Sector: Service industries, particularly environmental engineering and consulting, dominate Maine’s environmental sector.
- Market Trends: Pollution prevention and waste reduction are identified as long-term growth areas, shifting focus from “end-of-the-pipeline” solutions. International markets are also seen as a major growth area due to stringent U.S. environmental regulations providing a comparative advantage.
- Maine’s Profile:
- Most firms are Maine-based and relatively young (over 86% established since 1970).
- They primarily serve local markets (over 71% of sales in Maine in 1991).
- Despite declines in sales and employment in 1991, firms were optimistic about strong growth by 1994.
- The biggest emitters of toxic chemicals in Maine in 1990 were the pulp and paper, leather, textiles, plastics, electrical, transportation, and chemical industries.
- Barriers to Expansion: Maine firms cited capital availability (especially for new technologies), lack of effective market demand, insufficient internal resources for market development, imperfections in information flow, lag in market demand (preference for proven technologies), and inconsistent regulatory policies.
- Potential Interventions: The report suggests providing “gap financing” (e.g., through CEI’s Green Fund), performing in-depth market analysis, facilitating interaction between waste generators and environmental industries, and brokering technology transfer from federal laboratories and other New England R&D hubs.
- Next Steps: CEI was in the process of capitalizing its Green Fund, and further industry input via focus groups was recommended to refine policy support and private initiatives.
