Among the myths taken as fact by the environmental managers of most corporations is the belief that environmental regulations affect all competitors in a given industry uniformly. In reality, regulatory costs — and therefore compliance — fall unevenly, economically disadvantaging some companies and benefiting others. For example, a plant situated near a number of larger noncompliant competitors is less likely to attract the attention of local regulators than is an isolated plant, and less attention means lower costs.

Additionally, large plants can spread compliance costs such as waste treatment across a larger revenue base; on the other hand, some smaller plants may not even be subject to certain provisions such as permit or reporting requirements by virtue of their size. Finally, older production technologies often continue to generate toxic wastes that were not regulated when the technology was first adopted. New regulations have imposed extensive compliance costs on companies still using older industrial coal-fired burners that generate high sulfur dioxide and nitrogen oxide outputs, for example, whereas new facilities generally avoid processes that would create such waste products. By realizing that they have discretion and that not all industries are affected equally by environmental regulation, environmental managers can help their companies to achieve a competitive edge by anticipating regulatory pressure and exploring all possibilities for addressing how changing regulations will affect their companies specifically.

Which of the following hypothetical examples would best illustrate the point the author makes in highlight text ?

Believing its closest competitor is about to do the same, a plant reduces its output of a toxic chemical at great cost in order to comply with environmental regulations.

In the face of new environmental regulations, a plant maintains its production methods and passes the costs of compliance on to its customers.

A plant's manager learns of a competitor's methods of lowering environmental compliance costs but is reluctant to implement those methods.

Having learned of an upcoming environmental ban on a certain chemical, a company designs its new plant to employ processes that avoid use of that chemical.

A plant attempts to save money by refusing to comply with environmental laws.


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