What are Abatement Costs?

Abatement costs are those associated with reducing the amount of toxic or unwanted by-products from a manufacturing process.

How are Abatement Costs Used?

The United States Environmental Protection Agency has the right to impose penalties on businesses that havent adequately addressed high outputs of toxic by-products in their manufacturing process. History shows that, if the EPA has to step in and forces a company to clean up their manufacturing process, the abatement costs associated with the clean up can be significantly higher and extremely damaging to a companys bottom-line earnings. Recently, GE found itself liable for a large environmental clean-up operation in 2006, when the EPA ruled that GE is responsible for the pollution and subsequent cleanup. GE was judged liable for a 197-mile stretch of the Hudson River where two of their plants had discharged 1.3 million pounds of PCBs into the waterway between the years 1947 and 1977. GE would be forced to foot the bill for the operation, including clean up of an additional 40 miles of upstream coastline that was also affected by the pollution. The cleanup operation began in 2009 and, after eight years, was finally completed in 2009. By the time the environmental cleanup was completed, GE had spent a staggering $1.7 billion dredging the river bed and cleaning up the affected coastline, but its not over for GE yet. The EPA has five years to review the job before they release GE from their obligation, and GE could end up having to spend more money on dredging the Hudson if the EPA is not satisfied.