Quantcast

Big Pharma Emits More Greenhouse Gases Than the Automotive Industry

Insights + Opinion

By Lotfi Belkhir

Rarely does mention of the pharmaceutical industry conjure up images of smoke stacks, pollution and environmental damage.

Yet our recent study found the global pharmaceutical industry is not only a significant contributor to global warming, but it is also dirtier than the global automotive production sector.


It was a surprise to find how little attention researchers have paid to the industry's greenhouse gas emissions. Only two other studies had some relevance: one looked at the environmental impact of the U.S. healthcare system and the other at the pollution (mostly water) discharged by drug manufacturers.

Our study was the first to assess the carbon footprint of the pharma sector.

More Polluting

More than 200 companies represent the global pharmaceutical market, yet only 25 consistently reported their direct and indirect greenhouse gas emissions in the past five years. Of those, only 15 reported their emissions since 2012.

One immediate and striking result is that the pharmaceutical sector is far from green. We assessed the sector's emissions for each one million dollars of revenue in 2015. Larger businesses will always generate more emissions than smaller ones; in order to do a fair comparison, we evaluated emissions intensity.

We found it was 48.55 tonnes of CO2e (carbon dioxide equivalent) per million dollars. That's about 55 percent greater than the automotive sector at 31.4 tonnes of CO2e/$M for that same year. We restricted our analysis to the direct emissions generated by the companies' operations and to the indirect emissions generated by the electricity purchased by these companies from their respective utilities companies.

The total global emissions of the pharma sector amounts to about 52 megatonnes of CO2e in 2015, more than the 46.4 megatonnes of CO2e generated by the automotive sector in the same year. The value of the pharma market, however, is smaller than the automotive market. By our calculations, the pharma market is 28 percent smaller yet 13 percent more polluting than the automotive sector.

Extreme Variability

We also found emissions intensity varied greatly within the pharmaceutical sector. For example, the emissions intensity of Eli Lilly (77.3 tonnes of CO2e/$M) was 5.5 times greater than Roche (14 tonnes CO2e/$M) in 2015, and Procter & Gamble's CO2 emissions were five times greater than Johnson & Johnson even though the two companies generated the same level of revenues and sell similar lines of products.

We found outliers too. The German company Bayer AG reported emissions of 9.7 megatonnes of CO2e and revenues of US$51.4 billion, yielding an emission intensity of 189 tonnes CO2e/$M. This intensity level is more than four times greater than the overall pharmaceutical sector.

In trying to explain this incredibly large deviation, we found that Bayer's revenues derive from pharmaceutical products, medical equipment and agricultural commodities. While Bayer reports its financial revenues separately for each division, it lumps together the emissions from all the divisions. The company also reports and tracks its emission intensity in terms of tonnes of CO2e produced for each tonne of manufactured goods, whether fertilizer or Aspirin, for example.

This level of opacity makes it not only impossible to assess the true environmental performance of these kind of companies. It also raises questions about the sincerity of these companies' strategies and actions in reducing their contribution to climate change.

Climate Compliance

We also estimated how much the pharmaceutical sector would have to reduce its emissions to comply with the reduction targets in the Paris agreement.

We found that by 2025, the overall pharma sector would need to reduce its emissions intensity by about 59 percent from 2015 levels. While this is clearly a far cry from their current levels, it is interesting to note that some of the 15 largest companies are already operating at that level, namely Amgen Inc., Johnson & Johnson and Roche Holding AG.

If those performance levels are achievable by some, why can't they be achieved by all?

These three leading companies are also the ones with the highest level of profitability and revenue growth in the whole sector. Indeed Roche, Johnson & Johnson and Amgen showed revenue increases of 27.2 percent, 25.7 percent and 7.8 percent respectively between 2012 and 2015, while managing to reduce their emissions by 18.7 percent, 8.3 percent and eight percent respectively. This supports the premise that environmental and financial performance aren't mutually exclusive.

The pharmaceutical industry is responsible for some serious environmental impacts beyond greenhouse gas emissions. For example, the wastewater from drug manufacturers in Patancheru, India has left river sediment, ground water and drinking water polluted. Researchers estimated that in a single day, 44 kilograms of ciprofloxacin, a broad-spectrum antibiotic, was released — enough to treat everyone in a city of 44,000 inhabitants.

Clearly, there is a dire need for more extensive and sustained research as well as more scrutiny of the pharmaceutical industry's environmental practices and performance. Healing people is no justification for killing the planet.

Lotfi Belkhir is an associate professor & chair of eco-entrepreneurship at McMaster University.
Disclosure statement: Lotfi Belkhir does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond his academic appointment.

Reposted with permission from our media associate The Conversation.

EcoWatch Daily Newsletter

Rob Greenfield pictured above is driven by the concept of "living a life where [he] can wake up and feel good about [his] life." Rob Greenfield / Facebook

For one year Rob Greenfield grew and foraged all of his own food. No grocery stores, no restaurants, no going to a bar for a drink, not even medicines from the pharmacy.

Read More Show Less
Apple has removed all 181 vaping-related apps from its App Store. VioletaStoimenova / E+ / Getty Images

Apple has removed all 181 vaping-related apps from its App Store, the company announced on Friday. The removal of the apps comes after thousands of people across the country have developed lung illnesses from vaping and 42 people have died.

Read More Show Less
Sponsored
(L) Selma Three Stone Engagement Ring. (R) The Greener Diamond Farm Project. MiaDonna

By Bailey Hopp

If you had to choose a diamond for your engagement ring from below or above the ground, which would you pick … and why would you pick it? This is the main question consumers are facing when picking out their diamond engagement ring today. With a dramatic increase in demand for conflict-free lab-grown diamonds, the diamond industry is shifting right before our eyes.

Read More Show Less
A Keystone Pipeline oil spill has affected nearly 10 times the amount of land than previously thought. CBC News / YouTube screenshot

A spill at the Keystone Pipeline that began last month has affected nearly 10 times the amount of land than previously thought, state officials said Monday.

Read More Show Less
We shouldn't have to be toxicologists to be able to grab something at the grocery store that doesn't contain dangerous ingredients. Daniel Orth / Flickr

By Melissa Kravitz Hoeffner

A major but largely glossed over report by the Environmental Working Group (EWG), an environmental and public health nonprofit based in Washington, DC, shows that thousands of untested chemicals (an estimated 2,000, to be exact) are found in conventional packaged foods purchasable in U.S. supermarkets. And yes, all of them are legal.

Read More Show Less
Sponsored

The deforestation rate in Brazil's Amazon rainforest is at its highest in more than a decade, CNN reported Tuesday.

Read More Show Less
Traffic on Highway 101 in Los Angeles, California on March 25, 2015. Eric Demarcq / Flickr

California will stop buying vehicles from the more than a dozen automakers including General Motors (GM), Fiat Chrysler and Toyota who sided with the Trump administration on the question of whether the state has the authority to set its own emissions standards, CalMatters first reported Friday.

Read More Show Less

Record flood water levels in Venice hit again on Sunday making this the worst week of flooding in the city in over 50 years.

Read More Show Less