Refer to 17-11. In the environmental benefits section of the report, three types of benefits are listed: income, savings, and cost avoidance. Now consider the following data for selected items for a four-year period:

The engineering design costs were incurred to redesign the production processes and products. Redesign of the product allowed the substitution of a raw material that produced less ozone-depleting substances. Modifications in the design of the processes also accom¬
plished the same objective. Because of the improvements, the company was able to reduce the demand for pollution control equipment (with its attendant depreciation and operating costs) and avoid fines and litigation costs. All of the savings generated in a given year rep¬
resent costs avoided for future years. The engineering costs are investments in design pro¬
jects. Once the results of the project are realized, design costs can be reduced to lower lev¬
els. However, since some ongoing design activity is required for maintaining the system and improving it as needed, the environmental engineering cost will not be reduced lower than the $50,000 reported in 2001.
Required:
1. Prepare a partial environmental financial statement, divided into benefit and cost sec¬
tions for 1999, 2000, and 2001.
2. Evaluate and explain the outcomes. Does this result support or challenge ecoefficiency?
Explain.

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Year Engineering Design Costs Cost of Ozone-Depleting Substances 1998 $100,000 1999 800,000 2000 400,000 2001 50,000 $1,800,000 1,200,000 800,000 200,000