Earth Day Legacy
April 2000 marked the 30th anniversary of Earth Day. After three decades of environmental policy initiated since that first Earth Day, environmental policy is in a state of transition. The environmental model that emerged after the first Earth Day had four characteristics. First, the model engendered relatively prescriptive regulations that both set goals and required particular technologies and methods to meet those goals. Second, the model emphasized process over performance, with permits often serving as a proxy measure of performance. Third, the old model segregated environmental problems into discrete categories air, water, and waste, for example and addressed each separately. Finally, the model tended to focus on punishment enforcement actions as the central strategy for achieving environmental progress. "Sticks" rather than "carrots" predominated.
This regulatory strategy produced some successes. Open dumps were virtually eliminated. Phosphorous levels, a major indicator of water pollution, had fallen 40 percent or more in the Great Lakes by the 1990s contrasted with pollution levels in the 1970s. In Los Angeles, stage one smog alerts declined from more than 120 in 1977 to 13 in 1995.
But all is not well. The punitive model often engendered high conflict and litigation. The prescriptive emphasis tended to stifle innovations in pollution prevention and environmental restoration. Segregating problems into distinct categories sometimes resulted in unintended consequences shifting of pollutants from one medium to another. And, finally, costs to achieve results were higher than might have been possible in a context that inspired innovation and wider implementation options.
Moreover, circumstances are changing, giving rise to increasing tensions between the regulatory model of the 20th century and the complex and dynamic 21st century context.
First, new kinds of problems are moving center stage. The old model focused primarily on "point" sources of pollution. By 2000, many remaining challenges took the form of "nonpoint" pollution from agricultural waste, stormwater runoff, and so on.
Second, a new breed of industry had emerged that reflected the environmental values of the broader American culture. By the 1990s, industries had begun to move toward "knowledge-based" production and products and "closed loop" production, accelerating the process of dematerialization using fewer resources for each good or service produced. "Industrial ecology" the deliberate incorporation of environmental values into product-design and process decisions began to flourish. In this context, a survey of large American corporations showed that 77 percent cited pollution prevention as an important business strategy.
Architects of environmental policy thus face a new "problem set." There is a growing mismatch between permit-focused compliance and the reality of complex, often dispersed problems. There are growing tensions between prescriptive regulations and the broadening press for fast-paced innovation within firms and on farms and ranches. Finally, the punitive model has limited scope for inspiring environmental excellence a nation of self-motivated environmental stewards.
Put another way, four recurring challenges confront environmental stewards in both the public and private sectors:
· How can policies better ensure environmental innovations? · How can policies better focus on results and take into account simultaneously many interrelated goals and complexity of the physical world? · How can policies better foster private incentives for stewardship? · How might policies better take into account specific, or local, knowledge the knowledge of time, place, and circumstance?
New Environmentalism
In this changing context with its combination of new and old challenges, a new environmentalism is emerging. The states and their environmental protection agencies, working with the private sector, are at the forefront of this "discovery process." Programs and policies emerging as part of this new environmentalism have four features. These features include: (1) greater flexibility in how firms, farmers, and local communities might achieve environmental goals; (2) a focus on performance rather than on process; (3) a move toward incentives rather than punishment as the strategy of choice; and, (4) a move toward place-based decisions where the "devilish details" of local circumstance become part of the decision process.
Flexibility. By the 1990s, states were overseeing, implementing, and enforcing the majority of all environmental programs. That day-to-day, hands-on experience made state regulators acutely aware of some of the challenges, missed opportunities, and unintended consequences of prescriptive and process-focused environmental regulations. Acting upon this recognition, state regulators have launched an array of programs intended to inject greater flexibility into the way the regulated community may achieve desired environmental goals.
These experiments in flexibility do not imply "roll back" quite the opposite. Most of these endeavors involve extending the performance envelope upward and outward to cover more environmental problems and with higher ultimate goals. Some of these endeavors have been initiated independently by the states. Others have advanced in tandem with federal programs such as Project XL and the National Environmental Performance Partnership system.
These programs include the development of "environmental performance compacts" with firms and farmers; facility-wide permitting programs that move away from source-by-source permit requirements; and industry-wide permits. Some are pilot programs; some have become more broad-based initiatives. States with both Democratic and Republican legislatures and governors are moving in this direction.
Among the trend setters in developing these programs are Wisconsin, Oregon, Illinois, Minnesota, Massachusetts, New Jersey, and Florida.
Wisconsin's Green Tier program establishes a two-tier permit option. The first, the Control Tier, applies traditional source-by-source permits. The second, the Green Tier, allows firms that demonstrate high levels of compliance an opportunity to develop a "performance compact" in effect, a single, facility-wide permit. This permit establishes a set of performance criteria, potentially on a multi-media basis, spelled out in a "contract" or "compact" between the firm and the public. The compact is enforceable in the courts.
Under its Green Permits program, Oregon's Department of Environmental Quality (DEQ) offers two types of permits available to facilities that have achieved superior environmental performance a Green Environmental Management System (GEMS) Permit and a "Custom Waiver Permit." The GEMS permit requires that firms use a formal environmental management system through which firms establish and maintain environmental goals. The custom waiver allows limited waivers of normal permit requirements if a waiver is needed for the facility to achieve superior environmental results (for example, through pollution prevention).
Florida is developing a Phosphate Industry permit that establishes a single permit for an entire mining operation over its life. The permit agreement sets performance standards and identifies environmental data the industry must report and make available to the public. It will allow reductions in paperwork and process burdens, results-based performance, and increased public accountability.
Massachusetts introduced an Environmental Results Program, which establishes performance goals and compliance assistance for selected industries on an industry-wide basis. Under the traditional permitting program, some 10,000 facilities in the target industries were regulated using over 16,000 permits. The Department of Environmental Protection spent significant resources issuing permits rather than focusing on achievement of environmental results. For example, the department was issuing air permits to some 4,400 facilities, of which two-thirds were small- and medium-sized companies that accounted for just 5 percent of the state's total air emissions. Under the new program, the state created industry-wide standards. Participating firms agreed to comply with the standards; the state focused on auditing and enforcement. The program resulted in a 43 percent reduction in fugitive emissions from participating dry cleaners and a 99 percent reduction in silver discharges by photoprocessors.
In the mid-1990s, New Jersey experimented with a facility-wide permitting program. Through the program, participating facilities must keep emissions below specified performance caps but may achieve those goals in whatever ways they deem most effective and efficient. For one firm, the old, source-by-source permitting process had generated ten binders of paperwork. The new system reduced paperwork to a 1.5-inch thick packet. A single permit replaced 80 separate permits and could be processed in 90 days rather than 18 months. One firm estimated that it reduced 8.5 million pounds of emissions per year because the permit allowed them to modernize their facility (without getting new permits for each individual process change). Through the modernization, the firm eliminated 107 of 350 pieces of equipment.
Performance. While most state-initiated new environmental programs emphasize results (rather than process), several programs have particularly focused on developing performance indicators. Among these efforts are programs in both Florida and Oregon.
Florida, for example, has developed a three-pronged set of performance measures that move away from simple "bean-counting" of enforcement actions as the proxy for performance. The first tier of measures sets forth direct indicators for environmental and public-health outcomes. These include indicators of air quality, surface and groundwater quality, aquatic and marine-resource protection, public health and safety, and public recreational opportunities. The second tier evaluates behavioral and cultural measures that go beyond mere compliance statistics. While the state measures regulatory compliance, it also looks at voluntary adoption of environmental technologies, pollution prevention achievements, energy consumption, per capita freshwater consumption, and so on. Tier three includes traditional enforcement statistics, but they attempt to measure internal agency efficiency and effectiveness as well time taken to issue permits, resources spent on compliance assistance, research, and monitoring, resource management, and land acquisition. Indicators are ranked as "good," "watch," or "focus" areas, allowing state regulators to set priorities by focusing on those areas in which resources are most needed to solve problems.
Incentives. The ultimate goal of environmental policy is to foster a nation of self-motivated environmental stewards. As states grapple with how to inspire firms and farmers to move "beyond compliance", many have introduced environmental-incentive and compliance-assistance programs. Through its Texas Clean Industries 2000 program, for example, Texas has attracted over 140 participating firms into pollution-prevention activities. The firms commit to achieving a 50 percent reduction in toxic chemicals over a two-year period. After one year, the program was credited with fostering reductions in hazardous waste by 43,000 tons; reductions in energy consumption by 11.3 million kilowatt hours; and reductions in 317 million gallons of water consumption. Also in Texas, the state established a landowner incentive program to encourage farmers and ranchers to restore and maintain habitats to attract threatened species such as the lesser prairie chicken.
Mississippi launched a voluntary stream protection program in which the Department of Wildlife, Fisheries, and Parks worked jointly with farmers, riparian landowners, and individual citizens to reduce water pollution, primarily through pollution-prevention efforts. Pennsylvania, through its Pollution Prevention Site Assessment grants, helps small-business owners identify pollution-prevention and energy-conservation strategies. Wyoming has an Outreach and Environmental Assistance program also designed to help participants meet environmental goals. Illinois, through its Clean Break Amnesty program, offers compliance assistance to small businesses. In exchange for their participation and completion of pollution-reduction efforts, the small businesses are exempted from various fees and fines.
Among the more notable incentive programs are those designed to clean up "brownfield" (abandoned hazardous waste) sites. A number of states, including Michigan, Pennsylvania, Illinois, New York, and many others now have voluntary remediation programs. The programs typically have several central features. First, they often tailor clean-up standards to the proposed use of the property, so standards are based on expected exposures to hazards rather than on a single, bright-line clean up standard. Second, they often provide some liability protection to developers that invest in site clean up to the prescribed levels. Liability protection does not extend to future pollution but applies to pre-existing conditions only.
Place-based Decision-making. As experience with environmental problems builds, one observation recurs many environmental challenges involve location-specific details. A landfill in Florida, with high water tables, faces different challenges compared to a landfill in a desert. Fast-moving streams involve problems that differ from slow-moving delta streams. Forests in low, wet latitudes require different management practices than forests in high, dry mountains. The recognition of location-specific challenges of many environmental problems has led many states to experiment with place-based decision making. Local settings also have the potential to bring together diverse people with varying interests and needs in relationship to local resources.
To some extent, voluntary remediation programs represent a move to place-based decision making, because local economic, environmental, and social interests are woven together in final clean up decisions. But one of the most fertile arenas for place-based decisions has centered on watershed management challenges. Numerous states and localities have attempted to tailor decisions about watershed management to local circumstances and priorities by devolving decisions to those most affected by such decisions.
In Minnesota, for example, the Department of Natural Resources, City of St. Paul, University of Minnesota, and the Ramsey-Washington Metro Watershed District joined forces to develop a watershed management program for the Phalen Chain of Lakes in the Mississippi River basin. Since the project's inception, another seven city governments and two counties have joined the effort. The project moves away from the single-problem focus of the more traditional regulatory process, addressing simultaneously water quality, fisheries, wetland protection, vegetation and wildlife management, and river corridor protection and restoration.
Minnesota and Idaho have both pioneered effluent-trading schemes that improve water quality by involving "point-source" and "nonpoint" (for example, chemical runoff from farming practices) sources. The Minnesota Pollution Control Agency (MPCA) has capped new and existing discharges into the Minnesota River. Because the cap made it difficult for firms to modernize or upgrade, the MPCA agreed to work with the Coalition for a Clean Minnesota River and one brewing company to institute an effluent-trading program. Under the program, the brewing company was permitted to discharge effluent from its new wastewater treatment plant if it helped reduce other discharge sources along the river. The company agreed to offset its emissions by investing in programs that helped farmers reduce their chemical runoff and other pollution sources.
On the Upper Clark Fork River basin in Montana, initial disputes between environmental activists and farmers over instream flows yielded to consensus for a leasing arrangement after a local, collaborative decision process was initiated. The lease agreement allowed for temporary transfer of pre-1973 water rights rather than the outright sale or relinquishment of those rights. The lease allayed fears of ranchers that they would lose prior claims to those water rights, while still allowing them to be remunerated for conserving water and leasing the "saved" water for instream flow maintenance. Increased instream flows, in turn, helped to maintain wildlife habitats.
Challenges and Opportunities
State environmental innovations toward flexibility, performance focus, incentives, and place-based decision making invite substantial new opportunities to improve environmental performance. In general, these programs allow for a more holistic approach to environmental problem-solving that recognizes the interconnectedness of many of these problems. They also nurture private-sector innovation and private stewardship, creating a context in which firms and communities are better able to set priorities, target resources to critical problems, and craft more cost-effective approaches to reducing these problems.
But these efforts face both political and implementation challenges, including constraints imposed by the existing federal regulatory context. For example, an April 2000 survey by the Environmental Council of the States, an association of state environmental regulators, ranked problems with EPA's existing policies, procedures, and rules as the most significant barrier to their efforts at innovation.
In general, challenges cluster into three categories. First are challenges posed by fitting new regulatory structures within the old regulatory context. These include uncertainties about allocation of enforcement responsibilities between federal and state agencies. Lack of clarity in this regard has given rise to concerns about potential overfiling in enforcement cases by federal regulators.
Another central challenge tied to regulatory structures is how to ensure that permits or agreements initiated under the new programs, which often deliberately avoid issuance of traditional source-by-source permits, will supplant the source-by-source permits without: (a) triggering an enforcement action, or (b) requiring a negotiation process with federal regulators on each and every source-by-source permit that is intended to be avoided through the flexible-permitting, or multi-media permitting process. Some streamlined federal mechanism to allow the new permits to supersede the old may be warranted. Currently, through its Project XL and other programs, U.S. EPA has attempted to create conditions for this blending of the old and the new to occur. However, these processes remain unevenly implemented; procedures and qualifying conditions remain unpredictable.
States also face difficulties in meshing new data-reporting mechanisms that emerge from more holistic and performance-focused programs with the data-reporting requirements of the old regulatory model.
The second set of challenges are technical.
For example, as states move toward effluent trading, for example, establishing equivalencies among pollutants subject to trades is not straightforward. Allocation of initial baselines or emission credits as part of tradable credit schemes is also difficult and often contentious. At least one proposed state air-pollution trading program failed because of difficulties over these allocation questions.
Development of appropriate performance indicators by states also poses technical and conceptual challenges. Environmental problems are complex and numerous. Reducing indicators to a workable set and determining appropriate measures for different problems involves data aggregation and simplification. Regulators face a choice between what might be called "richness" detailed, highly tailored indicators and "reach" indicators that are sufficiently generic so that they can be reduced to a manageable and broad set.
The third set of challenges relate to stakeholder interests and concerns.
In developing facility-wide compacts with firms or in establishing place-based watershed management programs, a key question is which "stakeholders" should be at the decision table. These issues likely should not be settled at the federal level but rather on an individual basis by states as they determine what decision-making forums work well in different circumstances.
Some stakeholders have also raised questions about "fairness" as well as about the certainty of outcomes that might emerge in programs with multi-media permits, compacts, or voluntary incentives. Air-permit trading, for example, may shift pollution to certain "hotspots," thereby unevenly benefiting different populations.
Conclusion
George Meyer, Secretary of the Wisconsin Department of Natural Resources, eloquently summarized the new environmental challenge to lawmakers:
It is time for public policy makers to unleash America's potential to solve its remaining and emerging environmental problems.... With Congressional direction, and adequate infrastructure, the states can create a learning system, with useful knowledge applied outward to each other and upward to Washington, their co-implementation partner.
New environmentalism involves a discovery process a search not only for new technologies but also for new institutional forms that inspire environmental stewardship and yield continuing environmental progress. There is no reason to think that, in our first attempts at constructing rules and decision processes to address environmental issues, we achieved institutional perfection. Current state innovations are pointing to new institutional forms that have potential to reduce conflict, enhance environmental performance, and more efficiently deliver environmental benefits.