Sixty years ago, the World's Fair of 19391 introduced to its visitors "The World of Tomorrow." The fair's "Futurama" exhibit presented a glimpse of life in the year 1960. Its theme was, "The promise for the Future, built with the tools of Today upon the experience of Yesterday." Millions of people visited the diorama depicting life in the city of the future (1960), and millions more saw the news reel made about the exhibit and the vision it presented. In some ways, the issues facing the President's Council on Sustainable Development (PCSD) arose out of the nation's pursuit of a modern world "without limits," as reflected in that 1939 vision.
A lesson from the 1939 World's Fair is that America and the world can benefit from a concrete, positive vision of a sustainable world. To have any effect, this vision must be appealing and meaningful to people today -- it must represent a kind of world people are willing to build. Unlike 1939, when we contemplated the future of the United States alone, we must now incorporate the wants and needs of all nations into our vision. Today as we think about the promise of the future, we increasingly recognize the need to consider whether the economic, social, and environmental protection tools and practices of today will allow future generations to enjoy that promise. It is possible to provide more prosperity and more opportunity for more people, with less burden on the environment, if we agree that is what we want, and we are prepared to make it profitable to attain.
This report sets forth the attributes of a new environmental management framework and recommendations for promoting sustainable development2 and aims to advise the President on critical steps that can be taken to move the existing environmental management framework3 toward one that is more sustainable.4 The Council articulates key characteristics of a new framework based on our hopes and vision5 for a world that promises a good and improving quality of life for everyone today and in the future -- one that includes a healthy environment, a strong standard of living, harmony, and fairness; in other words, a sustainable way of life.
The need to improve environmental quality is not going to disappear once a certain threshold has been reached. Pollution control, for instance, is a necessary component of the current environmental management system, but alone is not enough to safeguard the future. We have and will continuously and persistently strive to enhance our economic well-being, our health, and the quality of every aspect of our lives. So too should we build an environmental management framework that will, now and in the future, promote clean air, clean water, less stress on fragile resources and natural habitats, and greater resource productivity.
The new environmental management framework of the 21st century will be one that drives continuous environmental improvement to accompany continuous economic and social gains.
A new environmental management framework that fosters sustainable development has a clear and indisputable goal: continuous environmental improvement that respects the importance of social and economic health. The new environmental management framework of the 21st century will be one that drives continuous environmental improvement to accompany continuous economic and social gains. To do this, the new framework must optimize the dynamic interplay between people, markets, information, technology, and the natural world.
Over the past several years, numerous experiments have been pursued that begin to suggest the shape of a new environmental management framework conducive to sustainable development. Dozens of communities are experimenting with "Brownfields Redevelopment" projects to rejuvenate formerly used industrial properties (called "brownfields" to distinguish them from "greenfields," agricultural and other virgin properties sought for new plant locations). Other communities have adopted "watershed" management strategies, organizing their efforts to protect the environment by focusing on the sources of contamination that feed into a single water body. These and many other initiatives now underway begin to point the way to an environmental management framework for sustainable development. While none of them individually represents the full model for the future, these initiatives each suggest elements that could become characteristics of the environmental management framework of the future. The combination of these elements working together, organized for sustainability, would undoubtedly have a multiplying effect, increasing the performance level of each element.
A new environmental management framework will embrace multiple strategies of action. It will include mandatory requirements for those who do not know how to protect the environment but more flexible strategies for those who demonstrate strong environmental performance and increasing improvement. It will tap a combination of voluntary, regulatory and market mechanisms that motivate improved environmental performance, recognize the value of community, and respect a sense of place. It will focus on more effective environmental protection and encourage more efficient strategies for increasing effectiveness.
Review of Current Environmental Management Reforms
Current environmental protection efforts do not always decrease pollution and waste at a rate greater than they are created. There are clear differences, however, between environmental management reforms that use tools such as full-cost accounting, life-cycle analysis, pollution prevention, and certified environmental management systems and those that do not.6 Many recent initiatives have heralded a new relationship between the regulated and regulating communities. And, more and more, leading firms are involving the public and environmental groups in dialogues regarding their environmental management initiatives.
Many of the environmental management reforms currently in use across the country challenge the traditional locus of environmental management.7 Conventionally, environmental management focused on individual waste streams from facilities. "Reinvented," the environmental management framework can emphasize watershed protection, habitat restoration, air quality districts, community-based environmental protection, or brownfield redevelopment. Other approaches are oriented to geographic regions or ecosystems, industrial sectors, market mechanisms, or households.
Throughout this report, the aims of a new environmental management framework are highlighted with references to "related activity" or examples corresponding to the specific recommendations. Although these and other recent initiatives were not explicitly designed to achieve sustainable development goals, some are achieving success, but not always in the integrative way, or to the degree, that sustainable development requires. Read together, the suggested framework attributes, recommendations, and related activities form a compass for charting the next steps in building the environmental management framework of the 21st Century.
One of the most important revelations of the PCSD in Sustainable America was that meaningful and long-term solutions for environmental, economic and social equity problems will require new strategies that re-define the source of problems, create mutual benefit throughout society and the chain of commerce, and solve multiple problems -- environmental, economic and social -- simultaneously. Following this expression, the Council sought to further identify the interrelated characteristics that need to be put into place for aligning economic and social equity concerns within an environmental management framework. Sustainable America emphasizes some specific approaches that are necessary in building a new environmental management framework,8 but alone may be insufficient for simultaneously achieving the interrelated goals of sustainable development outlined elsewhere in the report. A framework for environmental management that promotes sustainable development will be one that also achieves multiple objectives simultaneously.
. . .we must also recognize and understand that there are in fact economic and social dimensions to almost every environmental issue, and that they are often interrelated or connected.
Most consistent with Sustainable America is the concept that no matter what environmental issue we choose to address, our goal would be to understand the economic and social aspects of that issue. If so, we must also recognize and understand that there are in fact economic and social dimensions to almost every environmental issue, and that they are often interrelated or connected. Likewise, solutions to these issues or problems must address the environmental, economic and social aspects in relation to one another.
The Council asserts that the characteristics of a new environmental management framework described below are necessary, interrelated concepts that constitute a sustainable development approach to the future of environmental management.9
Improve environmental conditions beyond existing requirements and measurably increase resource productivity with a framework that is performance-focused and taps the full, multi-media capacity of implementing organizations to meet environmental goals.
Environmental management decisions should focus on improving environmental performance, taking into account social and economic impacts. Transforming the existing system to one that rewards continuous performance-improvement requires changing the way the people think and act. In order to facilitate this change, incentives for improving performance must be incorporated into environmental management systems in ways that encourage innovation and self-implementation for performance beyond baseline requirements. Equity and economic growth should also be seen as performance-improving goals and should be measured accordingly.
An environmental management framework that focuses on improving performance includes, but is not limited to, the following characteristics:
Focusing on performance improvement can provide a greater impetus for progress and may encourage innovation and development of new approaches for achieving performance goals. In order to reward and encourage performance improvements, regulatory agencies like EPA need corresponding criteria for identifying which firms are achieving high levels of environmental performance. Similarly, members of other sectors, including private firms, citizens, and non-profit organizations must recognize and place value on performance, as determined by indicators and quality factors.
Sustainability requires not only to recognize top performers, but to encourage more firms to out-perform existing requirements with innovative, improved or enhanced processes or pollution prevention techniques. In a few instances, this has been done by actually separating regulated entities into separate tiers based on performance. "Green-track" describes programs or initiatives designed to reward and support top performers, as well as to motivate good operators to perform at levels above current norms.10
Market mechanisms are linked directly to profits and hence motivate firms to improve environmental performance. In a similar way, properly implemented and accredited third-party auditing and certification utilized widely might help firms identify and document improvements in environmental performance. Additionally, a framework that confidently understands and reports environmental management performance is better able to allocate municipal and agency resources.
The value of performance models also applies to publicly owned facilities and other operations or entities that may not be regulated, monitored, or currently expected to manage performance expectations. A management framework that focuses on such performance will challenge all sectors to improve productivity and the efficient use of materials and energy.
Ensure Environmental Stewardship
Producers and consumers share extended responsibility for environmental effects of making products, their use, and waste streams using a life-cycle approach to identify opportunities for pollution prevention and stewardship.
A shared ethic and practice of environmental stewardship is an essential element of an environmental management framework that achieves sustainable development.11 This shared sense of responsibility toward the natural environment drives the framework, as it is necessary to achieve many of the other objectives. Environmental stewardship is an ethic and practice of responsibility toward the earth and its natural processes, suggesting that responsibility for the life of products, materials, and energy is shared variously by all those in the flow of commerce.
Through communication of the principles of environmental stewardship, it is hoped that the following will be achieved:
Foster collaboration in problem solving and planning among companies, agencies, and citizens for achieving mutually beneficial community-wide results.
Communities, governments, and market actors can form a powerful a degree of consensus, building a culture of inclusive engagement to support sustainable development. The combined performance of enterprise, government, community organizations, and public associations can greatly enhance the value and benefits of local citizenship. Counting, building and leveraging natural, cultural, and social assets expands the wealth of a community and strengthens its economic well-being.
The process of making decisions that affect the environment and the community can often be enhanced by sharing informational resources, clearly articulating objectives, and collaborating with stakeholders. Information from the community helps expand environmental management decisions to include social and economic issues. Community participation and multi-stakeholder collaboration processes at the firm level and all levels of government and public affiliation can also help optimize the efficacy and efficiency of environmental management decisions. Increased levels of community stakeholder involvement influences decisions through:
Transparent processes and ease of access are critical to identifying potential community benefits that can be attained through a well-rounded, multi-purpose environmental problem-solving approach. Collaborative approaches are especially important in the planning and initial phases of private and public projects with potential community impacts or benefits. Orienting and expanding collaboration to a regional and multi-jurisdictional scope increases the likelihood that disproportionate impacts will be avoided and that, to the greatest possible degree, agreement on a sustainable design will be attained.
Advance employment opportunities in a healthy, safe, and ecologically benign work environment, and offer human resource development that satisfies the talent, skill and desires of workers.
In Sustainable America, the PCSD said, "To achieve our vision of sustainable development, some things must growójobs, productivity, wages, capital and savings, profits, information, knowledge, and education..."12 A new environmental management framework needs to engage workers both in terms of the level of employment needed for a sustainable society and the quality of employment desired by working people. No economy can survive long without addressing both of these worker engagement issues.
Environmental education and training provided as part of job responsibilities has been shown to enhance worker involvement in environmental management and to increase performance levels beyond compliance. In a Cornell University study, John Bunge, Edward Cohen-Rosenthal, and Antonio Ruiz-Quintanilla determined that it is a "...serious and organized effort to involve employees in pollution prevention that is most important [to program effectiveness], and not the occasional collection of ideas [from employees]. The employee needs to believe that the organization is making a serious effort to involve and empower him or her in matters of pollution prevention."
Economic growth, and therefore sustainable development, cannot occur without a commensurate increase in employment opportunities.
The management framework that fosters sustainable development is one that achieves environmental benefits while simultaneously establishing a positive, rewarding work environment. For this to happen, the management framework of the future needs to recognize the asset and productivity value of human capital as well as the employment levels needed to promote prosperity for greater numbers of people rather than fewer. Economic growth, and therefore sustainable development, cannot occur without a commensurate increase in employment opportunities.
Paul Hawken notes the present trend is to use more and more resources to make fewer people more productive.13 He is referring to processes in which personnel are eliminated as the scale of the technology applied increases. The end result is a waste of people and resources. Sustainable development challenges us to invert this outcome so that "reducing resource use creates jobs and lessens the impact we have on the environment."14 Similarly, the Rocky Mountain Institute states that the focus should be on eliminating the enormous waste of energy inherent in many production processes, which can be accomplished while simultaneously harnessing more human capital. The best management system continually increases the quality of life for workers, lowers the number of people living in poverty, and invests in education, training, child care, and other areas that enhance equal economic and employment opportunities.
Utilize standardized public reporting formats and comparable data sets comprised of metrics, benchmarks, and/or common indicators of environmental performance geared toward generally accepted accounting principles and generating feedback systems for learning.
An information-rich system, one that generates and disseminates accurate and useful information, has multiple advantages. It answers former New York City Mayor Ed Koch's question: How am I doing? It motivates those who are being measured to perform better. It allows analysis of past experience that can inform future practices.
Ideal systems improve the collection, organization, and dissemination of information to reduce duplication and streamline reporting requirements while giving decision makers information related to economics, environmental, and equity goals.15 Information by itself, however, does not solve problems. In addition, "information rich" does not simply translate into "more is better than less." Information is relevant to the environmental management framework to the extent that it is meaningfully incorporated into decision-making processes. Information is the fuel for the learning that leads to problem-solving, not the driver. Open information policies and practices recognize that disclosure, transparency, and active dissemination of information should be the rule, not the exception, with the goal of increasing access to public information for all segments of society.16
A new environmental management framework needs baseline data and metrics, information that should be accessible and understandable to the public. Performance should be monitored against these baselines to measure and verify effectiveness of environmental management and resource productivity. In addition, benchmarks and indicators are needed to evaluate the effectiveness of environmental management programs and to measure progress toward sustainable development at the local, state, national, and global level.
Adopt Integrated Approaches
Employ a systems approach toward environmental management and sustainable development that aligns and maintains an ecological balance of economic and social influences that complement natural cycles or ecosystems.
This attribute category is based on the idea that the fate of the economy, social well-being, and the natural environment are all intertwined. Although it is not possible to take every interdependence into account in every decision, thinking of activities in terms of a holistic system with integrated economic, social, and environmental components can eliminate costly mistakes, unintended consequences, duplication, and gaps.
One of the far-reaching aims of sustainable development is to better align human activities with the natural cycles of the earth . . .
At the broad resource-management level, "systems thinking" means employing approaches that consider the entire ecosystem. The concepts of bio-diversity and bio-regional or cross-boundary effects instruct us that natural systems play a crucial role in building the best environmental management and economic development approaches. Infrastructure determinants such as vehicle-miles traveled, energy efficiency, and multi-media releases must be considered dynamic aspects of the environmental management framework and be managed as such as well. Energy use and natural resource consumption are particularly vulnerable to waste and throw-off. Management, logistics, and accounting systems should be utilized not merely for efficiency but to design better delivery and service patterns that lead to dramatic abatement in energy and natural resource demand.
At a community level, brownfields redevelopment provides an example of an approach that is integrating and holistic. Previously industrialized land is being redeveloped without the expense of complete environmental cleanup. In general, brownfields are a cost-effective option that manages urban sprawl by reducing greenfields development.
At the facility level, systems thinking means treating a facility as a holistic entity, or a "closed-loop" in which all forms of waste are viewed as non-product output. "Closed loop [systems are those] in which resources and energy flow into production processes, and excess materials are put back into the loop so that little or no waste is generated. Ideally, the loops are closed within a factory, among industries in a region, and within national and global economies."17 Integrated and holistic systems also address the entire life cycle. The concept "suggests that manufacturing be treated not as a linear activity, but as circular...in a closed loop, sustainable system...treating products holistically from cradle-to-cradle...to establish pollution prevention and product stewardship as standard business practices."18
At all levels, holistic environmental understanding can be introduced to more closely complement or incorporate natural biological cycles and systems. One of the far-reaching aims of sustainable development is to better align human activities with the natural cycles of the earth by mimicking, by design, the cyclical flow of energy and waste within natural ecosystems.
Use Market Mechanisms
Recognize the economic value of natural resources and the financial value of environmental performance; create incentives that stimulate innovation and the use of market mechanisms in the pursuit of environmental goals.
In a framework that fosters sustainable development, environmental quality and economic vitality can be achieved simultaneously. A new environmental management framework should employ incentives that will motivate businesses and individuals to improve environmental quality. The key to linking market rewards with improved environmental performance is the recognition of externalities, or releases into the natural environment, as waste in the economic system.19 Reducing pollution and increasing efficiency often produce financial gains to the economy that remain uncounted or left out of the accounting system.
In an integrated management system, economic drivers increasingly anticipate, value, and leverage environmental and social goals. Such systems acknowledge externalities that fail to attain market value or that consistently thwart business logic. They also calculate strategic business advantage of environmental management to assess return market value. The system should provide for equitable reaping of market rewards to both small and large businesses, as well as across sectors.
Market-related mechanisms are not a stand-alone solution. Rather, market mechanisms can be coupled with the existing regulatory system to achieve the objectives of the new framework. Other types of market mechanisms need additional regulations in order to be implemented, or changes in the current regulatory system to function effectively and efficiently. The best strategies successfully work with or enhance the current system, or can break down barriers to improvement in the current system. The full spectrum of financial and business accounting principles can be an appropriate model for managing the environment as reflected both in firm, state, and national accounts. Until environmental management of companies, metropolitan areas, natural resources, and global impacts is understood as having business and fiscal value and return, it will remain a cost-centered management phenomenon, unable to drive better results.
Early Action for Climate Change
Market mechanisms are likely to play a significant role in any strategy to reduce greenhouse gas (GHG) emissions. Some financial institutions are already beginning to re-assess and project the value of energy efficiency, renewable energy, technology, and environmental management in future markets. This evaluation is based on the perception that foreign markets and governments are moving to provide incentives, both economic and political, for early reductions in GHGs and other releases. Participation and formal credit for emissions reductions in such market programs can be facilitated by the use of environmental management and accounting systems that include measures to track energy efficiency and GHG reductions.
The Council's recommendations reflect a balance of interests about where progress could be accelerated for implementing a new environmental management framework. Applied together as part of an integrated framework, the following policy recommendations begin to further align and sensitize the current environmental management system to foster sustainable development. Also listed are "related activities" or examples that are intended to illustrate some aspect of the recommendations.
INFORMATION: Using Information to Improve Performance and accountability
Developing and using high-quality information on environmental performance and conditions is critical to any environmental management framework and must be incorporated at all levels of decision-making. Environmental information needs to be sufficient to enrich collaborative decision-making and comprehensive enough to measure real progress. Information by itself, however, does not solve problems. Information-driven, applied learning leads to change.
Public and private environmental management decisions should focus on improving environmental performance, taking into account social and economic opportunities and impacts. Ideal information systems improve the collection, organization, and dissemination of information; reduce duplication and streamline reporting requirements; and give decision makers economic, environmental, and equity information goals. Shifting the arrangement of environmental information from insular anecdotes, dated reporting materials, and periodic assessments, toward a system of credible, standardized performance data collection and reporting that is relevant and valuable to communities, managers, and the market-place can facilitate the development of these systems.
Information on environmental performance should be shared with the public in a timely manner to provide tangible accountability and to foster environmental awareness. Availability should extend access to meaningful (i.e., understandable) and useful information, using education and information technology such as the Internet. Balanced with the public's right-to-know is the need to observe appropriate protection of valid confidential business information claims in this objective.
Another objective for the overall environmental management framework is to measure and, where appropriate, assign business or market value to the environmental management performance of organizations (including GHG emissions reductions and energy efficiency), and, more broadly, natural resource and land use. In the case of corporate environmental management performance, measuring, accounting, valuing, and disclosing this information to investors, customers, vendors, and the public may enhance the competitive economic or enterprise value of companies.20 Assessing and reporting environmental management performance can improve the overall quality of both private and public operations and provides a basis for taking advantage of incentives for innovative environmental management strategies. Consequently, the further development and implementation of environmental assessment tools and accounting criteria for economic, financial, and regulatory purposes is indicated. The multiple opportunities for measuring environmental performance include:
It is essential that the public have confidence that national, state, and local environmental goals are being addressed and that progress is being made. To determine progress, environmental performance and conditions should be measured at many levels: national, state, discernible regions, community, company, and individual facility (whether industrial, agricultural, public, or commercial). Collection and dissemination of good environmental information linked to established goals may help drive performance improvement, better planning, and proactively alleviate stresses on the environment. For goals to have broad acceptance, stakeholders need to be consulted in goal setting, and competing considerations (economic, social, and environmental) need to be integrated.
Various stakeholders use environmental information in different ways. For policy makers, recommended indicators for sustainable development can21 provide a good framework for policy making at the state and national level, with the overall goal of maximizing resource productivity and the performance of the economy. Regulators can use environmental performance information for program purposes and better allocating resources for program management. For businesses, environmental accounting is important in determining the strategic business value of environmental activities, which can be an important factor in business planning and creating new markets. Information on ambient conditions and environmental resources is also useful for citizens groups and others to help set goals and determine priorities for community development and restoration.
Accounting for Sustainable Development (ASD),22 developed in cooperation with the Society of Management Accountants of Canada to measure sustainability in corporations, is an accounting approach that encompasses the entire cycle of production, also known as full-cost accounting. Currently, the ASD framework is being utilized in the development of some environmental management systems.
Define Common Metrics for Environmental Performance
Environmental performance metrics23 and indicators24 help ensure that the right information is being collected to support achievement of goals and to accelerate progress toward those goals. Common metrics or indicators must be consistent, unbiased, understandable, relevant to the issues being addressed, able to portray trends over long time periods, and capable of communicating the relative risk and comparable progress on various environmental matters (see Appendix B).
In order for a common framework to emerge, one that can simultaneously and meaningfully inform communities, NGOs, regulators, and financial analysts interested in the environmental performance of organizations, indicators need to be decided. The development of comparable, standardized, environmental performance indicators that offer informational value, rather than volume, requires identifying core environmental performance elements or metrics. Which metrics or indicators to use will depend on what is to be measured and for what purposes. Ideally, in the beginning, elements common to most organizations (both public and private), reflecting both site-specific (i.e., facility) and firm level (i.e., corporate-wide) performance would be adopted. The accepted systems of measuring performance must then evolve to account for sector and regional differences as well as begin to incorporate similar measures of economic and social well-being.
Related Activity: The Global Reporting Initiative's (GRI) mission is to create "worldwide standardized corporate sustainability reporting" in collaboration with the Coalition for Environmentally Responsible Economies (CERES). The effort is intended to lead to a "harmonization" of corporate entity reporting. This program, when piloted, will be marketed to establish guidelines for information that would be "user friendly" to diverse groups of participants and, later, will encourage similar steps for sustainability reporting.
U.S. EPA's Environmental Accounting Project works to encourage the modification of accounting practices to accept and explicitly account for the environmental cost of all business decisions. The Environmental Accounting Project focuses primarily on managerial accounting practices, those costs internal to the firm, and encourages identification of environmental costs within a facility by product or process. This information can be used by managers to develop more accurate costing and pricing of products and services. It is anticipated that applying environmental management accounting principles will demonstrate the business benefits of superior environmental performance.
Link Environmental, Economic, and Social Information
To balance interests and optimize progress toward sustainable outcomes, environmental performance information must be integrated with social and economic information. Greater strides in sustainable development will occur when businesses are able to capitalize on the financial value of good environmental performance, life-cycle issues are considered in process and product design, and when consumers are able to see beyond the material to the value of products.
The Digital Earth concept, which is not fully developed or operational yet, is a characterization of the terrestrial natural and cultural environment, referenced in space and time, along with the educational program needed to communicate the possibilities and procedures for its use. Within the U.S., the National Spatial Data Infrastructure provides the basic mechanism for the coordination, access, and distribution of the geospatial data needed to form the Digital Earth. The geospatial data can be used in GIS applications, which is of increasing interest at the local government level. International or global data sets can extend the geospatial components beyond the borders of the U.S.
INDUSTRY: Improving Performance
The current national environmental protection system has achieved a substantial degree of success by requiring manufacturers to control pollutants; however, it is time to consider implementing new approaches. It is important to maintain minimum national standards where appropriate and strong enforcement to assure compliance with those standards. At the same time, the emphasis of industrial managers should be on improving environmental quality and resource productivity -- not just complying with minimum expectations. Tools such as pollution prevention,25 design for the environment,26 extended product stewardship,27 and environmental management systems that include a commitment to continuous improvement improve industrial efficiency by reducing energy and materials use, enhancing both competitiveness and environmental performance. These prevention approaches can also provide inherently safer places to work and reduce the impacts of pollution on communities.
Industry leaders adopt prevention approaches when it is demonstrably in their interest and profitable to do so. Those who lead the way in research, development, and application of these approaches should be supported and rewarded. Also, industry leaders and government agencies should encourage adoption of more sustainable practices by the large majority of firms who are not currently high performers. If the nation is to move toward sustainability, progress must come not only from the leaders, but from improvements in performance of all actors.
After decades of evolving environmental regulation, there is growing variation in the way different organizations perform. Some firms have internalized the need for environmental stewardship into their business, while others are focused on doing what is necessary to achieve compliance. Still other firms need a great deal of assistance before they are able to meet environmental requirements. Regulatory systems may need to be tailored to the differing environmental management capabilities, commitments, and performance of different regulated entities.
Differentiation among regulated entities must be based on their level of environmental commitment to stewardship, management, and actual performance. Firms can be categorized in tiers, or along another continuum, and appropriate incentives should be applied to improve performance at each level. Firms that fail to comply continue to be subject to penalties. By contrast, excellent organizations have a history of compliance with applicable requirements and internal management commitments and systems that indicate a high level of environmental performance and likelihood of success. Regulatory strategies that provide incentives for performance improvement should be sensitive to business size and sectoral differences, distinguish between strong and weak performers, and leverage third-party agents when feasible and effective.
Differentiate By Sector and Size
Different companies respond to various types of regulatory programs because of factors such as their size, information sources, the competitive nature of their industry, and how much they depend on selling directly to individual consumers. Regulatory programs should recognize these differences. For example, programs targeted to smaller businesses and/or specific sectors could provide more detailed information about specific environmentally protective processes and technologies, and communicate directly with the businesses, through business-specific trade publications, trade associations, and suppliers. Regulatory agencies might also work with the small businesses to help them explore ways to realize economies of scale in environmental protection that big businesses enjoy, perhaps by sharing (i.e., aggregating) the costs and use of pollution control equipment or by sharing experts through cooperative contracts with environmental consultants. There is a need for workable regulatory programs that address different sectors in ways that account for the unique aspects of those sectors and that will increase environmental performance.
Action Steps: Implement management programs using environmental performance information to provide the flexibility needed to meet specific requirements of regulated activities in the following ways:
EPA's Common Sense Initiative is a participatory, multi-stakeholder program that seeks innovative ways to achieve environmental goals for six industry sectors. The Metal Finishing Sector launched the National Strategic Goals Program to improve the environmental performance of metal finishing facilities. At the national level, the industry committed to achieve a set of specific environmental goals (e.g., 98% metals utilization on products, 50% reduction in metals emissions to air and waste, and 50% reduction in water use, by 2002). To promote achievement of the goals, a tiered program offers incentives appropriate to four levels of environmental performance, including: operational flexibility for top firms; compliance assistance for mid-performers; transition assistance for firms that might otherwise abandon contaminated operating sites; and enforcement against chronic non-complying firms. While EPA is providing guidance and support, the program is being implemented -- and tailored -- by participating state and local agencies.
Promote High Performance
Top performers should benefit from their excellent performance and commitment to the environment through mechanisms such as market rewards, public recognition, and increased operational flexibility.
Environmental performance programs should be designed to encourage and provide incentives to organizations that consistently out-perform minimum environmental standards and who are committed to continued environmental excellence and improvement. Many companies (and states) are achieving comparatively high levels of environmental performance, operating significantly beyond the level where compliance problems are noteworthy. Top performers should benefit from their excellent performance and commitment to the environment through mechanisms such as market rewards, public recognition, and increased operational flexibility while maintaining high levels of environmental protection.
Excellence should find its reward in public recognition and the marketplace. In addition to the market rewards conferred on innovative companies, which require a more deliberate demonstration of the business value of environmental performance, regulatory programs may also need to bestow flexibility under appropriate circumstances. Government programs should aim to both help align market rewards with good environmental performance and design program or system changes to reward high environmental performance. These rewards will help motivate companies to pursue excellence as a sound management strategy.
A multi-purpose strategy could be developed by establishing a specialized avenue for alternative regulatory strategies, sometimes referred to as a "greentrack."28 Enrolled businesses would have to out-perform minimum environmental performance requirements and would be expected to show progress toward continual improvements in performance over time. They would also have to report verified performance information to government and the public. At the same time, participating companies could propose operational changes and alternative strategies for process-specific requirements that lead directly to high environmental performance.29
It is crucial that proposals by a firm under the alternative regulatory strategies result in an overall environmental improvement over what the firm is required to do otherwise. Therefore, such approaches must employ quantifiable and enforceable environmental performance measures specifically targeted at, among other things, the areas in which the firm has been offered regulatory flexibility to ensure that performance is indeed improving and can be seen. Government must be able to verify and enforce this performance at least as reliably as it can verify and enforce performance under the present system. Similarly, in the case where a firm is receiving regulatory benefits different from those firms under existing programs, the proposed alternative should confer a cognizable net benefit upon society. Current programs are in the developmental and experimental stages. Such programs must establish clear goals, guidelines, and performance measures in order to maintain the fairness of the system and ensure public confidence. These programs must also be designed to address concerns that small businesses may not benefit equally, and that program design and monitoring may demand additional resources from government and stakeholders.30
Align with the Economy
Common to all performance-improving programs is the need for effective means to assess environmental performance and ensure public confidence in the system. A challenge to the current system is its struggle to maintain levels of protection in the face of increases and changes in activities that affect the environment. The number of operating businesses that affect the environment grows and contracts with the economy. The government workforce, such as inspection and permit approval staff, seldom changes at the same rate. Moreover, the information economy now allows far more rapid change in production processes and products. More than ever, companies need to be able to change their processes rapidly to maintain economic competitiveness. Government can and should do its best to reallocate, adapt, and expand its capabilities to keep pace with expansion and change in the economy.
When government workforce levels do grow, the growth often lags behind the economic spurt. Similarly, changes in the environmental management framework that would improve government productivity are not always in pace with agency or program needs. As a consequence, the environmental protection system either suffers in its effectiveness or becomes an unintentional bottleneck in the system, and frustrations grow on all sides. An alternative is to adopt mechanisms to assure environmental protection that automatically matches growth in the activities likely to affect the environment.
New programs need regular assessment, and not all initiatives are yielding the results expected. A new environmental management framework must anticipate change and strive to evolve. A number of different mechanisms show promise in their ability to grow with the economy depending on the context and the level of appropriateness. These include market-based programs and charges; the use of qualified third-parties (neither the regulated nor the regulator) to document environmental performance and show compliance with environmental laws; and the adoption of effective environmental management systems. The use of market mechanisms are discussed as an attribute of a new environmental management framework earlier in the report.
Market Mechanisms: Market programs and charges use regular market functions to protect the environment, assigning allowances, responsibilities, and costs to companies linked to the consequences of their environmental actions. Companies can then manage their allowances and costs as they would any aspect of their business -- holding, selling, or reducing the cost through innovation. The government plays a very different role in this sort of system than it does in most other environmental protection programs. Its primary role is to maintain the honesty of the market, assuring that the companies are buying and selling what they say they are, just as governments do in other markets, from the grocery store check-out counter to the stock exchanges. The government also needs to assure overall progress toward environmental goals.
Environmental Management Systems: There is widespread and growing use of Environmental Management Systems (EMSs) by companies domestically and abroad. The Council believes that there is potential for their use in enhancing environmental performance, however, the link to performance improvement has not yet been made. An EMS can be a significant tool for sustainable development if the link to verifiable, trustworthy reporting is made and performance improvements can be demonstrated. These EMS characteristics alone do not ensure environmental performance improvement. Rather, effective EMSs provide significant structural support for improving performance that must be coupled with qualitative performance commitments and goals. Moreover, such systems must be implemented to produce environmental performance results.
Action Step: Environmental management systems can and should include systems for successfully ensuring compliance and accurately measuring and reporting environmental performance. Comprehensive EMSs would share the following characteristics:
Third Party Certification of Environmental Performance: Third-party programs use qualified private-sector experts to review corporate activity to assure compliance with public laws and protection of public health and the environment. Third parties can be used to review permits, certify compliance, or verify environmental performance and reporting. A commercial industry of highly qualified and competent third-party certifiers and auditors (analogous to the auditing industry that oversees the financial system) could be an important feature of a more diverse environmental management framework. Currently, the field of third-party certification is in initial stages of development, and fundamental design and oversight issues must be addressed. However, such an industry could augment government inspection efforts, adapt more quickly to changes in the economy, and help ensure the public's confidence in the new environmental management framework.
An effective third-party system needs to "audit the auditors." That is, it is necessary to verify that what the recognized third-party certifiers have approved should, in fact, have been approved. Poor-performing auditors should be penalized through disqualification, civil liability, or criminal sanctions. Private auditing arrangements can assist, but do not replace, governmental oversight. Third-party auditing can fail: auditing standards may prove ambiguous; auditors can be lax, poorly qualified or incompetent, or may be deliberately misled. Existing financial auditing and accounting systems occasionally fail and a similar failure in an environmental auditing system could have disastrous effects on human health or the environment. Thus, the government's ability to establish and enforce environmental standards, and ensure the veracity of a limited number of validated certifiers, is essential to environmental protection. Government should also ensure that comparable programs are available to both small and large businesses and that such programs are not a replacement for community involvement.
All parties -- government, business, and the public -- could benefit from a vibrant third-party certification and auditing industry where the participants are qualified and competent, and their integrity is unimpeachable. Government can serve as a catalyst for this by providing guidelines that can be used for accrediting third-party certifiers and auditors under certain conditions, creating voluntary programs that stimulate a demand for this new service, and in maintaining and enforcing strict standards for third-party certifiers and auditors.
The Licensed Site Professional (LSP) program of the Massachusetts DEP is an innovative "bridging" of government and private-sector resources that uses licensed non-government professionals to oversee contaminated site clean-ups, thereby achieving more clean-ups than if the state reviewed all sites on its own. Although the state still maintains oversight responsibility at a small number of sites (those that are determined to be the most serious and/or complex), private LSPs are responsible for approving the key response actions at all other sites, using the redesigned remedial program as their guide. Responsible parties and their LSPs must follow the processes and meet the standards specified by the state, document actions taken, and provide an "opinion" from the LSP stating that the clean-up work complies with state requirements. Thus, those responsible parties who wish to proceed rapidly with clean-ups are able to do so without delay due to shortages of state staff time to conduct the reviews. This system has accelerated clean-ups statewide without reducing environmental standards. More than 7,200 assessments and/or cleanups have been completed by LSPs. Of these, approximately 1,600 had been in the system for years and were not scheduled for direct action due to agency resource constraints.
PLACE: Linking Strategies
Connections to one's community and a sense of place have long contributed to the quality of our lives. In many ways, the value placed on community and place is hard to explain and even harder to prove, yet we can see the strength and breadth of community bonds in the support for local sports teams or allegiance to schools and neighborhoods. People place a value on connecting with others. In addition, when they do connect with others through parent associations at school, churches and synagogues, or block organizations, they are able to fix problems and make progress that they could not have made individually.
Environmental performance and environmental management apply to communities and geographic regions as well as to businesses and industrial sectors.
Private institutions have traditionally planned "strategically" around markets, sectors, and development projects with more regard to economic demand than place. Public institutions have also sought to regulate activities sometimes overlooking the context of place and community. Environmental performance and environmental management apply to communities and geographic regions as well as to businesses and industrial sectors. In fact, the actions one group takes have an effect on the others.
The combined performance of enterprise, civic government, community organizations, and public associations greatly enhances the value and benefits of local citizenship by expanding the wealth of a community through building and leveraging natural, economic, and social assets. Integrated strategies, which greatly influence environmental conditions, are best understood in terms of:
A new environmental management framework that supports sustainability needs to respect and incorporate the value of community and places. It also needs to reach out broadly to those in places experiencing negative environmental consequences to work collaboratively to find and implement solutions that reduce those consequences. Strategies that engage the community in monitoring environmental problems and crafting solutions have many advantages. They create a forum for debating trade-offs that may be necessary. They tap the opinions and expertise of people with diverse views and diverse talents. They can catalyze cooperative action.
Foster A Collaborative Regional Approach to Environmental Protection
Environmental problems are place-dependent. Air emissions can concentrate in a relatively small area or cross jurisdictional boundaries, depending on the characteristics and size of the air shed. Contaminants released to water bodies spread throughout a water body, as moved by current flows. Pollutants spilled on land often make their way into the waters within a watershed, as rains create soil erosion and storm-water runoff, or the pollutant seeps into groundwater.
Environmental solutions must therefore be place-sensitive, identifying specific environmental problems affecting an air or watershed, the sources of those problems, and how each source contributes to the problem. Environmental solutions can be strengthened by building on the regional connection of certain environmental problems, tapping the resources and expertise in air and watersheds that can be applied to devising and implementing solutions.
The collaboration of community, government, and market actors can positively transform the land form and increase the effectiveness of environmental management when it is also organized at the regional level. Conducting a sustainability inventory of environmental impacts affecting an area while simultaneously assessing the availability of resources needed to make progress can greatly enhance individual initiatives when they are viewed in a regional context. Target indicators for sustainable development measure, for example, water use, air quality, energy consumption, solid waste, education and business infrastructure, transportation, natural resource assets, and overall economic progress. Regional evaluations of environmental conditions (e.g., water tables, air sheds) can similarly identify targets for mitigating activities that contribute to pollution from non-point sources.
Regional, state and local collaboration are essential for achieving sustainable environmental management, especially in natural resource and land-use decisions. Regional and state-level collaboration can take multiple forms and occur at different points in the same geographic area. Regardless of the form, collaboration can embrace community-based, intergovernmental, and market-based processes:
Involve Individuals and Communities in Improving Environmental Performance
Perhaps one of the biggest hurdles in moving forward toward sustainability is overcoming the lack of public awareness about the environmental impacts of the lifestyle choices we make. Increasingly, the cumulative impact of small decisions made by individuals and communities leads to large-scale environmental impacts that are difficult to manage. Individuals make decisions every day -- where to live, what form of transportation to use, what products to buy -- that have significant cumulative environmental impacts. In most cases, people make these decisions without adequate information, and often without any idea of the potential environmental consequences. Similarly, communities make decisions about zoning, housing, schools, transportation, and other pressing issues, without accurate information on the relative environmental costs of those choices.
Governments and businesses need to do a better job of education about sustainability -- to build a more common understanding of how the products we buy, the policies we adopt, and other everyday choices we make affect sustainability. While the Internet has suddenly made vast amounts of data widely available, we still face enormous challenges: turning data into useful information that can help people make choices, reaching people at all levels of society, integrating environmental knowledge and problem-solving skills into our educational system, and building a sense of individual responsibility for the environment.
Related Activity: The Global Action Program (GAP) works to empower individual households to change personal behavior and to move consciously toward sustainable consumption. Organized through "EcoTeams," efforts are made to reduce consumption patterns such as waste, energy, transportation, and to more efficiently use our water resources. These EcoTeams, in turn, work together and report their results to a national office to be compared with other teams. Together, efforts to educate and train EcoTeams potentially flow into all parts of homes and communities.
The New Jersey Watershed Management Approach was developed to improve surface and ground water quality and quantity for all uses by more effectively managing public and private efforts through a performance-driven framework. The residents of New Jersey take the responsibility to serve as stewards for their own watersheds. Information is acquired by the stakeholders (including NJDEP) and then developed into a watershed management area plan, which drives activities and investments in the geographic area. This approach allows stakeholders to determine the priority of problems and builds a better understanding of the environmental impacts of our everyday activities.
Identify Risks and Protect Communities Against Disproportionate Impacts.
Historically, some low income and minority communities have lacked equal environmental protection and have borne disproportionate or cumulative environmental burdens. President Clinton's Executive Order in 1993 was the first federal effort recognizing this issue and required federal agencies to consider the environmental justice implications of their programs and policies. A critical characteristic of any future environmental framework will be ensuring that environmental burdens are reduced, and environmental protection is shared equally throughout all communities.
Although there are several mechanisms to remediate environmental injustices, it is more important to prevent the conditions that create inequities and competition between communities. By taking steps to prevent environmental inequities, communities begin to fully integrate sustainable development principles and practices. One step to prevent inequities is to better incorporate the community into decision-making processes of industries, government and other decision-making bodies. Studies have demonstrated that communities increase their economic potential, quality of life, and overall empowerment with established mechanisms to ensure that a community representative (not a local government official alone) is collaboratively involved in decision-making processes affecting the community.
For example, the St. Paul Port Authority's brownfields redevelopment program is one of 16 "showcase communities" and has over 50 sites needing redevelopment. Because of scarcity of resources, the Port Authority determines which sites to remediate based on the extent of redevelopment costs, site configuration, and a variety of social justice indicators such as the level of unemployment, housing vacancies, and percentage of rental property. The redeveloped land is given away to businesses, which enter into an agreement with the Port Authority, to retain and attract businesses to St. Paul. Agreements include design criteria relating to energy efficiency, local hiring guarantees for St. Paul residents, and livable working wages. Even with these constraints, the Port Authority has three to four businesses competing for each available slot. This program has generated over $2 million per year in property taxes, created over 1,500 job in distressed communities, and created 900,000 square feet of building space in previously abandoned lots.
PROCESS: Applying New Approaches to Persistent Problems and Emerging Environmental Issues
While the U.S. has made great strides in addressing environmental problems, the nation and the world still face significant environmental challenges. Environmental professionals, lawmakers, non-governmental organizations, businesses, and others are struggling to understand and devise solutions to persistent and complex environmental problems and new environmental challenges. Some of the persistent and complex environmental problems facing us today included pollution from myriad numbers of small, dispersed sources -- such as dry cleaners, film processors and dental offices -- that are not readily reached through conventional regulations, but that cumulatively contribute
...the environmental management framework needs to test and adopt new approaches...The result will be a system that is less uniform and more complex but also more flexible.
significantly to pollutant loadings. Other challenges include land-based activities that create local problems -- such as inadequately controlled land development (i.e., urban sprawl), agricultural runoff -- that are best addressed in the context of local community decision-making.
Although these are the problems that we recognize today, doubtless new environmental issues will emerge in the next century that will also demand attention. These environmental challenges include global issues -- such as climate change, and long range transport of persistent organic pollutants, mercury and other toxics -- that involve complex interactions between anthropogenic agents and natural systems.
To address both currently recognized environmental problems and yet-to-be identified ones while moving toward sustainability, the environmental management framework needs to test and adopt new approaches. The framework will become more complex and less uniform than today's system, because we must broaden the range of tools in the environmental management toolbox to deal with the broader set of problems. The framework will include traditional tools (national standards, permits, reporting, enforcement, etc.) and new approaches (market- and information-based approaches, stakeholder participation in decision-making, performance-based standards, etc.). Only those tools that best address a given problem in the most effective, efficient and fair manner will be applied to that problem. The result will be a system that is less uniform and more complex but also more flexible. The Internet provides a useful analogy: it is a complex, interlocking system that significantly expands options available to users and efficiently provides a service, but its complexity remains fairly invisible to the user.
A fundamental tool that needs to be developed is the ability to rethink the nature, source, and linkages of environmental problems. We need to look at interdependencies among suppliers, producers, and consumers. We have to try to understand feedback mechanisms and lags and inaccuracies in the messages they send to decision-makers. We have to try to correct those inaccuracies, and set up a dynamic learning system that continually learns from and uses past experience to try to improve current performance. In the environmental field, that requires trying to understand who pollutes and why, and how their decisions are affected by the decisions of others.
Although the new environmental framework described above will address both existing and new environmental problems after they have been identified, a new approach to assessing and addressing new environmental issues needs to be considered. We need more research, sophisticated data bases and analysis to assess patterns that point to systemic problems and major sources or causes of problems. For example, endocrine disrupting chemicals are emerging as a potential global issue, though the sources and effects are of these chemicals are still not well understood. And, we need the ability to develop and tailor strategies that allow specific problems and opportunities to be identified and addressed.
As we attempt to solve global issues in the 21st century, we need to strengthen our relationships with international partners. We have much to share with other nations that are striving for sustainability, and also much to learn from others. OECD countries with parallel economic and environmental histories, such as the UK, Netherlands, Denmark, Germany, and Canada, offer valuable lessons that should be shared with U.S. communities and regulatory agencies. This is evident in New Jersey's inclusion of Dutch pollution prevention policies, Virginia's acceptance of Danish ecological industrial parks, and Wisconsin's incorporation of Germany's acid rain programs.
We also need to get as many involved parties -- including government, business, other countries, NGOs -- into dialogue about emerging environmental issues as soon as possible. In the 1980's, the discovery of the ozone hole over Antarctica galvanized international action, resulting in the Montreal Protocol agreement to phase out the production of chlorofluorocarbons (CFCs). A key element to the successful implementation of the protocol was the general acceptance of the need for action and consensus on what action was required by the various national governments, NGOs, and the businesses that made and used CFCs. We need to reproduce the success of that concerted international effort as we face the challenges of the future.
"Even in the face of scientific uncertainty, society should take reasonable actions to avert risks where the potential harm to human health or the environment is thought to be serious or irreparable."-- PCSD, Sustainable America, p. vi.
Foresight is a crucial element of sustainable development and it should be important in a new environmental management framework. For example, the Swedish government has established goals of phasing out certain persistent substances in products. A reverse engineering process to determine how to reach the goals is being implemented in the hope of leading innovation without creating new risks. By focusing on alternatives, goals, and severity of effects the debate is shifted from causality to solutions. For making decisions, there must be some process that weighs evidence about harm but considers it in the context of available technologies and methods that eliminate or reduce the severity of the impacts.
Related Activity: The Brake Pad Partnership Project was formed to addresses the issue of copper in the San Francisco Bay. Copper in the Bay remains a problem, even though point source controls are fairly effective. Recent studies indicate that the majority of copper pollution comes from nonpoint source runoff, and automotive brake pads have been identified as constituting 80% of the copper source. Copper from brake pads emerged as a water quality problem after regulation eliminated the use of asbestos in brake pads, and increases in the use of copper were sought to meet automotive safety standards. To address this problem, industry, government and environmental leaders are developing a voluntary industry program to reduce the use of copper (with specific percentage reduction goals), and are proposing a research program to develop a methodology to fully evaluate the potential impacts of copper and other ingredients that are proposed for use in brake pads.