Order Code RL30760
CRS Report for Congress
Received through the CRS Web
Environmental Protection: New Approaches
December 11, 2000
John E. Blodgett
Deputy Assistant Director
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress
Environmental Protection: New Approaches
In recent years, the interest in alternatives to the nation’s “command-andcontrol” approach to environmental protection has heightened. Driving this interest
are concerns that the current approach is inefficient and excessively costly, and that
it is ineffective in addressing certain problems such as nonpoint source pollution and
global climate change. Several blue-ribbon panels have issued reports on
environmental protection needs for the next century, including one headed by former
two-time Administrator of the Environmental Protection Agency, William D.
Ruckelshaus – The Environmental Protection System in Transition: Toward a More
Desirable Future (1998) – and one by the National Academy of Public Administration
– environment.com: Transforming Environmental Protection for the 21st Century
Alternative environmental protection approaches range from proposals that
would replace the current system to ones that would supplement it. Elements of the
proposals include enhanced information processes, greater reliance on market
mechanisms, devolution of federal responsibilities to state and local decisionmakers,
and substitution of private markets for public actions. The proposals for the most part
represent a mix of techniques, and few are really new. Most of the ideas have been
developed and promoted for some time; many have been incorporated to some degree
in existing programs.
This report summarizes briefly a number of “new approaches,” grouped under
the following categories:
Information: Approaches to improve the quantity and quality of
information to enhance the knowledge base underlying environmental decisions (e.g., risk assessment, cost-benefit analysis).
Public Sector Processes: Approaches to restructure governmental
processes for making environmental decisions (e.g., devolution).
Incentives: Approaches that emphasize incentives as opposed to
regulatory or financial penalties for achieving environmental ends.
Market Mechanisms: Approaches that rely on markets and
common law for environmental decisions to the extent possible.
Management Principles. Approaches to inculcate environmental
values in public or private managerial decisions (e.g., sustainability).
Each approach seems to have some useful applications. Each has some
disciplinary, ideological, or institutional proponent; but none commands the multistakeholder commitment necessary for truly transforming environmental programs.
There may be consensus that environmental protection programs could and should be
improved, but beyond modest iterative steps, there is as yet no consensus on what that
would entail nor on how to achieve those steps. Critical to this lack of consensus is
an apparent split in proponents’ goals – those most focused on improving the
efficiency of the current process, versus those most focused on finding new ways to
address so-far intractable environmental problems such as global climate change.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environmental Management: A Portfolio of “New” Tools . . . . . . . . . . . . .
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Public Sector Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selecting and Implementing New Approaches . . . . . . . . . . . . . . . . . . . . . .
Selected New Approaches to Environmental Protection . . . . . . . . . . . . . . . . . . . 9
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
#“Sound Science” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
#Risk Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
#Cost-Benefit Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
#Informing Public Choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Public Sector Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
#Environmental Federalism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
#Beyond Compliance: Incentives for Environmental Performance . . 23
Market Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
#Pollution Trading and Pollution Taxes . . . . . . . . . . . . . . . . . . . . . . 26
#Private Markets and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . 28
Management Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
#Sustainability – Sustainable Development . . . . . . . . . . . . . . . . . . . 32
#Precautionary Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
#Ecosystem Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
#Good Management Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
#Pollution Prevention / Materials Management . . . . . . . . . . . . . . . . 42
#Environmental Management Systems and Audits . . . . . . . . . . . . . . 44
Appendix A: Selected Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Environmental Protection: New Approaches
Since the early 1970s, as U.S. environmental policy burgeoned, a key debate has
centered on the proper approach for federal environmental protection programs. The
dominant approach of choice has been a regulatory one – often labeled “command and
control” 2 – in which government decisionmakers set standards or specify particular
actions required of potential or actual polluters. However, concerns about economic
inefficiency, the difficulty of addressing certain problems such as nonpoint source
pollution, and other perceived shortcomings of the regulatory approach have from the
beginning stimulated interest in alternative environmental protection approaches that
would complement, supplement, or even replace the regulatory regime.
In recent years, the interest in alternatives has taken on a new intensity. Several
reasons explain this interest, including: First, while the regulatory approach has been
quite successful in reducing pollution originating from large point sources – such as
manufacturing facilities and sewage outfalls – as well as pollution arising from
products with relatively few manufacturers – such as automobiles and pesticides – it
has not been so successful in addressing “nonpoint” sources of pollution, such as
agricultural and urban runoff, nor small “dispersed” sources, from domestic fireplaces
to small businesses. Second, economic and other analyses have suggested that,
compared to regulation, various alternative approaches may be more economically
efficient and may encourage technological developments to reduce pollution, among
other advantages. Third, the federal “command and control” approach troubles those
concerned about the overall size and power of the federal government. Fourth, some
argue that the regulatory approach has become captured by one or another set of
stakeholders. Some environmentalists believe that those being regulated strongly
influence the process, to the detriment of the environment, while others perceive
regulators as overly responsive to environmentalists. Additionally, the advent of a new
millennium has seemed, at least to some, a propitious symbolic opportunity for
exploring alternatives. (For selected initiatives and publications relating to the future
of environmental protection, see Appendix A.)
Prepared by John E. Blodgett, Deputy Assistant Director, Resources, Science, and Industry
Division, Congressional Research Service.
For an introduction to the early development of environmental protection programs, see
Frank P. Grad, et al., Environmental Control: Priorities, Policies, and the Law (New York:
Columbia University Press, 1971), especially pp. 47-183. For an assessment of why market
mechanisms were not more readily adopted during that early development, see Steven Kelman,
What Price Incentives? Economists and the Environment (Boston: Auburn House Publishing
Numerous alternative environmental protection approaches have been proposed.
They range from proposals that would radically reshape the environmental protection
approach in the nation, to proposals that would fine-tune existing programs.
Metaphorically, some proposals represent new tool boxes for addressing
environmental problems, others represent individual new tools. Generally, they are
not exclusive; that is, any environmental protection program would likely draw on a
mix of the tools.
Moreover, their “newness” lies more in application than
conception: most of these ideas have been developed and promoted for some time;
many have been incorporated to some degree in existing programs.
Environmental Management: A Portfolio of “New” Tools
This report summarizes briefly a number of “new approaches,” grouped under
the following categories:
Information: Approaches to improve the quantity and quality of
information and to organize it effectively so as to enhance the
knowledge base underlying decisions affecting the environment
Public Sector Processes: Approaches to revise or create new
governmental structures or processes for making environmental
Incentives: Approaches that emphasize incentives as opposed to
regulatory or financial penalties for achieving environmental ends
Market Mechanisms: Approaches that rely on markets and
common law for environmental decisions to the extent possible
Management Principles: Approaches to inculcate environmental
values in public and private managerial decisions
These categories are not necessarily mutually exclusive. Not only may the
approaches overlap, but also the various “tools” may serve more than one approach.
As will become apparent, the idea of a “new approach” to environmental management
in reality consists of a mix of ideas and proposals.
Information. This group of approaches centers on enhancing the information
available to decisionmakers, including administrators, legislators, environmental
managers, polluters, and the public. Legislatively establishing information generating
processes is not novel, of course. It is the essence of the National Environmental
Policy Act of 1969 (NEPA, P.L. 91-190), specifically the “environmental impact
statements” (EIS) provision of section 102, which requires a study of environmental
effects of alternative approaches to federal actions. Initially, there was a question of
whether the EIS requirement of NEPA applied to environmental regulatory decisions;
in the end, only selected environmental regulatory decisions were made subject to the
EIS requirement. Proposals for cost-benefit analyses, risk assessments, and the use
of “sound science” represent continuing pressure for generating and/or arranging
information to improve decisionmaking. Within this group of information tools are
a number that proponents believe will benefit decisionmaking in various ways.
In general – “Sound Science”3
Information focused on improving regulatory decisions, in particular
risk analysis and cost-benefit analysis
Information focused on improving planner/program manager
decisions, in particular “green accounting” and materials
Information focused on improving consumer/voter decisions, in
particular the Toxic Release Inventory and energy efficiency ratings
Often these proposals to enhance information for environmental decisions are
proffered with the stated goal of improving regulatory decisions; certainly this has
been the primary impetus for developing cost-benefit analysis and risk assessment, and
for much of the concern about “sound science.” Some alternatives to regulation may
reduce the need for certain kinds of information. For example, a pollution tax may
generate a price signal that leads to pollution controls without the government
needing information on the specific controls used, as might be required by regulation.
On the other hand, the alternative may require its own enhanced information base;
thus, implementing a pollution tax could depend on developing particular information
in order to set such a tax at an appropriate level. (It should be noted that reliable
information may be costly to collect, maintain, and interpret and may raise issues of
Public Sector Processes. This second set of approaches proposes to
improve environmental decisions by restructuring the processes by which those
decisions are made in the public sector. Proposals include:
Environmental Federalism – state delegation –defederalism/
devolution – “Civic Environmentalism”
Creation of an independent cost-benefit/risk assessment review body
Establishment of a “Regulatory Budget”
These proposals are designed primarily to reform and improve the regulatory process,
not to replace it.
Incentives. A third set of approaches seeks to shift the emphasis from a
government regulatory role with its enforcement and compliance emphasis to a
supportive role based on incentives to encourage environmentally beneficial actions.
Grants, loans, tax breaks
Regulatory waivers, “Beyond compliance”
If the role of government in a regulatory approach is that of the “stick,” then for these
alternatives the role of government is to offer “carrots.” Inducements can include the
provision of information; technical and financial support; or regulatory relief for
Items in bold are discussed at length in the body of the report.
voluntary compliance, especially if it goes beyond what might be required. Typically,
incentive approaches leave the potential or actual polluter to respond as he or she
chooses – that is, to decide whether to seek out and use assistance, or to decide
whether the amount of reimbursement for costs of pollution-reducing actions is worth
it. The conduct of research and development, to develop information and techniques,
might be seen as an indispensable antecedent to governmental incentive programs.
Market Mechanisms. This set of approaches shifts as much as possible of the
decisionmaking on environmental protection away from the government to the private
Market mechanisms by which environmental standards can be met,
including trading, banking, and offsetting of pollution rights; and
the “clean development mechanism,” to allow international trading
Market signals, such as through pollution taxes and liability risks
under tort law (plus information such as from the Toxic Release
Private markets/private property, including common law remedies,
trespass protections, and “free market environmentalism”
What distinguishes all of these alternatives is the reliance on marketplace-type
processes to affect decisions with respect to their environmental implications. A
potential or actual polluter can decide what action is best, given his or her
circumstances, based on emission allowances (e.g., in a banking/trading program);
cost signals (e.g., from a pollution tax); liability from imposed risks (e.g., from harm
resulting from waste disposal practices); or liability from violating private property
rights (e.g., when pollution crosses property lines). For these alternatives, the role of
government lies primarily in setting the rules and boundaries on the market, and/or
establishing the courts and rules of evidence for determining legal redress. In contrast
to the regulatory approach, the government does relatively less specifying of
environmental requirements that designated sources would have to meet, although a
standards-setting role may be maintained.
Management Principles. A fifth group of approaches relies on defining
management processes or values that proponents believe would result in good
Environmental Management Systems
“Good Management Practices”
Where the privatizing approach would affect decisions concerning the environment
by modifying market signals, the management process approach proposes to affect
decisions by promoting and reinforcing environmentally oriented values. Generally,
“good management” approaches have entailed moral suasion, sometimes backed with
incentives; they are often seen as a “voluntary” alternative to regulatory mandates.
A key issue is who can and should define such standards; typical options include
governmental bodies (international, federal, state, local), professional societies, and
private sector consortia. Experience suggests that translating general values of
environmental protection into practical decisionmaking is not always easy, however.
In a regulatory setting, incentives may be contingent on complying with the standards;
in other contexts, compliance may be largely or entirely voluntary.
Selecting and Implementing New Approaches
What is striking about these proposals for complementing, supplementing, or
replacing environmental regulation is how few of them are really new, and how even
fewer represent radically new approaches. In part, this may simply reflect the truth
that there is nothing new under the sun; but even more, it may reflect the fact the
environmental protection system that has grown up over the past 40 years in the U.S.,
while dominated by a federal regulatory approach, consists of complex, multifaceted,
and interlocking institutions, laws, regulations, and programs involving all levels of
government. Some aspects of virtually every approach proposed have found at least
some niche for trial, and some are, in fact, widely accepted as practical for particular
applications. (For example, the market approach of the acid rain program under the
Clean Air Act is widely viewed as greatly successful and as a potential model for
additional programs; but it is not widely viewed as a model for comprehensively
replacing the existing environmental regulatory regimen. Likewise, the Toxic Release
Inventory is widely viewed as a greatly successful informational mechanism, but
whether it should be expanded is highly contentious.)
For those proposing different environmental protection approaches, the quest for
alternatives is often driven by a conviction that the existing system is piecemeal,
unduly complex, inefficient, and too costly. Implicitly, this view suggests that a new
approach would be simpler, neater, more efficient, and hence less costly – and surely
more (cost-)effective. This search for more efficient, less costly approaches has
focused on market alternatives because traditional economic analysis suggests that
market-based alternatives are usually more efficient. However, empirically, the
relative efficiencies may not always be clear-cut.4 Moreover, while the ideas for “new
alternatives” to regulation have attracted much attention and considerable theoretical
analysis, assessments of the actual costs to develop and implement them are often
lacking. Even where alternatives may in the long run save money – for example in
private sector compliance costs – they may require substantial up-front investments,
often by government at some level. 5
See Robert W. Hahn, “The Impact of Economics on Environmental Policy,” Journal of
Environmental Economics and Management, 39 (May 2000), 375-399.
See, for example, the conclusion of Rena I. Steinzor, “The Corruption of Civic
Environmentalism,” Environmental Law Reporter, V. XXX, no. 10 (Oct. 2000), 10921: “...
there can be little doubt that civic environmentalism will be a more expensive alternative [than
the regulatory system], if it is carried out in accordance with the civic environmentalists’
stated goals. Gathering and organizing the information necessary to impose effective
One recent effort to examine program and policy alternatives was the Enterprise
for the Environment (E4E) project, headed by former EPA Administrator William
Ruckelshaus. Basically, the E4E project concluded that there was no single new
environmental protection approach; rather, the participants concluded that the
“existing system must be improved” through an iterative, “deliberate, step-by-step
process” that involves better information, flexibility, best-available scientific and
economic information, and a “broad set of policy tools.”6 As Ruckelshaus said in his
None of us were so certain that we knew how to construct the new system that we
were willing to recommend its immediate adoption; we recognized that a lot of care
and adaptive management will be needed along the way. Thus we were led to
recommend a “stepping-stone” approach, one that allows us to move carefully and
systematically from where we are today to where we want to go.7
Further impetus for the quest for a new approach arises from the recognition that
the present system seems ill-equipped to deal with some important environmental
problems – some of long standing concern, like nonpoint source pollution, others
more newly recognized, such as global climate change. These problems have proved
extremely difficult, especially where they involve individual behaviors on the one
hand, and where they involve global actions on the other. The E4E project concluded
that tackling these issues was beyond its capabilities.8
A second major effort to examine program and policy alternatives was a series
of studies by the National Academy of Public Administration (NAPA), culminating
in a report environment.gov: Transforming Envirionmental Protection for the 21st
Century.9 In many respects, the NAPA report comes to similar conclusions as the
E4E project (not so surprisingly, as Ruckelshaus was on the Panel that prepared it).
The report begins by defining three high-priority environmental protection problems
for which the existing regulatory system is proving inadequate and for which the
report recommends innovative, alternative approaches. These three problems are:
performance-based standards will be very expensive, as will the financial support that should
be provided to ‘level the playing field’ for local groups.
“This then brings us to what is, in many ways, the ultimate dilemma. As long as we are
in the throes of denying that reinvention will cost money, we will not end up with reinvention
The Environmental Protection System in Transition: Toward a More Desirable Future
(Washington, D.C.: Center for Strategic and International Studies. 1998), pp. 3, 5, 4.
Ibid., p. viii.
Ibid. In the end, virtually all the environmental stakeholders originally participating in the
E4E process dropped out. One of the main reasons was that they felt the process was failing
to address continuing and emerging environmental problems.
Published by the National Academy of Public Administration, 2000. Two earlier reports by
the Academy were Setting Priorities, Getting Results: A New Direction for EPA, and
Resolving the Paradow of Environmental Protection: An Agenda for Congress, EPA and the
States. These reports were funded by Congress through appropriations to EPA.
nutrient pollution of waters, mainly from nonpoint sources;
dispersed sources of ground-level ozone and smog; and
global climate change.
The NAPA report directly discusses the need for statutory changes, particularly to
allow innovation, to increase flexibility among media-focused programs, and to
develop better information on environmental quality.
The report analyzes the successes and failures of efforts to make environmental
protection programs more efficient and effective.10 It assessed the respective roles
of all levels of government, business and industry, the public, and the Congress. The
report concludes that the nation will continue to need a strong national environmental
regulatory agency; that the agency needs both to adopt innovations to achieve more
efficient environmental protection and to take a leadership role in developing
alternatives (especially market mechanisms) and in mobilizing public and
congressional support for them; and that the federal government needs to be a leader
in providing credible, authoritative environmental information.
While E4E and the NAPA Report focus on environmental protection, the
development of the concept “sustainability,” originating in global concerns, subsumes
environmental protection issues within a broader framework of long-term resource
management. The term “sustainable development” emerged in its current form in
1987 in the final report of the United Nations World Commission on Environment and
Development (WCED).11 The definition most widely quoted in the WCED report is:
“Development that meets the needs of the present without compromising the ability
of future generations to meet their own needs.” The importance of the concept is that
traditional economic analysis often treats growth in economic activity without taking
into account possible deterioration of the resource base; sustainability analysis focuses
on the ability of resources to sustain economic activity over the long-run. In this
context, pollution becomes viewed as a degrader of the resource base.
Finally, concerns about the federal role itself can drive the search for a new
environmental protection approach. For some, the federal government is simply too
big and too powerful. They would cut down the federal environmental role, typically
relying on state programs, the marketplace, and/or tort and common law to resolve
environmental problems. For some others, the federal regulatory process has been
captured by one or another set of stakeholders – for some, the polluters, for others,
environmentalists. Their response often involves radical restructuring not just of
environmental protection programs, but of all governing institutions.
The existing system is embedded in law, institutions, and expectations. Its inertia
must be overcome to accomplish change, modification, or even improvement. Overall,
while each “approach” could contribute to protecting the environment, none seems
to command an essential breadth of political and technical respect to be seen as a
NAPA commissioned 17 research papers relating to environmental protection innovation:
see Appendix A of environment.com.
World Commission on Environment and Development, Our Common Future (Oxford:
Oxford University Press, 1987).
single viable “new direction” for the 21st Century. Each “approach” seems to have
some useful application. Each has some disciplinary, ideological, or institutional
proponent; indeed, many of the approaches have become virtually inseparable from
the institutions and/or group of individuals promoting them.
While many have contributed to the conceptual development of alternative
approaches, the largest share has come from the work of academics and think tanks.
Institutions involved in international development issues have also contributed, such
as the Organization for Economic Co-operation and Development (OECD). Business
and industry interests have more commonly reacted to regulatory issues than taken
the lead in conceptualizing new approaches.12 Environmental and health public
interest groups have more commonly focused on the need to address environmental
problems than on the development of new approaches. The White House’s Council
on Environmental Quality – a dynamic force in environmental policy development in
the early 1970s – has been allowed to atrophy. And the Environmental Protection
Agency – whose Administrator the NAPA report suggests might spearhead the
transformation of environmental policy in the 21st Century – has tended to focus on
finetuning the existing system. Indeed, it was Congress through the appropriations
process that directed the Agency to contract with NAPA to prepare the analyses that
led to environment.com: Transforming Environmental Protection for the 21st
What it would take to prompt additional innovation is the question: it could be
a crisis – perhaps a critical environmental threat for which regulation seems powerless
or some fundamental environmental regulatory mistake that threatens economic
disaster. Alternatively, it might be, as the NAPA report urges, a sustained initiative
by the future head of EPA, the new President, and/or the Congress. Absent a crisis
or this kind of initiative, it is hard to see how the regulatory “approach” will be
supplanted generally until a more comprehensive, interdisciplinary, multi-stakeholder
commitment to some alternative emerges. That, indeed, would seem to be the final
lesson of the E4E and the NAPA projects: there may be consensus that environmental
protection programs could and should be improved, but beyond modest iterative
steps, there is as yet no consensus on what that would entail nor on how to achieve
Building toward that consensus would appear to be the next necessary step if
environmental policy is to be transformed. Inhibiting the formation of consensus is
a split in the way proponents tend to see new approaches: for some they are primarily
ways to solve the inefficiencies of the existing regulatory problem; for others they are
primarily ways to address unresolved or new environmental problems. Those focused
on inefficiency fear that expanding environmental protections to new problems would
make the burdens of compliance worse; while those focused on environmental insults
fear that efforts to reduce inefficiencies would be accomplished by retreating from
environmental protections and ignoring new problems. These divergent motives
See, however, the works of Stephan Schmidheiny, e.g., Financing Change: The Financial
Community, Eco-efficiency, and Sustainable Development (Cambridge, Mass.: MIT Press,
inhibit joint recognition of opportunities for new approaches to contribute both to
efficiency and to effectiveness.
Selected New Approaches to Environmental Protection
The remainder of this report consists of brief introductions to selected new
approaches to environmental protection. Each identifies a tool, or set of related tools,
describes its basic characteristics, notes “pros” and “cons” associated with the tool,
provides some background, summarizes current developments, and concludes with
a list of readings for further research. These introductions are necessarily brief and
incomplete; their purpose is to expose the reader to these alternatives and to provide
sources through which the reader can pursue ideas that he or she finds promising.
Making environmental decisions requires an understanding of the problem at
hand and the ability to predict outcomes from alternative actions. Common criticisms
of the existing regulatory approach to environmental management are that
decisionmakers may lack sufficient, reliable information to make a sound decision;
that they may rely on invalid data or findings or selectively choose only data
supporting preferred outcomes (i.e., “junk science”); or that they may rely overmuch
on nontechnical determinants at the expense of sound scientific information. A
presumption that sufficient, robust information will be brought to bear objectively on
environmental decisions underlies all conceptions of an improved or alternative
approach. What this presumption means in general is often subsumed in calls for
“sound science”; particular applications include risk analysis and cost-benefit analysis,
among other methods of generating and organizing information.
#“Sound Science”.13 The idea of “sound science” encompasses at least two
parts of the policy decisionmaking process. The first part is establishing the technical
knowledge underlying the issue and assessing possible solutions. This involves many
activities, including development, validation, and application of research methods;
environmental monitoring; epidemiological studies; data collection, storage, and
evaluation; laboratory experiments; integration of disciplinary knowledge; and
assessment of the robustness of the data, experimental results, and interpretive
The second part of science-in-policy is applying the scientific understanding to
the policy issue. At this intersection of science and policy, of scientists and
decisionmakers, the question about the science moves from “What do we know?” to
“What do these findings mean (in terms of the policy options faced by the
decisionmaker)?” To illustrate, science can address the question, “At a 95%
confidence level, what is the no-effect level of arsenic in drinking water?”; the policy
question might be, “What level of exposure to arsenic in drinking water will we
consider safe?” Or, scientifically, “What do we know about the effects of emissions
Prepared by Michael Simpson, Specialist in Life Sciences, and John E. Blodgett, Deputy
Assistant Director, Resources, Science, and Industry Division.
of mercury from fossil fuel combustion?”, where the policy question might be,
“Should emissions of mercury be regulated?” While sound science may necessarily
underlie a good policy decision, it is not sufficient: statutory and administrative
requirements and social and cultural values are also determinative.
Validating and Applying Science. Because policy issues by definition involve
conflicting viewpoints, both the validity of the science base as well as its interpretation
may be challenged. Scientists have developed processes for ensuring robust results
– that is, scientific information that is widely perceived as reliable. Crucial
components of these processes include publication of both data and results so
experiments can be independently repeated to verify results, and peer review through
which colleagues assess and, at times, challenge findings and interpretations. Science
is not static: new observations and understandings may raise questions about the
findings of earlier studies, and peer review and the self-correcting nature of science
help ensure that scientific knowledge is updated to reflect the most current and
widely-accepted thinking in the scientific community. Thus scientific knowledge is
always subject to some degree of uncertainty, especially in frontier areas such as
ecology and the environment. Even widely agreed-upon scientific findings may be
accompanied by “loose ends”: incomplete data as well as some data that do not fit,
uncertainties, probabilistic findings, ranges in results, incomplete studies, and not
infrequently, some contradictory findings and even an occasional reputable scientist
who contends in favor of an alternative conclusion.
The policymaker – usually not a scientist – must meld the technical information
with the other factors involved in his or her decision. Even if the science indicates a
problem, it may not indicate a solution. The EPA Administrator’s 1998 decision to
set a very fine particulate matter (PM2.5) National Ambient Air Quality Standard is
illustrative: while 19 out of 21 members of the Clean Air Scientific Advisory
Committee recommended that EPA regulate PM2.5, the body fragmented on what
level would be appropriate for the standard. Thus, in setting a standard, the
Administrator must not only make decisions about the “loose ends” of the scientific
findings, but also must incorporate appropriate policy determinants – from the
statutory guidelines to social ethos. Claims of “junk science” can stem both from
disagreements concerning a decisionmaker’s handling of uncertainties and any
persisting scientific “loose ends” and from disagreements about the need for and
effectiveness of alternative solutions.
Uncertainty. Perhaps the single biggest challenge to the decisionmaker is
deciding when the robustness of the science outweighs remaining uncertainties. The
question of when enough reliable information is available to act is, in the end, a policy
call. As an emerging arena of scientific attention, environmental issues have regularly
been bedeviled by that question: notable examples include DDT and its effects on
birds, PCBs and their persistence in the environment, emissions causing acid rain, and
the hypothesis that chlorofluorocarbons deteriorate stratospheric ozone; and it
continues at the center of the climate change debate.
For scientists, uncertainty can be an opportunity for further research; for
policymakers, uncertainty is a void that makes assessing options more difficult. But
more research takes time – and during that time further damages may occur. This
raises the policy question, In the face of potential but uncertain hazards, should one
defer action until better information is at hand, or should one act quickly to forestall
possible future damages? In part, the answer depends on the risks and costs involved,
but there are other considerations, as well. A key concern is who will generate the
better information – Should that be a government responsibility, or should it be the
responsibility of the producer of the hazard, if identifiable? One management principle
for dealing with uncertainty is the “Precautionary Principle,” discussed below.
Federal Procedures. Congress and the Administration have developed a number
of procedures and processes to ensure that the scientific underpinnings of
environmental, health, and safety decisions are robust, and that policy decisions are
sound. These include:
creation of scientific bodies to advise policymakers: governmentwide ones include the federally-chartered National Academy of
Sciences – National Research Council and the Office of Science and
Technology Policy in the Executive Office of the President;
individual agencies have their own science advisory bodies, for
example the Science Advisory Board appointed by the Administrator
of EPA, as well as specialized ones, such as the Clean Air Scientific
Advisory Committee in EPA mandated by the Clean Air Act
employment of scientific research expertise within agencies
(including the Department of Agriculture, Food and Drug
Administration, and Environmental Protection Agency), or in parallel
to the administrative body (Occupational Safety and Health
Administration – National Institute for Occupational Safety and
statutory and/or administrative requirements for incorporating
science in policymaking decisions, for example the criteria document
review process spelled out in the Clean Air Act, plus a statutory
requirement that scientific data generated through federal research
dollars be publicly available14; as well as requirements in the
Administrative Procedure Act (5 U.S.C. 551 et seq.) for public
review of administrative decisions (for air quality regulations, these
are replaced by special administrative review procedures in the Clean
Air Act [42 U.S.C. 7607(d)]); Executive Order 12866, Regulatory
Planning and Review, requires that “Each agency shall base its
[regulatory] decisions on the best reasonably obtainable scientific,
technical, economic, and other information concerning the need for,
and consequences of, the intended regulation” (Sec. 1(b)(7)).
Both improvements to environmental regulatory programs and the development
of alternative environmental management techniques presume continued enhancement
of the science underpinning decisions. How to ensure sound science has attracted
congressional attention, notably in the context of various controversial EPA
regulatory actions, and most particularly with respect to oversight of EPA’s 1998
Generated by a controversy over the availability for review of data used in assessing health
risks from air pollution.
ozone and fine particulates National Ambient Air Quality Standards.15 Most
proposals to reform and improve EPA’s regulations would mandate cost-benefit
analysis and/or risk assessment procedures – which themselves depend on good
scientific information – to enhance the information base for decisions. Some
regulatory reform bills also specifically provide for new mechanisms to enhance the
science underlying regulatory decisionmaking – e.g., in the 106th Congress, H.R. 574,
introduced by Rep. Pombo, would require peer review of scientific data used in
support of federal regulations through establishment of a list of impartial peer
reviewers from which agency heads would select reviewers for comment on proposed
regulations; H.R.5195, introduced by Rep. Ehlers, would provide for the
establishment of a position of Deputy Administrator for Science and Technology of
the Environmental Protection Agency.
For additional reading, see:
John D. Graham, ed., Harnessing Science for Environmental Regulation (New
York: Praeger, 1991)
Mark R. Powell, Science at EPA: Information in the Regulatory Process,
(Washington, D.C.: Resources for the Future, 1999)
National Research Council, Committee on Research and Peer Review in EPA,
Strengthening Science at the U.S. Environmental Protection Agency (Washington,
D.C.: National Academy Press, 2000)
National Research Council, Linking Science and Technology to Society’s
Environmental Goals (Washington, D.C.: National Academy Press, 1996).
#Risk Analysis.16 Risk analysis is a tool for setting priorities among programs
and evaluating management options. In the context of environmental issues, “risk”
is defined as the probability of occurrence of a particular adverse effect on human
health or the environment as a result of exposure to a “hazard,” which may be a
chemical, some other technology, or a natural hazard, such as flooding. “Risk
assessment” refers to a formal or informal procedure producing a quantitative
estimate of environmental risk. For example, risk assessment is often used to estimate
the expected rate of illness or death in a population exposed to a hazardous chemical.
“Risk analysis” is used more broadly to include quantitative and qualitative evaluation
of all relevant attributes of environmental hazards, risks, adverse effects, events and
conditions that lead to or modify adverse effects, and populations or environments
that influence or experience adverse effects. Comparative (or relative) risk analysis
and cost-benefit analysis are aids to risk management, the process of deciding what
should be done about hazards, for example, to reduce risk.
E.g., U.S. Congress, House, Committee on Science, Subcommittee on Energy and
Environment, The Science behind the Environmental Protection Agency’s (EPA’s) Proposed
Revisions to the National Ambient Air Quality Standards for Ozone and Particulate Matter,
Parts I-III, Hearings [No. 21] (105th Cong., 1st sess.) (Washington, D.C.: U.S. Govt. Print.
Off., 1997), 659 pp.
Prepared by (name redacted), Specialist in Environmental Policy, Resources, Science,
and Industry Division, Congressional Research Service.
Thus, risk analysis is a tool for risk management, and Environmental Protection
Agency risk managers increasingly have relied on it, to the extent permitted by law.
In setting priorities across or within program offices, EPA sometimes has compared
risks or risk reduction potential of different regulatory targets. In developing
regulations, EPA has used the results of risk analysis to set standards, to compare the
effectiveness of various control measures, and to evaluate risks relative to costs.
Risks avoided (i.e., the difference between risks before and risks after a regulation
is implemented) are the usual measure of benefits for environmental or health and
safety regulations. Reports by the Commission on Risk Assessment and Risk
Management17 and the National Academy of Public Administration18 recommend an
expanded role for risk analysis in risk management.
Benefits and costs of risk analysis. Environmental risk analysis assists
decisionmakers by summarizing available data about hazards and potential effects of
exposure. At its best, when reliable data are available, scientific understanding is
relatively advanced, methods are reliable (i.e., when the underlying science is sound),
and interested stakeholders are involved in the process, risk analysis can facilitate
decisions. Quantified, robust information about alternative regulatory strategies and
their potential consequences – implementation and compliance costs, risks avoided,
and other benefits – help policymakers and the general public set priorities, allocate
resources, assess options, and evaluate existing federal laws and programs. Also, it
is a critical component of cost-benefit analysis.
Risk assessment is not always at its best, however: the scientific understanding
of a risk may be undeveloped, data incomplete, and experiments unfruitful;
practitioners and stakeholders may disagree on methods and interpretations. Ensuring
that the underlying science for risk assessment is sound requires resources – time,
effort, and money – to collect data, conduct experiments, run computer models,
analyze findings, and write reports. Agency resources expended on analysis may not
be available for enforcement, program evaluation, or research. Some costs, for
example, collection of data, may be shifted to those regulated; for example, the Clean
Air Act requires large emitters of certain air pollutants to monitor emissions. Another
concern has been that the time required to conduct risk analysis may make difficult
the meeting of deadlines for implementation of provisions of major environmental
statutes. Finally, quantitative risk assessment, by focusing on the data that do exist
and on risks that are best understood, may thereby ignore or insufficiently account for
other risk parameters. For example, many environmentalists, among others, have long
been concerned that risk assessment often over-weighs cancer endpoints compared
to other health risks; and it often over-weighs health endpoints generally compared
to ecological risks.
Executive and legislative interest in risk analysis. The potential value of risk
assessment has both stimulated research in its development and made its use a focus
The Presidential/Congressional Commission on Risk Assessment and Risk Management,
Framework for Environmental Health Risk Management (Vol. 1) and Risk Assessment and
Risk Management in Regulatory Decision-Making (Vol. 2) (Washington, D.C.: 1997).
Setting Priorities, Getting Results: A New Direction for the Environmental Protection
Agency (Washington, D.C.: National Academy of Public Administration, 1995).
of policy debates. Presidents have attempted to encourage more consistent use of risk
and economic analysis by federal agencies through executive orders. Most recently,
President Clinton’s Executive Order 12866 requires EPA to analyze risks, costs, and
benefits for “significant” rules, including all proposed and final rules expected to cost
at least $100 million in a year.
Congress also has issued general mandates to federal agencies to encourage
greater use of risk and cost-benefit analysis. The Unfunded Mandates Reform Act
(P.L. 104-4), Title II, requires all federal agencies to quantitatively assess benefits,
including the effect of a federal mandate on health, safety, and the natural
environment, and to compare benefits to costs for all rules with an expected cost of
$100 million or more in a year. However, of 110 economically significant rules
promulgated in the first 2 years since enactment, 78 did not require assessments due
to specific exemptions allowed by the Act, according to the U. S. General Accounting
The 104th Congress added mandates for considering risks to two environmental
statutes authorizing EPA’s regulatory activities, the Federal Insecticide, Fungicide,
and Rodenticide Act and the Safe Drinking Water Act. The 105th and 106th
Congresses have continued working on legislation that would foster and in some cases
require more rigorous use of risk assessment by regulatory agencies. For example,
S. 746 (Levin-Thompson), the Regulatory Improvement Act of 1999 [106th Congress]
would codify the requirements for cost-benefit analysis and risk assessment for major
rules, and executive oversight of the rulemaking process. Among its major provisions,
the bill would have required regulatory agencies to prepare a risk assessment if rule
involves a risk to health, safety, or the environment; provide for independent peer
review of risk assessments and cost-benefit analyses for rules costing $500 million;
and include cost-benefit analysis, cost-benefit determinants, and risk assessment in the
rulemaking record. The Office of Information and Regulatory Affairs, in consultation
with the Office of Science and Technology Policy, would issue guidelines for risk
For further reading, see:
CRS Report 98-619, Risk Analysis: Background on Environmental Protection
CRS Report 98-618, Environmental Risk Analysis: A Review of Public Policy
CRS Issue Brief 94036, The Role of Risk Analysis and Risk Management in
Environmental Protection (updated regularly)
Robert W. Hahn (ed.), Risks, Costs, and Lives Saved: Getting Better Results
from Regulation (New York: Oxford University Press, 1996)
National Research Council, Committee on Risk Characterization, Understanding
Risk: Informing Decisions in a Democratic Society (Washington, D.C.: National
Academy of Sciences, 1996)
National Research Council, Committee on Risk Assessment of Hazardous Air
Pollutants, Science and Judgment in Risk Assessment (Washington, D.C.: National
Academy of Sciences, 1994).
#Cost-Benefit Analysis.19 Cost-benefit analysis is one way to organize,
evaluate, and present information about the actions that governments take to improve
public well-being. With respect to environmental and health issues, risk assessment,
which presents information in such terms as morbidity and mortality for humans or
animals, is a prerequisite for cost-benefit analysis, which places monetary values on
attributes of human well-being.20 And like risk assessment, its use can be
complicated, expensive, and controversial.
As a set of procedures to measure the merit of some public sector actions in
dollar terms, cost-benefit analysis is a counterpart to private-sector profitability
accounting. The difference is that most public actions to improve public well-being
do not have established private markets which generate price information on which
to judge their value or benefits. To compare the public benefit of such actions to their
costs, benefits (and sometimes costs) are indirectly estimated in dollar terms. The
objective is to determine the alternative for public action that produces the largest net
gain to the society. In this case, gain is not in terms of private sector profit, but rather
as an estimated surplus of monetized benefits over estimated costs. Based on this
criterion, cost-benefit analysis attempts to identify the most economically efficient way
of meeting a public objective. Other goals of public management are not focused on
in this process, but in some cases they may be subsumed in the analysis.
The debate over cost-benefit analysis focuses on its possible value in reducing
the perceived economic burden and complexity of traditional regulatory approaches.
Greater use of cost-benefit analysis is part of the broader regulatory reform effort
calling for increased flexibility in regulatory approaches and increased accountability
and scrutiny of regulatory decisions.
Complexities. Formal cost-benefit analysis often demands costly and sometimes
disputed expertise and data. Done carefully, it provides an array of information that
can inform the decision process. Done poorly or taken out of context, the results can
create a false sense of clarity and precision. Methods, data, expense, and prospects
for court challenges on use and abuse are concerns driving debate on how greater use
of this tool may figure in regulatory reform.
The tensions in regulatory reform and the role of cost-benefit analysis touch on
many complex issues. These include: scientific capabilities in measuring and
characterizing long-term and often uncertain health, safety, and environmental
phenomena; agency capacity for collecting and using data; methods to characterize
positive and negative effects of regulations; equity in protecting the public against
health, safety, and environmental risks; burdens on lower levels of government and
the private sector in achieving public goals; and fundamental questions of regulatory
design such as flexibility and location of implementing and decisionmaking authority.
Prepared by (namer edacted),Assistant Director, Resources, Science and Industry Division.
Risk assessors tend to be drawn from various health and environmental disciplines,
including epidemiology, toxicology, statistics, public health, and others; cost-benefit analysis
is primarily the domain of economics.
The role and application of cost-benefit analysis by agencies are important
focuses of the evolving process of regulatory reform. Disagreements typically revolve
around the practicality and usefulness of strict application of the tool. The conflicts
involve more questions of “how much” and “to what end” than “whether,” since these
techniques are already used by federal agencies to differing degrees in assessing many
of their regulatory activities.
Application of cost-benefit analysis: support and criticism. Cost-benefit can
be applied to public actions using varying degrees of formality (how far analysts go
in trying to compare monetized benefits with costs). At one level, some believe that
the only regulations that should be maintained or adopted are those that clearly pass
the cost-benefit test – namely, benefits must demonstrably exceed the costs.
Proponents of this position argue that promulgating only those regulations where
benefits outweigh or justify costs (presumably in monetary terms) can help rationalize
the regulatory process and improve priority setting. In this view, such reform would
increase the likelihood that regulations will not place burdens on businesses and
consumers that are out of proportion to gains in health, safety, or environmental
protection. Such a change, it is maintained, could lead to more systematic
consideration of more efficient ways to achieve desirable health, safety, and
environmental protection goals. Excessive regulations would be minimized,
eliminating rules and enforcement where goals are ill defined and measurement of
costs or benefits is uncertain.
Others argue that cost-benefit analysis can be an important and useful exercise
in assessing the impacts of regulatory actions, but the resources demanded for full and
rigorous cost-benefit analysis can be excessively costly and time consuming with the
result that cost-benefit analysis can impede legitimate protection. Proponents of this
position fear that efforts to use cost-benefit comparisons for establishing regulatory
priorities will end up emphasizing only those aspects of health, safety, and
environmental protection which can be easily translated to dollar terms. Such an
outcome would weigh heavily against intangible or nonmonetary aspects of health,
safety, and environmental protection, which is often what these types of regulations
are intended to protect or enhance in the first place. In this view, the effort to make
such comparisons could impede the legitimate government role of protecting and
enhancing public well-being. As a practical matter, expanding the use of cost-benefit
analysis would imply committing additional agency resources in research, monitoring,
Finally, many argue that cost-benefit analysis is an incomplete tool for regulatory
impact analysis, particularly with respect to non-quantitative values, and that related
methods of analysis such as risk assessment and cost-effectiveness are more
appropriate. Proponents of this view argue that no one opposes the use of costbenefit in a quantitative or qualitative sense in assessing regulatory impacts in
instances where it is feasible. However, there is a wide range of opinion regarding
how rigorously the method should be used, given that costs and benefits in many
instances are so difficult or perhaps impossible to measure, even in an approximate
way. Cost-benefit analysis, despite its widespread application, is still a developing art.
Much of the policy dispute is really about the rigorous use of cost-benefit analysis
versus the use of other related methods of regulatory impact assessment, such as the
less rigorous use of cost-benefit (based on a combination of qualitative and
quantitative assessment); risk analysis or risk assessment; and cost-effectiveness.
Executive and legislative interest in cost-benefit analysis. From the beginning
of federal environmental programs, costs imposed on industry and business, state and
local governments, and consumers and taxpayers have generated concern. As a tool
for identifying those costs and comparing them to environmental and health
improvements, cost-benefit analysis has been a subject of research and a focus of
policy debates. In many respects, the development and application of cost-benefit
analysis and of risk assessment have gone hand-in-hand.
President Clinton’s Executive Order 12866, the most recent of several E.O.’s on
analyzing regulatory costs and benefits, sets forth criteria for the application of both
risk assessment and of cost-benefit analysis in preparing major regulations. In meeting
its obligations under this directive, EPA has created an “EPA economy and
environment program” which carries out “research and analyses of the interactions
and relationships between the economy and environmental pollution control as well
as other aspects of environmental economics.” A key task of the office is “developing
and applying improved methods to produce economic benefit information used in
benefit-cost analyses of environmental programs, policies and regulations.”21
Likewise, in the Unfunded Mandates Reform Act (P.L. 104-4), Title II, Congress
requires federal agencies to quantitatively assess benefits, including the effect of a
federal mandate on health, safety, and the natural environment, and to compare
benefits to costs for all rules with an expected cost of $100 million or more in a year.
As noted in the risk assessment section above, recent Congresses have worked on
legislation that would foster and in some cases require more rigorous application of
cost-benefit analysis by regulatory agencies. For example, S. 746 (Levin-Thompson),
the Regulatory Improvement Act of 1999 [106th Congress] would codify the
requirements for cost-benefit analysis and risk assessment for major rules.
For further reading, see the citations under risk assessment, above, especially
Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from
Regulation (Washington, D.C.: The AEI Press, 1966), plus:
Robert W. Hahn, “The Impact of Economics on Environmental Policy,” Journal
of Environmental Economics and Management, 39 (May 2000), 375-399.
John E. Blodgett, Environmental, Health, and Safety Tradeoffs: A Discussion
of Policymaking Opportunities and Constraints, CRS Report RL30043 (1999)
Tammy Croote, Cost-benefit Analysis of EPA Regulations: An Overview, CRS
Report RL30326 (Sept. 16, 1999). 31 p.
Lisa Hinzerling, “The Perils of Precision,” The Environmental Forum
(September/October 1998), 38-43
(namer edacted),Cost-Benefit Analysis: Regulatory Issues, CRS Report 95-760
ENR (Jan. 10, 1997)
See EPA’s webpage for the program [http://126.96.36.199/ee/epa/eed.nsf/pages/aboutee]
and especially the hotlink to Regulatory Economic Analysis at the EPA by Robert Anderson
and Paul Kobrin: [http://188.8.131.52/ee/epalib/riaepa.nsf]
#Informing Public Choices.22
One widely used tool today is making
environmentally-relevant data available to consumers, voters, corporations, and policy
and program administrations so they can make environmentally-informed choices
among competing products or programs. (Conceptually, there is a parallel with
energy or pollution taxes, which convey price signals to consumers, corporate
officials, and others.) Various public laws mandate public dissemination of
information such as the environmental impacts of alternative federal programs,
relative energy efficiency of products, and emissions of pollutants:
The National Environmental Policy Act (P.L. 91-190) requires
U.S. government agencies to include in every recommendation
or report on proposals for legislation and other major federal
actions significantly affecting the quality of the human
environment, a detailed environmental impact statement.
The Energy Policy and Conservation Act (P.L. 94-163, in
Section 322), as amended by the Energy Policy Act (P.L. 102486, Secs. 121-126), requires that household appliances and
some commercial equipment be labeled by the Federal Trade
Commission with an energy efficiency rating developed by the
Department of Energy to allow buyers to assess the energy
consumption and potential cost savings of alternative products.
The Energy Policy and Conservation Act (P.L. 94-163) also
requires the EPA Administrator to report annually in a Fuel
Economy Guide estimates for miles per gallon (mpg) rankings
for passenger vehicles to help consumers make informed
choices about fuel economy when selecting new or used
The Emergency Planning and Community Right-to-Know Act
(P.L. 99-499, Title III) mandates annual reports to the EPA by
industries with pollutant emissions to the environment; after
EPA compiles these reports in the Toxics Release Inventory
(TRI), they are issued publically.
The Residential Lead-Based Paint Hazard Reduction Act of
1992 (P.L. 102-550, Title X) requires the certification of
contractors and laboratories engaged in detection and control
of lead hazards, the publication of an “information pamphlet”
on lead hazards that includes lists of certified contractors, and
the disclosure of lead hazards to purchasers or lessees of
Criticism and support for information provision. Industries targeted by
information provision strategies usually are required to generate and report to
government the requisite data which the governmental agency then makes available
to the general public. As reporting requirements escalate, some industries have
objected to the cost, not only for data gathering and reporting, but also for producing
and presenting to the public other information to “provide context” for the data which
Prepared by (name redacted), Specialist in
and Industry Division.
Environmental Policy, Resources, Science,
otherwise may be misleading. Some businesses have been concerned about the public
release of data that might reveal confidential business information and compromise
economic competitiveness. In a few cases, chemical companies and other facilities
that handle dangerous chemicals have argued that there are risks of terrorism that
could be exacerbated if certain information were easily accessible, for example
information about the potential consequences of accidents at various facilities.
Environmental and consumer advocacy groups have championed these tools.
They argue that citizens have a “right to know” about potential environmental risks
to which they may be exposed, and that information approaches such as the TRI have
been successful in the past in promoting more environmentally responsible corporate
behavior. TRI is credited by right-to-know advocates with reducing releases of many
toxic chemicals from manufacturers by more than 50%. On occasion, manufacturers
also have promoted use of these tools, especially as an alternative to federal regulation
of emissions or manufacturing practices.
Proponents argue that providing information works with a free economic market
rather than against it, facilitates pollution prevention and creative pollution reduction
strategies, and encourages stakeholder involvement in decisionmaking and
enforcement. It facilitates voluntary efforts to protect the environment, and may be
one of the few options for reducing pollution that is the cumulative effect of numerous
daily individual decisions. On the other hand, the tool is only as good as the
information; information that is inaccurate, confusing, misleading, out-of-date,
irrelevant, or incomplete could distort rather than improve decisions. Similarly, there
may be little benefit, or greater environmental harm could result, if the selection of
reporting parameters (for example, under TRI) encourages industry to use alternative
substances or processes which may pose even greater risk than the reported or
regulated substance or process.
Under the Clinton Administration, EPA worked vigorously to expand public
access to information, especially electronically. EPA has promised to “make 100
percent of EPA’s non-confidential environmental data available and accessible to the
public in a user-friendly manner” by 2003.23
For additional information about tools that manage the environment by providing
CRS Report 97-970, Toxics Release Inventory: Do Communities Have a Right to
Know More? Oct. 26, 1997.
Public Sector Processes
Reforming the federal role in environmental protection has attracted much
attention. One group of such proposals would mandate risk assessment and/or costbenefit analysis (which have been discussed previously), with varying institutional
overseers. Another related set of proposals would constrain the federal regulatory
U.S. EPA, Office of the Chief Financial officer, EPA Strategic Plan [EPA/190-R-97-002/]
(Washington, D.C., Sept. 1997), p. 17.
scope, for example by establishing a regulatory budget, which would be based on
costs imposed. But by far the most attention to the federal role has focused on its
relation to state (and local) roles.
#Environmental Federalism.24 Giving states more responsibility or a larger
role in environmental management is one of the oldest new ideas in environmental
policymaking and implementation. Variously termed environmental federalism,
devolution, decentralization, defederalization, or civic environmentalism – all of these
terms have been used in recent years – the concept involves returning some
decisionmaking authority from the federal to state and local governments.
Environmental federalism, or devolution (or accountable devolution, as it has most
recently been termed), is based in part on returning to intergovernmental relationships
that predominated before enactment of today’s federal environmental laws. In the
intervening 30 years, however, both federal and state environmental programs have
evolved considerably. Notably, states have enacted laws and developed management
capacity to a much greater extent than was the case before 1970.
Development of the federal role in environmental policy. Regulation and
management of pollution was almost entirely the province of state and local
governments before the 1970s. States had virtually unlimited discretion to protect
local environmental quality, yet most failed to act. During the late 1960s and early
1970s, many environmental concerns previously seen as local issues became federal
issues, and the proper role of each level of government in implementing policies has
been debated continuously since then. The primary impetus for the major federal
environmental statutes was the perceived need for a national response to states’
inaction, by providing a minimum level of environmental quality throughout the
country. Historically, environmental policymakers justified a strong federal role on
the basis of several considerations: (1) the implications of interstate or transboundary
pollution which individual states could not effectively control; (2) fear that states
competing for economic development will engage in a “race to the bottom,” if left to
their own devices; (3) concern that a hodgepodge of separate state regulation will
impose financial costs on out-of-state producers operating in national markets; and
(4) belief that administrative efficiency and economies of scale can be achieved by
developing complex technical standards at the national level.
The organizing principle of federal environmental laws is that policy is developed
at the national level, and programs are implemented at the state level. For 30 years,
federal environmental policy was characterized by command-and-control strategies
with states acting primarily through a system of delegated authority administered by
EPA. Issues of day-to-day program management often strain the state-EPA
relationships. There have been a number of thorny issues, which are now driving the
agenda for change in intergovernmental relationships in environmental policy. The
most contentious are costs (program costs and unfunded federal mandates) and
federal micromanagement of states.
Prepared by (name redacted), Specialist in Resources and Environmental Policy,
Resources, Science, and Industry Division.
Current support for increased state responsibility. The numerous advocates
of increased state responsibility in environmental management reflect a spectrum of
views on the issue. Some see the debate in terms of needing to strengthen the existing
EPA-state partnership, while others argue for more complete shifting of
responsibilities. On one end are those in state agencies, governors’ offices, and top
levels of EPA itself who believe that states should have more discretionary authority
(flexibility) to implement federal laws, so that states can address their highest
environmental priorities and establish resource allocations based on those priorities.
Concurrently, these advocates believe that EPA should lighten the burden of oversight
where states are willing to take on added responsibility. They cite several reasons for
changing the EPA-state relationship and increasing state responsibility. First, the
issue of state capacity to manage programs has changed. Unlike 30 years ago, states
today have working environmental programs, and the federal government is not
forcing states to create programs. Second, relying on traditional command-andcontrol methods derived from nationally uniform requirements is less effective in
meeting today’s changed environmental protection needs. The current generation of
environmental problems (ranging from sprawl to nonpoint source pollution to
watershed management and pollution impacts from people rather than companies)
points to the need for state and local governments to wield the policy lever, they say,
and points to the need to move beyond “one-size-fits-all” regulatory approaches
On the other end of the spectrum of environmental federalism proponents are
views represented by some academics and economists, who may bring a more
ideological approach to the debate. Some argue, for example, that the command-andcontrol regulatory strategy that dominates environmental policy has proved
inadequate, because it has not set intelligent priorities, has squandered resources, has
discouraged environmentally superior technologies, and has imposed unnecessary
penalties on innovation and investment.
They maintain that centralized
decisionmaking ignores local preferences for varying levels of environmental quality,
reduces the ability of citizens to monitor government, and stifles experiments with
policy options that are alternatives to one-size-fits-all. The goal of devolution, they
say, is to reverse the rising power of the national government, which they see as
bloated and ineffective, and to return authority to states and individuals. Some
economists view these issues in terms of the implications that alternative divisions of
decisionmaking responsibility have on efficiency. They are interested in questions
such as which level of government might best determine the extent of environmental
protection and which is most likely to select the least costly methods of control. In
many cases, they believe, the answers will dictate moving the locus of decisionmaking
to states and localities.
Between those who are advocating primarily an enhanced federal-state
partnership and those seeking a more complete shifting of roles are other groups who
support many of these arguments, including some federal legislators who advance
policy and budgetary initiatives to restrict or curtail the federal role and those in
industry who want less stringent federal regulation. A federal role would continue,
all agree, but would be restricted to setting national standards, monitoring and
enforcing compliance, providing technical assistance, and addressing transboundary
Policy literature on this topic has continued to grow, with reports and
recommendations from a number of non-partisan or stakeholder groups (such as the
National Academy of Public Administration and the National Environmental Policy
Institute), as well as advocacy groups (e.g., the American Enterprise Institute, Cato
Institute, and the Progressive Policy Institute). These studies have advocated and
endorsed devolving existing environmental management responsibilities to capable
state and local governments to tailor regulatory solutions to local problems and
concerns, while leaving the federal government to address cross-boundary and
Opposition to increased state responsibility. While there is considerable
support for environmental federalism, there is significant opposition, as well.
Environmentalists, in particular, who have traditionally supported a strong federal role
that provides a core level of environmental protection for all citizens and a level
playing field across the country, believe that a federal programmatic baseline is an
important counterbalance to potential state backsliding that could result from
devolution. For these groups, concern persists that state capacity to shoulder the
responsibility of devolution is less robust than state regulators say, although it is hard
to either prove or disprove this assertion. Given flexibility, they say, states fail to
meet high-priority program requirements, such as monitoring, permitting, and
enforcement. States may set lax standards in order to lure industry or succumb to
pressure by industry to adopt weak standards. Some environmentalists are concerned
that states will shift away from enforcement towards compliance assistance and also
reduce public involvement and participation.
Environmental federalism today. Devolution, or environmental federalism, is
occurring today, and the basic issue is one of timing and extent. Debate continues
over the degree of oversight that EPA exercises and degrees of responsibility,
authority, and accountability that it gives to states. In May 1995, EPA and states
took a major step towards devolution when they entered into a commitment to an
improved partnership called the National Environmental Performance Partnership
System (NEPPS). In it, EPA and states agreed that states should establish their own
comprehensive environmental plans and identify environmental priorities. National
minimum standards will remain, but EPA will allow more flexible approaches to
achieve national goals. EPA oversight will focus on ensuring that states achieve
environmental results, not on process. As of May 2000, 34 states have developed
Performance Partnership Agreements with EPA under NEPPS.
In return for the autonomy and flexibility that states seek, all of the advocates of
environmental federalism acknowledge that accountability for environmental
performance is key – thus, the source of the phrase often used today to describe these
developments, “accountable devolution.” Accountability is necessary to address
concerns of critics such as environmentalists who fear that devolution will lead to
disintegration of national programs. The largest challenge for EPA and states is to
build a foundation of meaningful indicators for a transformed performance-based
system. The success of such a system depends on the ability to measure
environmental progress in lieu of measuring traditional programmatic outputs (such
as number of enforcement actions).
For further reading, see:
Henry R. Butler and Jonathan R. Macey, Using Federalism to Improve
Environmental Policy (Washington, D.C.: AEI Press. 1996)
Environmental Protection Agency, Joint Commitment to Reform Oversight and
Create a National Environmental Performance Partnership System. (“May 17th
Agreement”) May 17, 1995, available at:
National Academy of Public Administration, Setting Priorities, Getting Results:
A New Direction for the Environmental Protection Agency. Report to Congress.
Vickie L. Patton, “A Balanced Partnership,” The Environmental Forum
(May/June 1996), 16-22
Rena I. Steinzor, “Reinventing Environmental Regulation Through the
Government Performance and Results Act: Are the States Ready for the Devolution?”
Environmental Law Reporter News & Analysis (Vol. 29, February 1999), 1007410084.
Incentives, including both financial and technical support, predated the
regulatory command and control environmental protection programs. They remained
a critical complement to those programs – most notably sewage treatment grants as
a complement to the water quality regulatory program. And new forms of incentives
are components of various alternatives – for example, of the best management
practices approach to controlling agricultural pollution (see under Management
Principles below). Of various new incentives being proposed, rewarding entities that
undertake environmental protection initiatives that go beyond regulatory requirements
has gotten particular attention.
#Beyond Compliance: Incentives for Environmental Performance.25
The concept of businesses and other regulated entities achieving improved
environmental performance beyond what is strictly required to meet regulatory
obligations is often called “beyond compliance.” Some say that, besides being overly
prescriptive, the current environmental management system fails to reward excellent
performers. Truly voluntary initiatives by some businesses that are intended to
encourage improved environmental performance (such as environmental audits and
Environmental Management Systems) attract some businesses and industries, but
participation is limited. While businesses enter into such voluntary commitments for
various reasons, including a perception by some that good environmental practice is
good for business, the numbers that will do so without some type of incentive is likely
to be small.
Recent literature and activity advocating beyond compliance. A number of
recent reports and contributions to the policy literature have examined how the United
States could adopt environmental management systems using alternatives to
Prepared by (name redacted), Specialist in Resources and Environmental Policy,
Resources, Science, and Industry Division.
command-and-control regulation. Some of this literature explicitly recommends that
whatever new systems evolve and develop should include incentives to encourage and
reward those whose environmental protection performance exceeds basic
requirements. For example, the 1995 report of the National Academy of Public
Administration, Setting Priorities, Getting Results, recommended that EPA support
legislation to provide flexibility and accountability to businesses and local
governments in exchange for better-than-required performance A similar theme was
expressed in the 1996 report of The Aspen Institute, Alternative Path, which
recommended that in the future the United States should utilize two parallel
environmental regulatory tracks. One would be the existing system. An alternative
would allow volunteers to propose pilot demonstrations of better ways to achieve
environmental progress. Only projects yielding a greater net benefit than expected
from existing or anticipated regulations could become pilots, but participants would
receive regulatory flexibility in order to encourage their environmental protection
The concept of providing incentives to encourage beyond compliance
environmental performance underlies a number of EPA’s recent regulatory reinvention
projects and programs. These include the ongoing Project XL, which was largely
based on principles in the Alternative Path report and seeks to encourage up to 50
site-specific experiments to achieve better environmental outcomes along with
operational flexibility and other benefits. The Common Sense Initiative (CSI), which
lasted from 1994 to 1998, is related to Project XL. It sought to remove barriers to
innovation by implementing multi-media projects in six specific industrial sectors.
EPA’s newest regulatory reinvention program, called the National Environmental
Performance Track, was announced in June 2000. EPA says it is intended to reward
companies which exceed minimum regulatory requirements and take extra steps to
reduce and prevent pollution, including having an operational Environmental
Management System. Benefits for participants will include national recognition,
regulatory and administrative flexibility, a more cooperative relationship with EPA,
a reduction in record keeping and reporting requirements, and flexibility in meeting
certain regulatory requirements.26 Several states (including New Jersey,
Massachusetts, and Minnesota) also have adopted regulatory reinvention programs
which provide qualifying facilities with flexibility under state and/or federal rules in
exchange for improved environmental performance.
The types of incentives appropriate or necessary to encourage beyond
compliance environmental performance are varied. They range from direct financial
incentives (e.g., tax subsidies for installing pollution control equipment), to indirect
financial incentives (such as more rapid permitting, less stringent standards or
monitoring, more flexibility to meet standards, or less frequent renewal of permits),
to public recognition in the form of a Presidential merit award or EPA certificate, to
better relations with regulators, corporate customers, or non-corporate customers.
In September, EPA announced that Epson Portland Inc. of Hillsboro, Oregon, is the first
company accepted for the National Environmental Performance Track. (For additional
information, see [http://www.epa.gov/performancetrack].)
The most powerful incentives are likely to be those that contribute directly or
indirectly to the corporate bottom line.27
Support and criticism. Proponents of providing incentives for beyond
compliance performance include business and industry participants, who favor the
prospect of regulatory flexibility and other benefits, and top federal and state
environmental officials, who view such policies as integral to more efficient,
performance-based management systems in the future. Opponents include some
environmentalists who criticize policies that potentially would allow companies to
sidestep regulations or obtain regulatory relief with no guarantee of environmental
outcome. As with a number of other recent environmental management tools, there
is a fundamental conflict between business’s desire for flexibility and simplicity and
environmentalists’ desire for certainty and enforceability.
As a tool of environmental policy, incentives for beyond compliance are related
to a number of other ideas intended to move beyond rigid regulatory strategies and
towards performance-based approaches, especially use of market incentives,
management practices, and devolution or defederalization. Unlike most of these other
new or newer approaches, however, beyond compliance incentives lack statutory
authority, a fact that some proponents believe is an obstacle. These supporters argue
that many companies (especially small ones) will remain reluctant to innovate because
they view the transaction costs as being too high in terms of uncertain rules,
consensus requirements, and unclear benefits at the end of the process. At the same
time, there has been little discussion and there is no consensus on how to change
statutes to address these kinds of uncertainties.
For further reading, see:
Terry Davies and Jan Mazurek. Industry Incentives for Environmental
Improvement: Evaluation of U.S. Federal Initiatives
Global Environmental Management Initiative (Washington, D.C., 1996);
National Academy of Public Administration, Setting Priorities, Getting Results: A
New Direction for the Environmental Protection Agency. Report to Congress (April
The Aspen Institute, The Alternative Path, A Cleaner, Cheaper Way to Protect
and Enhance the Environment (Washington, D.C., 1996).
Employing market mechanisms in environmental protection has been an evolving
policy approach for certain types of problems since the mid-seventies. Such
mechanisms have the potential to reduce the compliance costs of some environmental
protection actions. These cost saving potentials are an important reason that the EPA
introduced greater flexibility in implementing some Clean Air Act regulations and that
Congress authorized a market-based approach to acid rain control. Such mechanisms
Davies, Terry, and Jan Mazurek. Industry Incentives for Environmental Improvement:
Evaluation of U.S. Federal Initiatives. Global Environmental Management Initiative.
Washington, 1996: 7.
have also been authorized in the international treaty dealing with possible future
actions to slow global climate change.
This gradual development of supplements to the “command and control”
regulatory approach in practice has also has been preceded and accompanied by a
growing body of academic and policy community attention. Proponents of marketbased approaches include think tanks, academics, and some leading environmental
advocacy groups. They argue that properly structured incentive mechanisms can
produce significant reduction in pollution control costs while achieving agreed upon
#Pollution Trading and Pollution Taxes.28 Market-based mechanisms
fall into two distinct groups with many variations in each category. The first are
trading mechanisms which allow businesses to meet a facility, regional, industry-wide,
or a national cap on a pollutant by shifting their individual compliance obligations
within their business operations or to other businesses subject to the same compliance
requirements. For the case of trading between companies, this mechanism operates
when companies with low compliance costs control their pollution beyond what is
required by regulation and then sell the excess compliance to companies with high
control costs. The latter companies are thus relieved of some of their pollution
control obligations, avoiding costly abatement expenditures. The net effect is to
concentrate compliance at the points of lowest cost, thus reducing overall compliance
costs. Environmental protection is achieved in a more economically efficient manner.
A second market mechanism is the explicit taxation of a polluting activity in
order to include in the cost of a good or service the social costs (environmental or
human health damage) that the polluting activity may cause. By raising the cost of
polluting inputs or outputs for businesses or raising the cost for consumers using
polluting substances (e.g.; gasoline combustion), businesses or consumers have an
incentive to economize on the polluting activity. Businesses or consumers can
respond as they choose, with some paying the higher costs and others making changes
that avoid the effects of the tax. The combined responses to the cost incentive in
theory will result in a reduction in the polluting activity to a point where further
reductions by businesses or consumers would cost more than paying the tax or be
inconvenient or impractical. The potential reduction in pollution depends on the level
of the tax. This is set, in theory, based on what is needed to meet a targeted reduction
in pollution. Alternately, the tax can be set to achieve a given level of reduction in the
incremental monetized damages caused by the pollutant. This assumes that complex
environmental and human health values and attributes can be translated to monetary
surrogates. Although widely advocated by economists, this incentive mechanism has
never been employed in U.S. environmental laws or regulations except as fees or
charges intended to raise revenue or cover regulatory administrative costs. Such
charges typically are low enough not to create incentive effects for reducing pollution
Both trading mechanisms and pollution taxes have defined circumstances in
which they have been or could be effective in environmental management.
Prepared by (namer edacted),Assistant Director, Resources, Science and Industry Division.
For trading mechanisms, like sulfur allowance trading for acid rain control or the
EPA’s netting, banking, and offset programs for some criteria air pollutants, several
business and institutional circumstances are necessary for effective implementation.
These programs are likely to be effective when: 1) the pollutant is one where
transactions and information costs are low, typically when industries have long
experience with monitoring and controlling a pollutant, there are a large but fairly set
number of possible market participants, and there are intermediary institutions to
facilitate trading; 2) security of long term investments in pollution control by
companies is highly certain, so that unanticipated future changes do not impede long
term planning and financial commitments; 3 ) there are several technically and
financially feasible options for reducing pollution among different industry segments
(fuel switching, process changes, etc.); and 4) reductions are sought across a broad
geographical area for a pollutant that does not involve local public health or
environmental effects or alternately within one jurisdiction or facility, so that third
party impacts are minimized. Thus, the advantages of trading mechanisms are their
potential for lower-cost implementation of environmental controls in situations where
a set number of large sources can potentially optimize expenditures on abatement
through mutually beneficial exchange of the location of control. On the other hand,
for pollution from diffuse and numerous sources, trading mechanisms do not appear
very practical given the high transaction and information costs needed for
Taxation as a tool for reducing environmental damage is particularly applicable
to problems where pollution is the result of small, diffuse, and numerous sources. In
these cases, meeting environmental objectives requires an overall reduction in the total
consumption or use of a polluting material or activity, but the large number of
contributors makes traditional regulation or targeted reductions difficult. With
population, GDP, material consumption, and waste flows all growing, mitigating
environmental deterioration may be extremely difficult or impossible to manage
without the use of incentives. Some forms of air and water pollution, CO2 generation,
and traffic congestion are examples where taxation or other price signals could be a
relevant management tool. Taxes on polluting substances and activities send a signal
to consumers and businesses to make short and long term alterations, without
prescribing how or what to modify. The advantages of using this tool are its
administrative simplicity; the flexibility it gives those affected to respond; and its long
term effects on innovation and technical and behavioral changes.
While the theory and logic for using taxes to reduce certain types of
environmental deterioration are straightforward, this approach meets public as well
as policy objections on several fronts. First, those who would pay such taxes may
oppose this approach as being unfair if other types of pollution sources are not being
taxed, and as diverting monies that could be used for pollution abatement investments.
Second, if large sums of money are involved, how such revenue is used is a critical
question (some argue for use in environmental programs or recycling through income
tax relief, but questions of tax base stability arise). Third, agreeing on the appropriate
level of a pollution tax is problematic due to uncertainty about the exact reductions
in pollution that may result. Finally, questions of pollution taxes become involved in
broader tax policy issues which complicate practical implementation.
For further reading, see:
Gary C. Bryner, New Tools for Improving Government Regulation: An
Assessment of Emissions Trading and Other Market-Based Regulatory Tools (The
PricewaterhouseCoopers Endowment for The Business of Government: 1999)
Stephen Kelman, What Price Incentives: Economists and the Environment
(Boston: Auburn House Publishing Co., 1981)
Robert Repetto, et al., Green Fees: How a Tax Shift Can Work for the
Environment and the Economy (World Resources Institute, 1992)
Project 88 – Round II: Incentives for Action: Designing Market-Based
Environmental Strategies, A Public Policy Study Sponsored by Senator Timothy E.
Wirth and Senator John Heinz (Washington, D.C.: May, 1991)
EPA’s National Center for Environmental Economics website at
[http://www.epa.gov/economics/], for articles such as Robert Anderson, “Economic
Savings from Using Economic Incentives for Environmental Pollution Control” and
Robert C. Anderson and Andrew Q. Lohof, The United States Experience with
Economic Incentives in Environmental Pollution Control Policy.
#Private Markets and Legal Actions.29 Under some circumstances,
environmental protection can be achieved between private parties without direct
statutory and regulatory involvement. Some argue that these tools if used more
extensively could avoid the inefficiencies of bureaucratic regulation, although critics
contend that the circumstances are more narrowly delimited than proponents
acknowledge. In one case, if pollution rights are clearly defined between two parties
where one is generating pollution, bargaining can lead to an economically efficient
reduction in the pollution level. In a second case, tort actions based on injuries
suffered due to pollution can result in court rulings that restrict defendants or
compensate plaintiffs; and polluters will consider the benefits of reducing the threat
of liability in accounting for costs of pollution reduction. Finally, in a third situation,
private property rights can be used to protect resources vulnerable to the “tragedy of
the commons” (in which common ownership leads to overexploitation as each
participant seeks to maximize gain).
Markets in pollution rights. In the case of bargaining between private parties,
the potential for finding an economically efficient reduction exists when a clearly
traceable pollution source operated by one party is causing verifiable damages or loss
to another party. Under specific and site-dependent circumstances, such private
transactions can produce economically efficient environmental protection.
If the right to discharge pollution is clearly defined or alternately, the right to be
free of pollution is clearly defined, negotiations between the parties can lead to an
efficient balance between reducing pollution damages and expenditures to reduce
pollution. This occurs because either party has an incentive to bargain with the other.
In the case where the polluter has the rights to discharge wastes, the negatively
affected party can offer to pay the polluter to reduce discharges to the point that the
monetary value of remaining damages is below the cost of additional abatement
expenditures to the polluting party. On the other hand, if the party that potentially
would be damaged has the right to be free of pollution, the party that needs to pollute
in order to operate can negotiate a level of compensation in order to find a balance
Prepared by (namer edacted),Assistant Director, Resources, Science and Industry Division.
between abatement expenditures and purchasing from the other party the right to
discharge some pollution. Depending on equality in bargaining positions, an
“optimal” reduction in pollution would result. Which party draws the greater benefit
from the exchange depends on who holds the initial pollution rights. This type of
situation is an example of what is called the Coase theorem (after a classic article by
Professor Ronald Coase) in which a clear assignment of property rights in theory will
lead to an economically efficient reduction in pollution through private party
bargaining. This outcome, however, rests on the assumption of no barriers to
transactions such as imperfect knowledge, limited rationality, or communications
costs. It assumes equality of bargaining positions, clear and provable linkages
between polluter and the injured party, minimal transaction costs (meaning, generally
a limited number of parties), and the absence of potential free riders on the
agreements reached between the bargaining parties.
Private legal remedies. In the second case, where pollution rights are illdefined, or custom has implicitly assumed that pollution is accepted as part of
economic activity, legal remedies sometimes can lead to a balance between pollution
reduction costs on the one hand and avoided injuries to other parties on the other. A
variety of legal theories may be available to plaintiffs such as nuisance, negligence,
trespass, infliction of mental distress, and strict liability. For example, under the
common law doctrine of nuisance, as well as under other legal theories, courts can
award compensation of injuries or injunctions to parties injured by pollution. In
situations where there is one polluter and the nature of hardships favors the plaintiffs,
nuisance remedies can be an effective management tool. This assumes that plaintiff
has the money, time, and patience to see the action through. Class actions also help.
As a hypothetical example, if air emissions from a factory were causing damage to
crops on downwind farms, the farmers could seek an injunction and compensatory
damages for any losses in the value of their crops. A court could find any number of
ways to address the situation depending on the severity of damages to the crops and
the economic consequences of enjoining further pollution from the factory. For
example, if the plant was the mainstay of the local economy and had already
undertaken extensive pollution abatement expenditures and the aggregate damages
to crops were small, a court could find against enjoining the factory from further
pollution. In this type of situation, some state courts have chosen to “balance the
equities” and deny injunctions since the resulting hardships to the defendant outweigh
the harm to the plaintiffs. However, where injunctions are denied, sometimes courts
have awarded past or ongoing compensatory damages to plaintiffs.
In general, nuisance law has had only limited effectiveness in controlling widespread pollution. In addition to the tendency to balance the equities and deny
injunctions, other factors have limited nuisance law as an effective tool in controlling
widespread pollution. One important limitation is the lack of eligibility to sue. The
common law distinguishes between private and public nuisances, where the latter may
involve small damages to large numbers of people. In cases of public nuisances, in
general, only a state attorney general or a local prosecutor has been allowed to bring
a law suit against polluters. Reluctance by governments to bring suits that would
harm local industries has mostly limited the role of injunctive relief, though some
states now allow individuals to bring suits to mitigate public nuisances.
Another complication that has limited the usefulness of nuisance remedies is the
burden of proof on the plaintiffs. Widespread pollution typically comes from many
sources, none of which alone could be shown to produce the resulting injury. It is
further difficult to achieve a group of defendants among whom potential damages can
be allocated. In general, then, common law remedies under nuisance law do not
provide a sufficiently systematic means for managing widespread pollution discharges
to environmental media. In other types of legal actions, similar issues of causation and
accountability limit such methods for dealing with widespread pollution which is
typical of must contemporary environmental problems.
Environmental markets. In a third situation, creating markets for transactions
of environmental “goods,” may lead to efficient outcomes. (In pollution control,
trading programs, as discussed above, constitute a type of environmental market). In
some cases, private parties may act through existing markets to achieve environmental
protection ends, as for example when the Nature Conservancy buys private land in
order to protect it and its resources, or when a private landowner sells hunting or
fishing rights (and thereby has a vested interest in maintaining healthy populations of
the sport game or fish). In other cases, governmental intervention may be needed to
create the market for an environmental good or service, as for example when
governmental bodies allow the selling of development rights as a way of channeling
development from environmental sensitive areas to less sensitive areas, or when state
and federal governments provide for market transactions of water rights.
Market approaches are being actively debated for allocating water resources30
and certain fisheries.31 Proponents of what is sometimes called “envirocapitalism”
have cataloged numerous other examples that demonstrate the potential power of
environmental markets. Examples include the Fossil Rim Wildlife Center in Texas,
the marketing of paddlefish roe in Montana, the retirement of salmon quotas by the
North Atlantic Salmon Fund, and wildlife management in Zimbabwe.32
How to generalize from the anecdotal successes of environmental markets (and
from failures of common ownership of resources) is not easy, however. A key issue
is the original endowment of rights: first-in-time, first-in-right effectively legitimizes
historical patterns of income and property; while changing those rights raises
questions of due process. For example, should fishing rights be vested to those now
fishing, or should those rights be auctioned to give every one an opportunity of entry?
(In the case of sulfur oxides emission allowances,33 existing facilities received
allowances based on historical emissions, and new sources have to buy into the limited
number of allowances available.) A second key issue arises from the complex
interactions that can be affected by transactions in environmental markets. Promoting
Terry L. Anderson and Peter J. Hill, eds., Water Marketing–The Next Generation
(Lanham, MD: Rowman and Littlefield Publishers, Inc., 1997; and Richard W. Wahl,
Markets for Federal Water: Subsidies, Property Rights, and the Bureau of Reclamation
(Washington, D.C.: Resources for the Future, 1989).
(name redacted), Individual Quotas in Fishery Management, CRS Report 95-849 ENR.
See Terry L. Anderson and Donald R. Leal, Enviro-Capitalists: Doing Good While Doing
Well (Lanham, Md. : Rowman & Littlefield Publishers, 1997).
The Clean Air Act specifies that the allowances do not constitute “property rights”
(§403(f)); hence they could be revoked without penalty.
markets for resources such as game animals and fish may have divergent impacts on
broader ecosystems and other community and public values – for example, on
nongame species, helping some and harming others, or on other resources, such as
As with so many of the other alternatives to command and control regulation,
the creation of environmental markets is an evolving tool. It includes not just markets
in goods and services, but also in qualities, over time, as with the sale and transference
of development rights. While these initiatives can bring the power of the market to
bear on environmental goods, they may require governmental structuring of the
markets and defining of the transactions.
For further reading, see:
Michael Common, Sustainability and Policy (Cambridge: Cambridge University
Press, 1995), pp. 145-152
Roger W. Findley and Daniel A. Farber, Environmental Law (St. Paul, MN:
West Publishing Co., 1998)
Roger E. Meiners and Andrew P. Morriss, eds., The Common Law and the
Environment: Rethinking the Statutory Basis for Modern Environmental Law
(Lanham: Rowman & Littlefield Publishers, 2000).
Addressing environmental protection as a problem of changing decisionmakers’
values underlies a set of approaches that may be called “management principles.”
These approaches focus on the way managers make decisions with environmental
consequences. The managers involved can include not only corporate managers, but
also managers of public lands and resources, individual property owners, and, in some
cases, regulatory officials as well.
The “command-and-control” regulatory system specifies what is to be done or
accomplished; enhancing information and “market-based” systems presume
environmentally protective decisions will follow from neutral competence and/or selfinterested responses to the information or the price and cost signals. In contrast, the
management principles approaches seek to achieve environmental protection goals by
redirecting managers’ criteria for making decisions affecting the environment. New
information, changed cost/price signals, incentives, even regulatory standards may be
involved; but the key elements of management principles approaches involve, first,
inculcating a heightened awareness of environmental protection needs in managers,
and second, providing some criterion or yardstick for decisionmakers to assess the
environmental implications of choices. If a manager can accurately anticipate the
consequences of decisions and has accepted environmental values, environmentally
preferable choices should follow voluntarily – a crucial difference from regulation.
Management principles approaches themselves range from the relatively abstract,
such as “sustainability,” to the pragmatic, such as “best management practices” for
agricultural tillage and environmental “audits.”
#Sustainability – Sustainable Development.34 The term sustainable
development emerged in its current form in 1987 in the final report of the United
Nations World Commission on Environment and Development (WCED), known as
the Brundtland Commission after its chairman, then Norwegian Prime Minister Gro
Harlem Brundtland. The definition most widely quoted in the WCED report is:
“Development that meets the needs of the present without compromising the ability
of future generations to meet their own needs.”
In the more detailed treatment of the term, the report identified requirements for
sustainability to include citizen participation in the political system, a self-reliant and
sustained economic system, a social system that allows for solutions for tensions from
“disharmonious development,” a production system that respects the ecological base,
a technological system that continuously searches for new solutions, an administrative
system that is flexible and has the capacity for self-correction, and an international
system that fosters sustainable patterns of trade and finance.
Summing up these components, the WCED report stated, “In its broadest sense,
the strategy for sustainable development aims to promote harmony among human
beings and between humanity and nature.” Popular usage has made sustainable
development nearly synonymous in many circles with “environmentally compatible
development.” In 1992, following up on the Brundtland Commission report, the
United Nations Conference on Environment and Development (UNCED, popularly
known as the Earth Summit) was held in Rio de Janeiro. The Conference produced
the Rio Declaration on Environment and Development, plus a 40-chapter action plan
called “Agenda 21" (referring to the 21st Century). Agenda 21 posits sustainable
development as key to most areas of development, and discusses both what individual
nations should undertake to achieve it and what the international community should
do. The Rio Declaration endorses actions such as environmental impact assessment,
public participation, effective environmental legislation, cooperation to promote an
open international economic system, and the precautionary approach (this last is
discussed in a following section). One of the most general principles, number 25,
states, “Peace, development and environmental protection are interdependent and
At a practical level, sustainable development is a planning and decision
framework. For example, optimal management of a fishery or of lumbering of a forest
can be based on the criterion of sustainability, in which, as a first principle, harvesting
only the annual growth from a fish or timber stock assures a perpetual yield from the
resource base. In other words, society consumes only the interest from its asset, not
the principal itself. At a broader level, sustainable development involves both an
understanding and a commitment (by individuals, businesses, communities, and
various levels of government) to set and meet goals or constraints on key
determinants of the ecological or environmental health of an environmental system.
The goals or constraints represent indicators or variables which must be maintained
at certain levels if the system in the long term is to yield desired human uses and
benefits without degrading or seriously damaging the system. The goals or
Prepared by (name redacted), Senior Analyst in International Environmental Policy,
Resources, Science and Industry Division.
constraints set the context for decision makers to use various economic and
regulatory tools, such as tradable permits, taxation of pollution, best management
practices, cost-effectiveness, risk assessment, or cost-benefit analysis.
The local, interstate, and federal efforts to improve the ecology of the
Chesapeake Bay can be viewed in the sustainability framework. Science and research
have determined that, in order to enhance the fishery and recreational values of the
Bay and ensure their sustainability into the future, dissolved oxygen levels and water
clarity must improve from current levels and harvest levels on commercial and
recreational species must be established and enforced. To achieve those goals,
nutrient and sediment loadings must be reduced. To do that, a host of watershedwide land use management practices (buffering tributaries with forest-cover,
protecting and expanding wetlands, improving urban storm water management,
limiting agricultural runoff, etc.) and a similar host of direct pollution control
improvements (upgraded sewage and industrial waste water treatment, reduced
nitrogen oxide emissions from transportation and industry sources, improved septic
system performance, etc.) must be undertaken. Achieving such improvements, then,
is a process of applying a range of tools (informational, economic, and regulatory)
within numerous government and citizen planning and decision making processes.
The ultimate measure of success would be the long-term viability of the Bay’s
In practice, the application of the sustainability concept to environmental
program management is proceeding along several lines, notably: (1) within the
economic discipline, evaluating what it means with respect to economic concepts of
growth, development, and social welfare; (2) within executive and ministerial bodies,
assessing what it means for environmental planning and management; and (3) within
specific programs, focusing on what it means for accomplishing “on the ground”
The Economics of Sustainability. At present, “sustainability” remains on the
periphery of economic practice; however, a number of economic theoreticians have
been exploring how to incorporate the insight behind the concept into economic
theory and understanding.35 So-called “green accounting” is the idea of modifying
national accounts, such as Gross Domestic Product, so that resource depreciation is
incorporated. However, efforts to develop “national indicators of progress toward
sustainable progress” have been controversial and in the United States they have yet
to be widely endorsed or to be formally adopted.36
E.g., “Processes for Environmental Valuation: Procedures and Institutions for Social
Valuations of Natural Capitals in Environmental Conservation and Sustainability Policy.”
See Organisation for Economic Co-operation and Development, Towards Sustainable
Development: Indicators to Measure Progress (OECD, 2000), especially pp. 194-197, on
the experience of the United States. See also, [http://www.sdi.gov]
Planning.37 In the eight years since UNCED, the U.N. Commission on
Sustainable Development (CSD) has met annually at the United Nations to review
what countries are doing to implement the elements of Agenda 21. National reports
submitted to the CSD detail what countries are doing in various focus areas such as
pollution control, forestry, water resources, agriculture, etc. In many, if not most,
cases it is difficult to sort out which, if any, actions proceed with conscious reference
to Agenda 21 or to sustainable development as an organizing principle. In some
developing countries, such as China, action plans around principles of Agenda 21
have been identified.
However, the concept of sustainability has been adopted and integrated into the
terminology of development in a number of European government efforts,38 and in the
United States there has been extensive activity – particularly at the state and local
level – around this term. In 1993, the President established the President’s Council
on Sustainable Development (PCSD), bringing together high-level participants from
government (Cabinet secretaries), business and industry (at the CEO level), and nongovernmental and academic entities, usually the heads of these organizations. The
Council formed Task Forces, held extensive hearings and public meetings, and
prepared numerous reports on topics such as eco-efficiency, population and
consumption, energy and transportation, sustainable agriculture, etc. The Council
submitted a report Sustainable America: A New Consensus in 1996, having adopted
the Brundtland Commission definition. It outlined a vision statement that “articulates
the Council’s broad concept of the benefits of sustainability to the Nation.” The
Council outlined 10 broad goals, such as ensuring a healthy and clean environment,
economic prosperity, equity, conservation of nature, civic engagement, population
stabilization, education, and sustainable communities. It published a second report
Towards a Sustainable America in 1999. It included chapters on Climate Change,
Environmental Management, Metropolitan and Rural Strategies, and International
Leadership, with each chapter including recommendations for concrete actions. Since
the appearance of this report, it is unclear whether a federal entity charged with a
comprehensive sustainability mandate will be continued, although some federal
agencies have incorporated this concept into their policy framework.
Practical applications. At the local level, a Joint Clearinghouse on Sustainable
Communities was established by the National Association of Counties and the
National Conference of Mayors in 1996 at the request of President Clinton (for
information, see http://www.usmayors.org/USCM/sustainable/background.htm), in
which the quite extensive array of activities undertaken by communities, towns, cities
and states in the United States are tracked. In most cases, these efforts begin with a
decision by a town, county or state government to commit to sustainable
development, followed by the convening of multi-stakeholder councils, commissions,
The World Wide Web Virtual Library “SUSTAINABLE DEVELOPMENT” gives access
to a broad range of activities, at [http://www.ulb.ac.be/ceese/meta/sustvl.html]; see also the
“sustainable development gateway” on the web: [http://sdgateway.net/default.htm]
The concept was added to the European Union constitution in 1997 and by July 2001 the
European Commission is expected to introduce a “sustainability strategy” to direct policies
of governmental sectors. See
or committees to decide on the process to be used. The dialog that follows usually
attempts to identify key goals of the community, then arrive at recommended actions
to achieve sustainability as those goals are conceived. The key concept underlying
these attempts is that sustainability can be achieved only if the trade-offs between
potentially conflicting goals are identified early in the process, and mechanisms
devised to assure that one stakeholder’s goals are not undermined as other
stakeholders’ goals are achieved. Participants in this dialog often feel that they have
had a beneficial learning experience when unrecognized trade-offs are brought to their
attention. But arriving at a means of achieving all stakeholders’ goals usually requires
some compromises. As these compromises are identified and debated, the sustainable
development effort often becomes a very painful process, and it often breaks down
without arriving at action points.
Overall, the effort to define and achieve sustainability has involved a significant
amount of consciousness raising about the trade-offs involved in community decisionmaking, especially those such as environmental ones, which economic development
activities often tend to ignore. At its best, it is a process for ensuring that otherwise
overlooked perspectives and constituencies are not excluded from decisions. But it
remains an ill-defined process in which operational results remain elusive.
For further reading, see:
World Commission on Environment and Development, Our Common Future,
(Oxford, England: Oxford University Press, 1987)
United Nations, Agenda 21, Rio Declaration, Statement of Forest Principles:
The final text of agreements negotiated by Governments at the United Nations
Conference on Environment and Development (UNCED), 3-14 June 1992, Rio de
Janeiro, Brazil (New York: United Nations Department of Public Information, 1992)
President’s Council on Sustainable Development, Sustainable America, A New
Consensus (Washington, D.C.: U.S. Govt. Print. Off., 1996) and Towards a
Sustainable America (Washington, D.C.: U.S. Govt. Print. Off., 1999)
Board on Sustainable Development, National Research Council, Our Common
Journey: A Transition toward Sustainability (Washington, D.C.: National Academy
Michael Common, Sustainability and Policy: Limits to Economics (Cambridge
University Press, 1995)
Michael Toman, “Sustainable Decisionmaking: The State of the Art from an
Economics Perspective,” Discussion Paper 98-39 (Washington, D.C.: Resources for
the Future, 1998).
#Precautionary Principle.39 How managers should assess potential hazards
has been debated for many years. It was a key issue in the debates over the Toxic
Substances Control Act, enacted in 1976. Its resolution of the issue was that
chemical producers should be responsible for research to assess hazards, but that there
had to be some trigger of concern before EPA could require such research. In recent
years, the European Community has taken the lead in applying what is called the
Prepared by Michael Simpson, Specialist in Life Sciences, and John E. Blodgett, Deputy
Assistant Director, Resources, Science, and Industry Division.
“precautionary principle.” It provides a framework for making decisions in the face
of uncertainty – described by one observer as a shift in environmental policy from
“react-and-cure to anticipate-and-prevent.”40 It has also become prominent in
international agreements. The 1992 Rio Declaration on Environment and
Development, Principle 15, stated:
In order to protect the environment, the precautionary approach shall be
widely applied by States according to their capabilities. Where there are
threats of serious or irreversible damage, lack of full scientific certainty
shall not be used as a reason for postponing cost-effective measures to
prevent environmental degradation.41
In January 1998, an international group of scientists, government officials, attorneys,
and labor and environmental activists developed the Wingspread Statement on the
Precautionary Principle which says, in part, “when an activity raises threats of harm
to human health or the environment, precautionary measures should be taken even if
some cause and effect relationships are not fully established scientifically. In this
context the proponent of an activity, rather than the public, should bear the burden of
proof.”42 The precautionary principle or approach has become a basis for European
environmental law and, increasingly, European environmental health policies, as well;
but in the U.S., the principle is at most implicit in environmental statutes.
The precautionary principle is not without its critics. Key objections include its
variability in interpretation, its potential role in trade protectionism, and its potential
to hinder the development and application of new technologies. The title of a June
1999 Harvard Center for Risk Analysis workshop on “The Precautionary Principle:
Refine It or Replace It”43 conveys the concern over how to interpret the principle.
Controversies over bioengineered foods have been cited as exemplifying both trade
distortions and hindrances to beneficial research and development.44
For further reading, see:
Kenneth Foster, et al., “Science and the Precautionary Principle,” Science, Vol.
288 (May 12, 2000), 979
A. Stewart, “Scientific Uncertainty, Ecologically Sustainable Development and the
Precautionary Principle,” Griffith Law Review, Vol. 8, no. 2 (1999), 364.
The United Nations Conference on Environmental Development, Rio de Janeiro 1992, Earth
Summit ’92 (London: The Regency Press Corp.,1992), p. 13.
P. Montague “The Precautionary Principle,” Rachel’s Environment and Health Weekly,
586 (February 19, 1998), 2. http://www.monitor.net/rachel/r586.html
For a brief summary, see Harvard Center for Risk Analysis, “Making Sense of the
Precautionary Principle,” Risk in Perspective, Vol. 7, issue 6 (Sept. 1999).
See Jonathan Adler, “More Sorry Than Safe: Assessing the Precautionary Principle and
the Proposed International Biosafety Protocol,” Texas International Law Journal, Vol. 35,
no. 173 (1999-2000), 196; and Kenneth Foster, et al., “Science and the Precautionary
Principle,” Science, Vol. 288 (May 12, 2000), 979-981.
Harvard Center for Risk Analysis, “Making Sense of the Precautionary Principle,” Risk
in Perspective, Vol. 7, issue 6 (Sept. 1999).
#Ecosystem Management.45 Ecosystem management is an approach to
land and resource management that has been conceptualized in various ways.46 The
scientific community has viewed ecosystem management largely as identifying
environmental conditions before European settlement of North America, and
examining how subsequent activities and management have altered ecosystems from
these conditions. The environmental community has seen ecosystem management as
using the scientific information on pre-settlement conditions to set management goals
for restoring or preserving ecological processes and biological diversity. The federal
land and resource management agencies have adopted ecosystem management to
improve their planning processes, both expanding the geographic and ecological scope
under consideration and broadening the participation of stakeholders.47 The USDA
Forest Service has recently revised its planning regulations to include “ecological
sustainability” as a way to implement ecosystem management.48
Ecosystem management is one of several approaches that attempt to expand the
historic, geographic, ecological, and participatory aspects of land and resource
management. Other efforts, some of which have existed far longer than ecosystem
management, include watershed management, landscape management, and multipleuse management. These approaches are all generally similar in attempting to consider
interactions among uses on lands and resources, typically on broader geographic
scales and over longer time periods than traditional management. They differ
primarily in their geographic basis (ecosystems, watersheds, landscapes, or politicallydefined management units) and their emphasis (ecological conditions; water supply
and quality concerns; ecological interactions; and land and resource uses).
Background. Policies to manage resources based on an understanding of the
broad environmental and social consequences of decisions have existed for decades.
Multiple-use management for the national forests, for example, has been required by
law since 1960, and arguably was the intent in the original 1897 forest management
authority. Watershed management can be traced easily to the Water Resources
Council and river basin commissions authorized in 1965. Ecosystem management
appears to have been first used in Professor Eugene Odum’s Fundamentals of
Ecology in 1971, and arguably is the vision presented by Aldo Leopold in A Sand
County Almanac in 1949.
Prepared by Ross Gorte, Specialist in Natural Resources Policy, Resources, Science, and
For a more detailed discussion of this issue, see U.S. Senate, Committee on Environment
and Public Works, Ecosystem Management: Status and Potential. Summary of a Workshop
Convened by the Congressional Research Service, March 24 and 25, 1994, S.Prt. 103-98
(Washington, DC: U.S. Govt. Print. Off., 1994), 331 p.
For a list of federal agencies with some land and/or resource management responsibilities
that are implementing ecosystem management, see CRS Report 94-339 ENR, Ecosystem
Management: Federal Agency Activities.
65 Federal Register 67514-67581 (Nov. 9, 2000).
Ecosystem management, as adopted by the federal agencies, can be traced to the
United Nations Conference on Environment and Development (UNCED) held in June
1992 in Rio de Janeiro, Brazil. The 1989 U.N. General Assembly resolution initiating
UNCED cited concerns about freshwater quality and supplies, deforestation and
desertification, biological diversity, and many other issues. UNCED included
discussions of the Rio Declaration (principles on environmentally sustainable
development), adopted Agenda 21 (an action program to implement the principles),
and opened for signature two treaties — a convention on climate change and a
convention on biological diversity. Ecosystem management for U.S. federal land and
resource management agencies was an approach announced by the Bush
Administration to precede the President’s attendance at the Earth Summit.
Pro/Con Analysis. The various views of ecosystem management have both
support and opposition. The scientific community view of ecosystem management,
involving expanded historic, geographic, and ecological information, is seen as leading
to better informed decisions by providing a baseline for assessing the results,
especially cumulative impacts, of management efforts. However, some argue that the
sciences have not progressed sufficiently to develop such information and that the
cost of such data collection exceeds any improvement in decisions. There is also
some concern that additional information on the conditions and uses of private lands
could be used to regulate those lands, constraining the private landowners.
The environmental community views of ecosystem management largely as a goal
of preserving or restoring biological diversity and ecological processes. Proponents
often assert that, because it is generated by scientific research, the information is a
“science-based” goal for land and resource management. They also sometimes argue
that the improved information and a goal of “naturalness” for federal lands can clarify
the role of the federal government, as a provider of public goods and social values,
and private landowners as producers of private goods. Opponents argue that a goal
of “naturalness” is unlikely to be limited to federal lands, and is likely to be used to
restrict private land uses. They also argue that, while recreating historically natural
conditions might be desirable for providing certain environmental values and
processes, but is only one of many possible options for land and resource
The federal adoption of ecosystem management has been as an expansion of the
planning process. Part of this expanded planning is developing broader historic and
geographic information. The Forest Service and the Bureau of Land Management
have conducted “ecoregional” assessments at relatively broad geographic scales that
include private land conditions and uses. These agencies contend that greater
information at expanded scales could lead to a better sense of the possible cumulative
impacts of federal decisions, while private land information might provide a clearer
understanding of the appropriate role of federal lands within a specific region. Some
oppose such data development, however, as a costly exercise with few real benefits.
Also, private landowners are concerned about possible regulation of their lands based
on information allegedly collected to improve federal land management planning.
Environmental interests criticize the federal agencies view of ecosystem management
only as a planning process rather than as a goal of restoring natural conditions. This
criticism might be alleviated somewhat by the November 2000 Forest Service final
revised planning regulations that establish ecological sustainability as a management
goal for the national forests. However, this new management goal engendered
criticism of the draft regulations from groups whose uses or interests may conflict
with this goal.49 Further, some have suggested that this goal differs fundamentally
from the direction in the laws currently governing national forest management, and
question whether the current laws permit ecosystem management for the federal
Federal ecosystem management planning is, according to the agencies, also
intended to promote greater cooperation in federal decisionmaking through expanded
public participation. Collaboration might reduce local antipathy towards federal land
ownership and produce a broader, more balanced local and regional economic base.
However, the expanded planning process likely will increase the time and cost of
planning, both directly by the federal government and indirectly by the public
participants, especially if another planning level (ecoregional assessments) is added.
The process also could exacerbate current feelings of frustration with federal land
ownership if the participants do not feel that the process has been truly collaborative
and led to consensus.
For additional information, see:
U.S. Senate, Committee on Environment and Public Works, Ecosystem
Management: Status and Potential. Summary of a Workshop Convened by the
Congressional Research Service, March 24 and 25, 1994. Prt. 103-98.
(Washington, DC: U.S. Govt. Print. Off., 1994).
U.S. General Accounting Office, Ecosystem Management: Additional Actions
Needed to Adequately Test a Promising Approach. GAO/RCED-94-111.
(Washington, DC: Aug. 1994).
(name re dacted),
(name er dacted), and (name redacted), Ecosystem
Management: Federal Agency Activities. CRS Report for Congress 94-339 ENR.
(Washington, DC: April 19, 1994).
The Keystone Center. The Keystone National Policy Dialogue on Ecosystem
Management: Final Report. (Keystone, CO: Oct. 1996).
Interagency Ecosystem Management Task Force. The Ecosystem Approach:
Healthy Ecosystems and Sustainable Economies. (Washington, DC: June 1995). 3
Oliver A. Houck, "On the Law of Biodiversity and Ecosystem Management,"
Minnesota Law Review, v. 81, no. 4 (April 1997): 869-979.
#Good Management Practices.51 Good management practices at the
individual level are the least intrusive and least consistent end of the environmental
policy spectrum because they rely on the good intentions of individuals. These
65 Federal Register 67514-67581 (Nov. 9, 2000).
Roger A. Sedjo, “A View of the Report of the Committee of Scientists,” Sustaining the
People’s Lands: Recommendations for Stewardship of the National Forests and Grasslands
into the Next Century, by the Committee of Scientists, K. Norman Johnson, Chair
(Washington, DC: March 15, 1999), p. 183.
Prepared by Jeffrey Zinn, Specialist in Natural Resources Policy, Resources, Science, and
practices encompass stewardship by landowners and leaseholders as they manage
private working lands that provide diverse benefits, ranging from producing
commodities such as trees and row crops to providing habitat and amenities. The
most familiar applications of good management practices occur in the context of
resource management activities. However, the essential concept of these practices is
that good stewardship of the land – keeping soil on the land, rather than permitting
it to erode into nearby streams – will benefit both the land resource and environmental
quality. Good management practices are a collage of many possible actions that
involve physical modifications to the landscape and sound resource management
activities that provide environmental benefits. While the practices usually have a
single environmental focus, such as improved water quality, they typically provide
multiple benefits. These practices often are voluntarily applied, although that is not
The typical role of the federal government is to provide incentives that encourage
participation: (1) public cost sharing funds to help pay for planning, installation, and
maintenance; (2) education to explain both their benefits and how to properly use and
maintain them; and (3) technical assistance to help design and implement stewardship
activities. A cornerstone is planning to assemble the most appropriate mix of
practices that will help the land user reach his goals while recognizing the physical
characteristics and limitations of each site and its resources. The focus of application
has been on the most modified lands, which are usually lands cultivated to produce
crops, but also include forest lands, range, and pasture, and at the scale of an
Underlying concepts. Good management practices are designed to maintain,
restore, or enhance the health and integrity of the resource base – soils, water and air,
and the plants and animals that depend on them – by using tools that range from
active to passive and from construction to resource management. Individual practices
have design and other standards, but they vary widely in what they actually
accomplish because of the dynamic nature of land uses and conditions, and users’
goals. The unstated assumption is that resources benefit from these practices, not that
they should benefit at least to some prescribed level, or standard.
Pros and cons. Supporters cite many aspects of good management practices as
the basis for continued and expanded use. Participation is incentive-driven, involves
willing participants, and attracts those who want to improve their resources.
Participation is driven by personal goals about resource protection and improvement
rather than externally-generated requirements. Good management can be practiced
at many different scales and levels of intensity. Practices have design standards that
must be met. Each benefits the resources to different degrees, but all are
improvements over the status quo for resource conditions. Land users can change
their mix of good management practices; this flexibility recognizes the dynamic ways
in which land users may modify their goals from year to year.
Reliance on good management practices has also been criticized. Resource
problems are not evenly distributed across the landscape, so the relative interest in
applying them does not match the distribution pattern of environmental problems.
The result is a hodge-podge of practices that inefficiently address resource problems.
In addressing the resource problems of a given area, such as a watershed, there is
greater benefit when all landowners participate and when all utilize consistent
practices. Also, since participation is voluntary, there are few mechanisms to insure
that the practices are properly maintained after they are installed, even when federal
funds help pay for the installation. Few of these programs have penalties, such as
requiring the repayment of public funds if the practices are not maintained; the
installation of practices is often publicized, but the ephemeral characteristics are not
discussed. Further, there are few incentives for public agencies to monitor the
condition or performance of these practices after they are in place, and in many cases,
there are no penalties for land operators who decide not to maintain these practices.
Historical beginnings. Good management practices can be traced back to
defining events or periods. For agricultural land uses, the defining event for soil was
the Dust Bowl of the 1930s, when dust storms from the Midwest blanketed that
region and the West. The response was development of conservation practices that
would allow crop production while reducing soil erosion. For forests, there was a
defining period late in the 19th century rather than an event, with the recognition that
much of the forests were disappearing, especially in the East and upper Midwest. The
response was the establishment of the National Forest System and the beginnings of
efforts to develop sound forest management practices.
One part of the institutional structure that supports these practices, the land grant
college system, is far older, having been created in the 1860s. Because this system
was already well-established when these defining events occurred, the public policy
responses have drawn from this structure. The land grant college system has provided
a major research component to develop new practices and improve existing ones, and
also a major educational component through the USDA Extension Service.
Since the broad needs to protect and improve natural resources on private lands
were first recognized, both the number of concerns and the tools to address them have
expanded. Newer concerns are often more precise modifications of more general
ones raised earlier. Newer tools include tillage practices, forest management
techniques, and grass and rangeland management techniques. Emerging technologies,
such as biotech and Geographic Information Systems, are creating new opportunities
for good management practices. Recently, interest has grown in considering resource
needs from a systems perspective that combines many of these factors on a scale that
is larger than single land holdings, and emphasizes interrelationships among resources
that resource management experts view as critical to maintaining healthy resources
in the broader landscape.
Concluding thoughts. The voluntary approach to managing these resources has
generated considerable debate about their effectiveness. The voluntary approach is
viewed by some as getting the strongest commitment to installing and maintaining
practices because all the participants are willingly involved and have a strong desire
for success. Others see limitations in this approach in that the greatest needs or worst
problems are not necessarily controlled by willing land owners. They view this
approach as being less efficient, both in terms of committing public resources and in
terms of results. They also may view it as less enduring, as there are few features
built into these programs to insure that environmental benefits are maintained. One
aspect of this debate has been the questions of whether resources to conduct these
programs should be distributed more-or-less equally over the landscape and be
available in small amounts to many participants, as had been the case until recently,
or should they be concentrated to address the worst problems or greatest needs, based
on some measure of physical conditions, and the role that new technologies might
play in making this approach more effective.
For further reading, see:
National Research Council, Board on Agriculture, Soil and Water Quality
(Washington, D.C.: National Academy Press, 1993)
U.S. Department of Agriculture, Economic Research Service. Agricultural
Resources and Environmental Indicators.
#Pollution Prevention / Materials Management.52 Since passage of the
Pollution Prevention Act (Title VI of the Omnibus Budget Reconciliation Act of
1990, P.L. 101-508), the Environmental Protection Agency has been required to
develop and coordinate a pollution prevention strategy, and owners and operators of
many industrial facilities have been required to report annually on source reduction
and recycling activities as part of their submissions under the Toxics Release
Enactment of the Pollution Prevention Act marked a turning point in the
direction of U.S. environmental protection policy. From an earlier focus on the need
to reduce or repair environmental damage by controlling pollutants at the point where
they are released to the environment – i.e., at the “end of the pipe” or smokestack, or
after disposal – Congress turned to pollution prevention through reduced generation
of pollutants at their point of origin. Broad support for this policy change was based
on the notion that traditional approaches to pollution control had achieved progress
but should in the future be supplemented with new approaches that might better
address cross-media pollution transfers, the need for cost-effective alternatives, and
methods of controlling pollution from dispersed or nonpoint sources of pollution.
The Act states that –
it is the policy of the United States that pollution should be prevented or reduced
at the source whenever feasible; pollution that cannot be prevented should be
recycled in an environmentally safe manner, whenever feasible; pollution that
cannot be prevented or recycled should be treated in an environmentally safe
manner whenever feasible; and disposal or other release into the environment
should be employed only as a last resort and should be conducted in an
environmentally safe manner [§6602(b)].
These principles were adopted 15-20 years after the development of a complex
regulatory structure that governs emissions to the air, water, and land separately,
however, and their adoption has had little effect on the day-to-day functioning of
environmental regulatory authorities. Further, EPA and its state counterparts are
essentially reactive agencies, with little authority to require the use of cleaner
production methods or to require the adoption of “environmentally preferable”
Prepared by (name redacted),
and Industry Division.
Specialist in Environmental Policy, Resources, Science,
products. Given the fundamental respect for private property that permeates
American society and an economic system that values free enterprise above most
competing values, EPA and state environmental agencies are unlikely ever to have
authority to regulate production methods or production decisions, except in extreme
cases where a production method or product can be demonstrated to pose an
unreasonable risk to human health or the environment.53
Pollution prevention tools in the United States and internationally. Given
these constraints, the government’s role in pollution prevention has been limited
largely to research, information gathering, and information dissemination. Tools such
as the Toxics Release Inventory and voluntary programs in which industry commits
to reduce pollution beyond the requirements of law (“beyond compliance”) in return
for public recognition and use of an EPA-developed symbol are perhaps the Agency’s
most widely recognized tools.
In recent years, another pollution prevention tool has been the Supplemental
Environmental Project (SEP). SEPs are environmentally beneficial projects that may
be proposed by a violator during the settlement of an enforcement action. In FY1998,
EPA settlements produced 221 SEPs valued at $90.8 million. Over the 1996-1998
fiscal years, 20% of all judicial and administrative penalty orders included SEPs.
SEPs are often used as a pollution prevention tool: in reporting on its FY1998
enforcement accomplishments, EPA estimated that “60% of SEPs offered human
health or worker protection benefits, while 52% offered ecosystem protection.”54
Extended Producer Responsibility. There are other possible approaches that
combine regulation and pollution prevention. The most frequently discussed is an
approach referred to as “Extended Producer Responsibility” (EPR). EPR is a term
applied to efforts in Europe, Japan, and elsewhere that hold producers of certain
products responsible for managing them at the end of their useful life. This
management may be accomplished individually, by requiring manufacturers to take
products back after use, or collectively, by allowing take back or recycling to be
managed by an industry-wide organization.
Perhaps the best known example of EPR is the Green Dot system for packaging
recovery and recycling established in Germany by Duales System Deutschland (DSD).
Under the German Ordinance on the Avoidance of Packaging Waste, adopted in 1991
and fully implemented in 1993, packaging must be recovered and reused or recycled
by retailers and manufacturers. Since retailers did not wish to collect used packages,
manufacturers established a consortium to operate a separate collection system for
There are, in fact, some cases in which EPA has been given and has exercised pollution
prevention authority, for example in banning the manufacture and sale of asbestos products
or of DDT, or prohibiting the use of lead in gasoline. Several statutes, including the Clean
Air Act and the Federal Insecticide, Fungicide, and Rodenticide Act, provide some such
authority. The broadest authority is probably that provided in the Toxic Substances Control
Act (P.L. 94-469), which gives EPA the power to control “unreasonable risks” to human
health and the environment by prohibiting or limiting production or distribution of harmful
substances or products containing them. Use of this authority has been rare.
U.S. EPA. Office of Enforcement and Compliance Assurance.
Accomplishments Report, June 1999, p. 4.
used packaging throughout Germany. (The Green Dot, or recycling symbol, identifies
those packages included in the system.)
This Dual System collects material for recycling curbside or at drop-off locations
in much the same way local governments or private organizations do in the United
States, but the system operates nationwide, and is paid for by fees that the
manufacturer or packager gives to DSD. These fees are based on the cost of
recovering and recycling specific materials (glass, plastic, paper, etc.). Thus,
manufacturers have an incentive to minimize packaging waste, since they must pay for
its recovery; and packages that are not recyclable are forced out of the system.
Many European countries and Japan have adopted systems similar to Germany’s
Green Dot for managing their packaging waste, and the concept is now being applied
in Germany and elsewhere to automobiles, electronic equipment, and other products.
By returning products for reuse or recycling, these EPR systems provide incentives
for the design of products that are easily reused or recycled and minimize the disposal
of solid and hazardous waste.
There are many sources of information on pollution prevention and extended
producer responsibility. Two comprehensive sources are the EPA Office of Pollution
Prevention Website [http://www.epa.gov/p2/] and the National Pollution Prevention
Roundtable [http://www.p2.org]. For information on extended producer
responsibility, the Organisation for Economic Cooperation and Development’s
Website [http://www.oecd.org/env/] is searchable using the term “Extended Producer
Responsibility.” Among OECD publications is a 1996 report on EPR policies in the
OECD member countries.
#Environmental Management Systems and Audits.55 Over the last 10
years, corporations and governments have given a great deal of attention to the use
of environmental management systems (EMS) as a tool to lessen environmental
impacts and improve compliance with environmental laws. The most prominent
efforts to facilitate the use of EMSs have been those of the International Organization
for Standardization (ISO), which has developed a series of standards for
environmental management systems referred to as the ISO 14000 standards.
Voluntary industry standards. ISO is a nongovernmental, international,
industry-based organization. Its U.S. counterpart, the American National Standards
Institute (ANSI), has a long history – as does ISO – of setting voluntary industry and
product standards to facilitate both domestic and international commerce.
In the 1990s, ISO (with ANSI participation) developed a set of standards
covering environmental management, environmental auditing, life cycle assessment,
environmental labeling, and environmental performance. To be certified or registered
under these standards, an organization must demonstrate that it has an Environmental
Management System in conformity with ISO 14001. Conformity with ISO 14001
indicates that a company or organization has a system in place for setting
Prepared by (name redacted),
and Industry Division.
Specialist in Environmental Policy, Resources, Science,
environmental goals, auditing performance, and taking corrective action. But the
company or organization is free to set its own goals; thus, compliance with ISO
14001 does not necessarily certify environmental excellence. Furthermore, the
absence of any meaningful public reporting requirement in the standard means that
outsiders have no way of judging a company’s environmental performance under the
Thus, compliance with ISO 14001, often discussed as a new method of
stimulating improved environmental performance, is probably not, in its current form,
a substitute for environmental regulation. But many feel it has the potential to
improve corporate performance and benefit the environment.
Environmental audits. The same may be said for a related tool, the
environmental audit. Environmental audits presume that there are environmental
regulations against which to measure a company’s performance. In the absence of
regulations, an audit would be relatively meaningless.
Audits have been used extensively in the corporate world as a means of
improving environmental performance. A 1995 survey by Price Waterhouse found
that 75% of 369 companies who responded conducted such audits and another 8%
planned to do so.
Some argue that audits would be even more widely used were it not for fear that
they may provide evidence that could be used against the company in court or in other
enforcement proceedings. As a result, there has been a lively debate throughout the
1990s as to whether state and federal governments should consider information
collected in audits to be “privileged,” or inadmissible in enforcement proceedings.
About 20 states have provided some such privilege for environmental audit
information, and some states offer immunity from civil and criminal penalties to
persons and entities reporting violations detected in such audits, provided that
violations detected are promptly reported and corrected.
U.S. EPA and the Department of Justice have adopted policies restricting the
role of audit information in enforcement proceedings and reducing penalties for
voluntary disclosure of violations; but they oppose legislation that they believe would
limit their discretion in such matters. Such legislation was the subject of
congressional hearings in the mid-1990s, but now appears to have less support.
For further reading, see:
CRS Report 96-332, Environmental Audit Privilege: State Laws and Federal
Policy, (name redacted), Apr. 11, 1996.
Pacific Institute for Studies in Development, Environment, and Security.
Managing a Better Environment: Opportunities and Obstacles for ISO 14001 in
Public Policy and Commerce. March 2000
Appendix A: Selected Readings
Jonathon H. Adler, ed., Ecology, Liberty & Property: A Free Market Environmental
Reader (Washington, D.C.: Competitive Enterprise Institute, 2000)
Terry Anderson, ed., Breaking the Environmental Policy Gridlock (Stanford, CA:
Hoover Institution Press,1997)
The Aspen Institute, The Alternative
Ronald Bailey, ed., Earth Report 2000: Revisiting the True State of the Planet (New
York: McGraw-Hill, 2000)
The Business Roundtable, Toward Smarter Regulation (Washington, D.C.: The
Business Roundtable, updated 1995)
Carnegie Commission on Science, Technology, and Government, Risk and the
Environment: Improving Regulatory Decision Making (New York: Carnegie
Marian R. Chertow and Daniel C. Esty, Thinking Ecologically: the Next Generation
of Environmental Policy (New Haven: Yale University Press, 1997)
Robert W. Crandall, et. al., An Agenda for Federal Regulatory Reform (Washington,
D.C.: American Enterprise Institute for Public Policy Research and The Brookings
Environmental Protection Agency, National Center for Environmental Economics,
[http://www.epa.gov/economics/]. See, for example, Robert Anderson, “Economic
Savings from Using Economic Incentives for Environmental Pollution Control” and
Robert C. Anderson and Andrew Q. Lohof, The United States Experience with
Economic Incentives in Environmental Pollution Control Policy.
The Environmental Protection System in Transition: Toward a More Desirable
Future (Washington, D.C.: Center for Strategic and International Studies. 1998)
Peter Humber, Hard Green: Saving the Environment from the Environmentalists: A
Conservative Manifesto (New York: Basic Books, 1999)
National Academy of Public Administration, environment.gov: Transforming
Environmental Protection for the 21st Century (Washington, D.C.: National Academy
of Public Administration, 2000)
Wallace E. Oates, ed., The RFF Reader in Environmental and Resource
Management (Washington, D.C.: Resources for the Future, 1999)
The Presidential/Congressional Commission on Risk Assessment and Risk
Management, Framework for Environmental Health Risk Management (1997) at
Research and Policy Committee of the Committee for Economic Development,
Modernizing Government Regulation: The Need for Action (New York: Committee
for Economic Development, 1998)
Philip Shabecoff, Earth Rising: American environmentalism in the 21st century
(Washington, D.C. : Island Press, 2000).
Irwin M. Stelzer and Paul R. Portney, Making Environmental Policy: Two Views
(Washington, D.C.: The AEI Press, 1998).
“25th Anniversary Special Issue,” Journal of Environmental Economics and
Management, 39 (May 2000).
World Wide Web Virtual Library “SUSTAINABLE DEVELOPMENT,” at
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