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8 Implementation Strategy A [though falling short of creating formal national material flows accounts, the United States possesses numerous databases, accounting based and statistical in nature, which could support the development of such accounts for the purposes described in this report. Specific studies using material flows accounts have been cited in earlier chapters, and from these efforts, significant insights on an effec- tive strategy for implementing material flows accounts can be gleaned. The material flows data already being developed at various levels (from the local to the national to the international) clearly demonstrate the value of material flows accounting, but the data are not being used as effec- tively as they could be if there were a consistent framework and system to link data at various levels. Further, the extent of accounts develop- ment and the nature of materials to be included are yet undetermined for any formal U.S. application. The committee notes that a formidable amount of work will be re- quired in designing a robust system of material flows accounts, to what- ever extent eventually justified a notion reinforced by the European Union (Eurostat, 2001~. Regardless of scale, intensive work will be in- volved in pulling distributed material flows databases together into a common system of prioritized accounts of quality data that will lead to accuracy in derived indicators and analyses. Further, the trade-offs regarding the extent of accounting system development, the nature and level of details of materials to be tracked, the cost of development, and the perceived benefits that will be derived from their use will have to be reconciled through extensive interactions among divergent constituencies. 93

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94 MATERIALS COUNT A successful implementation strategy for material flows accounting will be the key to its effective use in public policy making. An important element of the strategy would be the nature of the organization and its functionality. The committee discussed options for creating the organiza- tion, which are presented below. However, regardless of the organiza- tional structure established to effect material flows accounting in the United States, certain characteristics will be necessary. MISSION AND GOALS OF THE ORGANIZATION Clearly stating the mission and specifying the anticipated goals of the material flows accounting organization will be a necessary first step. The mission should focus on the key purposes for establishing material flows accounts and the desired outcomes from using them. An example, based in part on the European Union mission (Eurostat, 2001) statement follows: The mission of the Material Flows Accounting Office [organization] is to develop and maintain a common database system that will provide ma- terial flows information, which can be integrated into analyses of physi- cal and economic systems, thereby permitting more robust public policy decision-making. Related to the mission, organizational goals would focus on what spe- cifically is anticipated from establishing and using the system of material flows accounts. Examples not comprehensive goals follow: · For a specified system with definable boundaries (e.g., the U.S. economy) and a specified period, accurate material flows accounting will provide (1) an aggregate view, in physical units (e.g., tons), of the inten- sity of inputs to the system and outputs from the system to the environ- ment; (2) the changes in stocks of materials in the system; and (3) the flows of inputs to and exports from the system. · For a specified system, material flows accounting, along with pro- cedures for estimating uncertain flows as accurately as feasible, will per- mit the calculation of an accurate mass balance. · Material flows accounting and mass balances for targeted materi- als, at times coupled with other databases, will allow the derivation of indicators of impacts on the economy, people, and the environment. · Material flows accounting and various analyses will allow the tracking of targeted materials (e.g., toxic or hazardous substances) and the determination of secure or safe ways to handle or store them. · Material flows accounting can provide valuable data for use in life cycle assessment, which in turn may be used to design products or manu-

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IMPLEMENTATION STRATEGY 95 factoring or utilization processes to reduce adverse impacts on people and the environment or improve economic benefit. · Focusing on improving energy efficiency, accounts and analyses may be used to improve the recycling and reuse of materials, thereby ad- vancing manufacturing sustainability. · Material flows accounting and analyses may provide information to remove or mitigate regulatory and jurisdictional impediments to recy- cling and other beneficial reapplication or reuse of materials. · Accounting and analyses can be used to inform the substitution of materials for national security purposes. PARTNERSHIP A KEY TO SUCCESS As noted in Chapter 6, a deliberate attempt to include partners in material flows accounts data development and material flows analysis applications could result in early buy-in, better (more informed or robust) analyses, participatory decision making, rational compromise, and un- derstanding of the range of positions, options, variabilities, and uncer- tainties. Conversely, data development and material flows accounts ap- plications in isolation could result in narrowly focused analyses, data gaps, skewed (biased) outcomes, reduced expectations, reduced imple- mentation of material flows accounting conclusions, adversity, suspicion, fear, and resistance. The committee believes that a broad range of proactive partnerships is necessary to ensure successful development, implementation, and ef- fective use of material flows accounts. However, significant impediments to building effective partnerships will have to be overcome, as discussed in detail in Chapter 6. The ongoing work of the U.S. Geological Survey and the Bureau of Economic Analysis provide robust partnership-based models for data collection and analysis. IDENTIFYING AND SELECTING AN ADVISORY COMMITTEE A multidisciplinary advisory committee of expert partners should ini- tially specify data needs for targeted materials reflective of cost-benefit trade-offs, including integration, structuring accounts to address these needs, and developing a protocol for creation, prioritization, and popula- tion of accounts. After the initial work has been accomplished, the advi- sory committee would then guide successive steps aimed at achieving maturity of the system; coordinate the data input to the system by various stakeholders; and coordinate the research agenda to improve the system of accounts and linkages to other databases.

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96 MATERIALS COUNT COLLABORATIVE PROTOCOL NECESSARY Successful use of material flows accounts for sound public policy making hinges on cooperation among government, business, and the pub- lic. Regardless of the form of the organization, an important task is to establish the databases through the efforts of various stakeholders based on criteria and a protocol to ensure that those criteria are satisfied. Ele- ments of such a protocol include data quality, transparency, and format- ting to ensure access. PRIORITIZING MATERIAL FLOWS ACCOUNTS Not all materials in a specified system have to be tracked for sound public policy making; rather, reflective of practical and economic consid- erations, successful implementation would require that selected material flows accounts be structured and populated according to a protocol. This does not necessarily require an expansive new data collection program, but targeted material flows data from existing distributed database sys- tems may be pulled into a common accounting system that reflects the benefits related to costs. Areas of potential highest benefit will have to be determined while considering the optimal spatial levels of implementa- tion, the scope of targeted materials, and the associated scale of accounts development. Determining the order of accounts development requires a prioritization system, which should be part of the protocol. Many criteria could be used to determine priority materials for which accounts would be established. An incomplete list includes the following: economic im- portance, scarcity, volume, goal-based impact, ease of collection, and risk. GLOBALIZATION OF ACCOUNTS Just as materials flow across national boundaries from import and export activities, so must the data to ensure full and accurate accounting of targeted materials. The Eurostat (2001) report also acknowledges this eventuality, which could well become part of doing international busi- ness beyond the European Union, much as International Standards Office (ISO) guidelines have been incorporated to ensure quality control (ISO 9000) and improve environmental management systems related to busi- ness (ISO 14000~. For these reasons, the committee encourages the U.S. material flows organization to explore the usefulness of integrating inter- national data into the nation's databases. The committee also encourages the design of the U.S. system so that it is compatible with a global (e.g., the European Union and Japan) materials accounting and flow analysis sys- tem in terms of definitions, standards, and measurements.

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IMPLEMENTATION STRATEGY OUTLINING AN INITIAL RESEARCH AGENDA 97 Even though there are substantial existing data for the early develop- ment of formal material flows accounts, additional important issues will arise concerning the scope of these accounts and of the data in them, as well as their uses, such as estimation methods for indirect or hidden flows and their impacts, estimation of the level of recycling and its contribution to resource conservation, procedures for balancing inputs and outputs, and derivation of the most appropriate indicators of various measures of performance. Chapter 7 outlines many other research issues in detail. Working together, government agencies, the industrial sectors, re- searchers, and other users of the data will undoubtedly have to capture the issues that arise, which will require further research for solution or better understanding. For example, many gaps in data collection are cer- tain to be found, and a key task will be to examine the trade-off between additional data collection and the use of proxy data. Further, there will be opportunities to improve the material flows accounting framework and the accounts themselves over time, thereby moving the entire process to a higher functional level. Anticipating the inevitably of such issues, a mate- rial flows accounting organization must coordinate collaborative devel- opment among government agencies, industrial sectors, researchers, and other users to form a long-range vision. The vision would focus on emerg- ing issue-oriented studies for supplementing the material flows databases, thereby filling the important gaps; completing the accounts; and develop- ing standards for the reliability and quality of data as well as appropriate qualitative descriptions and quantitative limits for the data. SUPPORTING ONGOING ACTIVITIES As mentioned above and in Chapter 5, a number of separate data- bases are available in the United States from which substantial material flows data can be obtained. These data have already proved useful, as described in Chapter 4 in some cases in a way relevant to public policy making. They also provide an historical repository from which dynamic analyses of material flows and their impacts may be done. Significant gov- ernment expertise already exists in the agencies that collect, maintain, and report on these data. Thus, the creation of material flows accounts requires that these data be available for incorporation into a formally structured common database system. The committee believes that it would be cost- effective to maintain the current material flows data and expertise, at least initially. As prioritized accounts are established and become functional, the activities of existing government data sources should be evaluated. The committee concludes that the present level of data collection and analysis

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98 MATERIALS COUNT must be maintained as an essentialfoundationfor the initial development of struc- tured materialflows accounts. The committee recommends that the present material flows data activities of the federal government, including those of the U.S. Geological Survey, U.S. Environmental Protection Agency, and Departments of Commerce and Agriculture, be maintained at least at their current levels of activity. Budgetary support must be sufficient to allow the activities to continue at levels that will maintain the integrity of the present databases. Sufficient resources must be available to replace retiring personnel and maintain staffing levels. If a decision were made to establish a system of national material flows accounts, staffing levels would likely have to be enhanced to support the effort. ORGANIZATIONAL OPTIONS AND RECOMMENDATION The scope of work discussed above generally includes work to con- vert data from existing distributed databases to the formally defined, modular material flows accounts structure. The cost of this effort goes beyond the cost of maintaining the distributed databases (by the home agencies) and requires that a working staff be established to populate, maintain, and use the accounts. The size of this staff depends on the ex- tent to which materials are targeted by the partnership for inclusion, as well as the frequency of reports, analyses, and extended uses (e.g., deriva- tion of various indicators), expected to be annual after the system is func- tional. An advisory committee should assist the administration of the or- ganization in defining, organizing, and prioritizing accounts. A number of options may be pursued in establishing and funding the material flows accounting organization, but it should be founded on a partnership-based consortium of industry, government, academia, and other committed stakeholders. The primary functions of the organization must include defining, organizing, prioritizing, populating, implement- ing, using, reporting on, and allowing access to selected accounts and as- sociated target materials. The establishing action would have to ensure the active participation of representatives from organizations and agen- cies that perform material flows-related functions. Potential options for creating and funding the organization include the following: Implementation in a Government Agency Although numerous material flows-related databases exist across agencies, the creation of the formal system of material flows accounts in a lead agency is viable, provided it is given authority and a budget com- mensurate with the responsibility relative to a formal charge and mission.

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IMPLEMENTATION STRATEGY 99 The establishing action must define where the organization will reside within an agency (e.g., exactly where in the Department of Commerce) and the working relationships among the lead agency and the many other material flows data providers in other agencies and externally. The estab- lishing action must also mandate a multiple-constituency advisory com- mittee, comprised of a core team of experts, to ensure that an effective partnership is used in resolving complex issues as work is pursued. This scenario would be relatively easy to mandate, perhaps the most cost-ef- fective scenario, but the committee perceives that it would present a chal- lenge to establishing an effective partnership. Specifically, this type of or- ganization may not be able to embrace a full range of issues in the broad context, presented in Chapter 3. It would provide direct federal oversight, as in most countries, that have implemented material flows accounting systems. Government Task Force Although the use of a task force historically relates to the accomplish- ment of temporary or formative tasks, it is possible that an interagency- and multiple constituency-based task force, or working group, could be established on a more extensive basis, similar to those for homeland secu- rity and energy policy. This is envisioned as a high-level, executive branch-based task force over an initial period (e.g., 5 or 10 years) with transition to one of several other forms of permanent organization later, after the system has been designed completely, implemented to the extent justified, used to generate relevant indicators and reports, and determined to be successful for permanent implementation. An advisory committee could either be a part of the working group or a stand-alone advisory committee to a working group of representatives from appropriate gov- ernment agencies (e.g., The Departments of Commerce [Bureau of Eco- nomic Analysis], Interior [USGS], Energy [Energy Information Adminis- tration], Environmental Protection Agency, White House Office of Science and Technology Policy). This scenario would present high visibility, at least initially, for a material flows accounting mission and provide im- petus for start-up and early implementation. The transition from a tempo- rary to a permanent organization is problematic. The public perception that a task force is often ineffective must be overcome. The effectiveness of a task force charged with the actual work could be compromised if members retained significant duties and responsibilities with their home organizations. There could also be a potential for conflict of missions.

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00 MATERIALS COUNT Independent Organization Affiliated with a Government Agency As an alternative to housing such an organization and its authority within a single lead agency with an advisory committee, it might be es- tablished as a completely independent organization, similar to the Energy Information Administration, associated with a coordinating or enabling agency, similar to the Department of Energy. Authority and a budget would be vested in a head, or administrator, of the organization, who would interact with the coordinating agency and the advisory committee. This approach would give more decision-making authority relative to material flows accounting to the independent organization, which must be responsive to the multiple-constituency advisory committee, thereby better ensuring an effective partnership effort. For cost savings the coor- dinating agency would coordinate organizational activities and facilitate the organization's functionality; however, formal decision making and its outcomes, as they impact other agencies, would be done by the organiza- tion itself. In this scenario the establishing action must ensure that repre- sentatives of the agencies that currently perform material flows related activities participate actively in processes. A New Center The final organizational strategy considered by the committee was the establishment of an independent center, similar to those established by the National Science Foundation. A center focusing on the creation, implementation, and use of a material flows accounting system could be established through a competitive solicitation (e.g., through the National Science Foundation). The mission and charge of the center and its func- tion would be specified in detail in the solicitation, which could be formu- lated by an interagency working group on material flows accounting. The center would consist of an administrative unit and of units that focus on various aspects of defining, organizing, prioritizing, populating, imple- menting, using, and reporting on selected accounts and associated target materials as well as researching related issues. To ensure its effectiveness, the center could be re-competed on a periodic basis, say every five or ten years. The center would also be responsive to an advisory committee com- prised of experts from multiple constituencies. The establishing action would have to ensure the active participation of representatives from agencies that perform material flows-related functions, a participation that transcends the role of advisory committee membership. Gaining the level of activity from government experts as well as the relevant data would be problematic. An organization that is independent of the government

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IMPLEMENTATION STRATEGY 101 would not have the same level of national support, visibility, or impact as would an organization under direct government authority. The budget needed to achieve full functionality would likely be more than for other scenarios, and in certain cases the costs for some activities would be du- plicative. Recommendation Having examined several options, the committee concludes that an indepen- dent organization is the most likely option to ensure success of material flows accounting in the United States. The committee believes that it will help the partnership process if the organization is separate from existing data pro- viders. Accordingly, the committee recommends that an independent organization, comprised of interdisciplinary experts, be created and funded through a formal process. The committee converged on the independent organization option as the most likely to ensure success of material flows accounting in the United States in the pursuit of sound, holistic public policy making. How- ever it is created, authorized, and funded, such an organization although necessarily independent must be given a specific mission and charge related to the provisions in this chapter, including the tasks outlined above. To ensure its effectiveness, detailed interactions must be estab- lished with U.S. agencies that currently perform material flows data col- lection and analysis. The material flows accounting organization must be comprised of a broad core team of interdisciplinary experts, augmenting the advisory committee and government partners. Specifically, the broader core team will have to consist of experts with knowledge of and experience in the fields of environmental science; design engineering; industrial ecology; geology and/or geological engineering; agricultural, energy, forestry, and mineral industries; economics; biology and chemistry; epidemiology, toxi- cology, and/or occupational medicine; survey development and data col- lection; database systems and management; and possibly others. SUMMARY As concluded in Chapter 5, the establishment of material flows ac- counts and their use in material flows analyses will improve public policy making. Ultimately, the accounts and analyses using them can be coupled with economic, quality of life, and environmental information to give in- tegrated-impact input on public policy. Much of the progress in this arena will be enhanced by ongoing research, which will run concurrently with the development of material flows accounts.

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02 MATERIALS COUNT The strategy for successful implementation of material flows accounts is important to ensure success in using them. By employing a partnership approach through an independent organization, the accounts and their uses would be enhanced, and through this enhancement, linkages with other databases on the economy, the environment, and social status could lead to the type of holistic public policy making necessary for a progres- sively more complex society.