Executive Summary

Many in government, industry, academia, and other groups have questioned the effectiveness of traditional regulatory approaches (also known as ''command-and-control'' regulation) as the predominant mechanism for pollution control. The regulatory approach is becoming viewed by many involved in the process as an incomplete environmental strategy. In that context, industry-initiated environmental programs have increased in number and popularity and have come to be seen as an important means of supplementing regulatory activity. Industry-initiated programs can have many desirable aspects, including (1) the potential to address some environmental problems more efficiently than regulation can, (2) the ability to use in-depth industry knowledge of manufacturing processes to develop industry-specific, cost-effective solutions; (3) greater flexibility in methods by which to achieve environmental objectives; and (4) allowance for companies to establish environmental approaches that are consistent with their business goals.

The National Research Council's Committee on Industrial Competitiveness and Environmental Protection was formed to look at efforts undertaken in recent years to foster environmental initiatives within various industry sectors. Specifically, the charge to the committee was to:

Assess (a) ways to enhance and sustain recent 'voluntary' efforts by industry and government facility managers in pollution prevention and energy efficiency, and (b) recent efforts by EPA,



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--> Executive Summary Many in government, industry, academia, and other groups have questioned the effectiveness of traditional regulatory approaches (also known as ''command-and-control'' regulation) as the predominant mechanism for pollution control. The regulatory approach is becoming viewed by many involved in the process as an incomplete environmental strategy. In that context, industry-initiated environmental programs have increased in number and popularity and have come to be seen as an important means of supplementing regulatory activity. Industry-initiated programs can have many desirable aspects, including (1) the potential to address some environmental problems more efficiently than regulation can, (2) the ability to use in-depth industry knowledge of manufacturing processes to develop industry-specific, cost-effective solutions; (3) greater flexibility in methods by which to achieve environmental objectives; and (4) allowance for companies to establish environmental approaches that are consistent with their business goals. The National Research Council's Committee on Industrial Competitiveness and Environmental Protection was formed to look at efforts undertaken in recent years to foster environmental initiatives within various industry sectors. Specifically, the charge to the committee was to: Assess (a) ways to enhance and sustain recent 'voluntary' efforts by industry and government facility managers in pollution prevention and energy efficiency, and (b) recent efforts by EPA,

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--> DOE, and other agencies to stimulate, facilitate, and reward such efforts. The committee gathered information on a variety of programs to elucidate their common elements and some of the factors apparently influencing industry involvement in them. The committee was not charged to evaluate, nor did it have the resources to examine rigorously, the quality of individual programs. Thus, this report does not recommend one type of strategy over another. The growing number and variety of environmental programs initiated by industry in the United States includes environmental-management programs across entire industry or corporate entities, programs implemented on a project-by-project basis, and programs that seek to improve product- or process-design practices. In general, such programs are not related directly to technical compliance with regulations. Industry's motivations for initiating environmental programs are undoubtedly varied, not well understood, and typically multifaceted. Possible cost savings appear to be an important motivator. Companies tend to believe that programs they design to be compatible with their business culture and production processes are much more efficient and cost effective than traditional regulatory compliance programs. It is not easy and often not possible to quantify the effectiveness of most industry-initiated programs. Uniform metrics generally are not available to measure progress objectively, baseline data usually are inadequate, and goals (targets) for the programs often are not adequately described so that success can be measured. However, the potential benefits of such programs should not be dismissed merely because they cannot be measured rigorously. It is important to note that most regulatory programs also lack rigorous ways to measure environmental effectiveness or benefits.

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--> Next Steps Based upon its investigations, deliberations, and collective experience, the committee suggests the following approaches and principles to foster industry-initiated environmental efforts: Government agencies and other organizations should strive to improve methods to measure independently and evaluate objectively the environmental effectiveness of industry-initiated approaches. Efforts have been undertaken by government agencies and other organizations to encourage industry to begin or continue with self-initiated programs. Such efforts include partnerships between industry and government, between environmental organizations and local communities, and among industry consortia with environmental goals. Those efforts use approaches such as the establishment of industry-initiated environmental management standards, environmental labeling and certification programs, and federal and state programs to provide incentives and recognition for improving industrial environmental performance. The success of various programs remains largely speculative, and claims of industry successes often are met with skepticism. Better methods for evaluating programs are needed to provide a basis for agreement as to what is successful. By defining measurable goals and developing definitive and objective methods or a common set of principles, industry-initiated environmental programs could be encouraged further. A system for public reporting of environmental performance data by industry would provide all the stakeholders with information sufficient to allow conclusions to be drawn on the overall effectiveness of an activity or program. Such a system would need to take into account concerns about disclosure of confidential business information. In developing criteria for evaluation of industry-initiated efforts

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--> not involved with regulatory compliance, total net reductions of environmental waste or releases should not necessarily be considered paramount, because those can be greater for larger companies and for companies that have not previously operated efficiently. Rather, evaluation methods might include measures of efficiency, such as waste per unit of product. Different types of programs need different criteria for evaluation. No one criterion can accommodate the broad diversity of programs and types of industrial activities. An overall environmental management program needs a different form of evaluation than a program that focuses on specific industrial activities. In addition, industries, and sometimes manufacturing processes within an industry, have different environmental issues to contend with and each type should be evaluated with respect to the relevant issues. Government agencies should strive to make regulatory compliance strategies flexible and adaptable to opportunities for improvement. Many U.S. companies have initiated environmental-protection programs suited for a particular industry or facility. A common sentiment among industry is that specific technical elements of environmental regulations should be flexible enough to permit and encourage such programs by moving towards performance-based regulations which specify performance standards without mandating the means of compliance. New environmental regulations also need to protect the gains made by ongoing projects from being undone. Industry initiatives could be encouraged and sustained by a flexible performance-based regulatory structure that took more fully into account the ability of corporate management to comply with regulations in ways that are most effective and efficient for their enterprise.

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--> Other Considerations for Promoting Industrial Initiatives The committee is aware that efforts to recognize innovative programs, supply technical assistance, and disseminate information appear to be successful in some instances. Government agencies and other organizations are encouraged to explore innovative ways of using such techniques to promote industrial initiatives. Public awareness and public image are an important part of the motivation for companies to develop effective environmental programs. Organized and respected forums for recognition can encourage efforts in this area by providing recognition in the form of awards or publicity for innovative programs to improve environmental quality. This approach requires some framework for evaluation and selection by independent panels. Especially for small manufacturers and businesses, the costs of environmental improvements might be barriers to starting a self-initiated program. If technical assistance is available, the time and costs of researching options and developing a program often is lessened, and more small companies might initiate programs. If one company has developed an effective environmental management strategy, has overcome barriers, or has developed innovative technology, that information could be useful to other companies. Conferences, other types of meetings, and electronic communications should be used regularly by government agencies and other organizations to disseminate such information to encourage and assist other companies interested in improving their environmental performance. Examples of industry-initiated environmental programs and efforts to promote such programs are provided in Chapters 2 and 3 as well as the appendices.

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