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Avoiding environmental bankruptcy.

The nation's effort to preserve the environment is shaping up to be the savings and loan debacle of the 1990s, but with much bigger stakes.

The numbers are mind boggling. If we address all of the problems from the past, such as hazardous waste sites, leaking underground chemical and petroleum-related storage tanks, and asbestos contamination, the cost could easily reach $600 to $700 billion.

How do we avoid another fiasco?

First, we must find agreement now between the scientific community and the public on a sensible concept of acceptable risk. Then we must develop a risk-based mechanism for setting cleanup and control priorities across all environmental media.

To accomplish the goal, I believe some drastic steps are needed.

Congress must effect a total reorganization of the Environmental Protection Agency with three major objectives in mind:

First, it should break up the entrenched bureaucracies that defend each and every program within the agency regardless of risk.

Second, it should give EPA the flexibility to establish risk-based priorities within and between programs.

Third, EPA should be charged with developing a five-year plan for allocating expenditures between programs based on its assessment of maximizing environmental benefit per dollar.

When the Environmental Protection Agency was formed 20 years ago it was well intended. In fact, its efforts have led to some very real national benefits However, instead of being pro-active, EPA has become a reactive agency. As environmental "problems" were identified, often with little scientific basis, the public conveyed its concerns to Congress, which then passed laws to solve those perceived "problems" and gave EPA the responsibility for implementation of these laws.

In the process, the EPA has created a constituency of over 68,000 private businesses, including contractors, consultants, lawyers, and others on the receiving end of expenditures that now exceed $120 billion annually. This virtual torrent of money has been fired at a panoply of environmental "problems," with little regard to the level of risk to either humans or the ecology.

To be sure, this governmental largess has provided the resources for the development of some very thoughtful, very skilled, and very effective firms who serve their clients with efficiency and great skill.

On the other hand, this growing environmental gravy train has spawned thousands of pseudo "environmental" consulting and other business services that seriously hurt the credibility of the firms which have real competence in the field.

In many cases, the result is the worst of all possible worlds - incompetent firms hard at work trying to solve "low risk" environmental problems.

What really is most numbing is the thought that we are putting the emphasis in the wrong places.

According to a well-thought-out, clearly documented study prepared for EPA by its Science Advisory Board (SAB), the problems most threatening to human health are:

* Ambient air pollution.

* Worker exposure to chemicals in industry and agriculture.

* Drinking-water contamination.

The high-risk ecological problems include:

* Habitat alteration and destruction (such as wetland degradation, soil erosion, and deforestation).

* Stratospheric ozone depletion and global climate change.

Considered relatively low risk are:

* Oil spills.

* Groundwater pollution.

Interestingly, contrary to what the scientific community is telling us; hazardous waste was ranked by the public in a recent poll as the top environmental problem. This misguided perception is costing the country billions.

The cleanup of hazardous waste contaminated sites dictated by EPA's Superfund and Resource Conservation and Recovery Act (RCRA) programs alone is expected to cost industry in excess of $100 billion over the next decade. This is almost equivalent to the profit of the entire Fortune 500.

Unfortunately, both of these programs were created by legislation and can be changed only by legislation. In the meantime, "business as usual" continues as Congress compounds the problem. As part of the 1991 budget reconciliation package, for instance, Congress, in a midnight action and without debate, re-authorized the Superfund program until 1994.

What this means is that industry and the government will for the most part continue to mis-spend billions in precious capital on "low-risk" environmental mismanagement, while problems that are truly serious go begging.

Few corporate executives really understand the magnitude of the problem. And fewer still have made any provision to reserve for these costs. Worse yet, industry is not mobilized to debate these expenditures which, all to often, constitute extravagant spending to fix "low risk" environmental problems.

RCRA re-authorization is anticipated within the next two years, and is expected to be the foremost environmental issue of the 103rd Congress. If industry and science can make the case, it is just possible that a major debate can be joined regarding the structure of the EPA and its inability to establish priorities.

There should be little argument against any shift in EPA's regulatory agenda toward environmental problem areas in which the agency can get the greatest benefit per dollar cost. But the enviro-industry/government complex can be sure to contest vigorously any significant shift in priorities.

How much heavier the burden on American industry gets will become much clearer over the next 12 to 18 months. The re-authorization of RCRA will be a major indication, as will EPA'a implementation of the new Clean Air Act. With any luck, and a renewed emphasis on "high risk" environmental issues, we may see the first signs of a shift in environmental issues and a reordering of the country's environmental agenda.

Anthony J. Buonicore is president and CEO of Environmental Data Resources, Inc., an environmental information services firm in Southport, Connecticut.
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Title Annotation:Viewpoint
Author:Buonicore, Anthony J.
Publication:Journal of Property Management
Date:Nov 1, 1991
Words:906
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