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Environmental protection at a profit.

|The notion that EPA could show American business how to save money struck me at first as somewhat preposterous.'

As I look back at the last 20 years, it is hard to find a more contentious area of public policy than the environment. It is a field peculiarly prone to morality plays, where opponents caricature one another as "rape and ruin" industrialists with dollar signs for eyes, or as "back-to-nature" no-growthers, contemptuous of the economic aspirations of others. When president Bush took office, the pattern of confrontation on environmental issues was deeply ingrained. He set out to change this, to depolarize the terms of the debate and to reconcile the growth vs. environmental conflict.

One of the president's first environmental priorities was to break the stalemate that had long stymied re-authorization of the Clean Air Act. He sent to Congress an ambitious and far-reaching bill, a good deal of which was embodied in the law that finality passed. The innovative new tools employed by the Clean Air Act, such as trading pollution allowances, credit for early voluntary reductions of toxics, and the use of other market incentives to obtain pollution reductions at the lowest possible cost, are going to achieve the level of environmental protection required by law on an accelerated timetable -- and in a manner providing the greatest benefits for the costs incurred. As I see it, these new approaches hold great promise for tackling many other environmental problems in a cost-effective way.

In fact, the Bush administration continues to search for new ways to help companies improve environmental performance in a manner as cost-effective as possible. We are encouraging voluntary commitments by companies to reduce toxic pollution levels in all environmental medial -- air, water, and land.

No one need fear that by emphasizing voluntary initiatives, we are neglecting our enforcement responsibilities. In the first three years of the Bush administration we have assessed more penalties and fines for violations of environmental laws than in all the previous 18-year history of EPA. The likelihood of tough effective enforcement, in fact, is a prerequisite for our promising environmental initiatives.

In one such voluntary, direct-action program, EPA has targeted 17 high-priority toxic pollutions for reduction. These are high-volume industrial chemicals that are associated with a variety of environmental ills. Benzene, for example, is a known carcinogen and also contributes to smog pollution; lead poses particularly high risks to children. These pollutants are controlled by existing laws, yet their releases from more than 10,000 industrial plants still total more than a billion pounds per year.

A little more than a year ago, I set the goal of reducing total releases and off-site transfers of these toxics by one third nationwide by the end of this year, as measured against a baseline reported in the Toxics Release Inventory (TRI) in 1988. By 1995, my goal is to cut these toxic releases in half. I called the program "33/50" and mobilized an EPA team to work with interested companies to achieve the goals.

At the core of this project is pollution prevention: eliminating wastes at the source, rather than creating wastes which then must be incinerated, treated, or otherwise disposed of. The project also stimulates the development of new materials, fuels processes, practices, and products designed to reduce or eliminate the generation of waste in the first place.

Through the 33/50 program, EPA has been able to open new channels of communication and action in industry. As of February, more than 700 companies had made explicit commitments to the 33/50 Program, resulting in a projected reduction of more than 300 million pounds of toxic pollutants by 1995.

Green Lights

Another EPA effort to achieve pollution prevention through voluntary, direct action is our Green Lights Program, which encourages the use of energy-efficient lighting technologies by both the public and private sectors. Green Lights is a novel partnership between government and the private sector designed to encourage the installation of pollution-reducing, energy-efficient lighting across the country. It is voluntary and non-regulatory. It is a program through which the environment will not only be protected, but protected at a profit. Green Lights encourages U.S. corporations to install energy-efficient lighting only where it is profitable and only where it maintains or improves lighting quality.

I must say that the notion that EPA could show American business how to save money struck me at first as somewhat preposterous. It defies our normal experience. Now I'm a believer.

An investment in energy-efficient lighting, in most cases, guarantees a company a return on investment greater than its cost of capital. To demonstrate this, EPA is helping corporations choose the correct lighting upgrades that bring a high return on investment, help clean up the environment, and enable participating companies to demonstrate their commitment to environmental protection. More than 450 of America's leading companies have already signed up.

Green Lights Partners included American Express, Boeing, Citicorp/Citibank, Johnson & Johnson, Polaroid, Warner-Lambert, and Xerox. Eight states have even joined, as have 33 utilities and 148 lighting manufacturers and lighting management companies. Since its start in January 1991, Green Lights has received commitments to upgrade over two billion square feet of space to energy-efficient lighting. That's the equivalent of all the office space in New York City, Los Angeles, Chicago, Houston, and Washington, D.C., combined. These companies are upgrading their space today. And, they're typically earning a 30% return on the money they invest, with lighting systems that reduce energy and pollution.

Participation is simple: Companies that become Green Lights Partners agree to upgrade their lighting over a period of five years. They need only upgrade where it is profitable to do so, and only where lighting quality is maintained or enhanced. For its part, EPA provides a range of support services, including a decision support system designed to facilitate lighting upgrades, a National Lighting Product Information Program to help choose high quality hardware, and a financing data base that identifies utilities and finance, companies that offer incentives for upgrading. EPA is also committed to recognize publicly all Green Lights Partners through a public information campaign.

Dramtic Benefits

The financial benefits of Green Lights to individual corporations are clear. But perhaps even more dramatic are the benefits to the nation as a whole. If energy-efficient lighting were used everywhere it would be profitable, the electricity required for lighting would be cut in half, meaning that national electricity demand would be reduced at least 10%. That reduction alone would free about $18 billion annuality from rate prayers' bills for useful investment.

Most dramatic of all are the benefits to the environment. If fully used, Green Lights will result in a 7% reduction in total annual sulfur dioxide emissions, a 5% reduction in total nitrogen oxide emissions, and a 4% reduction in total carbon dioxide emissions, an output equivalent to that of 42 million cars -- one third of the U.S. auto fleet. These reductions will curb acid rain and help slow the green-house effect.

A New Cooperation

Green Lights is the vanguard for future "green" programs -- programs that will bring about new cooperation between EPA and the business community. Green motors, green computers, green refrigerators, green buildings -- all hold promise of reducing electricity demand and the pollution associated with power production. These programs reflect the common-sense view that good investment decisions require accurate and timely information. The Green Lights program gives corporations the information they need to make lighting investment decisions that are right for them.

The response to 33/50 and Green Lights demonstrates that a pollution prevention ethic is beginning to take root in many corporate settings. As the nation's environmental protection efforts mature, company managers are finding that the elimination of waste and the Total Quality Management approach go hand-in-hand -- both working to make industrial operations more efficient, less wasteful, and more profitable.

EPA also has something important to learn from these ventures in voluntary pollution prevention. The nation's environmental laws, and the great successes achieved over the past 20 years, relied heavily on command-and-control approaches to regulation. It is becoming increasingly clear that in a number of areas these approaches have taken us about as far as they efficiently can. Further incremental pollution controls are often limited in their reduction potential and expensive to achieve.

The use of incentives on behalf of the environment that work with rather than against the market, that reinforce sound economic decisionmaking, in conjunction with policies that leave industry with greater discretion to choose the means to achieve the goals set by government -- to redesign processes, to substitute new, less-polluting materials or fuels, to recapture and reuse pollutants -- represents the promising new directions that can achieve great gains in cost-effective ways. In these efforts, we regard industry both as partners and as customers.

Shared Goals at Least Cost

These programs demonstrate that government and industry can work together. They show that we need not rely on prescriptive policies, but instead can concentrate our efforts on cooperative ventures that engage the resources of the public sector and the private sector to achieve a shared goal at the least cost. They represent a collective approach to environmental stewardship that is setting the pace for future environmental policy. And they are transforming the culture of EPA.

Government -- fully as much as industry -- needs to experiment with new ways of doing business, even as we continue to enforce the laws vigorously and consistently. If our efforts in the 33/50 and Green Lights Programs are successful, we will have helped reconcile the nations's environmental goals with its economic aspirations, to the lasting benefit of both.

William K. Reilly is Administrator of the U.S. Environmental Protection Agency. Prior to becoming head of the EPA in February 1989, Reilly held a number of environment-related positions over two decades, including President of the World Wildlife Fund and President of The Conservation Foundation.
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Title Annotation:Meeting the Environmental Challenge
Author:Reilly, William K.
Publication:Directors & Boards
Date:Jun 22, 1992
Previous Article:Reconstructing the regulatory framework.
Next Article:The environment and U.S. competitiveness.

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