Daniel J. Fiorino’s The New Environmental Regulation is an important book for environmentalists and economic developers. Following in the footsteps of James Boyd (Resources for the Future), Peter Barnes (author of Skytrust), Malcolm Sparrow (Kennedy School), Archon Fung (Kennedy School) and Daniel Esty (author of Green to Gold), Fiorino seeks to demonstrate that the United States has accomplished all the environmental protection that it can with its traditional approaches to regulation.
According to the author, “old school” regulation was necessary in its time, when the government had to legally coerce industry into changing their habits of resource use and disposal. The novelty of the environmental regulation field made it almost inevitable that regulators would take a top-down approach and require the use of a particular technology.
But this approach has had its downsides as well. Corporate-government relations were, at best, chilly, and could be litigious, adversarial and, at times, punitive. Other developed nations, such as Sweden, began exploring more collaborative styles and strategies much earlier than the U.S. and have made correspondingly larger strides in pollution prevention and environmental conservation. In these nations, industry associations played a larger role in actually shaping the regulation, pollution treatment and prevention “nexus”, in concert with government. In the U.S., Fiorino notes that worries about industry “capturing” environmental protection agencies led to a more distant business/government relationships than in Western Europe and Japan.
American federalism positioned the courts to play a bigger role than overseas, adding more fuel to the flame. The myriad U.S. “checks-and-balances” made it hard to really get anything done and issues closed, wreaking havoc with mounting more holistic multi-agency responses. (Once something was enacted or made an executive order, you could always sue and drag out or delay the implementation forever.)
Yet, despite the conflict and chaos, the book points out that the U.S. managed to ban DDT, nearly eliminate lead pollutants, clean the waters so one could eat what one caught and curb most other air and water pollutants. However, it is much more difficult to prevent non-point source pollution with a top-down approach. The old system cannot fully address the carbon emissions that threaten global warming and its attendant dangers. As a result of poor record keeping and the omnipresence of carbon emissions in industry, the U.S. is faced with an entire generation of hazardous waste that it has barely begun to tackle.
The challenges faced today are increasingly complex. Their solutions do not lend themselves to “one-size-fits-all” policies. The U.S. needs to call upon the problem solving talents and creativity of business, government and the citizenry. Efforts to drag industry kicking-and-screaming into the new world of preventative strategies will not succeed. The coerced make poor partners.
The author makes a strong case for this view, as it treats the history of environmental regulation and legislation, compares contrasting approaches in Western Europe, describes the growing obstacles, and spells out what the U.S. should do.
New environmental regulations should de-emphasize compliance, litigation and sanctions. (These tools should, of course, be kept in reach). The mutual interests of all parties should be the starting point, instead of the belief that all parties are as always at odds. Those firms that are effective environmental stewards should be rewarded with more flexibility in devising ways they meet its milestones.
The author, a professor at Johns Hopkins University and American University, devotes part of the book to reviewing successful examples of these new environmental regulations both here and abroad.
Fortunately, we do not have to start from scratch. We have models to emulate. Starting in the 1980s, companies like 3M embraced pollution prevention. Industries developed codes of conduct. New gurus of improved environmental stewardship, such as Michael Porter and William McDonough, preached that “going green” could create new industries. Researchers found enduring correlations between decreased toxic emissions and better financial performance.
What are these firms doing? They are setting their own environmental goals and doing enhanced reporting on their progress. Many corporations have created “Environmental Management Systems,” which move beyond compliance and pursue more holistic strategies. Economic sectors, such as the chemical industries, crafted “Responsible Care,” a far-reaching statement of goals and comprehensive strategies. Progress was uneven in the first years, but now the industry has embraced third-party certification efforts to really look under the hood and report objectively about performance.
Why this shift in philosophy and political tactics? Lots of reasons. Public relations and branding were major considerations for some. Others used the process to leapfrog over their competition. More companies showed that environmental investments compete favorably with other financial options. Some corporate leaders saw the uncertainties in business multiplying as the tensions between economic health and environmental health intensified. They drew the conclusion that they should embrace the future by taking action today to reduce the firm’s risks in the future. Credible threats to tighten the regulatory screws motivated business as well.
The worlds of policy and public administration also changed during this same period. The “reinvent government” movement took off. “Civic environmentalism” emerged as a method to tailor environmental strategies for a region. Both Republican and Democratic administrations gave states more power over environmental regulation and policing. The federal EPA launched some experimental approaches to reduce industrial pollution and conserve natural resourcesProject XL, the 33/50 Program, and others. The results of allowing more flexibility and customization by EPA were positive but uneven. Many environmental groups were also anxious about cutting deals with specific companies or facilities. Yet, over time, things went smoother and transaction costs and hassles were cut and milestones were met. Both sides were learning how to work together in very new ways, such as how to negotiate outcome-based agreements with regulated companies.
The author believes that, with good leadership and more constructive bi-partisanship, we could make accelerated progress in protecting our planet and its many life forms. He also offers a few directives for change agents:
- Design objectives for new regulations
- Establish legally enforceable, demanding performance standards
- Differentiate between firms based on past performance
- Promote continuous improvement in environmental performance
- Increase capacities and opportunities for learning
- Measure performance well
- Create mechanisms and relationships that foster trust
- Enact some new laws and change governmental cultures
- Champion a win-win vision for the future that avoids conventional tradeoffs between nature, environmental quality and the economy
The New Environmental Regulation shows industry, activists and environmental regulators that increased collaboration is necessary to create pollution prevention strategies that adequately address climate change. If more government agencies and corporations commit to the proposed directives, the U.S. will be in a better position to thwart a challenging threat and protect the environment in a more cost-effective fashion.