United States
Environmental Protection Agency
Office of
Air and Radiation
Publication # 410-N-93-002
December 1993
The Economy vs. the Environment:
Working Toward a Win-Win Solution
E
nvironmental regulation does
not have to hinder the interna-
tional competitiveness of U.S. in-
dustry. Indeed, for many companies
the Clean Air Act Amendments of
1990 (CAAA) and other environ-
mental requirements can create new
economic opportunities. This idea
was the central message and chal-
lenge delivered to participants in
EPA's Clean Air Marketplace Con-
ference and Exhibition, held Sep-
tember 8-9 in Washington, DC.
The conference, which over 550
industry, government, academia, and
environmental group representatives
attended, provided a forum for the
discussion and promotion of new
business opportunities the CAAA
Max Baucus
created. Participants joined in 19
panel discussions on such topics as
new clean air technologies, export
opportunities, and the role of gov-
ernment in supporting the clean air
marketplace. The most intriguing
insight from the conference was that
CAAA regulations and the regula-
tory process can promote innovation
and increase competitiveness in af-
fected industries.
Four of the most influential
people in today's environmental mar-
ketplace gave thought-provoking
speeches at the Clean Air Market-
place Conference. EPA Administra-
tor Carol M. Browner and Senator
Max Baucus, Chairman of the Sen-
ate Environment and Public Works
Committee, each presented the
government's plans for designing a
regulatory regime that supports the
clean air marketplace. Donald A.
Deieso, President and CEO of the
Research-Cottrell Companies, em-
phasized the role of government in
keeping U.S.-based environmental
industries atop the world environ-
mental market. Professor Michael
E. Porter of the Harvard Business
School introduced conference par-
Highlights
Motor Vehicle Emission
Control Programs
Bruce Bertelson, Executive
Director of Manufacturers of
Emission Controls Association,
discusses the successes of the U.S.
motor vehicle emission control
program. See Page 5
Public/Private Clean
Air Partnerships
Steven Howards, President of
Environmental Strategies: Consult-
ants in Pollution Prevention,
describes the success of public/
private partnerships in Denver.
SeePageS
A Note To Our Readers
If you would like to add your name
to The Clean Air Marketplace
mailing list, please call (703) 934-
3172.
ticipants to what he called a new
paradigm of innovation underlying
the environment-competitiveness
issue.
Continued on following page
The Clean Air Marketplace is published by EPA's Office of Policy Analysis and Review, Office of Air and Radiation. Stephen Harper, Editor
-------
The Clean Air Marketplace
December 1993 Page 2
Environmental Regulations, the
Economy, and Competitiveness
It is commonly accepted that eco-
nomic prosperity is a prerequisite for a
robust environmental industry. Envi-
ronmental issues typically do not be-
comeprioritiesuntilacountry achieves
a relatively high standard of living.
Representatives of some sectors of the
economy, however, argue that pursuit
of a clean environment hinders efforts
to maintain a healthy economy, espe-
cially in periods of weak economic
performance. In opening the confer-
ence, Administrator Browner flagged
this argument saying, "The most com-
mon, but false debate that I hear— and
I hear this again and again — is that
people believe we must make a choice
between environmental protection on
the one hand and economic growth on
the other hand."
Clearly, environmental regulations
cost a lot of money. However, a signifi-
cant percentage of these expenditures
become revenues for the environmen-
tal products and services industry, with
an annual value currently estimated at
approximately $100 billion.
Based on their own companies'
experiences, many conference par-
ticipants stated that the technologi-
cal innovations developed to assist
companies in complying with strin-
gent pollution regulations have
helped U.S. -based companies domi-
nate the global market for pollution
control equipment and other envi-
ronmental technologies. Because
they need to comply with air quality
regulations, for example, U.S. com-
panies have developed and marketed
clean diesel-engine technologies,
clean fuels, improved monitoring
techniques, alternative fuel vehicles,
and cleaner paints and solvents.
But what about the regulated
companies who, to comply with
CAAA requirements, have to invest
scarce resources in pollution pre-
vention and control equipment? Pro-
fessor Porter, recognized as an in-
ternational leader in the field of
competitive strategy, maintains that
pollution is basically wasteful. Pol-
lution "involves incompletely us-
ing a resource, throwing something
away, or burning something out.
"Pollution involves
incompletely using a
resource, throwing
something away, or
burning something out.
Therefore, it seems
inherently inefficient."
—Michael Porter
Therefore, it seems inherently ineffi-
cient." Rather than counting on con-
trolling pollution once it has been
created, for example by placing scrub-
bers on smokestacks, companies
should seek alternatives that improve
production efficiency to use raw
materials completely and, conse-
quently, reduce the creation of pollu-
tants. In Porter's view, the extent of
pollution generated in any manufac-
turing process suggests the extent of
opportunities for improving effi-
ciency and saving money, including
regulatory compliance costs.
Technological innovationis akey
to improving efficiency. Innovation
can be the development of new tech-
nologies such as better scrubbers that
minimize the costs of compliance.
Another, wider-reaching form, is in-
novation that not only addresses en-
vironmental regulations or problems,
but also leads to improved and com-
petitively superior products and ser-
vices. For example, hydroponic
growth of plants enables optimal
plant development and eliminates
Conference participants examine the various exhibits at the conference
-------
EPA Office of Air and Radiation
December 1993 Page 3
groundwater pollution from pesti-
cides and fertilizers. Such innova-
tions reduce the cost of compliance
and may yield benefits that exceed
initial compliance costs. Professor
Porter calls such improvements "in-
novation offsets" because they par-
tially reduce or completely elimi-
nate compliance costs.
In addition to solving environ-
mental problems, innovation can in-
creaseacompany'scompetitiveness.
Carol Browner
Companies that can recognize new
market segments, develop improved
process technologies and products,
and get their products to the market
first, will win. Because other coun-
tries often adapt U.S. environmental
regulations, U.S. companies are
given a head start on developing
superior products for which there
willbeglobaldemand. Whenviewed
in this light, environmental issues
and regulations can be seen as strate-
gic opportunities rather than burden-
some requirements.
If the potential for innovation
offsets is so great, why don't compa-
nies recognize this potential on their
own? Why do they need a regulatory
push? Professor Porter notes that
many companies have not focused
on environmental considerations in
the past and are, therefore, relatively
inexperienced in estimating the ben-
efits of both reduced compliance
costs and increased efficiencies
gained by preventing pollution.
Regulations identify specific
issues that companies should pay
attention to, ensure demand for envi-
ronmental solutions, push compa-
nies to address environmental prob-
lems, and level the playing field so
that no company will have a market-
place advantage over companies that
are pursuing environmentally
friendly strategies.
Rethinking Regulations and
the Regulatory Process
Regulations must be designed
correctly if these benefits are to be
realized. Stringent but flexible regu-
lations will best encourage rapid in-
novation. Stringency guarantees
environmental improvement by forc-
ing companies to take aggressive
steps. Flexibility allows companies
to find least-cost pollution preven-
tion and control approaches best tai-
lored to their own operations.
Conference attendees agreed
that for the economy to continue
growing as environmental standards
become stricter, future regulations
must provide flexibility to regulated
companies. Administrator Browner
remarked that she frequently hears,
"It's not the standards per se that are
causing the problem, it's the meth-
ods by which they have to be
achieved."
Regulations must move from
"command and control" to market-
based incentives; from reliance on
best available control technology to
encouraging development and dis-
semination of new, innovative con-
trol technologies; and from a single-
medium to a multi-media approach.
Administrator Browner and nu-
merous other panelists highlighted
the emphasis on flexibility in the
CAAA, citing as an example the
system of trading allowances that
was developed as the key to reduc-
ing acid rain emissions. Emissions
tradingprovides economic incentives
to companies to cut their sulfur diox-
ide emissions below the legal limit.
Browner also announced the Opt-In
Rule that will allow non-utility com-
panies to participate in this emis-
sions credit trading system. This will
extend the program's environmental
and economic benefits to other sec-
tors of the economy.
ProfessorPorteragreedthatEPA
should be regulating outcomes, not
technologies. Industry should be
Continued on following page
Michael Porter
-------
The Clean Air Marketplace
December 1993 Page 4
Donald Deieso
given tough standards to meet and
allowed flexibility in meeting those
standards. Under the current regula-
tory structure, Porter says, the prac-
tice of relying on a specific, "best
available technology" ensures thatin-
novation will not happen. Bestavail-
able technology approaches create dis-
incentives for companies to try some
other, more innovative way of con-
trolling pollution. If technology op-
industries. Senator Baucus believes
that regulations must use a multi-
media approach that considers the
total emissions of all pollutants into
all media. Porter also emphasized the
need to go beyond the "medium .by
medium" outlook.
One way to achieve this broader
regulatory approach is to focus envi-
ronmental improvement efforts on
specific industries. To identify and
achieve innovative solutions requires
a thorough understanding of each in-
dustry, its processes, its technologi-
cal limitations, and all of the environ-
mental issues it confronts.
Government, Industry,
and Environmentalists
Must Work Together
Of equal importance to how regu-
lations are structured is the process
through which they are developed.
Professor Porter described the cur-
rentsystem as an arm-wrestling match
"There's one thing that I want you to take away
from my remarks this morning: It's that in the
environmental debates that lie ahead, we really
need to enlist your help." — Carol Browner
tions are left unspecified by regula-
tions, but standards are stringent and
consistently applied, a competitive
market for innovations that meet the
standards at lowest cost will evolve in
response.
In designing flexible regulatory
approaches, regulators need to look at
the big picture to understand the en-
tire range of problems confronting
involving government, industry, and
environmental groups, in which sub-
stantial resources are consumed de-
veloping and responding to litigation
over the standard, rather than being
used to clean up the environment.
The resources and energy consumed
in the current struggle need to be
transferred to improving both the en-
vironment and the economy.
Increasing regulatory flexibility
and reducing the costs consumed in
the environmental struggle necessi-
tates altering the roles of government,
industry, and environmentalists. In-
stead of "feinting and dodging," us-
ing Porter's terms, about what the
standard should be, all sectors of the
marketplace must work together. Ad-
ministrator Browner recognized the
importance of this cooperative effort
when she closed her speech by say-
ing, "There's one thing that I want
you to take away from my remarks
this morning: It's that in the environ-
mental debates that lie ahead, we re-
ally need to enlist your help."
She and Senator Baucus pointed
out that EPA has already taken steps
in this direction and is planning to
take more. EPA is promoting innova-
tion through the development of more
flexible regulations as well as through
funding, partnerships, and public in-
formation. For example, President
Clinton has provided $36 million to
EPA this fiscal year for the Environ-
mental Technology Initiative; greater
funding is projected in the future,
including $80 million for 1995. Ac-
cording to Browner, this initiative "is
expected to provide significant impe-
tus to the environmental goods and
services industry by spurring the de-
velopment and marketing of innova-
tive technologies for pollution pre-
vention and control."
Administrator Browner stressed
that she recognizes that many small
businesses will be affected by the
CAAA. She wants to help businesses
See CONFERENCE, page 11
-------
EPA Office of Air and Radiation
December 1993 Page 5
The U.S. Motor Vehicle Emission Control Program:
Cleaning Up the Air and Stimulating Economic Growth
by Bruce Bertelson, Executive Director, Manufacturers of Emission Controls Association
The U.S. motor vehicle emission
control program has rightly
earned the reputation as one of this
century's great environmental and
technical success stories. New cars
emitonly a small fraction of the harm-
ful pollutants that were emitted from
cars made in the 1960s, and lead, one
of the most insidious pollutants, has
been virtually eliminated from gaso-
line. Of equal importance, the strate-
gies and technologies that have been
designed to achieve these significant
pollution reductions have contributed
to a dramatic increase in fueleconomy.
And they have fostered a new, multi-
billion dollar American industry em-
ploying thousands of highly skilled
workers who produce control tech-
nologies that are sold around the
world.
Despite the significant gains in
reducing per vehicle pollution levels,
the number of vehicle miles traveled
has doubled since 1970 to nearly three
trillion miles annually. As a result,
significant air quality problems per-
sist. To address these problems, Con-
gress enacted comprehensive revi-
sions to the mobile source program in
1990. Meeting the challenges of the
1990 CAAA and achieving our goal
of healthy air calls for innovative
strategies — and the U.S. motor ve-
hicle emission control industry will
continue to play a critical role in
meeting our air quality objectives.
Congress Enacted Controls
Automobile pollutants have
caused concern for decades. Smog in
Los Angeles on some days in 1955
was worse than it is in Mexico City
today, and during the late 1950s it
became clearthatmotor vehicles were
a primary source of air pollution. In
1970, the U.S. Congress targeted cars
by requiring more than a 90 percent
reduction in hydrocarbon (HC) and
carbon monoxide (CO) emissions
over uncontrolled levels by the 1975
model year, and approximately a 90
percent reduction of oxides of nitro-
gen (NOx) by the 1976 model year.
Congress recognized that the tech-
nology needed to meet those stan-
dards did not yet exist, but it also
knew that without the "incentive" of
statutory requirements, the automo-
bile industry would not develop the
technology needed to clean up auto
emissions. So Congress adopted tech-
nology-forcing standards.
The original deadlines were post-
poned several times, less stringent
interim standards were set, and the
original goal for NOx control was
modified. But emission control tech-
nologies evolved at a much faster
pace than would have occurred with-
outthe technology-forcing provisions
of the 1970 law. In 1977 Congress
mandated that all gasoline-powered
cars meet stringent standards by the
1983 model year.
Bruce Bertelson
In 1970 when Congress was con-
sidering whether to adopt technol-
ogy-forcing standards, many said the
technology needed to meet those new
standards could not be developed,
and even if it could, it would be pro-
hibitively expensive and fuel
economy, vehicle performance, and
model selection would all suffer; The
doomsayers, however, were wrong;
the control technology was devel-
oped to reduce pollution to a fraction
of the levels emitted by pre-1970 ve-
hicles, fuel economy has doubled
since the late 1960s, and a wide vari-
ety of high performance vehicles con-
tinue to be offered.
Motor Vehicle Pollutants Have
Been Substantially Reduced
Current emission standards for
cars require a more than 96 percent
reduction in HC and CO emissions
and a 76 percent reduction in NOx
from the levels emitted by uncon-
trolled vehicles in the 1960s. Today,
Continued on following page
-------
The Clean Air Marketplace
December 1993 Page 6
vehicles are equipped with modern
emission controls that also reduce
mobile source air toxics such as ben-
zene. Finally, lead, which presents
human health hazards and damages
emission control devices, has virtu-
ally been eliminated from gasoline.
Emission Controls Have
Been a Technological
Triumph
The centerpiece of motor vehicle
emission control technology is the
catalytic converter, or "catalyst",
which was first introduced in 1975.
This sophisticated technology accel-
erates the chemical reactions that con-
vert HC, CO and NOxto CO2, N2 and
watervapor without the catalyst itself
being consumed.
Some of the engine and fuel man-
agement developments that enable
catalysts to function more effectively
also improve fuel economy and per-
formance. Since the catalyst was
introduced in 1975, fuel economy has
shown a dramatic and continuous
rise. The success in improved fuel
economy is largely because of the
maximum engine efficiency made
possible by catalytic converters.
By 1983, when tougher emission
standards went into effect, the corpo-
rate average fuel economy for new
cars had reached 27.4 mpg, an im-
provement of 83 percent over the
1967 level. Even correcting for ve-
hicle weight reductions, the improve-
ments, compared to pre-controlled
cars, are dramatic—about 47 percent.
Catalyst technology has been
hailed as one of the great automotive
engineering developments. Car and
Driver magazine called the catalytic
converter one of the century's ten
best automotive breakthroughs.
The 1970 Clean Air Act
Created the U.S. Motor
Vehicle Emission Control
Industry
When Congress established tech-
nology-forcing standards in 1970, it
created a regulatory incentive for auto
manufacturers to act, and provided
thejustifcationforcompaniesto spend
millions of dollars in research and
development and capital investments
to bring control technologies into com-
mercial production. Armed with the
certainty that a market would exist for
those products meeting statutory stan-
dards, many companies responded to
the challenge and the motor vehicle
emission control industry was cre-
ated.
A recent survey of members of
the Manufacturers of Emission Con-
trols Association (MECA) revealed
that during the period 1975 to 1992
sales of catalysts and diesel filter tech-
nology in the U.S. and Canada ex-
ceeded $7 billion.
Sales areprojected^^owjy^n
additional $8 billionby/the ^do?f the
decade. And asyi^f^r^si^as^neT^^
figures are, they'Vepresent'^nly & por-
tion of the total |^.esoCmotQf yehicle
;P
*eco|K
United States led the rest of the world
in requiring reductions of pollution
from cars and trucks. Now, as the rest
of the world seeks to control motor
vehicle emissions, U.S. companies
with extensive experience are poised
to supply the world market with mo-
torvehicleemissioncontrolproducts.
Since the passage of the first Clean
Air Act Amendments in!970,MECA
members have spent over $500 mil-
lion in capital investments and nearly
$300 million in research and devel-
opment to commercialize and manu-
facture catalytic converters and die-
sel filters.
To meet the growing domestic
and foreign markets, these compa-
nies arepredictingthatthey will spend
an additional $350 million in capital
investments and $200millioninR&D
during the 1990s.
Revenues realized in the U.S.
from sales of catalysts and diesel fil-
ter technology outside the U.S. and
Canada already exceed $1 billion and
are expected to total an additional
$1.5 billion by the end of the decade.
By the year 2000 these revenues are
expected, to exceed $400 million an-
£xpan^ng..ffiarkets will create
*-\
more than 2000 full-tirribdobs for the
~*""-"
. . v \
emission contro
,*...- y~*""-"^%
U.S—Workforce; oya&50~J»rcent of
*" /\v^m^J. f '
rthesep;Q'&£Joris wMbefiledFby skilled
U.S.
nized as world
and producing mobile source control
technologies such as the catalytic con-
verter. U.S. companies got the jump
in developing motor vehicle emis-
sion control equipment because the
re does
-net include additi
by the multiplier effect. The motor
vehicle emission control industry is
one of a growing list of industries that
has prospered as a result of environ-
mental control programs.
-------
EPA Office of Air and Radiation
December 1993 Page 7
Technology Forcing vs.
Market-Based Incentive
— Are They in Conflict or
Compatible?
Technology-forcing standards are
the cornerstone of the successful U.S.
motor vehicle emission control pro-
gram. These standards created an
incentive for both auto and emission
control manufacturers to develop and
commercialize the technology which
has become a showcase to the world.
But some would argue that technol-
ogy-forcing concepts have outlived
theirusefulnessandthatmarket-based
incentives are more efficient and po-
tentially more effective. Market-
based incentives offer some promis-
ing possibilities, but they have a
limited track record in the environ-
mental arena.
To meet the significant air qual-
ity challenges facing this nation in the
next decade and beyond, the optimal
strategy is to combine the best ele-
ments of technology-forcing perfor-
mance-based standards and market-
based incentives.
Performance-based standards cre-
ate the necessary regulatory incen-
tive for sources of pollution to act,
and provide certainty to those pre-
pared to commit the resources to de-
velop and commercialize the tech-
nology necessary to comply with the
standards.
Market-based incentives can pro-
vide flexibility by encouraging the
development of creative solutions that
will achieve the required emission
reduction.
See CONTROL, page 11
Global Market for Vehicle Pollution
Controls Could Reach $29 Billion by 2000
A recent market study forecasts that by the year 2000, the motor
vehicle pollution control market will nearly triple from an estimated 1993
level of $12,5 billion to over $29 billioa The report, "Motor Vehicle
Pollution Control: The Global Market," was prepared by Michael P.
Walsh, an expert on international motor vehicle emission control issues.
The motoryehicle population worldwide has been increasingtremen-
dously for several decades: automobiles by ten million per year, trucks
and buses by three and one half million per year, and motorcycles and
mopeds by approximately 4 million per year. One by-product of this
growth is a substantial increase in emissions of hydrocarbons, carbon
monoxide, nitrogen oxides and such toxic substances as fine particles and
lead. Rising motor vehicle-related emissions have caused governments
around the world to adopt stringent control programs to reduce this air
pollution.
Catalyst technology has played a key role in helping motor vehicles
meet increasingly stringent emission standards worldwide. Propelled by
a rapid increase in catalyst usage in Western Europe, and supplemented by
modest gains in Asia and Latin America, the global catalyst market has
grown from approximately 50 percent of all new cars in 1990 to over 80
percent in 1993. Further, incremental gains are expected as standards
become increasingly tighter in individual countries in Asia, Latin America,
and Eastern Europe.
As a result of tighter emissions standards and continued growth in
motor vehicle sales, the market forecast predicts:
* The light duty motor vehicle pollution control market should rise
from approximately $11 billion in 1993 to almost $ 16 billion by the
year 2000;
• The light- and heavy-duty truck and bus pollution control market is
anticipated to rise from a current $ 1.2 billion market to more than
$2 billion in the next several years and to climb to $7 billion by the
end of the decade; and
• The motorcycle and moped pollution control market, while much
smaller than me, automobile and truck markets, is no longer insig-
nificant and should grow to a $400 million market during the
decade.
Copies of the full report can be obtained from Michael Walsh at
telefax (703) 241-1418.
-------
The Clean Air Marketplace
December 1993 Page 8
Building Public/Private Partnerships for Clean Air:
Models From the Denver Experience
by Steven Howards, President, Environmental Strategies: Consultants in Pollution Prevention
CAAA requirements, a fact that has
complicated adoption of existing pro-
grams by other states or localities.
Large segments of U.S. industry
willbenefit from the implemen-
tation of stronger controls mandated
by the Clean Air Act Amendments of This article examines three types of
1990 (CAAA). Agrowingnumberof partnerships successfully tested in the
Denver metropolitan area and de-
scribes how these experiences might
be used to create models for other
state and local air quality administra-
tors are learning how to marshall these
considerable forces into helping them
develop and implement key programs.
These partnerships between the pub-
lic and private sectors may include
the thousands of companies vending
alternative fuels, pollution control
products, technologies, processes and
services, as well as those who support
metropolitan areas.
Three Models
Model 1: Partnerships for
Conducting Key Research
The Opportunity. Research can be
instrumental in helping air quality
stronger controls on certain types of planners design appropriate control
emitters. These partnerships are programs. Research findings can also
formed in the hopes of minimizing be of direct interest to diverse ele-
theneedformoreexpensiveprograms. ments of the private sector, helping
Public/private partnerships boast
an impressive record of accomplish-
ment in helping state and local offi-
cials to expand their resource and
political bases and to implement pro-
grams that might not otherwise have
been possible. These partnerships are
often custom-crafted to meet the spe-
cific program needs targeted by the
agency responsible for implementing
sources targeted for emission reduc-
tion to better understand why pro-
posed programs are needed and how
costs should be allocated.
Results of key research can also
be used to guide the development of
control programs that create expanded
markets for clean energy products,
technologies, services, and alterna-
tive manufacturingprocesses. A care-
fully crafted research pro-
cess that marshals the
involvement of these in-
terests can leverage pri-
vate resources to help
conduct research, build
consensus, and lead to
programs that enjoy
The Denver skyline broad support.
TheModel. The "Brown Cloud" study
was initiated by the Governor of Colo-
rado in response to growing pressure
from state and local air quality offi-
cials and the public, all of whom were
seeking stronger controls on coal-
fired utilities. Progress was stalled by
growing dissension over the projected
costs and benefits of reduction. The
cost of research needed to resolve
these issues was estimated at nearly
one million dollars. With limited
public funding available, the Gover-
nor convened a meeting of senior
level representatives of the major
polluting sources, clean energy prod-
uct vendors, and major public sector
interests.
Companies pledged funding and
their participation in designing a re-
search methodology to determine the
cause of metropolitan Denver's vis-
ibility problems, and to identify cost-
effective solutions. To protect re-
search credibility while insuring
private sector representation in all
aspects of decision-making, a Tech-
nical Advisory Committee represent-
ing major regional interests was ap-
pointed by the Governor and staffed
by the state air agency. Its recom-
mendations were conveyed to a three-
person oversight group that included
delegates of the Chamber of Com-
merce, the EPA Regional Adminis-
trator, and the Governor.
-------
EPA Office of Air and Radiation
December 1993 Page 9
Steven Howards
The Reward. It is unlikely that this
research or the programs it spawned
could have been completed without a
public/private partnership. The en-
tire project encompassed three phases
with a total cost of almost $2 million.
Over 90 percent of this funding came
from the private sector.
While the third and final research
phase is scheduled for completion in
Summer 1993, earlier findings docu-
menting the pollutant contribution of
motor vehicles, wood burning units,
and coal-fired boilers have led to a
host of initiatives by state and local
governments and the private sector.
These initiatives include local ordi-
nances banning wood-burning units
in new home;, state and local laws
requiring the purchase of alternative
fuel vehicles by public fleets and pro-
viding subsidies to defray the cost of
private sector conversions; and deci-
sions by the Public Service Company
of Colorado to test the use of gas
return technology at one of its Denver
area coal-fired plants and to avoid
coal as an option in converting its Fort
St. Vrain nuclear facility.
Model 2: Partnerships for
Building Consensus In
Developing Programs
The Opportunity. Both the publicand
private sectors have much to gain by
working cooperatively to develop the
most cost-effective programs for re-
ducing pollution from targeted sec-
tors. Potentially affected sources want
to ensure that all reasonable options
have been adequately considered and
that programs minimize costs. Com-
panies vending clear air products, pro-
cesses, or services need strong pro-
grams to create maximum market
opportunities. Air quality officials
must anticipate and address points of
contention, building consensus while
developing programs that secure
needed reductions.
The Model. The Governor's Diesel
Task Force was established in 1987 at
the recommendation of regional air
Colorado Public Interest Research
Group; and local, state and federal
governmental agencies, includingthe
Colorado legislature and U.S. EPA.
The group reviewed an assort-
ment of control options recommended
by air quality officials. The state air
quality staff, working in cooperation
with public and private sector partici-
pants, prepared briefing reports and
organized panels of experts to help
address questions raised by task force
members and to facilitate decision-
making.
The Reward. The Task Force devel-
oped the framework for specific leg-
islative and regulatory initiatives and
formed the core of an influential coa-
lition that worked together with state
and local officials to promote imple-
mentation of these proposed pro-
grams. Asadirectresultofthiseffort,
Colorado implemented one of the
The public and private sectors have much to gain by
working cooperatively to develop the most cost-
effective programs for reducing pollution.
quality officials. Its purpose was to
create consensus for developing and
implementing programs to reduce
particulate emissions from diesel ve-
hicles. The panel was appointed by
the Governor and staffed by the state
air agency, and included representa-
tives of major corporations, includ-
ing Cummins Power, Conoco,
Texaco, Marathon Oil, and Navistar,
environmental groups including the
Environmental Defense Fund and
nation's only inspection and mainte-
nance programs for diesel vehicles;
the Governor committed to propose
regulatory enactment of clean fuel
standards if the federal program was
jeopardized or delayed; and state and
local governments worked together
to strengthendieselopacityprograms.
In Colorado, the Wood Burning
Working Group and the Governor's
Alternative Fuels Task Force have
Continued on following page
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The Clean Air Marketplace
December 1993 Page 10
both successfully used similar mod-
els to identify needed programs, es-
tablish their framework, and develop
a base of consensus that has enabled
successful program implementation.
ModelS: Partnerships for
Educating the Public and
Implementing Specific
Programs
The Opportunity. Many private
sectorinterests are positively affected
by the implementation of new pollu-
tion control
grams can imprve a community's
image and living environment, create
conditions corducive to future
growth, help to eil sure that the burden
for cleanup is all< icated equitably
tweensources, and establishexpi
markets for clean energy product
technologies, processes, and services.
Identifying those interests that will
benefitmost from proposed programs
and encouraging them to undertake
specific projects can be instrumental
in educating the public and helping to
implement needed programs.
The Model. Although air quality
officials were unable to impose an
outright ban on wood burning, they
were able to establish a metropolitan
area- wide program prohibiting wood
burning on declared "high pollution"
days. The program exempted natural
gas fireplaces, new generation wood
stoves, and pellet stoves, thereby cre-
ating enormous market opportunities
for these products. To facilitate pub-
lic compliance, state and regional air
quality officials worked cooperatively
with representatives of the "clean
burning" industry to encourage prod-
uct promotion. Led by Public Service
Company of Colorado, Rocky Moun-
tain Gas, Colorado Interstate Gas,
and a cadre of companies manufac-
turing or selling gas fireplaces, gas
logs, and gas stoves, these interests
created the "Light a Better Fire Cam-
paign." This coalition spearheaded
an aggressive advertising program to
inform the public about the hazards of
wood burning and the many advan-
esjjfta$ffifirgas*$ltern
Air officials worked
/ ??•
lively* with jtrfeX^ampaign andkother
private-sector interests-providing tax
breaks and rebates to cossumers pur-
^v
chasing natural gas or cleansburn|ng
units; promoting consistency ft
bui|ding codes \ofacililkte jtse of
&ural|*as'^nd newW woplTand pel-
ji&s; and esiablish-
ing certification programs insuring
the quality, efficiency, and proper
installation of the new technologies.
The Reward. Since the wood
burning program was put into place,
the number of clean burning stoves
and fireplaces has grown from an
estimated 300 to 96,000 units (about
one-third of ihe metropolitan Denver
area tolal). The burning bans to-
gether with the education/advertising
program mounted by the private sec-
tor have dramatically reduced wood
burning and retained high public com-
pliance with ihe episodic bans;
spawned the installation of natural
gas units in over 90 percent of all new
metropolitan Denver area homes hav-
ing fireplaces; spawned complete pro-
hibitions on new wood burning fire-
places in some communities; and
created new markets for clean burn-
ingproducts. Public compliance with
the episodic bans, consumer willing-
ness to purchase cleaner burning units
achieving season-long reductions, and
the success of local governments in
establishing increasingly stringent
programs is largely attributable to the
active role the private sector has
played in promoting clean alterna-
tives to traditional wood burning units.
Conch
>n
State and focal air agencies across
the country h^ve employed an assort-
ment of innovative partnerships with
the private sector, enlisting valuable
loping and implement-
ing a variety of important programs.
While many of these models are cus-
tom-crafted to meet the specific needs
of an area, replication is possible in
other areas if several criteria are
present: (1) strong public pressure
for regulatory action that encourages
active participation in programs; (2) a
diverse group of private sector inter-
ests (this may include both polluting
sources and companies vending air
products) that can be called upon for
support; and (3) political leadership
and technical expertise that can ini-
tiate, fashion, and pilot the process.
By focusing greater attention on
the positive role the private sector can
play in supporting clean air programs
and building upon the experiences of
others in creating innovative public/
private sector partnerships, state and
local agencies can dramatically aug-
ment their bases of support and their
abilities to achieve clean air goals.
-------
EPA Office of Air and Radiation
December 1993 Page 11
Conference
From page 4
learn what the rules require, the array
of technologies that are available to
them, and how to avoid enforcement
actions. EPA is planning to train
people at Small Business Adminis-
tration development centers across
the U.S. to assist small businesses in
complying with the CAAA. In addi-
tion, EPA is going to stimulate the
clean air marketplace by helping
small businesses that are currently
developing environmental technolo-
gies by partnering them with busi-
nesses that need the technologies.
Despite recent EPA efforts to
work with industry, many industry
representatives argue that the gov-
ernment should be doing more. Don
Deieso, President and CEO of Re-
search-Cottrell Companies, encour-
aged the government to provide in-
vestment tax credits for environmental
technology investments and tax cred-
its for research and development on
environmental technologies. To en-
hance the role of U.S.-based compa-
nies abroad, the government should
subsidize U.S. environmental busi-
nesses in other nations "by providing
loan guarantees and access to capital
at below-market rates." Without help
from the federal government, he ar-
gues, U.S.-based companies cannot
compete withforeign counterparts that
are backed by their national govern-
ments.
Others cited the need for industry
to play a key role in strengthening the
clean air marketplace. Professor Por-
ter encouraged industry to provide
substantive input during the regula-
tory process. In addition, companies
must strive to understand how their
operations affect the environment and
how they can reduce those impacts.
Emissioninventory requirements such
as the Toxics Release Inventory are
very powerful because they help com-
panies systematically quantify the
amounts and types of pollutants they
release.
The role of environmentalists in
the clean air marketplace also needs
to be redefined. Instead of focusing
on forcing industry to comply with
regulations, they should support regu-
latory standards that encourage inno-
vation, help disseminate information
about best practices, and work with
industry to develop strategies that will
allow companies to remain profitable
while protecting the environment.
Government, industry, and envi-
ronmentalists working together to
improve both the quality of our envi-
ronment and the health of our
economy can provide the underpin-
nings of sustainable development.
Senator Baucus stated his vision of a
sustainable future most optimistically
when he said, "Now we are on the
verge of a Renaissance; at the core is
an understanding that we must pre-
serve our natural resources to sustain
ourselves both economically and
physically."
Control
Frontpage 7
The U.S. emission control indus-
try is proud of its contribution over
the past 20 years in helping to clean
up the air we breathe. Catalysts have
been equipped on over 200 million
vehicles worldwide. Diesel panicu-
late controls are being installed on
new and existing trucks and buses.
Control technologies are now avail-
able for vehicles which operate on
alternate fuels such as natural gas,
propane, methanol, and ethanol. To-
day, sophisticated emission controls
are an integral part of high technol-
ogy/high performance motor vehicles.
Looking to the future, the 1990
Clean Air Act Amendments call for
possible implementation of Tier II
standards after the year 2000, which
would require an additional 50 per-
cent reduction in emissions, and Cali-
fornia has adopted an ambitious con-
trol program that will significantly
reduce emissions of cars sold in Cali-
forniainthemidto late 1990s. Greater
reduction of paniculate andNOx from
heavy trucks and buses also has been
mandated. Finally, emissions from
engines in off-road vehicles ranging
from heavy construction equipment
to lawn mo wers will be controlled for
the first time. The U.S. emission
control industry is now hard at work
on new technologies to meet these
emission control challenges and to
help the U.S. achieve the dual objec-
tives of clean air and sustained eco-
nomic growth.
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EPA Office of Air and Radiation
December 1993
The
A periodic newsletter on
business opportunities created
by the Clean Air Act Amendments
U.S. Environmental Protection Agency
Office of Policy Analysis and Review
Office of Air and Radiation
401 M Street, SW (6103)
Washington, DC 20460
Official Business
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