for Better Environmental Results:
    A Report on EPA Progress
from the Innovation Action Council
          April 2004

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                                    o the
                                            eader
In 2002, EPA released a comprehensive strategy to drive innovation in
environmental programs. Innovating for Better Environmental Results:
A Strategy to Guide the Next Generation of Innovation at EPA builds
upon past successes with innovative approaches to environmental pro-
tection and lays out how EPA will continue to advance new ideas to
improve the quality of our work.

This report describes the progress made to date and reaffirms our com-
mitment to advancing innovative approaches in the future. Indeed, sus-
taining a focus on innovative approaches is as important as ever. Today
we are challenged by increasingly complex environmental problems that
defy conventional regulatory solutions, budget constraints that require
doing more with less, and the expectations of an American public that
looks to EPA for leadership in ensuring environmental progress.

Innovation is key to meeting these and other challenges. Indeed, asking
the question "Is there a better way?" is one of the hallmarks of EPA
Administrator Mike Leavitt's leadership. Today we are asking that
question much more routinely. And by searching for the answer, in
partnership with other organizations that share our interests, we are
moving toward a stronger, more cost-effective environmental protec-
tion system for the country.

We are pleased to share this progress report, and we hope it will inspire
our staff and other environmental professionals outside of EPA to pur-
sue innovative approaches for improving environmental results.
                              The Innovation Action Council

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Contents
Introduction	1


Focusing Innovation on Priority Environmental Problems	3

   Improving Water Quality	3
   Meeting Water Infrastructure Needs	6
   Reducing Greenhouse Gas Emissions	8
   Reducing Smog	11
   Reducing Waste	13
   Reducing Chemical Risks	16
   Developing Safer Pesticides	18
   Addressing Regional Priorities	19

Developing Innovative Tools and Approaches	22

   Environmental Indicators and Results	22
   Environmental Technology	24
   Environmental Management Systems	26
   Sector Strategies	27
   Integrated Compliance and Enforcement Strategies	29
   Incentives	31

Strengthening Our Innovation Partnership with States and Tribes... 33

   Providing Financial Support	33
   Setting Priorities Jointly	34
   Collaborating to Solve Problems	35
   Replicating Innovative Successes	37
   Sharing Lessons Learned	37

Fostering Innovation in  EPA's Culture & Organizational Systems	38

   Capitalizing on Managerial Talent	38
   Tearing Down Organizational Barriers	39
   Sharing Information to Spur Innovation	41
   Evaluating Innovations to Assess Value	42
   Setting Aside Funds to Explore New Ideas	42
   Creating Awards for Innovation	43

Conclusion..                                                  ..44
For More Information  .                                        ..45

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  Introduction
   magine a future where companies achieve environmental
   results that exceed government requirements, where the same
   market forces that drive the economy create incentives for bet-
ter environmental results, where green technology and manufactur-
ing practices are widely utilized, where environmental considera-
tions are routinely factored into consumer choices, and where gov-
ernments, businesses, and communities work together to solve
environmental issues in new ways. EPA envisions an environmental
protection system that enables these and other benefits, and is har-
nessing the power of innovation to achieve it.

Innovation has and will continue to play a key role in advancing
environmental protection for the United States. Our current system
of environmental protection, comprised  of environmental regula-
tions, policies, and initiatives at the federal, state, and local levels,
   "Innovation will help launch the American people
   to a whole new level of environmental protection.
   Powerful technologies, market incentives,
   collaborative partnerships, and a focus on results
   must guide our approach to environmental
   protection now and in the future."
                         —EPA Administrator Mike Leavitt

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is now in its third decade. While some of its roots can be traced to
federal laws passed in the early part of the twentieth century, for
the most part, its "architecture" was designed in the 1970s. As
Congress began passing laws to address what had become a
national environmental crisis, EPA got to work developing regula-
tions to carry them out. lnitially,the focus was on controlling  pollu-
tion from the biggest and most obvious sources, such as industrial
and municipal facilities. And by all measures, those controls have
proven highly effective, significantly cutting pollution to our air,
water, and land.

Today, the basic architecture is still strong, but EPA and others recog-
nize future progress will not come easily.There is a growing concern
about our ability to address an increasingly complex set of problems
that defy conventional  regulatory solutions. EPA is addressing this
concern by supplementing the current regulatory system with inno-
vative environmental strategies and developing new non-regulatory
approaches to achieve  better environmental results. Finding ways to
advance environmental progress—to enable continuous improve-
ment—is the driver behind EPA's innovation interests.

EPA released Innovating for Better Environmental Results: A Strategy
to Guide the Next Generation of Innovation at EPA in April 2002. It
focuses on solving a set of priority environmental problems, devel-
oping new tools to enhance environmental problem-solving,
strengthening partnerships with states and tribes, and fostering
innovation in EPA's culture and organizational systems.

EPA offers this report to describe the Agency's progress in  each area.
Spanning the breadth of EPA's work, it provides numerous examples
of how environmental programs are changing to meet the increas-
ingly complex demands of today's world. Some of the examples
describe newly developed approaches. Others show how familiar
concepts, such as market-based trading, are being adapted for other
purposes.These examples are particularly encouraging, as they show
innovation taking hold and creating value on a much larger scale.

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   Focusi1
             Priority Envir
                            Problems
      With broad-ranging responsibilities and a workforce that is particular-
      ly passionate about its mission, EPA has spawned numerous inno-
vations over the past three decades. The emissions trading program
created to control acid rain, for example, is now in its 10th year and con-
tinues to be a model for applying market-based incentives to environmen-
tal goals. Likewise, voluntary programs, such as 33/50, which was created
to reduce emissions of 17  priority chemicals, and Green Lights, which
focused on improving energy efficiency, spawned a new generation of
voluntary initiatives that have enabled progress more quickly and cost
effectively than regulation alone.

   In considering new innovation investments, EPA honed in on a set of
environmental issues that  are serious in nature, national in scope, and in
need of new approaches to achieve more progress. They are impaired water
quality, funding for water infrastructure, smog, and greenhouse gas emis-
sions. The following sections highlight some of the innovative approaches
being used to address these issues as well as several other concerns.
Improving Water
Quality

   With about 40 percent of all
waters assessed in the United States not
meeting uses designated for them by
states, such as fishing and swimming,
EPA is embracing watershed  principles
to create a more comprehensive frame-
work for achieving water quality goals.
A watershed approach takes into
account natural hydrology and other

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factors that ultimately affect water quality, leading to more tailored and
integrated strategies for improving conditions. Watershed approaches also
emphasize stakeholder involvement, which means more perspectives and
resources are brought to bear to enhance problem-solving.

   EPA promoted a watershed approach through core water quality pro-
grams, in particular, programs that focus on monitoring, assessment,  and
development of total  maximum daily loads (TMDLs)—the  pollution lim-
its required for impaired waters.

   Monitoring is the  first  step to improving water quality, providing data
to assess conditions. EPA  is encouraging states to develop monitoring
strategies in collaboration with  other government agencies, volunteer
monitoring organizations, and academic interests to leverage resources and
improve coordination. Many states have now set up monitoring councils,
and as more information is obtained, EPA is in a better position to report
on actual water quality conditions. In 2002, EPA reported on 1,980 water-
sheds—90 more than in 2000. The additional information is also accelerat-
ing TMDL development.  In 2003, states prepared nearly 2,400 TMDLs
and EPA prepared more than 170. While developing TMDLs can be
resource-intensive, these results show steady progress toward putting them
in place wherever they are needed to achieve water quality goals.

   Recognizing that most water quality problems are best solved at the
watershed level and that the number of citizen-based watershed organiza-
tions continues to grow, EPA established a grant program in 2003 to sup-
                                       port locally driven watershed
                                       protection efforts. Twenty
                                       organizations  received a total of
                                       $15 million to implement a
                                       variety of watershed protection
                                       activities. In the  Meduxnekeag
                                       River Watershed in Maine, for
                                       example, the Houlton Band of
                                       Mahseet Indians is setting up a
                                       cost-share program with local
                                       potato growers to reduce agri-
                                       cultural runoff from farmland.
                                       This  grant is also being  used to
identify and address improper sewage connections, which can pollute
local waters. In addition to addressing the unique concerns in each water-
shed,  these 20 projects are creating models for addressing water quality
challenges in many other parts of the country.

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   EPA also promoted watershed protection by issuing a final policy on
water quality trading. EPA's 2003 Water Quality Trading Policy describes
common elements of credible trading programs and provides guidance on
how trading can be conducted in accordance with the federal Clean
Water Act. It also emphasizes the need for accountability and safeguards
to ensure strong water resource protection.
    "Water quality trading provides the kind of incentives
    and flexibility required to allow the nation's cities to
    work with other parties to achieve the goal of
    protecting watersheds ... We applaud EPA for
    developing and adopting this policy."
                     —Douglas Palmer and David Wallace, co-chairs,
                     U.S. Conference of Mayors Urban Water Council
   Increasingly viewed as an efficient and cost-effective method of
achieving water quality goals, trading programs allow one source, such as
a factory, to meet water quality requirements using pollutant reductions
created by another source that has lower pollution control costs. After a
water pollutant cap is set for a watershed, each source is given perform-
ance requirements.  If a source reduces pollution loads below the level
required, it creates a "credit" that can be sold. Some sources find that
buying credits is more cost-effective than making the reductions neces-
sary to meet their requirements. A study of three Midwestern watersheds,
for example, found  that trading could reduce the cost of controlling phos-
phorus loadings from point and nonpomt sources substantially—by 40-80
percent. An EPA analysis found the total potential savings from all types
of trading  ranges from $658 million to $7.5 billion annually.

   EPA's trading policy has garnered much support from key stakeholders.
According to Paul Faeth of the World Resources Institute, "The guidance
will help create markets that will provide incentives for improvements in
water quality. Ultimately, we believe this change will help to clean up the
nation's waters." Similarly, Douglas Palmer and David Wallace, co-chairs
of the U.S. Conference of Mayors Urban Water Council, stated, "Water
quality trading provides the kind of incentives and flexibility required to
allow the nation's cities to work with other parties to achieve the goal of
protecting watersheds . . We applaud EPA for developing and adopting
this policy."

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   Connecticut is using a trading program to reduce nitrogen loadings,
the primary pollutant impacting Long Island Sound. Publicly owned
wastewater treatment plants are the biggest source of nitrogen, and 79
facilities have come together to reduce nitrogen levels by nearly 60 per-
cent by 2014. In the western United States, Oregon has set up a trading
program to meet temperature requirements on the Tualatin River. The
state's largest sewage treatment plant operator, Clean Water Services, will
be able to save over $40 million in capital costs by restoring riparian habi-
tat along tributary streams and creating natural shade cover for spawning
salmon, rather than installing costly equipment to cool its discharge less
than 2 degrees Fahrenheit. Based on successful experiences with this and
other trading projects, EPA Region 10 created a handbook to help other
states determine whether trading is the right approach for achieving their
water quality goals. This product is now being modified for use nationally.

   EPA's new policy and implementation guidance on watershed-based per-
mitting represents another important step in reorienting water quality pro-
grams around watersheds. Under a watershed permitting program, permits
are issued to the sources within a watershed in a coordinated manner. This
approach makes it easier for the permitting authority—usually a  state—to
consider watershed goals and the impact of multiple pollutant sources and
stressors before permits are issued. Putting this approach into practice can
require permitting authorities to undertake a variety of changes,  such as
synchronizing permit issuance cycles within a watershed and developing
pollution limits that take multiple dischargers into account.

   While EPA is working with states and permit  holders to document dif-
ferent watershed permitting approaches, some useful models are already
available. For example,  in North Carolina, the Neuse River Compliance
Association—a nonprofit  organization comprised of public and private
sector permit holders—developed a single permit for reducing nitrogen
loadings into the river that supplants the need for individual permits.
Similarly, in Michigan, the Department of Environmental Quality devel-
oped a single permit to cover multiple stormwater discharges from com-
munities in the Rouge River watershed.
Meeting Water Infrastructure Needs

   Another important priority for achieving the nation's clean water goals
is protecting and sustaining investments in water infrastructure.
Communities across the country are challenged to find the fiscal resources
needed to replace aging drinking-water and wastewater systems, build new

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capacity to allow them to keep up with growth, and implement proper
security measures. A 2002 EPA analysis found that with no growth in rev-
enue, the shortfall for capital and operation and maintenance costs for
wastewater infrastructure will exceed $270 billion over the next 20 years.
For drinking water, the shortfall is nearly $265 billion for the same period.
    "Innovation will either reduce the need for infrastructure
    or bring down the cost of infrastructure, and hence,
    close the  gap."
                —Tracy Mehan, EPA Assistant Administrator for Water
   In 2003, EPA hosted a national forum with leading experts to discuss
options for meeting the United States' critical water infrastructure needs.
In opening remarks, the EPA Assistant Administrator for Water, Tracy
Mehan, highlighted the need for innovative approaches, stating,
"Innovation will either reduce the need  for infrastructure or bring down
the cost of infrastructure, and hence, close the gap." Four innovative
strategies dominated that discussion, and together they provide a frame-
work for addressing infrastructure needs nationally.

   One of those strategies involves managing infrastructure needs on a
watershed basis. As the preceding section described, watersheds provide the
optimal framework for addressing water-related issues, including those relat-
ed to infrastructure. A second strategy focuses on improved management
approaches for water infrastructure, such  as
environmental management systems, system
consolidation, and public-private partner-
ships. Based on their usefulness in helping
drinking water and wastewater facilities
improve operational efficiency, save money,
and extend the life of infrastructure invest-
ments, EPA is providing training and other
resources to promote their use within the
water infrastructure industry.

   A third strategy being promoted is
full cost pricing, which refers to billing
customers for the actual quantity of water
used rather than charging a flat rate. When
used effectively, this approach can raise

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revenue and increase awareness of water use. In 2003, EPA took steps to
encourage full cost pricing in hundreds of thousands of rental properties
by revising a drinking-water policy that has inadvertently discouraged
water metering and conservation for years. Under the Safe Drinking
Water Act, any public water system that has its own water source or treats
or sells water is subject to federal drinking-water regulations. As a result,
building or property owners who receive water from a public water system
and then provide and bill tenants separately for water have been regarded
as sellers and subject to regulations. The revised policy addresses this sce-
nario, allowing limited sub-metering and direct billing without triggering
drinking-water requirements.

   Promoting efficient water use on a broader scale is the fourth priority
In 2003, EPA began developing a new voluntary program to inform a vari-
ety of water users about the advantages of water-efficient products; to
motivate manufacturers to add more water-efficient options to their prod-
uct lines; and to encourage distributors, retailers, and water utilities to
promote water-efficient choices to consumers. In addition to reducing
demands on water infrastructures, EPA believes better efficiency can help
protect water quality and ecosystems, help mitigate the effects of
droughts, and save homeowners money on water and energy bills without
compromising convenience or performance.
Reducing Greenhouse  Gas Emissions

   EPA is focusing on incentives and the growing interest in environmen-
tal stewardship to reduce greenhouse gas emissions, such as carbon diox-
ide and methane. These emissions are an environmental concern because
they trap heat in the atmosphere and contribute to global climate change.
Given that the leading source of greenhouse gases—burning of coal and
other fuels—is also the  nation's leading energy source, EPA has worked
with a variety of organizations to promote energy efficiency
   Building on past success, EPA and the Department of Energy chose to
expand one of the country's most widely recognized energy efficiency pro-
grams—ENERGY STAR".  Through this program, last year, Americans saved
$9 billion on their energy bills, saved  enough energy to power 20 million
homes, and reduced greenhouse gas emissions equivalent to taking 18
million cars off the road. New energy performance rating tools created for
schools, hospitals, hotels, and other building sectors should boost future
benefits even more. On average, buildings that achieve improved energy
efficiency and earn the  ENERGY STAR label use about 40 percent less
energy than conventional buildings.

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    ENERGY STAR also added ceiling fans,
water coolers, and other consumer goods to its
list of qualified products. Since the program's
inception, 28,000 products—from 1,400 different
manufacturers—have earned the ENERGY
STAR label. More than 1 billion of these energy
efficient products have been sold. In an effort to
connect directly with consumers, EPA launched
the Change a Light, Change the World campaign in 2003 to challenge all
Americans to convert to energy-efficient lighting products. If every
American converted the five most frequently used light fixtures (or bulbs)
in their home to ENERGY STAR qualified products, the United States
could prevent 1 trillion pounds of greenhouse gas emissions annually.
                                                 ENERGY STAR
 CLIMATE
 U.S. Environmental Protection Agency
                                  While encouraging action from indi-
                               viduals, EPA also challenged businesses
                               to become part of the greenhouse gas
                               solution. Through the Climate Leaders
program, businesses and other organizations develop a greenhouse gas
emissions inventory for their activities and then set aggressive emissions
reduction goals to be achieved in five to 10 years. In the first two years of
the program, 54 organizations—with combined revenues representing
             Hydrogen Fuel Cell Vehicles
                    Become A Reality
   Opening the door to a new generation of cleaner vehicles, in 2003, the
   EPA National Vehicle and Fuel Emissions Laboratory became the first
   federal facility capable of testing and certifying a hydrogen fuel cell
   vehicle for emissions and fuel economy. Hydrogen fuel cell vehicles
   mean zero air emissions and less reliance on foreign sources of ener-
   gy.The first certification was given to Honda for its 2003 PCX model
   vehicle.To further promote this clean technology, EPA joined with
   DaimlerChrysler and UPS to put package
   delivery vehicles powered by hydro-
   gen fuel cells into commercial
   service.This initiative marks
   the first time these vehi-
   cles have been introduced
   as a part of a commercial
   fleet in North America.




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10
                                                     s^SmartWay
                                               Transport Partnership
                                                U.S. ENVIRONMENTAL PROTECTION AGENCY
6 percent of the U.S. Gross Domestic Product—have joined. To date,
pledging companies have agreed to greenhouse gas emissions reductions
that are the equivalent of taking 5 million cars a year off the road.

   Several initiatives for reducing
greenhouse gas emissions focus on the
transportation sector. For example, in
2003, EPA launched SmartWay
Transport, a voluntary partnership that
focuses on improving fuel efficiency and reducing greenhouse gas emis-
sions from ground freight transportation. Truck and rail transport now
consume 20 percent of all energy used by the transportation sector. While
burning fuel is necessary to move goods efficiently by truck and rail, some
of that fuel is wasted due to inefficient practices such as excessive idling
and using trucks with poor aerodynamic design. That wasted fuel trans-
lates to wasted money for freight transport companies and increased
emissions released into the environment.

                        The Best Workplaces for Commuters program
                    focuses on another source of greenhouse gas emis-
                    sions—drive-alone commuting. In the United
                    States, three-quarters of all trips made to and from
                    work are in single-passenger vehicles. Through this
                    voluntary initiative, EPA aims to minimize the envi-
                    ronmental impacts of drive-alone commuting while
also helping employers address parking issues, traffic congestion, and other
employee commuter concerns. So far, more than 600 employer partners
and 10 commuter districts—covering 1.2 million individuals—have  earned
the Best Workplaces for Commuters distinction for offering subsidized
transit, telework options, and other similar benefits. EPA expects the num-
ber of employees covered under this program
will triple in the next two years.

   The power of Best Workplaces for
Commuters, SmartWay Transport, ENERGY
STAR, and other voluntary initiatives for reduc-
ing greenhouse gases was highlighted in a 2002
EPA annual progress report. This report found
that EPAs partners voluntarily reduced green-
house gas emissions by 43 million metric tons.
Preliminary results for 2003 are even higher.
Reductions in greenhouse gas emissions rose to
48 million metric tons—the equivalent to elimi-
nating emissions from more than 30 million cars.
           Workplaces
           for Commuters8*

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Reducing Smog

   EPA is pursuing a number of innovative approaches to combat ground-
level ozone, sometimes referred to as smog. Ozone occurs naturally in the
Earth's atmosphere, providing protection from the sun's ultraviolet rays.
However, high concentrations at ground level can be unhealthy, aggravat-
ing respiratory illnesses such as asthma. Ground-level ozone forms when
emissions of nitrogen oxides and volatile organic compounds from vehi-
cles, power plants, refineries, and other sources react chemically in the
presence of sunlight, and is of greatest concern in the summer months.
The same sources that contribute to ground-level ozone also contribute
to particle pollution, either emitting particles directly or contributing to
their chemical formation. In addition to limiting visibility, particles can
have serious health effects for people with lung and heart disease, causing
hospital admissions and even premature death.

   In 2001, EPA acted to reduce ground-level ozone and  particle pollu-
tion by decreasing air emissions from a major source—diesel engines. A
new standard requires lower emissions from diesel engines and lower sul-
fur content in the fuels used to power them. Scheduled to take effect in
2007, these standards are expected to decrease emissions of  particles and
nitrogen oxide by 90 percent and 95 percent, respectively, compared to
1990 levels. While the new standards will mean cleaner emissions from
future vehicles, many existing diesel-powered vehicles will be on the road
long after the 2007 deadline passes. One way of addressing older vehicles
is to retrofit them with new emission control technologies.

   Through the Voluntary Diesel Retrofit Program, EPA works with state,
local, and industry partners to evaluate and install new technologies on
older vehicles. To date, public fleet owners and operators have committed
to 160,000 retrofits nationwide. In 2003, FedEx Freight—the first private
company to sign up—committed to retrofitting and using low-sulfur fuels
in one-third of its national fleet.

   EPA's Region 6 office in Dallas launched a retrofit program specifically
for older school buses. Air pollution from diesel vehicles has health implica-
tions for everyone, but children are more susceptible to this pollution
because they breathe at a faster rate than adults. The Adopt-A-School Bus
Initiative was established through a partnership with the American Lung
Association, state agencies, local officials, and corporate sponsors to help the
Dallas-Fort Worth area comply with air quality standards. Together, these
partners are working to replace 500 older buses over the next three years, a
move that will eliminate about 200 tons of emissions annually and give chil-
dren a healthier ride to school.
11

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                                              This program is now being
                                           picked up in other cities—in fact,
                                           more than 20 school bus retrofit
                                           projects are underway. In 2003, EPA
                                           established the Clean School Bus
                                           USA program to promote school bus
                                           retrofitting nationally, awarding $5
                                           million to help America's school dis-
                                           tricts clean up their fleets. With a
                                           goal of upgrading the nation's entire
                                           school bus fleet by 2010, this pro-
                                           gram will help ensure that school
                                           buses—the safest transportation
         choice for getting to school—are also the cleanest. For example, EPA
         Region 2 and the New York Association for Pupil Transportation recently
         signed a groundbreaking agreement to  reduce emissions of harmful pollu-
         tants from the thousands of diesel buses that transport more than 2  mil-
         lion children to and from school. This agreement marks the first time a
         statewide industry organization has committed to clean up its entire
^^^    diesel school bus fleet.

 12         EPA also promoted use of new technology to reduce emissions from
         diesel trucks and locomotives specifically when idling. In addition to
         increasing maintenance costs and engine wear, EPA estimates that long
         duration idling of trucks and locomotives consumes 1.2 billion gallons of
         fuel and emits over 200,000 tons of nitrogen oxides annually. Earlier this
         year, EPA provided guidance to state and local environmental agencies
         that promotes new idling reduction technologies as an additional way of
         meeting national air quality standards.

            Market-based trading offers a proven method for reducing air emis-
         sions from another major source—power plants. In 2004, EPA proposed a
         trading program that would cap  emissions of nitrogen oxide, sulfur
         dioxide, and mercury at levels that would never increase. Under this
         approach, states could set up trading programs that would  allow power
         plants to buy or sell emission credits. Modeled after the trading program
         successfully used to control acid rain, this approach gives power plants
         firm emission reduction requirements and an opportunity to find the
         most innovative ways of meeting them. It would be phased in over time,
         and would apply in 28 eastern states and  the District of Columbia, where
         smog levels are higher than air quality standards allow. When the pro-
         posed rules are fully implemented  in 2015, EPA estimates power plant
         emissions of nitrogen oxides and sulfur dioxide will fall by 65 percent and
         70 percent, respectively, compared to current levels.

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   Despite these and other initiatives, some parts of the country are not
expected to achieve compliance with the new standard for ground-level
ozone—the "eight-hour standard" taking effect this year. This spring, EPA
will formally designate those areas as non-attainment areas. In addition to
letting the public know that air quality is unhealthy, these designations
can affect environmental, transportation, and other public policy options
at the state and local levels. Recognizing the importance of innovation
and early planning to meet the tighter standard, in 2002, EPA announced
Early Action Compacts as a voluntary, proactive approach for areas
currently meeting the "one-hour ozone standard," but projecting non-
attainment for the eight-hour standard. With this option,  states, commu-
nity leaders, and local industry develop a plan for reducing ground-level
ozone three years earlier than would otherwise be required, while also
agreeing to meet other obligations that allow the non-attainment designa-
tion to be deferred.
Reducing Waste

   EPAs approach to waste management is
undergoing a fundamental change.
Traditionally, EPAs cleanup programs have
focused on managing waste after it has been
produced, such as disposing of hazardous
materials properly and operating landfills
safely. While those issues are still important,
EPA is now focusing more on preventing
waste and reducing and reusing resources
and materials when creating products.
WHAT CAN YOU
SAVE TODAY?
 S M  T W  T  F  S
        -   \\
RESOURCE CONSERVATION
CHALLENGE
   In 2002, EPA launched the Resource Conservation Challenge to
find  flexible, yet protective, ways to reduce waste and conserve natural
resources. This multimedia program challenges all Americans to prevent
pollution, promote recycling and reuse of materials, reduce the use of
toxic chemicals, and conserve energy and materials. Many industries are
taking up this challenge and finding environmental and economic bene-
fits along the way. For example, work with the electronics industry has
focused on reusing and recycling outdated computers, cell phones and
other electronic products. In 2000, more than 2 million pounds of
"e-waste" was generated in the United States, but less than 10 percent
was recycled. To raise public awareness about the value of reusing
and recycling these products and to provide more reuse and recycling
opportunities, in 2003, EPA—along with electronics manufacturers and
                           13

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"By the year 2020,1 believe.. .reusing waste products
will become the norm, and the demand for virgin
natural resources will be reduced dramatically.This
transition from disposal to resource recovery will be
driven, in part, by what we're learning today  in the
Resource Conservation Challenge."
                    —Marianne Horinko, Assistant Administrator
                       for Solid Waste and Emergency Response
retailers—launched the Plug-In To eCycling campaign. In the first year,
partners collected more than 26 million pounds of used equipment.

   The healthcare industry is also taking up the Resource Conservation
Challenge. Hospitals and other health-related organizations are working with
the Joint Commission on Accreditation of Healthcare Organizations to
strengthen environmental performance through the industry's accreditation
standards. In an effort to help facilities achieve continuous environmental
improvement, this initiative emphasizes waste minimization and, in
particular, eliminating mercury—a priority chemical of concern and routine
component of many medical waste streams.
      Reducing Packaging  in E-Commerce
   Internet-based companies ship millions of books, CDs, DVDs, and videos
   each year, and a large portion of the packaging waste ends up in the
   trash. In 2003, EPA and McDonough Braungart Design Chemistry, an
   international design firm, launched a design challenge focused specifi-
   cally on the packaging associated with the online sale of books.The
   premise of the challenge was to re-think and re-design e-commerce
   packages for a cradle-to-cradle life cycle. A team from Microsoft, Allen
   Schluger Company, and Shorewood Packaging won in the professional
   category, and a team from the Art Center College of Design in Pasadena,
   California won in the student category.The winning designs have many
   environmental advantages compared to conventional packaging, and
   exemplify how the public and private sector can work together to find
   innovative solutions to environmental problems.

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   Another important shift in EPA's waste program is a new focus on revi-
tahzation as part of cleanup actions. Revitahzation has been one of the
key objectives behind the success of EPA's Brownfields Program, which
cleans up and redevelops sites that have been abandoned because of real
or perceived contamination problems. Since 1995, this program has
enabled assessments at more
than 4,400 properties, helped to
create 25,000 jobs and lever-
aged $5.2 billion for cleanup,
construction, and redevelop-
ment. From the start, stake-
holders have been able to see
the benefits of jobs and an
expanded tax base, as well as
recreation and  other benefits
that enhance quality of life in
the community. This under-
standing has fostered public
support and hastened cleanup
and redevelopment activities.

   In 2003, EPA announced a new Land Revitalization Agenda to bring
these same  benefits to Superfund and other cleanup programs. In addi-
tion to emphasizing cleanup and reuse as mutually supportive goals, this
agenda focuses more attention on the needs of neighboring communities
in cleanup efforts—regardless of whether the property is a brownfields
site, a Superfund site, a petroleum facility, or a former gas station.

    Integrating revitahzation  objectives into EPA's cleanup  programs
will be easier because of another change—a decision to consolidate indi-
vidual cleanup programs into one new program. While Superfund and
other cleanup programs were created for distinct purposes,  the differences
among them have sometimes led to confusion, redundancy, and inconsis-
tency. From the public's perspective, the program name is unimportant.
The One Cleanup Program is designed to break down barriers between
separate programs and simplify cleanups for everyone. EPA expects this
move toward integration will achieve a number of benefits, including
improved efficiency and effectiveness of cleanup efforts, better sharing
of lessons learned from individual projects, development of more consis-
tent policy and guidance, and quicker and wider use of new cleanup
technologies. This consolidated approach will also enable communities to
gain a better understanding of all the contaminated sites in their neigh-
borhoods and the progress in cleaning them up.



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                                     Reducing Chemical Risks
16
                                The same pollution prevention mind-
                             set that has EPA focusing on the origin of
                             waste can also be seen in a new approach
                             for reducing risks from new chemicals.
                             Each year, the chemical industry develops
                             new chemical substances, and the Toxic
                             Substances  Control Act gives EPA author-
                             ity to regulate them. Before a company
                             manufactures a chemical for commercial
                             purposes, however, it must first submit a
                             pre-manufacture notice to EPA, and EPA
                             has 90 days to review it. EPA receives
                             between 1,500 and 2,000 pre-manufacture
notices annually. In most cases, the decision  to commercialize a product is
driven by issues such as efficacy, yield, and cost. Companies are not
required to test products and provide data to EPA, but if product testing is
performed, data must be submitted. Responsibility for assessing risk
ultimately falls to EPA, however. If EPA finds reason  for concern, it has
regulatory options, including the ability to require testing.

   Given its responsibility, EPA has developed numerous tools over the
years to assess new chemical hazards and exposures. Recognizing the
potential value these tools could have for industry during research and
development, EPA began working with chemical manufacturers and envi-
ronmental groups on an alternative approach to new chemical review.
Numerous computer-based methods that screen for hazardous exposure
concerns were combined into a  Pollution Prevention (P2) Framework. This
tool gives users information about products  and pollution prevention
opportunities early, when process and chemical changes are easier and less
costly. By taking chemical compounds and characteristics into account,
the P2  Framework enables manufacturers and EPA to address risk-related
questions quickly when actual testing data are lacking.

   In 2000, EPA launched a pilot program to test the P2 Framework more
broadly and offered companies a valuable incentive to participate—faster
reviews of pre-manufacture notices. Qualifying companies received a
response  to their notice in half the normal time, a real advantage for an
industry that aims to get products to market quickly. Participating compa-
nies cited other benefits, including a chance to minimize hazardous
wastes, product liability, and costs for research and development. In fact,
a study by one participant, Eastman Kodak,  showed research and develop-
ment costs could be reduced by up to 50 percent.

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   Based on pilot results, EPA released the P2 Framework for industry-
wide use in 2003 as part of the Sustainable Futures Initiative. This initia-
tive combines the P2 Framework with training,  technical assistance, and
special support for small businesses to promote the design, development,
and application of safer products and processes  throughout the chemical
industry. In addition to chemical manufacturers, EPA is now promoting
this tool to other manufacturing industries that use chemicals, such as
textiles and consumer products, which also could benefit from earlier
analysis of product risks.

   EPAs Design for the Environment program provides another venue for
working with industry to improve understanding of the relative risks of
chemicals and encourage use of safer alternatives. Industry partners value
collaboration with EPA because it helps them identify opportunities to
reduce chemical  risks and increase market share  for environmentally
preferable products. According  to one partner, Bactain Environmental
Products, Design for the Environment was key to getting their new prod-
uct stocked at over 250 Wal-Mart and West Marine stores. Partners cite
other important environmental and economic benefits. One company's
                Views on the Pollution
                Prevention Framework
   "This sort of upfront knowledge of a potential problem and the ability
   to address it before a premanufacture notice ... saves time and
   resources for both the company and the agency."—PPG Industries
   "This fits in well with our internal policy of life cycle analysis and
   product stewardship."—Akzo Nobel
   "These are the kinds of tools industry toxicologists need to persuade
   business leaders to pursue new directions in chemistry."—Ciba
   Specialty Chemicals
   "EPA...may underestimate the true value of these tools."—The Procter
   & Gamble Company
   "Sustainable Futures makes versatile screening models available to all
   who have an interest in moving from a reactive to a precautionary
   approach to designing products with social, environmental, and
   economic benefits."—GreenBlue (a nonprofit environmental organization)
                                                                          17

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18
            U.S.EPA
                     new technology eliminated use of 340,000 gallons
                     of toxic chemicals while saving 100 million gallons
                     of water and the energy required to heat it. And a
                     partnership with the automobile refinishing sector
                     has reduced emissions of toxic chemicals, includ-
                     ing one that is known to be the leading cause of
                     occupational asthma, by as much as 30 percent.
                     On average, these improvements have saved each
                     shop between $4,000 and $13,000 per year.
   EPA's Green Chemistry program is also helping to reduce risks from
chemical products. Companies design and commercialize chemical prod-
ucts or processes that are safer for human health and the environment
and that are also economically viable. Each year, EPA sponsors the
Presidential Green Chemistry Challenge Awards, which recognize the
most outstanding product or process innovations. To date, the award-win-
ning technologies have eliminated the use or generation of more than 326
million pounds of highly toxic chemicals and solvents, including chloro-
fluorocarbons and volatile organic compounds. These technologies also
have conserved more than 390 mil-
lion gallons of water from  a broad
range of industrial processes. These
and other benefits are helping the
chemical industry maintain its global
competitiveness and ensure progress      y      f*j¥T?1Vjf¥Onpl>V
     j          ,  •  11     • ,          ^C^^ v^il_IUYll.o J. J&.J.
toward a more sustainable society.
        Developing Safer Pesticides

           EPA is also working in partnership with the private sector to reduce
        risks from pesticides. Pesticides play an important role in ensuring a safe,
        abundant, and affordable food supply, but they can also pose risks to
        humans,  other living creatures, and the natural environment.
           EPA's  Pesticide Environmental Stewardship Program provides
        support and recognition to organizations for reducing the health and
        environmental risks associated with pesticide use. Many partners are test-
        ing reduced-risk approaches and alternatives to conventional pesticides,
        such as biological pesticides and reduced-risk chemicals. Walnut growers
        in California, for example,  are interested in alternative approaches for
        handling the coddling moth. This industry is especially interested in
        reduced risk pesticides because of the moth's resistance to commonly

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used insecticides and the
availability of new applica-
tion technologies for
pheromone-based products.
These products contain
naturally occurring
chemicals and now, with
sprayable formulations,
they are easier and less
costly to apply. In demon-
stration projects, the
Walnut Control Board
tested these products and
found them to be successful in disrupting mating patterns. The industry
is now refining application techniques and planning a statewide mating
disruption program with interested growers. The long-term goal is to
reduce the use of conventional insecticides by 75 percent as walnut
growers switch to the safer, more cost-effective products.

   California's almond industry is also working on  reduced-risk pest man-
agement strategies. The Almond Board has set up demonstrations at field
sites as well as educational events to teach growers how to reduce or elim-
inate use of diazinon and other higher-risk products. Several field days are
held each year to allow growers to learn about successful management
techniques. These events give growers the opportunity to see firsthand—
under local conditions—how low-risk practices can be used in almond
production. As a  result of continued outreach and education over the past
five to six years, less than 40 percent of growers now rely on conventional
organophosphate products for insect control.

=
      19

Addressing  Regional Priorities

   By working closely with states and territories, EPAs 10 regions are
devising innovative approaches for addressing a range of environmental
issues. As the following examples show, these innovations often create
models or practices that can be useful in other parts of the country.

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                         Innovation  in  the  Regions
                  Region 10: Collaborating to Improve Air
                  Quality
         n the Pacific Northwest, shared leadership
         e stage for a dramatic transformation in the
way air quality is protected.Through the Northwest
Collaborative Air Priorities Project, EPA and other
organizations are working together to address a set of
regional air priorities over the next five to 10 years.This
collaborative approach is broadening support for air
quality initiatives, opening communication channels
among participants, and enabling smarter use of scarce
20
                  Region 9: Controlling Mercury
                               A voluntary
partnership with the Nevada gold mining industry
gives companies technological and process options for
voluntarily reducing mercury air emissions, a toxic pol-
lutant that can have serious neurological effects.Since
2002,this program has reduced mercury emissions by
40 percent, or more than 8,000 pounds annually.These
reductions are the equivalent to the emissions of 33
power plants.
                  Region 8: Addressing AirT
                  Community Level
                    i northeast Denver, EPA is
                  ,sed partnership that is address-
               ollutants in a heavily industrialized
u.^u.,,~. ,x...y i~yether, the team is identifying the pol-
lution sources, facilitating public participation, and
implementing projects that will improve air quality and
reduce risks to human health.
                                                     Region 7: Using Renewable Energy ir
                                                     Cleanups
                                                               of Engineers, and the University of
                                                             >ila are using a wind turbine generator
                                                     to power a groundwater remediation system at a
                                                     former military ammunition plant. Designed as a
                                                     demonstration project, this approach is conserving
                                                     fossil fuels and protecting air quality while restor-
                                                     ing groundwater resources.

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Region 5: Reducing Agricultural
Impacts
          -To address agricultural water quality
          ?gion 5 established agricultural liaisons
to work with U.S. Department of Agriculture and
state agencies on a suite of watershed issues, such
as pathogens from animal feedlots and protection
of drinking water sources.Through training and
collaboration, these liaisons have gained insights
and information on agricultural practices that will
be used to improve water quality management
strategies in partnership with other federal,state,
and local agencies.
                                                         Region 1: Breathing Better in Boston
                                                         England, EPA Region 1 is working with the city of Boston
                                                         to increase participation in a number of voluntary clean
                                                         air transportation initiatives, such as the Voluntary Diesel
                                                         Retrofit program, Best Workplaces for Commuters,
                                                         SmartWayTransport Partnership, and Clean School Bus
                                                         USA The goal is to make Boston a national model for
                                                         community-based voluntary transportation programs
                                                         that reduce air pollution and traffic congestion.
                                                         Region 2: Promoting Green  Buildings
                                                         York City Department of Environmental Protection
                                                         launched a Green Building Design Competition to estab-
                                                         lish the city as a leader in America's green building
                                                         movement.The focus is on showcasing green building
                                                         principles, developing new ideas, and identifying green
                                                         building impediments.
                                                         Region 3: Addressing Contaminatec
                                                         Sediments
                                                                     —In the Mid-Atlantic region, a watershed
                                                                    >eing used to clean up and prevent con-
                                                         tamination of sediments in the Anacostia River.
                                                         Working across the watershed, EPA and the Anacostia
                                                         Watershed Toxic Alliance have undertaken a variety of
                                                         actions in and around the river to improve environ-
                                                         mental quality and to link those improvements to an
                                                         economic development vision.This robust, stakehold-
                                                         er-driven model offers useful lessons for addressing
                                                         challenges in other urban watersheds.
Region 6: Evaluating Passive Air
Samplers
               . -S partnering with the states of
               exico to test passive samplers for
sulfur dioxide, nitrogen dioxide, and toxic air emis-
sions. Passive air monitors are smaller, more portable,
and less expensive than conventional equipment
and do not require electrical power. If these devices
gain EPA approval, air monitoring costs could be
reduced by up to 50 percent without reducing accu-
racy, quality control, or precision.
                                                                     Dcusing on Sust
                                                         working with stakeholders in the fast-growing area span-
                                                         ning Charlotte, North Carolina, and Rock Hill, South
                                                         Carolina, to achieve a healthy environment, vibrant econ-
                                                         omy, and high quality of life.The Sustainable Environment
                                                         for Quality of Life (SEQL) initiative is evaluating growth tak-
                                                         ing many factors into account,such as air and water qual-
                                                         ity,energy use,transportation,and economic develop-
                                                         ment. In addition to helping the region achieve its
                                                         desired future, SEQL will create a model of integrated
                                                         environmental management that can be used by other
                                                         areas facing similar growth challenges.

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            The environmental challenges EPA addresses on a regular basis are as
            diverse as the environment itself. Some are very localized, while oth-
        ers are national in scope. Some clearly need regulated action, while others
        are more suited to voluntary initiatives. To find the best solution for each
        problem, EPA is developing new tools and approaches that create more
        options  for environmental problem-solving. The following highlights show
        some of the new offerings and how they are being used to enhance envi-
        ronmental and public health protection.
22


        Environmental Indicators and  Results

           Environmental quality and public health can be affected by many fac-
        tors, making it difficult to attribute measurable results specifically to
        environmental programs. This dilemma can be complicated further by
                                         the timeframes involved—results
                                         from actions taken today might not
                                         be detectable in nature or public
                                         health for years.

                                            Having quality data to track
                                         progress and guide decisionmaking is
                                         a critical need for EPA, and an  EPA
                                         report released in 2003 will go a long
                                         way in meeting it. The Draft Report
                                         on the Environment provides EPAs
                                         first-ever national picture of environ-
                                         mental conditions, describing what is
                                         known and not known about environ-
                                         mental conditions and how those
                                         conditions are changing. This

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          Highlights from the 2003 Draft
             Report on the Environment
   Based on measurements of six common air pollutants at more than
   5,000 monitoring sites across the country, air pollution has declined 25
   percent over the past 30 years—even with large increases in popula-
   tion, gross domestic product, and vehicle miles traveled.

   Drinking Water
   In 2002,94 percent of Americans served by community water systems
   received their drinking water from systems that meet EPA's health-
   based standards—an increase of 15 percent in the last decade.

   Land
   Releases of toxic chemicals have declined by 48 percent since 1988,
   and waste management has improved significantly. Municipal solid
   waste recycling and composting increased  1,100 percent in the last
   decade.

   Human Health
   Americans are living longer than ever before, while infant mortality has
   dropped to the lowest level ever recorded.
23
comprehensive assessment, which is undergoing public review, is part of a
larger initiative to develop environmental indicators that can be used to
identify priority concerns and target resources to address them. Just as
economic indicators tell us about the state of the economy, environmental
indicators reveal important information about the state of the natural envi-
ronment. Indicators used in creating the report, such as wetland acreage and
air pollution levels, were based on a thorough review of available data from
EPA's own databases; other federal, state, and tribal  agencies; and some non-
governmental organizations. The results represent EPA's most comprehen-
sive attempt to characterize the condition of the nation's environment.
They also reveal important data needs that must be addressed to improve
understanding of environmental conditions in the future.

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        Environmental Technology
24
           Environmental technologies have played a key role in enabling envi-
        ronmental progress in the United States. From monitoring and assessing
        ecological conditions, to preventing and controlling pollution, to cleaning
        up contaminated lands and groundwater, environmental technologies
        enable a range of environmental protection activity. With annual invest-
        ments in environmental technology and related services in the United
        States now exceeding $150 billion a year, there is strong interest in new
        products that can be applied at home and abroad.

           EPA offers several programs to support environmental technology
        development, commercialization, and use. These programs offer help
        with financing, testing, and verification, as well as incentives and infor-
        mation. To provide information and make assistance available, in 2003,
        EPA launched the Environmental Technology Opportunities Portal
        (ETOP). Through this Web-based  resource, users can search central data-
        bases, learn about new funding opportunities, and get updates on the lat-
        est environmental technology news. Links are provided not only for EPA
        technology programs, but also for programs run by other governmental
        and non-governmental organizations.
           EPAs Science to Achieve Results
        (STAR) grant program is one of
        the programs found on ETOR This
        program awards funds to scientists
        and engineers from academia, states,
        and nonprofit organizations to
        address environmental research
        priorities of special significance to
        EPAs mission, such as hazardous
        waste cleanup and control of partic-
        ulate matter in the air. Designed to
        support only the highest quality
        research, STAR has supported
        numerous distinguished scientists
        and researchers, including some past
        winners of the Nobel Prize.
           EPA is engaging other bright minds to find innovative solutions to
        today's environmental problems. In 2003, EPA and partners from
        industry, nongovernmental organizations, and other agencies launched a
        national student design competition to respond to the scientific and
        technical challenges of moving towards a sustainable society. Through the

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   Taking Technology to a Whole  New Level
   Nanotechnology is the ability to work at the molecular level, atom by
   atom, to create fundamentally new organizational structures.Today
   scientists are finding ways to apply this exciting new capability to
   environmental research. With STAR funding, scientists at Lehigh
   University are synthesizing nano-sized particles for use in ground-
   water cleanup; researchers at the University of California—San Diego
   are developing a nano-based sensor for real-time, remote detection of
   heavy metals; and at the University of Delaware, researchers are study-
   ing how nano-sized particles can be used to treat automobile exhaust.
P3 Competition and Award Program, named for the three pillars of
sustamabihty—people, prosperity, and the planet—teams of college stu-
dents compete for grants to research and develop  sustainable solutions to
environmental challenges.  In spring 2005, the grant recipients will be
invited to compete for a national award that conveys additional funding
to further the development and use of sustainable designs. Along with
advancing select designs, this program will help integrate an understand-
ing of sustamabihty into higher education and training.

   Small businesses are responsible for most new technology development,
and the Small Business Innovation Research Program provides scientific
and technological firms with funding for research and development and
commercialization. EPA is  one of 10 federal agencies that solicits and
funds project proposals. In 2003, EPA awarded approximately $8 million to
small businesses to develop technologies for water and air pollution con-
trol,  pollution prevention, and new analytical monitoring instruments.
EPAs latest solicitation for 2004 focuses on hazardous waste minimization.
These projects will become part of a legacy of pollution prevention tech-
nology developed by small  businesses with EPA support.

   A new Environmental Technology Council will  help EPA coordinate all
of its technology-related activities. Established earlier this year, the
Council will facilitate innovative technological solutions to environmental
problems, particularly problems with multi-media implications. The
Council will also focus on  improving results from  EPAs core regulatory,
enforcement, and voluntary programs.
25

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        Environmental Management Systems
26
   As more organizations look for ways to integrate environmental issues
into their everyday operations, EPA is promoting the use and develop-
ment of Environmental Management Systems (EMSs). Comprised of a
set of standard processes and practices for addressing environmental
impacts, EMSs can help environmental professionals manage regulatory
responsibilities and unregulated environmental impacts such as resource
conservation and energy efficiency

   Based on a growing body of research investigating the impact of EMSs
on environmental and economic performance, in 2002, EPA issued a poli-
cy statement to encourage EMS use more broadly. Since then, EPA has
promoted EMSs in a variety of ways, starting with  its own facilities. EPA
is now implementing EMSs at 36 facilities, spanning all ten EPA regional
offices and the headquarters facility in Washington, D.C.

   To accelerate EMS use  by others, EPA has worked with a variety
of organizations including universities, public sector entities, small
business assistance groups, and, as the next section describes, industry
trade associations. Joint ventures include the preparation of case
studies to showcase EMS results; support for the PEER center, a Web-
based clearinghouse to support EMS activities in local, county, and
state government; and investments in research to assess EMS perform-
ance. With EPA funding, researchers from the  University of North
                  An EMS  Fosters Environmental
                  Improvement in EPA Region 8
           In Denver, EPA engaged employees in developing an EMS, getting
           their help in identifying the environmental impacts of everyday opera-
           tions and brainstorming ways to reduce them. For example, after iden-
           tifying the driving of fleet vehicles as one impact, the region ordered a
           Honda hybrid vehicle to reduce air emissions and save energy.
           Likewise, the region changed sampling processes to reduce use of
           methylene chloride and installed software to automatically power
           down computer monitors when not in use. By promoting more effi-
           cient use of paper, the region has cut photocopying by 20 percent,
           saving paper and energy.

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Carolina (UNC) and the Environmental Law Institute created the
National Database on Environmental Management Systems to collect
and analyze EMS data. According to the project director, Dr. Pete
Andrews of UNC, the study demonstrates that "EMSs are worth
encouraging. On balance, performance and compliance appear to
improve, and facilities believe they benefit."

   To help guard against recurring violations of environmental require-
ments, EPA also added EMSs to civil settlements in certain enforcement
cases. In late 2003, EPA completed a strategy to  explore how and whether
EMSs might be used in other regulatory programs, such as permitting, to
achieve better environmental results at less cost. Together, these and
other actions have the potential to make EMSs as common in the future
as accounting, fire prevention plans, and other standard management
tools are today.
Sector Strategies

   Many of EPAs programs are designed with a national scale in mind;
however, customized strategies that hone in on special circumstances sur-
rounding a problem can be highly effective, too. In recent years, EPA has
found that working with specific industry sectors to improve environmen-
tal performance can reveal  significant opportunities.
   Through the Sector Strategies Program, EPA works with trade associa-
tions, state and local governments, and other constituent groups to
reduce the environmental impacts  of selected manufacturing and service
sectors. Priorities include addressing regulatory barriers that can stand in
the way of better performance, promoting widespread use of EMSs devel-
oped with sector-specific operations in mind, and developing measures to
track environmental performance on a sector-wide basis.
   EPA expanded this program in 2003 to 12 sectors. Collectively, they
comprise 700,000 establishments that employ more than 11 million work-
ers and contribute 23  percent of the value of manufacturing shipments in
the United States. Each year, these sectors spend more than $8 billion on
pollution control—approximately 30 percent of the national total—yet
they still present significant opportunities to reduce their impacts on air,
water, and land.
   The value of this sector-based approach can be seen in results from
the metal finishing industry. In the late 1990s, metal finishers began
working with EPA, states, and other stakeholders on a comprehensive set
27

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28
                                            Results from the Metal Finishing
                                                Strategic Goals Program
                                                        2003
  -20.

U -40.
s
I
  -60.
                                       -80
                                                - 16%
                                                 Sludge
                                                Production  . 23%
                                                      Sludge
                                                    Shipped Oflsite
                                                           Energy Use
                                                                - 62%  - 62%
                                                                 Organic
                                                                      Metals to
                                                                      Water
of environmental per-
formance goals. As the
chart to the right shows,
in 2003, participating
facilities  reported that
organic air emissions and
toxic discharge fell by
more than  60 percent.
Water  use  fell by more
than one-third, while the
amount of sludge shipped
offsite  was cut by nearly a
quarter. While these
improvements were being
made,  EPA worked with
stakeholders to address
regulatory concerns. For example, after learning how requirements under
the Resource Conservation and Recovery Act might be limiting beneficial
reuse of metals from metal finishing waste streams, the Agency is now
considering changes that would allow easier recovery of metals from low-
toxicity sludge.

   Working with the industries' trade associations has been an effective
method for promoting EMSs to a large number of businesses, and each
industry is  encouraging EMS development in its own way. For example, in
2003, EPA  developed  tailored EMS instructional guides and booklets
explaining  the business benefits of an EMS for several sectors. Now, a
number of industries are using EPA tools and support to  set up national
EMS development programs. For example, the Association of General
                                          Percentage reductions by participating facilities from 1992 baseline;
                                          reductions normalized by $ of sales using most current available data.
                       EPA's Sector  Partnerships
               Agribusiness
               Cement manufacturing
               Colleges & universities
               Construction
               Forest products
               Iron & steel manufacturing
                                     Metal casting
                                     Metal finishing
                                     Paint & coating
                                     Ports
                                     Ship building & ship repair
                                     Specialty-batch chemicals

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Contractors is completing an EMS guide and preparing training for its
35,000 members of the construction industry. Meanwhile, EPA and the
American Association of Port Authorities launched a project to help 11
major ports adopt EMSs, with a focus on related port security issues.

   Several trade associations are adding EMSs to their environmental
stewardship initiatives. EPA and the  Synthetic Organic Chemical
Manufacturers Association recently completed an EMS template that will
be part of the association's Responsible Care® Management Systems pro-
gram. Likewise, the American Meat Institute is using an EMS template as
part of a new performance improvement program for its members.
Integrated Compliance and Enforcement

Strategies

   Compliance assistance, which gives the regulated community informa-
tion and support to understand and follow regulatory requirements, is an
important tool for protecting public health and the environment. It can
be delivered in many forms, including environmental management guides
and checklists, Web-based resource centers, and onsite visits. Another
tool is enforcement, which imposes penalties on businesses and other
organizations that fail to meet  regulatory requirements. Enforcement also
may entail a range of activities, from administrative orders to criminal
sanctions. Both tools are valuable and can
be effective independently, but EPA is
finding their value can be magnified greatly
when used together.

   The benefits of an integrated strategy
can be seen in EPAs approach to protecting
children from lead-based paint.  Lead poi-
soning is a major health  concern for chil-
dren—one that can cause seizures, comas,
and even death. Under federal law, busi-
nesses and individuals that sell  or rent prop-
erty are required to let potential residents
know about lead-based paint hazards and
provide information explaining  the risks in
detail. After publicizing these requirements
through inspections, seminars, mailings,
and public service announcements, EPA
launched several activities with  the



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                      Assisting Small Businesses
            According to the final report of the Small Business Paperwork Relief
            Task Force, there are more than 22 million small businesses in America,
            and many of them are subject to environmental regulations. Yet small-
            er companies often do not have the time or resources needed to fully
            understand regulatory requirements. Recognizing this challenge, EPA
            has developed resources specifically for small businesses.These
            resources include a national hotline that routinely responds to more
            than 1,000 calls per month and environmental management guides,
            checklists, and workbooks that help small business owners assess and
            improve their environmental performance. In all, EPA has more than
            100 small business initiatives underway, and a Small Business
            Strategy completed in 2003 is unifying them in a way that has never
            been achieved before. By improving understanding and coordination
            of these activities, EPA aims to  provide small businesses with the assis-
            tance they need most as efficiently and effectively as possible.
30
         Department of Housing and Urban Development (HUD) to encourage real
         estate companies to disclose and address any failures to provide relevant
         information about lead risks.

            The first activity provided real estate companies with a valuable incen-
         tive—substantially reduced or eliminated penalties for voluntarily disclos-
         ing mistakes and agreeing to address the problem. This  incentive was
         offered in 11 cities with significant lead risks. Having provided informa-
         tion about what was required and an incentive to encourage compliance,
         EPA then followed up with enforcement actions against firms that had
         not fulfilled their responsibilities. A second activity involved examining
         the compliance records of the nation's largest landlords  and using the
         results to target potential enforcement action. In one case, a national real
         estate firm was required to test for lead and address lead-related problems
         in  130,000 apartment buildings in 47 states. Finally, EPA and HUD, along
         with the Department of Justice, began conducting joint inspections in
         lead "hot spots" identified by local governments. One of those cases,
         which involved obstruction of justice, ultimately led to  a criminal
         prosecution—a first for a case involving lead disclosure.

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   In addition to integrating compliance and enforcement at the federal
level, EPA is supporting integrated strategies by states. With support from
EPA, the state of California, for example, launched a study of chrome-
plating businesses in the South Coast Air Basin and found that less than
a quarter of firms were complying with environmental requirements.
Through targeted compliance assistance, inspections, and enforcement,
California boosted compliance rates to 80 percent within three years.
Similar results were achieved in Colorado, where inspections showed most
asphalt facilities were out of compliance. After providing compliance
assistance and providing facilities with performance reports, more than
90 percent came into compliance.


Incentives

   In an effort to build a better working relationship with regulated
entities and encourage environmental improvements that exceed the
minimal requirements of law, EPA is building more incentives into its
programs and policies. One valued incentive is regulatory flexibility, which
gives environmental managers more choice in  deciding how to achieve a
regulatory goal in a  way that best suits their operations.

   In recent years, EPA has
begun offering more flexibility
to proven environmental lead-
e^ For example, m 2003, EPA         —RerformanceTrack
added regulatory incentives to       m U.S. Environmental Protection Agency
its most comprehensive program
for recognizing environmental leadership—the National Environmental
Performance Track.  This program, which has more than 340 members,
provides rewards and recognition to select facilities that meet certain
environmental performance criteria. Members will soon receive regulatory
advantages, such as the option of storing hazardous materials onsite twice
as long as allowed for other facilities. By reducing hauling offsite, this
action will cut air emissions, energy use, transport costs, and paperwork.
    "Incentive-based programs present genuine opportunities
    that should be aggressively pursued by all levels of
    government, the private sector, and the NGO community,"
          —John Flatley, Performance Track Participants Association

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        Another benefit cuts in half the reporting required under certain Clean
        Air Act provisions. "Incentive-based programs present genuine opportuni-
        ties that should be aggressively pursued by all levels of government, the
        private sector, and the NGO community," said John Flatley, executive
        director of the Performance Track Participants Association.
        "Since management quality is the primary driver of
        stock returns, environmental performance turns out to
        be an excellent indicator of stock market potential."
                                                —Frank Dixon, Innovest
           Public recognition, such as media attention, awards, and use of dis-
        tinctive logos, also provides a valuable incentive for improving environ-
        mental performance. Organizations can use public recognition  to build
        market share, improve community relations, and—as Performance Track
        members have seen—increase investor confidence. In 2003, Innovest, an
        investment advisory firm, began using Performance Track membership as
32      a factor in developing the ratings used to guide investment decisions.
        "Since management quality is the primary driver of stock returns, envi-
                                             ronmental performance turns
                                             out to be an excellent indicator
                                             of stock market potential," said
                                             Frank Dixon, managing director
                                             of Innovest. The company's
                                             action shows the value of pub-
                                             lic recognition and sets the
                                             stage for increased considera-
                                             tion of environmental perform-
                                             ance by others in the
                                             investment advisor industry.
                                             Indeed, earlier this year, two
        additional investment firms—Calvert Group,  Ltd and KMD Research and
        Analytics, Inc.—announced they would also begin using Performance
        Track membership in their  ratings.

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    Strengthening Our
       Innovative Partnership with
            States and  Tribes
   EPA's interest in environmental innovations is mirrored at the state
   level. As the primary implementor of environmental programs, states
are in excellent position to gauge how well environmental programs are
working and recognize opportunities for improving them. As such, EPA is
supporting state-led innovations in a number of ways.
 Providing Financial Support

   Because funding shortfalls can hinder new ideas from getting off the
ground, EPA launched a new competitive grant program in 2002 to sup-
port state innovation. This program focuses on innovations surrounding a
core regulatory responsibility—environmental permitting. Seven states
received a total of $750,000 to explore new permitting approaches—from
33
   "EPA's most important partnerships are those with
   states and tribes... (they) are closer to the front lines of
   environmental protection and must be an integral part of
   a strategy to obtain better results through innovation."
                              —EPA Innovation Action Council
online systems that simplify the permit application process to alternatives
that replace conventional permits with more comprehensive environmen-
tal management agreements. Based on the strong state response, EPA
announced a second grant competition in 2003 that also focuses on
improving permitting.

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         Setting Priorities Jointly
           No matter how large or small the task, states and EPA can accomplish
        more by working together. Today, EPA works with many states to agree
        upon common priorities using principles set forth in the National
        Environmental Performance Partnership System (NEPPS). This system
        was established in  1995 with the intent of promoting joint planning and
        priority-setting between states and EPA. While it has been helpful, states
        continue to raise concerns about the extent of their influence.
34
                        State Innovation Grants
             Exploring New Approaches to Environmental Permitting
Arizona is developing an automated system for stormwater permit-
ting that allows users to go online to make applications, check on per-
mit status, and learn about compliance requirements.

Colorado is pilot testing performance-based, multimedia permits
for facilities that use environmental management systems as a basis
for meeting regulatory requirements while committing to continual
environmental improvements.

Delaware is using self-certification procedures, compliance assis-
tance, and performance measurement to replace traditional permits
for the autobody maintenance and repair sector.

Illinois is developing a system that allows permit-holders to make
certain permit modifications without prior regulatory approval if they
have demonstrated strong environmental stewardship by adopting a
formal environmental  management system.

Massachusetts is creating a watershed-based permitting system
that integrates point and non-point source controls to create a total
maximum daily load for nutrients.

Oregon is creating a streamlined process for managing sediments
that will enable faster  and more economical decisions about benefi-
cial reuse and disposal options.

Texas is integrating a requirement for environmental management
systems into air and water permitting programs to help drive continu-
ous environmental improvement.

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   Agreeing on the need to better align priority-setting and improve the
NEPPS process, EPA and states endorsed enhancements in 2003 that
increase state input in EPAs planning and budgeting processes. These
enhancements focus on achieving environmental results, engaging states
and tribes early on, making priority-setting as open and inclusive as possi-
ble, and minimizing transaction costs.
    "The challenge to EPA and the states is finding clear,
    distinctive ways to evaluate performance ..."
                       —National Academy of Public Administration
      Environment.gov:Tmnsforming Environmental Protection for the 21st Century
   One of the biggest changes for states and EPA is the development of
regional plans. Under federal law, EPA is required to prepare a national
strategic plan every three years. Many states prepare their own plans, cov-
ering various time frames. For the first time, EPA is placing new emphasis
on strategic planning at the regional level.

   Under the new model, EPA regions—working in consultation with
states and tribes—develop plans that address regional conditions and pro-
tection needs. In addition to focusing work at the regional level, these
plans explain how progress will be made in achieving national environ-
mental goals and lay the groundwork for preparation of national program
guidance. Finally, by creating more opportunity for dialogue, this model
facilitates the preparation of performance partnership agreements, which
set out what states and EPA will do to accomplish environmental goals,
and annual grant work plans, which describe how states will manage
funds received from EPA. Performance partnership grants allow states to
combine funds and gain the greatest management flexibility
35
Collaborating to Solve Problems

   While the improved process described in the previous section will
create more opportunities for states and EPA to engage on priority issues,
the Joint EPA/State Agreement to Pursue Regulatory Innovation provides
a vehicle specifically for exploring innovations. Under this agreement,
states and EPA work together to identify innovative approaches for
improving environmental protection and remove  regulatory barriers that
can hinder environmental progress.

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36
   Since the establishment of this agreement in 1998, states have
launched more than 50 projects designed to improve environmental pro-
grams and policies. For example, EPA Region 5  and Michigan are testing
a simplified process for handling certain automobile wastes. Under the
Resource Conservation and Recovery Act (RCRA), wastewater sludge
from some automobile manufacturing processes is classified as hazardous
waste due the presence of certain toxic constituents.  In recent years,
automakers have eliminated or reduced the toxicity in sludge through
process changes. Yet their sludge has remained on the hazardous waste
list because under regulations, the process of "dehsting" a waste must
occur facihty-by-facihty and usually takes about two years to complete.
Michigan proposed a simplified process applicable to multiple facilities.
In addition to saving resources, this approach reduces the amount of
waste being disposed in hazardous waste landfills and creates an incentive
for automakers to minimize the hazardous constituents in their  waste-
water sludge. EPA is now adapting this approach to expedite delisting
decisions for other automobile manufacturing plants in the region.
Moreover, results are being evaluated to determine the need for  a change
in the RCRA regulations. Ultimately, this project may have even wider
effects, as a simplified approach is considered for other industries that
manage hazardous waste.

   In an effort to further address issues of common interest, states and
EPA began developing a joint innovation work plan in 2003. This plan
targets three problems. Community toxics was chosen because toxic
exposure can occur from many different and diffuse sources. Recognizing
that  conventional regulatory controls may not be feasible or sufficient,
                          states and EPA agreed to explore community-
                          based strategies that can address risks at the
                          local  level. The second priority is expediting
                          the development of TMDLs. By exploring
                          innovative approaches, such as developing
                          multiple TMDLs required for a water body
                          simultaneously, and by considering ways to
                          use flexibility provided under existing regu-
                          lations, states and  EPA hope to put more of
                          these important water quality improvement
                          strategies in place. The  final area for collabo-
                          ration is hazardous waste permitting under
RCRA. Hazardous waste transport and disposal  is highly regulated, and
the states and EPA recognize the need to explore options for making
those regulations more efficient and effective.

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Replicating  Innovative Successes

   As new ideas evolve, states and EPA are working together to expand the
use of innovative approaches that have already proven successful. One of the
best examples is the Environmental Results Program (ERP). Created by the
state of Massachusetts, this program  focuses on improving environmental
performance among small businesses, particularly those that have not
received significant  regulatory attention in the past. ERP takes an unconven-
tional approach to helping small businesses meet their environmental
responsibilities. Rather than issuing environmental permits to each business,
the state provides small businesses in certain sectors with the information
and assistance they  need to check and self-certify compliance with require-
ments. Using a set of performance measures, the state then tracks environ-
mental progress across the sector as a whole. This approach is enabling
environmental improvement and a level of outcome reporting that was pre-
viously unavailable.  For example, before this program, Massachusetts found
only 33 percent of dry cleaners were performing routine leak checks for
perchloroethylene emissions; three years after this program was initiated,
the percentage had  doubled. Similarly, before the program, 60 percent of
Massachusetts' photo-processing firms were complying with a limit on silver
discharges; one year into the program, the rate had jumped to 98 percent.

   This alternative  approach to small business  compliance has other
advantages. Because it is less burdensome than conventional regulatory
approaches, more small businesses are apt to participate. Indeed, after
three years, Massachusetts had increased the number of dry cleaning
operations tracked  in its databases by 85 percent. And, with its self-
certification procedures, this program enables the state to target  inspec-
tion resources to higher-priority problems. Based on the results, and with
EPA assistance and encouragement, nine states are  now establishing
similar programs to address small business sectors.
Sharing Lessons Learned
   The Environmental Results Program described in the previous section
is the kind of innovation that can benefit many states and inspire envi-
ronmental professionals to rethink how they might achieve environmental
goals. To gain more exposure to new ideas, the states and EPA joined with
the Council for Excellence in Government in 2003 to host a national
symposium on environmental innovation. Over two days, participants had
an opportunity to share a variety of insights and experiences. First held in
2000, this forum is the only one of its kind for states and EPA to discuss
innovations shaping the next generation of environmental progress.

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         Innovation  in EPA's Culture
                           and Organizational Systems
38
   The same commitment to improving results that is driving innovation
   within EPA's programs, policies, and partnerships with others is also
influencing the Agency's internal operations. Under the leadership of
EPA's Innovation Action Council, the Agency has focused on creating a
culture of innovation—one that enables and rewards environmental prob-
lem-solving by staff. As the preceding section describes, EPA has realigned
planning and budgeting systems with states. In addition to achieving bet-
ter coordination with states, this  approach creates more opportunities to
incorporate innovation priorities  into strategic resource and management
decisions. This  section highlights some of the additional changes EPA has
made to foster innovation internally.
        Capitalizing  on Managerial Talent
          While depth of knowledge and continuity can be valuable assets
        for managers, there are also advantages to having leadership with fresh
        perspectives and ideas. In an effort to bring the full value of EPA's
       "Innovation must become an attitude, an outlook, and
       an integral part of EPA's daily work."
                                    —EPA Innovation Action Council
       managerial talents to bear in addressing environmental challenges, EPA
       rotated nearly a quarter of its senior mangers to new positions in 2002.
       Managers from voluntary programs were moved into regulatory positions
       and vice versa. In some cases, managers were switched to entirely new

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                 A  National Center for
             Environmental Innovation
   A year after the release of Innovating for Better Environmental Resuh
   Strategy to Guide the Next Generation of Environmental Progress, EPA
   showed its commitment to innovation again by creating a Nationa
   Center for Environmental Innovation (NCEI). Designed to fill a speci
   role at EPA, this organization focuses on finding ways of achieving
   ter environmental results. It does so by supporting the full cycle of
   innovation—starting with testing of new ideas, continuing with ev
   ations to measure results, and ultimately helping others apply
   approaches that prove successful. NCEI also runs a set of multimed
   programs that help to improve environmental performance in
   businesses, communities, states, and other government agencies.
   These include National
   Environmental Performance
   Track and Sector Strategies,
   well as programs that focus o
   smart growth and support for
   small bi
NCEI
NAT ONAL CENTER FOR
ENV RON MENTAL  NNOVAT ON
                                                                        39
media, so that approaches commonly used to address one type of
problem, such as waste, could be factored into strategies for addressing
other issues, such as air pollution or water quality. As envisioned, these
exchanges are resulting in more cross-fertilization of ideas, perspectives,
and experiences, and providing the leadership needed to drive innovative
approaches in environmental programs.
Tearing Down Organizational  Barriers

   In addition to spurring exchange of ideas, the management rotations
enacted in 2002 are also helping to overcome organizational barriers within
EPA. These barriers are a  remnant of EPAs organizational development—
one that evolved in response to the passage of environmental laws. As laws
were passed for specific purposes, EPA set up national programs to oversee
implementation. This approach has been effective in addressing many
issues, but it is not as effective for addressing problems that involve more
than one media, such as air or water, and need a more holistic approach.

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Smarts Growth
ACHIEVEMENT
           One of those issues is growth and development. Across the country
        communities and individuals are realizing that growth patterns have sig-
        nificant impacts on the environment, the economy, and overall quality of
        life. These impacts include loss of open space and farmlands; more pol-
        luted runoff flowing from paved surfaces into lakes and streams; and more
        driving, air pollution, and traffic. Through the national Smart Growth
        Network, EPA is working with other federal agencies, state and local gov-
        ernments, developers, environmental groups, and communities to identify
        common ground on a range of growth and development issues.

           EPAs work is designed to
        improve understanding of growth
        issues through research and policy
        development, information and out-
        reach, and technical tools and assis-
        tance. Often this work is conducted
        in partnership with other organiza-
        tions. For example, EPA and the
        International City/County Management Association developed Getting to
        Smart Growth: 100 Policies for Implementation. More than 100,000 copies
        were distributed around the country after issuance, while 30,000 copies of
40      a second volume,  containing additional policies, were distributed in just
        the first three months following publication.  Meanwhile, EPAs National
        Award for Smart Growth Achievement provides a high-profile method of
        recognizing smart growth policies and practices by cities, states, other
        public entities, communities, and developers.

            Reducing the environmental impacts of buildings represents an
        important opportunity for achieving smart growth. Nationwide, buildings
        use 66 percent of all energy,  contribute 25 percent of greenhouse gas emis-
        sions, and generate 40 percent of all solid waste entering landfills.  Rather
        than addressing these and other impacts individually, EPA is drawing
        environmental expertise from multiple programs to address buildings
        holistically. In the Mid-Atlantic  region, EPA Region 3 is helping the
        Philadelphia school district incorporate "green building" into a $1.5 billion
                                         capital campaign, while work with
                                         commercial  developers has already
                                         resulted in the greening of a major
                                         Philadelphia office tower. In addition
                                         to supporting others, EPA is also pro-
                                         moting green building at its own facil-
                                         ities. EPAs recently completed
                                         campus in Research Triangle  Park,

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North Carolina (see photo, opposite page), incorporates hundreds of green
features and is a model for other organizations. Hundreds of visitors,
including many international guests, have toured the facility in the  past
two years to learn from EPA's example.
Sharing Information to Spur Innovation

   Enhancing information flow throughout an organization fosters greater
creativity and innovation by facilitating the exchange of ideas. To this end,
EPA's national waste program set up an innovation workgroup with repre-
sentatives from all parts of the organization, who meet routinely to discuss
new ideas and issues needing attention. Similarly, EPA Regions 2 and  10
established "innovation networks" to bring together staff from multiple
programs to share information about new approaches.
   Recognizing the importance of innovation in achieving air quality goals,
EPA's 10 regional air directors also created an information sharing network.
Led by EPA's regional office in Dallas, the EPA Center of Excellence for Air
Innovations/Futures is used to facilitate communication about innovative
approaches and to set up innovation teams to address specific priorities.
   "EPA's regional offices are in many ways at the crux of
   institutional changes the agency needs. Some of the
   regions have already organized along multimedia  lines
   and have become powerful forces for innovation and
   organizational change."
                       —National Academy of Public Administration
      Environment.gov:Tmnsforming Environmental Protection for the 21st Century
   While the networks described above are helpful for sharing informa-
tion across organizations, vertical information flow—up and down the
organizational chain—is important, too. With this in mind, the national
enforcement and compliance assurance program established a Creativity
and Innovations Change Board to provide a direct conduit for staff to
reach management with new ideas. One idea involves using more incen-
tives to encourage environmentally responsible redevelopment and reuse
of contaminated properties. As a result, EPA is now developing new
incentives, such as supplemental environmental projects for green building,

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                                 to complement conventional
                                 enforcement tools. In addition,
                                 EPA is working with other govern-
                                 ment agencies to identify and bring
                                 even more incentives to bear on
                                 redevelopments. The Creativity and
                                 Innovation Change Board has been
                                 instrumental in enabling this work
                                 by providing a venue for internal
                                 communication and collaboration.
Evaluating Innovations to Assess Value

   Evaluations play a critical role in the innovation process, generating
results that enable decisionmakers to determine whether an approach
has value and merits further use and investment. Through an internal
Improving Results Competition, EPA invests in evaluations to help
improve environmental programs. Some of those resources are directed
specifically at innovation projects. For example, an evaluation of a mar-
ket-based approach to controlling air pollution in California identified
key features that, if designed differently, might have addressed the unex-
pected increase in the price of emission credits. The results were used by
the EPA Clean Air Act Advisory Committee and in other venues where
innovative approaches to air quality improvement are considered.

   Another evaluation of state watershed management programs reaf-
firmed the national water program's decision to reorient around water-
sheds. Some  of the benefits found from a watershed approach included
improvements in the quality and quantity of water quality monitoring
data, better planning and assessment capabilities, and more efficient and
equitable permitting programs. In addition to informing program  man-
agement decisions, these and other evaluations are building EPAs capaci-
ty to analyze program  results and creating awareness about the important
role that evaluation plays in the development and use of new approaches.
Setting Aside Funds to Explore  New Ideas

   Because of the lead times required for planning, and the tendency to
favor well-established programs, innovative projects can often have diffi-
culty competing for resources in the standard budgeting process. With this
in mind, several  EPA offices have created competitive funding programs to
allow innovative projects to be introduced and acted upon quickly. After

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setting up a new office to spur innovation, the national waste program, for
example, also established a fund to test new approaches to waste mini-
mization, energy recovery, recycling, and land revitalization. One project
led by EPA Region 9 in San Francisco is testing the placement of environ-
mentally preferable products on television shows to raise consumer aware-
ness. Through the efforts of another project in North Carolina, 1,750 tons
of waste will be diverted from landfills by reusing wood pallets as wood
flooring. Additionally, at least 12 new jobs will be created. Along with
demonstrating the environmental and economic benefits  that can  be
achieved with new approaches, these projects are creating models that can
be replicated to  improve  results on a larger scale.

Creating Awards for Innovation

   One of the same incentives EPA uses to encourage environmental
improvement by external partners—awards—is being used to spur
environmental innovation internally. For example, EPAs Office of
Enforcement and Compliance Assurance instituted the Assistant
Administrator's Award for Excellence in Innovation. A second award—the
Best Practices for Innovative Practices in the Enforcement and Compliance
Assurance Program—recognizes innovations that can provide models for
others. In the national waste program, a new Assistant Administrator
Priorities Award recognizes an individual or team that has helped to
advance program priorities in an innovative manner.

   Several EPA regions have established innova-
tion awards as well. In the Northwest, EPA
Region 10  selects an "Innovation of the Year." In
2003, that  award was presented for a state-of-the-
art modeling tool for assessing the impacts of
current or planned forestry burns. Whether
planned or accidental, the air quality impacts  of
these burns can  be significant. The Blue-Sky/
RAINS system gives EPA and other users a way to
visualize and analyze these impacts over the
entire affected area. Work is now underway to
extend this valuable tool to other parts of the
country and to consider how it might be adapted
to address other environmental issues. In the Northeast, EPA Region 2 also
recognizes employee innovation. A recent award was given for an electronic
emergency contact information system that will allow the region to provide
a faster, more effective response when faced with an emergency situation.

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  Conclusion
In 2002, EPA released a strategy to guide the next generation of
innovation in environmental programs.Two years later that effort
has proven influential in many ways.This report shows how EPA is
changing its mode of operation to foster innovation and provides
examples of innovative approaches being used throughout the
country. Many of those innovations offer models that can be
applied in other places and on a much larger scale.Therein lies the
real power of innovation—taking ideas that show promise, testing
their value, and then applying proven concepts to increase the
newfound benefits many times over.

The EPA Innovation Action Council based its innovation strategy on
a vision for an improved system of environmental protection for the
21st century, one that:

•  Focuses on performance and results
•  Emphasizes environmental stewardship
•  Takes a comprehensive and integrated approach to problem-solving
•  Uses market-based incentives
•  Emphasizes partnership and stakeholder collaboration

Evidence of these attributes can be found throughout this report-
partnerships and collaborative problem-solving, in particular,are
mentioned routinely.

So has this vision of an improved environmental protection system
been achieved? Not yet, but change is underway. Indeed, through
the power of innovation, it does appear increasingly within  reach.

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For  More  Information

EPA gleaned information from numerous sources to produce this
report, and  much of it can be found on the Agency's Web site.The
following list identifies the major topics discussed in each section,
and provides Web site addresses for obtaining more information.
Introduction
"Innovating for Better
Environmental Results: A
Strategy to Guide the Next
Generation of Innovation at EPA"
http://www.epa.gov/
innovation/plan/fina!4_10.pdf

Improving Water Quality
Water Quality Conditions in the
United States
http://www.epa.gov/305b/
2000report/factsheet.pdf

2003 Watershed Initiative
http://www.epa.gov/owow/
watershed/initiative/
selected.pdf

"Water Quality Trading Policy"
http://www.epa.gov/owow/
watershed/trading/
finalpolicy2003.html

Trading—Regional and State
Examples
http://www.epa.gov/owow/
watershed/tradel inks.htm I

Watershed-based Permitting
http://cfpub.epa.gov/npdes/
wq based permitting/
wspermitting.cfm

Meeting Water
Infrastructure Needs
The Clean Water and
Drinking  Water  Infrastructure
Gap Analysis
http://www.epa.gov/owm/
gapfact.pdf
EPA Forum "Closing the Gap:
Innovative Responses for
Sustainable Water
Infrastructure"
http://www.epa.gov/water/
infrastructure/GapForum.htm

Applicability of the Safe
Drinking Water Act to
Submetered Properties
http://www.epa.gov/fedrgstr/
EPA-WATER/2003/Decem ber/
Day-23/w31588.htm

Reducing Greenhouse
Gas Emissions
ENERGY STAR® and Change a
Light, Change the World
Campaign
www.energystar.gov

Climate Leaders
http://www.epa.gov/
climateleaders/

Smart Way Transport
http://www.epa.gov/smartway/

Best Workplaces for
Commuters Program
http://www.bwc.gov

"ENERGY STAR® and Other
Voluntary Programs 2002
Annual Report"
http://www.epa.gov/appdstar
/pdf/cppdann02.pdf

Reducing Smog
Ground-level Ozone
http://www.epa.gov/
airnow/health/

Particle Pollution
http://www.epa.gov/air/
urbanair/pm/index.html
Clean Diesel Program
http://www.epa.gov/otaq/
diesel.htm

Voluntary Diesel Retrofit
Program
http://www.epa.gov/otaq/
retrofit/

Adopt-a-School Bus Initiative
http://www.epa.gov/region6/
6xa/adopt_a_school_bus.htm

Clean School Bus USA
http://www.epa.gov/
cleanschoolbus/

Proposed NOX and SO2
Trading Program
http://www.epa.gov/
clearskies/

Early Action Compacts
http://www.epa.gov/air/eac/

Reducing Waste
Resource Conservation
Challenge
http://www.epa.gov/epaoswer/
osw/con serve/

Electronics Recycling
www.plugintoecycling.org

Design Challenge for
E-Commerce Shipping
Packaging and Logistics
http://www.epa.gov/epaoswer/
non-hw/reduce/epr/products/
pfed.html

Brownfields Program
http://www.epa.gov/
brown fields/

Land Revitalization Agenda
http://www.epa.gov/swerrims/
landrevitalization/agenda.htm

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46
One Cleanup Program
http://www.epa.gov/swerrims/
onecleanupprogram/docs/
OCPFactSheetpdf

Reducing Chemical
Risks
Pollution Prevention (P2)
Framework
http://www.epa.gov/oppt/
p2framework/

Sustainable Futures Initiative
http://www.epa.gov/
opptintr/newchems/
sustainablefutures.htm

Design for the Environment
www.epa/gov/opptintr/dfe

Green Chemistry
www.epa.gov/greenchemistry

Pesticide Environmental
Stewardship Program
http://www.epa.gov/
oppbppdl/PESP/

Addressing Regional
Priorities
Green Building Design
Competition
http://www.nyc.gov/html/
moec/pdf/competition.pdf

Regional Vulnerability
Assessment Program
http://www.epa.gov/reva/

Developing Innovative
Tools and Approaches
EPA Draft Report on the
Environment
http://www.epa.gov/
indicators/roe

Environmental
Technology
Environmental Technology
Opportunities Portal
http://www.epa.gov/etop

Science to Achieve Results
Program
http://es.epa.gov/ncer/grants/
People, Prosperity, and the
Planet Award Competition
http://es.epa.gov/ncer/p3/

Environmental
Management Systems
EPA Position Statement on
Environmental Management
Systems
http://www.epa.gov/ems/
policy/own.htm

National  Database on
Environmental Management
Systems: Project Final Report
http://ndem s.ca s.u nc.ed u/
final_report.htm

Sector Strategies
Sector Strategies Program
http://www.epa.gov/sectors/

Metal Finishing
http://www.epa.gov/sectors/
metalfinishing/

Integrated
Enforcement Strategies
Lead Disclosure Settlement
http://yosemite.epa.gov/opa/
admpress.nsf/bl ab9f485b0989
72852562e7004dc686/3f92045
482734fc085256b43006d 136a
?opendocument

Small Business Information
http://www.epa.gov/
smallbusiness/

Unifying EPA's Small Business
Activities: A Strategy to Meet
the Needs of Small Business
http://www.smallbiz-
enviroweb.org/html/pdf/
Strategy_Final_062303.pdf

Incentives
Performance Track
http://www.epa.gov/
performancetrack/

Innovest Announcement
http://yosemite.epa.gov/opa/
admpress.nsf/0/7b9462a8420
e654085256d820074d586?Op
en Document
Strengthening Our
Innovation Partnership
with States and Tribes
State Innovation Grants
http://www.epa.gov/
innovation/stateg rants/

National Environmental
Performance Protection System
http://www.epa.gov/ocir/nepps/

"Joint EPA/State Agreement to
Pursue Regulatory Innovation"
http://www.epa.gov/fedrgstr/
EPA-GENERAL/1998/May/
Day-05/g 11799.htm

Environmental Results Program
http://www.epa.gov/permits/
02summary.pdf

State-EPA Environmental
Innovation Symposium
www.excelgov.org/epa

Fostering Innovation
in EPA's Culture and
Organizational
Systems
National Center for
Environmental Innovation
www.epa.gov/innovation

Evaluation Support
http://www.epa.gov/
evaluate/index.htm

Smart Growth
www.epa.gov/smartgrowth

Green Buildings
www.epa.gov/oppt/
greenbuilding/

Blue Skies/RAINS System
http://blueskyrains.org

National Academy of Public
Administration
http://www.napawash.org/
pc_economy_environment/
recent_publications.html

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