EPA Technology
Programs:
               . /.
Engaging
Marketplace
May 2007
SUBCOMMITTEE ON
ENVIRONMENTAL
TECHNOLOGY

National Advisory
Council for Environmental
Policy and Technology (NACEPT)

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The National Advisory Council for Environmental Policy and Technology (NACEPT) is an
independent federal advisory committee that provides recommendations to the Administrator
of the U.S. Environmental Protection Agency on a broad range of environmental  issues.
The Subcommittee on Environmental Technology is an ad hoc subcommittee of the Council
and was formed to examine EPA's role in the development, commercialization, and use of
innovative technology in fulfilling its mission to protect human health and the environment.
The findings and recommendations of the Subcommittee do  not necessarily represent the
views of the U.S. Environmental Protection Agency.
                                EPA 130-R-07-004
                      U.S. Environmental Protection Agency
                 Office of Cooperative Environmental Management
                             http://www.epa.gov/ocem
                                    May 2007

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EPA Technology Programs:
Engaging the Marketplace

May 2007
National Advisory Council for Environmental
Policy and Technology (NACEPT)

SUBCOMMITTEE ON ENVIRONMENTAL
TECHNOLOGY
Subcommittee Members

Philip Helgerson (Chair) - CSC Advanced Marine Center
Dan Watts (Liaison to the NACEPT Council) - New Jersey Institute of Technology
Linda Benevides - Massachusetts Department of Environmental Protection
David Dzombak - Carnegie Mellon University
Kenneth Geiser - University of Massachusetts at Lowell
John Hornback - Metro 4/Southeastern States Air Resource Managers, Inc. (SESARM)
Kristine Krause - Wisconsin Energy Corporation
JoAnn Slama Lighty - University of Utah
Raymond Lizotte - American Power Conversion Corporation
Oliver Murphy - Lynntech, Inc.
Robin Newmark - Lawrence Livermore National Laboratory
Patrick O'Hara - Cummings/Riter Consultants
Christine Owen - Tampa Bay Water
Katherine Reed - 3M Environmental, Health and Safety Operations
Norman Richards - Mohegan Environmental Protection Department, The Mohegan Tribe
Karen Riggs - Battelle Memorial Institute
James Robbins - Environmental Business Cluster
Howard Roitman - Association of State and Territorial Solid Waste Management Officials
Kent Udell - University of Utah (Professor and Chair), University of California, Berkeley
 (Professor Emeritus)

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Chairman's Prologue
   This is the second report by the Environmental Technology Subcommittee of
the National Advisory Council on Environmental Policy and Technology (NACEPT).
The Subcommittee was created in November 2004, at the request of the U.S.
Environmental Protection Agency's (EPA) Administrator to provide insight and
guidance regarding EPA's current technology programs.  The Subcommittee has
brought together representatives from the environmental, industrial, public policy,
scientific, and academic communities in dialogue with senior managers and EPA
subject matter experts. Together with our first report, which was issued in May
2006, this report completes the Findings and Recommendations of the
Subcommittee.

   In our first report, we focused on internal EPA programs and practices.  In this
report, we offer additional recommendations for the Agency's Environmental
Technology Programs, and then turn our attention outward, looking at how the
Agency engages with others. The recommendations cover four critical  areas:

   • Partnerships—We recommend specific ways that EPA can increase its part-
     nerships with  states, tribes, and private-sector organizations to further the
     discovery, development, and deployment of new technologies.
   • Encouraging Market Demand—We highlight opportunities for EPA to use its
     regulatory authority and respected science and technology expertise to
     stimulate market demand for promising new technologies.
   • Internationa! Issues—Our recommendations encourage EPA to engage
     more in international  activities, increase awareness of and response to
     changing international standards and markets, expand cooperative tech-
     nology verification programs across the world, and identify emerging mar-
     kets for new technologies.
   • Global Climate Change Roles and Responsibilities—We propose increased
     activity in technology development and regulatory analysis and policy in
     areas where  the Agency's mission will require it to be involved in addressing
     causes, projected environmental impacts, and potential adaptation
     actions related to global climate change.

   In December 2006, EPA Administrator Johnson  advised NACEPT that he had
directed implementation of key recommendations from our first report,  establish-
ing a Senior Environmental Technology Officer to lead and coordinate Agency
environmental strategy and policy and creating positions for Environmental
Technology Advocates in each EPA region.  In addition, the Administrator acted
to strengthen the Environmental Technology Council and to create an
Environmental Technology Verification and Assessment Staff coordinated by
the National Risk Management Research Laboratory.

   Building on these positive initiatives, I am confident that the Agency will be
able to adopt further recommendations of this Subcommittee, and more visibly
and effectively improve its engagement with the environmental technology
market.

                           Philip Helgerson, Chairman
                           Subcommittee on Environmental Technology
                           National Advisory Council for Environmental
                              Policy and Technology

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Table of Contents
  Executive Summary
    A. Background and Process	1
    B. Summary of the Recommendations in the First Report
       of the NACEPT Subcommittee	2
    C. Findings and Recommendations in the Second Report
       of the NACEPT Subcommittee	3




    A. Introduction/Background	11
    B. NACEPT Subcommittee First Report, EPA Technology Programs
       and Infra-Agency Coordination	12
    C. Report Overview	13
    D. Findings and Recommendations 	13
       1.  EPA Technology Program Management
          (Additional Recommendations)	13
       2.  Partnership Issues	18
       3.  Encouraging Market Demand for Innovative
          Environmental Technology	25
       4.  International Issues 	37
       5.  Environmental Technology and Climate Change	41


  gJ^^^J

Appendix A: Charge to the Subcommittee on Environmental
            Technology	49

Appendix B:  List of Subcommittee Members	55

Appendix C: List of Recommendations in the First Report of the
            NACEPT Subcommittee	56

Appendix D: EPA Administrator's December 19, 2006 Letter
            to NACEPT Chair	59

Appendix E: Suggested Functions and Duties of the SETO, Regional
           Technology Coordinators, and Technology
           Communication Coordinator 	61

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List of Acronyms
DfE     Design for the Environment
DOC    Department of Commerce
DoD    Department of Defense
DOE    Department of Energy
ECOS   Environmental Council of the States
ELV     End of Life Vehicles
EMS    Environmental Management System
EP      Environmental Project
EPA     Environmental Protection Agency
EPRI    Electric Power Research Institute
ERIS     Environmental Research Institute of the States
ESTCP   Environmental Security Technology Certification Program
ETC     Environmental Technology Council
ETOP    Environmental Technology Opportunities Portal
ETV     Environmental Technology Verification
EU      European Union
FRTR    Federal Remediation Technologies Roundtable
GHG    Greenhouse Gas
ITRC    Interstate Technology and Regulatory Council
LEED    Leadership in Energy and Environmental Design
MOA    Memorandum of Agreement
NACEPT National Advisory Council for Environmental Policy and Technology
NPS     Nonpoint Source
ORD    Office of Research and Development
POC    Point of Contact
R&D    Research and Development
RoHS    Restriction on Hazardous Substances in Electronics
SEP     Supplemental Environmental Project
SERDP   Strategic Environmental Research and Development Program
SETO    Senior Environmental Technology Officer
SWAQ   Subcommittee on Water Availability and Quality
TARP    Technology Acceptance and Reciprocity Partnership
UNEP    United Nations Environment Programme
USAID   U.S. Agency for International Development
USGBC  U.S. Green Building Council
WEEE    Waste Electrical and Electronic Product
WHO    World Health Organization

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                                       r**#
   Executive Summary
   This report, EPA Technology Programs: Engaging the Marketplace, is the sec-
ond of two reports issued by the National Advisory Council for Environmental
Policy and Technology (NACEPT) on therole of the U.S. Environmental Protection
Agency (EPA) in fostering the development and deployment of innovative envi-
ronmental technologies. Produced by the NACEPT Subcommittee on
Environmental Technology, the first report was published in May 2006 and
focused on the internal structure, efficacy, and communication aspects of EPA's
many and diverse technology programs. The Subcommittee now issues its sec-
ond and final report on EPA's relationships, interactions, and communication with
the vast universe of entities that constitute the complex marketplace for new
environmental technologies.
A.  Background and Process

    EPA's mission is to protect human health and the natural environment. Its
strategic goals are Clean Air and Global Climate Change, Clean and Safe
Water, Land Preservation and Restoration, Healthy Communities and Ecosystems,
and Compliance and Environmental Stewardship. The EPA Administrator and
other senior managers have stated that technology is critical in achieving these
goals, and that it will be the central driver in moving from the command and
control policies of the past to a new, more sustainable environmental protection
paradigm for the future.

    The EPA Administrator established the NACEPT Subcommittee on
Environmental Technology to evaluate and make recommendations on EPA's
stimulation, facilitation, and use of innovative technology in carrying out its mis-
sion. The Agency's charge to this Subcommittee is presented in Appendix A, and
a list of the Subcommittee members is provided in Appendix B. The
Subcommittee convened its first meeting in November 2004, and has held quar-
terly sessions for the past 2 years.  Numerous presenters from EPA, other govern-
ment agencies, states, nongovernmental organizations, and the private sector
have briefed the Subcommittee on a broad spectrum of technology issues.  Eight
specific subject areas have been addressed further by working groups comprised
of Subcommittee members. Each working group has developed findings and
recommendations with which the full Subcommittee concurs.

    The Subcommittee has reviewed the Agency's technology programs in the
context of the unique role that EPA plays in the broad spectrum of public and pri-
vate activities that must occur to bring increasingly cost-effective technologies

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into use. Specifically, the Subcommittee has sought to answer the questions
posed in the Agency's charge:

     How can EPA better optimize its environmental technology programs to
     make them as effective as possible in promoting the research, develop-
     ment, commercialization, and implementation of sustainable private-sector
     technologies?

     What other environmental programs and activities should EPA initiate to
     take advantage of opportunities that it may be missing to further the effec-
     tiveness of its technology facilitation objectives? (Although EPA is not likely
     to receive significant additional funding for any new technology activities,
     the Subcommittee should not feel constrained in its thinking.)

    In general, the Subcommittee has been most impressed with the broad spec-
trum of technology-related programs presented to it by Agency managers and
others.  The overall pace of environmental progress in recent decades attests to
EPA's effectiveness in supporting the legal and technological changes that have
brought it about. EPA is involved in all of the components of technology
research, development, and diffusion, and some of the Agency's programs have
been pivotal in bringing important new technologies into use.
B. Summary of the Recommendations in the First Report of the
   NACEPT Subcommittee

   The NACEPT Subcommittee on Environmental Technology issued its first report,
EPA Technology Programs and Infra-Agency Coordination, in May 2006. This
report focused on the evaluation of EPA's internal technology programs, the
organization of their presentation to the public, and recent efforts to cross organi-
zational lines to more effectively solve problems that are impeded by the lack of
commercially available technology.  In particular, the report contained the EPA
Technology Development Continuum, a newly developed tool for organizing and
analyzing the Agency's diverse technology facilitation programs, which reside in
EPA's media program offices (i.e., Air and Radiation; Water; Solid Waste and
Emergency Response; and Pollution Prevention, Pesticides and Toxic Substances),
Office of Research and Development (ORD), and Region 1. Twenty-four pro-
grams are defined and appropriately arrayed across the entire spectrum of
activities needed to move technology ideas from earliest conceptualization
through research and development and on to full commercialization and use.
The first report contained Subcommittee findings and the following recommenda-
tions in three areas:1

   1.  Environmental Technology Development Continuum:  EPA should broadly
       publish the Continuum and should use it as a tool to evaluate the out-
       comes of EPA programs across a wide spectrum of metrics and criteria.

   2.  EPA Programs, Priorities, and Policy:  EPA should target its technology sup-
       port efforts to publicly stated environmental goals; improve  its metrics of
       success; expand its support programs at the demonstration, verification,
1 Figure 1, on page 14 of this report, contains a summary of the major recommendations from the Subcommittee's first
 report and Appendix C contains the complete list of recommendations. The entire report can be found on the Web
 at http://www.epa.gov/etop/nacept.

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          and commercialization end of the Continuum; improve communication
          from one technology program to another; designate technology coordi-
          nators in the regional offices; increase public awareness of its programs to
          create demand for new environmental technologies; and encourage
          sustainability as one of the criteria for technology development assis-
          tance.

       3.  Environmental Technology Action Teams: EPA should employ an ongoing
          public process to identify the country's most pressing environmental prob-
          lems needing technological solutions and utilize its newly developed
          Environmental Technology Council (ETC) Action Team initiative to address
          them.
   C. Findings and Recommendations in the Second Report of the
      NACEPT Subcommittee

                             The Subcommittee's second report, EPA
                               Technology Programs: Engaging the
                                Marketplace, focuses on management issues
                                 that affect the Agency's ability to coordinate
                                  its programs and interface with the diverse
                                   governmental and private-sector organiza-
                                   tions that constitute the environmental
                                    marketplace; on the critical area of the
                                    Agency's ability to build, join, coordinate,
                                    sustain, and leverage partnerships with key
                                    government and private-sector organiza-
                                   tions; on the complex issues of EPA's role in
                                   impacting market demand forces to
                                  empower technology deployment both
                                 within the United States and abroad; and
                                finally, on the looming technological chal-
                               lenges associated with mitigation of and adap-
                             tation to climate change.
-
Findings and Recommendations
   Finding 1: EPA Technology Program Management
             (Additional Recommendations)

       From its earliest deliberations, the Subcommittee has discussed the need for
   EPA to create a more coordinated and interconnected internal technology man-
   agement structure to attain a higher degree of coordination and visibility across
   the broad and diverse spectrum of programs now operating within the Agency.
   The Continuum was the first product of this focus on increased coordination and
   this report follows with its focus on EPA's engagement with those outside entities
   whose actions will fundamentally influence the rate of new technology imple-
   mentation.

       Between the issuance of its first report in May 2006 and this one, the
   Subcommittee is pleased to note that EPA management has responded to its
   recommendations through the establishment or enhancement of four organiza-
   tional entities. These changes are described in a letter dated December 19,

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2006, from EPA Administrator Stephen L. Johnson, to the Chair of NACEPT, John L.
Howard, Jr. (see Appendix D). The Subcommittee believes the implementation of
these changes will have a positive impact on the Agency's ability to manage its
internal technology programs and to interact with a diverse external universe of
environmental actors. The four new functions identified in the December 19 letter
are to:

   • "Establish a Senior Environmental Technology Officer (SETO) who will be the
     focal point for key activities recommended in the report like establishing pri-
     orities, chairing the ETC, facilitating cross-agency coordination and informa-
     tion sharing, working with the business community and other stakeholders,
     and  developing metrics for measuring effectiveness."

   • "Establish the Environmental Technology Council as a  core Agency activity
     with  more senior-level membership accountable for results."

   • "Establish a Regional Environmental Technology Advocacy Network com-
     prised of a technology advocate in each region to identify opportunities to
     use technology to achieve better results, share information within the
     Agency and with stakeholders, serve as a liaison with technology programs
     across the Agency, and serve as a member of the ETC."

   • "Create an Environmental Technology Verification and Assessment Staff
     coordinated by the National Risk Management  Research Laboratory to
     provide enhanced technology support to the SETO and the rest of the
     Agency on issues like technology verifications, state-of-the-art assessments,
     technology development collaborations, and encouraging sustainability."

     Recommendation 1.1:  SETO. EPA's newly created SETO should report
     directly to the Administrator and be afforded the appropriate staff and
     monetary  resources necessary to support this important function. The pri-
     mary roles of this position should be to: (1) have knowledge of Agency
     technology programs and needs; (2) coordinate program and regional
     office activities to ensure that redundancies are avoided and resources
     are appropriately allocated to address the most serious problems requiring
     technological fixes; (3) provide the Administrator with  knowledgeable
     advice on domestic and international technology issues and policies;
     (4) open communication channels and partnership opportunities to all
     outside entities whose assistance can further Agency technology develop-
     ment and deployment goals; and (5) ensure that outstanding communica-
     tion functions operate across the entire Agency to facilitate robust
     information flow to the marketplace on effective technologies of all types.

     Recommendation 1.2:  Additional Important SETO Functions. Three addi-
     tional functions to be carried out by the SETO are recommended to:
     (1) assure EPA leadership in environmental technology communications
     and  the provision of substantial resources for this critical function; (2) create
     and  nurture EPA partnerships with both public- and private-sector organiza-
     tions to maximize effective interface with other government agencies that
     have major technology development and deployment responsibilities, as
     well as the multiple actors in the commercial marketplace; and (3) con-
     vene a broadly based External Technology Advisory Board to  advise the
     Agency on priority environmental problems needing technology break-
     throughs, marketplace realities, communication issues, partnership

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     opportunities, and emerging technological challenges and opportunities
     such as those to be found in the field of nanotechnology.

     Recommendation 1.3:  Expansion of Environmental Technology Council
     Functions. EPA will expand the present functions of the ETC to encompass
     the broader role of an ongoing, cross-Agency technology council for coor-
     dination of technology programs, sharing of information, and development
     of general EPA technology policy.

     Recommendation 1.4:  Regional Technology Coordinator Function. The
     Subcommittee reconfirms its previously stated recommendation to "estab-
     lish a policy that each regional office will designate a specific technology
     information coordinator" and applauds EPA's decision to do so. It further
     recommends specific functions to be provided by the regions through this
     mechanism and overall coordination by the SETO.

     Recommendation 1.5:  Environmental Technology Verification and
     Assessment. A primary barrier to new private-sector technology has been
     the lack of independent and quality assured data on its environmental per-
     formance, operational reliability, and cost. EPA-supported verification
     allows this gap to be filled by providing technology developers with data
     that they can use to convince buyers to buy, while ensuring that the
     Agency's primary function, environmental  protection, is safe-guarded by
     technologies that work. The permanent placement of verification and
     assessment staff within ORD's National Risk Management Research
     Laboratory will ensure that this critical function is continued.

Finding 2: Partnership Goals and Opportunities

   The concept of partnership is integral to the success of EPA's environmental
technology efforts.  Partnerships with other federal, tribal, state, and local govern-
ment agencies; academia; public- and private-sector research organizations;
trade and professional associations; technology  developers and vendors; and
purchasers and users of new technologies are necessary for technologies to
move from early research to  actual deployment. EPA cannot and should not
develop or promote the development of technology in a vacuum. This is true not
only because of EPA's finite resources, but also, more importantly, because a host
of other partners bring needed expertise, creativity, and market  knowledge, as
well as resources, to the table. EPA is particularly in need of input from the pri-
vate sector.

     Recommendation 2.1:  Strategic Partnership Planning.  EPA should use the
     Environmental Technology Development Continuum, described in the
     Subcommittee's first report, for strategic thinking about the need for part-
     ners at different stages along the Continuum.  By identifying partnerships
     that may be needed and available at particular stages, the Agency can
     better target its resources towards either supporting those partnerships or
     filling gaps by establishing new partnerships where there currently are no
     partners.

     Recommendation 2.2:  Partnerships With Other Agencies. EPA should join
     successful initiatives that already exist in other government agencies at all
     levels to further commercialization of environmental technology and
     expand the successful partnerships in which the Agency now participates.

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     Recommendation 2.3: State Partnership Challenges.  Because states, tribes,
     and local government regulators play a major role in implementation of all
     technology, EPA should establish effective mechanisms for them to provide
     significant ongoing input into EPA environmental technology strategies and
     receive information and training on new technologies.

     Recommendation 2.4: Partnership With the Private Sector. EPA should
     expand the use of its broad stakeholder process used in the Agency's
     Environmental Technology Verification (ETV) program to other appropriate
     programs across the Continuum and use that process in the ETC Action
     Teams. The process brings to the table all segments of the marketplace-
     scientists and engineers, small business incubators, testing organizations,
     buyer and seller associations, developers and vendors,  purchasers and
     users,  other appropriate federal agencies, and regulators/permit writers at
     all appropriate levels of government—to discuss the opportunities and
     impediments as well as the data necessary to bring specific classes of
     needed technology to commercialization.

Finding 3:  Encouraging Market Demand for Innovative
           Environmental Technology

    Historically, EPA has conducted numerous
programs to develop and promote marketplace
demand for innovative environmental technolo-
gy with strong emphasis on particular areas
such as municipal wastewater treatment
systems, soil and groundwater remediation
technologies, and others. In the past 15
years, the universe of primarily voluntary
approaches for stimulating and increasing
demand for innovative technology
deployment has expanded, and EPA has
been involved to varying degrees with
development and/or implementation of
many of these approaches. In general,
so-called "demand pull" activities fall into
three categories:  (1) creative regulatory and
enforcement approaches that provide incen-
tives for technology innovation, such as emission
trading (e.g., the acid rain program), flexible
permitting, and enforcement incentives; (2) efforts to
assist skeptical purchasers in their selection of new tech-
nologies with high-quality, independent information on performance (e.g., ETV,
Design for the Environment (DfE)) and voluntary certification programs (e.g.,
ENERGY STAR); and (3) direct government support in selected areas through pref-
erential procurement standards and purchasing (e.g.,  recycled paper, fly ash in
concrete) or direct project funding (e.g., wastewater facilities, arsenic removal
systems).

     Recommendation 3.1: Emission Credit Trading. Emission credit trading
     should be a component of environmental programs wherever possible.
     Under "cap and trade" programs, industry is given the incentive to achieve
     pollution reduction and maximize efficiency by the ability to sell emission
     credits to other companies that it has gained through reductions in emis-
     sions.  The weak market for many new technologies can be stimulated

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     through partnership with market forces found in emission credit trading pro-
     grams established or endorsed by EPA.

     Recommendation 3.2:  Flexible Permitting. EPA should commit to partner-
     ing with states independently and regionally to develop specific opportuni-
     ties for greater flexibility in permitting to promote progressive technology
     development, particularly in areas in which innovative technology is need-
     ed to address serious unsolved problems or existing technology is too
     expensive for widespread implementation.

     Recommendation 3.3:  Flexible Enforcement Actions. Environmental
     Projects (EPs) and Supplemental Environmental Projects (SEPs) are impor-
     tant tools that EPA can employ to promote technology development and
     should be used more extensively for this purpose.  Enforcement actions
     should authorize the development, piloting, or enhancement of environ-
     mental technology where appropriate. EPA should specifically include
     innovative technologies in project ideas for potential SEPs, with appropriate
     protections for the performance risks of the new technologies.

     Recommendation 3.4:  ETC Action Teams  and SEPs. SEPs should be expand-
     ed specifically to include support for ETC  Action Team projects. Action
     Team problem areas that have sufficient  nexus to the environmental condi-
     tions impacted by alleged violations could be directly supported by SEPs.

     Recommendation 3.5:  Independent and  Quality Assured  Performance
     Data. EPA can and should continue to stimulate demand by providing the
     environmental marketplace with independent information and quality
     assured data on the performance of innovative, commercial-ready tech-
     nologies through expansion of the DfE and ETV programs.

     Recommendation 3.6:  Expanded "Green" Certification Programs.  EPA
     should continue to expand  on the success of its voluntary ENERGY STAR pro-
     gram, creating additional "green" programs in the same  mold for a wide
     variety of industries and activities. In addition, the Agency should welcome
     the opportunity to work with any not-for-profit or private-sector organization
     interested in  creating a robust certification program aimed at reducing pol-
     lution, energy usage, water usage, and waste, and increasing the overall
     sustainability of commercial, residential, and industrial activity.

     Recommendation 3.7:  Preferential Purchasing.  EPA should identify and act
     on opportunities to stimulate innovative environmental technology devel-
     opment and adoption through direct Agency preferential purchasing and
     through preferential purchasing requirements included in  procurement
     specifications. EPA should be a leader among federal agencies in environ-
     mentally preferential purchasing, and  offer guidance to other agencies in
     implementing adaptations of its model program.

Finding 4: International Trends and Issues

   The Subcommittee has focused its work  in the international  area on evaluat-
ing the role and function of EPA technology assistance activities in the rapidly
evolving international  marketplace. The international technology sector is impor-
tant to EPA and to the United States for many reasons, including the direct envi-
ronmental  impact  of cross-border pollution, the expanded use in this country of
technology developed and manufactured abroad, and the economic stimulus

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potential of the global marketplace for the development of innovative technolo-
gies across the board. In addition, emerging product, operational, and waste
regulations in Europe that target the environmental characteristics of products
are causing entire industries to redesign their products to optimize for environ-
mental performance. Individual U.S. states, most notably California, are produc-
ing similar regulations that are resulting in the demand for new environmental
technologies in the areas of manufacturing, measurement and verification, risk
assessment, software, and other tools needed to achieve and ensure desired
product performance.

     Recommendation 4.1:  New International Manufacturing and Recycling
     Standards.  U.S. manufacturers are responding to product environmental
     performance standards and regulations developed in Europe, and to state
     regulations that are emulating those developments at home. Emergence
     of differing and possibly conflicting standards will create confusion and
     impede the marketplace for these new technologies. Therefore, in partner-
     ship with appropriate state and business organizations, EPA should promptly
     conduct a major study or series of studies in affected  sectors to determine
     the extent to which these new standards will affect U.S.  environmental and
     technology requirements and determine what EPA's role should be in har-
     monizing regulatory approaches and guiding states, manufacturers, and
     citizens in this rapidly evolving situation.

     Recommendation 4.2:  International Technology Verification. EPA's technol-
     ogy verification programs should be strengthened and promoted interna-
     tionally as a process that offers technically reliable assessment of new
     domestic and international environmental technologies. In particular, the
     Agency should promote the use of ETV testing protocols by other nations to
     allow for the more rapid understanding and diffusion of commonly based
     performance information.

     Recommendation 4.3:  International "Targets of Opportunity."  EPA should
     continue to pursue, and if possible, expand its policy of addressing interna-
     tional  "targets of opportunity," particularly in areas of cross-boundary pollu-
     tion prevention/control and on other topics of high priority to the Agency,
     such as mercury control. Such targets also may arise  from priorities devel-
     oped  by other departments and agencies charged with U.S. foreign policy
     missions.

     Recommendation 4.4:  U.S. Department of Commerce (DOC) and U.S.
     Agency for International Development (USAID) Partnerships. EPA should
     strengthen its interaction and cooperation with the domestic agencies that
     are the primary players in the international realm.  DOC and USAID, in par-
     ticular, have the lead in areas such as foreign aid and capacity building
     and support international opportunities for U.S. environmental technology
     industries.

Finding 5: Global Climate Change Technology Challenges

   Climate change, a large-scale environmental issue with the potential to
impact the entire globe, is one of the most important challenges that EPA will
face in the 21st Century.  The EPA Administrator stated in his climate change
memorandum of July 6, 2006, that "Our planning must truly  be strategic and
include consideration of emerging challenges and  opportunities. Rather than
react or confront problems out of necessity, we should try to anticipate them and

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adapt our programs accordingly." The Subcommittee agrees with this forward-
looking strategy and believes that problem anticipation must be accompanied
by a corollary activity in technological solution evaluation.

    EPA's massive commitment to and success in improving air and water quality
over the last three decades are at risk.  Many problems, which the nation has
viewed as "solved," will require new technology development to address newly
defined issues as the dimensions of climate change impacts emerge.

    Strategic planning in this area will be multimedia of necessity, and therefore,
will require the active participation of the new SETO to ensure that cross-media
impacts are addressed and that the climate change aspects of technologies
developed for other needs are evaluated.

    EPA should, as a result of its core environmental protection function, continue
on its present course of assessing  the potential degradation of air and water
quality that will be caused by global warming. The Subcommittee also thinks,
however,  that EPA should expand its role in facilitating the development and
deployment of the new technologies that will be needed to address climate
change, assess its role in facilitating emissions trading, and prepare to use its reg-
ulatory authority to work with partners on the state and federal level on this seri-
ous emerging environmental challenge.

     Recommendation 5.1:  Climate Change Technology Planning and R&D.
     Current federal climate change policy gives primary responsibility to other
     agencies, principally the U.S. Department of Energy, for technology related
     to reducing greenhouse gas emissions. The Subcommittee recommends
     that EPA identify and fund climate change technology in areas of impor-
     tance within its purview that need special development assistance.
     Assistance along the entire  Continuum for these required technologies
     needs attention and active, cross-Agency strategic planning for technolo-
     gy development. This planning process should be addressed by the SETO
     as a priority matter.

     Recommendation 5.2:  Public/Private and State Partnerships. EPA should
     establish and cultivate meaningful public/private partnerships for technolo-
     gy development on climate change challenges. The importance of pri-
     vate-sector and public-sector partnerships becomes markedly more signifi-
     cant when dealing with large-scale environmental issues because of cost
     and scale, as well as practical implementation issues.  In addition, EPA
     should increase its participation in partnerships with state, tribal, and region-
     al groups that already are actively addressing the environmental effects of
     climate  change.

     Recommendation 5.3:  Technology Verification and Demonstration Support.
     EPA should establish and actively promote its leadership role in evaluating
     climate  change technologies as new technologies approach the commer-
     cialization stage, so that purchasers can be assured that they are selecting
     the best technology for their particular situation. Governments, businesses,
     and individual consumers are beginning to voluntarily seek climate-friendly
     technologies in large numbers. Performance claims by vendors in a rapidly
     expanding marketplace need to be verified to ensure that technologies
     produce the types of results desired and that purchasers are not dissuaded
     from further voluntary actions by poor performance of new technology.

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                          Recommendation 5.4:  EPA's Potential Role in Carbon Dioxide (CO2)
                          Emissions Trading. EPA should utilize its existing inventory of CO2 power
                          plant emissions to establish a baseline for use by electric utilities in instituting
                          an emissions trading program in the United States as soon as possible.  As a
                          result of the emission monitoring and reporting provisions of the Clean  Air
                          Act Amendments of 1990, EPA's Office of Atmospheric Programs is a world
                          leader in operating both emissions inventory activities and emissions trading
                          programs. The CO2 database that it has maintained for 10 years is the
                          most available and logical source of plant-by-plant emissions data in the
                          country and it should be utilized to rapidly establish year-specific baselines
                          for all medium- to large-sized power plants.

                          Recommendation 5.5:  EPA's Regulatory Role in Innovative Technology
                          Development.  Consistent with its charge to explore "encouraging demand
                          for innovative technologies," the Subcommittee recommends that EPA
                          drive and enable innovative technology in all media by using  not only exist-
                          ing but also new and creative regulatory and policy approaches to help
                          solve the difficult issues facing the nation with respect to both  prevention of
                          and adaptation to climate change. EPA should actively seek and consider
                          suggestions for innovative regulatory approaches that would encourage
                          technology development within the regulated community as well as state,
                          tribal, and local organizations.
o

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     EPA Technology Programs:  Engaging the Marketplace
A.  Introduction/Background

    In October 2004, the U.S. Environmental Protection Agency's (EPA) Office of
Research and Development (ORD) requested that the National Advisory Council
for Environmental Policy and Technology (NACEPT) form a broad-based subcom-
mittee of technology experts to address issues and advise the Administrator on
the present focus and status of environmental technology programs within the
Agency (see Appendix A for the full text of the Subcommittee Charge docu-
ment).  On November 3, 2004, the Environmental Technology Subcommittee was
formed (see Appendix B for the Subcommittee membership list) and shortly there-
after, held its first meeting.

    The Charge to the Subcommittee posited the following core questions:

    How can EPA better optimize its environmental technology programs to make
    them as effective as possible in promoting the research, development, com-
    mercialization, and implementation of sustainable private-sector technolo-
    gies?

    What other environmental programs and activities should EPA initiate to take
    advantage of opportunities that it may be missing to further the effectiveness
    of its technology facilitation objectives? (Although EPA is not likely to receive
    significant additional funding for any new technology activities, the
    Subcommittee should not feel constrained in its thinking,)

    In particular,  EPA requested  the Subcommittee to review its effectiveness in
the following five areas:

•  Evaluating the existing suite of technology support programs, both individually
    and collectively, with a particular focus on redundancies or gaps and the
    extent to which they are appropriately designed to address technology
    development barriers.

•  Encouraging demand for innovative technologies through  the use of such tools
    as direct financial incentives, creative regulatory and policy approaches,
    preferential governmental purchasing, the evaluation and elimination of gov-
    ernmental permitting barriers, or other demand-pull actions.

•  Reaching critical audiences with innovative technology information by organiz-
    ing  (or reorganizing) the massive amount of information  that the Agency pos-
    sesses on technology advances and performance, and  by making this mate-

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o
   rial more accessible to the multiple public- and private-sector customers who
   need it through the use of 21st Century communication tools.

• Collaborating with states, tribes, and local governments to increase coordina-
   tion and cooperation within and across all levels of government in assisting
   technologies to move from research to the actual implementation stage of
   development and commercialization.

• Collaborating with other federal agencies and the private sector to ensure that
   all major stakeholders in the complex process of bringing innovative tech-
   nologies to market are represented in the consideration  and implementation
   of EPA's technology programs.

   The full Subcommittee has held eight meetings to date.  Meeting agendas
have included presentations by both government and nongovernment experts
on overview issues and extensive briefings on the many and varied environmen-
tal technology research, development, and proliferation programs  conducted by
EPA.  Working groups comprised of Subcommittee members have been formed
to address specific issues and make preliminary recommendations to the full
Subcommittee. After 2 years  of deliberation, the Subcommittee now issues its
second and final report containing  findings and recommendations on which all
members concur. The Subcommittee recommends that EPA and NACEPT moni-
tor and periodically review the results of actions taken in response to recommen-
dations contained in both reports.

B. NACEPT Subcommittee First Report,  EPA  Technology Programs
   and Infra-Agency Coordination

   The Subcommittee's first report, EPA Technology
Programs and Infra-Agency Coordination, was
issued in May 2006, and focused on findings and
recommendations pursuant to EPA's broad
spectrum of technology programs and coor-
dination among them. As such, it addressed
primarily the first and third of the Charge
topics listed above.  In particular, the report
contained the newly developed EPA
Technology Development Continuum, the
entire text of which can be found in
Appendix D of the Subcommittee's first
report (the full Subcommittee report is
available on the Web at
http://www.epa.gov/etop/nacept). The
Continuum displays, for the first time, the full
range of EPA's many and diverse technology
facilitation programs. The Subcommittee
reviewed a substantial subset of these programs,
24 of which have been identified to date, and have
used this information to inform the findings and recommendations for both of its
reports. These programs reside in all of the Agency's media program offices (Air;
Water; Solid Waste and Emergency Response; and Pollution  Prevention,  Pesticides
and Toxic Substances), ORD, and Region 1.  They cover all of the three major

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functions necessary to develop, evaluate, and promote commercial-ready tech-
nologies to improve the environment:

• Basic research and development assistance for new ideas and innovations by
   academics, independent inventors, and researchers working both within the
   Agency and in large and small companies;

• Demonstration and verification of near or fully commercial-ready technologies to
   assist consultants and purchasers in making good choices among competing
   technologies based on independent and quality assured performance data;
   and

• Technology information diffusion to targeted audiences such as states, local
   governments, associations, and private-sector organizations to facilitate the
   spread of information on technologies that are available, effective, and
   affordable.

   A brief summary of the major recommendations in the Subcommittee's first
report is presented in Figure 1. A full list of these recommendations is provided in
Appendix C and will be referenced extensively in this report. The entire first report
can be found on the Web at http://www.epa.gov/etop/nacept.

C. Report Overview

   This second report, EPA Technology Programs: Engaging the Marketplace,
focuses on findings and recommendations pursuant to the remaining elements of
the Subcommittee's Charge. These include:  management recommendations,
which the Subcommittee believes will make the operation of the Agency's pro-
grams more holistic, coordinated, and transparent to the public; the critical area
of the Agency's ability to build, join, coordinate, sustain, and leverage  partner-
ships both internally and with key organizations outside of EPA, including the pri-
vate sector; the use of various instruments, both regulatory and nonregulatory, to
create a market demand for new technologies; the increasingly important role of
international activity in the development and proliferation of improved technolo-
gy; and the looming technological challenge of global climate change.

D. Findings and Recommendations

1. EPA Technology Program Management
   (Additional Recommendations)

   As the Subcommittee emphasized in its first report, innovative and cost-effec-
tive environmental technologies are the keys to meeting our environmental goals
and to achieving maximized environmental  protection in the 21st Century.
Ensuring that innovative technologies, capable of attaining improved environ-
mental results at lower cost to the economy, move through the research and
development continuum to full implementation in the marketplace requires
focused attention at the highest levels of EPA and throughout the organization.
This focus is particularly important in light of the need to interact extensively with
the private sector on technology commercialization and deployment.  With
declining resources, however, the focus on getting technologies developed and
used is rarely a priority activity in the Agency's media programs and regional
offices.

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Figure 1.. Summary of Recommendations From the First Subcommittee Re
      The U.S. Environmental Protection Agency (EPA) should broadly pub-
   lish the Continuum, in both Web and document form, to assist information
   seekers both within the Agency and outside. The Agency should use the
   Continuum as an effectiveness and evaluation tool to determine the
   metrics and outcomes of EPA programs; a prioritization and resource
   evaluation tool to make cross-Agency resource decisions; and an evalu-
   ation tool to determine EPA's effectiveness in working with the other criti-
   cal stakeholders in technology development and diffusion, most particu-
   larly state and local government and the private sector.
    EPA should target its technology support efforts to areas clearly linked
    to environmental regulations and other publicly stated environmental
    goals.
    Improved and coordinated metrics need to be developed, used
    across the entire spectrum of EPA technology programs, and publi-
    cized.
    Although a research focus is consistent with the government's tradition-
    al role in funding basic research, it is important that other efforts, further
    along the research and development continuum, continue to be sup-
    ported.
    Demonstration/verification programs need to be expanded.
    Each EPA technology program should know where to direct technolo-
    gies to the next step in the development process both inside and out-
    side EPA to ensure that promising innovations move through the
    Continuum toward commercialization.
    The Agency should address critical diffusion and utilization gaps that
    impede new technology from reaching the appropriate markets.
    The Agency should establish a policy that asks each regional office to
    designate a specific technology information coordinator.
    EPA should place more emphasis on and increase public awareness of
    its programs to create a demand for new environmental technologies.
    EPA should devote more attention and resources to those Agency pro-
    grams that incorporate and encourage sustainability as one of the
    goals or criteria for technology development or implementation assis-
    tance.
      EPA should develop a formal and ongoing public process to identify
   the country's most pressing environmental problems needing technologi-
   cal solutions. EPA should make the Action Team initiative a core program
   with high-level  Agency support, while streamlining the management
   structure for both the Environmental Technology Council (ETC) and its
   Action Teams.  The ETC should develop and institute Standard Operating
   Procedures for Action Teams and ensure that they immediately begin to
   include appropriate outside stakeholders.

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.
       The Subcommittee believes that implementation of the recommendations
   made in its first report (see Figure 1 ), as well as those contained in this report, will
   move EPA toward more robust and coordinated technology programs across the
   Agency.  The recommendations in this report, in particular, will facilitate activities
   through the many outside entities that must be involved for improved technology
   to be deployed through the marketplace.

       From  its earliest deliberations, the Subcommittee has discussed the need for
   EPA to  create a more coordinated and communicative internal technology
   management structure to attain a higher degree of coordination and visibility
   across  the broad and diverse spectrum of programs now operating within the
   Agency.  The Continuum was the first  product of this focus on increased coordi-
   nation, and this report follows with its focus on EPA's engagement with those out-
   side entities whose actions will fundamentally influence the rate of new technolo-
   gy implementation.

       Between the issuance of the Subcommittee's first report in May 2006, and this
   one, EPA  management has responded to the Subcommittee's recommendations
   through the creation of four new organizational entities. These changes are
   described in  a letter dated December 19,  2006, from EPA Administrator, Stephen
   L. Johnson, to the NACEPT Chair, John L. Howard, Jr. (see Appendix D). The
   Subcommittee believes that the implementation of these changes will have a
   positive impact on the Agency's ability to manage its internal technology pro-
   grams and to interact with a diverse external universe of environmental actors.
   The four new organizational functions  are referenced in  the findings below,  along
   with the Subcommittee's comments and recommendations on their implementa-
   tion.
Findings
        Finding 1.1: EPA will, "Establish a Senior Environmental Technology Officer
        (SETO) who will be the focal point for key activities recommended in the
        report like establishing priorities, chairing the Environmental Technology
        Council (ETC), facilitating cross-agency coordination and information shar-
        ing, working with the business community and other stakeholders, and
        developing metrics for measuring effectiveness."

        Finding 1.2: EPA will, "Establish the Environmental Technology Council as a
        core Agency activity with more senior-level membership accountable for
        results."

        Finding 1.3: EPA will, "Establish a Regional Environmental Technology
        Advocacy Network comprised of a technology advocate in each region
        to identify opportunities to use technology to achieve better results, share
        information within the Agency and with stakeholders, serve  as liaison with
        technology programs across the Agency, and serve  as a member of the
        ETC."

        Finding 1 .4: EPA will, "Create an Environmental Technology Verification and
        Assessment Staff coordinated by the National Risk Management Research
        Laboratory to provide enhanced technology support to the SETO and the
        rest of the Agency on issues like technology verifications, state-of-the-art
        assessments, technology development collaborations, and  encouraging
        sustainability."

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  Finding 1.5:  Communication of technology information on the broadest
  possible scale is necessary for the actual adoption, implementation, and
  use of better technology. At every point in the Continuum, but especially
  at the end of the process when an innovation has been fully developed,  its
  performance independently verified, and its commercial potential ensured,
  EPA must facilitate the transmission of information and data to the wide
  diversity of people outside the Agency who need it for decision-making
  purposes. Today, Web sites and Web-based communication activities are
  the most universal means of information diffusion and critical to every
  aspect of implementation of innovative technology.  The existence of a
  Web site, however, does not ensure that it will or should be used.  EPA,
  through the focused management structure that it now has created, must
  ensure that those sites incorporated into its Environmental Technology
  Opportunities Portal  (ETOP) Web Site are up to date, accurate, and user
  friendly. This Web site quality control function is essential for the Agency's
  ongoing reputation  as a repository of current and high-quality data and
  information.
Recommendations
  Recommendation 1.1: SETO. EPA's newly created SETO, should report
  directly to the Administrator and be afforded the appropriate staff and
  monetary resources necessary to support this important function.  The pri-
  mary roles of this position should be to:  (1) have knowledge of Agency
  technology programs and needs; (2) coordinate program and regional
  office activities to ensure that redundancies are avoided and resources
  are appropriately allocated to address the most serious problems requiring
  technological fixes; (3) provide the Administrator with knowledgeable
  advice on domestic and international technology issues and policies;
  (4) open communication channels and partnership opportunities to all
  outside entities whose assistance can further Agency technology develop-
  ment and deployment goals; and (5) ensure that outstanding communica-
  tion functions operate across the entire Agency to facilitate robust
  nformation flow on effective technology opportunities of all types.
  Appendix E contains further Subcommittee ideas on the internal and
  external roles of the SETO.

  Recommendation 1.2: Additional Important SETO Functions. The
  Subcommittee believes that there are several specific functions requiring
  special skills and experience that should reside within the office of the SETO.
  These are:

  • Communications Leadership,  The responsibility for the critical communi-
     cation function should reside with the SETO and receive the substantial
     resources that a really effective  communication effort will require to
     ensure actual implementation of new technologies.  Subcommittee
     suggestions for this function are found in Appendix E.

  • Partnership Coordination. EPA should create and nurture a technology
     support coordination function with the mission and responsibility of
     linking promising technologies with  partners. This support function
     should have a working knowledge of incubators, markets, financial
     resources like venture capital organizations,  regulatory agency needs,
     leadership companies, regulatory tools, interests of nonprofits, states

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    taking leadership roles in specific areas, and other partners that could
    contribute to successful technology development and marketing.

 •  External Technology Advisory Board, An external Technology Advisory
    Board, comprised of major stakeholders, including a range of public
    and private representatives, should be formed to provide ongoing
    advice to the SETO and the Agency on priority environmental problems
    needing technology breakthroughs,  marketplace realities, communica-
    tion issues, and partnership opportunities. The Technology Advisory
    Board also could be charged with recommending or reviewing appro-
    priate metrics for the Agency to use  in measuring real-world results,
    both environmental and economic,  from the introduction of innova-
    tions and could follow and advise on issues germane to the emer-
    gence of wholly new environmental  approaches such as those involv-
    ing nanotechnology.

Recommendation 1.3: Expansion of Environmental Technology Council
Functions. The Subcommittee approves  of the Administrator's decision to
place the ETC under the direction of the SETO as EPA's cross-Agency coun-
cil on technology issues.  The now permanent ETC should expand its func-
tions to the broader role of an ongoing technology forum for coordination
of technology programs, information diffusion, and development of gener-
al EPA technology policy. The ETC currently consists of representatives from
each program office,  ORD, and all 10 regions. Its present functions are to
periodically identify the most pressing environmental problems requiring
new technology and establish cross-Agency Action Teams to address them.
The Subcommittee examined the ETC and its Action Teams and developed
several recommendations concerning the Council in the May 2006 report,
among which was, "EPA should make the Action Team initiative a core pro-
gram with high-level Agency support..."  ETC's expanded functions will vary
over time as Agency goals, issues, and initiatives evolve, but its existence as
an intra-EPA forum for technology discussion is critical.

Recommendation 1.4: Regional Technology Coordinator Functions. The
Subcommittee's May 2006 report recommended that the Agency
"...establish a policy that each regional office will designate a specific
technology information coordinator." The Subcommittee reconfirms this
recommendation and applauds the Administrator's decision to implement
it. The Subcommittee's recommendations on the functions of these
Coordinators are found in Appendix E.

Recommendation 1.5: Environmental Technology Verification and
Assessment.  In almost every section of both its first and second reports, the
Subcommittee has recommended the expansion and support of the
Agency's programs for technology verification as a core function within
EPA. The Agency's charge to this Subcommittee stated, "The Agency must
support the role of the private sector in technology development, leverag-
ing its programs and activities to facilitate the deployment of such tech-
nologies and eliminating barriers that discourage or hold back their adop-
tion." A primary barrier to new private-sector technology has always been
the lack of independent and quality assured data on its environmental per-
formance, operational reliability, and cost.  EPA-supported verification
allows this gap to be filled  by providing technology developers with data
that they can use to convince buyers to  buy, while ensuring that the

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     Agency's primary function, environmental protection, is safe-guarded by
     technologies that work. The permanent placement of a verification and
     assessment staff within ORD's National Risk Management Research
     Laboratory will ensure that this critical function is continued.

2.   Partnership Issues

    The recommendations of the Subcommittee on partnerships are intended to
address strategic use of various partnership opportunities to further EPA's environ-
mental goals and solve priority problems. EPA has adopted a partnership culture
and has established successful partnerships with many organizations. Some
examples of these effective partnership-based programs include the Design for
the Environment (DfE), WasteWise, Environmental Technology Verification (ETV),
Nonpoint Source Partnership, and ENERGY STAR programs (see Successful EPA
Partnership Programs on page 19 as well as the descriptions of DfE and ETV in the
May 2006 report), but there are many others across the Agency.

    The concept of partnering with other federal, tribal, state, and local govern-
ment agencies; academia; trade and professional associations; public- and pri-
vate-sector research organizations; technology developers and vendors; and
purchasers and users of new technologies is integral to the success of EPA's envi-
ronmental technology efforts.  EPA cannot and should not develop or promote
the development of technology in a vacuum. This is true not only because of
EPA's finite resources, but also more importantly, because a host of other partners
bring needed expertise, creativity, and market knowledge, as well as resources,
to the table.

    It should be emphasized that "partnership" is not a euphemism for "deep
pockets," nor are partnerships entered into primarily to leverage resources from
other organizations, although this may sometimes occur.  Partnership means
many different things, and different kinds of partnerships may be more or less
important at various points along the Continuum of technology development
described in the NACEPT Subcommittee's first report.  Further, EPA's role is differ-
ent in relation to different partners. EPA can form partnerships and lead them,
but it also can join existing partnerships led by others and effectively further its
mission through these activities.
    Findings
     Findings 2.1: Partnerships are important to the advancement of environ-
     mental technology.  EPA's ability to advance technology is greatly
     enhanced by effective collaboration with a multiplicity of research, devel-
     opment, and marketplace actors. In particular, its relationships with state
     organizations such as the Environmental Council of the States (ECOS) is criti-
     cal to implementing its environmental goals in general and its technology
     goals in particular (see the description of ECOS on page 20). EPA needs to
     identify the gaps in developing needed technologies and support their clo-
     sure through strategic use of partnerships.

     Finding 2.2: Current EPA partnerships that support development and mar-
     keting of environmental technologies are category specific (i.e., by indus-
     try, media, or technology) and tend to focus on the early and late stages
     of the Continuum. Partnerships appear to be less prevalent in the middle
     of the Continuum, the stage at which good ideas either succeed or fail in
     moving to commercialization.  Partnerships needed at this stage may

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               Successful EPA Partnership Programs

Design for the Environment (DfE) is one of EPA's premier partnership programs, working
with individual industry sectors to compare and improve the performance and reduce
human health and environmental risks and costs of existing and alternative products,
processes, and practices. DfE partnership projects promote integrating cleaner,
cheaper, and smarter solutions into everyday business practices,

WasteWise is a free, voluntary EPA program through which organizations eliminate
costly municipal solid waste and select industrial wastes, benefiting their bottom line
and the environment. WasteWise is a flexible program that allows partners to design
their own waste reduction programs tailored to their needs.  All organizations within
the United States may join the program.  Large and small businesses from any industry
sector are welcome to participate. Institutions, such as hospitals and universities, non-
profits, and other organizations, as well as state, local, and tribal governments, also
are eligible to participate in WasteWise.

The Environmental Technology Verification (ETV) program develops testing protocols
and verifies the performance of innovative technologies that have the potential to
improve protection of human health  and the environment. The program partners with
private-sector testing organizations, federal agencies such as the U.S. Department of
Defense, Department of Energy (DOE), National Oceanic and Atmospheric
Administration, and Coast Guard, and numerous states to accelerate the entrance of
new environmental technologies of all types into the domestic and international mar-
ketplace. ETV utilizes the largest stakeholder process in the Agency—more than 800
public- and private-sector individuals representing federal, state, and local govern
ment agencies;  academics and technology experts; not-for-profits; associations; and
a broad group of technology purchasers, users, developers, and vendors—to direct
program activities.

The State-EPA Nonpoint Source (NFS)  Partnership provides an excellent framework for
states and EPA to work together cooperatively to identify, prioritize, and solve NPS
water problems. Work groups were established through this partnership to focus on
NPS topic-specific needs, including: watershed planning and implementation; rural
nonpoint sources; urban nonpoint sources; nonpoint source grants management; non-
point source capacity building and funding; information transfer and outreach; non-
point source results; and nonpoint source monitoring. The information and products
emerging from these work groups help states to more effectively implement their NPS
management programs,

ENERGY STAR is a joint program of EPA and DOE that is helping Americans save money
and protect the environment through energy-efficient products and practices. The
program was introduced by EPA in 1992  as a voluntary labeling program designed to
identify and promote energy-efficient products to reduce greenhouse gas emissions.
Today, more than 40 percent of the American public recognizes the ENERGY STAR
label,  which is on major appliances, office equipment, lighting, home electronics, and
more. EPA also has extended the label to cover new homes and commercial and
industrial buildings,  Through its partnerships with more than 8,000 private- and public-
sector organizations, ENERGY STAR delivers the technical information and tools that
organizations and consumers need to choose energy-efficient solutions and best man-
agement practices.

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               Environmental Council of the States

The Environmental Council of the States (ECOS) is the national nonprofit, nonpartisan
association of state and territorial environmental agency leaders. The purpose of
ECOS is to improve the capability of state environmental agencies and their leaders
to protect and improve human health and the environment of the United States.
ECOS believes that state government agencies are the keys to delivering environmen-
tal protection afforded by both federal and state  law, and that the Council plays a
critical role in facilitating a quality relationship between federal and state agencies in
the fulfillment of that mission. The role of ECOS is to:

    ^  Articulate, advocate, preserve, and champion the role of the states in
       environmental management.

    ^  Provide for the exchange of ideas, views, and experiences among states and
       with others.

    ^  Foster cooperation and coordination in environmental management.

    ^  Articulate state positions to Congress, federal agencies, and the public on
       environmental issues.
ECOS is actively working on several environmental policy research efforts both inde-
pendently and through cooperative agreements with EPA, including the National
Childhood Asthma Prevention Campaign, the Forum on State and Tribal Toxics Action,
and Small Community Compliance Assistance.  ECOS currently has several key part-
nerships with EPA, including:

   ^  State-EPA Information Management Workgroup. This workgroup formed the
       Environmental Data Standards Council in November 1999. The Council has 10
       members—four state, four EPA, and two tribal representatives. The Council
       develops environmental data standards to promote the exchange of informa-
       tion  among states, tribes, and EPA.  The workgroup also sponsors WISER, a
       secure, electronic workplace for use by employees of state environmental
       agencies and the EPA.  Its purpose is to share ideas and information about
       information management and other topics of mutual interest.

   ^  National Environmental Information Exchange Network.  The Exchange
       Network is a partnership among states, tribes, and EPA that is revolutionizing
       the exchange of environmental information. Partners on the Exchange
       Network share data efficiently and securely over the Internet. This new
       approach is providing real-time access to higher quality data while saving
       time, resources, and money for partner states, tribes, and territories.

   +  The Interstate Technology and Regulatory Council (ITRC). The ITRC is a state-
       led coalition of regulators, industry experts, academia, citizen stakeholders,
       and federal partners working together to increase regulatory acceptance of
       state-of-the-art environmental technologies and approaches.

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provide funding for verification, regulatory or market advice, a venue for
demonsfrafion, and/or an opporfunify for scale up. All are imporfanf fo
technology development and marketing success.

Finding 2.3: A successful technology project partnership contains several
key components, including:  a serious environmental problem focus, a free
exchange of existing knowledge and information as it develops, an ade-
quate funding base, a willingness to explore the technology opportunity
and pursue development, and an acceptance that risks and rewards
should be shared. Different partners provide these components.

Finding 2.4: Creative collaboration with the private sector, as well as input
and interaction with government entities, are pivotal to the success of
EPA's environmental technology programs. Critical elements of develop-
ment and commercialization can be achieved and sustained only by the
private sector. A major factor in the success of EPA's verification programs
is the active inclusion of diverse public and private stakeholder groups used
to:  set priorities on categories to be tested, identify data needs, set testing
parameters/protocols,  and locate commercial technologies ready for test-
ing. Stakeholder groups typically include appropriate federal, state, and
sometimes local and tribal representatives, business and industry associa-
tions, scientists and engineers working in the field, large and small compa-
nies that need to procure technology in the area, and technology devel-
opers and vendors.

Finding 2.5: Commercialization by the private sector may be the least
understood aspect of technology development by government regulators.
As a project approaches the commercialization phase, the importance of
private-sector partnerships becomes markedly more significant.  Factors
that affect commercialization include:

 •  Limited growth potential, recognizing that, unlike many other business-
    es, there is a natural ceiling for many environmental technologies (i.e.,
    only those who are required to or, for business or altruistic reasons, vol-
    untarily decide to purchase pollution prevention/control/monitoring
    technology do so).

 •  Technical risk of noncompliance or nonperformance;  operational and
    management difficulties; and high or unknown lifecycle costs.

 •  Intellectual property rights issues.

 •  Unfavorable odds, including lack of capital, opportunity, and time nec-
    essary to adequately demonstrate performance capabilities of the
    technology.

 •  Uncertain, evolving, and multiple regulatory requirements and perform-
    ance standards at the local, state, and federal levels.

Finding 2.6: Small business incubators, which accelerate development of
successful entrepreneurial efforts by providing practical assistance and a
variety of business and technical support services, represent a target of
opportunity for EPA. A relatively small investment per company or project
may be critical to the development of a technology needed to address a
key EPA priority.

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  Finding 2.7:  Partners who can supply much-needed financial resources are
  particularly difficult for regulatory agencies to identify. Fundamentally, to
  invest in technology development, an entity must perceive a reasonable
  likelihood of a return on investment through the creation of new markets,
  increased efficiency, and/or lower costs.  Thus, broad-based and multipur-
  pose technologies will have greater likelihood of attracting venture capital
  than technologies with limited applications, even though some of these
  "limited market" technologies could be important for environmental pro-
  tection needs (e.g., real-time bacterial monitoring).

  Finding 2.8:  EPA's longstanding policy of collaboration with other federal
  agencies, states, tribes, and local governments needs to focus more effec-
  tively on technology issues.  Lack of regulatory acceptance at state and
  local government levels continues to be cited as an impediment to effec-
  tive adoption of new environmental technologies. Early involvement of EPA
  in the process will help to  facilitate the acceptance of state, tribe, and
  local regulators and the effective implementation of innovative technolo-
  gies.

  Finding 2.9:  EPA participates in a number of partnerships in which the
  Agency plays an important role in influencing the policies and actions of
  the other partners. EPA representatives serve on committees and other
  groups that are shaping federal policy, identifying research needs, and
  forging strategies for addressing important environmental issues.  EPA's role
  in these activities is important for overcoming barriers to the adoption of
  innovative technologies and for identifying opportunities to work with part-
  ners to address specific high-priority problems.
Recommendations
  Recommendation 2.1: Strategic Partnership Planning. EPA should use the
  Technology Development Continuum, described in the Subcommittee's first
  report, for strategic thinking about the need for partners at different stages
  of technology development along the Continuum. By identifying partner-
  ships that may be needed and available at particular stages, the Agency
  can better target its resources towards either supporting those partnerships
  or filling gaps where there currently are no partners by actively seeking new
  partners. The likelihood of financing should be evaluated, and synergies
  can be identified and promoted. This should be done as early as possible
  in the development process and include an assessment of motivations or
  drivers for needed partners, including such factors as potential financial
  gain, rule development facilitation, good will, regulations, and enforce-
  ment.  EPA should have an explicit goal in entering into each partnership
  and evaluate the need for its continuation, modification, and termination
  with that goal in mind as a technology moves through the Continuum. As
  indicated in Recommendation 1.1, the SETO should have overall responsibil-
  ity for coordinating the Agency's technology partnership strategy and
  implementation.

  Recommendation 2.2: Partnerships With Federal and State Organizations.
  EPA should develop new partnerships and expand existing ones that
  address technology needs across the entire Continuum and in all environ-
  mental media.  EPA should join successful initiatives and multiparty consor-
  tia that already exist in other government agencies both at the federal and

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state levels to further commercialization of environmental technologies that
address the Agency's priority problems. For example, EPA could partner
with the California Energy Commission and the U.S. Department of Energy
(DOE) National Renewable Energy Laboratory's Industry Growth Forums,
and follow technologies all the way across the development Continuum
with these partners.

EPA also should expand the successful partnerships in which it now partici-
pates, such as the Department of Defense's (DoD) Strategic Environmental
Research and Development Program (SERDP), which focuses on the early
stages of the Continuum (see the description  of SERDP on page 24), and
the Environmental Security Technology Certification Program (ESTCP), which
focuses on the middle and later stages of the Continuum (see the descrip-
tion of ESTCP on page 24).  Furthermore, EPA should expand many of its
current partnerships and support more partnerships that include all environ-
mental media.

The Agency should seize opportunities to participate in committees and
other groups that are shaping federal policy, identifying research needs,
and forging strategies as a  means of overcoming  barriers to the adoption
of innovative technologies and for identifying opportunities to work with
partners to address specific high-priority problems. Some examples of these
types of partnerships include the Federal Remediation Technologies
Roundtable (FRTR) and the Subcommittee on Water Availability and Quality
(SWAQ).  The FRTR leads the Federal Government's efforts to promote inter-
agency cooperation to advance the use of innovative technologies for the
remediation of hazardous waste sites and transfer the benefits of these
cooperative efforts to the site remediation community.  SWAQ was formed
to advise and assist the Committee on Environment and Natural Resources
and the National Science and Technology Council on policies, procedures,
plans, issues, scientific developments,  and research needs related to the
availability and quality of water resources of the United States.

Recommendation 2.3:  Regulator Challenges and  Opportunities.  Because
states, tribes, and local government regulators play a major role in imple-
mentation of all  technology, EPA should establish or maintain strategic part-
nerships that allow these regulators to provide significant input to Agency
environmental technology strategies early in the process so that their con-
cerns can be addressed. EPA also should form partnerships to provide
information and training on new technologies to these regulators. Lack of
acceptance by state regulators may  be tied to unfamiliarity with the tech-
nology and/or lack of comfort with the risk it poses, as well as resource limi-
tations that require focus on core activities (permitting, developing regula-
tions, providing technical assistance, and enforcing regulations). It is impor-
tant that  the Agency understands and honors the legitimate role and con-
cerns of state and local regulators that may be contributing to their reluc-
tance to  foster utilization of new technologies.

There are many  state-, tribal-, and local-level environmental initiatives that
are consistent with EPA policy or regulations, but that may not be required
by EPA. The Agency should consider technology partnerships that are
mutually supportive of those efforts and EPA's mission. The Interstate
Technology and Regulatory Council (ITRC) (see the description of the ITRC

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             Strategic Environmental Research and
                       Development Program

The Strategic Environmental Research and Development Program (SERDP) is the U.S.
Department of Defense's (DoD) environmental science and technology program,
planned and executed in full partnership with EPA and the U.S. Department of Energy
(DOE), with participation by numerous other federal and nonfederal organizations.
Representatives from DoD, EPA, DOE, and the U.S. Coast Guard sit on the 12-member
council that manages SERDP.

To address the highest priority issues confronting the Army, Navy, Air Force, and
Marines, SERDP focuses on cross-service requirements and pursues high-risk/high-payoff
solutions to DoD's most intractable environmental problems.  The four focus areas of
the program are: Environmental Restoration, Munitions Management, Sustainable
Infrastructure, and Weapons Systems and  Platforms.  Within its broad areas of interest,
SERDP focuses on cleanup, compliance, conservation, and pollution prevention tech-
nologies.  The program partners provide locations, facilities, and mechanisms for
applied research, comparative demonstrations, and comprehensive evaluations. Its
goal is to transfer technology from research to full-scale  use and from government
agencies to the private sector.
               Environmental Security Technology
                        Certification Program

The Environmental Security Technology Certification Program (ESTCP) is DoD's environ-
mental technology demonstration and validation program. ESTCP's goal is to identify,
demonstrate, validate, and transfer promising, innovative technologies that address
DoD's highest priority environmental requirements. The program promotes innovative,
cost-effective environmental technologies through demonstrations at DoD facilities
and sites. These technologies provide a return on investment through improved effi-
ciency, reduced liability, and direct cost savings. ESTCP selects laboratory-proven
technologies with broad DoD application for rigorous field trials documenting their
cost performance, and market potential. ESTCP technology demonstrations address
DoD environmental needs in the Environmental Restoration, Munitions Management,
Sustainable Infrastructure, and Weapons Systems and Platforms focus areas.

In July 1999, DoD and EPA signed a Memorandum of Agreement (MOA) to facilitate
closer cooperation and coordination on joint technology verification efforts. The MOA
built a partnership between DoD's ESTCP and EPA's Environmental Technology
Verification program. This agreement was designed to help companies that develop
innovative technologies penetrate markets of interest to both EPA and DoD at a faster
rate.

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     on page 26) and the Technology Acceptance and Reciprocity Partnership
     (TARP) (see the description of TARP on page 28) are good examples of
     partnerships that involve states early in the process, address the challenges
     faced by these regulators, and expedite the acceptance and use of inno-
     vative technologies.  The Subcommittee believes that EPA's focused, effi-
     cient, and highly leveraged support of ITRC represents a "best practice" in
     real-world fostering of technical innovation that should serve as a model for
     consideration by EPA offices and programs.  EPA should use the ITRC and
     TARP as models in other areas and expand them to include additional
     media, states, and programs.

     Recommendation 2.4: Partnership With the Private Sector. EPA should
     expand the use of its broad stakeholder process used in the ETV program to
     other appropriate programs across the Continuum and use it in the ETC
     Action Teams. This process brings to the table all segments of the market-
     place—scientists and engineers, small business incubators, testing organiza-
     tions, buyer and seller associations, developers and vendors, purchasers
     and users, other appropriate federal agencies, and regulators/permit writ-
     ers at all appropriate levels of government—to discuss the opportunities
     and impediments as well as the data necessary to bring specific classes of
     needed technology to commercialization. The broadest possible range of
     public/private collaboration should be encouraged through this process.

3.  Encouraging Market Demand for Innovative Environmental
   Technology

   In its first report, the Subcommittee recommended that, "the Agency place
more emphasis on and increase public awareness of its programs to create a
demand for new environmental technologies," and commit itself to "seek further
information on EPA's past experiences, both positive and negative, with these
types of policies." EPA has conducted a number of programs to develop and
promote approaches to stimulate marketplace demand for innovative environ-
mental technology with emphasis on particular areas such as municipal waste-
water treatment systems, soil and groundwater remediation, and others.  In
recent years, the universe of possible approaches for stimulating and increasing
demand for innovative environmental technology has expanded, and EPA has
been involved to varying degrees with development and/or implementation of
many of these approaches.

Approaches for Stimulating Market Demand

   General categories of approaches for stimulating market demand for innova-
tive technology are listed in Table 1, along with examples of specific programs or
activities under each category. The motivating factors that drive the interest of
individuals or organizations in the various approaches also are listed, and include
regulatory/legal, financial, and public benefit. A subjective assessment of the
important motivators for each  of the approaches also is provided in Table 1.  The
demand-pull approaches identified in the table have been selected from the
perspective of the desirability of moving commercial-ready technologies into the
marketplace. Although some  of the approaches listed could certainly be
applied to promote initial research and development of new technologies, these
approaches were selected for their actual  or potential ability to enhance market
demand and facilitate market penetration at the commercialization and diffu-
sion/utilization stages of the Technology Development Continuum.

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              State Leadership in Permit Facilitation:
      The Interstate Technology and Regulatory Council

The Interstate Technology and Regulatory Council (ITRC) is a state-led organization
devoted to increasing the efficiency of state permitting on innovative technologies.
ITRC originated in 1995 from a previous initiative by the Western Governors'Association.
In January 1999, it affiliated with the Environmental Research Institute of the States
(ERIS), which is a nonprofit educational subsidiary of the Environmental Council of the
States (ECOS).

For most of its 10-year history, the primary goal of the ITRC has been to expedite the
acceptance of innovative technologies utilized in  the remediation of contaminated
hazardous waste sites. In the last 2 years, the ITRC has broadened its focus to address
other environmental issues. With the funding ITRC  receives from EPA, Department of
Energy (DOE),  and Department of Defense (DoD), it has been able to break down
barriers to innovative technologies, reduce compliance costs, make it easier to use
new technologies, and help states maximize their resources.

ITRC accomplishes its mission in two ways:  it develops guidance documents and train-
ing courses to  meet the needs of both regulators and environmental consultants, and
it works with state representatives to ensure that ITRC products and services have max-
imum impact among state environmental agencies and technology users. EPA has
supported the development and operation of ITRC through modest direct funding, but
additionally through broad and effective outreach communicating ITRC information,
events, and programs to vital stakeholders. For example, all free ITRC Web workshops
(typically 10 per month) are directly advertised by EPA's Office of Superfund
Remediation Technology Innovation to more than 26,000 subscribing stakeholders.
Just this one example of outreach enables 150 stakeholders (on average) to actively
participate in each ITRC Web seminar at no cost.  The benefits to ITRC on having such
broad and deep stakeholder involvement in its activities are substantial, and include
the support and consensus on ITRC guidance documents enjoyed by state regulators
and the engineering community.

ITRC has made significant strides in reducing the barriers to and increasing the accept-
ance of innovative technologies by forming technical teams devoted to providing
information that decision makers use to address issues of concern. ITRC brings togeth-
er  a diverse mix of environmental experts and stakeholders from both the public and
private sectors to broaden and deepen technical knowledge and streamline the reg-
ulation of new environmental technologies. Technical Teams are comprised of a
diverse group of stakeholders: state and federal regulators, federal site owners such
as DoD and DOE, consultants, vendors, academics, and public stakeholders.  These
organizations bring a healthy diversity of views and interests to ITRC. The Technical
Team gets the "shovel in the ground" and provides critical information that is used in
the Team's final product, the Technical and Regulatory Review Guidance Document
(Tech/Reg). This document is a comprehensive review that examines all aspects of
the technology. The Team may produce other documents as well—most commonly
Overviews of the Technology, State Surveys, or Case Studies. Although sometimes
challenging, consensus is facilitated by the fact that ITRC concentrates on technical
issues, providing the best information available,  and does not directly address policy
issues. Upon completion of the Tech/Reg document, the Team provides related train-
ing on the Internet or possibly through classroom training. ITRC documents and train-
ing have proved immediately beneficial to the user, and the documents do not "sit on
the shelf."

A critical component of ITRC is its network of state Point of Contact (POC). Each state
that is a member of ITRC (currently 46) assigns one staff person to serve as a liaison
between ITRC and the organization. The POCs provide information on training oppor-
tunities and documents that may be relevant to state technology problems to state
staff and others that may benefit from ITRC products.  They respond to surveys pre-
pared by Technical Teams and seek state concurrence on documents. POCs also are
expected to convey the needs of their states to ITRC and to attend ITRC meetings.

ITRC is housed in ECOS, giving members a direct line of communication to state envi-
ronmental commissioners, who are the most important environmental decision makers
in the state and pivotal in getting new technologies introduced and accepted.

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  Table 1.  Demand-Pull Approaches, Motivating Factors, and EPA Involvement
Motivating Factors
Market Demand Stimulation
Approach1
EPA
Role2
Regulatory/ Financial
Legal
Public
Benefit

Creative Regulatory Approaches
Emissions Trading
Flexible, Efficient Permitting
Supplemental Environmental Projects
Environmental Projects

L
L
L
L

X
X
X X
X X



X
X

Green Product/Process Design
(e.g., Hg-free batteries)
Technology Verification
EPA ETV Program
S

L

X

X

X




Certifications/Labeling
Product Labeling (e.g., cleaning supplies, carpets)
EPA ENERGY STAR Standards
EPA Green Lights
Voluntary Greenhouse Gas (GHG) Reduction
Mobile Diesel Emission Reduction
LEED Green Building Certification

S
L
L
L
L
S

X
X
X
X

X

X
X
X
X
X
X

Product Take-Back Requirements
(e.g., PCs, Pb-acid batteries)
S

X




Preferential Purchasing
(e.g., recycled paper, green buildings, hybrids
for fleet vehicles)
S


X


X



Direct Financial Incentives
(subsidies for innovative technology
implementation)
L


X





                                                                                           o
'Example programs or activities are shown in italics.
2EPA Role: L = lead; S = supporting role to states, tribes, or other organizations.
   Creative regulatory and enforcement approaches can provide incentives for
   technology innovation. Examples of regulatory approaches that encourage
   innovation are emissions trading, where an investment in control technology
   can yield a valuable asset in the form of emission credits, and flexible permit-
   ting that allows for uncertainty in technology performance during a startup
   period or under varying operational conditions. Flexible enforcement pro-
   grams also can create the opportunity for new solutions and the chance to
   demonstrate them, increasing the market for innovative technologies.

   Market demand also can be stimulated for new technologies through efforts to
   assist skeptical purchasers in their selection of technologies with high-quality per-
   formance and cost information.  When it comes to making technological
   choices and acquisition decisions, buyers and users frequently will move to
   those technologies that are known to work, rather than take a chance on
   new and  unproven approaches even if these are advertised to save them
   money either immediately or over time. Demonstration, verification, publicly
   available information on operation and maintenance parameters and costs,
   and/or certification with respect to publicly stated standards by trusted insti-
   tutions are all approaches that assist high-performing, commercial-ready
   technologies to penetrate the market.  Readily available information, particu-
   larly verified or certified information, on new approaches is critical to accept-
   ance and widespread implementation.

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     Technology Acceptance and Reciprocity Partnership
         Consensus Testing Protocols at the State Level

Scientifically valid information on the performance of new technologies is critical to
making state permit decisions, and it often does not exist for new technologies.
Uncertain testing requirements and duplicative reviews under traditional "state by
state" permit review systems drive up the cost of commercialization for new technolo-
gies.

The Commissioners and Secretaries of the eight Technology Acceptance and
Reciprocity Partnership (TARP) states (California, Illinois, Massachusetts, Maryland, New
Jersey, New York, Pennsylvania, and Virginia) have set up a mechanism for states to
develop common testing protocols for vendors to use to demonstrate the effective-
ness of their technologies, thereby providing a pathway for technology developers to
develop credible data; reduce costly, duplicative field-testing; and gain regulatory
acceptance.

In the area of stormwater treatment technologies, for example, regulators in each par-
ticipating state oversee the field-testing of stormwater technologies across the coun-
try.  The host state performs a critical evaluation of the performance data collected
and required in the common protocol and then shares its analysis with collaborating
states. Results are posted in a searchable database (http://www.mastep.net) to pro-
vide the public and regulators with a "one-stop shop" for reports, data, and evalua-
tions of stormwater technologies.  By sharing the workload for review across state lines,
TARP estimates that up to 80 percent of the state's traditional application review time
is reduced. TARP is housed in the Environmental Council of the States along with the
Interstate Technology and Regulatory Council.

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   The government can stimulate markets in selected areas through preferential
   purchases or direct funding. The capacity for government to stimulate market
   demand for environmental technologies and products through preferential
   purchasing and direct financial incentives has been demonstrated and such
   efforts can be expanded.
Findings
     Finding 3.1: Emissions trading programs have been in place for sulfur diox-
     ide (SO2) air emissions control since the early 1990s, and currently are under
     development for water effluent control. Under such  "cap and trade" pro-
     grams, industry is given the incentive to achieve emission reduction and
     maximize efficiency through the ability to sell its unused emission credits to
     other companies.  Trading schemes encourage the adoption of innovative
     technology as opportunities for process revision arise because of the poten-
     tial to create more emission credits than can be achieved with convention-
     al technology. The credits can be used for process expansion internally or
     sold. By providing industry with maximal opportunity  for technology innova-
     tion,  trading programs can be a cost-effective way to achieve regional or
     national emissions reduction at relatively low cost through voluntary imple-
     mentation of new emission control technology. The success of the acid
     rain air emission credit trading program, which was established under the
     authority of the Clean Air Act to reduce acid rain and its impacts, has
     demonstrated the clear potential of the approach.  It is now being devel-
     oped by EPA and the states for use in water programs and is used exten-
     sively in other countries. Partnerships with industry and regional state organ-
     izations may provide opportunities for EPA to identify emissions impacting a
     variety of media that may potentially respond to emission trading pro-
     grams. In any media, however, pollutant-specific emissions trading must
     start with a limited number of pollutants and grow to include other pollu-
     tants as successes are demonstrated.

     Finding 3.2: Flexible permitting approaches are sometimes important for
     the trial and adoption of innovative environmental control technology.
     There is little incentive for trying a new emissions technology, for example, if
     penalties for excess emissions during the trial or startup period loom.  Pilot-
     scale studies or other controlled technology testing with engineering uncer-
     tainty but minimal public health consequences need to be pursued. The
     decision of an organization concerning the trial of a  new control technolo-
     gy can be influenced by the willingness of a regulatory agency to work
     with  the organization to develop monitoring and performance require-
     ments appropriate for the new technology. Colorado, for example, has
     piloted a holistic permit that combines all media permits for a given facility
     under the umbrella of an environmental management system (EMS) permit
     as a way of encouraging innovation for better environmental results.

     Finding 3.3: Creative enforcement approaches can help stimulate technol-
     ogy innovation.  The development of Supplemental Environmental Projects
     (SEPs) in lieu of legal  penalties is an important example of such an enforce-
     ment approach. A SEP is a tool that the Agency can use in achieving set-
     tlements of enforcement actions with the regulated community.  EPA has a
     policy that permits fines and penalties to be mitigated in part by settle-
     ments that provide for voluntary performance of SEPs by the accused vio-
     lator of an environmental statute.  There are clear policy limitations on the

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scope and use of SEPs in settlements. Some important aspects of the EPA
SEP policy are:

 •  A SEP cannot be inconsistent with any provision of the underlying
    statute.

 •  The SEP must advance at least one of the objectives of the environ-
    mental statute(s) that  is(are) the basis of the enforcement action.

 •  The SEP must have nexus (i.e., it must be reasonably directed towards
    improving conditions or adverse effects of the alleged violation).

 •  The SEP must be a tangible project that otherwise would not be
    required to be performed. It cannot simply be a monetary contribution
    to an existing charitable or civic organization.

 •  EPA cannot directly manage the SEP or the funds used to finance the
    SEP.

EPA has published ideas for potential SEPs such as:  lead-based paint
abatement,  purchase/installation of fuel cells, diesel retrofits of
municipal/transportation fleets, alternative fuel/hybrid vehicles, coolant
recycling systems, installing wind turbines for buildings, and so on.
Innovative technologies in these and other areas that could be explored
for SEP applications are  developed in the EPA Small Business Innovation
Research Program, and investigated by the EPA ETC Action Teams and the
Technology Innovation Program. In general, SEPs cannot be pure research
activities; however, projects to overcome funding gaps to produce/encour-
age demand for innovative technologies and that produce environmental
benefits are excellent candidates for SEPs and should be routinely consid-
ered by EPA in settling enforcement actions.  Another tool that has been
utilized by the EPA is an  "Environmental Project" (EP).  An EP can be part of
a settlement process where injunctive relief and assessment of civil penal-
ties is sought by EPA. The Wisconsin Electric Environmental Project
(described on page 31) is  a notable example.

Finding 3.4: The Pollution Prevention Act of 1990 recognized that "pollution
should be prevented or reduced at the source whenever feasible." The
legislation directed EPA  to provide industry with technical assistance and
information on source reduction opportunities and  financial assistance to
states to establish source reduction programs. EPA's Office of Prevention,
Pesticides and Toxic Substances has created several information and tech-
nical assistance activities that include the DfE, Green Chemistry, and
Environmentally Preferable Products (EPP) programs.  EPA also initiated a
national design  competition entitled, "P3: People,  Prosperity, and the
Planet Student Design Competition for Sustainability," and has co-spon-
sored initiatives with the Green Chemistry Institute of the American
Chemical Society, the International Center for Sustainable and Appropriate
Technology,  and other organizations. DfE works collaboratively with indus-
try groups to share information and improve the environmental perform-
ance of products, processes, and practices.  These programs,  coupled with
increasingly stringent emission and waste disposal regulations in the United
States and elsewhere, have served to increase interest in sustainable
("green") product and process design. Examples include the development

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            Wisconsin  Electric Environmental Project

An example of an Environmental Project is contained in a consent decree dealing
with an alleged violation of the Clean Air Act by Wisconsin Electric Power Company.
Part of the settlement is a full-scale demonstration project of a new technology
designed to remove mercury from the flue gas of coal-fired power plants.  This project
was of interest to EPA because the readiness of the technology is a key component of
the rulemaking process with which the Agency was involved. The U.S. Department of
Energy (DOE), through the Clean Coal Power Initiative, was seeking proposals for proj-
ects designed to demonstrate this type  of technology, and Wisconsin Electric success-
fully proposed a project in which the $50 million cost was essentially split between DOE
and the company. EPA embedded certain features of the project and project sched-
ule in the consent decree. This example demonstrates how the enforcement process
can be used by  EPA to further technology development, but it also is an example of
EPA and DOE partnering together and with the private sector to leverage resources to
advance environmental technology. The technology being demonstrated here is the
result of a collaborative process in the electric utility industry where companies pool
their research dollars to fund the Electric Power Research Institute (EPRI)—yet another
example of partnering. EPA's notice that mercury emissions were going to be regulat-
ed initiated the original research within EPRI. DOE is charged with keeping coal as a
viable option in the energy infrastructure, and thus funds projects that address emerg-
ing environmental issues.
              Private-Sector Certification Programs

Some certification programs outside of government have had significant effects on
stimulating demand for environmental products and technologies.  The certification
organization Green Seal, for example, has developed green standards for a variety of
consumer products, including paints, cleaning products, paper, lighting,  tires, and oth-
ers. Another example of very successful independent certification is the green build-
ing certification program entitled "Leadership in Energy and Environmental Design"
(LEED) developed by the U.S. Green Building Council (USGBC). The LEED Green
Building Rating System is a voluntary, consensus-based national standard for develop-
ment of buildings with high energy performance and environmentally sustainable fea-
tures. The LEED rating system for new construction and renovation projects is based on
lists of specific green building features that, if included in a project, accrue points
toward a rating. The features listed include use of technologies verified in the
Environmental Technology Verification or Technology Acceptance and Reciprocity
Partnership programs. Depending on the number of LEED features and points includ-
ed in a design, buildings can achieve different levels of LEED certification.  To obtain a
LEED rating, building owners must submit detailed, defined technical documentation
to USGBC for review. The LEED rating system has stimulated a tremendous amount of
voluntary interest  across the United States. Private organizations as well as federal and
state agencies have made commitments to LEED certification for new construction
and  major renovation projects.

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of mercury-free alkaline bafferies and fhe design of some compufers for
disassembly and material recovery. EPA does nof have fhe resources or
legislative mandate fo develop green products and processes itself, but it
can do much through collaborations and advice to help stimulate such
development. The DfE  program, in particular, although small in budget, is a
model for the future. The DfE staff works collaboratively with industry groups
to share information and develop technologies that reduce the use of envi-
ronmentally harmful chemicals through chemical substitution and other
methods that support the achievement of design criteria mandated by
product-focused regulations.

Finding 3.5: Verification of environmental technology performance by EPA
through the ETV program stimulates market demand by demonstrating new
technology performance in an independent setting under consensus test-
ing protocols with Agency quality assurance  of the data. Purchasers who
are reluctant to acquire innovative technologies are thus assured that they
work and can meet both operating requirements and regulatory standards.
Some 360 environmental technologies and products have  been voluntarily
submitted for verification by vendors who must pay a substantial part of the
cost of testing, but consider whether the marketing value of publicly estab-
lishing their performance parameters under EPA protocols is worth the cost.
ETV was discussed extensively in the Subcommittee's first report. Like DfE,
ETV's chief contribution in creating market demand is providing help in
overcoming the lack of reliable performance information for purchasers of
new technology.

Finding 3.6: Since the mid 1990s, work on development of voluntary certifi-
cations for environmental technologies and products by EPA and a variety
of nongovernmental organizations has done  much to stimulate market
demand. Although EPA does not issue certifications directly, it has pub-
lished criteria for defined (and named) levels of technology performance
through a number of programs.  In the most prominent example, EPA
developed criteria for energy efficiency  of appliances and other energy-
saving technologies and techniques in the ENERGY STAR program (see the
ENERGY STAR program description  on page 33 and its metrics of success on
page 45).  Manufacturers meeting these criteria self-certify and can claim
that their product complies with and qualifies for ENERGY STAR status. This
program and the related performance criteria have stimulated consumer
interest in appliances that meet ENERGY STAR criteria, which in turn has
stimulated manufacturers to develop more energy-efficient appliances.
Voluntary private-sector certification programs also are effective in encour-
aging the use of new technology (see description of Private Sector
Certification Programs on page 31) and  are increasing in number.  At the
international level, product environmental performance regulations include
product certification programs, such as the green labeling programs in the
European countries and the certification requirements within China's
Administrative Measures on the Control of Pollution Caused by Electronic
Information Products. These labeling programs are intended to be the
environmental performance equivalent of existing and successful product
certification programs,  such as ENERGY STAR  (see ENERGY STAR and Other
Air Quality Improvement Programs on page 33).

Finding 3.7: Waste reduction and technologies to reduce waste production
and increase waste recovery can be stimulated through product take-
back programs such as those in place for paper, bottles and cans, lead-

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ENERGY STAR and Other Air Quality Improvement Programs

ENERGY STAR is a joint program of EPA and the U.S. Department of Energy (DOE) that is
helping Americans save money and protect the environment through energy-efficient
products and practices.  The program was introduced by EPA in 1992 as a voluntary
labeling program designed to identify and promote energy-efficient products to
reduce greenhouse gas (GHG) emissions. Today, more than 40 percent of the
American public recognizes the ENERGY STAR label, which is on major appliances,
office equipment, lighting, home electronics, and more. EPA also has extended the
label to cover new homes and commercial and industrial buildings.  Through its part-
nerships with more than 8,000 private- and public-sector organizations, ENERGY STAR
delivers the technical information and tools that organizations and consumers need to
choose energy-efficient solutions and best management practices.

The continued success of the ENERGY STAR program is a result of its focus on practical
strategies to remove market barriers. These barriers can hinder investment in cost-
effective, energy-efficient products and practices that help individuals and organiza-
tions realize significant savings. It enhances the market for energy efficiency by reduc-
ing the transaction costs and lowering the investment risks to the point that many
more projects become attractive. ENERGY STAR plays a distinct role in the market-
place by providing credible, objective information and tools on which businesses and
homeowners can rely to make well-informed energy decisions.  Better energy deci-
sions contribute to a better environment by reducing emissions of GHGs, and through
ENERGY STAR, the efforts of thousands of homeowners and businesses are adding up
to significant contributions to the President's GHG intensity reduction goal for 2012.

A cornerstone of the ENERGY STAR program is identifying efficient products that will
reliably deliver energy savings and environmental benefits.  EPA and DOE work closely
with about 1,500 manufacturers to determine the energy performance  levels that
must be met for a product to earn the ENERGY STAR. The label is only awarded to
products that offer the features and performance consumers want and provide a rea-
sonable payback if the initial purchase price is higher. Over the past decade, ENERGY
STAR has been a driving force behind the more widespread use of such technological
innovations as LED traffic lights, efficient fluorescent lighting, power management sys-
tems for office equipment, and low standby energy use. ENERGY STAR has dramati-
cally increased the use of energy-efficiency products and  practices and is well posi-
tioned to promote more widespread efficiency improvements.

EPA has established a number of other programs that aim to achieve cleaner air in a
cost-effective and beneficial way without the need for regulation. These programs
reduce pollution and improve air quality through partnerships with small and large
businesses, citizen groups, industry, manufacturers, trade associations, and state and
local governments. Examples of these programs include: the Green Vehicle Guide,
which helps consumers choose the cleanest and most efficient vehicle that meets
their needs; the SmartWay Transport Partnership, which creates strong market-based
incentives that challenge companies shipping products and the truck and rail compa-
nies delivering these products to improve the environmental performance of their
freight operations; and the Green Power Partnership, which encourages organizations
to purchase green  power as a way to reduce the environmental impacts associated
with conventional electricity use.

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e
acid batteries, and computers. Legislated product take-back requirements
are the fastest means of market stimulation, and are a rapidly growing
international trend (see the next section, 4, International Issues, for more
detailed information). Information and startup assistance, however, can
motivate community/industry initiatives for product recovery, sometimes on
a large scale, even in the absence of legislation.  Computer recovery for
disassembly and material reuse in the United States is at an early stage but
growing. A host of nonregulatory product stewardship initiatives have been
undertaken by individual companies, trade organizations, and nonprofit
groups. The nonprofit Product Stewardship Institute, for example, works with
companies and government agencies to develop environmentally progres-
sive goals for various stages of product lifecycle (e.g., material selection
and recovery).

Finding 3.8: The ability of government and companies to stimulate market
demand for environmental technologies and products through preferential
purchasing decisions has been well demonstrated.  For example, the Federal
Government had a central role in expanding the production and use of
paper with recycled  content through purchasing requirements for federal
agencies and contractors. The federal EPP initiative was developed in
response to Executive Order 13101 entitled "Greening the Government
through Waste Prevention, Recycling and Federal Acquisition." The EPP ini-
tiative encourages the purchase of environmentally progressive products
on a continuing basis. This use of the power of large-scale purchasing to
grow the market for environmental technologies and products also has
been adopted by state and local government agencies  as well as private-
sector organizations.  There is potential for the government and other
organizations to do much more in stimulating demand for environmental
technologies through direct purchasing as first users or near-first users, and
also through development of guidelines for defining green technologies
and products.

Finding 3.9: Government subsidies to cover, or help with covering,
increased  financial cost or risk associated with innovative technologies can
do much to stimulate market demand for innovative technologies.  As prof-
it potential is rarely involved in decisions about adoption of technology that
will prevent or mitigate environmental impact, purchasers (e.g., communi-
ties, companies, and individuals) are naturally risk averse. There is usually a
modest financial upside and significant financial downside if an innovative
environmental technology does not work as advertised. For example,
financial incentives for adoption of innovative technologies were included
in the wastewater treatment plant construction grants program of the 1970s
and 1980s.  Similar incentives, through partial subsidies or more generous
repayment requirements, could be included in the current water and
wastewater revolving fund programs of the  present if funds were available.
Subsidies for implementation of innovative soil and groundwater remedia-
tion technologies were offered by EPA in the 1990s, but were rarely used.
Because there appears to be little likelihood for budget expansions that
would support direct financial incentives, the Subcommittee will make no
recommendations in this area.

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Recommendations
  Recommendation 3.1: Emission Credit Trading.  Trading of emission credits
  should be a component of environmental programs wherever possible
  because of its effective role in stimulating use of innovative technology.
  Emission credit trading programs can be an effective way to achieve
  regional or national emissions reduction at relatively low cost through volun-
  tary implementation of emission control technology. The weak market for
  many new technologies can be stimulated through partnership with market
  forces found in emission credit programs. Under such "cap and trade" pro-
  grams, industry is given the incentive to achieve emission reduction and
  maximize efficiency by the ability to sell to other companies emission cred-
  its it has gained through  reductions in emissions and discharges that go
  beyond regulatory requirements. The new technologies employed in early
  reduction programs and highly efficient emission control systems frequently
  advance the technological state-of-the-art in areas as diverse as pollution
  prevention, materials substitution, and advanced monitoring. The Agency
  should engage with states and industry to help shape the most promising
  trading program alternatives and stimulate market activities that fulfill and
  sustain the emission trading market objectives.

  Recommendation 3.2: Flexible Permitting. EPA should encourage and
  assist states in developing specific opportunities for greater flexibility in per-
  mitting to promote progressive technology development and demonstra-
  tion.  This is particularly important in areas in which innovative technologies
  are needed to address serious unsolved problems or existing technology is
  too expensive for widespread implementation.  The new SETO should be
  involved in convening appropriate state and regional officials, including
  enforcement staff,  in  several pilot cases to explore options for addressing
  flexible permitting prior to the permitting event. Successful approaches
  then should be standardized and publicized in all regions.

  Recommendation 3.3: Flexible Enforcement Actions. EPs and SEPs are
  important tools that can promote technology development and should be
  used more often.  EPA has unique opportunities to demonstrate environ-
  mental technologies  and create market demand through creative
  enforcement approaches that promote adoption of innovative environ-
  mental technology. Enforcement actions should authorize the develop-
  ment, piloting, or enhancement of environmental technology where
  appropriate. EPA should specifically include innovative technologies in
  project ideas for potential SEPs. Acceptance of new technologies in SEPs
  should acknowledge and provide for protection regarding the perform-
  ance risks of new technologies. Because there appears to be substantial
  variation among regional offices related to knowledge  of and interest in
  SEPs, EPA should exhibit leadership in communicating the potential for SEPs
  and in disseminating  best practices regarding the use of innovative tech-
  nologies in SEPs.  Establishment of a technology advocate in each EPA
  regional office could  assist in this effort.

  Recommendation 3.4: SEPs and ETC Action Teams. SEP projects should be
  actively promoted to include support for ETC Action Teams.  Action Team
  problem areas that have sufficient nexus to the environmental conditions
  impacted by alleged violations could be directly supported by SEPs. Done

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well, these projects would provide highly leveraged investments contribut-
ing tangibly to mitigating the high-priority technology gaps already identi-
fied by the Agency through its ETC prioritization process (see the May 2006
Subcommittee report). The breadth of the Action Team subject areas is
such that the necessary linkage to many alleged violations could be readily
demonstrated. Therefore, SEPs represent a relatively untapped resource to
address high-priority technology gaps already identified by EPA, and the
Subcommittee recommends expedited exploration of the full potential of
SEPs to help mitigate these gaps.

Recommendation 3.5:  Independent and Quality Assured Data. EPA can
and should continue to stimulate demand by providing purchasers and the
environmental marketplace in general with independent information  and
quality assured data on the performance of innovative, at or near com-
mercial-ready private-sector technologies. The Agency should expand the
voluntary DfE and ETV programs to continue offering technology vendors
the opportunity to display the performance capability of their innovations.
EPA should explore opportunities to expand the  best available technology
concept into sustainable technologies in different industries.

Recommendation 3.6:  Expanded "Green" Certification Programs.  EPA
should continue to expand on the success of its voluntary ENERGY STAR pro-
gram, creating additional "green" programs in the same mold for a wide
variety of industries and activities.  In addition, the Agency should welcome
the opportunity to work with any not-for-profit or private-sector organization
interested in  creating a robust certification program aimed at reducing pol-
lution, energy usage, water usage, and waste, and in increasing the overall
sustainability of commercial, residential, and industrial activity. A relatively
low-cost Agency role in such instances could include providing technical
support and  technology performance verification with industry and other
stakeholders providing financial support. As will  be discussed in the next
section of this report, green product and waste avoidance programs  are
proliferating across the world based primarily on European regulatory mod-
els, and U.S. states are beginning to legislate in this area as well. EPA's par-
ticipation in the international discussion relative to both legislated and vol-
untary product certification programs would be beneficial in stimulating the
development of comprehensive product certification programs in the
United States.

Recommendation 3.7:  Preferential Purchasing. EPA should identify and act
on opportunities to stimulate innovative environmental technology devel-
opment and adoption through Agency preferential purchasing and
through preferential purchasing requirements included in procurement
specifications. EPA is in a unique position, for example, to influence the
technology used for environmental monitoring both by purchasing such
technologies and by ensuring that its regulations and procedures for air,
water, soil, and waste monitoring reflect current capabilities of systems that
produce highly accurate and real-time data. EPA should be a leader
among federal agencies in environmentally preferential purchasing, and
should provide guidance and assistance to other agencies on how to plan
and implement preferential purchasing programs that favor new environ-
mental technologies.

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4.   International Issues

    The Subcommittee has focused its work in the international area on evaluat-
ing  the role and function of EPA technology assistance activities in the rapidly
evolving international marketplace.
Findings
     Finding 4.1:  The international technology sector is important to EPA and to
     the United States for several reasons:

      •  Many environmental problems are inherently international in nature,
         most notably cross-boundary air and water pollution, global warming,
         and the prevention of invasive species. The implementation of
         improved technology in other countries can have a direct impact on
         the U.S. environment.  For example, anticipated deployment along the
         U.S. border is a primary goal of the diesel retrofit and ultra-low sulfur fuel
         technology bus project being tested in Mexico City (see Cleaning Up
         Diesel Emissions in Mexico City on page 38).

      •  Areas such as  drinking water and alternative energy systems have
         been internationalized by the rise of non-American technology devel-
         opers entering the U.S. market in force and offering improved technolo-
         gies for use in  this country.

      •  Other market interests have arisen because, in the face of flattening
         U.S. markets, the viability and expanding scope of the overseas market
         encourages developers to investigate technologies that would not be
         economically  practicable for the U.S. market alone.

      •  Innovation for  the world market, whether developed in this country or
         abroad, has increasing impact on the ability of the United States to
         benefit from better technology.  Environmental technology develop-
         ment has been globalized in the last decade, and EPA's programs must
         evolve with these trends in mind if they are to remain current.

     Finding 4.2: The Subcommittee believes that the Agency has several  areas
     of strength in the international arena:

      •  EPA's greatest strength is that, as an agency, it is well respected inter-
         nationally and thus an effective agent in disseminating environmental
         technology information abroad.  It has taken a strong leadership  role in
         demonstration and verification of commercial-ready technology and
         developed programs as well as test protocols that now are being
         copied around the world.

      •  EPA has demonstrated a commitment to technology information  diffu-
         sion in selected countries with specific environmental problems, such as
         air pollution in  China and Mexico and waste disposal issues in  the
         Eastern European nations.

      •  EPA responds to "targets of opportunity" around the world when these
         targets are in line with EPA's strategic goals and objectives. It also
         works with international agencies such as the United Nations

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            International Technology Demonstrations
          Cleaning Up Diesel  Emissions in  Mexico City

The Challenge: Mexico City's air pollution, with ground-level ozone and particulate
matter exceeding national standards 80 percent of the year, affects the health and
quality of life of all its residents. Heavy-duty diesel vehicles—buses, trash trucks, com-
mercial vehicles—contribute up to 38 percent of the nitrogen oxides and more than 50
percent of the fine particulates in the air, despite comprising only 5.5 percent of the
entire vehicle fleet. Emissions from diesel trucks and buses pose serious public health
concerns, ranging from asthma to cardiovascular disease to cancer.

The Initiative: EPA, working with the U.S. Agency for International Development
(USAID) and EMBARQ, the World Resources Institute's Center for Transport and the
Environment, initiated the Mexico City Diesel Retrofit Project in June 2004.  The project
was designed to demonstrate how the combined use of low sulfur fuels and diesel
retrofit technologies on urban buses can improve air quality and reduce impacts to
human health. The project is similar to diesel retrofit projects now underway in several
U.S. cities, which have committed to retrofit more than 150,000 diesel vehicles. The
Mexico City Diesel Retrofit Project is the first international retrofit project of the United
States, and already it is serving as a model for EPA projects in other areas of the world.

The technologies used for the demonstration project are diesel particulate filters and
diesel oxidation catalysts that have been performance verified under EPA's
Environmental Technology Verification program.  The project developed key informa-
tion on costs and emissions reductions, and is leading to policy recommendations for
reducing emissions from other fleets in Mexico City and other cities in Mexico.  It also
was a concrete demonstration for the benefits of ultra-low sulfur fuel.  Mexico has
since passed a regulation requiring ultra-low sulfur fuel for the U.S.-Mexico  Border by
2007, and for the nation by 2009.

The Results: Ultra-low sulfur diesel fuel (15 ppm) was provided from a U.S. refinery for 20
buses involved in the demonstration.  The buses were retrofitted, labeled, and operat-
ed on the streets of Mexico City. The Centre de Transporte Sustentable performed
baseline emissions testing, testing 1 month after the retrofits were installed, and at the
end of the demonstration project (after approximately 11  months of operation) to
determine how much the emissions are  reduced by the cleaner fuels and cleaner
vehicle technologies.

Results of the testing show reductions of 86 to 92 percent in the particulate emissions
from the newer vehicles using diesel particulate filters and ultra-low sulfur fuel, and 10
to 23 percent reduction from the older vehicles using diesel oxidation catalysts, a
technology most useful for older buses.  Although the project size was limited, the
potential is great:  there are more than 3,000 buses in Mexico City. More important is
the opportunity to use this information in the other pollution-choked cities of the world.

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•
            Environment Programme (UNEP) and the World Health Organization
            (WHO) on specific issues. EPA's activities with the U.S./Asia
            Environmental Partnership over the years have been particularly fruitful.

         •  The United States, in general, enjoys a prominent position in negotiating
            trade agreements that establish international environmental standards.

         Finding 4.3:  Emerging product, operational, and waste regulations in
         Europe that target the environmental characteristics of products, such as
         the European Union Restriction on Hazardous Substances in Electronics
         (RoHS), the Waste Electrical and Electronic Product (WEEE), and End of Life
         Vehicles (ELV) directives, are causing entire industries to redesign their prod-
         ucts to optimize for environmental performance (see International Product
         Design, Take-Back, and Recycling Standards on page 40 for a description
         of this rapidly evolving situation). Individual U.S. states, most notably
         California, are producing similar regulations that are bringing within U.S. bor-
         ders what has initially been an international phenomenon. These regula-
         tions are resulting in the demand for new environmental technologies in the
         areas of manufacturing, measurement and verification, risk assessment,
         software,  and other tools needed to achieve and ensure desired product
         performance. They also are resulting in a patchwork of state regulations
         that could negatively impact the diffusion of environmental technologies in
         much the same way that varying state septic system regulations have
         impeded the adoption of new septic system technologies.

         The emergence of these product environmental performance regulations
         and the subsequent demand for product-related environmental technolo-
         gies offer the Agency several opportunities. First, although the regulation of
         environmental characteristics is not within EPA's statutory authority, attain-
         ing improvements in product design and product environmental perform-
         ance would generate improvements in the areas where EPA does have
         authority (e.g., solid waste management) and has identified priority prob-
         lems. Second, this is an area receiving a great deal of attention in the
         states that would benefit from EPA's participation and leadership. Third,
         regulation of this type is being adopted throughout the world and by many
         U.S. states as the preferred method of regulating waste products. EPA
         would benefit from participating now, rather than later, in the development
         of these future-oriented guidelines. Activity in this arena also would be
         consistent with the Agency's goals in fostering the long-term sustainability of
         commercial and industrial activity in the United States.
Recommendations
         Recommendation 4.1: New International Manufacturing and Recycling
         Standards and Studies.  EPA should emphasize activities focused on building
         international demand for improved environmental technologies and, in
         particular, determine the extent to which new international manufacturing
         and other standards that incorporate environmental parameters will affect
         U.S. technology standards. As described above, manufacturers around the
         world are responding to product environmental performance standards
         and regulations developed in Europe, and states within the United States
         are beginning to develop regulations that emulate these developments.
         There is a real risk that states and regions will independently develop differ-
         ing and perhaps conflicting standards that will introduce complexity and
         confusion in the marketplace, impeding the development and acceptance

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            International Product Design, Take-Back,
                      and Recycling Standards

Product-specific directives and regulations that mandate design criteria and end-of-
life take-back responsibilities are being implemented by regulators around the world to
address significant environmental problems caused by increasing quantities of elec-
tronic and other slowly degrading or toxic wastes generated by society. Product-
focused approaches emphasize the removal of toxic or difficult-to-manage hazards
from products and/or assign to the products' manufacturers the responsibility to take-
back, recycle, or pay for the disposal of the products they place on the market. The
adoption of these new standards in Europe, Japan, China, and other countries and
the nature of the globalized marketplace has placed American manufacturers at a
disadvantage and caused numerous states to begin the process of legislating in this
area. There now are more than 400 laws governing electronic product design and
disposal around the world, up from less than 100 in 2002.

The European Union's (EU) Restriction on Hazardous Substances in Electronics (RoHS)
and Waste Electrical and Electronic Equipment (WEEE) directives are typically the
model on which other product-focused regulations around the world are based.
Redesigning products has resulted in the development of new materials, manufactur-
ing  processes, and support products.  For example, the RoHS regulations requiring the
elimination of lead solder from components and circuitry has spawned a lead-free sol-
dering industry that is supporting the conversion of lead-based products to lead-free.
The need to verify that the supply of components needed to build RoHS-compliant
products has resulted  in the creation of business-to-business software that facilitates a
company's query of its supply base  regarding compliance, manages the gathered
data, and links those data to the  subject products for compliance verification.
Portable analysis instruments, such as NITON's Lead Paint Analyzer, described in the  first
Subcommittee report, have become key tools for ensuring a product's compliance
with mandated design criteria.

In countries like the United States where the consumer typically bears the financial
responsibility, either directly or through taxes, for disposal of obsolete electronic
devices, the EU WEEE directive is being considered as a  method to address increasing
quantities of waste electronics without a corresponding  burden on public infrastruc-
ture. Although the EU WEEE directive specifically places disposal responsibility on man-
ufacturers of electronic devices, other waste disposal regulations seek to manage
end-of-life disposal by requiring special labeling or seller notification of products,
charging buyers an "E-Waste" recycling tax or fee, requiring manufacturers to take
back their product at the end of functional life, and simple landfill  disposal bans.
Other product-focused directives and regulations are moving beyond electronics and
affecting product types such as "white goods" appliances, automobiles, and truck
tires.
All of these options are under discussion and study in U.S. states and many countries
outside the EU. State regulators are evaluating product take-back directives and reg-
ulations to solve their growing electronic solid waste problems.  Fifteen states have
either authorized or are considering studies to determine if product-focused
approaches would work for them. More than one-half of these states have imple-
mented or proposed implementing all or part of the EU substance restrictions, and
one-quarter are proposing the collection of fees at the point of sale to defer future dis-
posal  costs. State regulations are being developed with widely varying requirements.
Some sort of national harmonization may be necessary to prevent these international
environmental standards from becoming a significant barrier to doing business in the
United States,  as well as preventing the American consumer from purchasing environ-
mentally inferior products.

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     of new technologies and products. Therefore, in partnership with appropri-
     ate state and business organizations, EPA should conduct a major study or
     series of studies to determine the extent to which these new standards will
     affect U.S. environmental and technology standards and determine what
     its role should be in  harmonizing regulatory approaches and guiding states,
     manufacturers, and citizens in this rapidly evolving situation. The
     Subcommittee believes that EPA has a critical role to play that is as yet
     undefined—one that may impact many of its present programs and
     responsibilities.

     Recommendations  4.2: Promote International Technology Verification
     Programs. EPA's technology verification programs should be strengthened
     and promoted internationally as a process that offers technically reliable
     assessment of new  domestic and international environmental technologies.
     Internationally accepted verification tests and monitoring standards are par-
     ticularly important in addressing the product content and design standards
     discussed above. EPA should participate in the ongoing development of
     similar programs in Europe, Japan, and other Asian nations. In particular,
     the Agency should  promote the use of ETV testing protocols by other
     nations to allow for  the more rapid diffusion of commonly based perform-
     ance information. Such information strengthens world technology markets
     and thus speeds commercial development of technologies by assuring pur-
     chasers that innovative technology is both environmentally beneficial and
     cost effective.

     Recommendation 4.3: Seek International "Targets of Opportunity." EPA
     should continue to pursue, and if possible, expand its policy of addressing
     international "targets of opportunity," particularly in areas of cross-boundary
     pollution  prevention/control and on other topics of high priority to the
     Agency such as mercury control. Such targets may arise from priorities
     developed by other lead departments and agencies charged with U.S. for-
     eign policy missions. Consistent with the Subcommittee's recommendations
     on global climate change (see the next section, 5. Environmental
     Technology and Climate Change'),  EPA should devote considerable
     resources to working with other governments on this critical worldwide issue.

     Recommendation 4.4:  Revive U.S. Department of Commerce  (DOC) and
     U.S. Agency for International Development (USAID) Partnerships. EPA should
     strengthen its interaction and cooperation with other domestic agencies
     that are the primary players in the international realm. DOC and USAID, in
     particular, have the lead in areas such as foreign aid and capacity building
     and support international opportunities for U.S. environmental technology
     industries. EPA has  had significant innovative technology assistance proj-
     ects with these agencies in the past and should seek to revive these activi-
     ties in the future.

5.   Environmental Technology and Climate Change

    Climate change, a large-scale environmental issue with the potential to
impact the entire globe,  is one of the most important challenges that EPA will
face in the 21st Century.  Although the overall federal climate change strategy
assigns primary responsibility for the issue to the Department of Energy—in partic-
ular, the development of  innovative greenhouse gas emission control technolo-
gy—there are technology areas in which  EPA will  be required to participate in the
future and should be preparing for now.

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o
   The EPA Global Change Research Program Multi-Year Plan of April 2003, EPA's
basic strategy document in this area, states, "It is the mission of EPA to protect
human health and to safeguard the natural environment—air, water, and land—
upon which life depends." The Plan focuses EPA's research in this area on assess-
ing the potential impacts of climate change on four focus areas: human health,
ecosystems, air quality, and water quality.  Numerous studies of both macro and
regional impacts on all of these four areas have been completed by the Agency
and many more are ongoing (see page 43 for the results of several regional
impact summaries conducted to date).  Funding for greenhouse gas technology-
related research and private-sector technology verification, however, ended in
2000.

   Building on the 2003 strategic plan, the EPA Administrator further stated in his
memorandum of July 6, 2006, that "Our planning must truly be strategic and
include consideration of emerging challenges and opportunities. Rather than
react or confront problems out of necessity, we should try to anticipate them and
adapt our programs accordingly." The Subcommittee agrees with this forward-
looking strategy and  believes that problem anticipation must be accompanied
by a corollary activity in technological solution evaluation. The Subcommittee
has considered several areas in which EPA's strategic contribution to develop-
ment, evaluation, verification, and acceptance of technologies related to cli-
mate change mitigation and adaptation can significantly contribute to environ-
mental safety and public health, as well as air and water quality.

   Just as technology  has proved to be essential to the achievement of healthy
air and water standards over the last 35 years, technology research, develop-
ment, verification, and  commercialization will be essential to combating the
threats of climate change, both preventing contributions to and mitigating those
climate change consequences that affect the environment and human health.
EPA should, as a result of its core environmental protection function, continue on
its present course of assessing the potential degradation of air and water quality
that will be caused by global warming. The Subcommittee also thinks, however,
that EPA should expand its role in facilitating the development and deployment
of the new technologies that will be needed to address climate change.
                        Findings
                          Finding 5.1:  Climate change is a large-scale environmental issue requiring
                          significant technological innovation to address a broad range of chal-
                          lenges. The possible negative impact on the environment in the United
                          States over the next 50 years, based on multiple scientific studies, is project-
                          ed to include, among other things: loss of snow pack and other drinking
                          and industrial water supplies leading to a degradation of water quality, sea
                          level rise, increased flooding, heat-related deaths, decreased crop yield,
                          changes in insect populations, food quality losses, increases in forest fire fre-
                          quency, increased ozone formation leading to degradation of air quality,
                          and more respiratory ailments. As these impacts and challenges become
                          better defined through EPA's ongoing research (see examples on page 43)
                          and that of others,  the Agency will have an expanding role to play in
                          addressing emerging issues. EPA's massive commitment to and success in
                          improving air and water quality over the last three decades are at risk, and
                          many problems, which the  nation has viewed as "solved," will require new
                          technology development to address newly defined problems.

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         EPA Analysis of Expected Climate Change Effects
                            on Specific Regions

The following list, while not comprehensive, provides illustrative examples of some of the
higher likelihood effects of climate change that EPA expects in different parts of the United
States:

In the Northeast:
     Northward shifts in the ranges of plant and animal species resulting from warmer
     temperatures
     Coastal erosion, loss of wetland habitat, increased risk from storm surges from sea
     level rise
     Reduced winter recreation (skiing); increased warm season activities
     Higher summer heat and increase in heat-related morbidity and mortality, espe-
     cially in urban areas; reduced winter cold stress with associated decrease in
     cold-related mortality.

In the Southeast and Gulf Coast:
    ~ Increased loss of barrier islands and wetlands
     Intense coastal zone development places coastal floodplains at risk to flooding
     from sea level rise, storm surge, and extreme precipitation events
    - Changing forest character as disturbances (e.g.,  fire and insect outbreaks)
     increase
     Higher summer heat; reduced winter cold stress.

In the Midwest and Great Lakes:
    • Lowered lake and river levels, resulting from warmer temperatures and increased
     evaporation, impact recreation, and shipping
    • Increased agricultural productivity in many regions resulting from increased car-
     bon dioxide and warmer temperatures
    • Higher summer heat and increase in heat-related morbidity and mortality, espe-
     cially in urban areas; reduced winter cold stress with associated decrease in
     cold-related mortality.

In the Great Plains:
    • Agricultural productivity shifts northward as the potential for drought increases
    • Intensified springtime flood and summertime drought cycles
    • Higher summer heat; reduced winter cold stress.

In the West:
    • Changes in natural ecosystems resulting from higher temperatures and possibly
     intensified winter precipitation
     Earlier runoff of snowmelt, stressing some reservoir systems
     Rapid population growth coupled with limited, heavily utilized water supplies
     present significant challenges for securing reliable sources for consumption,
     power generation, and agricultural needs
     Higher summer heat; reduced winter cold stress
     Increased wildfire potential.

Alaska:
     Forest disruption resulting from warming  and increased pest outbreaks
     General increase in biological production from warming; but reduced sea ice
     and warming disrupts polar bears, marine mammals, and other wildlife
     Damage to infrastructure resulting from permafrost melting
     Retreating sea ice and earlier snowmelt alter native people's traditional life styles
     Opportunities for warm season activities increase.

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Finding 5.2: EPA should play a leadership role in solving those specific tech-
nical challenges within its sphere of influence and expertise.  EPA
Administrator Stephen Johnson has stated that "voluntary programs and
technological innovation are the best ways to address climate change"
(January 19, 2006).  As discussed in section 3, Encouraging Market Demand
for Innovative Environmental Technologies, EPA has made a substantial
commitment to voluntary energy conservation programs, which combined
with its pollution prevention and waste disposal regulatory programs and
the ever increasing cost of energy have been quite effective in ameliorat-
ing the growth of energy use on the part of industry, commercial, and
community sources (see ENERGY STAR Metrics of Success on page 45 for
information on outcome measurements for the ENERGY STAR program).
Although other federal organizations—particularly DOE, which has been
assigned primacy in the technology area—also are addressing this prob-
lem, EPA needs to identify the key  environmental issues to which it can con-
tribute solutions to the emerging technical challenges in appropriate pro-
grams along the entire technology Continuum.  Strategic planning in this
area will be multimedia of necessity, and therefore, will require the active
participation of the SETO to ensure that cross-media impacts are addressed
and that the climate change aspects of technologies developed for other
needs are evaluated.

Finding 5.3: Regulatory action drives technology adoption; therefore, EPA
needs to utilize its existing regulatory authority and be ready to utilize new
authority if and when it emerges from Congress, the courts, or the states.
EPA's authority to regulate emissions of carbon currently is being chal-
lenged before the U.S. Supreme Court. The results of that case will have
substantial ramifications for the Agency  and the country. Concurrently, a
number of states, counties, and cities have taken action to regulate CO2
emissions in various ways. California, for example, seeks to return emissions
to a 1990 baseline by 2020. In addition,  DOE is sponsoring development of
many CO2 control technologies, some of which will require environmental
permitting by  EPA, including the enormous zero-emission coal technology,
Future Gen. Other regulatory challenges, such as deep well  sequestration
for CO2 control, also await EPA decision making. As stated in the 1997
National Academy of Sciences' report Preparing for the 21st Century:
Technology and the Nation's Future, while "...private firms have the primary
responsibility for the development  and adoption of technology in this coun-
try, federal and state governments play an important role in enhancing
civilian technology development and adoption through their economic,
regulatory, and trade policies, their support for research and development,
and their own procurement of technology."

Finding 5.4  The Subcommittee believes that it is in the interest of major CO2
generators, particularly in the electric utility industry, for a CO2 emissions
trading market to begin  operation at the earliest possible date. Power
plants across the  country are delaying decisions on new, more efficient
technology purchase and installation because of the uncertainties inherent
in not knowing key parameters on  how such a  cap and trade program will
operate for CO2.  A key component of this uncertainty is the so-called CO2
baseline factor against which emission trading  is measured and where it will
be drawn for each facility.  Companies that take early action on technolo-
gy installation and emissions reduction may well be penalized for such
actions, and most have decided to delay improvements until the trading

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                  ENERGY STAR Metrics of Success

ENERGY STAR products prevented 35 million metric tons of greenhouse gas emissions
in 2005 alone—equivalent to the annual emissions of 23 million vehicles—and saved
about $12 billion on utility bills.  They also saved 150 billion kilowatt hours (kWh) or 4
percent of the total 2005 electricity demand.

About 1,500 manufacturers are using the ENERGY STAR to label and differentiate
more than 35,000 individual product models.

More than 800 retail partners are bringing ENERGY STAR qualifying products and edu-
cational information to their customers.

More than 2,500 builder partners are constructing new homes in every state that
qualify for the ENERGY STAR, and 70 architecture and engineering firms are using the
"Designed to Earn the ENERGY STAR" graphic on drawings.

About 2,500 private businesses, public-sector organizations, and industrial facilities are
investing in energy efficiency and reducing energy use in their buildings.

More than 30 states and more than 450 utilities and other energy efficiency program
sponsors are leveraging ENERGY STAR to improve the efficiency of government build-
ings and of their customers.

Americans purchased about 175 million ENERGY STAR qualified products spanning
more than 40 product categories  in 2005, bringing the total number of ENERGY STAR
products purchased since 1992 to more than 2 billion.

More than 17,000 homes have been improved through state and locally sponsored
Home Performance with ENERGY STAR programs.

EPA added new products to the ENERGY STAR suite by developing energy efficiency
specifications for power supplies and a specification for battery charging systems.

More than 500,000 families, 40  percent more than in 2004, now live in ENERGY STAR
qualified new homes and are saving about $110 million annually.

EPA launched the ENERGY STAR challenge in 2005, calling on U.S. businesses and insti-
tutions to  reduce energy use by 10 percent or more in coordination with key associa-
tions and  states.
More than 2,500 buildings (480 million square feet) have earned the ENERGY STAR
label for superior energy and environmental performance.

EPA's energy performance rating system has been used to evaluate about 26,000
buildings, including 38 percent of hospitals, 25 percent of office buildings, 24 percent
of supermarkets, 15 percent of schools, and 14 percent of hotel spaces.

ENERGY STAR partnered with three new focus industries—food processing, glass man-
ufacturing, and water/wastewater treatment—to develop standardized measure-
ment tools and industry-specific best practices.

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o
program becomes defined. Technological approaches that could be sav-
ing money for utilities and reducing greenhouse gases at the same time are
not being implemented because of this uncertainty.  Some states have
recently implemented emission registries to begin the process of facilitating
CO2 emission trading, which is expected to begin operation sometime with-
in this decade. Under the requirements of the Clean Air Act Amendments
of 1990, however, EPA already has collected 10 years of continuous,
detailed, quality assured, and highly accurate CO2 emissions data from all
of the nation's major power plants that could be, but are not being, used
for this important purpose.

Finding 5.5: According to a recent issue of The Economist, almost one-
tenth of America's venture capital is being spent on a broad array of alter-
native energy projects (approximately $64 billion in 2006), doubling the
amount invested just 2 years ago. John Doerr of Kleiner Perkins states that:
"Innovation in clean tech could be the biggest economic opportunity in
the 21st Century."  The Electric Power Research Institute's 2007 Global
Energy Technology Strategy for Addressing Climate Change states that,
"Technology plays a critical role in containing the societal cost of policies
to reduce net greenhouse gas emissions... and creating the technological
change needed to stabilize concentrations of CO2 in the atmosphere is a
challenge to energy R&D of unprecedented scope." Very little private
investment takes place by venture capitalists or customers until the technol-
ogy is ready for the commercial market. Cost remains a major barrier to
technology research and development, and the challenges posed by
global warming  are enormous. The State of California has proposed com-
mitting $4 billion  to the development of clean energy technology.  Stanford
University's Global Climate and Energy Project sponsors will invest a total of
$225 million over a decade or more as it explores energy technologies that
are efficient, environmentally benign, and cost-effective when deployed
on a large scale. Other states are considering sponsorship of or are partici-
pating in new technology investment programs.  Action is needed at all
levels of government and by all pertinent agencies, however, to help
reduce cost barriers at the research, development, and verification stages.
EPA has the expertise to assist in evaluating new  technologies to help stimu-
late private and public investment, particularly through its verification pro-
grams.
                        Recommendations
                          Recommendation 5.1:  Climate Change Technology Planning and R&D. EPA
                          should identify and fund climate change technology development in areas
                          of importance within its purview that need special development assistance.
                          Just as EPA has identified Action Teams to address certain environmental
                          problems, it needs to anticipate and identify specific areas where new
                          technology could help prevent, monitor, or aid adaptation to environmen-
                          tal impacts caused by climate change. Assistance along the entire
                          Continuum for these required technologies needs attention and active,
                          cross-Agency strategic planning for technology development.  This  plan-
                          ning process should be addressed by the SETO as a priority matter.  As stat-
                          ed above, targeted research and development on technologies needed
                          to address the new aspects of environmental degradation expected to
                          occur as a result of climate change is particularly important. Targeted

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funding needs to be identified and/or leveraged through partnerships that
can help reduce barriers to technology development and adoption. This
may require reallocation of funds within existing and future budgets.

Recommendation 5.2:  Public/Private and State Partnerships. EPA should
establish and cultivate meaningful public/private partnerships for technolo-
gy development on climate change challenges. The importance of pri-
vate-sector partnerships becomes markedly more significant when dealing
with large-scale environmental issues because of cost and scale, as well as
practical implementation issues. In addition, EPA should increase its partici-
pation in partnerships with state and regional  groups that already are
actively addressing the environmental effects of climate change-
California and New England being prime examples (see Recommendation
5.4 below).  EPA should, for instance, encourage partnerships with respect
to CO2 mitigation, including the creation of an information clearinghouse
and publication of technology information. This would help provide and
coordinate  data for policy makers, businesses, consumers, and legislators to
be able to make more informed decisions about technology. Public
recognition of results and visible advocacy for successful new technology
initiatives are low cost but powerful methods for the Agency to encourage
and support development of new environmental technologies.

Recommendation 5.3:  Technology Verification and Demonstration Support.
EPA should establish and actively promote its  leadership role in evaluating
climate change technology as new technologies approach the  commer-
cialization stage so that purchasers can be assured that they are selecting
the best technology for their particular situation.  Governments, businesses,
and individual consumers are beginning to seek climate-friendly technolo-
gies voluntarily in large numbers. Performance claims by vendors in a rap-
idly expanding marketplace need to be verified to ensure that technolo-
gies produce the types of results desired and  that purchasers are not dis-
suaded from further voluntary actions by poor performance of new  tech-
nology. EPA's verification of private-sector developed climate change
technology and publication of its effectiveness is an important source of
data for businesses, consumers,  and  policy makers in this area and should
be reactivated.  Opportunities for pilot testing should be promoted for
technologies where early installment and technology utilization appear key
to EPA climate change priorities. EPA also should demonstrate advanced
vehicle and engine technologies, consistent with EPA's FY2007-2009 mile-
stones and create pilot programs to use commercially available  advanced
technology in fleets to  produce cost-effective models for emission and fuel
consumption reduction.

Recommendation 5.4:  EPA's Potential Role in  CO2 Emissions Trading. EPA
should utilize its existing database of CO2 power plant emissions to establish
a baseline for electric utilities to use in instituting an emissions trading pro-
gram  in the United States as soon as possible.  As a result of the emission
monitoring and reporting provisions of the Clean Air Act Amendments of
1990,  EPA's Office of Atmospheric Programs is a world leader in operating
both emission inventory activities and emission trading programs. The CO2
database that it has maintained for 10 years is the most available and logi-
cal source of plant-by-plant emission data in the country and should be uti-
lized to rapidly establish year-specific baselines for all medium- to large-

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o
                          sized power plants. Through this mechanism, trading can begin and tech-
                          nology decisions on the part of the electric utility industry that will better
                          protect the environment and lower costs to customers can be implemented.

                          Recommendation 5.5 EPA's Regulatory Role in Innovative Technology
                          Development. Consistent with its charge to explore "encouraging demand
                          for innovative technologies," the Subcommittee recommends that EPA
                          drive and enable innovative technology in all media by using not only exist-
                          ing but also new and innovative regulatory and policy approaches to help
                          solve the difficult issues facing the nation with respect to both prevention of
                          and adaptation to climate change. Although new legislation may be nec-
                          essary for some beneficial actions and court actions for others, EPA's broad
                          authority to protect the environment through existing laws is already exten-
                          sive. In particular, the Agency should ensure that all new regulations, no
                          matter which media office they emerge  from or which environmental law
                          they implement, include standard evaluations of climate change impacts if
                          appropriate.

                          Northeastern states and most recently, five western states (California,
                          Washington, Oregon, Arizona, and New Mexico), and others have devel-
                          oped formal state greenhouse gas reduction plans that include quantita-
                          tive emission assessments, innovative regulatory approaches, and the
                          beginnings of regional emission trading programs. EPA has  the opportunity
                          to follow the states' programs and also to assess co-benefits of use of tech-
                          nology on EPA-regulated air pollutants at significantly reduced cost. EPA
                          also should actively seek and consider suggestions for innovative regulatory
                          approaches that would encourage technology development by the regu-
                          lated community as well  as state, regional, tribal, and local organizations.

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                             Appendices
 Appendix A: Charge to the Subcommittee on Environmental
               Technology
               List of Subcommittee Members
               List of Recommendations in the First Report of
               the NACEPT Subcommittee
               EPA Administrator's December 19, 2006 Letter to
               NACEPT Chair
               Suggested Functions and Duties of the SETO,
               Regional Technology Coordinators, and
               Technology Communication Coordinator
Appendix B:
Appendix C:

Appendix D:

Appendix E:
APPENDIX A: Charge to the Subcommittee on Environmental
              Technology

National Advisory Council For Environmental Policy and Technology

Draft Framework for Developing Recommendations on U.S. EPA's Environmental
Technology Programs

Background

   EPA Administrator Leavitt has established a vision that will enable EPA to
move to a new level of more efficient, effective and collaborative environmental
management.  He has identified four cornerstones of this effort: better use of sci-
ence and technology, using  market mechanisms, collaboration and networking,
and managing for results.  These elements must work together to bring about
environmental progress. In particular, EPA needs to focus its efforts on the role
that innovative technology can play in moving to a model of environmental pro-
tection built on the principles of stewardship and sustainable development,
which will allow environmental, economic, and social goals to be achieved
simultaneously.

   The following statement by Paul Gilman, EPA Science Advisor and Assistant
Administrator, Office of Research and Development, from a recent editorial in
Science, provides an overarching context for thinking about environmental tech-
nology.

      EPA is at its best when it views its role as not just custodial but as
      cutting edge, providing leadership and prescribing answers to
      key environmental problems. Today in the same vane, EPA
      Administrator Michael Leavitt is challenging the Agency to find
      creative ways to accelerate efforts to protect human health and
      the environment, and prepare for the future. This challenge can
      only get more daunting if the suggested increases in world's pop-
      ulation (50 %), global economic activity (500 %), and global ener-
      gy consumption and manufacturing activity (300 %) are
      achieved in the next 50 years. Here the goal of sustainability can
      be an important unifying principle,  EPA's research and technolo-
      gy programs can be an effective force in the design and meas-
      urement of our progress toward sustainable systems.
                                                                                Q

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   Technology is undoubtedly a central element in being able to achieve a syn-
ergy between environmental protection and economic growth while improving
the lives of people around the world. The following quote from a report to the
European Parliament, titled Stimulating Technologies for Sustainable Development:
An Environmental Technologies Action Plan for the European Union, establishes a use-
ful perspective:

       The potential of technology to create synergies between envi-
       ronmental protection and economic growth was recognized by
       the October 2003 European council. Environmental technolo-
       gies—taken in the Action Plan to include all technologies whose
       use is less environmentally harmful than relevant alternatives—are
       key to this. They encompass technologies and processes to man-
       age pollution (e.g. air pollution control, waste management), less
       polluting and less resource-intensive products and services, and
       ways to manage resources more efficiently (e.g. water supply,
       energy-saving technologies). Thus defined, they pervade all
       economic activities and sectors, where they often cut costs and
       improve competitiveness by reducing energy and resource con-
       sumption, and so create fewer emissions and less waste,

   Without innovative technology, most of the environmental gains that we
have achieved over the last thirty years would not have been possible. EPA con-
tinues to think strategically about how development and rapid introduction  of
innovative technology can lead to better and more cost effective  environmental
management. To do this the Agency must support the role of the private sector
in technology development, leveraging its programs and activities  to facilitate
the deployment of such technologies, and eliminating barriers that discourage  or
hold back their adoption. While development and sale of commercial-ready
environmental technology is the task and  proper role of the private sector, the
EPA plays an important role in facilitating the creation of sustainable technology
in at least the following ways. The Agency:

    1.  Helps to identify technology gaps in environmental protection through an
       ongoing process of problem identification and setting of environmental
       goals;
   2.  Provides limited and targeted financial support for needed new technolo-
       gies through research grants to universities, funding for small business R&D,
       and research in  EPA's laboratory research facilities;
   3.  Provides performance verification of new private sector technologies to
       reduce uncertainty for technology purchasers and protect the public;
   4.  Provides information to the public (states, communities, industrial and com-
       mercial purchasers) on the availability, benefits and effectiveness of inno-
       vative and sustainable technologies;
   5.  Encourages design and use of sustainable technologies in various public and
       private sectors through voluntary partnerships;
   6.  Impacts the use of innovative technologies through its policies, regulations,
       and compliance activities.

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Charge to the Subcommittee

   The Subcommittee is asked to assist the Agency in evaluating its current and
potential role in technology facilitation, bearing in mind two overarching ques-
tions as it formulates its recommendations:

    •  How can EPA better optimize its existing environmental technology pro-
       grams to make them as effective as possible in promoting the research,
       development, commercialization, and implementation of sustainable pri-
       vate sector technologies; and
    •  What other environmental technology programs and activities should EPA
       initiate to take advantage of opportunities it may be missing to further
       the effectiveness of its technology facilitation objectives? (Although EPA
       is not likely to receive significant additional funding for any new technolo-
       gy activities, the Subcommittee should not feel constrained in its thinking.)

   There are several specific areas where NACEPT can advise the Agency on its
environmental technology programs.  The Subcommittee is asked to consider at
least the following  types of actions and programs.

    1.  Evaluating EPA's Existing Suite of Technology Support Programs. In a Report to
Congress in October of 2003, EPA described the current suite of technology sup-
port programs carried out by the Agency's Program Offices, Regional Offices,
and the Office of Research and Development. Using information on the entire
range of technology programs conducted by the Agency, all of which can be
accessed through  the Environmental Technology Opportunities Portal
(www.epa.gov/etop), the Subcommittee is asked to evaluate the mission and
overall approach of the programs individually and collectively, determine
whether there are  any redundancies or gaps, and consider whether they are
appropriately designed to address technology development barriers. The
Subcommittee's views on the coverage and focus placed on various environ-
mental problems areas and the effectiveness of these efforts in supporting pri-
vate sector development and commercialization of the most critically needed
new and sustainable technologies are also sought.

   2.  Encouraging Demand for Innovative Technology.  EPA's regulatory require-
ments for the attainment of certain levels of pollutant reduction, as well as ongo-
ing or periodic monitoring of pollutant releases and levels, inherently create a
demand for environmental technologies. Other more direct approaches to
demand-pull may  be needed, however.  Specific categories of innovative tech-
nologies may warrant assistance from the EPA or other government programs
because of their efficiency or sustainability factors or their inherent benefit in
addressing certain difficult or intractable environmental problems. Some of the
approaches listed  below have been used to further such goals by providing
incentives to appropriate places in the technology development system.  Which
of these appear to be particularly worthy of expansion?

    •  Direct financial incentives.  Up front capital costs often deter businesses
       from installing greener technologies that may be more environmentally
       beneficial and in some cases more cost effective, and thus more sustain-
       able, in the long term.  In the past, government funding for the  construc-
       tion of wastewater treatment projects included incentives for purchasing
       innovative  technologies over standard technology. Are new investment
       incentives needed for either developers or user of new technologies?

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    •   Creative regulatory and policy approaches, The way regulations and
       policies are designed, can provide either incentives or disincentives for
       technology innovation. For example, emission trading approaches such
       as those employed through the Acid Rain Program and those proposed
       in the Clear Skies Initiative are generally considered to provide incentives
       for innovation. Use of voluntary approaches in lieu of  regulations also may
       encourage technology innovation.  For example, the Toxic Releases
       Inventory encourages firms to find innovative ways to reduce their emis-
       sions. Voluntary use of Environmental Management Systems might also
       encourage firms to find innovative ways of improving their environmental
       performance. What types of approaches should the Agency consider to
       encourage technology innovation?

    •   Preferential governmental purchasing that makes the government a first
       user of innovative technologies is another demand-pull approach that
       can help move promising technologies into full commercial use.  The
       Federal program for the "Greening of Government" encourages the pur-
       chase of environmentally preferable products often produced by innova-
       tive technologies. Innovative field monitoring technologies and continu-
       ous monitoring devices have been purchased by Federal and State envi-
       ronmental  agencies to improve the efficiency and effectiveness of their
       environmental measurement functions. As "first users" of innovative tech-
       nologies, government agencies are in an excellent position to demon-
       strate their benefits.  How can government purchasing best be used for
       innovative technologies?  Should EPA encourage states to use grant
       funds for preferential funding of innovative new technologies such as air
       monitoring networks and other beneficial uses?

    •   Permitting  Barriers, Past EPA and White House reports have highlighted
       permitting  as a barrier to new technology introduction. Beyond these
       generic recommendations, what specifically about the permitting
       process is the issue that EPA and its partners can deal with? For example,
       is technology introduction inhibited by problem owner reluctance due to
       the cost of failed technologies, lack of confidence in approaching the
       state regulator, lack of authentic, verified information for the user and the
       regulator on technology performance in the specific  new application,
       lack of resources by the regulator to divert to evaluating new technology
       applications,  problem owner concern over public acceptance, or other
       issues?

    3.  Reaching Critical Audiences with Innovative Technology  Information. The
commercialization of innovative technologies is frequently stymied because of
the lack of current and accurate information on their availability, applicability,
performance, location, and cost. EPA, through its long years of supporting tech-
nology development and evaluation programs, has one of the largest reposi-
tories of environmental technology information in the world.  Making this store of
information available to the numerous public and private entities that need it is a
daunting task. In its "Report to Congress on a One-Stop-Shop for Coordination of
Programs Which Foster Development of Environmental Technologies," EPA com-
mitted to creating an Environmental Technology Opportunities Portal (ETOP) that
would lead users to information on all of EPA's technology programs through an
integrated "one-stop-shop."  This portal became operational  on December 31,
2003.

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    •   Information coverage,  ETOP consists of 16 independent websites created
       and maintained across the Agency. Some of these are particularly suited
       to the scientific and engineering community, some to the technology
       purchasing community and consuming public, some to government enti-
       ties, some to narrow segments of environmental interest, and some to
       broad interests. Is the organization of both the ETOP and its component
       parts adequate in its clarity of purpose, its coverage, and its depth for the
       various audiences that need access to its information? If not, what other
       information should be available through this web portal and how should it
       be organized?  Do these gaps require the creation of new programs or
       simply restructuring the site to make it more user-friendly?

    •   Accessibility.  Websites created by the Agency have frequently taken
       years to gain readership by targeted audiences. How can EPA rapidly
       inform the numerous and diverse public and private constituency groups
       mentioned above that the information they require is available through
       ETOP and easily guide these users to the information they need?  What
       other tools (workshops,  conferences, association partnerships, regional
       and state technology contacts) should the Agency employ to assure that
       full, but targeted, information reaches appropriate audiences in a timely
       manner?  Is EPA's public recognition of successful new technologies
       appropriate and effective?

   4.   Collaborative Approaches with States, Tribes and Local Governments. As the
governmental entities most directly proximate to the purchasers of environmental
technology, the states,  tribes and local governments frequently play a pivotal
role in encouraging the development and implementation of innovative tech-
nologies.  States can also place barriers to innovation if they do not have the
information required to evaluate the applicability and performance of new tech-
nology. Several programs have proved helpful in the past and could be expand-
ed.

    •   Public assistance programs. US EPA Region I has developed an effective
       program called the Center for Environmental Industry and Technology
       that provides assistance to both technology developers and technology
       users seeking solutions to problems. If this program were to be  replicated
       in other Regions, what kinds of assistance should be available through
       these Centers?  Would a Technology Assistance Center at Headquarters
       be valuable as  a central EPA point of contact and a formal  link to other
       Federal, State and local organizations with environmental technology
       programs? What should its functions be?

    •   Cross-State cooperation. At the State level, differing regulatory require-
       ments and permitting practices may impede the adoption of innovative
       technologies. The Interstate Technology Research Council (ITRC) is work-
       ing with the States to establish common data requirements for  the permit-
       ting of remediation technologies.  How should this, and similar programs,
       such as the Technology Acceptance and Reciprocity Partnership, be
       expanded to help remove regulatory impediments to the adoption of
       sustainable environmental technologies?

    •   Enforcement interface, EPA and some State Agencies have had pro-
       grams offering incentives to companies not in compliance that encour-
       age them to implement pollution prevention solutions, which often
       involves the adoption of innovative technologies. How can EPA work

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       more effectively with State Agencies to make information on cost effec-
       tive innovative technologies available to firms that aren't in compliance,
       particularly small and medium sized firms?  In addition to the enforce-
       ment offices in EPA and State Agencies, what other offices should be
       involved?  How can information on enforcement actions and potential
       customers be effectively conveyed to technology developers and
       suppliers?

   5.  Collaborative Approaches With Others. EPA can be most effective in
encouraging technology innovation  if it works collaboratively with numerous and
diverse stakeholders. This includes states (see above), other federal agencies, pri-
vate sector developers and purchasers, and various interest groups. Many of the
programs already discussed require engagement with these organizations.
Examples of targeted  collaborations  might include:

    •  Working with other federal agencies. Opportunities for collaborative
       undertakings with other federal agencies working in the environmental
       field include preferred purchasing  (discussed above), dual use technolo-
       gies, joint R&D, providing incentives and information sharing. An example
       of a successful partnership for sharing information is the 10-year-old
       Federal Remediation Roundtable.  Another example of cooperation are
       the five federal agencies that have provided test beds for private sector
       technologies being verified by the Environmental Technology Verification
       (ETV) program, significantly reducing the testing costs to vendors. How
       can EPA be more effective in getting other federal agencies to serve as
       demonstrators and first time purchasers of innovative technologies?

    •  Dual use technologies. Since the market for environmental technologies
       is generally low growth, the greatest opportunities for the commercializa-
       tion and adoption of innovative technologies may come through taking
       advantage of dual use technologies that are  being developed for other
       markets. How can EPA engage companies and agencies in defense,
       energy, health science, food science and  other sectors industries that are
       developing technologies that might also have environmental applica-
       tions?

    •  Working with the private sector.  Many of EPA's programs involve collabo-
       ration with the private sector in the development of technologies, such as
       the CRADA program. The ETV program operates within a broad stake-
       holder structure that includes state and local permitters, technology test-
       ing  organizations, and technology vendors and purchasers. Through
       these programs, EPA  provides factual information to states, industry and
       the public, but does not advocate for a particular company's product or
       technology. How can EPA best recognize  and publicize outstanding new
       commercially available technologies without negating its non-advocacy
       policy?

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APPENDIX B:  List of Subcommittee Members
Chair:
Philip Helgerson
CSC Advanced Marine Center

Liaison to the NACEPT Council:
Dan Watts
New Jersey Institute of Technology

Members:
Linda Benevides
Massachusetts Department of
  Environmental Protection
David Dzombak
Carnegie Mellon University
Kenneth Geiser
University of Massachusetts at Lowell
John Hornback
Metro 4/Southeastern States Air
  Resource Managers, Inc. (SESARM)
Kristine Krause
Wisconsin Energy Corporation
JoAnn Slama Lighty
University of Utah
Raymond Lizotte
American Power Conversion
  Corporation
Oliver Murphy
Lynntech, Inc.
Robin Newmark
Lawrence Livermore National
  Laboratory
Patrick O'Hara
Cummings/Riter Consultants
Christine Owen
Tampa Bay Water
Katherine Reed
3M  Environmental,  Health and Safety
  Operations
Norman Richards
Mohegan Environmental Protection
  Department, The Mohegan Tribe
Karen Riggs
Battelle Memorial Institute
James Robbins
Environmental Business Cluster
Howard Roitman
Association of State and Territorial Solid
  Waste Management Officials
Kent Udell
University of Utah
  (Professor and Chair);
University of California, Berkeley
  (Professor Emerifus)

EPA Liaisons:
Stephen Lingle
Office of Research and Development
U.S. Environmental Protection Agency

Maggie Theroux
New England, Region 1
U.S. Environmental Protection Agency

Walter Kovalick
Region 5
U.S. Environmental Protection Agency

Designated Federal Officer:
Mark Joyce
Office of Cooperative Environmental
  Management
U.S. Environmental Protection Agency

Contractor Support:
Beverly Campbell
Penelope Hansen
Susie Warner
The Scientific Consulting Group, Inc.

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APPENDIX C:  List of Recommendations in the First Report of the
                NACEPT Subcommittee

   The following is a summary of fhe recommendations of fhe NACEPT
Environmenfal Technology Subcommiffee's May 2006 report EPA Technology
Programs and Infra-Agency Coordination (fhe full report is available on fhe Web af
hffp://www.epa.gov/efop/nacepf).

Finding 1: The EPA Technology Development Continuum

     Recommendation 1.1: Broadly publish the Continuum, in both Web and
     document form, to assist information seekers both within the Agency and
     outside fo find fhe fechnology support and dafa  fhey need fo move tech-
     nology forward. EPA must ensure that the information in the Continuum
     remains current and up to date.

     Recommendation 1.2: Use the Continuum as:

          1.2.1 An effectiveness and evaluation tool to determine the metrics
               and outcomes of EPA programs;

          1.2.2 A prioritization and resource evaluation tool to make cross-
               Agency resource decisions; and

          1.2.3 An evaluation tool to determine the Agency's effectiveness in
               working with the other critical stakeholders in technology devel-
               opment and diffusion, most particularly state and local govern-
               ment and the private sector.

Finding 2: Subcommittee Observations on EPA Technology Programs

     Recommendation 2.1: EPA should target its technology support efforts to
     areas clearly linked to environmental regulations and other publicly stated
     environmental goals. In particular, the Agency should build its strategic
     plans around the availability of emerging technology with a clear plan of
     technology support for those areas it considers to be critical to its success.

     Recommendation 2.2: Improved and coordinated metrics need to be
     developed, used across the entire spectrum of ERA technology programs,
     and publicized. The Agency has an impressive array of programs but in the
     absence of consistent and available metrics, it is  difficult to see how effec-
     tive they are in actually bringing  needed technologies to implementation
     or to make valid effectiveness comparisons among individual programs.
     The Subcommittee understands that the Agency is working on the issue of
     metrics within all of its programs and that this kind of outcome measure-
     ment, particularly applied to the  broad area of technology development
     and deployment, is difficult to construct.

     Recommendation 2.3: Although  a research focus is consistent with govern-
     ment's traditional role in funding basic research, it is important that other
     efforts, further along the research and development continuum, continue to
     be supported.  Front-loading of resources on research may be less effective
     in achieving technology utilization than actively promoting those technolo-
     gies that have been shown to work. Many innovations begin in the private

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sector with little or no government support but require demonstration
and/or verification by independent entities to determine their effectiveness.
They also may require diffusion activities by the government to achieve
regulatory acceptance and thus commercialization.

Recommendation 2.4: Demonstration/verification programs need to be
expanded.  States support the verification testing of technologies through
activities like EPA's Environmental Technology Verification (ETV) Program
rather than leaving this testing for each individual state to do on its own.
The fact that EPA has verified more than 350 innovative technologies to
date and that hundreds more await verification  attests to the value of this
activity to commercial developers. The fact that the ETV Web Site contain-
ing performance data on all of these technologies is visited more than
1,500,000 times each year attests to the value of the information it contains
on new technologies.  Demonstration and  verification programs are major
commercialization facilitation  activities and help assure that effective,
rather than ineffective, technologies are deployed.

Recommendation 2.5: Each EPA technology program should know where
to direct technologies to the next step in the development process both
inside and outside EPA to ensure that promising innovations move through
the Continuum toward commercialization.  Program interaction, communi-
cation, and focus on commercialization requirements need improvement.

Recommendation 2.6: The Agency should address critical diffusion and uti-
lization gaps that impede new technology from reaching the appropriate
markets.

     2.6.1 The Subcommittee recommends that the Agency establish a
          policy that each regional office designates a specific technolo-
          gy information coordinator. The regions  are the front line of the
          Agency and a primary source for state- and local-level decision
          makers to obtain guidance on  technology and permitting
          issues, particularly concerning the performance  of new tech-
          nologies. Developers also come to the regions for help in
          penetrating EPA's technology assistance programs. A regional
          technology information coordinator would serve to connect
          regional problems to the funding and resources of EPA
          Headquarters.  The effectiveness of this approach has been
          demonstrated in Region 1. Headquarters' coordination of these
          regional technology information coordinators will be critical to
          their success. The  Subcommittee will address the management
          and  coordination issues for EPA's technology programs in future
          reports.

     2.6.2 The Subcommittee recommends that EPA place more emphasis
          on and increase public awareness of its  programs to create a
          demand for new environmental technologies.  A review of the
          scope of programs in the Continuum reveals an  apparent gap
          in Agency activities that directly address the creation of
          markets or market mechanisms for new technologies. One
          example of such a program is ENERGY STAR, which encourages
          energy conservation by working with corporations to develop
          conservation plans. Such "demand-pull" activities can include

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               government policies such as tax credits and "first purchaser"
               activities that encourage innovation. The Subcommittee will
               seek further information on EPA's past experiences, both posi-
               tive andnegative, with these types of policies at its upcoming
               meetings.

     Recommendation 2.7: EPA should devote more attention and resources to
     those Agency programs that incorporate and encourage sustainability as
     one of the goals or criteria for technology development or implementation
     assistance.  As this subject is specifically called out for comment in the
     charge and the Subcommittee considers that there is an opportunity for
     the Agency to accomplish important strategic objectives in this area, the
     Subcommittee will look at the issue of sustainability in more detail over the
     coming months and make specific recommendations in a future report.
     The Subcommittee hopes to identify and evaluate several EPA programs
     that are actively seeking to incorporate this analytically difficult subject into
     their technology development activities and highlight their methodology
     and successes.

Finding 3: The Environmental Technology Council (ETC) Action Teams

     Recommendation 3.1: EPA should develop a formal and ongoing public
     process to identify the country's most pressing environmental problems
     needing technological solutions, ensuring that the selection is truly focused
     on environmental problems and not simply on technology development.

     Recommendation 3.2: EPA should make the ETC Action Team initiative a
     core program with high-level Agency support, while streamlining the over-
     sight for both the ETC and its Action Teams.

     Recommendation 3.3: The ETC should develop and  institute Standard
     Operating Procedures for Action Teams and ensure that they
     immediately begin to include appropriate outside stakeholders in their
     deliberations and activities.  The most successful Team activities should be
     highlighted.

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APPENDIX D:   EPA Administrator's December 19, 2006 Letter
                     to  NACEPT Chair
                      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                    WASHINGTON, D.C. 20460
                                          DEC 1 9 2006
                                                                           THE ADMINISTRATOR
       Mr. John L. Howard. Jr.
       Chair
       National Advisory Council for Environmental
        Policy and Technology
       Vinson & Elkins, LLP
       2801 Via Fortuna, Suite 100
       Austin, Texas 78746

       Dear Mr. Howard:

             I thank the National Advisory Council for Environmental Policy and Technology and its
       Environmental Technology Subcommittee for the thoughtful and comprehensive
       recommendations in the report titled EPA Technology Programs and Intra-Agency Coordination.
       These recommendations have stimulated the U.S. Environmental Protection Agency to examine
       how best to promote the use of innovative technology in carrying out its mission.

             You will be pleased to learn that the Subcommittee's report has already helped promote
       change and achieve positive results. The EPA Technology Development Continuum chapter is a
       valuable resource as EPA evaluates its programs, as well as an information source for technology
       developers and users seeking guidance and support from EPA. The Agency has already used the
       information to restructure the one-stop-shop Environmental Technology Opportunities Portal on
       its Web site to provide a coherent roadmap of EPA's technology programs.

             The report's 15 recommendations were reviewed by the Agency's Science Policy
       Council. The SPC also sought input from the Environmental Technology Council on how to
       respond to each of the recommendations. The ETC considered not only the recommendations
       themselves, but also how they could be implemented and sustained. As a result, the SPC
       approved four recommended actions that essentially embrace the whole of the NACEPT report
       recommendations:

             I.  Establish a Senior Environmental Technoloev Officer who will be the focal point for
                key activities recommended in the report like establishing priorities, chairing the
                ETC, facilitating cross-agency coordination and information sharing, working with
                the business community and other stakeholders, and developing metrics for
                measuring effectiveness.
                                     Interne! Address (URL) • http //www epa gov
               Recycled/Recyclable • Printed with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycled Paper

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APPENDIX D:  EPA Administrator's December 19,  2006 Letter
                    to NACEPT Chair (continued)
            2. Establish the Environmental Technology Council as a core Agency activity with more
               senior-level membership accountable for results.

            3. Establish a Regional Environmental Technology Advocacy Network comprised of a
               technology advocate in each region to identify opportunities to use technology to
               achieve better results, share information within the Agency and with stakeholders,
               serve as liaison with technology programs across the Agency, and serve as member of
               the ETC.

            4. Create an Environmental Technology Verification and Assessment Staff coordinated
               by the National Risk Management Research Laboratory to provide enhanced
               technology support to the SETO and the rest of the Agency on issues like technology
               verifications, state-of-the-art assessments, technology development collaborations,
               and encouraging sustainability.

            We have decided to move forward to  implement these recommendations, It is important
      that EPA increasingly be engaged in promoting and facilitating cost-effective solutions to
      environmental challenges.  Obviously, the implementation of these recommendations has
      resource implications that must be taken into consideration as we define the specifics of our
      actions.  Dr. George Gray, EPA Science Advisor and Assistant Administrator of the Office of
      Research and Development, will lead our implementation efforts. Dr. Gray and I will keep the
      Council informed as we move forward.

            I understand that a second report with recommendations from the Environmental
      Technology Subcommittee will be delivered  early next year. We look forward to working with
      NACEPT as we consider the recommendations in that report.

            Again, my thanks to NACEPT and the Technology Subcommittee for its advice and
      assistance in helping EPA meet its commitment to promote innovative technology in carrying
      out its mission.
      cc:
Marcus Peacock, Deputy Administrator  »/•/
George Gray, Assistant AdmmMtratpr, pffice of Re
Rafael DeLeon, Director, Office of Cooperaqye Environment.
  il Helgerson, ChairJimvironmCttal TedaiKogy Subcommittee
                    V

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APPENDIX E:  Suggested Functions and Duties of the SETO,
               Regional Technology Coordinators, and
               Technology Communication Coordinator

Internal responsibilities of the Senior Environmental Technology Officer
(SETO) and staff should include functions such as:

•  Understand and influence all existing internal technology support activities
   across the Continuum and assist in the coordination of these programs to
   ensure maximum effectiveness.

•  Ensure that technology programs across the Continuum support the Agency's
   strategic plan and solution of its highest priority problems that require technol-
   ogy development and deployment. Seek opportunities to add technology
   activities and metrics to all program office sections in the EPA Strategic Plan,
   support and coordinate those activities, and report on environmental results.

•  Chair and direct the activities of the Environmental Technology Council (see
   below), including updating current priorities, Action Teams, and followup on
   previous Environmental Technology Subcommittee recommendations.

•  Efficiently resolve internal and partnership disputes related to environmental
   technology commercialization and deployment. EPA should consider creat-
   ing an innovative technology appeals board to address and resolve issues
   that arise in a timely manner.

•  Identify international programs that have an environmental technology com-
   ponent and seek opportunities to understand the international market for
   technologies to encourage investment in developing technologies and pro-                   KU
   mote export of U.S. technologies.

•  Develop and be responsible for keeping current a central, consolidated, and
   simple clearinghouse for commercial-ready technologies and associated
   performance data to assist purchasers in getting the best technology for their
   particular situation.

•  Educate staff about the issues faced by technology developers—there
   should be  a list of Frequently Asked Questions about technology develop-
   ment and  partnering.  Establish performance expectations for regional tech-
   nology advocates and consider recognition programs for staff members who
   take risks to use environmental technologies that achieve results.

•  Establish clearly defined metrics for program success that include the most
   important  elements for technology development along the entire Continuum.

•  Oversee communication and outreach activities, particularly the quality of
   the Agency's various technology Web sites, to achieve outstanding informa-
   tion flow to the entire technology development, commercialization, and pur-
   chasing  community.

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External responsibilities of the SETO should include:

•  The authority to represent the Agency as a technology champion and cre-
   ate external events and communication tools that highlight successful tech-
   nology commercialization and uses.

•  Act as the primary external spokesperson for environmental technology,
   including providing advice to Congress.  Establish communication with and
   among appropriate government agencies at all levels.

•  Establish relationships with key governmental, external nongovernmental
   organizations, and private-sector actors, including the investment community
   and appropriate international organizations. Build relationships with other
   federal agencies and encourage partnership formation wherever appropri-
   ate.

•  Establish relationships with state entities of all types, including state small busi-
   ness development agencies, as well as CalPERS and other state funds that
   invest in clean technology.  Establish and chair an external technology advi-
   sory board to provide input and expertise into technology activities.  Work
   with the Environmental Council of the States and other state organizations to
   engage states in all aspects of technology implementation and support state
   environmental technology innovation programs such as the Technology
   Acceptance and Reciprocity Partnership and the Interstate Technology and
   Regulatory Council.

Functions of the Regional Technology Information Coordinator:

•  Work day-to-day with regional staff to facilitate the use of new technologies
   as a primary tool to improve environmental performance and solve prob-
   lems.

•  Serve as the external contact for companies needing access to services,
   markets, or regulatory assistance.

•  Communicate with states to respond to their technology information and
   policy needs and learn from their areas of expertise.

•  Coordinate routinely with regional counterparts and  through quarterly meet-
   ings with the Senior Environmental Technology Officer.

•  Staff the Environmental Technology Council and recruit members for the
   Action Teams.

•  Seek technology solutions to achieve environmental results in all regional
   media programs and enforcement (see section 3. Encouraging Market
   Demand for Innovative Environmental Technology).

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Functions of the Technology Communication Coordinator under the SETO:

•  Ensure effective communicafion of dafa and informafion between scientists/
   engineers/regulators throughout EPA. The SETO and Regional Coordinators
   should lead the effort to move other offices toward proactive, engaging
   technology outreach.

•  Devote the resources for one person to continually monitor and update the
   Environmental Technology Opportunities Portal (ETOP) Web Site and all of its
   components. Material that is outdated, poorly organized, or confusing
   should be removed rather than left to confuse the public and reduce
   Agency credibility. This person should report to the recommended SETO.

•  Ensure timely information reporting and use timeliness of public reporting as a
   metric of success in all technology programs. Timely reporting of environ-
   mental technology information (data, performance, etc.), no matter where
   that technology is on the Continuum, is imperative for commercialization.
   Within the context of this rapidly moving environment, a multi-year turn-
   around for report approval is not acceptable.

•  Provide short- and long-term data on environmental  technologies in a
   searchable Web-based format to ensure that ongoing information is cap-
   tured. The data should not only reflect initial stage verification but also per-
   formance data, operation and maintenance information, and costs.

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