United States
     Environmental Protection
     Agency
Policy, Planning,
And Evaluation
(2173)
EPA 236-R-98-001
June 1998
     Stakeholder Attitudes
     On The Barriers To  Innovative
     Environmental Technologies
          Internet Address (URL) • http://www.epa.gov

Recycled/Recyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (20% Postconsumer)

-------
                                   DISCLAIMER
       The information in this document has been funded wholly or in part by the United States
Environmental Protection Agency under Cooperative Agreement CR-822795-01 to F.T.T It has been
subject to the Agency's peer and administrative review, and has been approved for publication as an
EPA document Mention of trade names or commercial products does not constitute endorsement or
recommendation for use.
                             ACKNOWLEDGMENTS
       This report was prepared by Abt Associates, Inc. and the Environmental Law Institute,
Cooperative Agreement CR-822795-01, and with funding from the U.S. Environmental Protection
Agency. The authors wish to express particular appreciation to EPA's Office of Policy, Planing and
Evaluation, project officer Alan Carlin  and project coordinator Robert Sachs  for their fullest
cooperation. Abt Associates staff contributing to the report include Andrew Stoeckle and Adam Burke,
and for ELI Byron Swift and Andrew Galbreath. The authors would particularly like to thank
individuals who provided advice on this survey and report, including Richard Andrews, Linda
Benevides, Rhea Brekke, Betsy David, Barry Elman, Grant Ferrier, Gail Humphries, Carol Kilbride,
Susan Krueger, Jim Laity, Lance Miller, Rick Tomlinson and Winona Victery. In addition, they thank
Marybeth Brenner, James Harrington, Jerry Hill, Sean Moulton, Michael Lippman, Steve Taglang, Rick
Tomlinson and Barbara Wells  for reviewing a draft version of the report Finally, the authors would
like to thank the numerous representatives of government agencies, private businesses, and non-
governmental organizations who generously provided information for this report

-------
                            TABLE OF CONTENTS



EXECUTIVE SUMMARY  	  I

1.      INTRODUCTION  	  1

2.      BACKGROUND  	  1

       A.     Why are innovative environmental technologies
             not being implemented and used?  	1

       B.     The lack of venture capital for environmental technologies   	  3

3.      SURVEY PROFILES  	  5

       A.     Regulators  	  5
       B.     Users 	  6
       C.     Vendors	  8

4.      SURVEY RESULTS

       A.     Experience	  9

             1.    Experience in Environmental Compliance  	  9
             2.    Experience with Innovative Environmental Technologies  	  9

       B.     Firm characteristics   	   9

       C.     Benefits of using innovative environmental technologies 	  10

       D.     Frequency and Types of Barriers Encountered by
             Innovative Environmental Technologies  	  12

       E.     Regulatory Barriers	  14

             1.    Views on importance of specific regulatory barriers   	  14
             2.    Views on federal or state origin of regulatory barriers  	  15
             3.    Barriers caused by regulatory systems for different media  	  16
             4.    How often companies do not pursue promising innovative
                   technology because of the uncertainty of its complying with
                   the environmental regulations or permitting	  18
             5.    Changes in the regulatory system that would be helpful
                   in promoting the use of innovative technologies  	18
             6.    Suggested changes to the regulatory or permitting system
                   to further promote the use of innovative technologies  	  21

-------
             7.     Cost savings from eliminating regulatory barriers  	  22

       F.     Financial and Internal Barriers   	  22

             1.     Perceived importance of specified barriers which are  '
                   unrelated to the regulatory system 	  22
             2.     Difficulty of obtaining financing for innovative
                   environmental technology compared to standard
                   environmental technologies	  24

       G.    Information and sources for environmental technology
             (regulators and/or users only)  	  25

             1.     Sources of environmental technologies 	  25
             2.     Information resources	  25

       H.    Miscellaneous	  26

             1.     Annual compliance costs	  26
             2.     Vendor company practices in research and development  	  26
             3.     Vendor Liability concerns 	  27


APPENDIX A: RESEARCH METHODOLOGY

A.l.    SUMMARY  	  A-l

A.2.    SAMPLE SELECTION  	  A-2

       A.3. Preparation of the Survey Instrument  	  A-3

       A.4. Pretest and Revisions	  A-4

       A.5. Survey Administration	  A-4

             (a) Survey protocols	  A-4

             (b) Disposition of Completed Survey  	  A-4

       A.6. Post-Survey Weighting  	  A-6

A.7.    POST-SURVEY STATISTICAL TESTING
       OF CORRELATIONS AND RESULTS 	  A-6

A.8.    LIMITATIONS TO THE SURVEY  	  A-7

APPENDK B: ENVIRONMENTAL TECHNOLOGY BARRIERS SURVEY

-------
Regulatory Barriers	B-7




Financial and Internal Barriers	B-17




Liability (vendors only)	B-22




Information (regulators and users only)	B-24




Background/Details	B-28

-------
                              EXECUTIVE SUMMARY
       This report presents the results of a survey of regulators, users and vendors of environmental
 technologies. It focuses on these stakeholder groups' perception of barriers to the permitting, use or
 development of innovative environmental technologies. In this way, it attempts to verify the existence
 of the barriers identified previously by the reports of the Technology Innovation and Economics (TIE)
 Committee of the National Advisory  Council for Environmental Policy and Technology and other
 research and publications on technology innovation.

       In this report, environmental technologies are defined to include monitoring equipment,
 treatment and control devices, pollution prevention technologies and process modifications if installed
 to improve environmental performance. The term innovative  environmental technologies refers to
 systems of pollution prevention or control that have not yet been demonstrated in practice.

       The three stakeholder groups were interviewed by telephone about their personal experience
 in considering innovative environmental technologies in the past five years. Regulators interviewed were
 chiefs or senior personnel of air, water  and waste divisions at state environmental agencies. Users
 interviewed were managers with responsibility for environmental compliance at facilities holding one
 or more "major" air, water, or hazardous waste permits. Vendors were leading figures in companies
 which develop, sell, or recommend environmental technologies. The great majority in each group had
 over 5 years experience in the environmental field, and over 60% of regulators and vendors had more
 than 10 years experience. A profile of each group is presented in Part 3, and the results of the interviews
 in Part 4.

 A.     Barriers Encountered to Innovative Environmental Technologies

       Of those who have considered innovative environmental technologies, most have encountered
 problems in moving forward with them, led by over 70 percent of vendors who encounter barriers. A
 salient finding of this research was the  strong agreement by all stakeholder groups of the significance
 of barriers to innovation caused by the regulatory and permitting system, lack of credible information
 on technology alternatives, kck of financial resources, as well as business practices and rekted barriers
 to innovation.

       However, while reguktors believed that a kck of credible information on technology alternatives
is the most significant barrier, vendors  and users gave higher priority to the kck of financial resources
 and barriers created by the reguktory  system. The greater need by reguktors for data on  the
performance of innovative technologies confirms the "double barrier'' faced by such technologies, as
vendors need to convince both users and reguktors of the technology's acceptability.

 B.     Regulatory Barriers to Innovation

       1.      Barriers. All groups strongly affirm that the following aspects of the reguktory system
create barriers to innovation, establishing a broad consensus on the importance of the barriers identified
in previous studies. Over two-thirds of each group responded that each listed source of

-------
regulatory barriers creates at least a minor barrier to environmental technology innovation, and for each
at least 50% of one or more stakeholder groups regard the barrier as major:

              • lack of incentive to exceed minimum compliance;
              • uncertainty, excessive length for permit approval;
              • permit writers inexperience;
              • too little time for testing and implementing.

Both regulators and vendors view the most significant regulatory barrier as the lack of incentive to
exceed minimum compliance, whereas users see it as the uncertainty and excessive length for permit
approval and permit writers' inexperience. Vendors also view the lack of acceptance of new technologies
as a major problem. Regulators tend to place less emphasis on barriers within the permitting system than
users or vendors.

       Responses among groups also varied dramatically when asked how often companies decide not
to pursue a promising innovative  technology  because  of  the uncertainty of its  complying with
environmental regulations or permitting. Forty percent of vendors responded very often, compared to
25 percent of users and only 9 percent of regulators.

       2.     Sources. When asked whether federal or state kws, regulations or permitting systems
caused the barriers, all groups agreed that federal regulations are the most significant barrier, and that
federal statutes also create important barriers. Users and vendors also gave high importance to state
permitting systems, which regulators did not perceive as a major barrier.

       Over 70 percent of each group believe that regulatory systems for air, water or waste are at least
somewhat likely to give rise to barriers, and all groups agreed that barriers were most likely to arise from
the systems regulating solid or hazardous waste.

       3.     Solutions. Over 50 percent of users and vendors believe that reducing delays and other
changes to the permitting system such as more  consistent enforcement and the adoption of overall
performance standards would be very helpful in promoting the use of innovative technologies.
Regulators consistently pkced less emphasis on such changes, placing greatest emphasis instead on
government sponsored technology verification and demonstrations.

       Respondents were also asked what percentage of current compliance costs they thought could
be saved if there were no regulatory or permitting barriers to implementing innovative environmental
technologies. A majority in all groups agreed such savings would be substantial, on the order of 25
percent or more. Users and vendors estimated such savings to be only slightly higher than regulators.

C.     Business and Other Barriers

       1.      Barriers. The stakeholder groups were asked to evaluate the importance of financial and
internal business barriers to innovation which are unrelated to regulatory barriers. The response was
overwhelmingly affirmative, with almost 50 percent of respondents believing most of the barriers listed
below to be major ones, and over 85 percent believing them at least minor. To a greater degree
                                            11

-------
than for the questions concerning regulatory barriers, responses were fairly consistent between the
stakeholder groups. The identified barriers were:

              • lack of credible data on a technology's cost or performance;
              • lack of financing for innovative technologies;
              • kck of financial benefits or rewards for using an innovative technology;
              • company staff not having enough time to make an assessment of technical options;
              • kck of information on the avaikbility of innovative technologies; and
              • large investments in technologies in pkce prevent the selection of new technologies.

       2.      Financing barriers. Financing is perceived as a major barrier to innovative technologies
by all groups. About  50  percent believe it is more difficult to obtain financing for innovative
technologies and see the kck of finance as a major barrier to innovative technologies. Less than five
percent of each groups think financing may be easier to obtain for innovative technologies.

D.    Benefits of using Innovative Environmental Technologies

       Roughly 80 percent of all three groups agreed that there are a variety of important benefits in
using innovative technologies, including reduced pollution releases, lowered compliance costs and
improved production efficiency.

E.     Sources for Environmental Technology and Information

       When users were asked where the environmental technologies that their firm uses come from,
two thirds identified independent vendors,  indicating the  importance of this community to users
regarding environmental compliance issues. The one-half of companies that rely on their own research
may also indicate an emphasis on internal process changes as a compliance strategy.

       When users and reguktors were asked about specific information sources, both groups pkce
highest importance on industry and trade association publications and conferences. Reguktors pkced
next greatest importance on government technical assistance offices and university and extension
programs, although only one-quarter of the users rated these as very useful Users instead pkce greater
reliance on industry: half of users found outside consultants or contracts very useful, and a third regard
other companies, their own research, or vendors and suppliers as very useful

F.     Compliance costs

       When asked to estimate their facility's annual environmental compliance costs users gave a wide
range of answers, presumably according to the size of the operation. Approximately an equal number,
or one -fourth of users answered their compliance costs were in the  following categories: $75,000 or
less; $76,000 to 350,000; $360,000 to $2 million; and $2 million or over.
                                           111

-------
                STAKEHOLDER ATTITUDES ON THE
                       BARRIERS TO INNOVATIVE
                ENVIRONMENTAL TECHNOLOGIES
1.      INTRODUCTION

       This report presents the results of a survey of regulators, users and vendors of environmental
technologies completed in May 1997. It is focused on these stakeholder groups' perceptions of barriers
to the permitting, use or development of innovative environmental technologies. In this way, it attempts
to verify the existence of the barriers identified previously by the reports of the Technology Innovation
and Economics (TIE) Committee of the National Advisory Council for Environmental Policy and
Technology and other research and publications on technology innovation.

       The survey was administered by telephone to three stakeholder groups: senior permit officials
from state environmental regulatory agencies, managers at regulated user facilities, and managers at
vendor firms which sell, lease or recommend environmental technologies. There were approximately
460 completed interviews, with more than one hundred from each group. Survey results were men
analyzed using statistical tools to  determine confidence intervals, described in Appendix A. Survey
results are presented below.

       In this report, environmental technologies are defined to include monitoring equipment,
treatment and control devices, pollution prevention technologies and process modifications if installed
to improve environmental performance. The term innovative environmental technologies refers to
systems of pollution prevention or control that have not yet been demonstrated in practice.

2.      BACKGROUND

       A.     Why are innovative environmental technologies
              not being implemented and used?

       There is a widespread perception that innovative environmental technologies are not being
adequately implemented and used to control pollution, resulting in lower environmental quality to the
public and higher costs to industry. Federal activity to investigate the above question has been organized
under the National Advisory Council for Environmental Policy and Technology (NACEPT), a public
advisory committee advising the Administrator and staff of the U.S. Environmental Protection Agency
(EPA). The NACEPT created the Technology Innovation and Economics (TIE) Committee specifically
to address the issue.

       The TIE Committee convened many multi-stakeholder meetings and issued three reports
addressing this question. Their first report issued in 1991 concludes that the disincentives to innovative
environmental technologies creates a  "market dysfunction symbolized by th[e] lagging rate  of

-------
investment in environmental technology."1 It describes how a number of policies, including government
policies, can hinder technology innovation by making it difficult for companies to try something new.
It concluded: "Permitting and compliance systems, as they function today, discourage all stakeholder
groups from' taking the risks necessary to develop innovative technologies", and that ''changes to the
environmental regulatory system will be needed to create incentives encouraging the environmental
technology innovation process".2

       The TIE Committee made a series of findings as to why innovative environmental technologies
were not being implemented and used.3 They concluded that fundamental changes to the environmental
regulatory system would be needed, and offered a series of recommendations. These stressed the need
for modifying permitting and enforcement systems, providing incentives and flexibility for innovative
technologies, improving testing and demonstration capacity, developing cross-media coordination,
identifying and removing regulatory barriers, and developing EPA leadership.

       The TIE Committee noted that, while environmental regulations create the market, they can also
obstruct and slow innovation: "Regulatory and statutory requirements often limit the potential to
introduce flexibility into implementing policies." They further concluded that "the emphasis in the
environmental management system on single-medium pollution control strategies is rapidly reaching
both technological and cost limits," and that "Existing permitting and compliance authorities at all levels
of government lack the flexibility necessary to encourage technology innovation for environmental
purposes."4

       The Committee found that the hurdles facing industry can take many forms. For example, most
environmental standards now in pkce were developed around a particular technology and can have the
practical effect of "locking in" that technology's use. The permitting process can also discourage
innovation by making the approval process for new technologies longer, more cumbersome, and less
certain than  for conventional approaches. Even when companies are allowed to use an innovative
technology, they may be unwilling to risk non-compliance as they receive no reward for exceeding the
minimum  regulatory  requirements  and no protection against failure. Therefore, the same old
technologies may be used year after year, freezing out newer and more effective alternatives.

       Subsequent to these reports, Congress and EPA established the Environmental Technology
Initiative (ETI) in 1994 to help address these problems. ETI was an EPA-led interagency effort that has
supported more than 250 projects to advance the development and use of innovative environmental
technologies. After initial growth, lack of funding by Congress for the initiative has eliminated the
creation of new projects, although previously funded ETI projects are still being finished. But elsewhere,
       1      U.S. Environmental Protection Agency, PERMITTING AND COMPLIANCE POLICY: BARRIERS TO U.S.
ENVIRONMENTAL TECHNOLOGY INNOVATION, at4 (EPA 101/N-91/001, January 1991).

       2      I
-------
EPA has launched innovative programs such as the Common Sense Initiative, which promotes action
to address environmental pollution at the sector level, Project XL, a national pilot program to test
innovative ways of achieving better and more cost effective environmental compliance, and the
Environmental Technology Verification program (ETV).

       ETV verifies the performance of innovative technical solutions to problems that threaten
human health or the environment Managed by EPA's Office of Research and Development, ETV was
created to substantially accelerate the entrance of new environmental technologies into the domestic
and international marketplace. ETV verifies commercial-ready, private sector technologies through
twelve pilot programs.

       There are also programs at the state level oriented towards addressing the barriers to innovative
environmental technologies. A significant effort in this regard has been the formation of the Interstate
Technology & Regulatory Cooperation (ITRC) Working Group of 26 states initiated by the Western
Governors Association to expedite the use of technology  for the characterization and cleanup of
contaminated sites. Most participating states agreed to accept each other's test results if agreed upon
testing protocols are used, which could make it possible to test a technology in one of the slates and
have results accepted in the 25 other states.

       Other state programs include a memorandum of understanding signed by six states, Cafifomia,
Illinois, New Jersey, Massachusetts, New York and Pennsylvania to  establish and implement an
information exchange process and interstate technology reciprocity. Another is the New England
Interstate Regulatory Cooperation Project, an innovative federal/state partnership designed to promote
the acceptance of new environmental technologies in New England and improve the competitiveness
of regionally-based companies for marketing environmental  technologies.

       This survey project intends to further examine stakeholder perceptions of the barriers and
problems identified in the above mentioned reports and programs.

       B.     The lack of venture capital for
              environmental technologies

       Perhaps one of the best ways to examine the health of the environmental technology industry
is to review the rate of financing available for new ideas. The  TIE Committee of NACEPT concluded
in 1990 "that  for at least the past decade the rate  of investment in environmental technology
development and commercialization has lagged."5 Since this statement, the level of venture capital
financing for environmental innovation has gone from bad to worse: from $200 million in 1990 to only
$30 million in 1996, in an era of unprecedented funding for technology in general
              USEPA, PERMITTING AND COMPLIANCE POLICY: BARRIERS TO U.S. ENVIRONMENTAL
TECHNOLOGY INNOVATION, at 4 (EPA 101 /N-91/001, January 1991).

-------
Table 1. Venture Capital Available for Investment in Environmental Technologies ($ millions)
Compared to Industry Size ($ billions)

                                         Environmental             Venture
                    Year                Industry size               Capital

                    1988                $125 billion                 $120 million
                    1989                137                        140
                    1990                149                        200
                    1991                153                        160
                    1992                159                        110
                    1993                164                         75
                    1994                172                         60
                    1995                179                         50
                    1996                181                         30

Source: Environmental Business International (San Diego, CA)

       The fall in venture capital financing reflects a similar trend in other financing vehicles for
environmental technology development, according to data from Environmental Business International.
Between 1993 and 1996, environmental mutual funds have also shrunk, from $240 million to $80
million, and government funding has as well. The budget of the Department of Energy's Office of
Technology Development has declined from $400 million to $290 million, and for the Department of
Defense from $180 to $150 million.

       These data show that financing for environmental technologies is at an all-time low. This crisis
severely constrains  the  development of innovative technologies,  especially by independent small
technology development companies. The lack of venture capital is especially important, which could
be expected to fuel innovation.

       The reasons for the kck of financing for environmental technology rekte to barriers created by
the environmental regulatory system. Interviews with technology financiers reveal two key reasons why
they no longer fund environmental technologies while providing considerable funding for technology
in general First, even if a technology works and is commercially acceptable, it faces additional hurdles
in the permitting process which may create time delays, kck of acceptance or other problems which
prevent commercialization. This "double acceptance" barrier means fewer environmental technologies
gain acceptance, and so fewer can become commercialized and profitable.

       The second reason concerns market size. Under our federal system, the kck of a national permit
approval process means that the environmental market is fractioned into 50 state markets and hundreds
of local ones, each one representing a permitting jurisdiction. Approval in one state or jurisdiction is not
a guarantee of approval in another, creating a balkanized market which creates a formidable barrier to
entry. These two kinds of barriers to innovative environmental technologies help to explain why private
capital has virtually left the environmental field, as shown in the table above.

-------
3.     SURVEY PROFILES

       The following profiles present summary information by stakeholder group, and emphasize me
responses in which each group expressed particularly strong views.

       A.     Regulators

       Experience:

              •     regulators interviewed were heads of air, water and waste permitting divisions
                    at state environmental agencies;

              •     over 60 % have more than 10 years experience in environmental field and most
                    have considered innovative environmental technologies several times;

              •     74 % of regulators responded that their offices are more burdened than they
                    were two years ago.

       Barriers:

              •     52% have encountered problems moving forward with innovative technologies;

              •     most view the lack of credible information on technology alternatives as the
                    major barrier to innovative technologies.

       Regulatory barriers:

              •     most view the regulatory system as a minor barrier to technology innovation
                    and see the kck of incentives to exceed minimum compliance as a major
                    regulatory problem; regulators consistently pkce lesser emphasis on barriers
                    created by the permitting system than do users or vendors;

              •     only 9 % feel it is very likely that companies decide  not to pursue promising
                    innovative  technology  because  of the uncertainty of its  complying with
                    environmental regulations or permitting;

              •     most  emphasize government  sponsored  technology verification  and
                    demonstrations to surmount regulatory barriers;

-------
              most perceive federal regulations and federal statutes as the more important
              sources of barriers, when asked to choose between federal and state laws,
              regulations, and permitting;

              almost half estimate business could reduce compliance costs by 25 % or more
              if there were no regulatory barriers to innovative technology.
Other barriers:
Information:
              regulators perceive many non-regulatory barriers to be important, and pkce
              extremely high value on  need for credible data and information  about a
              technology: 75 % of regulators identify the kck of credible data as a major
              concern, and 62 % perceived the kck of information on the avaikbility of
              technology as a major barrier;

              over half believe it is harder for innovative technologies to obtain financing, and
              less than 1 % think it is easier.
       •      reguktors receive information about alterative technologies from a variety of
              sources, with the greatest emphasis on government, universities and trade
              association programs.

B.     Users

Experience:

       •      users  interviewed  are  personnel with  responsibility for  environmental
              compliance at regukted facilities;

       •      over 70 % have more than 5 years experience in the environmental field, and
              80 % can name innovative technologies which could potentially be applied to
              their operations;

       •      a third of user companies had more than 400 employees at the facility and
              14,000 in the company; two thirds believe their company is stronger man it was
              three years ago.

Barriers:

       •      53 % encounter problems moving forward with innovative technologies;

       •      most view kck of finance, the permit system and the kck of information on
              technology alternatives as major overall barriers, and de-emphasize business
              practices and rekted barriers;

-------
              users feel slightly stronger than other groups that using innovative technologies
              will lead to both economic and environmental benefits.
Regulatory barriers:
              users perceive many major regulatory barriers, and give greatest emphasis to the
              uncertainty and excessive  length for  permit approval,  permit -writers'
              inexperience, and kck of time to test and implement new technologies;

              70 % believe that reducing dekys in the permitting system would be "very
              helpful" in promoting the use of innovative technologies;

              25 % feel it is  very likely that companies decide not to pursue promising
              innovative  technologies because  of the uncertainty  of complying with
              environmental regulations or permitting;

              When asked to choose between federal and state kws,  regulations  and
              permitting, most perceive state permitting as well as federal reguktions and
              statutes as the more important sources of barriers;

              over half estimate business could reduce compliance costs by 25 % or more if
              there were no reguktory barriers to innovation.
Other barriers:
Information:
              many perceive non-reguktory barriers as important: the kck of staff time to
              assess technologies, the kck of finance, the kck of economic benefit and the
              kck of data were considered by most users as major sources of barriers to
              innovative technologies;

              42 % believe it is harder to obtain financing for innovative technologies than
              standard ones, compared to 3 % who find it easier.
              users receive information about alterative technologies  from a variety of
              sources, with the greatest emphasis on trade association programs, contractors
              and other industry sources.

              two  thirds identify independent vendors as  an important source of the
              environmental technologies that their firm uses, followed by one-half who rely
              on their own company's research.

-------
C.     Vendors

Experience:

       •      vendors are senior personnel in companies which sell, lease or recommend
              environmental technologies;

       •      over 60 % have more than 10 years experience in environmental field and most
              have considered innovative technologies more than 4 times;

       •      most vendor companies have fewer than 125 people working at the facility and
              less than 3,000 in the entire company.

Barriers:

       •      over 70 % encounter problems moving forward with innovative technologies;

       •      many perceive the kck of financial resources, the permitting system  and
              business practices all as major overall barriers.

       •      many feel strongly that using innovative technologies will lead to both economic
              and environmental benefits.

Regulatory Barriers:

       •      vendors perceive many regulatory barriers, giving highest priority to the lack of
              incentives to go beyond minimal compliance, permit writers' inexperience, and
              the kck of acceptance of innovative technologies within the permitting process;

       •      41 % believe firms very often do not pursue promising innovative technology
              because of the uncertainty of its complying with environmental reguktions or
              permitting;

       •      When  asked to choose  between federal and state kws,  reguktors  and
              permitting, most perceive state permitting as well as federal  reguktions and
              statutes as the more important sources of reguktory barriers;

       •      vendors emphasize more consistent enforcement, reducing dekys in permitting
              and a  change from technology-based to overall performance standards as
              changes that would most benefit innovative technologies;

       •      over half estimate business could reduce complknce costs by 25 % or more if
              there were no reguktory barriers to innovation.

-------
       Other barriers:
                     vendors perceive many non-regulatory barriers as major, and most feel mat a
                     lack of economic reward for innovation, a lack of credible data on a technology
                     and a kck of  financing are  all major sources of barriers to innovative
                     technologies;

                     47 % believe it is harder to obtain financing for innovative technologies
                     standard ones, and 2 % think it easier.
       Research:
              •      almost half are spending more on research and development than they did three
                     years ago, compared to 17 % spending less; a majority (72 %) conduct R&D
                     primarily though their own staff.

4.     SURVEY RESULTS

       This part describes the actual results of the survey questions.  It begins with background
questions, and then addresses barriers to innovation created by the regulatory system, followed by
financial and other barriers internal to business firms.  Finally, it addresses information sources and
other issues.

       A.     Experience

              1.      Experience in Environmental Compliance

       Most people interviewed had significant experience in the environmental compliance field.
Regulators interviewed were chiefs or senior personnel in the air, water and waste divisions at state
environmental agencies. Users interviewed were personnel with responsibility for environmental
compliance at facilities holding one or more "major" air, water, or hazardous waste permits. Vendors
were  senior representatives in companies which develop, sell, or recommend environmental
technologies. The great majority in each group had over five years' experience, and over 60 % of
regulators and vendors had more than 10 years' experience.

              2.      Experience with Innovative Environmental Technologies

       Regulators, users, and vendors were asked about their personal experience in considering
innovative environmental technologies in the past five years. All three groups reported a significant
amount of exposure to the issue.  Over 73 percent of respondents in each group  reported having
considered innovative environmental technologies at least once, and most had considered innovative
environmental technologies twice or more. Environmental technology vendors repotted the most
frequent consideration of innovative technologies, with the majority (57 %) having considered
recommending, selling, or leasing innovative environmental technologies four or more times in the past
five years. The respondents having considered innovative environmental technologies at least once went
on to complete the survey.

-------
Table 2. How many years have you worked in permitting/environmental compliance/your field?
          Regulators                        users
                                     32.3%
                                                                         Vendors
                                                  29.1%
                                         20.0%                                    33.6%
  | SVaanorLui      6 to 10 Yean
  f 11 to 19 Yean    X  20 Years or More

       B.     Firm characteristics

       Although small, medium and large firms were interviewed in both user and vendor categories,
user companies were considerably larger than vendor companies. A third of user companies had more
than 400 employees at the  facility and 14,000 employed in die company, whereas most vendor
companies had fewer than 125 people working at the facility and less than 3,000 in the entire company.
User companies surveyed were larger than vendor companies surveyed in part because efforts were
made to survey the more regulated, and thus larger, facilities. Also, about two thirds of users and one
half of vendors replied their facility has a parent company. Finally, about two thirds of both vendors
and users believed that, in terms of competitiveness and financial strength, their company is stronger
than it was three years ago. Only about 10 % of respondents felt their company was weaker.

       C.     Benefits of using innovative environmental
              technologies

       Significant majorities of all three groups agreed that diere are a variety of benefits in using
innovative technologies.  Reduced pollution  releases,  lowered compliance  costs and  improved
production efficiency are all viewed as important  by roughly 80 % of all groups.  Fewer permitting
problems was viewed as a benefit by slightly fewer respondents.

       These responses may reflect the actual permitting situation faced by environmental technologies
today. Innovative technologies must generally meet or exceed the minimum thresholds established
under rate-based end-of-pipe regulatory standards. Business drivers therefore only exist for innovations
which both meet and exceed the standards and cost less. Our regulatory system provides few incentives
to technologies which may fail to meet an end-of-pipe standard by a slight amount but cost much less,
those which exceed the standard but cost more, or those which reduce overall pollution and meet the
standard, but may cost more. Indeed, the responses in  Table 10 show significant cost savings are
available if the barriers to innovative technologies could  be reduced. These responses therefore may
emphasize current benefits of technology innovation, instead of potential benefits, especially cost
reductions, under a regulatory system which focuses more on overall performance than end-of-pipe
results.

                                           10

-------
Table 3.  Responses indicating significant  benefits  of using innovative environmental
technologies

Reduced pollution releases:
           Regulators
       82.9%
                       6.7%

                      10.5%
     ffl  Yos    D No     B DK/R«f


Lowered compliance costs:
Users
                                      91.4%
        4.6%
Vendors
                                                                        843*.
          4.0%


         11.2%
            Regulators
        78.1%
                        8.6%
                     13.3%
         YM     J  No
                         DK/Ref
  Users
                                         84.6%
                                   Vendors
                                                                            81.6%
                                             S.JS

                                           8-5%
Improved production efficiency:
            Regulators
         82.9%
                        12.4%

                      4.8%


         YM    D No    • DK/Rsf
  Users
                                         79.5%
                                                        6.8%
         13.6%
                                                                                  Vendors
                                                                              rr.es
                                             11

-------
 Fewer problems complying with environmental permits:
                                              Users                         Vendors

       70.5%   	                          74.5%
Regulators
                                                                  61.6%
                                                                                      10.4%
                                                                                28.0%

                     DK/Rof
       D.     Frequency and Types of Barriers Encountered by
              Innovative Environmental Technologies

       Of those who have considered innovative environmental technologies, most have encountered
problems in moving forward with them. Vendors encountered the most problems, with over 70 %
encountering  barriers.  This, coupled with the results showing that vendors more often consider
innovative technologies, may imply that many innovative technologies never make it past the vendors
to the users. Vendors may consider the potential barriers  a technology may face and screen out
technology innovations.

       When asked about the importance of different types of barriers, there was general agreement
that all those listed (regulatory or permitting system, kck  of  credible information on technology
alternatives, kck of financial resources, and business practices and related barriers to innovation) have
some importance. However, there were differences between the groups as to which barrier they regard
as the most important.

       While regulators believed that a kck of credible information on technology alternatives is the
most significant barrier, vendors and users  gave higher priority to the kck of financial resources and
barriers created by the reguktory system. The greater need by reguktors for data on the performance
of innovative technologies confirms the "double  acceptance  barrier"  faced  by environmental
technologies. They must not only surmount the normal business and economic barriers to approval, but,
unlike other technologies, also get reguktory approval. Since reguktors appear to have greater needs
for data than business representatives, it appears that some innovative technologies which would be
approved by business may not be by reguktors.

       Perhaps predictably, each group viewed barriers within their own sphere as causing the fewest
problems. Few users view their own business practices as a major barrier, nor did many reguktors view
the reguktory process as a major barrier, though both groups did view these problems as minor barriers.
Vendors also pkced least importance on the need for credible information on technology alternatives,
as perhaps they feel that they adequately develop and prove innovative technology alternatives.
                                            12

-------
 Table 4. Responses identifying major sources of barriers

 Lack of financial resources
         Regulators
                  34.3%
Users
    43.6%
     35.2%
                                              37.7%
                                                              09%
                                                             177%
          Major     !  Minor
          Not Imp.  £  DK/R«f
 Lack of credible information on technology alternatives
          Regulators
           54.3%
                      1.9%
                      7.6%
          36.2%
          Mijor   ^j Minor
          Not Imp.  fyj DK/Ref
 Regulatory or permitting system
    Regulators
54.3%
  x—^^ 25.7%


(     '^^E 2.9%

  \	^^17.1%
    Mijor    fj  Minor
    Not Imp,   Q  DIORtf
                                                 Users
                                              41.4%
                                                           0.9%
                                                             25.0%
                                                      Users
                                                           38.6%
           0.9%

           11.8%
                                                48.6%
                                                                                   Vendors
                                                                                    38.0%
                                                                                                  :.>%

                                                                                                 •3_«
                                                                                        Vendors
                                                                                               13.SS

                                                                                 44.0%
                                                                                                 :: .-s
                                                                                     Vendors
                                                                                    384N
                                                 13

-------
Business practices and related barriers to innovation
        Regulators

                 28.6%
    41.9%
                   10.5%
               19.1%

         Major   D Minor
         Not imp  Q DK/R«f
Users
                                       58.1%
                                                                         44.0%
      24.6%
       E.     Regulatory Barriers

              1.      Views on importance of specific
                     regulatory barriers

       In this question the stakeholder groups were asked their opinion of a list of potential barriers
drawn from previous reports on the subject of barriers to environmental technology innovation, such
as those by the TIE committee of NACEPT. The strongly affirmative nature of the responses indicate
that the barriers these reports identified: risk aversion, the lack of credible data, limited regulatory
flexibility, added delays and uncertainty and the kck of reward for doing better -- are genuine.

       Responses are shown in the following table and are strongly affirmatory to all the identified
barriers in each of the stakeholder group, establishing a broad consensus on the barriers identified in
previous studies. Over two-thirds of each group responded that each listed source of regulatory barriers
is at least a minor barrier to environmental technology innovation, and with few exceptions at least a
third of each group regard each barrier as major.

       The highest number of both regulators and vendors view the major regulatory barrier as the lack
of incentive to exceed minimum compliance, whereas users see it as the uncertainty and excessive length
for permit approval and permit writers' inexperience. Vendors also view the kck of acceptance of new
technologies as a major problem.

       As in the previous question, each stakeholder group placed lesser emphasis on the barriers that
derive from its own actions: regulators pkce less emphasis on barriers within the permitting system than
do users or vendors, users pkce least emphasis on the kck of incentive to exceed minimum compliance,
and vendors least emphasis on the need to test and implement their own technologies. There remains
however significant agreement on the significance of these barriers, many inherent in the way rate-base
systems operate.
                                            14

-------
Table 5.  Responses indicating major regulatory barriers

                                              Regulators          Users        Vendois

             Lack of incentive to
             exceed min. compliance            57%                36%         62%

             Uncertainty, excessive
             length for permit approval          38%                59%         40%
'0
             Permit writers inexperience          31%                53%         48%

             Too little time for
             testing and implementing           31%                49%         26%

             Lack of new technology
             acceptance                       18%                29%         43%
After being asked about specific barriers, respondent were asked whether they could think of other
barriers to innovative technologies. Although the majority of each group could not, some from each
stakeholder group suggested other barriers. The leading responses included 6 % of regulators who
indicated that other barriers included either regulation specific problems or kck of data, and 5 % of
users and 10 % of vendors who responded that regulators are uncooperative and are, therefore, a
barrier.

             2.     Views on federal or state origin of
                    regulatory barriers
Table 6. Identification of federal or state statutes, regulation or permits as source of major
barriers.

                                              Regulators   Users       Vendors

             Federal regulations               37%         41%         39%
             Federal statutes                  29%         33%         34%
             State permits                     10%         40%         32%
             Federal permits                  12%         31%         30%
             State regulations                 12%         31%         28%
             State statutes                     6%          28%         18%
                                          15

-------
       A significant majority of all groups felt that each of the six components are a source of at least
minor barriers to innovative environmental technologies. There was also consensus as to the chief
source of barriers, as everyone agreed that federal regulations create the most significant barriers, and
all groups also felt that federal statutes also create important barriers.

       The difference between the stakeholder groups is however notable when it comes  to state
permits,  which are considered a  major barrier by  many users and vendors, but only by  10% of
regulators. The lack of emphasis on state permits may be due in part to the nature of the regulators
interviewed, all state permit officials. In this regard, the responses of the users and vendors may be more
impartial, and indicate that state permitting creates equivalent barriers as federal statutes and regulations.
This would make sense, as federal regulatory requirements are traditionally carried out by state permit
authorities.

       The chief difference among the groups is that while regulators placed equivalent priority on
federal regulations and statutes as a major source of barriers, less than 12% identified the other
components as the source of major problems. Users and vendors on the other hand perceive that all
the components create barriers, with roughly a third stating that they create major barriers, and 80% that
they create at least a minor barrier. Their  response is slightly weaker for federal permits and state
statutes.

              3.     Barriers caused by regulatory systems
                     for different media

Table 7. Regulatory systems by media which are likely to impose a barrier to using innovative
technology

Solid or hazardous waste.
         Regulators
          41.0%
                                            Users
     15.2%
No< Ukely
VafyL*a(y
Vendors
     22.4%
                                           33.6%
                      7.6%
                  36.2%
                  Somewhat Ukely
                  DK/NA
                                                        20.9%
                                                         7.3%
                                                                         18.4%
                                                                                         12.0S
                                               38.2%
                                                                                   47.2%
                                             16

-------
Air:
             Regulators
                                                  Users
                                                                                  Vendors
                      25.7%
                                            45.0%
        No
-------
              4.     How often do companies not pursue promising innovative technology
                    because of the uncertainty of its complying with the environmental
                    regulations or permitting

Table 8. Responses indicating how often companies do not pursue innovative technology
because of uncertainties with environmental regulations or permitting
        Regulators                          Users                           Vendors

                                                                             	40.8%
                                            ~~~^^^ 24.5%

                   8-8*                41.8% /      B


                                            fi&S 6.8%

       29.5%   -   6.7%                      \^B^5.9%

                                               20 9%
    VwyOftan     ] Sometimes
    NotVaiyCman   y New
    DK/Ref
       Responses among groups varied dramatically when asked how often companies decide not to
pursue a promising  innovative technology because of the  uncertainty  of its complying  with
environmental regulations or permitting. Forty percent of vendors responded very often, compared to
25 % of users and only 9 % of regulators.

       One explanation for this difference is diat users have the most accurate assessment, and that
vendors exaggerate this problem while regulators underestimate it. Another is diat possibly each group
may act to screen the technologies for die other groups.  Vendors are the first to consider various
innovative technologies for development, and may be expected to have the highest frequency of
dismissing them for compliance uncertainty. Users are die next to review die technologies, and
regulators the last, and therefore may have correspondingly lower rejection rates. This would indicate
diat users and especially regulators are not aware of die number of potential innovative technologies
diat are being rejected due to the barriers involved, and are never presented for their review.

              5.      Changes in the regulatory system that would be helpful in promoting the
                     use of innovative technologies

       The stakeholder groups were asked to evaluate die changes in die regulatory system which have
been identified in previous literature, such as the TIE committee reports, as important to promote the
use of innovative environmental technologies.

       The response was overwhelmingly affirmative, with at least a third of respondents finding each
change to be very helpful, and generally over 75 % of each  group finding the changes to be  at least
somewhat helpful The only weaker responses came from regulators, about a third of whom thought
                                            18

-------
that reducing delays in the permitting systems, multimedia permitting, and more consistent enforcement
were "not at all" helpful.

Table 9. Responses indicating that changes would be very helpful in promoting the use of
innovative technologies

Reducing delays in permitting:
       Regulators

                2».5%
   33.3%
                                      Users
                                       69.5%
      V»ty     n Sonwwhat
      Not A] All   / DK/Ref
Vendors
53.6%
                                          20.9%
                                                                      34.4%
Government-sponsored technology verification and demonstrations:
        Regulators
             49.5%
        41.0%

       Vary     Q Somowhal
       NotAJAII   2 DK/Ro(
                                        Users
                                  36.8%
                                                  41.4%
                                                       4.1%
                                                17.7%
                                                                     34.4%
                                                                                         3.2%
                                                                                  18.4%
More consistent enforcement
       Regulators
               35.2%
  31.4%
V«cy
NotAIAI
               Sonwwhat
               DKJRtl
                                        43.6%
                                         Users
                                                    33.6%
                                                        3.6%
                                                      19.1%

-------
 Change from technology-based to overall performance standards:
           Regulators
                   MM
                                     Users
                                         45.9%
Vny
NetAlAI
                     12.4%
                   Sommrfnt
                   OK/Rcf
                                               5.9%

                                              6.8%
                                          41.4%
Vendors
    49.6%
                                                                             36.0%
Special treatment for innovative technologies:
           Regulators
                    30.5%
                     17.1%
                                             40.9%
          V«ry
          NdAtAI
                                                                         Vendors
                                                                              46.4%
                                                                              36.0%
                    OKfftef
Instituting bubbles or caps for multiple emission sources:
              Regulators
         39.0%
                        209%
               12.4%
            NolAlAI   rj OKJM
                                                 Users
                                                      40.0%
                                           36.8%
                                                          11.4%
                                                       11.8%
                                                                        Vendors
                                                                             38.0%
                                                                            11.2%
                                                                                          19.2%
                                                                                        33.6%
                                                 20

-------
Multimedia permitting
           Regulators
Users
Vendors
                                               41.4%
                                     34.5%
                                                                 360%
                                                   95%
                                                                               176%
          V«cy     ] Scmwtul
          Not AJ All  /" DK/R«f
                                                 14.5%
                                                                       15.2%
       Users had a hard time finding anything they didn't like, with an emphatic 70 % believing that
reducing delays in die permitting system would be "very helpful", the highest response to any question.
Many users, generally over 40 %, also perceived each of the other changes to be "very helpful".

       The sharp differences in opinion between regulators and users is especially evident in these
questions. Views on delays caused by the permitting system are especially notable: while two thirds of
users view reducing delays in the permitting system as very important to their use  of innovative
technologies, two thirds of regulators saw diis as only somewhat or not at all important

       Vendors likewise voted strongly for all the suggested changes, but showed greater preferences
for certain changes. Vendors gave greatest importance to more consistent enforcement, apparendy
linking this to demand for their products. Vendors also gave strong endorsement to reducing delays in
permitting and a change from technology-based to overall performance standards.

       Regulators consistendy pkced lesser emphasis on changes to die permitting system dian users
or vendors. The average response of regulators to die six changes regarding the permitting system was
an average of 15% lower dian die odier groups, and 30 % in the case of reducing delays, suggesting diat
they do not perceive die permitting system as great a problem as do vendors or users. Regulators pkced
greatest emphasis instead on government sponsored technology verification and demos, reinforcing
earlier findings about reguktors1 perceived need for better data.

              6.      Suggested changes to  the  regulatory ot permitting system to further
                     promote the use of innovative technologies

       When asked whedier diey could suggest changes  to die  reguktory or permitting system diat
would promote die use of innovative technologies, about 60 %  of each group made suggestions.
Although  a wide variety of changes were suggested, reguktors most commonly answered diat more
flexibility  (26 %)  and greater incentives (13 %) were needed.  Users most frequendy chose better
communications between die regukted and regulators (23 %), more flexibility (17 %), and more
knowledgeable reguktors (14 %) as changes needed to promote innovative technology. Vendors most
frequently chose increased incentives  (17 %), more knowledgeable reguktors (12 %) and government
technology verification programs (12  %).
                                            21

-------
              7.      Cost savings from eliminating regulatory barriers

       Respondents were asked what percentage of current compliance costs they thought could be
saved if there were no regulatory or permitting barriers to implementing innovative environmental
technologies. About half of all groups agreed such savings would be substantial, on the order of 25 %
or more. Users and vendors estimated such savings as only slightly higher than regulators.
Table 10. Perceived cost savings if barriers to innovation removed

Regulators
Users
Vendors
None
9.52%
10.24%
3.90%
10% or less
23.81%
17.47%
12.99%
10-23%
19.05%
18.07%
27.27%
24-30%
33.33%
28.92%
27.27%
more than
33%
14.29%
25.30%
28.57%
       F.     Financial and Internal Barriers

              1     Perceived importance of specified barriers which are unrelated to the
                    regulatory system

       The stakeholder groups were asked to evaluate the importance of barriers unrelated to regulatory
barriers. This question asked about barriers identified in past literature, including financial barriers and
those internal to the company.

       Again, the response was overwhelmingly affirmative, with almost 50 % of respondents believing
most of these barriers are major, and over 85 % believing them at least minor. To a greater degree than
for the questions concerning regulatory barriers, responses  were also fairly consistent between the
stakeholder groups.
                                           22

-------
Table 11. Responses indicating major non-regulatory barriers.
                             REGULATORS
                     USERS
                   VENDORS
 Lack of credible data on a
 technology's cost or
 performance
75
50
62
 Financing for innovative
 technologies not being
 available
54
54
61
 Lack of financial benefits
 or rewards for using an
 innovative technology
47
51
65
 Company staff not having
 enough time to make an
 assessment of technical
 options
44
55
54
 Lack of information on
 the availability of
 innovative
 technologies
62
33
49
 Large investments in
 technologies in place
 prevent the selection of
 new technologies
                                   56
                        41
                        42
 Company staff preferring
 end-of-pipe solutions to
 environmental
 requirements
35
20
32
       Responses from all stakeholder groups were uniformly strong that virtually all the specified
barriers are important. Leading the list are: the lack of credible data on a technology's cost or
performance; the kck of financing for innovative technologies; and the lack of financial benefits or
rewards for using an innovative technology. However, these are closely followed by: company staff not
having enough time to make an assessment of technical options; kck of information on the availability
of innovative technologies; and large investments in technologies in pkce prevent the selection of new
technologies.
                                               23

-------
       An interesting finding is that the weakest response in all groups was in regard to the proposition
 that company staff prefer end-of-pipe solutions to environmental requirements, which was viewed as
 only a minor barrier by all groups. This may be a testament to how much businesses' environmental
 compliance systems have moved away from an end-of-pipe focus, which was considered a major
 problem in prior decades.

       Another interesting rinding is the emphasis on lack of financial reward for using an innovative
 technology, given the significant cost savings from innovation that stakeholders identified in the
 previous question. This may indicate that while there is little financial reward to innovation in our
 current regulatory system, there is considerable potential for cost savings if regulatory barriers could be
 removed.

       A notable difference among stakeholder groups is the extremely high value pkced by regulators
 on credible data and information about a technology. A very high 75 % of regulators identify kck of
 credible data as a major concern, the highest response for any barrier, and 62 % perceived kck of
 information on the technology avaikbility as a major barrier. For both, only 1 % of reguktors thought
 these were not important, overall the strongest response for any question.  For other barriers, the
 response is fairly uniform, although vendors believe somewhat more strongly than the others that the
 kck of financing and kck of financial benefits for using an innovative technology is a major barrier.

       An interesting result here is that more reguktors than users or vendors perceive that large
 investments in technologies in pkce may prevent the selection of new technologies, even though the
 ktter might be expected to have better information. One explanation may be that reguktors are being
 told this by the industry representatives to a greater degree than it is true.

       When asked, only a minority of each group could think of other non-reguktory barriers in
 addition to those listed.  Of the 20 % or so that could, the fear of fines and the cost to  repkce
 technology were the leading overall responses, with vendors also citing a kck of money as a barrier.

              2.      Difficulty of obtaining financing for innovative environmental technology
                     compared to standard environmental technologies

Table 12. Percentage who feel it is  more  difficult to  obtain  financing  for  innovative
 environmental technology compared to standard environmental technology

              Regulators    56%          Users  42%         Vendors     47%

       Responses to this question indicate financing is perceived as a major barrier to innovative
 technologies by all groups. About 50 % perceive it is more difficult to obtain financing for innovative
 technologies, and the great majority of all groups feel that it is at least as difficult to obtain financing.
Less than five percent of each groups think such financing is easier to obtain.
                                           24

-------
       G.     Information and sources for environmental technology
              (regulators and/or users only)

              1.     Sources of environmental technologies

       When users were asked where the environmental technologies that their firm uses come from,
two thirds identified independent vendors, indicating the importance of this community to users
regarding environmental compliance issues. The one-half of companies that rely on their own research
indicates the importance of this source and may indicate an emphasis on internal process changes as a
compliance strategy. When asked to think of other sources, consultants and trade associations were
mentioned.

Table 13. Sources of environmental technologies used by firms.

              Independent technology vendors            67%

              Contractors to your company               64%

              Your company's own research and
              development                             55%


              2.     Information resources

       When asked about specific information sources, most users and regulators found them at least
somewhat useful,  often by large majorities. The only exceptions were small businesses assistance
programs, which were found by most users and regulators not to be useful, due to their specialized
nature, and customers, which were found by most users and a quarter of the regulators not to be useful.

       As to the most useful resources, both groups pkce highest importance on industry and trade
association publications and conferences as an information source. Regulators paced next greatest
importance on government technical assistance offices and university and extension programs, although
only one-quarter of the users rated this as very useful and one quarter as not at all useful Users instead
pkce greater reliance on industry: half of users found outside consultants or contracts very useful, and
a third regard other companies, their own research, or vendors and suppliers as such. When asked to
think of other resources for information or technical assistance, a large number of those responding
mentioned the Internet
                                           25

-------
Tabk 14. Information resources considered "very" useful

                                                      Users        Regulators

       Industry trade associations,
       publications, or conferences                       63%         52%

       Government technical
       assistance office, university,
       or extensions programs                           24%         58%

       Your facility's employees
       or own research                                 38%         43%

       Outside consultants or contractors                 48%         24%

       Other companies                                39%         33%

       Vendors and suppliers                            34%         27%

       Customers                                      9%          25%

       Small business
       assistance program                               6%          10%


       The fact that both businesses and regulators are accessing a wide range of information sources
should be taken into account in framing technology policy, as well as in considering the responses of
regulators in earlier questions that kck of information is a major barrier.

       H.    Miscellaneous

             L     Annual compliance costs

       When asked to estimate their facility's annual environmental compliance costs users gave a wide
range of answers, presumably according to the size of the operation. Approximately an equal number,
or one -fourth of users answered their compliance costs were in the following categories: $75,000 or
less; $76,000 to 350,000; $360,000 to $2 million; and $2 million or over.


             2.      Vendor company practices in research and development

       Almost 50 % of vendors are spending more on research and development over the past three
years, compared to 17 % who report spending has decreased. When asked to identify the primary
                                           26

-------
source of their company's research and development, 72 % identified their own staff, followed by the
following sources:

Table 15. Primary sources of vendor research and development

              Company staff                    71.90%
              Other companies                  11.57
              Parent company                    4.13
              Universities                        3.31
              Government research               3.31
              Other                             4.96
              3.      Vendor Liability concerns

       More than 67 % of vendors responded that liability concerns have not discouraged vendors
from developing, selling, or licensing an innovative technology in favor of an older more established
approach, while about 25  % responded that such concerns are barriers. When asked about specific
liability concerns, vendors rated each more as minor barriers than major ones.


Table 16. Liability concerns identified as major by vendors

       39%   The fear of being sued by users if a technology fails

       34%   The cost of product liability insurance

       24%   Time demands in dealing with liability issues

       19%   Difficulty in developing technologies jointly through partnerships
                                           27

-------
                                     APPENDIX A
                            RESEARCH METHODOLOGY
A.L SUMMARY

       This study was intended to identify barriers to innovative environmental technologies, drawing
heavily on potential barriers identified in past research. The results also reveal differences in perceptions
of barriers between the various stakeholder groups. The survey was administered to three stakeholder
groups: state environmental agencies, regulated facilities, and firms selling, leasing or recommending
environmental technologies. Abt Associates administered the survey, and approximately 460 interviews
were completed. Abt Associates then cleaned, weighted and developed confidence intervals for the data,
which are presented in the above graphs.

A.2. SAMPLE SELECTION

       Initially, five stakeholder  groups were identified for surveying: 1) individuals who set permit
requirements  and approve permit  applications in state  environmental agencies, 2) environmental
managers in regulated facilities, 3) vendors of environmental technologies, 4) individuals and CEOs of
companies providing financing for environmental technologies, and 5) individuals from environmental
organizations who are knowledgeable about innovative environmental technology issues.

       Ultimately, the survey was administered to only the first three stakeholder groups listed above.
Although a list of environmental technology financiers who have operated in the U.S. was obtained
from a private firm that compiles databases of individuals and companies in the environmental field,
the list was abandoned early in the survey implementation period after it was determined that the
majority of individuals contacted no longer financed environmental technologies, were out of business
or not available. The kck of identifiable financiers investing in environmental technology is itself a
significant finding, and reinforces the conclusion about the kck of available finance presented in part
2B above.  A comprehensive list of individuals in environmental organizations with knowledge of
innovative technologies was not obtainable. For qualitative research, the questionnaire was administered
to several individuals identified by ELI, however, since this sample has little statistical validity, the results
are not presented.

Regulators

       The names and  contact information for reguktors involved with approving innovative
environmental technologies was compiled from lists provided by the Association of State and Territorial
Solid Waste Management  Officials (ASTSWMO),  the Assocktion of State  and Interstate Water
Pollution Control Administrators (ASIWPCA), and  the Assocktion of Local Air Pollution Control
Officials (ALAPCO).  The list of state reguktors consisted of one divisional chief or head of permitting
of the air, water, and solid/hazardous waste division from each state environmental agency. Added to
this list were  15 individuals heading up state multimedia permitting programs. This resulted in a
universe (not sample)  of the 165 individuals in each state air, water, or solid/hazardous waste
                                          A-l

-------
regulatory program considered to be the most knowledgeable or experienced in the issues surrounding
state regulatory approval of innovative environmental technologies.

Users Sample

       The sample of regulated facilities (or potential users of environmental technologies) was
generated from the various EPA program office databases.  The names and addresses of facilities
holding one or more "major" air, water, or hazardous waste permits (as defined by each of these media
programs) were obtained using the Agency's Integrated Data for Enforcement Analysis (IDEA) system
and EPA's  Facility Indexing System (FINDS) which links the media databases (e.g. Clean Air Act -
CAA, Clean Water Act - CWA, Resource Recovery and Conservation Act - RCRA) at the facility level,
in addition the D&B database.  The linkages contained in IDEA are based on an address-match
established by EPA's Facility Indexing System (FINDS).

       Over 42,000 facilities were identified as having one or more major permits.  Facilities ranged
from having a single major permit to having one or more permits in all three media databases. The table
below shows the seven possible combinations of permits held by a facility (column A). Because major
permits are defined differendy within each program office permit program,  there were far more
facilities with major air permits than major water or hazardous waste permits (column B). Most of the
"major" permit universe is permitted only for air permits.
A
Stratum
Air, Water and RCRA
Air and Water Only
Air and RCRA Only
Water and RCRA Only
Air Only
Water Only
RCRA Only
Total
B
Number of Facilities
in the Population
523
1,099
1,335
168
30,728
4,546
3,992
42,391
C
Equal
Allocation for
Each Stratum
188
188
188
188
188
188
187
1,315
D
Allocated in
Direct
Proportion
16
34
41
5
953
142
124
1,315
E
Allocated in proportion
to the 2/3 power of
stratum population
46
76
86
22
707
197
181
U15
       A number of different sample allocations were examined. The allocations presented above have
been adjusted appropriately to reflect the total of 1,315 technology user sample records actually used
in the survey. (In the course of administering this survey, much of this sample was determined to be out
of scope of the study or could not be reached.)

       Because the stratum of facilities with only a major air permit was almost seven times higher than
the next largest stratum (and 180 times larger than the smallest stratum), a sample made up of fiaaKdes
allocated from each stratum based on the direct proportion of the stratum size (column D) would result
                                           A-2

-------
in a surrey of mostly facilities with only ait permits and little information would be gained from those
facilities holding water and RCRA permits. On the other hand, allocating an equal number of facilities
from each of the seven combinations would result in a sample that was not representative of the
regulatory burden on facilities (column C).

       It was decided that a compromise allocation between the two extremes described above would
better represent the more rigorous air permit requirements while providing input on barriers from
facilities with water and RCRA permits. As shown in the table above, two alternative allocations were
examined known as power allocations. The selected option was to allocate the sample in proportion
to the 2/3 power of the number of facilities in each stratum (column E). The number of facilities in
each of the seven stratums was raised to the 2/3 power and this number of facilities were randomly
pulled from each stratum into a larger list from which the sample was drawn.

Vendors Sample

       A list of individuals in companies that sell, lease, or recommend environmental technologies to
regulated firms was obtained from Environmental Business International, a private firm that compiles
databases of individuals and companies in the environmental field.  According to this firm, the total
population of such vendors in the U.S. is approximately 3,760. A sample of 360 was chosen randomly
from this list.

A.3. PREPARATION OF THE SURVEY INSTRUMENT

       The  survey instrument  was designed to collect as much  information as  possible while
minimising respondent burden in a telephone interview between 10 and 12 minutes in length. The
survey questionnaire was developed with assistance from individuals from state and federal government
and non-government organizations. Prior work on the issue such as a 1991  survey of hazardous waste
generators conducted by the Wisconsin Department of Natural Resources and the U.S. EPA's Permits
Improvement Team Task Force Recommendations were also reviewed.

       The survey did not solicit detailed facility information but focused on respondents' recollection
of recent experiences and opinions.  Respondents were promised anonymity;  individual and their
organizations were never identified to EPA staff. They were also provided with a telephone number that
they could call to request a copy of the survey results. Since barriers to technology innovation are often
integral to facility operations, particular efforts were made in the wording and sequencing of questions
to minimize respondent bias assockted with anticipating "correct" answers. Several iterations of the
survey were circulated to individuals within federal and state regulatory agencies, the private sector,
academics, and non-government organizations.

       Screening questions were used to ensure that the respondent was involved in the approval, use,
or marketing of environmental  technologies.  For all three populations surveyed, it was critical to
conduct the interview with individuals who have had some experience with innovative environmental
technologies. After defining environmental technologies and innovative environmental technologies,
a screening question asked if respondents had considered approving, using, recommending or selling
innovative environmental technologies in the past five years.  If not, they were asked why not, and then
die survey was terminated. These respondents were considered to be  out of scope, and were not
counted as completed interviews. The questionnaires used for regulators, technology users, and

                                          A-3

-------
technology vendors differed only slightly in the wording of questions and, in the case of vendors, a
series of questions on information sources was repkced with a series of questions on product liability.

A.4.   PRETEST AND REVISIONS

       A total of nine pretests were administered to technology users, vendors, and financiers. As a
result of the pretest, the survey was revised to clarify certain parts of the questionnaire and a number
of questions were shortened or eliminated to reduce the time required to participate. Similarly, Ksts of
items used within several lines of questions were shortened by combining items. Finally, a number of
wording and grammar changes were made to reduce the reading comprehension level required.

A.5.   SURVEY ADMINISTRATION

       (a)     Survey protocols

       The telephone survey was administered following well-tested protocols of a national survey
group, with interviewers experienced in administering surveys of establishments. All interviewers were
trained in the specific information needs of the study and were provided background on the types of
facilities they would be contacting. Constant supervision was provided by senior survey research staff.
The survey was recorded on survey questionnaires and records were kept on each attempt to reach a
respondent. Sample of names and telephone numbers  for the users and vendors sample groups were
provided to the interviewers in batches, or replicates. This ensured that all efforts were made to obtain
completed interviews with the sample in the replicate were made before additional sample was released.
A maximum of eight attempts were made at reaching each potential respondent before the sample was
coded as an incomplete.
       (b)    Disposition of Completed Survey

       In total, there were 220 completes for the technology users, 125 completes for the technology
vendors, and 105 completes for the permit writers. Response rates varied considerably between the
sample groups.  The response rate was best for the regulators universe at 76 %. The vendors sample
group also had a good response rate of 52 %. The users group had the lowest response rate at 39 %.
The table below provides the final disposition of all calls.
                                           A-4

-------

TOTAL SAMPLE
Unobtainable, not in scope, terminated
after Question 2, or out of business
Subtotal
Completes
Nonrespondent Subtotal
Users
1,315
744
571
220
(39%)
351
(61%)
Vendors
360
119
241
125
(52%)
116
(48%)
Regulators
165
27
138
105
(76%)
33
(24%)
Detailed Disposition of Unobtainable/Ineligible Sample
No eligible respondent at location
Facility claims to be unregulated or no
longer regulated
No listing for facility in directory
assistance or D&B
Out of business
Military or government facility
Duplicate respondent
Terminated at Question 2 (Respondent
had not considered innovative
technologies in past 5 years)
127
10
387
31
99
8
82
51
0
15
7
0
3
43
0
0
0
0
0
0
27
Detailed Disposition of Nonrespondents
No answer, answering machine, busy,
or requested call back on kst attempt*
Break off
Respondent not available during study
Gatekeeper refusals
Other refusals
112
4
24
18
193
54
0
1
16
45
10
2
0
1
20
* A. maximum of eight attempts were made to reach each respondent.

       The primary reason for the lower response rate in the users sample group is the relatively high
rate of refusals from potential respondents. The high refusal rate in this stakeholder group (211 refusals)
was not unexpected. It is common for managers at industrial facilities to refuse to participate in surveys
at a higher rate than other types of respondents since their duties often take them onto the plant floor
or grounds away from telephones and quiet spaces for answering the questions. Another contributing
factor to the relatively low response rate was that the environmental managers at regulated facilities were
not easily reached. At 112 facilities, potential respondents were unreachable or were not able to take
                                            A-5

-------
part in the survey after attempting to reach them eight times.

       Although it does not affect the overall response rate, it should be noted that a significant portion
of the technology users sample was found to be out of scope of the survey or may no longer be in
business. Most of these (387 of the 1,315 facilities in the sample) were facilities for which telephone
numbers were not found by the commercial telephone number look up service, and for which there
were no listings in the D&B database or in directory assistance. Another important group of ineligible
sample were government and military facilities (99 of the 1,315 facilities). These facilities were not
screened out of the original sample, and the decision to exclude such facilities was mad* after the sample
was obtained.  Government and military facilities, therefore, were screened out of the sample by the
telephone interviewers based on the facility name and  facility descriptions given on the telephone.
These facilities were excluded because the organi7ational structure and non-profit nature of these
facilities would be expected to result in a very different set of issues  driving the use barriers to
innovative environmental technologies than wouldbe faced by for profit industrial facilities. The survey
questionnaire was not developed with these facilities in mind and likely would not have identified many
of the barriers faced by these facilities.

A.6.   POST-SURVEY WEIGHTING

       There is a basic sample selection weight for each establishment in the sample that is considered
a completed call. This weight is derived by taking the ratio of the number of establishments in a stratum
population, divided by the number of establishments selected in the sample. This denominator includes
completes, Nonrespondents, out of business, and so on.  Although the samples were given these
weights to represent the overall populations of each group, these weights would only affect the results
when combining the results of all three sample groups into one large group.  Combining the sample
groups into one large group is not expected to be an effective tool in analyzing the survey results. The
size of the users population (over 42,000) is disproportionate compared to the population of permitting
program chiefs (165) and population of environmental technology vendors (3,760). Therefore, when
grouped together, the results of the users group will obscure the results of the permitters and vendors
groups. Instead, results are presented and analyzed separately for each of the three groups surveyed.

A.7.   POST-SURVEY STATISTICAL TESTING OF
       CORRELATIONS AND RESULTS

       The weighted frequencies (or proportions) presented in the findings section of this report were
calculated for the responses to each question using the SAS statistical software package. Standard errors
of the estimates depend on the sample size and the sample design used for the survey. Standard errors
were not derived for the regulators group because this group was comprised of the most senior person
available in each permitting program. Since the entire population  of such individuals was surveyed,
therefore there is no sampling error. For computing the standard errors for the technology users and
vendors groups, the Survey Data Analysis software (SUDAAN, developed and maintained by Research
Triangle Institute) was used.  Standard errors were then used to calculate the 95 percent confidence
interval for each question. (The 95 percent confidence interval is calculated by multiplying the standard
error by 1.96.) This is the range in which one can be 95 percent confident that the actual results would
be within if the entire population had been surveyed.

       Standard errors were calculated for each possible response to a question (e.g. major, minor, not

                                           A-6

-------
important, and don't know or no answer - DK/NA). The confidence interval for a response becomes
larger as the portion of the sample giving a particular response approaches 50 percent and decreases as
that portion approaches 0 and 100 percent. Only the widest 95 percent confidence intervals for each
question and sample group (users and vendors) are presented in the summary of results in Appendix
B. For each question, the 95 percent confidence interval of other possible responses are the same or
smaller than the presented confidence interval.

       Standard errors and 95 percent confidence intervals were not calculated for those questions in
which respondents provided open-ended answers or estimated quantities.  One example is Question
7, where respondents were asked to name additional ways that the regulatory system hinders  the
consideration of innovative environmental technologies. Since only about 30 percent of respondents
provided additional information, and the open-ended responses were coded into nine different answers,
the number of responses for each possible answer are very small and therefore result in large standard
errors and confidence intervals. Responses to such questions should, therefore, be viewed as qualitative
survey findings.

A.8.   LIMITATIONS TO THE SURVEY

       In interpreting these results, it is important to understand the various limitations inherent in the
design and  execution of the survey.  Because it is not feasible  to survey every single stakeholder,  the
survey was  conducted by means of a sample and is thus subject to the limitations which go along with
such surveys.

       One of the primary goals of this study was  to obtain comparable data from a number of
stakeholder groups. The three groups studied had very different characteristics which required the use
of three different sources of sample. While the vendors and users sample were chosen randomly from
databases as described in Section A.2, the regulators contacted were the most knowledgeable permitting
staff in each state permitting office. Therefore, the results of the regulators survey should not be applied
to the entire population of regulators or permit writers in the U.S.

       Standard sampling errors are also estimated for each question using the Survey Data Analysis
software (SUDAAN) developed and maintained by Research Triangle Institute. From the standard
error, 95 percent confidence interval were calculated and are presented in the summary of results in
Appendix B. The 95 percent confidence interval indicates 95% confidence that the actual response from
the entire population would be contained in the interval obtained by taking the estimated percentage
based on the sample and plus or minus the numbers shown in the table.

       Another limitation of this survey and most surveys that should be considered is the effect of
nonresponse.  A certain percent of the sample in each target group could not be reached during  the
survey period, or  chose not to participate in the survey.  Response rates, and efforts to maximize
response rates, are discussed in detail for each group in above sections. Since it is possible that  the
nonrespondents are in some ways different from the respondents, it is also possible that, if every
individual was available and participated, the  survey results would be significantly  different This
nonresponse bias is impossible to quantify without collecting further data from the Nonrespondents.
                                           A-7

-------
                                 APPENDIX B

   ENVIRONMENTAL TECHNOLOGY BARRIERS SURVEY

                                   RESULTS
WHEN CALL IS ANSWERED, SAY:
Could I please speak with the person in charge of environmental compliance at this facility?

WHEN CONNECTED TO ELIGIBLE RESPONDENT, READ INTRODUCTION

Hello, my name is	.  I'm calling from Abt Associates, a national research company.
We are conducting a confidential survey of environmental permit writers/managers at manufacturing
facilities/vendors of environmental technologies nationwide. (We are interested in learning what things
affect environmental planning and decision-making at your facility and impediments to technological
innovation.] There are no correct answers — we want to record your experiences accurately. Just to
confirm that I'm talking to the right person, are you involved in evaluating the permit applications and
environmental technologies of industrial facilities /planning  for and implementing environmental
compliance decisions, such as permit application and technology evaluations/recommending, selling
or leasing of environmental technologies?

       YES    (CONTINUE)
       NO    (ASK FOR NAME AND PHONE NUMBER OF APPROPRIATE PERSON;
             RECORD AND ASK TO BE TRANSFERRED.  WHEN CONNECTED, READ
             INTRODUCTION.)

The study is sponsored by the Environmental Law Institute and the U.S. Environmental Protection
Agency. Participation is voluntary and your answers will be kept in strictest confidence. Only summary
information of the results will be reported.

When I refer to environmental technologies, I am including monitoring equipment, treatment and
control devices, pollution prevention technologies and even process modifications if they are installed
to improve environmental performance. When I refer to innovative environmental_tcchnok>gics,
I mean any system of pollution prevention or control that has not been demonstrated in practice,
and that could achieve greater environmental protection than traditional technologies or that could
achieve comparable environmental protection, but at a lower cost.

1.      In  the  past five years, how  many times have you yourself considered approving/
       implementing/recommending,   selling,  or leasing  specific  innovative  environmental
       technologies, as I have just defined it?  Would you say...
                                        B-l

-------

Regulators
Users
Vendors
Never
20.45
27.15
25.60
Once
15.91
18.54
7.14
2-3
times
30.30
31.13
10.12
>,=4
times
31.06
21.52
57.14
DK/Ref
2.27
1.66
0.00
             Max 95% c.i.: Users = ± 5.17%; Vendors = ±7.15%


IF ONE OR MORE, SKIP TO Q.3

2.     Why haven't you considered approving/using/sold, leased, or recommended any innovative
      environmental technologies? Is it because there was:

      None proposed/No need for a new technology/No market for a new tech.

Regulators
Users
Vendors
Yes
77.78
51.22
25.58
No/DK/
Ref
22.22
48.78
74.42
                  Max 95% c.i.: Users = ±10.86%; Vendors = ±13.09%

      A problem widi the regulatory or permitting system

Regulators
Users
Vendors
Yes
7.41
16.27
12.20
No/DK/
Ref
92.59
83.72
87.80
                   Max 95% c.L: Users = ±7.11%; Vendors = ±11.09%
                                        B-2

-------
A  lack of credible information on technology alternatives

Regulators
Users
Vendors
Yes
7.41
53.18
26.83
No/DK/
Ref
92.59
44.55
73.17
              Max 95% c.i.: Users = ±9.62%; Vendors = ±12.21%




No suitable technology available to the best of your knowledge

Regulators
Users
Vendors
Yes
3.70
53.18
34.88
No/DK/
Ref
96.30
44.55
65.11
           Max 95% c.i.: Users = ±10.02%; Vendors = ±1431%




A lack of financial resources or time

Regulators
Users
Vendors
Yes
7.41
19.51
25.58
No/DK/
Ref
95.29
80.49
74.42
             Max 95% c.i.: Users = ±8.60%; Vendors = ±13.09%
                                  B-3

-------
Another barrier within your office/the business or company itself
Any other reason?

Regulators
Users
Vendors
Yes
0.00
3.66
6.98
No/DK/
Ref
100.0
96.34
93.02
                  Max 95% c.i.: Users = ±4.08%; Vendors = ±7.64%

Regulators
Users
Vendors
Yes
14.81
6.10
44.19
No/DK/
Ref
85.19
93.90
55.81
                  Max 95% c.i.: Users = ±5.19%; Vendors = ±14.91%
 If yes, what are they

Regulators
Users
Vendors
inn.tech not
scope
0.00
2.44
41.86
business too
small
0.00
1.22
0.00
inn.tech too
expen
0.00
1.22
2.33
DK/NA
14.81
1.22
0.00
                                   TERMINATE
                                        B-4

-------
3.      Can you name any innovative environmental technologies that you considered approving/
       could potentially be applied to your operations (regulators and users only)?
                              (Number of technologies listed)

Regulators
Users
0
23.81
20.91
1
32.38
31.36
2
27.67
19.55
3
9.52
12.27
4
3.81
3.64
5
2.86
4.09
7
0.00
7.73
8
0.95
0.45
4.
5.
In the past five years, have you personally encountered any barriers or difficulties to a
business moving forward with/marketing an innovative technology that you were
considering?

Regulators
Users
Vendors
Yes
52.38
53.18
71.20
No
42.86
44.55
28.80
No/DK/
Ref
4.76
2.27
0.00
             Max 95% c.i.: Users = ± 6.57%; Vendors = ±7.80%

[In terms of your industry in general,]  how would you rate the following types of barriers
to/to facilities using innovative environmental technologies?  Is (READ ITEM) a major
barrier, a minor barrier, or not a barrier at all to your industry?

The regulatory or permitting system

Regulators
Users
Vendors
Major
25.71
38.64
39.20
Minor
54.29
48.64
38.40
Not Imp.
17.14
11.82
21.60
DK/Ref
2.86
0.91
0.80
                   Max 95% c.i.: Users = ± 6.59%; Vendors = ±8.41%
                                          B-5

-------
The lack of credible information on technology alternatives

Regulators
Users
Vendors
Major
54.29
32.73
33.60
Minor
36.19
41.36
44.00
Not Imp.
7.62
25.00
20.00
DK/Ref
1.90
0.91
2.40
              Max 95% c.i.: Users = ± 6.49%; Vendors = ±8.55%




The lack of financial resources

Regulators
Users
Vendors
Major
34.29
43.64
49.60
Minor
35.24
37.73
36.00
Not Imp.
15.24
17.73
13.60
DK/Ref
15.24
0.91
0.80
              Max 95% c.L: Users = ± 6.53%; Vendors = ±8.60%




Business practices and rekted barriers to innovation

Regulators
Users
Vendors
Major
28.57
14.55
36.80
Minor
41.90
58.18
44.00
Not Imp.
19.05
24.55
13.60
DK/Ref
10.48
2.73
5.60
              Max 95% c.i.: Users = ± 6.51%; Vendors = ±8.55%
                                  B-6

-------
Regulatory Barriers

6.     You may feel that the regulatory system impacts your [industry's] ability to considet/marfeet
       an innovative compliance strategy. Some people have suggested the following as possible
       regulatory barriers to innovative environmental technologies. Do you consider (READ
       ITEM) to be a major barrier, a minor barrier, or not a barrier at all to your industry?

Lack of acceptance of new technologies within the permitting or regulatory process

Regulators
Users
Vendors
Major
18.10
29.09
43.20
Minor
56.19
50.00
42.40
Not Imp.
24.76
18.18
13.60
DK/Ref
0.95
2.73
0.80
                   Max 95% c.i.: Users = ± 6.59%; Vendors = ±8.53%

Having too little time to test and implement a new technology before new environmental
requirements go into effect

Regulators
Users
Vendors
Major
31.43
48.64
26.40
Minor
45.71
33.64
40.80
Not Imp.
16.19
15.00
31.20
DK/Ref
6.67
2.73
1.60
                      Max 95% c.i.: Users = ± 6.59%; Vendors = ±8.47%

Permit writers' inexperience or unfamiUarity with the issues

Regulators
Users
Vendors
Major
31.43
52.73
48.00
Minor
60.00
30.91
33.60
Not Imp.
7.62
15.45
12.00
DK/Ref
0.95
0.91
6.40
                     Max 95% c.i.: Users = ± 6.59%; Vendors = ±8.60%

Lack of incentive for regulated facilities to go beyond minimal compliance with the requirements
                                          B-7

-------

Regulators
Users
Vendors
Major
57.14
36.36
61.60
Minor
28.57
40.91
25.60
Not Imp.
10.48
20.00
10.40
DK/Ref
3.81
2.73
2.40
                  Max 95% c.L: Users = ± 6.47%; Vendors = ±8.37%

The uncertainty or excessive length of permit approval time

Regulators
Users
Vendors
Major
38.10
59.09
40.00
Minor
49.52
27.27
40.80
Not Imp.
12.38
11.82
11.20
DK/Ref
0.00
1.82
8.00
7.
             Max 95% c.i.: Users = ± 6.47%; Vendors = ±8.47

Can you think of any other ways that the regulatory system hinders the consideration of
innovative environmental technologies?

Regulators
Users
Vendors
Yes
28.57
30.45
33.60
No
71.43
67.27
64.80
No/DK/
Ref
0.00
2.27
1.60
                      Max 95% c.i.: Users = ± 6.17%; Vendors = ±8.23%
                                         B-8

-------
IF YES, ASK: A. What are they?

First suggestion:

Regulators
Users
Vendors
fear of
penalty
16.67
11.94
11.90
not eval
quickly
16.67
10.45
4.76
lack of
consist
16.67
10.45
11.90
Regltrs
uncoop.
0.00
17.91
30.95
Reg/
pr oc
not
clr
0.00
13.43
4.76
prob w/
spec
reg
20.00
4.48
4.76
lack of
enfrcmnt
0.00
1.49
9.52
regltrs
lack
20.00
10.45
11.90
other
data
10.00
19.40
9.52
Second suggestion:

Regulators
Users
Vendors
not eval
quickly
66.67
14.29
20.00
lack of
consist.
0.00
14.29
40.00
regltrs
uncoop
0.00
14.29
0.00
reg/ proc
not clr
33.33
0.00
0.00
prob w/
spec reg
0.00
42.86
0.00
lack of
enforcement
0.00
0.00
20.00
regltrs
lackdat
0.00
14.29
20.00
8. How would you rate the following components of the regulatory system as sources of
barriers to innovative environmental technologies? Would you say that (READ ITEM) are a
major barrier for your industry, a minor barrier, or not a barrier at all [to your industry]?

State Statutes

Regulators
Users
Vendors
Major
5.71
27.73
17.60
Minor
55.24
54.09
51.20
Not Imp.
39.05
15.45
23.20
DK/Ref
0.00
2.73
8.00
    Max 95% c.i.: Users = ± 6.57%; Vendors = ±8.60%
                                        B-9

-------
State Regulations

Regulators
Users
Vendors
Major
12.38
31.36
28.00
Minor
55.24
52.27
52.80
Not Imp.
31.43
14.09
12.80
DK/Ref
0.95
2.27
6.40
    Max 95% c.i.: Users = ± 6.59%; Vendors = ±8.60%




State Permits
    Max 95% c.i.: Users = ± 6.57%; Vendors = ±8.60%




Federal Statutes

Regulators
Users
Vendors
Major
9.52
39.55
32.00
Minor
49.52
45.45
47.20
Not Imp.
40.95
11.82
14.40
DK/Ref
0.00
3.18
6.40

Regulators
Users
Vendors
Major
28.57
33.18
34.40
Minor
48.57
49.09
42.40
Not Imp.
19.05
12.73
16.80
DK/Ref
3.81
5.00
6.40
    Max 95% c.L: Users = ± 6.59%; Vendors = ±8.51
                                       B-10

-------
Federal Regulations

Regulators
Users
Vendors
Major
37.14
40.91
39.20
Minor
44.76
43.64
41.60
Not Imp.
15.24
12.27
14.40
DK/Ref
2.86
3.18
4.80
                   Max 95% c.i.: Users = ± 6.53%; Vendors = ±8.49%
Federal Permits
9.
Air

Regulators
Users
Vendors
Major
12.38
30.91
30.40
Minor
43.81
41.82
39.20
Not Imp.
31.43
21.36
16.80
DK/Ref
12.38
5.91
13.60
            Max 95% c.i.: Users = ± 6.51%; Vendors = ±8.41%

Now we would like you to consider separately the systems that regulate the various media
such as air, water and solid or hazardous waste. Would you say that regulatory systems for
(READ ITEM) are very likely, somewhat likely, or not at all likely to impose a barrier to
using innovative technology.

Regulators
Users
Vendors
not likely
25.71
18.64
20.00
somewhat
likely
28.57
45.00
38.40
very likely
13.33
30.91
15.20
DK/NA
32.38
5.45
26.40
                    Max 95% c.i.: Users = ± 6.55%; Vendors = ±837
                                         B-ll

-------
Water

Regulators
Users
Vendors
not likely
23.81
28.64
14.40
somewhat
likely
41.90
47.73
40.00
very likely
2.86
13.64
18.40
DK/NA
31.43
10.00
27.20
                   Max 95% c.i.: Users = ± 6.59%; Vendors = ±8.45%

Solid or hazardous waste
10.

Regulators
Users
Vendors
not likely
7.62
20.91
12.00
somewhat
likely
40.95
33.64
22.40
very likely
15.24
38.18
18.40
DK/NA
36.19
7.24
47.20
            Max 95% c.i.: Users = ± 6.41%; Vendors = ±8.60%

In the past five years, how often do you think that industrial facilities/companies in your
industry/industrial facilities have decided not to pursue a promising innovative technology
or process because of the uncertainty of its complying with the environmental regulations or
permitting?

Regulators
Users
Vendors
very
often
8.57
24.55
40.80
some-
time
42.86
41.82
42.40
not very
often
29.52
20.91
10.40
never
6.67
5.91
2.40
DK/Ref
12.38
6.82
4.00
                  Max 95% c.i.: Users = ± 6.51%; Vendors = ±8.51%
                                        B-12

-------
11.    Do you have any suggestions as to how the permitting and regulatory process can be
      changed to further promote the use of innovative environmental technologies?

Regulators
Users
Vendors
Yes
58.10
60.00
60.80
No
40.95
35.91
36.80
DK/Ref
0.95
4.09
2.40
     Max 95% c.i.: Users = ± 6.45%; Vendors = ±8.41%

             IF YES, ASK: A. What do you suggest?

      Fkst Suggestion

Regulators
Users
Vendors
knwldgbl
regltrs
6.56
13.64
11.84
move gov
funding
4.92
0.76
7.89
more
incentives
13.11
5.30
17.11
better
communic
ation
9.84
22.73
10.53
more
flexible
26.23
16.67
5.26
simplify
reg/per
6.56
9.09
9.21
overall
perfstd
6.56
530
9.21

Regulators
Users
Vendors
special
treatment
4.92
3.79
3.95
reduce
delays
0.00
6.82
6.58
multimed
permits
3.28
1.52
0.00
bubbles or
caps
0.00
0.76
0.00
consist
enforce
0.00
0.76
0.00
gov tech
verfctn
1.64
5.30
11.84
other
16.39
7.58
6.58
                                        B-13

-------
Second Suggestion

Regulators
Users
Vendors
knwldgbl
regltrs
11.76
14.81
0.00
move gov
funding
0.00
7.41
0.00
more
incentives
0.00
11.11
16.67
better
communic
ation
5.88
25.93
0.00
more
flexible
17.65
14.81
25.00
simplify
reg/per
17.65
0.00
0.00
overall
perfstd
5.88
3.70
16.67

Regulators
Users
Vendors
special
treatment
5.88
3.70
8.33
reduce
delays
11.76
0.00
25.00
multimed
permits
5.88
3.70
0.00
bubbles or
caps
0.00
0.00
8.33
gov tech
verfctn
17.65
7.41
0.00
other
0.00
7.41
0.00
12.    Do you think that the following changes would be very helpful, somewhat helpful, or not at
      all helpful in promoting the use of innovative environmental technologies?

      Changing from technology-based to overall performance standards

Regulators
Users
Vendors
very
34.29
45.91
49.60
somewhat
48.57
41.36
36.00
not at all
12.38
6.82
8.00
DK/Ref
4.76
5.91
6.40
                   Max 95% c.i.: Users = ± 6.57%; Vendors = ±8.60%
                                        B-14

-------
Instituting special treatment in permitting or enforcement for innovative technologies

Regulators
Users
Vendors
very
30.48
46.82
46.40
somewhat
48.57
40.91
36.00
not at all
17.14
9.09
14.40
DK/Ref
3.81
3.18
3.20
                  Max 95% c.i.: Users = ± 6.57%; Vendors = ±8.58%




       Reducing dekys in the permitting system

Regulators
Users
Vendors
very
29.52
69.55
53.60
somewhat
33.33
20.91
34.40
not at all
33.33
7.73
8.00
DK/Ref
3.81
L82
4.00
                  Max 95% c.i.: Users = ± 6.06%; Vendors = ±8.58%




       Allowing multimedia permitting

Regulators
Users
Vendors
very
21.90
41.36
31.20
somewhat
30.48
34.55
36.00
not at all
41.90
14.55
15.20
DK/Ref
5.71
9.55
17.60
                   Max 95% c.i.: Users = ± 6.49%; Vendors = ±8.27%
                                        B-15

-------
Instituting bubbles or caps for multiple emission sources

Regulators
Users
Vendors
very
27.62
40.00
19.20
somewhat
39.05
36.82
36.00
not at all
12.38
11.82
11.20
DK/Ref
20.95
11.36
33.60
                  Max 95% c.i.: Users = ± 6.45%; Vendors = ±8.27%




Applying more consistent enforcement

Regulators
Users
Vendors
very
35.24
33.64
61.60
somewhat
31.43
43.64
28.00
not at all
30.48
19.09
7.20
DK/Ref
2.86
3.64
3.20
                  Max 95% c.L: Users = ± 6.53%; Vendors = ±8.37%



Implementing government sponsored technology verification and demonstration

Regulators
Users
Vendors
very
49.52
41.36
44.00
somewhat
40.95
36.82
34.40
not at all
6.67
17.73
18.40
DK/Ref
2.86
4.09
3.20
                  Max 95% c.L: Users = ± 6.49%; Vendors = ±8.55%
                                       B-16

-------
13.
Now, thinking about industrial facilities/your own facility/industrial facilities, if there were
no regulatory or permitting barriers to implementing innovative environmental
technologies, what percentage of their/your/ their current compliance costs do you think
could be saved?

Regulators
Users
Vendors
None
9.52
10.24
3.90
10% or
less
23.81
17.47
12.99
10-23%
19.05
18.07
27.27
24-30%
33.33
28.92
27.27
33% or
more
14.29
2530
28.57
Financial and Internal Barriers
14.    We'd like to ask about specific barriers to technology innovation that are not related to the
       regulatory system. I'll read a list of these barriers. Drawing on your experience over the last
       five years, could you please rate each the following a major barrier, a minor barrier or not a
       barrier at all for technology users/your industry/technology users?

Lack of information on the availability of innovative technologies

Regulators
Users
Vendors
Major
61.90
33.18
48.80
Minor
35.24
50.91
40.80
Not Imp.
1.90
15.45
10.40
DK/Ref
0.95
0.45
0.00
                    Max 95% c.L: Users = ± 6.59%; Vendors = ±8.60%

Lack of credible data on a technology's cost or performance

Regulators
Users
Vendors
Major
75.24
50.45
61.60
Minor
23.81
39.09
31.20
Not Imp.
0.95
9.09
7.20
DK/Ref
0.00
1.36
0.00
                    Max 95% c.i.: Users = ± 6.59%; Vendors = ±837%
                                          B-17

-------
Company staff not having time to make an assessment of technical options

Regulators
Users
Vendors
Major
43.81
55.45
54.40
Minor
45.71
37.27
33.60
Not Imp.
5.71
7.27
11.20
DK/Ref
4.76
0.00
0.80
                   Max 95% c.i.: Users = ± 6.55%; Vendors = ±8.58%

Company staff preferring end-of-pipe solutions to environmental requirements

Regulators
Users
Vendors
Major
35.24
20.00
32.00
Minor
43.81
54.55
48.80
Not Imp.
14.29
22.73
13.60
DK/Ref
6.67
2.73
5.60
                   Max 95% c.i.: Users = ± 6.57%; Vendors = ±8.60%

Financing for innovative technologies not being available

Regulators
Users
Vendors
Major
54.29
53.64
60.80
Minor
31.43
31.36
29.60
Not Imp.
4.76
13.18
8.80
DK/Ref
9.52
1.82
0.80
                   Max 95% c.L: Users = ± 6.57%; Vendors = ±8.41%

       Lack of financial benefits or rewards for using an innovative technology

Regulators
Users
Vendors
Major
46.67
51.36
64.80
Minor
35.24
31.36
26.40
Not Imp.
13.33
16.82
8.80
DK/Ref
4.76
0.45
0.00
                  Max 95% c.L: Users = ± 6.59%; Vendors = ±8.23%
Large investments in technologies in pkce prevent the selection of new technologies
                                        B-18

-------

Regulators
Users
Vendors
Major
56.19
41.36
42.40
Minor
32.38
43.64
50.40
Not Imp.
7.62
12.27
5.60
DK/Ref
3.81
2.73
160
                   Max 95% c.i.: Users = ± 6.53%; Vendors = ±8.60%

15.     Can you think of any other financial barriers or barriers internal to firms that have hindered
       the consideration of innovative technologies?

Regulators
Users
Vendors
Yes
22.86
9.09
33.60
No
77.14
90.91
66.40
                   Max 95% c.i.: Users = ± 3.78%; Vendors = ±8.13%

IF YES, ASK: A. What are they?

First Suggestion

Regulators
Users
Vendors
fear of
fine/
rsk
25.00
15.00
19.05
reg/
perm
system
12.50
25.00
9.52
refinance
system
4.17
15.00
9.52
taxes
8.33
0.00
7.14
costs to
replace
25.00
30.00
4.76
consults
prefer
8.33
0.00
2.38
lack of
money
16.67
0.00
35.71
bidding
system
0.00
0.00
4.76
other
0.00
15.00
7.14
                                        B-19

-------
Second Suggestion

Regulators
Users
Vendors
fear of find/rsk
00.00
50.00
50.00
reg/perm
system
50.00
0.00
0.00
costs to
replace
0.00
50.00
25.00
consults
prefer
50.00
0.00
25.00
16.
Regarding financing, how difficult do you feel it is for firms to obtain financing for
innovative environmental technology compared to standard environmental
technologies?  Is it...

Regulators
Users
Vendors
more
56.19
41.82
47.20
same
18.10
36.36
41.60
easier
0.95
3.18
2.40
DK/Ref
24.76
18.64
8.80
                    Max 95% c.i.: Users = ± 6.51%; Vendors = ±8.60%
17.    I have asked about a variety of barriers to using innovative environmental technology. Are
      you aware of any other barriers that I did not mention?

Regulators
Users
Vendors
Yes
11.43
4.55
3.20
No
88.57
95.45
96.80
                  Max 95% e.i.: Users = ± 2.74%; Vendors = ±3.04%
                                        B-20

-------
IF YES ASK: What are they?

Regulators
Users
Vendors
public
oppos.
58.33
40.00
25.00
Cultural
barrier
16.67
10.00
50.00
bidding
system
0.00
0.00
25.00
other
25.00
50.00
0.00
18.    Which of the following do you feel are significant benefits of using innovative
      environmental technologies? Is (READ ITEM) a significant benefit?

      Lowered compliance costs

Regulators
Users
Vendors
Yes
78.10
84.55
81.60
No
13.33
9.09
9.60
DK/Ref
8.57
6.36
8.80
                    Max 95% c.i.: Users = ± 4.76%; Vendors = ±6.68%
       Reduced pollution releases

Regulators
Users
Vendors
Yes
82.86
91.36
84.80
No
10.48
4.55
11.20
DK/Ref
6.67
4.09
4.00
                    Max 95% C.L: Users = ± 3.70%; Vendors = ±6.19%
                                        B-21

-------
Fewer problems complying with environmental permits

Regulators
Users
Vendors
Yes
70.48
74.55
61.60
No
19.05
16.82
28.00
DK/Ref
10.48
8.64
10.40
                     Max 95% c.i.: Users = ± 5.74%; Vendors = ±8.37%

       Improved production efficiency

Regulators
Users
Vendors
Yes
82.86
79.55
77.60
No
4.76
13.64
18.40
DK/Ref
12.38
6.92
4.00
                     Max 95% c.i.: Users = ± 5.31%; Vendors = ±7.17%

Liability (vendors only)

       The next few questions deal with the issue of your firm's liability for injury to private parties
       for putting people at risk specifically due to the failure of an environmental technology that
       your firm might develop in the future.


18.    Have concerns about such liability discouraged you from developing, selling, or licensing an
       innovative environmental technology, in favor of an older more established approach?

Vendors
Yes
26.40
No
67.20
DK/Ref
6.40
                                 Max95%c.i. = ±8.09%
                                         B-22

-------
19.     Would you rate the following concerns about liability as major, minor or not applicable?




       The fear of being sued by technology users, customers, or citizens if a technology fails

Vendors
Major
39.20
Minor
42.40
Not Imp.
14.40
DK/Ref
4.00
                                 Max95%c.i. = ±8.51%
       The cost of product liability insurance or the inability to get insurance

Vendors
Major
34.40
Minor
46.40
Not Imp.
14.40
DK/Ref
4.80
                                  Max95%c.i. = ±8.58
       The time demands on company personnel in dealing with liability issues

Vendors
Major
24.00
Minor
56.80
Not Imp.
15.20
DK/Ref
4.00
                                 Max95%c.i.=±8.53%
       Difficulty in developing technologies jointly through partnerships

Vendors
Major
19.20
Minor
53.60
Not Imp.
20.00
DK/Ref
7.20
                                 Max 95% c.i. = ±8.58%
                                          B-23

-------
Information (regulators and users only)

19.     We'd like to know where you go for information or technical assistance about alternative
       practices or technologies to address environmental issues. Specifically, we'd like to know if
       you found the following resources very useful, somewhat useful, or not at all useful as a
       source of information.

       Other companies

Regulators
Users
very
33.33
38.64
somewhat
48.57
47.27
not at all
16.19
14.09
DK/Ref
1.90
0.00
                             Max 95% c.i.: Users = ± 6.59%
      Your facility's employees or own research

Regulators
Users
very
42.86
38.18
somewhat
43.81
45.00
not at all
8.57
16.82
DK/Ref
4.76
0.00
                             Max 95% c.i.: Users = ± 6.55%
       Government technical assistance office, university or extension programs

Regulators
Users
very
58.10
23.64
somewhat
35.24
48.18
not at all
4.76
25.00
DK/Ref
1.90
3.18
                             Max 95% c.i.: Users = ± 6.59%
                                         B-24

-------
Small business assistance program

Regulators
Users
very
10.48
5.91
somewhat
37.14
15.91
not at all
43.81
70.00
DK/Ref
8.57
8.18
                       Max 95% c.i.: Users = ± 6.04%
Industry trade associations, publications or conferences

Regulators
Users
very
52.38
62.73
somewhat
41.90
32.27
not at all
3.81
5.00
DK/Ref
L90
0.00
                       Max 95% c.i.: Users = ± 6.37%
Outside consultants or contractors

Regulators
Users
very
23.81
48.18
somewhat
60.95
45.00
not at all
11.43
6.82
DK/Ref
3.81
0.00
                       Max 95% c.i.: Users = ± 6.59%
Vendors and suppliers

Regulators
Users
very
26.67
34.09
somewhat
57.14
58.64
not at all
15.24
7.27
DK/Ref
0.95
0.00
                       Max 95% c.i.: Users = ± 6.49%
                                   B-25

-------
       Customers

Regulators
Users
very
24.76
9.09
somewhat
44.76
30.45
not at all
22.86
57.73
DK/Ref
7.62
2.73
                            Max 95% c.i.: Users = ± 6.51%
Any other resources?
       First Suggestion

Regulators
Users
none
00.00
7.69
Internet
72.73
73.08
regltrs
/regultns
27.27
3.85
other
0.00
15.38
20.    Do the environmental technologies that your firm uses come from (users only):
      Your company's own research and development

Users
Yes
54.54
No
45.45
                               Max95%c.i.= ±6.57%
      Contractors to your company

Users
Yes
63.64
No
36.36
                               Max95%c.i.= ±6.33%
                                       B-26

-------
       Independent technology vendors

Users
Yes
66.82
No
33.18
                               Max 95% c.i.= ± 6.21%
       Other?

Users
Yes
10.90
No
89.09
                                Max 95% c.i.= ± 4.12%

Users
consultants
50.00
trade assoc
16.67
other
3333
Background/Details




       Finally, I have a few questions for background purposes.




22.     About how many full-time employees work at this facility (users and vendors only)?

Users
Vendors
1-41
16.97
36.00
42-125
18.35
37.60
130-380
27.98
19.20
400-10K
36.70
7.20
                                        B-27

-------
23.    Does your facility have a parent company (users and vendors only)?'

Users
Vendors
Yes
68.18
54.40
No
31.36
45.60
DK/Ref
0.45
0.00
                  Max 95% c.i.: Users = ± 6.13%; Vendors = ±8.58%
24.     How many employees work in the whole company (users and vendors only)?

Users
Vendors
Ql:l-450
15.08
41.27
Q2:500-3000
26.98
22.22
Q3:3,500-
12,000
24.60
26.98
Q4:14,000-
80,000
33.33
9.52
25.     Could you give me an estimate of this facility's annual environmental compliance costs
(users only)?

Users
<,=$75k/yr
24.00
$80-350K/yr
23.33
$400k-
1.8MM/yr
28.00
>,=$2MM/
Yr
24.67
26.    In terms of competitiveness and financial strength, do you feel that your company is
       stronger, about the same, or less strong than it was three years ago (vendors and users
       only)?

Users
Vendors
stronger
66.36
67.20
same
21.36
19.20
less strong
10.00
12.80
DK/Ref
2.27
0.80
                   Max 95% c.i.: Users = ± 6.23%; Vendors = ±8.09%
                                        B-28

-------
27.     In terms of workload, do you feel that your office is more burdened, about the same, or less
       burdened than it was two years ago (regulators only)?

Regulators
more burdened
74.29
same
17.14
less burdened
5.71
DK/Ref
2.86
28.    Has the percent your company spent on research and development increased, stayed the
same, or decreased, over the past three years (vendors only)?

Vendors
increase
48.80
same
29.60
decrease
16.80
NoR&D
2.40
DK/Ref
2.40
29.    Does your company's research and development mostly come from (vendors only)
       your own company's staff, universities, collaboration with other companies, parent
       company, government research efforts, or some other source?

Vendors
company
staff
71.90
univs
3.31
other
cos.
11.57
parent
company
4.13
govern-
ment
resrch
3.31
other
4.96
DK/Ref
0.83
30.    How many years have you worked in permitting/environmental compliance/your field?

Regulators
Users
Vendors
<,=5 yrs
13.33
29.09
14.40
6-10 yrs
25.71
32.27
24.80
11-19 yrs
30.48
20.00
27.20
20 or more
30.48
18.64
33.60
Those are all the questions that I have. Thank you very much for your time.
                                         B-29

-------