National Advisory Council
                                     For
                   Environmental Policy & Technology
                                January 25, 2005
Administrator Michael O. Leavitt
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460

Dear Administrator Leavitt:

       On behalf of the National Advisory Council for Environmental Policy and
Technology (NACEPT), I am pleased to present to you the attached advice letter
supplementing our commitment to provide EPA with comments and recommendations in
response to the Draft Report on the Environment (ROE).  This advice letter was
developed by a NACEPT Work Group and endorsed by the full Council.

       The NACEPT reinforces its previous commendation of EPA for the extensive
work that resulted in the Draft ROE.  The document is a necessary and valuable first step
in identifying the critical indicators of the health of the nation's environment. We
strongly support the Agency's efforts to engage policymakers and the interested public in
discussing the ROE's findings and identifying next steps. Discussion amongst the
Council members subsequent to our November 6, 2003 letter to you surfaced additional
thoughts we wish to share with you and your staff on what EPA's role should be, what
needs to be accomplished, and why.

       The NACEPT strongly believes that EPA should provide the leadership for the
development of an integrated national environmental indicator database. This would
entail developing a strategy and action plan and facilitating implementation.  EPA should
allocate resources toward this end and should make it a priority. Such a database would
serve multiple purposes. Two important ones are enabling "state of the environment"
reporting and supporting policy development and assessment.

       The data in the database should be unbiased & credible; it must be well managed
(have contextual information/meta data, such as source and measurement method, have
assurance processes, be systematically updated, etc.); and it should be appropriate for
intended uses and accessible to decision makers.

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       Only with such a resource will government be able to inform policy and other
decisions and convey the status of the environment to the public. Why is this EPA's role?

       We believe EPA would be the natural leader for the creation of a national
database on environmental indicators since it provides national environmental leadership,
its staff is already networked with the multitude of other sources of environmental data,
and EPA already has the responsibility for collecting and overseeing the collection of a
large amount of the data.

       The NACEPT recognizes the severity of the national budget deficit and its
potential impact on EPA's funding.  However, we feel that this issue is sufficiently
important to bring to your attention at this time.

       Thank you again for the opportunity to comment on the ROE.  The NACEPT
looks forward to assisting in the preparation and review of subsequent reports.

                                        Yours very truly,
                                        Dorothy Bowers
                                        Chair,
                                        National Advisory Council for
                                          Environmental Policy & Technology
Attachment
cc:    Stephen L. Johnson, Deputy Administrator
       Kimberly T. Nelson, Assistant Administrator, OEI
       Daiva Balkus, Director, OCEM

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       National Advisory Council for Environmental Technology and Policy




                Advice letter: Environmental Indicators Database




                               January 13,2005









Background




       In 2003, the EPA published the Draft Report on the Environment 2003 (Report).




This Report has been described as the first comprehensive national report on the




environment ever published by the EPA.  The Report was called a "draft" in order to




stimulate dialogue and input on the development of environmental  indicators.  The




Report, for example, indicated that there had been a substantial reduction nationally in air




pollution over the past 30 years, but that no similar broad judgments on a national basis




could be made about water pollution because of the lack of consistent data; the Report




contained detailed comments about trends in land use, human health, and ecosystems but




the data did not lend themselves to broad inferences about the state of the environment.




       The Report was sent to members of NACEPT in 2003 and discussed at the July




2004 NACEPT meeting. It was also sent to the EPA's Science Advisory Board (SAB)




for extensive critique and review. Twenty scientists and EPA staff met for three and a




half days in March, 2004 to discuss and critique the Draft Report on the Environment




2003. On 8/11/2004 the SAB issued a 67 page review of the Report. This  SAB critique




has been extensively reviewed by the NACEPT workgroup on the environmental




indicators initiative and  the members of the workgroup are in substantial agreement with




the analysis, conclusions, and recommendations of the SAB report.

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The Need For An Environmental Indicators Database




       The EPA has become increasingly aware of the importance of a systematically




collected environmental indicators database. In 2001 the previous Administrator,




Christine Todd Whitman, indicated that a primary goal of her administration at the EPA




would be the establishment of a systematic database on environmental indicators. The




2003-2008 EPA Strategic Plan: Direction for the Future (July, 2003) contains numerous




references to EPA goals for the improvement of data bases on environmental indicators




and the need to measure results against baseline series. A private foundation, the Heinz




Center, has already published The State of the Nation's Ecosystems (2002) and hopes to




publish an update in 2007.  Their 2002 report advances the hope that their publication




"...will help to strengthen the empirical foundation for American environmental




policymaking in the same way that the emergence of solid data about changes in GDP,




employment, and inflation helped to strengthen the country's economic policymaking in




the last century." It goes on to note, "The completion of [the Heinz report] shows that a




sustained, multi-sector collaborative approach to environmental reporting can make




inroads on many of the problems of parochialism, perceived bias, and variable quality




that have plagued previous efforts.... However, we are well aware that this report is at




best an early step on a long path toward realization of the comprehensive, mature, and




well-grounded system of ecosystem and environmental reporting that the nation




deserves." (p.viii).  Organizations in addition to the EPA recognize the importance of an




environmental indicators data base to policy discussions and may well try to establish




themselves as  primary sources on environmental data.

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Science Advisory Board Recommendations




       NACEPT believes three key recommendations of the SAB 8/11/04 report were




       •   The EPA should institutionalize the environmental indicators data base and




          regular issuance of the Report by allocating regular staff and budget to the




          process.




       •   The Report should contain information on the environment and not the impact




          of government policies on the environment.




       •   The Report should have a more extensive introduction explaining the nature




          and purposes and conceptual framework of the document.









NACEPT Recommendations on the Draft Report on the Environment




       Bearing in mind the extensive analysis already completed by the SAB, NACEPT




makes the following additional recommendations:




       •   The EPA should assume leadership as the primary federal agency for the




          collection, organization, and dissemination of information  on the state of the




          nation's environment. A model for EPA's role in reporting on environmental




          indicators data is the role of the Council of Economic Advisors' in economic




          statistics and policy.[l]




       o   The EPA should recognize the importance of creating, maintaining, and




          analyzing an adequate environmental data base in its internal allocation of




          staff and other resources.




       •   The collection and presentation of data on environmental indicators should,




          where possible, be based on time series, have cross-sectional data on regions,

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          and be maintained in an on-line accessible data base for policy makers,




          researchers, and the public.  The data should be analyzed for the identification




          of trends in environmental indicators and should be published independently




          of reports on the effects of EPA policies and actions.




       o  Every effort should be made to secure the confidence of the scientific




          community and the general public that the methods of data collection




          represent a scientific consensus on the appropriateness of chosen indicators,




          their sampling methods, and their analysis. One criterion of appropriate




          methods should be their reproducibility by other researchers. Recognizing




          that consensus may not always be possible to attain, the EPA should,




          nevertheless, move ahead with the best support it can secure from interested




          parties. Regular Reports on the Environment should have accessible




          presentation for the general public but should avoid political "spin" or the




          perception of spin.









An Important Opportunity for the EPA




       The Environmental Protection Agency could substantially improve the scientific




basis for the analysis of environmental indicators and the effectiveness of environmental




policy if it could improve the quality and availability of a data base on environmental




indicators.  The data base should be continuously and systematically updated so it is




useful for understanding periodic changes and secular trends in the environment.

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Conclusion
       The EPA should take the lead in the development of a national data base on

environmental indicators and make it a priority. This will cost money. Measurement and

science are expensive.  However, good policy depends upon good data and analysis.

Further, without a scientifically based national data base on environmental indicators, it

will not be possible to communicate responsibly to the public on the state of the
                  i
environment and the effectiveness of environmental protection. Therefore,

NACEPT recommends that the EPA should shoulder the responsibility of

establishing a comprehensive and national data base on environmental indicators as

one of its most important priorities.
[1] A model for an appropriate vehicle for an institutionalized annual report and data base
comes from the annual Economic Report of the President which is coupled with the
Annual Report of the Council of Economic Advisors and contains extensive statistical
tables covering up to 40 years of data on such variables as national income, prices,
employment, interest rates, exchange rates, government finances, corporation and
international data. The primary data are transformed into all sorts of secondary data such
as inflation, productivity, unemployment and participation rates for the labor force, and
sectoral analysis.  The responsibility for producing these annual reports was made by
legislation in 1946.  The Council of Economic Advisors has a small permanent staff (2
senior statisticians) and virtually all of the data included in the report are produced by
other government departments and agencies (Agriculture, Commerce, HEW, Interior,
Labor, Bureau  of the Census, Federal Reserve, etc.). The EPA differs from the Council
in that it is a primary source of data.
         The development of any data base depends upon a conceptual basis for the
identification and measurement of variables and statistical techniques for sampling and
analysis. Decisions have to be made about inclusion and exclusion, aggregation, and
indexing. Professionals will  often differ on the construction of data bases but the
development of a scientific understanding of the phenomena being analyzed depends
upon an acceptance of the methods that are used for the construction of the data bases on
which analysis is done.  In economics, for example, there is continuing discussion about
the appropriate measures for income and prices. The Federal Reserve and the Treasury

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have different measures of saving; the Bureau of Labor Statistics and the Bureau of
Economic Analysis have different ways of sampling employment. There is continuing
disagreement about the construction of price indexes. Yet, discussions about appropriate
economic policy and the behavior of various economic indicators by policy makers and
economists rest on the same data base.

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