V
EPA100-F-07-047
January 2008
Supporting
Environmental
novation
i the States:
Report On Results From Projects
jpported By the EPA State
novation Grant Program
Executive Summary
NCEI
NATIONAL CENTER FOR
ENVIRONMENTAL INNOVATION
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Executive Summary
The State Innovation Grant Program is a corner-
stone in EPA's efforts to promote innovative ap-
proaches to better environmental performance.
Recognizing that those on the front lines of environ-
mental protection are most likely to generate effective
new approaches, the Agency's Innovation Strategy1
calls for EPA to strengthen its innovation partnership
with states. The State Innovation Grant program,
administered by EPA's National Center for Environ-
mental Innovation, has been a primary means for
realizing that goal.
The State Innovation Grant program strategically
focuses innovation efforts on priority environmental
problems and particularly promising approaches with
the long term goal of-diversifying the set of proven
environmental protection tools and approaches
available to EPA and its partners. These grants also
advance the vision of environmental protection articu-
lated in the Innovation Strategy which is character-
ized by:
A focus on environmental performance and
results;
An emphasi s on greater environmental
stewardship, not just pollution control;
Integration of environmental management
more fully across facilities, problems, and
media;
Use of market-based incentives to achieve
environmental goals; and
Partnerships and stakeholder collaboration.
Through the State Innovation Grant program,
EPA works collaboratively with states to: identify
areas ripe for innovation; improve cost efficiencies for
state agency operations; realize cost or time savings
for regulated entities; and measure and evaluate
project results in order to assess the potential to
transfer the innovative approaches to other states.
Since 2002, the State Innovation Grant Program has
awarded nearly $6.7 million for 35 innovation projects in
24 different states focused on testing innovative ap-
proaches for achieving better results in environmental
permitting programs. Seven of those proj ects have been
completed. This first progress report is designed to briefly
describe the Program and to share the accomplishments of
the completed proj ects in the hope that it will facilitate
understanding and potential adoption of effective new
environmental protection approaches and stimulate
additional ideas that merit testing.
Innovating
for Better Environmental Results:
A Strategy To Guide
The Next Generation of Innovation at EPA
1 The Innovation-Strategy, "Innovating for Better Environmental Results: A Strategy to Guide the Next Generation of Innovation at EPA, EPA
100-R-02-002, " was developed by the EPA Innovation Action Council and published in 2002. The strategy is available online at http://
www.epa.gov/innovation/strategy.htm
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Summary of Programs Funded
by State Innovation Grants
Of the 35 state innovation projects funded by the
State Innovation Grant Program to date, projects
were funded typically at about $200,000 and have
had a 2-4 year duration. Sixteen of these proj ects
provided for the development and testing of ERP
(Environmental Results Program),2 eight sought to
support EMS (Environmental Management Systems)
initiatives (one of these projects is a combination of
EMS and ERP), eight were designed to create or
enhance performance-based environmental leadership
programs (one of these projects is a combination of
ERP and an environmental leadership program), two
focused on watershed-based permitting, and one was
intended to streamline permit processes through use of
innovative information technology. Table 1 (back
page) summarizes awards made by the State
Innovation Grant Program to date.
Lessons Learned and Future
Directions for the State
Innovation Grants Program
The first five rounds of grant competitions (2002-
2007) provide several lessons for EPA's efforts to
support innovation in state environmental programs.
One key lesson is that resources provided by EPA
through these grants have been essential in fostering
innovation at the state level. States have consistently
told EPA that the program has allowed states to pilot
test and implement innovations that would not
otherwise have been possible. Demand for funding as
measured by the number of proj ect proposals
received has consistently outstripped the supply of
available funding each year by about four-to-one. The
grants have filled a critical need for resources that
provide the flexibility to test alternatives to
conventional regulatory approaches.
Project Highlights: Three State Innovation Grant Projects Test EMS in Permitting
Three states, Colorado, South Carolina, and Texas have completed State Innovation Grant projects that test the use of
Environmental Management Systems (EMS) in innovative permitting. The Colorado Department of Public Health and
Environment (DPHE) received a State Innovation Grant to test whether using EMS in conjuction with traditional media-
specific permits would produce better environmental performance at regulated facilities. To implement the program,
DPHE developed and issued two facility-wide, multi-media EMS permits. DPHE also incoporated EMS conformance and
compliance audits to assess changes in environmental performance in the implementation of the EMS permit. On
average, participating facilities achieved a 15 percent reduction in emissions of
air pollutants, a 27 percent reduction in hazardous wastes generated, a three
percent decrease in electrical energy use, and a 10 percent reduction in natural
gas consumed. DPHE is in the process of institutionalizing the program on a
permanent basis. South Carolina used its State Innovation Grant to explore
ways permit requirements could be integrated and streamlined based on an
EMS. Texas also used State Innovation Grant funding to integrate EMS
training and awareness into the permitting process and develop specific
permitting incentives for the state's environmental leadership program, Clean
Texas. The states found that EMS are not a substitute for permits, but they
may allow for streamlining of certain permit requirements. 0
2 This number does not include two projects that combined ERP with other types of innovations.
3
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Another significant lesson from the State
Innovation Grant Program is the importance of
measuring and reporting on environmental outcomes to
drive innovation. For example, states have shown an
interest in ERP because the approach demonstrably
improves environmental performance by businesses in
sectors that are often overlooked in traditional
compliance assistance and enforcement approaches.
The State Innovation Grant Program requires that
each grantee identify and measure specific
performance outcomes and document what factors
Project Highlight: Environmental Results
Programs Provide Measurable
Improvement In Compliance
With the help of a State Innovation Grant, Delaware
implemented a pilot Environmental Results Program
(ERP) to improve the compliance of its auto body and
auto repair sector with environmental laws. Auto body
repair shops produce hazardous waste and use auto
body paint and other materials that can cause serious
harm to workers and the environment if not handled
properly as mandated under environmental laws.
Through its ERP, Delaware enrolled 68 percent of the
state's auto body shops into a program to learn about
how to achieve better environmental performance.
Participating auto body shops increased their
compliance with hazardous waste and water pollution
requirements by 42 and 40 percent respectively, and
increased their compliance with air pollution
requirements by 24 percent. In a similar project Maine
implemented an ERP for the auto body- auto repair
sector using a State Innovation Grant and estimated
and overall 10 percent improvement in compliance by
the sector. An additional 12 states are now using State
Innovation Grants to test the ERP approach in eight
sectors, including dry cleaners, printers, animal
feedlots, auto body
shops, auto salvage
yards, oil and gas
production facilities,
gas stations, and
vehicle repair
facilities. Other
states are testing ERP
as an approach to
address stormwater
runoff.
influence a proj ect's effectiveness. In this way, grants
are designed to help measure the benefits and transfer
learning among states.
A third important lesson is the value of
strategically focusing on specific priority problems and
approaches. This focus had allowed a critical mass of
projects to develop around the most promising ideas
resulting in fairly rapid diffusion for a relatively small
investment. The most prominent example of this is the
much-expanded application of Environmental Results
Programs across new states and sectors. EPA's
assistance to states for testing and applying ERP (a
total investment of $3.7 million) has resulted in the
development of ERPs in 15 States and 7 new business
sectors in just five years. In each of the ERP Projects
completed to date, there has been a measurable
improvement in compliance by the business sectors
involved. In 2006, states implementing ERP proj ects
self-organized into a new State ERP Consortium that
meets regularly.
The State Innovation Grants also provide a
critical resource that allows recipient states to
participate in events where they can share their
experience and learning with other states and EPA,
such as the initial grants orientation workshop, the
biennial State-EPAInnovation Symposium, the annual
Environmental Summit, and the ERP Consortium
meetings.
Thus far, States have responded enthusiastically
to the State Innovati on Grant Program. Proj ects
completed to date are achieving measurable
environmental results and good communication has
been fostered among states and between states and
EPA to share experiences and transfer ideas. EPA
believes the State Innovation Grant Program has
contributed greatly to strengthening EPA's innovation
partnership with States and looks forward to further
collaboration in the exploration of promising new
approaches to environmental protection in the future.
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The State Innovation Grant
Program Supports Innovation
and Partnership
Projects funded under the State Innovation Grant
program test innovative approaches to address
priority environmental issues under one or more of the
goals identified in EPA's Strategic Plan, including:
clean air and global climate change; clean and safe
water; land preservation and restoration; healthy
communities and ecosystems; and compliance and
environmental stewardship. Projects are selected with
the intention that they will advance the state of
knowledge and/or transfer information, notjust'Tix"
an individual environmental problem using a well-
established method. The State Innovation Grant
Program funds proj ects with the greatest promise to:
Go beyond a single facility experiment to
promote "system" change;
Provide better environmental results through a
program, process, or sector-wide innovation;
and
Promote integrated, cross-media
environmental management with high potential
for transferability to other states and tribes.
EPA made the decision early in the program, and
in consultation with states to focus on permitting by
state environmental regulatory agencies as an area
particularly ripe for innovation, since permitting is
where policy and practical implementation meet. To
date, the program has focused on supporting projects
that:
Expand testing of the Environmental Results
Program (ERP) model (an alternative to
traditional permitting for small-business
sectors) for additional states and business
sectors;
Explore the relationship between
Environmental Management Systems (EMS)
and permitting; or
Build state support for EPA's National
Environmental Performance Track program, or
similar state performance-based environmental
leadership programs as mechanisms for
expanding beyond-compliance stewardship by
industry.
In addition, the program has funded a small
number of exploratory projects, designed to
demonstrate a limited number of other innovation
tools.
Project Highlight: Arizona Streamlines Its
Storm Water Permitting Program by
Automating the Application and Initial
Screening Process with a Web-Based
Portal and Geographic Information
Systems
Arizona was facing a serious challenge to its National
Pollution Discharge Elimination System (NPDES)
Phase-2 Storm Water Permit Program. Due to a change
in federal storm water regulations, the number of
permits it processed each year would double. To meet
this challenge, the state developed an internet-based
automated permit processing system, called the "Smart
Notice of Intent to Discharge" (Smart NOI), that would
significantly streamline the permit review and issuance
process. The Smart NOI system created an automated,
screening-level analysis using the State's Geographic
Information System (GIS) to determine if proposed
development projects would require detailed reviews
for storm water permits because they would affect
sensitive drinking water sources, impaired or unique
waters, or endangered species. As a result of the Smart
NOI system, Arizona reduced the total processing time
for a permit-requirement determination from 5-7 days to
2-3 days. Actual permit application processing time
was also reduced significantly because staff had more
time available for the comprehensive reviews. Arizona
estimates that the online system increased review
capacity from 25 permits per day to several hundred.
While the project was very successful for Arizona, one
of the lessons we
HIBfeSMm^^BHBBP learned was that
information systems
innovations may be
difficult to transfer to
other states because
of differences in
software systems and
data architecture.
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Summary of Programs Funded by State Innovation Grants
on Gra
^ompeimon
Cycle
(Fiscal Year)
2002
2002
2002
2002
2002
2002
2004
2004
2004
2004
2004
2004
2004
2004
2004
2005
2005
2005
2005
2005
2005
2005
2006
2006
2006
2006
2006
2006
2007
2007
2007
2007
2007
2007
2007
>»|UjM
MA
DE
AZ
IL
TX
CO
VT
ME
RI
MN
MI
WI
IN
sc
WY
MA
VA
IN
NV
WA
NH
KY
RI
LA
GA
VA
IN
AZ
ME
RI
NY
KY
TN
WI
WA
Watershed-based Permitting
Autobodv ERP
Streamlined Stormwater Permitting
Injection Well ERP
Strategically Directed Regulatory Structure - EMS Focus
Whole-facility EMS Permitting
Underground Storage Tank ERP
Autobody/ Auto Repair ERP
Auto Salvage ERP
Concentrated Animal Feeding Operations (Agriculture) ERP
Dry Cleaner ERP
Printing Sector Combined ERP/ EMS Permitting
Community EMS
EMS role in Permitting
Watershed-based Permitting/ Coalbed Methane Permitting
Common Performance Measures for ERP Programs
Underground Storage Tank ERP
Autobody Sector ERP
Dry cleaner ERP
Industrial Footprint Approach
Environmental Performance Track
Environmental Performance Track
Underground Storage Tank ERP
ERP for the Oil and Gas Sector
EMS for the Textile Sector
Environmental Performance Track
Environmental Performance Track
Environmental Performance Track
Parking Lot StormwaterERP
Construction StormwaterERP
ERP for Small Business Sectors
Compliance Assistance On-Ramp for State Performance Track
Stormwater Performance Track
Dairy Sector EMS
Sustainable Washington ERP/Performance Track
Award
$100K
$117K
$79 K
$97 K
$75 K
$150K
$202 K
$152K
$200 K
$126K
$199K
$200 K
$125 K
$100K
$198K
$255 K
$250 K
$228 K
$200 K
$182K
$234 K
$189K
$250 K
$250 K
$80 K
$225 K
$225 K
$225 K
$300 K
$200 K
$255 K
$189K
$200 K
$275 K
$225 K
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