New Environmentalism: Where Free Markets and Nature Meet

Jan. 1, 2002

Over the past three decades, environmentalism came of age, planted firmly in the American psyche and intruding into national and international politics. An environmental infrastructure–technological and legal–materialized to tackle environmental problems.

Whitman’s Big Challenge: Managing for Results

As inauguration revelers began gathering at the Capitol this past January, eight organizations presented a report on the Environmental Protection Agency (EPA) to incoming President George W. Bush. The report was a nonpartisan collaboration guided by the Los Angeles—based Reason Public Policy Institute and cosponsored by, among others, the National Academy of Public Administration, the Environmental Council of the States, the Green Mountain Institute for Environmental Democracy, and the Progressive Policy Institute. Their environmental message to the new president was reflected in the report’s title, “Managing for Results.”

The issue is straightforward enough: How do you know you are getting the results you want? With proper management, you can measure your performance. Without such measurement, neither the agency nor the nation can know whether all the investments, initiatives, and personnel expended to improve the environment actually do so both efficiently and effectively.

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Government officials of both parties know the importance of management to success. Former Vice President Al Gore’s “reinvention” effort was primarily a management initiative. Three laws passed by Congress over the past decade–the Government Performance and Results Act, the Chief Financial Officers Act, and the Information Technology Management Reform Act–centered on how to incorporate a “managing for results” ethic within government agencies, and not just old-style cost-saving or paperwork reduction, but how to get agencies to effectively fulfill their missions.

Yet the odds are that management matters will be drowned out by battles over particular pollution rules and programs. That’s exactly what happened during the confirmation hearings for Governor Christine Todd Whitman, Bush’s choice to head EPA. Senators recently for the most part queried her about her vision and agenda for the agency. They asked her views on policy matters: air-quality rules, water regulations, waste, and other pollution challenges that are the stuff of environmental politicking. They asked little about the central challenge she faces as the new administrator: management.

Supporters of the agency might ask what’s wrong with the way EPA is managed now. Aren’t its many actions yielding some environmental improvements? The simple answer: Of course they are. If EPA takes action to stop some malefactor from knowingly pouring hazardous wastes down urban sewers, there’s no doubt that that lessens harm to the public. And its work with states to monitor and report air quality on a real-time basis helps citizens and public officials gauge whether more cleanup efforts are necessary.

But EPA remains locked in old enforcement-dominated strategies to compel pollution cleanup and often lacks data or embeds what data it has in opaque models or politicized reports. The agency has no coherent set of performance measures; instead, as the “Managing for Results” report noted, it relies on “bean counting,” in which numbers of permits issued and enforcement actions undertaken remain the primary metric of success.

EPA is not fully to blame for its preoccupation with bean counting. Many environmental organizations continue to use these figures as their own test of how well the agency is doing. When former EPA Administrator Carol Browner briefly tried to steer away from enforcement bean counting, she met fierce resistance. But developing better agency performance measures that indicate whether water is getting cleaner or health risks from environmental problems are declining as a result of agency actions simply must occur if the agency is to set priorities and evaluate its programs.

This is not an impossible task. Florida has developed three tiers of performance indicators.

The first tier measures environmental and public-health outcomes–for example, how many of Florida’s citizens are breathing poor-quality air and for what percentage of time. Or how many Florida water bodies had mercury-related fish-consumption advisories.

The second tier looks at behavior rather than enforcement actions. How many companies are in compliance with environmental regulations? How many have gone “beyond compliance” to exceed required pollution-reduction levels? How many participate in pollution prevention (rather than merely cleanup) programs?

Florida’s third-tier measures include traditional enforcement statistics: permits issued, and inspections conducted. But these measures also look at agency efficiency and effectiveness. How efficiently does it process permits? How much compliance assistance does the agency provide? How well does it monitor outcomes?

The real key to Florida’s performance indicators, though, lies in their linkage to budget requests and the setting of priorities for the state’s environmental agency. An indicator ranked “good” will receive less attention in future planning than an indicator ranked “focus” (or poor).

Other states, such as New Hampshire, Oregon, and Pennsylvania, similarly are refining performance indicators. Developing these indicators is no easy matter since agencies must inevitably ask “which indicators?” and “what measures?” But EPA cannot manage for results without emulating the states by tackling these measurement challenges.

That’s why half of the 18 recommendations in “Managing for Results” focused on the need within EPA for clear performance measures and better data. Of the remaining nine recommendations set forth in the report, five focused on organization structure.

Whitman inherits an agency compartmentalized into air, water, waste, and other fragmented offices. This makes more integrated decision-making nearly impossible, with detrimental consequences. Decisions to regulate air emissions by using, say, smokestack scrubbers, could result in increases in sludge waste. Or segregation of air- and water-quality decisions may result in tighter and tighter standards for water-based emissions of, say, mercury when the central source comes, instead, from smokestacks.

EPA’s organizational structure is flawed in other ways. Implementation authority is arrayed among federal and regional offices along with state agencies. Lines of authority are vague, or disputed. That leads to companies regulated by EPA facing duplicative reporting requirements as well as states finding their permitting and enforcement decisions second-guessed.

As states initiate environmental programs designed to foster private-sector innovation, pollution prevention (instead of merely pollution cleanup), and more integrated decisions on what problems to tackle, the unclear lines of authority and second-guessing from Washington become critical barriers to action.

Organizational structure is no mere matter of efficiency. It is linked to needed program innovations that focus on environmental performance rather than issuance of permits. The “Managing for Results” report suggests that these kinds of innovations–whether by localities, states, or EPA itself–form the basis for a new environmentalism focused on performance.

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Thus, the first two recommendations of the “Managing for Results” report press for statutory or management changes that would provide “legal space” for program innovations that emphasize results.

EPA’s Christine Todd Whitman will undoubtedly face a continual barrage of policy issues and contests over which pollutants to regulate and how clean is clean enough. She will need to bring to bear what science can tell us about these issues and press for programs to address them that tap the special knowledge and creativity of those who operate factories and farms.

But she can make a more far-reaching and lasting mark on environmental performance in the United States by setting the agency’s own house in order. As the “Managing for Results” report noted, that means developing performance indicators that really show what policies are achieving along with reorganizing the agency to integrate decision-making and facilitate innovations that focus on results.

For the environment, as in the rest of government and business, management matters–a lot. 
About the Author

Lynn Scarlett

Lynn Scarlett is president of Los Angeles, CA-based Reason Foundation.

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