Summary of Policy Clusters
The demonstration projects, described in chapter 3, based their
findings on studies of conditions in particular industrial sectors.
The policy clusters discussed in this chapter took a more theoretical and
analytical view of issues that might be common across all industrial
sectors. Using this approach the Task Force sought to ensure that its
final policy recommendations were both realistic, when applied to
specific cases, and generally applicable.
The Task Force established four policy clusters: Information, Economics,
Regulatory, and Money and Management. Option papers were solicited from
experts in fields relevant to each of the four clusters.
Unlike the findings of the demonstration projects, the policy cluster
papers were not the product of a balanced team of participants, nor were
they indicative of Task Force consensus. Instead, the twenty-four
papers were intended to provide the Task Force with provocative and
diverse points of view. The ideas contained in the papers sparked
discussion among Task Force members and enriched the nine policy
recommendations of the Task Force.
Appendix C contains a summary of each paper and lists the authors and
THE INFORMATION CLUSTER
The idea of information as a field of study is uniquely modem. Yet
information is embedded in the most basic of social and economic
activities. In the marketplace, information is an integral component of
price signals. It also influences consumer decisions unrelated to
price. In a regulatory context, information allows for establishment of
realistic and practical goals; and through information, progress toward
those goals is measured. The Information Cluster delved into these
specific ideas and commissioned a number of policy options papers for
more indepth analysis.
The Information Cluster began with the thesis that information is a
component of the price signal, and the price signal is important to
behavior change. Improving the collection and dissemination of
information about the total life-cycle costs of a product should,
therefore, result in a more accurate price signal being sent to the
market. To the extent that environmental and social costs begin to be
more properly accounted for by this improved information flow, the
development and diffusion of eco-efficient products, processes, and
practices should be triggered.
Information plays a larger role in the marketplace, because consumer
behavior is not solely based on price. Emotional, philosophical, or
aesthetic factors also affect choice. Therefore, providing information
to consumers about the environmental benefits or risks associated with
the manufacture, use, or disposal of a product may encourage a shift
toward more eco-efficient consumption.
Information also emerged as a key element in performance-based
environmental management. Accurate and reliable information is a
prerequisite for evaluating performance. In the same way
that advanced satellite technology improved US. ability to be well
informed about the weapons capabilities of the Soviet Union and thereby
contributed to our nation's confidence in entering into arms agreements;
improved information about environmental performance will strengthen
the partnerships recommended under the new management regime. One
member of the Task Force even borrowed from the language of arms control
in noting that the next generation of environmental regulation would be
based upon the principle of "Trust, but verify."
In addition to these ideas about the relationship between information
and eco-efficiency the Information Cluster developed so many others that
the improvement of information collection and dissemination became
stand-alone Task Force Policy Recommendation 4: Information
Collection and Dissemination. The theme of improved information--within
manufacturing entities, between sources of supply and demand, and among
regulators, the public, and business--is also threaded throughout most of
the other eight recommendations.
The Economics Cluster surveyed the ways that market mechanisms can
encourage the adoption of eco-efficiency. In some cases, the market
itself produces environmental improvements, but in others the market
fails to value natural and cultural resources. When such market
failures occur, governmental involvement may be necessary to assist in
regulating the cleanliness of the environment or the rate of resource
consumption. The Economics Cluster evaluated the thesis that intentional
use of market mechanisms can be an efficient and cost-effective way to
protect the environment, enhance social well-being, and safeguard
The Economics Cluster examined both macroeconomic instruments--such as
emissions trading, user fees, and information programs--and macroeconomic
instruments--such as subsidy reform and tax shifts. It commissioned a
series of papers exploring the application of economic instruments to
achieve environmental goals. These papers are summarized in Appendix C.
The Economics Cluster determined that each economic instrument has its
particular advantages and disadvantages--it can be effective in dealing
with some aspects of a problem and less so with other aspects. For
example, because economic instruments may confer property rights and
allow the market to allocate responsibilities, these policies may have
effect of legitimizing rather than stigmatizing pollution.
The Economics Cluster also learned that not only are efficiency gains
important in the design of economic instruments, but so too are equity
concerns. Preservation of economic and social equity--who pays for
mitigation costs and the acceptability of risk and benefit distribution--
also had to be considered in the design and selection of economic policy
The Economics Cluster found that economic instruments can be powerful
incentives and made the following recommendations for their use:
- Change the standard of economic success by improving national income
- Modify U.S. tax and spending policy.
- Promote an environmentally sensitive international development policy,
adopting sector strategies to align economic and environmental objectives
with particular focus on the agriculture, transportation, and energy sectors.
- Make greater use of economic incentives in environmental regulation.
- Apply an industry-specific approach to environmental protection.
These and other fruits of the Economic Cluster's discussions appear in
the Task Force goals and in its final recommendations, particularly
Policy Recommendation 3: Market Incentives.
The Regulatory Cluster was a crucial breeding ground for the first two of
the Task Force recommendations: performance-based environmental
management system and extended product responsibility.
The Regulatory Cluster noted that although the current regulatory system
has made great progress in reducing environmental pollution, it does not
always operate in the most efficient and cost-effective manner. For
example, the current system controls environmental pollution using a
medium-specific approach, regulating cleanup of discharges into
waterways separately from discharges into the air. This medium-specific
approach orients decisionmakers to end-of-the pipe pollution control and
clean up strategies, yet such solutions are often costly and are
divorced from core business functions.
In addition, the current system tends to seek compliance by using
sometimes complicated and rigid regulatory requirements. An alternative
system would maximize environmental performance as a potential means for
gaining competitive advantage. Such an approach could produce
eco-efficient pollution prevention and resource conservation
opportunities that may go unrecognized under the current regulatory
These Regulatory Cluster findings were corroborated by those of the
Demonstration Projects, every one of which cited some aspect of the
current regulatory system as an inhibitor of eco-efficiency. For
example, the Auto Team reported that, absent an alternative system of
environmental regulation, eco-efficiency advancements in the automobile
manufacturing sector will be "incremental." The Auto Team stressed that,
"to realize the full innovative potential of the industry, which is
currently directed at compliance, an alternative system of environmental
regulation is needed."
The Regulatory Cluster developed options papers aimed at reforming and
reorienting the current regulatory system to encourage the adoption of
eco-efficiency improvements such as sustainable work practices. Its goal
was to define the general parameters of an alternative to the current
regulatory system that would provide both a cleaner environment and
cheaper compliance costs and where consistent achievement of higher
environmental standards would be balanced by a more flexible and holistic
regulatory regime. To that end, Regulatory Cluster members drafted
five options papers which have been summarized and included in Appendix C.
Many of the options that emerged from the Regulatory Cluster were merged
with the work of the Auto Team's "Alternative Regulatory System." This
combined proposal in turn provided much of the basis for Task Force
Recommendation 1: Environmental Management System.
MONEY AND MANAGEMENT CLUSTER
The Money and Management Cluster was established to study new models of
financing and managing eco-efficient decisionmaking.
The Money and Management Cluster recognized that transition to an
eco-efficient society will at times require larger societal
intervention. In addition, it recognized that small businesses and
communities suffer from a variety of capital access problems which
hinder their investment in eco-efficiency improvements. As a result, one
set of examined policies included those that structure alternative
capital markets to provide capital for investment in eco-efficient
improvements and those that facilitate entities' access to such capital.
The Money and Management Cluster also explored extended producer and
consumer responsibility. Using post-consumer waste as the focal point,
it explored options for shifting the cost for waste management from local
governments to consumers and producers. The objective of this shift,
according to its proponents, is to prompt the development of
eco-efficient products and packages.
The ideas of the Money and Management Cluster translated into a number
of the Task Force final recommendations, including Policy Recommendation
2: Extended Product Responsibility and Policy Recommendation 6:
Facilitating Capital Access.
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