Promoting Sustainability Through Improved EPA Incentives and Regulatory Outcomes

In a recent law review article titled Regulating for Sustainability, George Wyeth and Beth Termini argue that EPA should change the way it does business and move from the role of strictly regulator to that of an influencer of sustainability.  It’s a thoughtful and thought-provoking piece that contains many good ideas on ways in which the agency can have a greater role in shaping sustainable societal choices and behaviors.   As the authors note, sustainability is defined as economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs and seeks to balance economic, environmental, and social tensions (referred to as the “pillars” of sustainability).

EPA Administrator, Gina McCarthy, has reportedly made sustainability one of her top priorities.  According to George and Beth,

This may all seem unremarkable: sustainability might appear to be almost interchangeable with EPA’s traditional mission of environmental protection. In fact, however, adopting sustainability as a goal at EPA presents both a conceptual and a practical challenge, particularly for the regulatory programs that are its core line of work. Sustainability and environmental protection are not identical; furthermore, while voluntary programs promoting energy efficiency or pollution prevention fit comfortably with sustainability principles, the relationship between sustainability and regulation is more complex and has not been well articulated. If anything, experience suggests that there are tensions between them. Sustainability initiatives tend to be characterized by innovation, adaptability, continuous change, and systemic thinking, and these are not always easy to harmonize with a statutorily driven, top-down regulatory system addressing specific issues in a narrowly targeted way.

I would go farther than George and Beth and argue EPA must change the way it thinks and behaves as an institution or risk going the way of the dinosaur.  Moving from “regulator” to “influencer” will not be easy for the agency.  First, EPA is a regulatory agency and thus its proper objective is to regulate.  But what the authors urge – and where we’re in violent agreement – is the need for greater consideration of flexibilities and bigger vision under EPA’s current regulatory regimes with more sustainable outcomes.  But regulatory agencies like EPA do not like change and, in fact, don’t do change well even when forced to.  Changing any institution or organization is often a slow, arduous process requiring a seismic cultural shift.  Much like changing the direction of an ocean-bound cargo ship.   But urging or forcing the agency to think and act more in terms of influencing behavior through more flexibility and innovation in achieving results rather than simply playing the role of the gun-toting sheriff is a serious idea that deserves serious discussion.  In some cases, this change has begun to happen, for example, in the use of emerging environmental markets, but it needs to occur at a more rapid and sustained pace.

As I recently wrote for Water and Wastes Digest, Carrots and Sticks: utilizing incentives to alleviate aging infrastructure and workforce concerns, if society is to successfully erect the pillars of sustainability and fix many of the pressing environmental issues we still face, we can only do so through a healthy balance of regulatory carrots and sticks.  The low-hanging fruit of pollution reduction – end-of-pipe emissions – has long been harvested vis-a-vis traditional tools and approaches and we find ourselves reaching ever higher into the canopy to resolve environmental problems that in many ways are immune from traditional command-and-control approaches.  These additional reductions in some cases are warranted, but the marginal costs of the next units of pollution reduction are staggering, and can wreak havoc on local economies and jobs.  Simply put, we can no longer rely solely on 20th Century tools to fix 21st Century environmental problems. This seems intuitive, yet has proven extremely difficult in terms of translating new approaches into a forward thinking vision and regulatory agenda.  In fact, in recent years, EPA has neglected those tools and programs with the greatest opportunity to advance sustainability in the business world.  Now, in all fairness to the agency, this is due in part to budget cuts and resource constraints which has forced the agency to refocus its efforts on core traditional tools and programs.  However, it is mostly due to a culture that still clings to its role as the gun-toting sheriff.  Truth be told, it’s a lot easier to regulate than to influence, which necessarily involves greater uncertainty and stakeholder engagement.  EPA’s institutional norms and merit-based award system do not reward those who challenge old ideas and promote new ones.  In the end, however, regulations alone won’t work, just as incentives without regulations won’t appreciably move the dial – they must go hand-in-hand to influence sustainable choices and behavior.

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