An Innovation-Driven Environmental Policy

Article excerpt

U.S. environmental policy is receiving critical scrutiny from all sides. Congressional proponents of quick "fixes" such as regulatory moratoria and cost-benefit analysis have seized the limelight of publicity. But the reform impulse is also intense within the community of government officials, industrialists, and environmentalists who deal with environmental matters on a daily basis. Clearly, the nation's environmental policy needs to be revised; the problems are too many and the public resources too limited for things to continue indefinitely in the current mode.

The solution, however, is not to hobble regulators with inflexible analytical and legal requirements, which would only raise the hurdles to the introduction of improved technologies to solve environmental problems. Nor is it to weaken standards of environmental protection in the name of making U.S. firms more competitive. On the contrary, the evidence suggests that strong environmental demands actually stimulate innovation, particularly among the most technologically dynamic firms. As but one example, environmental considerations were an important if not major factor in General Motors' development of the Impact, a high-performance, electrically powered vehicle that embodies innovative propulsion systems and advances in materials science.

What is required is a refocus and renewal of environmental policy. Both regulators and industry, including those firms that pollute and those that produce environmental technology, need to be freed to concentrate on devising innovations that will reduce environmental hazards as well as the costs of control. This can be done only by making the central mission of environmental policy the enhancement of technological change. Technological change - both the development of new technologies and their diffusion - is arguably the major engine of progress in our society today. And while universities, government, and the research sector all contribute, private firms are our society's main locus of technological change.

The notion that environmental policy should be "in the business" of promoting technological change in the private sector is not really a radical one. Environmentalists have long been avid proponents of new technology. The Clean Air Act Amendments of 1970 reflected this approach by setting goals for mobile source emissions that could be achieved only through new technology. The industrial community also realizes that its competitive position depends on its ability to innovate, and it supports public efforts that enhance this capability. But such a mission does depart significantly from the path that policy has pursued to date. Whatever the rhetoric, the practical history of environmental regulation has shown a kind of schizophrenia, alternating between imposing strict controls on new products and facilities, mandating radical innovations by legislative fiat, and too often settling for the best available technology as a compromise solution that rarely moved forward with the times.

What is needed is for environmental policy to broaden its focus. It must stop discriminating against new technology, thereby prolonging the commercial life of yesterday's tired products and processes. It needs new skills and a more suitable organizational structure. It needs to connect and coordinate with the existing apparatus of the nation's technology policy, and it needs to apply many of the well-established tools through which technology policy already supports and enhances the process of technological change in the private sector.

What technologies to promote?

Much attention has been devoted in recent years to the need to promote "environmental" technology. Early on, the Clinton-Gore administration made the Environmental Technology Initiative a centerpiece of its technology policy. Several bills on this topic were introduced during the last Congress. Hundreds of enthusiastic participants attended the White House Conference on Environmental Technology in December 1994, and firms in the private sector have organized an Environmental Business Council and the Environmental Technology Export Council. …