IV. Achieving Superior Environmental Performance

Superior environmental performance is a term of art in the Aspen Series on the Environment. In general, it means to achieve an environmental outcome "better" than simple compliance with applicable regulations.

There are two fundamental public policy reasons for requiring superior environmental performance, as opposed to equivalent environmental performance, in exchange for enhanced regulatory flexibility and anticipated lower costs.

Increasing global pressures on the environment and evolving economic and market structures raise serious concerns about the current system's sustainability. A new way to protect and enhance the environment consistent with a sustainable society requires enhanced environmental performance at a lower cost.

The other reason relates to the statutory and institutional public responsibility of government agencies to ensure that the natural environment is protected for this and future generations. To the extent that the Alternative Path reduces the applicability of prescriptive regulations and regulatory intrusion in the ways environmental goals are achieved, this continuing public responsibility calls for a superior environmental performance requirement to balance the uncertainty of result inherent in a new, more flexible regulatory system.

A growing number of companies have chosen to attain superior environmental performance for strategic business reasons. For others it may mean an opportunity to "trade off" certain procedural and substantive regulatory requirements, with the expectation that such a trade-off can yield important environmental, economic, and social benefits.

Lacking a statutory basis and any sort of regulatory criteria, the term superior environmental performance is here defined in policy terms, including:

• quantitative benchmarks of performance based upon measurable, verifiable factors;
• differing benchmarks that vary for existing facilities, expanding facilities, and new facilities;
• considerations of qualitative value in addition to the quantitative benchmark; and
• safeguards that backstop the above benchmarks and values.

The Aspen Series intends that superior environmental performance be designed with a positive view towards incentives and innovation; and to encourage environmental results that contribute to a robust and vibrant economy. We expect to realize not only superior environmental performance but also to reduce transaction costs, provide for flexibility of means, accelerate permit processing, and reduce barriers to getting to market quickly.

Superior environmental performance is defined here in terms of a "facility" that is subject to "facility-specific" regulations. (The "facility" is understood to include an appropriate area of influence, so that offsets, trades, and market transactions can be given due credit.) The term will need to be expanded, based upon experience gained, to include other activities such as natural resource management and extraction, environmental remediation and cleanup, and environmental services. Eventually the term will need to be defined in the longer-term context of sustainable development.

The Aspen Series proposes the following Considerations for superior environmental performance:

Considerations for Superior Environmental Performance
Superior environmental performance is that which is qualitatively superior and produces a "better environmental result" than current or anticipated future regulations would achieve. The result being sought encompasses both the protection of human health (including that of communities and workers) and the protection of the integrity of natural ecosystems from the adverse impacts of pollution. Superior environmental performance is a prerequisite for approval of alternative path proposals.

To provide for demonstrable and measurable achievement of quantitative aspects of superior environmental performance regarding releases to the environment, the following "benchmarks" are proposed for implementation. "Benchmarks" are intended to be a simple threshold to assess the existing situation as a basis to assess the positive change that ensues from superior environmental performance.

The benchmarks include:

• For existing facilities, the benchmark will be based on the lesser of actual or allowable levels of environmental releases, and with the following specific considerations:
• For existing facilities that have already reduced releases significantly below current applicable requirements, exceptions to the actuals benchmark may be negotiated on a case-by-case basis to maintain excellence.
• For existing facilities being modified to significantly expand production, the benchmark will be the lesser of actual or allowable levels of environmental releases, expressed on a per unit of production basis, adjusted as required to avoid interfering with the prevailing ambient objectives or national standards of the areas affected by the project.
• For new facilities or expansion with new products, the benchmark will be based on the lesser of allowable levels or best performance practices of similarly situated facilities or products, such that new investments in new plants and equipment shall advance the threshold of continuous improvement in environmental performance.

The objectives of the Alternative Path will often be met by shifting our primary focus upstream of end-of-the-pipe releases to the environment. Therefore, additional quantitative and qualitative metrics may be employed to craft a project that will achieve superior environmental performance. For example, commitments to develop environmentally beneficial manufacturing processes and project designs and/or to reduce pollution in supplier operations may lead to superior environmental performance. Projects should establish baselines and measure progress toward fulfilling any such commitments.

For any metric or quantitative benchmark that may be applied to existing or new facilities, full transparency of information shall be required. Such information should be accessible and adequate to enable verification of environmental performance by any interested person.

Beyond these quantitative benchmarks, additional considerations supporting superior environmental performance could involve extra environmental, economic, or social benefits that could arise from the Alternative Path including measures that increase energy or material use efficiencies, that enhance ecological factors of habitat or species conservation, that support local job creation or workforce development, and that support local economic growth. Such extra measures of qualitative value abound; stakeholder groups should review and offer appropriate recommendations.

Despite surpassing the above quantitative benchmarks and receiving due credit for other considerations, environmental performance cannot be considered superior if the proposal:

• results in an exceedance of an applicable national environmental or health standard;
• poses any significant increase or shift in the risk of adverse effects to the health of individuals, populations or other categories of resources. (The "precautionary principle" will guide any decision to increase the release to the environment of substances for which health impacts are not adequately understood);
• results in significant export or relocation of pollution to other locations.

Federal and state regulators shall establish processes for assuring that the cumulative impact of Alternative Path projects is consistent with the above safeguards and with the development of a healthy economy that is compatible with the long-term needs of natural systems on which the economy depends.

The concepts of superior environmental performance and regulatory flexibility appear to have merit for projects that do not involve releases to the environment but otherwise impact the environment. The meaning and implementation of an Alternative Path in this context, including superior environmental performance and regulatory flexibility, and will need to be explored and elucidated for the concept to be further pursued.