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E3: Organizing for Environment,Economy in the Executive BranchGovernment.

Carnegie Commission on Science,Government, New York, NY.Apr 9028p.

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SE 051 865

Energy, and theof the U.S.

Technology, and

MF01/PCO2 Plus Postage.Alternative Energy Sources; Conservation(Environment); Decision Making; Depleted Resources;*Energy Conservation; Environment; *EnvitonmentalEducation; Fuelsr. Natural Rsources; NeedsAssessment: *Policy Formation; Pollution; *Srienceand Society; Science Education; *Technology

A Task Force created in 1989 was asked to provide theCzrnegie Commission on Science, Technology, and Government with abrief statement outliang both functional needs in environment andenergy and institutional forms to enhance the government's capablittyto address the emergent issues. One key need the Task Force hasidentified is for a greater emphasia on developing and structuringincentives to prevent environmental problems, rather than respondingto problems only after they occur. A second need is to grapple withthe multitude and subtlet' of interfaces between issues, not only ofenvironment and energy, t-x. of the economy as well. This reportsuggests that there is an abundance of organizations that deal withspecifics, but not with their integration. Discussions include: (1)limitations of command and control; (2) linking economic and eneigyneeds to the environment; (3) international dimensions; (4) short andlong term objectives; (5) matching organizations to the problem; and(6) coordination between existing systems. Key and supportingrecommendations of the Task Force have been included. Appended is adiscussion Oh the greenhouse effect as an illustration of thelinitages between the environment, energy, and the economy. (KR)

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V)Qi Carnegie Commission on

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Science, Technology, and GovernmentTask Force on Environment and Energy

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E3 : Organizing forEnvironment, Energy, and the Economyin the Executive Branch ofthe U.S. Government

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Carnegie Commission on Science,Technology, and Government

In a world rapidly transforming itselfthrough science and technology (S&T), instru-Lions and decision-making processes must continu-ally et ott e to make the most effecto.e and humaneuse of scientific and technological capabilities andto meet the demands anew situations. The pastfifty years bae been characterized by an extraordi-nary growth and devekirT.....nt of organizationsconcerned nith science and technology and of se,-entifk and technical components of organizationstraditionall,, little ed ith science and tech-nology . The expectation for cor ang decades canonly be that science and technology will turthersuffuse human society and decision-making,whether at international, national, or state levels,whether m executive agencies, legislatures, orcourts. Existing orge .zations will change to adaptto and to influence the new environment; newinstitutions will be create(' to accommo(late newneeds; and rules and processes will be imxlified andinvented to adjust and optimize the functioning ofthe system.

The main purpose of the CarnegieCommission on Science, Technology, andGovernment is to seek ways in which the branchesof the.U.S. government can encourage and betteruse the contributions of the nation's scientists andengineers. The Commission is unique in its long-range focus on more effective mechanisms bywhich the federal government, states, and interna-tional organizations in which the United Statesplays a major role can incoiporate scientitic andtechnical knowledge into policy and administra-tive decision-making.

The Commission seeks to bring aboutdesired changes through defining and drawingattention to opportunities for improvement andinnovation in institutions and decision-makingprocesses. These may relate to the establishmentof new institutions; adjustment of incentives; reor-ganization; legislation; or strengthening of mecha-nisms for participation, education, and coordina-tion.

Tlw first report of the Commission, issuedin October of 1988, addressed the qcestion of"Science St Technology and the President." Thereport explored Presidential. let el issues oh wescience and techuology and made recommen,:a-nom for organization for S&T v. ithin the Execu-tn. c Office. Subsequent reports of the Commission

address Nucl. topics as organization of thefederal go% emment for economic performance,silence, teehnulog) and the Congress, science andthe Judiciary, and science and technology in or-ganizations concerned ith alternation.... elop-men t.

The Commission and its AdvisoryCouncil consist of eminent scientists, engineers,scholars, heads of science- and technology-basedindustries, educators, (ormer government officials,and other leaders in the public a(1 private sectorwith direct experience of the use., of science andtechnology in policy development. The Commis-sion was formed in 1988 by Carnegie Corporationof New York at the initiative of its president,Da% id A. Hamburg. It is chartered for five sears.

3 APR 1 7 1990

E3: Organizing for

Environment, Energy,and the Economyin the Executive Branch ofthe U.S. Government

Carnegie Commission onScience, Technology,and GovernmentTask Force on Environment and Energy

4

Commissiorers

William T. Golden, Co-ChairChairman, American Museum of NaturalHistory

Joshua Lederberg, Co-ChairPresident, The Rockefeller University

Da. id Z. Robinson, Execum e Director

Richard C. AtkinsonChancellorUniversity of California, San Diego

Norman R. AugustineChairman and Chief Executive Officer,Martin Marietta Corporation

John BrademasPresi,ient, New York Unwersity

Lewis M. BranscombDirector, Science, Technology, andPublic Policy ProgramHarvard University

The Honorable Jimmy CarterFormer President of the United States

William T. Coleman, Jr.Attorney, O'Melvenv & Myers

Sidney D. DrellProfessor and Deputy DirectorStanford Linear Accelerator Center

Daniel J. EvansPresidentDaniel J. Evans Associates

General Andrew J. Goodpmer (Ret.)ChairmanThe Atlantic Council of the U.S.

Shirley M. HufstedlerAttorneyHufstedler Miller, Kaus, and Beardsley

Admiral B.R. Inman (Ret.)

Helene L. KaplanAttorney, Webster & Sheffield

Donald KennedyPresident, Stanford University

Charles McC. Mathias, Jr.Attorney, Jones, Day, Reavis & Pogue

William J. PerryChairman, Technology Strategies and Allia .ces

Robert M. SolowProfessor of EconomicsMassachusetts I nstitute of Technology

H. Guyford SteverFormer DirectorNational Science Foundation

Sheila E. WidnallProfessor of Aeronautics and AstronauticsMassachusetts Institute of Technology

Jerome B. WiesnerPresident EmeritusMassachusetts Institute of Technology

Advisory Council

Graham T. Allison, Jr.Former Dean, John F. Kennedy Schoolof Government, Harvard University

William 0. BakerFormer Chairman of the BoardAT&T Bell Laboratories

Harvey BrooksProfessor of Technology and Public PolicyEmeritus, Harvard University

Harold BrownChairmanThe Johns Hopkins Foreign Policy Institute

James CannonConsultantThe Eisenhowe- Centennial Foundation

Ashton B. CarterCent .r for Science and International AffairsHarvard University

Theodore CooperChairman and Chief Executive OfficerThe Upjohn Company

Eugene H. Cota-RoilesAssistant Vice President,Academic Affairs, Un' ersity of California

William DraytonPresident, Ashoka Fetiowships

Thomas EhrlichPresident, Indiana University

Stuart E. Eizensta,Partner, Powell, Goldstein. Frazer & Murphy

Th., Honorable Gerald R. Ford, Jr.Former President of the United States

Ralph E. GornoryPresident, Alfred P. Sloan Foundation

The Reverend Theodore M. Hesburgh, C.S.0President Emerkus, Univ ssity of Notre Dame

Alice M. RivlinSenior Fellow, The Brookings Institution

6

Rodney W. NicholsExecutive Vice PreisdentThe Rockefeller University

David PackardChairman of the BoardHewlett-Packard Company

The Honorable Lewis F. Powell, Jr.Former Associate JusticeUnited States Supreme Court

Charles W. PowersPartnerResources for Responsible Management

James B. RestonSenior Columnist, New York Times

Walter E. MasseyVice President for ResearchUniversity of Chicago

Oscar M. RuebhaesenFormer Presiding PartnerDebevoise & Plimpton

Jonas SalkFounding DirectorSalk Institute for Biological Studies

Maxine F. SingerPresidentCarnegie Institution of Washington

The Honorable Richard L. ThornburghU.S. Attorney General

Admiral James D. Watkins (Ret.)*Secretary of Energy

Herbert F. YorkDirector, Institute on Global Conflict &Cooperation, Unn ersity of California, San Diego

Charles A. ZraketPresident and Chief Executne OfficerThe MITRE Corporation

*Through January 20. 1989

Task Force on Environment and Energy

Members:

H. Guyford Stever, ChairmanFormer Director, National Science Foundation

Edward A. FriemanDirector, Scripps Institute for Oceanography

Robert FriPresident, Resources for the Future

Gordon J. F. ZAacDonaldChief Scientist, The MITRE Corporation

Staff:

Jesse H. Ausubel, Director of StudiesMargret Holland, Administrative Assistant

Carnegie Commission Staff:

David Z. Robinson, Executive DirectorJesse H. Ausubel, Director L f StudiesDavid Z. Beckler, Associate DirectorJonathan Bender, Research AssistantJennifer B. Catlett, Administrative AssistantDavid A. Kirsch, Program AssociatePaul Harris, Jr., Office ManagerMargret Holland, Administrative AssistantLaura A. Hyatt, Officc AssistantMark E. Schaefer, Senicr Staff Associate

7

PREFACE

Over the past tw enty fiv e y.ars, the termsof the env ironmental debate hav c shifted fromsma:1 and seemingly dist_rete problems to muehlarger, more eomplieatedind embraeing ones thatultimatefy relate to the possible destruction of thehuman habitat and of nature itself. In ortier totranslate the ney en% ironmentam understandinginto dice tix e polices, organizatioi and deeisionmaking must rise to a higher le% el, both in theUnited States and internationally.

Recognizing the urgency of the need, theCarnegie Commission on Science, Technology,and Government established its first Task Force toexamine how the Executive Branch of the U. S.Government might strengthen its ability to dealwith problems in the intimately related areas ofenvironment and energy. The Task Force, chairedby Commissioner H. Guy"-I Stever and made upof distinguished experts who were not members ofthe Commission, was created in the spring of 1989.It was asked to provide the full Commission with abrief statement outlining both fanctional needs inenv ironment and energy, and irstitutional forms toenhance the gov ernment's eqability to addressthe emergent issues.

One key need the Task Force basidentified is for a greater emphasis on di velopmgand structuring incentives to prevent environ-mental problems, rathe- than responding toproblems only after they occur. A second need isto grapple with the multitude and subtlety ofinterfaces between issues, not only of environmentand energy, but of the economy as well. Thefollowing report suggest_ accurately that there is anabundance of organizations that deal with specif-ics, but not with their integration.

-sitlent Bush's speeeh to the Intergovernmental Panel on Climate Change on Feoruary5, 1990, clearly recognizes the interrelation ofenvironmental and economic Issues and also citesthe review and revision of a national c -iergystrategy that will include environmental considera-tions. Effective integration and implementation of

these policies requires, ov er the long term, furtherstrengthening or adjustment of the presentmstitutional mechanisms ii. order to deal w ith themany issues that are certain to arise in the nextdeeade... The need to link the planning ofseientific researehissessment of impaet,, andpulley formulation and implementation requires asustained linking eapability at the highest levelof go% ernmel it. The meehanisni, that have

ed 0% er the past year, while able to dealeffectively with specific urgent issues, are not, inthe view of the Task Force, sufficiently institution-alized to predict future problems and opportunities,or to react swiftly to them In the long term,there is a need for a sustained mechanism respon-sible for Integrated policy analysis, able to identifytradeoffs and policy options using informationfrom the departments and agencies, and thismechanism should be permanently associated witha policy groun in the White House that considersthe options and makes recommendations to thePresident.

To fulfill this eentral goal, the Task Forcekis formulated three organizational alternati% esthat might be helpful. Detailed evaluation ofthese alternatives, a well as development ofothers, should be carried forward by those in thegovernment who are best placed to identifypractical advantages and disadvantages thatinevitably are connected to the current, specifichistorical context. At the same time, the Com-mission hopea that by presenting this report it willstimulate a much broader discussion within theExecutive Branch, the Congress, the media, and ofthe interested public about how the institutions ofthe U.S. government can best be adapted incoining years to face a daunting array of challengesrelated to en% ironment, energy, and the econotn).

The Commission recognizes that a strongU.S. institutional foundation in the area ofenvironment and energy is a vital, though onlypat tial, basis tor addressing what are, in large part,global problems. Subsequent efforts of the Com-mission will consider selected international institu-

tional dimensions.

Tlis: Commission endorses this report andthanks the members of the Task Force and the stafffor a timely and thoughtfu: contribution. Anearlier draft was re,iewed by both the Commissionand its Advisory Council. We all look forward toworking with corcerned parties in the furtherdefinition of the vision and implem6-itation of therecommendations presented in this report.

William T. Golden Joshua LederbergCo-Chairman Co-Chairman

9

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CONTENTS

Executive Summary2

In troduct ion5

Limitations of Command.and-Control5

Consequences of Fragmentation6

Linking Economic and Energy Needs to the Environment 6

International Dimensions7

Humoinzing Short- and Long- term Objectives8

Matching Organization to the Problem - A Functional Approach 8

A New Vision0

Key RI commendations of the Task Force10

Supporting Recommendations1 3

Conclusion14

References1 5

AppendixThe Greenhouse Effect: An Illustration of the Linkages of Environmen Eaergy, and Economy.. I8

I 0

EXECUTIVE SUMMARY

The United S.-- es needs basic changes inthe institutional, as Wei s legal, are ta to mini-mize c,intlict between golls for environmentalquality, energy security, and economic strength; topromote cooperation between proponents ofenvironmental quality and advocates ofeconomicdevelopment; and to address einergin environ-mental issues, especially those on a global scale.The environment-energy-economy, or E1, issue isone of the most complex facing government, for itcombines economics, science, and technol.igy withutilor social and international concerns. It hasshort-term avects, such as oil spills and the %VON-emng air breathed daily by many of our people;medium-term aspects, stud as the deterioration otour foiests, streams, soil, and lakes associated withacid rain; and long- t.:rm .hpects, such as radioac-tive waste disposal and global climate change.

The many faces of the environment-energy-economy challenge are, and will continueto be, of such priority that mire effective organiza-tion and decision-making must be put in place inthe U.S. Government. Given the excellence ofour environtental sciences, ow- capability in manyfields of energy technology, and the leverage ot oureconomy on world economic trends, the UnitedStates can be in a position to provide worldleidership in harmonizing env ironwnt and de-velopment. Ohibal political momentum is now sogreat for progress toward sustainable developmentthat, if the UnnNl States is to provide leadership, amuch more alert and strategic stance is requiredwithin the government.

Four (unctions need to be fulfilled by thegovernment; building the knowledge base,assessing impacts, formulating policy, and imple-menting poiacy..Quite apart from organization, thefunctions are difficult to fulfill for issues such asglobal climate change because of insufficent dataand uncertainty about causes and effects, irreversi-btlity ot consequences, and international require-ments fir response.

More is needed than better coordination2

of the existing system of environmental manage-ment and decision-making. A new vision of howwe can maintain and enhance environmentalquality nationally and globally must define our In-stitutions. In particular, greater use of economicincentives will help to realize the long-term com-patibility of goals for environmental quality andeconomic strength, in part by fostering neededtechnological innovations.

In recent years there hat e been intervalsof contusion within the U.S. government in policyformation on several ens ironmental issues, mostrecently on climatic change. This situation re .flected the absence ofa top-level organizationalmechanism that can address policy developmentand management of federal responsibilities. TheTask Force recommends that actions be taken toassure the stable and sustain -(1 functioning ofahigh-level mechanism concerned with linking en-vironment, energy, and the economy. The mecha-nism should be designed, to the greatest extentpossible, to accomplish the following:

) satisfy the needs of the President for integratedpolicy options anti advice2) influence the p Ike} directions and programs otrelevant departments and agencies1) create and maintain a forum tor interagency co-operation4) r ombinc inestic and mtei national considera-tions5) work compatibly n ith Congress6) attract and retain staff of high professionalstanding and ,!,3W on both in-house and extramu-ral expertise7) connect to the states, private industry, andpublic and environmental groups

Recently the gos ernment has takenpromising steps in the direction of insinutional ar-rangements satisy ing tnese criteria. The Presidentassigned to the Secrc:ary of Energy the responsibil-ity of developing a national energy strategy thatcovers short-, medium-, and long-term aspects ofenergy policy and takes into account economic

1

and environmental factors. A koadly basedworking group of the Er unomic Policy Council hasbeen constituted to participate in the sr.ategy for-mulation. The staff of the Council on Environ-mental Quality has been strengihened. Further-more. the Congress has voted to elevate the En%1-

ronmental Protection Agency to a cabinet-leveltic: ailment, a suggestion endorsed b, the Presi-dent.

In regard to chmamt, initiatives are underway in the Domestic Policy Council, and the role

played by the Assistant to the President forScience and Technology and the Offic.: of Scienceand Technology Policy (OSTP) is growing.OSTP's Federal Coordinating Council for Science,Engineering, and Technology (FCCSET), throughits Committee on Earth Sciences (CES), hasproposed the funding of a much expanded researchprogram on global change. Within the DomesticPolicy Council, the President's Assistant forScience and Technology chairs an influential co.on);nating committee of agencies dealing withpolicy responses to, as well as research upon.climate change.

An option that may go further towardmeeting the c-Iteria identified above is a newExecutive Office Council on Environment,Energy, and Economics (CE') that would evolvefrom and replace the current Council on Environ-mental Quality (CEQ) A second promn,ingoption is a furth r strengthening of the CEQwithin its current framework to embrace moreexpertise in science, engincering, energy, and eco-nomics. A third option is the creation of a newWhite House Council on Environment, Energy,and the Economy, composed of leaders of existingorganizations that have authority and responsibili-ties m relevant areas.

The Task Force also ,s commends that theCarnegie Commission's own ioups that are begin-ning study of science, technciogy, and the Con-gress consider ways to bring together disparateCongressional in,c.2sts involving environment,

energy, and economics. Examples of relevantcurrent mechanisms that might be explored in thiscontext include the Env ironmental and EnergyStudy Conference and the Joint EconomicComnuttee. Ar Iher possible approach is the establishme. ..xed period of a new SelectCommittee on En% ironment, Energy, and theEconomy.

In support of these recommendations, theTask Force suggests the following:

a) reinforcement of high-level representation incoordmatton between agencies conductingr -search on global environment and re'atedmatters;b) an intensive review of federal mot-laming effortsand responsibilities tor global environmon;C) further strengthening of the caeability of theState Department to aralyze and to respond toforeign policy implications of Issues in environ-ment and energy; andd) consideration of the establishment of a new, in-dependent, forward-looking Institute for environ-mental analysis to serve government agencies.

Sound policies in such areas as wasteminimization and energy efficiency, imaginativeuse of economic incentives, and promotion ofengineering solutions th..t address potential prob.lems thr..dgh design at the ongm, rather thanthrough retrofits at the "end-of-the-pipe," willstr ingly and simultaneously support economicgrowth, energy security, and environmental qual-icy. Now is foe time to match our insututionsbetter to the task.

2 3

"Fundamental changes in concepts, inlaws, and in th.. organizational structure oflegislative and executive branch activitiesare essential if further progress is to be madeon long-standing environmental issues andnewly recognized ones alike."William K. Reilly, Jr. '

INTRODUCTION

The long-term compatibility of environ-mental and economic objectives has becomeobscured by an excessive focus on short-termobjectives and on the regulatory tools developed toachieve them. The United States needs basicchanges in the institutional, as well as legaltrenato minimize this conflict, to promote cooperationbetween proponents of environmental quality andadvocates ot economic development, and toaddress emerging environmental Issues, especiallythose on a global scale. Much progress has beenmade on the environmental agenda by insmu-nonal and legislative means over the past twenty'years, but there are signs that the environmentalagenda of the future will diverge in increasinglytroublesome ways from the one that our currentgovernmental decision-making arrangements aredesigned to address. Neither the environmentalagenda nor other -lated social objectives will bewell served simply uy relying on the status quo

:n the late 1960s, there was widespreadagreement that the governmental system had notresponded adequately to envuonmental problems.In response, the Environmental Protection Agency(EPA), the National Oceanic and AtmosphericAdministration (NOAA), the OccupationalSatety and Health Administration (OSHA), andthe White House Council on EnvironmentalQuality (CL) were all created around 1970 astresh, stronger mechanisms for focusing America'sefforts on a range of envimmerital issues. Today,there is once again a sense that existing mecha-nisms are inadequate to address environmentalissues, particularly as these tames intersect tithissues of economic growth, energy use, andinternational affairs. Enhanced and probablydifferent mechanisms are needed at high levels ofgovemmeot to connect the analyses of variousissues and to provide leadersi in their manage-ment.

The Task Force believes that now Is the timetor the government to examine thoroughly theadequacy ot its organization and decision-makingprocesses for environmental quality as it relates to

energy and economic growth. The next few yearsshould be another formative perio-i for organiza-tion and decision-making processes regarding theenvironment, both domestically and internation-ally. Failure to orient our government's environ-mental institutions and decision-making processesto present and emerging conditions 01 be costlyto the people of the United States in both mone-tary and non-monetary terms. In turn, failure bythe United States to develop its capability tocontribute to progress on global environmentalissues could have major implications for all ourplanetary neighbors.

The economic lnsues are !ready large. TheUnited States now spends mort tt mn $70 billionper year to meet the lequirern uf the Clean Airand Clean Water Acts end thc "sesource Conser-vation and Recovery Act. The nation faces aclean-up price tag for Saperfund sites of approxi-mately $1 trillion.. Part of the T ..son that costsare this high is that the United . nes has reliedheat ily on an "end-of-the-pipe" approach, clean-ing up a problem after it occu.s. Thi, approach isnot only oaen ineffective, it is also vet,: expensiveOnly 1 percent of the $7,' biPion now spent isdevoLd to prevention of pollution. The nationneeds to move in the direction of poltitionprevention, esvzcially through waste minimization,energy efficiency, and more environmentallycompatible energy supply strategies 4 The g,,vern-rnent needs to de% zlop institutions that willadvance this process.

.e-Atations of Command-and-Control

Traditionally, the U c ---wernment hasdepended heavily on a "c M anand-and-control"strategy to achieve environmental goals. Thisstrategy may be characterized in simple terms asrelying on an elaborate system of planning inwhich a central administration imposes productionquotas on different plants and industries throughdirectives specifying the amount of pollutionallowed to escape into the air, water, and land7..catise the U.S. econ. mic system is largely

13

IN i-111MENEWEIMMEIM

"All too often, issues tvill be addressed insuch a way that all but the most criticalaspects are dealt with...fathough you canbreak a problem down and address solutionsto the pieces, it is not a complete solutionunless we can reconstitute the pieces into awhole that is consistent, realistic, and notself-contradictory."John H. Sununu

governed hy markets in gt-ods and serv ices, it Is notsurprising to find that the command-and-controlapproach has met with limited success in attainingthe goals set for it Among the ev ident shortcom-ings of the current syste the pressures itci ares for noncompliance by such means as simplymoving pollution from one medium to another,less-regulated medium; ;Regal dumping and otherevasive activity; and costly and time-consuminglitigarionP

The greenhouse issue, which is in factone ofa class of complex global issues for which newmanagement mechanisms ar ?. needed, demon-strates the limitations of applying command-and-control regulation to new problems (see Appen-dix) Energy use, the main s..urce of gretivousegases, is so pervasive in all sectors of society thatdeveloping and implementing sound policies inrelation to the greenhouse issue is particularly im-portant. As hinted at by the U.S. experience inresponding to the energy crises of the 1970s,attempts to regulate energy use in the traditionalstyle could lead to - bureaucratic apparatus thatwould dwarf the present Env nonmental ProtectionAgency in both si,:c and expense. More importantthan ske and cost of such a bureaucracy Is thelikelihood that .; would be ineffectiv e, or effectiv ebut seriously damaging to the economy.

Consequences of Fragmentation

The complexity of the global warming issuealso focuses attention on thc need to consider the"system" aspects of both environmental protectionand energy supply. For instance, a major elementm current proposals to curb damage due to acidrain is to use flue gas scrubber.; to remove sulfurfrom coal. Unintended consequences of successfuldiffusion of .rubber technology could be higheremissions and concentrations of greenhouse gasesthrough increased reliance on coal for energysupply, a decrease in efficiency of electricitygeneration, and other factors. Clearly, the coalthat is burned should be burned as cleanly aspossible, but more careful thought and analysis

6

should accompany investments in such partial"solutions" that may tend to lock energy systemsinto sources and technologies that could seriouslyexacerbate other environmental problems. Anyenergy strategy, whether emphasizing hydrocar-boas, nuclear power, reaewable sources, .aanage-ment of energy demand, or efficiency will havecomplicated environmental and economicimplications, and these need to be considered bythe government in a comprehensive, integratedfashion.

The United States and other countries arecaught in a costly, confu,ing web of Mlles becausethe links between and among the environment,energy, and the economy, as well as the linksamong environmental issues, ha. e been neglected.

Linking Economic and Energy Needs to the En-vironment

Economic considerations have. fo. course,always figured in U.S. env ironmentalMuch of the economic dimension has beenassociated with cost-benefit analyses of proposedenvironmental regulations. Beginning with therelatively simple "quality of life" rev iews stemmingfrom the National Env irunmental Protection Act(NEPA) passed in 1969, requirements for theseanalyses grew, particularly with the issuance ofExecutive Order 12291 in 1981, which requiresagencies to prepare Regulatory Impact Analyses formost major regulations. Cost-benefit analyseshave been useful in eliminating inefficientalternatives and in stimulating the search for alter-natives, among other outcomes.' Economic argu-ments have sometimes been used to justifyinaction on environmental matters. In general,environmental protection has been analyzed in aframework that puts it in opposition to economicgrowth.

A new and wore constructive intaectualfocus is now necessary for economic research andanalysis related to the env ironment." There is a

need, for example, to identify and provide incen-tives to develop processes and products thnincrease energy efficiency and reduce the nroduc-non of waste. Opportunities and incentives for

innovation and investment that would benefitboth the economy and ti-e environment throughwaste reduction have been tler neglected orforeclosed by the prevailir_ mand-and-controlstrategy. Waste reduction and energy efficiency

are complementary and make good economicsense. Prevention of pollution can often pay foritself through reduced demand for inputs, reduc-tion in waste disposal and liability costs, and other

means. Indeed, acLeving reductions in produc-tion of waste or the amount of energy required bywaste-producing industrial processes can contrib-ute significantly to the competitiveness of Ll S

industries.Numerous experts hax e argued in recent

years that more flexible ma,cet-based approachescould help achiev. environmental goals, includingpollution prevention, in a more timely and lesscostly way than traditional regulation.w Incen-tive-based systems would involve such mechanismsas emission fees and marketable permits. Experi-mentation with such new approaches, with whichthere is still little operational experience, appearsincreasingly necessary in lig: of the insufficiencyof traditional approaches for issues like globalclimate change and ozone depletion, as well asnon-point-source pollution of surface and groundwater, solid waste disposal, and buildup of pesti-cides and toxic substances." Adjusting the detailsof the current system seems unlikely r solve eitherlingering or emerging environmental problems,nor will it adequately promote the long-runcomplementarity between economic and environ-mental objectives. There is a need to look beyondthe short-run perspectwes of "environmentalists"and "polluters," and past the status quo of environ-mental regulation, to environmentally compatiblesygems of production and consumption promotedby economic incentives and to institutions anddecision-making processes that foster thesesysieins.

International Dimensions

Issues such as global warming, deforesta-tion, acid rain, stratospheric ozone depletion, andocean dumping also illustrate the internationalcharacter of sources, solutions, and consequencesof environmLntal problems. An internationalassessment of climate change is now in full ...ving

tor the United Nations (UN) General Assemblyunder the auspices of the Intergovernmental Panel

on Climate Change (1PCC)22 The 1PCC isscheduled to report its findings in the fall of 1990to the ministerial !eve; World Climate Conferenceas well as to the UN General Assembly. The1PCC process is forcing U.S. government agenciesto take a more unified view with regard to thegreenhouse effect. Pluralism of agency positionshas been reikcted in the sometimes inconsistentviews on this issue presented by the United Statesin different international forums during 1988 and

1989) "

The government is facing increasinglydifficult questions on the international front,es-)ecially as the subjects addressed in negotiationson matters such as "climate protocols" shift fromsimply environmental science and monitoring tointernational trade and industry. The mechanismsneeded to deal with the many facets of environ-mental issues on the international level are notcurrently apparent. What mechanisms exist in theU.S. government for arriving at sound U.S.positions with regard to "global trust funds" for theenvironment? What mechanisms are appropriatefor evaluating the need ro strengthen existinginternational organizations concerned with envi-ronment and development? What mechanismscan effectively foster the transfer of energyefficient and waste minimizing technologies to thedeveloping world? What mechanisms can followthrough ffectively on the proposris made byPresidelt Bush in Germany and Hungary in thespring and summer of 1989 for the creation of in-novative, new institutions to address needs for en-vironmentally sustainable economic growth? Inthis report, the Task Force seeks to make recom-

7

"Increasingly, policymakers and industrialleaders are recogaizing that the two is-suesglobal habitability and global eco-nomic growthare inextricably linked."Robert M. White"

mendations th-t are responsive to the felt need forsuch mechanisms.

Harmonizing Short- and Long- term Objectives

The many fixes of the environment-energy challenge are, and will continue to be, o;such priority that more effective organization anddecision-making must quickly be put in placewithin the U.S. government. Given our excellencein environmental sciences, our capability in manyfields of energy technology, and the leverage of oureconomy on world economic trends, the UnitedStates can be in a position to provide worldleadership in harmonizing environment and devel-opment. Global political momentum is now s-great for progress toward sustainable developmentthat, if the nation is to provide such leadership, amuch more alert and strategic stance is required.

The environment-energy issue is one ofthe most complex tacing the federal government,for ie combines economics, science, and technol-ogy with major social and international concerns,and it combines them on all time scales. It hasshort-term aspects, such as oil spills and theworsening air breathed daily by man- of ourpeople; medium-term aspects, such as the deterio-ration of our forests, streams, soil, and lakes associ-ated with 4-id deposition, and long-term aspeus,such as radioactive waste disposal and globalclimate change. A redeeming feature of thechallenge is that several key steps that nationsshould take to mitigate short-term effects will helpfor the longer term as well.

The current debates among nations andwithin the U.S. goveinment about the possibledangerous acceleration of-global climatic changeassociated with increases in greenhouse gases,t,nngly signal the emerging need for bettergovemmental organization and decision-makingprocesses. Greei.house warming is a new issue forthe politw.al sys.em and is thus less encumberedwith interests vested in the present system ofenvironmental management. It therefore provides

8

i a valuable opportunity and a fresh impulse to avoidI difficulties encountered previously in attempting

1

to deal with classical pollutants through tht ;mil-mand-and-control regulatory st...legy and throughfragmented and adversarial agency acne Ines.

Matching Organization to the Problem - A Func-tional Approach

The Federal Government has difficultywith the environment-ene-gy issue in con.iderablepart because the problem does not easily match theexisting organization of the Administration. Inaddressing the problem independent oforganiza-tion, there are four somewhat distinct and partiallyseparable functions that must be carried out:

1) to conduct the scientific research, monitoring,and data gathering to ascertain the root causes ofthe problem (tbe knowledge base); 2) to determinethe nature and extent of the adverse and beneficialeffects and impacts, evident or potential, of all rootcauses (impact, assessment); 3) to determineneeded preventive and mitigating actionspolicies an.; their benefits and costs (policyformulation), 4) to proceed with the remedies(policy implementation).

Clearly, these four functions need to beperformed in dealing with any major policy issue.Quite apart from organiza,ton, the. fnnctions areespecially mes4 for an issue like glok.1 climatechange. Among the reasons are the following:

1) Uncertainty. The knowledge base, the benefitsof emission reductions and ofadaptive :Limns, andeven thc costs of such preventive and adaptivestrategies are uncertain and will remain so for theforeseeable future. Among the reasons for theuncertainty are shortfalls in reliable data, theinherent unpredictability ofsome phenomena, andinadequate analytic tools, as well as gaps inresearch efforts and analysis in some areas.

2) Irreversibility: Both the environmental conse-quences and the social and economic behaviorthat may generate them may be exceptionally

.1

difficult to reverse or change. It takes much lesstime for human activities to build up rhe concen-tration of grealhouse gases than for natural proc-esses to dis.,ipate them. In fact, once the concen-tration of carbon dioxide, the main gre nhonsegas, is significantly elevated in the atmosphere, itis likely to remain that way for severd centuries.Moreover, when a society has i major commit-ment to an energy source like coal, it takes fifty ormore years to substitute another source of supplyon a large scale because of the extensive infra-structure t!eveloped for ext, acting, transporting,storing, and using the energy source and of all thejobs and income asociated with it.

3) International retorements. Policy implemc,,tatiun involves many countries, in some instancesdemanding cooperation without which don-esticrneasurts wquld fall short of the global requircments. For example, addressing some fac As ofglobe environmental change will proba'oly includeassistance to developing countries fc- diffusion ofenvironmentally compatible technologies andemission management within the bore Is of theUnited States and other industrialized nations.

Becabe of the uncertainty surrounding envronmental change and the high potential forirreversibility, research and policy must be veryclosely linked. In fact, all four function , ofresearch, impact assessment, and policy formula-tion and implementati.m must be closely iiritted.Ivlureover, because of the transnational features ofthe issue, domestic and international considera-tions also require close linkages.

Expressed in the funcnonal approach, onecan immediately see the difficulty the FederalGovernment has and will continue to have inincreasing measure, because quite different WlincHouse eount ds and Executive Branch depart-ments and agencies, as well as Congressional com-mittees, IldVe varying r_sponsibilities, capabilities,and work assignments.' The U.S. governmentorganization is nut congruent to the four 1.,asicfunctions and would be challenged to perform and

integrate theni well, en if they were easy toexecute.

A New Visie,1

In recent years there have been intervals ofconfusion within the U.S. government in policyformation on several environmental issues, such asglobal warming. It has been correspondinglyunclear to whom in the government concernedparties outside the government sht ild addresspolicy questions. Moreover, portions of existingorganizations are oriented toward strategies thatmay make addressing specific environment-energyproblems more difficult. For example, a substantialfraction of the Drtruent of Energy's (DOE)effort is clevoted t. promoting and expanding coal<is an energy source, and the OA is mainlystructurA to implement ct,mmand-and-controlregulation that J imply cannot addreLs the countlesssources of greenhouse gas emissions.

Therefore. more is needed than better co-ordination .4 th. existing system. A new vision ofhow che United States is to maintain and enhance,mvironmental quality nationally and globallynuist inform its institutions. These ihstitutionsmust Ile il.signed to embrace env ironmental,energy, ant; economic goals harmoniously andculler mtly and to perform at the highest capabil-ity the functions of securing the knowledge base,assessint impacts, and formulating and implemuit.ng poliue., ith both national and international dimensions.

Promising steps have recently been takenin this direction. In a speech to the IPCCFebruary 5, 1990, President Bush cleany recognized the convergence of env ironmental, energy,and economic 1.sues.'' The PresJent has directedthe Secretary of Energy to pros ide a nationalenergy strategy that LUN, ers short , medium-, andlong- term aspects of energy policy and takes intoaccount economic and env ironmental factors. Abroadly based working group f the EconomicPolicl Council has been constituted to participate

179

in the strategy formulation. The staff of theCouncil on Env ironmental Quality has beenstrengthened. Furthermore, the Congress hasNote.' to elevate the Env ironmental ProtectionAgency to a eabinet-lev el denartment, a suggestionendorsed by the President.

In regard to the climate issue, initiativesare under way in the Domestic Policy Council,and the role played by the Assistant to thePresident for Science and Technology and theOffice of Science and Technology Policy (OSTP)is growing. OSTP's Federal Coordinatim, Councilfor Science, Engineering, and Technology(FCCSET), through its Committee on EarthSciences (CES), has proposed the funding of amuch expanded research program on globalchange. Within the Domestic Policy Council, thePresident's Assistant for Scienee and Teehnologychairs an influential coordinating eommittee ofagencies dealing with pulley responses to, as wellas research upon, climate change. The NationalSecurity Council's Policy Coordinating Committee on Oceans, Env ironment, and Science has alsoplayed a helpful role.

Key Recommendations of the Task Force

1. Improve the Top-Level Mechanism in theExecutive Branch

The breadth of interests and activitysuggests a first recommendation, namely that atop-level policy mechanism is needed with abroader policy mandate. The Task Force recom-mends that actions be taken to assure the stableand sustained functioning of a high-level mecha-nism concerned with linking environment,energy, and the economy. To arrive at a decisionabout ways of addressing the need for an enhancedhigh-level mechanism, it is useful to identifycriteria that it should meet. Such criteria includethe following:

1) satts6 the needs of the President fur integratedpolicy options and advice,2) influence the policy directions and programs of

10

relevant departments and agencies,3) create and maintain a forum in which agenciescan challenge one another in a constructive wayas well as dev clop government wide plans forresearch and munitunnt,, impact assessment, andpolicy formulation and Implementation;4) combine domestic and international considera-tions;5) work compatibly with the Congress;6) attract and .etain staff of high professionalstanding and draw on both in-house and extramu-ral expertise; and7) connect to the states, private industry, andpublic and environmental groups.

In considering alternatives fot a high-level meehanism, the Task Force considered or-ganizational models used to address partly analo-gous past situations, such as the Law of the Seasand Antarctic negotiations and the ViennaConvention and Montreal Protocol negotiated inresponse to the endangering of the ozone layer.Among the commonly employed approaches insuch situations has been the designation of a "czar"(or special ambassador) or a lead agency. TheTask Force evaluated such notions against the"test case" of the climate ch.

There have been various proposals for theappointment of a "Climate Czar" (for example,proposed legislation S. 201 and S. 603). "Czars"are often helpful in the short-run for focusinggovernmental and public attention on an issue.The climate change issue, because it will likelypersist for many decades, if not indefinitely, doesnot seem well- :uited for an administrativesolution that is ad hoc and highly dependent onone individual. Moreover, the Task Force believesthat the difficulties in handling the climatechange issue that have been evident within thegovernment are symptomatic of a broad synchomein the way the United SIP es often deals with en-vironment, energy, and the economy. The TaskForce thus concludes that the federal gt alimentshould in general refrain from setting up a specialhigh lev el unit devoted solely to single env iron

c

a

mental issues Anil Th global climate change. The.)ften disappoinung experience w ith ad hocarrangements reinforces the need to hay c a bettt:rstaikling framework in which to develop organizat ion and decision-making processes for particularenv ironmental issues.

The Task Force also concludes that it ispreferable not to rely on designation of a singlelead agency when an environment-energy i-suesuch as climate change arises. To continue withthe climate example, while it is clear that theDOE and the EPA have the greatest concern withthe issue, overall leadership of the issue should bewithin the Execi ive Office of the Presidentbecause of the necessity for cooperation and coor-dination among many agencies, especially DOEand EPA, but also the Departments of State,Commerce, Agriculture, Interior, and Transporta-tion, the National Science Foundation, theNational Aeronautics and Space Administration,and others.'7

Overall, the Task Force concludes thatneither a "czar" approach nor a lead agencyapproach is likely to satisfy many of the criteriaidentifkd above. Changes in federal institutionsand decision-making processes related to theclimate issue should be approached generically,not as special cases. The Task Force also thinks itis evident that Executive Office units such as theCouncil on Environmental Quality, Office ofScience and Technology Policy, Economic PolicyCouncil, and Domestic Policy Council in theircurrent forms are not sufficiently staffed to addressthe environment-energy-econorny question in asustained way. The Task Force thus exploredoptions for further organizational development ofthe top-level mechanism adumbrated above.

Option A: A New Execuuve Office Council onEnvironment, Energy, and the Economy

An option that the Task Force believesmight suec.eed especially well in meeting many ofthe criteria stated boy c would be the establish

ment of a n...w Executiv e Office Council onEnv Inc,' tent, Energy, and the Economy, (CE`)This ne A Council %%mild hay c as ItS central charterthe un.lcrstanding and harnwnizauon of national,as well as international, com.erns Of the UnitedStates with respect to environment, energy, andthe economy and the identification of appropriatepolicies. The CE would represent an evolution ofthe present Council on Environmental Qualityand would replace that body.'s The CE3 wouldwork closely with other Executive Office units,particularly the Council of Economic Advisors,Domestic Policy Council, Economic PolicyCour , National Security Council, Office ofManagement and Budget, Office of the U.S. TradeRepresentative, and Office of Science and Tech-nology Policy. The CE might naturally havethree members, each of whom would have specialexpertise on one of the three areas whose intersec-tion would be the Council's central concc.

Option B: Strengthening the Council on Environ-mental Quality

A second option is to strengthen theCEQ within its current framework. The charterof the CEQ, as laid out in Executive Orier 11514(1970) is broad: to ass;st the Pmsident in thenational effort to meet national environmentalgoals. The language of the Order reflects the erain which it was prepared, emphasizing control ofpollutim. development and enforcement ofstandards, and oversight of the preparation ,fenvironmental impact statements. Nevertheless,the Order would permit activities with theorientation proposed here elrough its generalmandate to determine policies and programs forenvironmental problems not being adequatelyaddressed and through its directive to coordinatefederal programs and assist in achieving interna-tional cooperation.

In practice, as indicated, the CEQ hasdefined as activ Ines rather norrowly ov er the pastdecade, preparing the annaal.Eriv ironmentalQuality report mandated LI tot. National Env iron-

mental Protection Act (NEPA) and working onparticular kgislative iriitiativ es. To meet thegoals laid out here, a renewtd commitment wouldbe needed by CEQ to a broad interpretation of itscharter Also, it would be necessary to comple-ment the expertise in legal matters that has beenthe rrincipal strength of the CEQ staff since themid-1970s with much more expertise in science,engineering, energy, and economics. An outsideadvisory committee of leading experts in env iron-ment, energy, aad econoiiiics might further a: ,istthe CEQ to meet the challenges discussed in thisreport. The Task Force notes the section in thePresident's FY 1991 budget entitled "Rev italizingCEQ."23

Option C. A White House Counul on Env iron-ment, Energy , and the Economy

A quite different alternative would be anew, erironmentally oriented White HouseCouncil composed of leaders of existing organiza-tions in the Executive Office of the President thathave authority, responsibilities, and networks inthis area. These criteria suggest inclusion of theCouncil on Environmental Quality, the NationalSecurity Council, the Council of EconomicAdvisors, the Office of Management and Budget,and the Office of `3cience and Technology Policyas well as the Economic Policy Council andDomestic Policy Council Such a White House.Council, supported by high level executivedirector and good staff, c,,uld be effective if it has-len authority from the President to recommendpolicy and to assign actions to agencies to imple-ment approved policy 21 A va!iation on thisoption would be the establishment of 3 permanentcommittee of the Domestic Council on E.

As noted earlier, numerous agencies otthe government will be involved in carrying outone or more of the functions described earlier inrelation to such issues as global climate change.The principal Executive Office mechanisms, asidefrom the Cabinet itself, that involve many operat-ing agencies are the Economic Policy Council and

12

the Domestic Policy Council. As mentioned earlier,the Domestic Policy Council has active workinggroups in the climate area. The Domestic PolicyCouncil includes the Secretaries of Energy andInterior And the Administrator of the EPA, giving itsignificalt strengths in addressing issues at theintersection of env monment, energy, and economics.The Domestic Policy Council does not, however,customarily Lnclude the heads of the Departments ofCommerce, State, and Agriculture, who also havestrong interests in questions such as climate change.In contrast, the Economic Policy Counul includesCommerce, State, Agricultureind Transportation,but does not customarily include DOE or EPA.Ftom this perspective, either CoAncil, appropriatelysupplemented (at least on an issue-specific basis),would appear well-positioned to serve as thecabinet-ley el mechanism for rev iew mg recommen-dations that might emerge from the new CE', the en-hanced CEQ, or other alternative before therecommzndations go to the President, and to actupon those that receive approval.

2. Promote Coordination of E3 in the the Congress

To promote a dialogue between the Con-gress and the Executive Branch on complex mattersin y olv ing env ironment, energy, and the economy, itlb desirable to have a Congressional capability furconsideration of the issues in a coordinated andcoherent framework. Some thirty two bills and reso-lutions relating to global environmental change wereintroduced in the 100th Congress, and more thanone dozen bills are pending in the 101st Congress inthis area. Because such issues cut across manyCongressional committees, legislative acthority isfragmented, and responsibilities are uncle, r. Aclarification of authorization and appropriationresponsibilities would expedite agreement on mattersrehting to environment, energy, and economics andwould facilitate evaluation of broad, cross-cuttingissues like global environmental change.

The Carnegie Commission has established aCommittee on Suence, Technology, and tlieCongress and a Congressional Advisory Council

2 0

"[S]ince 'environment' cuts across ournational interests every bit as much aseconomic issues do, I suggest that it is timeto rationalize Congressional authority on amore integrated basis. I realize that previ-ous efforts along this line have had anunhappy history. Nevertheless, I urge that

the C'ongress keep trying. How can oilylegi kttor form a coherent view of interre-lated environment, issues whcn th aredispersed among nearly 20 full committeesin the House and Senate, and perhaps fourdozen subcommittees?

Russell E. Train"

consisting of members of Congress to examineways to strengthen Congressional capacity to dealwith suence and technology iSsues. The env ironment-energy-economics area nould SCR e as auseful Lase stud) in the Committee's deliberationsabout cross-cutting issues.

Among the relevant current mechanismsthat can bring together disparate Congressionalinterests are the Environmental and Energy StudyConference and the Joint Economic CommitteeNovel approaches to addressing these problemsare also worthy of consideration. For example, theCongress could establish a Select Committee onEnviru.iment, Energy, and the Economy for afixed period, perhaps two years, to help resolvecontradictory' legislative developments in this areaand stimulate and complement action by theExecutive Branch. Such a Select Committeecould draw upon a range of Congressionalcommittees concerned with environment, energy,natural resources, science and technology, ardother iields and would build upon the success ofthe Environmental and Energy Study Conferenceand Institute. Other approaches might also befeasible.

Supporting Recomoendarlsns

Along with tlw principal recommenda-tions M.-lined above tor strengthenin, ExecutiveBranch orgarazation and exploring Congressionalcapabilities, the Task Force offers the fonowingsupporting recommendations designed to helpbring about cohesive, constructive, astained6overnment action in the areas of environment,energy, and the economy

1. Reinforce high-level representation in coordi-nation between agencies conducting research englobal environment and related matters

To enhance promising initiativ es inresearch coordination on global env ironinL. alchange, the Ta.,Ic Force recommend

21

high level at vb hich interagency coordination .mrescarch Ls Lained out. There hav becn significantac'diev ements in research coordination by theCommitzee on Earth Sciences of the FederalCoordinating Council on Science, Engineering, andTechnology (FCCSET, the interagency coordintn.igbody for science and technology). The Director ofOSTP, as the Chairman of FCCSET, shouldcontinue to play a direct role in governmentplanning of research on global environment andrelated matters and should ensure appropriatelyhigh-level agency representation in the FCCSETeffort. The new President's Council of Advisors onScience and Technology (PCAST) can play avaluable role in working with the Director of OSTPin addressing the adequacy of the knowledge base.Questions that might be examined Include whetheropportunities provided by such programs as theInternational Geosphere-Biosphere Program andNASA's "Mission to Planet Earth" are beingoptimized trom the perspective of environment-energy interactions. Also, research erforts togenerate fundamental knowledge in such areas asplant biology and ecology need to be reconsideredand probably strengthened in the context of ourbest current understanding of trends in environmentand energy. Finally, research needs to be developedthat is focused on solutions as well as on under-standing thc situation.

2. Conduct an intensive review of federal monitor-ing efforts and responsibilities for global environ-ment.

The new high-level mechanism and OSTPshould take a much more active role to assuri thatoigh- quality programs of env ironniental monitthingare maintained and coordinated by relevant U.S..igenues and that there is international coordinationof monitoring. Among the agencies responsible formonitoring are NASA, NOAA, EPA, the ForestService of the Department of Agriculture, theGeological Survey of the Interior Department, andthe National Science Foundation. In contrast to theencouraging status of the basic research coordinationeffort, the Task Force believes monitoring to be an

13

"The process by which policies are set anddecisions ?mule kaves much to bedesired...11;1,1e degr..e of uncei-taintysurrounding the cla.a on t,...hich the environ-mental decisions are based is often frighten-ing. For example, many of the air qualitymodels used to support regulatory decisions

have enormus margins of en-or. Equallylacking is info) mation about how wellprograms work; compliance statist:es are no-toriously incomplete, and monitoring ofprogram implementation is problematic atbest."

William K. Reilly, Jr.23

area where effort has been serious)) lagging.

There are many poorly known factors andrelationships that enter into the environmentalpredictions upon which policy analyses andoperational activities depend. Careful monitoringof sources and sinks of greenhouse gases, changesin cloud cover, ocean circulattonmd otherariables is needed because of-the demands for

greater precision in detecting env ironmentalchanges associated ith the high stakes involvedin po!.ry decisions. Thz Task Force suggests thatthe new mechanism and OSTP (includingPCAST) conduct an intensive rev iew of thefederal data collection and monitoring effort forglobal environment and make reLommendationson its adequacy.

3. Further strengthen the capability of the StateDepartment to analyze am to respond to fare'rpolicy implications of issues in environment andenergy.

Noting the inacastngly intuliati, hflalcauses ...J wnsequenLe.) of Lhanges it the globals'yStem, the Task Rau: rewmmends the enkuiLe.men: if the capability of thc Department of Stateto analyze and to respond to the foreign polityimpliLations of bsues LonLerning en. ironment andenergy. With incre..sing frequenLy , the StateDepartment is pattupating in wmplex interna-tional negotiations Inv olv mg m. rs suLli asdepletion if the owne layer, acid dep baton, andclimatic Lhange. The State Department musthave the internal capability to understand andevaluate the inormaion provided to it byagencies such as DOE and EPA and by othergovernments and intergovernmennd organizations.Its competence in the field must be suf(ictent torepresent the views of the U.S. government toother governmmts and in multilateral forums. It isour view that unless- its capability is enhanced, theBureau of Oceans, Environment, and InternationalScience (OES) in the State Department, evenwith a recent augmentation of staff, is currentlystretched beyond realistic Inuits and may be

14

ov Liwhelmed by future demands, to du: detriment'the United States.

4. Consider establishment of a new, independent,forwarcHooking institute for environmentalanalysis to serve government agencies.

The Task Fut, tecomuiends that the*A eminent consider enhanung its Lapability torem ironmental analysts. The high-lcs el ExeLutn eOhiLt: meLhanisin and other parts of the govern-ment would benefit from a strongo Lapabuity, nen, itonmental arnilsis that would ZN2 av,ulatw hen needed:4 At present, there are major gapsin information av adable t, the got ernment, andthe quality u:ImpaLt assessment efforts Lan begreatly improved.2c The analysis function couldbe fulfilled either through a central institute orthrough several centers of excellence in universi-ties ard other reseatch institutions that aresupported On a long-term basis. The center(s)should be independent and forward-looking, andgovernanLe should enLourage all relev ant federalagu &Lies to hav e a sensL 1 nershlp, perhapsthrough some kind of Lonsultotiv c, interagenLy

crsight group. Cooperator. in the knmulation,direLtion, and folow-ur of studies wtiuld in Itselfhelp to improv c Imes of Lommunwatwin andLoordmation and integration of ar,roatht.S. Thesul-aanti . c orientation should be toward energyeffluent.), and waste minimization and toward thede Llopment of methods hit impact assessmentand poltLy analysis that intehrate env ironment,energy, and econonucs.26

CONCLUSION

In conclusion, the Task Force reiteratesthat wise institutional design, carried outpromptly, may eliminate wl .t is a much exagger-ated and diversiorary conflict between environ-mental quality and economic strength. Soundpolicies in such area: is waste minimization andenergy efficiency, imaginative use of economic in-centives, and promotion of engineering solutionsthar addi ess potential problems through design at

c)iCr.ra

the origin, rather than through retrofits at thy"end-of-the pipe," '. ill .,i.rongly and simultane-ously support economic grklt th, energy security,and env ironmental quality. A ncyy mechanism isneeded near the highest level of the Executive,paralleled by an initiative in the Congress, to bringthis about. The Task Force believes the conceptsoutlined here can be the basis for decisive steps inthis direction.

References

1. William K. Reilly, Jr., "A View Toward theNineties," in P. Bore Ili, Crossroads: EnvironmentalPriorities for the Future. Island Press, Washingy.mDC, 1988, p. 97.

2. According to the Department of Commerce, t'aenation spent about $78 billion in 1986 n all formsof environmental protection, about two.:hirds inindustry. See K. D. Farber and G. L. Rutledge,"Pdlution abatement and control expenditures,19811 986." Survey of Current Business, May1988, p. 28. See also Congressional Office ofTechnology Assessment, "Serious Reduction otHazardous Wage for Pollution Prevention andIndustrial Efficiency." OTA-ITE-317, 1986.

3. C A. Zraket, "Opening Remarks-Environ-mental Situation in the United States." In A. TAmr, D. E. Egan, K. R. Krickenberger, and S. VMcBrien, "Pollution Prevention: Opportunitiesand Constraints" (Workshop Presentations andSummary). MTP-89W00006, August 1989.Available from The MITRE Corporation, Cn ilSystems Division, 7525 Colshire Dr, e, McLeanVA 22102.

4. For -.lore detail, see G. J. F. MacDonald,"Policies and Technologies for Waste Reductionand Energy Efficiency" in A. T. Amr, D. E. Egan,K R. Krickenberger, .and S. V. McBrien, "PollutionPrevention: Opportunities and Constraints"(Workshop Presentations and Summary). MIT-89W00006, August 1989. Available from The

MITRE Corporation, Cn il Systems Div isiun, 7525Colshire Drive, McLean VA 22102. See also, J.I I. Ausubel and 11. E. Sladoy wit (eds.), Tech.-ol-ogy dud nonment. National Ak.ademy Press,Washington DC, 1989.

5. John H. Sununu, "Engineers and Policy," in H.E. Sladovich (ed.), "Engineering a;id HumanWelfare," National Academy of Engineering,Washington DC, 1990, pp. 28-29.

6. For views of the environmental movement onthe assessment of successes and failures so far, seePeter Borelli (ed.), Crossroads: Environmental Pri-orities for the Future. Island Press, WashingtonDC, 1988.

7. See U.S. Environmental Protection Agency,"EPA's Use of Cost-Benefit Analysis: 1981-1986."EPA-230-05-87-028. Office of Poliv,and Evalum ion, Washington DC 20460, August198-1.

8. The need for a transition to more anticipatorymanagement in the environmental field has beendiscussed at several conferences, for example, the1984 Pans Conference on Environment andEconomics of the Organnauon for EconomicCooperation and Development (OECD).

9. S. K. Friedlander, "Environmental issues: impli-cations for engineering design and education." InJ. H. Ausubel and H. E. Sladovich (eds.), Technol-ogy and Environment. National Academ: Press,Washington DC, 1989.

10. See, for example, "Project 88. HarnessinlFor:A.s to Protect Our Environment. Initiatives

tor the New President." Senators Timothy Wirthand John Heinz, Chairmen. Available from theoffices of Sen. Wirth (202-224-5852) and Sen.Heinz (202-224-6324). Washington, D. C.,20510. December 1988. For a summary', see R. N.Stavins (1989), "Harnessing Market Forces toProtect the Environment." Environment, Vol 31,

, pp. 4ff. See also B. A. Ackerman and R. B.Stewart (1988), "Reforming environmental law.

r)4, 15

The demociatiL Lase for market inLenti% es,"Columbia journal of En% iromnental L.m 13. 171199, and R. B. Stewart (1988), "Controllingenvironmental risks throuo, .conomic incentives,"Columbia Journal of Environmental Law 13: 153-169.

11. See Congressional Researe Sen !cc, "Using In-Lentn es fur En% ironmental Prot,: won. An 0%er%riew," for a er iti,il aluation of inLentn e- baseds:-stems. Libran of Congress, Washington DC, 2June 1989.

12. The Committee on SLienLe, Engineering, andPublic PA.) of the National ALadem) of &mikes,National ALadem of Engineering, and the Insutute of MediLine is k. a rrl ing out a Lomparabkassessment of the e.anate Lhange question for theU.S. Congress. This stud) is also global in sLopeand is exteLted to be Lompleted in hue 1990.

13. The General Accounting Office (OA()) report"Global Warming: Administration ApproachCautious Pending Validation of Threat" examinesthe extent and adequacy of federal agency coordina-tion, effectiveness of U. S. paracipation in interna-tional activities, and the status offederal agencyactions required to address Longressional LonLerns.GAO/NSIAD-9C-63, Januar) 1990. AN allable fromGAO, r....)B 6015, Gaithersburg MD 20877.

14. Robert M. White, "Technology and the Inter-dependence of Nations," in H. E. SladoviLh (ed.)(1990), "Engineering and Human Welfare,"National Academy of Engineering, WashingtonDC, p. 8.

15. For more detailed anal)sis, see the GAO reportLited in note 13 abiAre. For a lustoriLal summit.) otfederal organization on the greenhouse issue untilthe summer of 1989, Mx Jesse 11. Ausubel. "FederalOrganization for Climate and Energ). A BriefHistory and Analysis," Sept. 1989. A% allable fromCarnegie Commission on SLienLe, TeLhnolog), and

emment, The Rockefeller Unn ersit), Box 234,1230 York Acenue, New York NY 10021.

16

16. President George Bush, "U. S. Committed toSafe En% ironment," Current Pohe) No. 1249.Bureau of Palk. Affairs, Department of State,Washingum, D.C. 20520.

17. Moreover, a :ed in the GAO report,although the Cl. nate Protection Act (PL 100-204.1987) .ind the National CI mate Program (PL95.36 1978) identil) goals and agenL) responsi-bilities, suLh legislation funetions effeLtnelc onl)in Lombination ith high le% el exeLuti% c guid-ance.

18. The Task ForLe notes the Congressional pro-posal (S. 201) fo: Counol on World En% iron-mental Poll. (CWEP). S. 201 abolishes the CEQand transfers all re..ponsibilit) to the new CWEP,Limited b) EPA. The Comol would be made up oftwo Presidential appointees and the heads ofele% en agenLies, ith OSTP represented ex offiLio.Although the Task Force agrees with ottie of theobjectives 'such an arrangement, it maynot be workable and may go too far in emphasizingglobal considerations rather than links amongissues of environment, energy, and economics in aglobal context.

19. For a luston of ,he origins of CEQ and theearl) intentions for a, see J. Whittaker, Striking a

AmenLan Enterprise Institute, Washing-ton DC, 1976.

20. Budget of th U.S. Government FY 1991,Secrkon IIIF, pp. 127-128.

21. The Task Force notes 980, which createsa Council of Global Environmental Policy(COEP) to Lourdina-.. de% elopment of nationalMiele:, to ab.ite, mitigate, and adapt to the impaLtof global en% ironmental Lhange. The CounLilwould ha% e Lk% en members, meluding the LhaliCEQ, direLtor of OSTP, and representatn es of ap-propriate agenLies. The Lhair of CEQ would seneas chair of COEP. Although this arrangementmight ha% e some benefits, it does nut appear toaddress the fundamental need to join issues of en-vironment, energy, and economics on all levels,

,

whether national or global.

22. Russell il Train, "Environmental Concerns forthe Year 2000," paper prepared for the Congres-sional Research Service Symposium on "Congressin the Year 2000: The Policy Challenges." 18 Oc-tober 1989. Available from World Wildlife Fundand The Conservation Foundation, 1250 24th STNW, Washington DC 20037. This essay containFa broad examination of environmental issuesthrough a Congressional lens

23. William K. Reilly, Jr., "A View Towar.: theNineties," n, P. Borelli, Crossroads: EnvironmentalPriorities for the Future. Island Press, WashingtonDC, 1988, p. 94.

24. The concept for an institute of this type wasproposed in conjunction with the original estab-lishment of the CEQ. The passage of time hasstrengthened the argument for it, as the ExecutiveOffice repeatedly found itself improvising toaddress environmental questionsin the 1980s. Examples of issues that rose to highlevels of political attention for which the Execu-tive Office was hard-pressed to develop stronganalytic preparation include acid deposition,nuclear winter, and marine oil spills. There havebeen several propo3als for the related concept of aNational Institute for the Envfronment, modeledon the National Institutes of Health See, forexample, Science 247: 24, 1990.

25. For further discussion of the need for irilprovedtools for environmental policy analysis, see pp. 17-20 in R. W. Fri, "Energy and the environment:barriers to action." 25 July 1989. Available fromResources for the Future, 1616 P ..i, NW, Washing-ton DC 20036.

26. For particular issues that such an institutemight address, see G. J. F. MacDonald in note #4above.

17

APPENDIX

The Greenhouse Fct: An Illustration of the Linkages ofEnvironment, Energy, and Economy

Since the start ot human luston, theclimate ot the earth 11,1, ihmitiated onls .1 smallamiunt, perhaps ± I I et the past 10.0%.X1sears. it the global as etage annual tont-crania- isused as an 114,1hinit. Human act n ales are no..increasing the omentrat k of co."pedgreenhouse gases in the atnuisphere I .u,..11 anextent that k tin siderabie kluge. in tin: 4..Innan.ma% be mduced in kommg decades. Theset.l. Inge, ma% extend %sell besond the climate%amnions to which tAllIent social, ecologlkand agricultura, _ stems has e become iccus-corned. The largest source ot carbon cht mxide. theprincipal greenhouse is the burning ot fossiltugs. onwhich the world relies tor some 00 pereent ot itsenergy. Deforestation is an additional source otgreenhouse gas emissions anu Aso Millt,e% thecapacit% of the earth to re-capture carbondiox tete from the atinospher. Tke United 1:tatesaccounts tor about one-qual ter & global green-house gas em1ssions.

There ite mans uncertainties inNon:cling the !unlit emissions ..t greenhousegases, the fraction ot these gases that n ill remainin the atm, isphe re, the climate changes that a Ill

alid thy consyquk 01 the changes that%%di ensue. There is ss idesptead agreement onthe need to understand better ,,,rects of th,issue. There is also gross mg pressure to take di..lion. bath it resmun emission, and to !a, anal,.adaptation to climatic change, n Inch to someextent looks unasoklabie. Sii..11 actions ss illnecessarils relate to some ot the deepest andnuist pen a. ise ectinonuc structures of 'intsociety.

Evenone is an interested parts inclimatic change. All people contribute to theincrease in greenhouse gases through theireveryday act:vines ot travel, cookkng. keepingwarns or cool, and so forth. And, ot codrse, all

about transformations .4 the earth'sens moment .in the scale that mans cxpertnon speculate. From an economic roust oi

le%. the gre ak p.sue is a k.trike.n ft krtanne. ers where, but also hir lust to name .1ten -coal and oil co:npantes. dee trtcman Igers of %%am sum+ s5 sti. Ills, MI,: ntarn.41% `, lose In ehhood aught bt. Ate% ted bothads ersels and perlups beneficial's. Nearlspart of gi eminent is t.ont.eriset.i about thegreenhouse Liles t, for it relates to dee ,ionmaking about encro, transportati a, his,:

consen anon ot oature. tax polies.and international peace and st butts tscr TableI 1.

There %%ill be no single 'solution tothe greenhouse effect. Man y. rolh, les will be con.sidered. These might inchde, tor example. taxeson c bon to las or shifts from carbon-heas v coaland oil to carbon.light natural gas and mos e-ment to non-carbon tuck incentive...1ndregulations tor energs etacienev. manageme ot%%met ',HUI% and demand. reforestation. andprudeia land us.. aud coastal :one management.aid des ilipment tif t.i p saams that ale nibustin the face ot climate %aria! The need i tor

packatge of rota.. ies that is itself eine ient aa,1mach as nen as tad in dealing ssith coutlictsthat %%Ill insc. bek.nist. Ain "dliMate 14. les"nih has , sigi, int implications tor thedistributhn .1 'a t.ali h and burdens. Estimates otthe costs ot st.bstannal limitation ot g..ecithousegas ,nussions run into the hun 1 1 f 1 1o..1 aons ofdollars pet , -ar The need tot kilos% ledge andanalssts is cleat. The United States. aloae andas a partner in a global effort, must be organredtor the acquision and validatin ot thisknon ledge and other inputs into a sequence .1decisions about the gr ..ahouse issue that will bea continuing feature ot our political life far int .1future.

18

Table 1: Selected federal agencies' involvement in policies and activitiesrelated to the greenhouse effect

AGENCI . EOP DOE HA NOAATAA_ STATE AO VOI NASA LSTR TREAS.,R1 IXY FEMA DODJUsTICE

POLICY OR ACTIVITY

I

t ONO( ('T PERIODR' AS,T -4A- --4A- -4.- A-- A I A A. A A. k A. k 1 AINcREAq RXII'llE

, T ! ., i i/ -7- 4- -4

PENTIFI kl)A111%R1 sINEssOf PORTE NITIES ; .4 ' A

41

i!ITVELOPINsl R AM T-t

EMERt :ENC, WARNINt ; SIsTEMs 4 k .___A-M AN AGE Et Os'ISTEMs STRATEGY 4_ t(WIL14 1LI INFRAsTRL "TtRE

ATER S.. CO AsTAL ZONES

PROMOTE At; RE'ERII _

ElmPROMOTE t ON,FRA ATIONI

'IEMIFVONWTE sOL AR

ritOMOTE N 4fl RAL GAS

'tISOM* Nt LEAR

INTRt IA_ CT CARBON TA

4_ A.t-

IMPROVE LAND d sE

Exr,%Nr, 111

DEVELOP NOM Ass F N ER( '41

4- 4k I. I-41/

RFIAVE t ()%i L E

Aix Tr AMMENT ( MO sTANPARDS _.../._.1 -4- _LrROMOTE REFORESTATION _ i _ L A -L I-

-/-

1 .k k.t 1 t ' 1

EMIAllEttEOES4ONEERINGIt 0 TO VEEP CATAS4, ET(*)

REsEARt Il WEATHER _

MODIFit ATION

LI tramADGPTTRANsFER MENT

HEMES

IESTIt

INTL t fA AONDI, tTINTL NEGOTI %TWIN _ .A. A

1

I 1

4-

44EIL- I -4- 4- 4-

_4_ 4_ L.L

t'

-4- -1- 4-I 41L-1

.

21- t1

i

A. A 1_ I -i-,

l' '-- -4 4- A-

k k A _.1_ 1 . 4 .k.1 i 1

1

. , , . 7- -t- 7 44---

L _:. , _ __A._i 1._ J., _.A.

RE)

FOP +re, Alike thr Drodrnttar, tmg thc OthoL ot ',low, 41,1 Te. heel's, Pole- r.444 AN,- M iltoxxtrwta and P4

the 21 en En, folIMCMa 1....0.111%, tit I

IlerAttrOgIlt Enkr0E Its inemnent Prete, i/on AmnoN roPai Ink Atoi A111110,141Ctk

p Ittroent 44 t nwcrI p ntment ot geDe,..attexnt Agthottore

IxIN 1sAI "SIRTREASUED

DotEWAIx4'tlUsTIt T

Department et the !metierNatienal Aeronauts. s and Spa, and V.Inunear ment 'toted St at e4 Tra4k Rem-ft-nut eDepattment el the Treenn,National Sten,e FeurtlatertDepartment ot TureportanonTotem! Emererner, Elitla.retnent t1/4rna$

Depattment 4 ndcmcDrrartment i kme

se

Carnegie Commission onScience, Technology, and Government10 Waverly Place, New York, NY 10003Phoi e: 212-998-2150 Fax: 212-995-3181

28 ,