SUSTAINABILITY & WHAT THE RAILROADS HAVE TO SAY …
Sustainability in Government Agencies
Engineer market-based incentives
According to a Pollution Prevention Northwest article (Fall, 2004), a US Environmental Protection Agency study in 1999 found that the agency could save almost $50 billion per year (a quarter of the $200 billion spent annually on environmental management) by increasing the use of economic incentives in environmental regulation. When acid rain became a known threat to forests, lakes and buildings, the government might have instituted tough prescriptive regulations for the major emitters of nitrogen oxides and sulphur dioxides (fondly referred to as NOx and SOx). Instead the US government set up a cap-and-trade system whereby polluters could either clean up their own act or purchase the rights to other companies’ improvements. This method allowed investments to flow to the best opportunities and rewarded the companies that did the most. As a result, emissions dropped much faster than expected at a fraction of the cost to industry that was initially expected.
Based on the success of this programme, many other systems, including those to reduce greenhouse gases, are being modelled on it. The US Fish and Wildlife Department, for example, is using this approach to protect endangered species. They have set up bankable permits for breeding pairs of red-cockaded woodpeckers. ‘International Paper currently believes that it can sell banked breeding pairs for about $100,000 each. If several pairs can nest on each acre, this means that the value of land for breeding woodpeckers is greatly in excess of its value as a source of timber.’
Green taxes, more common in Europe than in the US, are another way of getting the incentives right. For example, in the UK, excise duties on leaded petrol were raised compared to those on unleaded over time, helping to reduce lead emissions by 70 per cent in a decade. Get the incentives right and you can change behaviour quickly. A Swedish tax on the sulphur content in diesel resulted in a tenfold increase in the use of clean diesel in only 18 months.
France and Britain are working on a plan to subsidize environmentally friendly products through tax cuts throughout Europe. The proposal is to reduce Value Added Tax on energyefficient products. This is in part driven by green one-upmanship amongst EU members. ‘We want people to say that after the French [took over the EU] presidency, Europe was transformed into a greener economy with a different kind of growth and consumption pattern, and that Europe has taken all the necessary steps to bring its partners on board’, explains Jean-Pierre Jouyet, the Minister for European Affairs.
Sometimes you just need to educate the citizens. A number of cities in the US are realizing that the loss of forest cover is costing them dearly. For example, in the Atlanta, Georgia area a study showed that the cities reportedly would need to spend $2 billion on new rainwater treatment facilities to deal with the run-off resulting from the loss of tree cover over 25 years. In Cincinnati, Ohio the government is having success reversing this trend by telling homeowners if they plant two trees, they can save $55 per year in air conditioning bills.
Public policy is also an important lever. Susan Anderson at the Portland, Oregon Office of Sustainable Development advises looking for the action that can create a tipping point. Portland adopted a green building policy that stated, in effect, that any city buildings or any housing or commercial buildings receiving local tax benefits or subsidized loans had to be to LEED-certified. Suddenly, a large volume of work was subject to this requirement, far beyond the city’s own set of buildings. Anderson commented:
We didn’t need to do much else; architects and developers are a creative bunch. We provide training, technical help and product information, but they know it’s to their advantage to learn what they need to know to get the job done. And now, many of these firms are providing development services throughout the US using sustainable construction practices related to LEED. It has been a great partnership between the city and local builders, architects and engineers. Reclaim public goods and charge the full cost While economists often have the most to say in favor of privatization, even The Economist magazine has concluded that for certain public goods, this is not the best solution. Water is one example. Life is not possible without it, so privatizing water resources might lead to only the rich being able to afford it, an untenable policy.
Furthermore, private water companies have not always proved to be more efficient than their public counterparts. Instead, The Economist advocates raising prices to reflect the full cost of water, including environmental impacts. California steeply raised prices for irrigation and added the needs of the environment into the equation, and they also set up a California Water Bank. Chile charges everyone the full cost of water but gives poor people stamps to redeem against their bills. The Economist also advocates changing how water rights are distributed, making these rights tradable so that they can go to serve the highest value purposes. South Africa, for example, abolished riparian rights and made water allocations temporary and tradable. Australia separated water rights from property rights, making water a public good, and then instituted a system of trading, which now crosses state boundaries.
RESOURCES
The Center for a Sustainable Economy provides economic models to determine the impact of environmental market-based tools, http://sustainableeconomy.org.
Reclaim public goods and charge the full cost
While economists often have the most to say in favour of privatization, even The Economist magazine has concluded that for certain public goods, this is not the best solution. Water is one example. Life is not possible without it, so privatizing water resources might lead to only the rich being able to afford it, an untenable policy.
Furthermore, private water companies have not always proved to be more efficient than their public counterparts. Instead, The Economist advocates raising prices to reflect the full cost of water, including environmental impacts. California steeply raised prices for irrigation and added the needs of the environment into the equation, and they also set up a California Water Bank. Chile charges everyone the full cost of water but gives poor people stamps to redeem against their bills. The Economist also advocates changing how water rights are distributed; making these rights tradable so that they can go to serve the highest value purposes. South Africa, for example, abolished riparian rights and made water allocations temporary and tradable. Australia separated water rights from property rights, making water a public good, and then instituted a system of trading, which now crosses state boundaries. Why should public goods – water, radio frequencies, microwave bands, fishing rights, etc. – be sold once and then traded in the private sector when the government can lease them instead, providing an ongoing income stream for society?
Create preserves
Often the best way to preserve ecosystem services is to protect vast tracts of habitat. Dr Daniel Pauly, a world-renowned fisheries scientist, believes that marine preserves are going to be key to regenerating fish stocks. To make this point in presentations, he shows a slide of the North Atlantic from roughly the equator to beyond the Arctic Circle. The title of the slide informs the audience that all the areas in green are protected from fishing; everything is red, nothing is green at the scale of his map. We don’t need international agreements, he asserts, since most of the fisheries are within the 200-mile boundary along coastlines. So nations already have the ability to protect portions of their marine habitat to help stocks recover. In Curitiba, Brazil, authorities recognized that their city was dependent upon the health of habitats outside their municipality. They are experimenting with transferring building rights to protect sensitive habitats both inside and outside its boundaries. If a developer wants to construct a building with more floors than zoning permits, he or she can protect one of these lands and, in exchange, the city will grant a variance. This ensures their citizens can benefit from the ecosystem services (clean water, flood control, etc.) that stem from lands outside their jurisdiction.
Adopt the precautionary principle
The precautionary principle to some extent switches the burden of proof. In most situations, the government has to prove that something is unsafe to stop it. The precautionary principle instead asks manufacturers to prove that their products are safe.
The Precautionary Principle Project defines the concept as ‘acting to avoid serious or irreversible potential harm, despite lack of scientific certainty as to the likelihood, magnitude, or causation of that harm’. While it is not feasible to prove that a product is safe in every situation for every organism on Earth, it is possible to invoke the precautionary principle when evidence begins to suggest there is a negative impact. At least in the US, the usual protocol is for companies to continue to sell their products while their corporate lawyers spend years fighting it out with government officials. Adopting the precautionary principle in public policy means that a product’s use can be stopped or phased out until the manufacturers can prove it is safe.
The precautionary principle was used in the Montreal Protocol, an international agreement to phase out ozone-depleting substances. Because it was believed that the ozone hole would pose a serious cancer threat, the precautionary principle was made the decision rule. Why wait for more data when the effects could be so catastrophic? The Montreal Protocol was quickly adopted for several reasons. It was a media-capturing event when the ozone hole was discovered, creating a sense of urgency. It was framed as a human health issue, making it more personal than vague threats to the environment. It also didn’t hurt that DuPont had declared they could manufacture alternatives to Freon if a market could be assured.
Both municipalities and nation states – San Francisco, California, Hungary and Brazil among them – are adopting the precautionary principle as public policy. Jacques Chirac has recently added an environmental charter to the French constitution whose ten articles include the precautionary principle.
Implement regulations
Regulations have been successfully used around the world, especially in Europe, to shift behaviour patterns, and while the approach is currently out of favour in the US, it still has an important role to play even there. Examples of landmark European legislation include:
• The WEEE (Waste Electrical and Electronic Equipment) Directive requiring manufacturers to take responsibility for many products and their packaging at the end of their useful life;
• The RoHS Directive (eliminating various hazardous substances in electronic components, including lead, mercury and cadmium); and
• The REACH (Registration, Evaluation and Authorisation of Chemicals) Directive, intended to help control chemicals.
Europe is using its significant buying power to change the behaviour of corporations around the world. Evidence is accumulating that these regulations are already having a positive impact on human health. Europeans, for example, have significantly lower levels of synthetic chemicals associated with fire retardants in their bodies than US citizens.
RESOURCES
The Precautionary Principle in Action: A Handbook was written for the Science and Environmental Health Network by Joel Tickner, Carolyn Raffensperger and Nancy Myers Appell, David (2001) ‘The New Uncertainty Principle’, Scientific American, January.
Implement regulations
Regulations have been successfully used around the world, especially in Europe, to shift behaviour patterns, and while the approach is currently out of favour in the US, it still has an important role to play even there. Examples of landmark European legislation include:
• The WEEE (Waste Electrical and Electronic Equipment) Directive requiring manufacturers to take responsibility for many products and their packaging at the end of their useful life;
• The RoHS Directive (eliminating various hazardous substances in electronic components, including lead, mercury and cadmium); and
• The REACH (Registration, Evaluation and Authorisation of Chemicals) Directive, intended to help control chemicals.
Europe is using its significant buying power to change the behaviour of corporations around the world. Evidence is accumulating that these regulations are already having a positive impact on human health. Europeans, for example, have significantly lower levels of synthetic chemicals associated with fire retardants in their bodies than US citizens.
