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State Innovation Grants

EPA 2005-2006 State Innovation Grants Competition Pre-Proposals

State Innovation Grant Program
National Environmental Performance Track Program and State Performance-Based Environmental Leadership Programs

Project Summary Information Page

Project Title and Location: “Investigation into Increased Incentives for Performance-Based Program Participants,” Raleigh, N.C.

State Agency Applicant: North Carolina Department of Environment and Natural Resources, Division of Pollution Prevention and Environmental Assistance

Project Contact: Gary Hunt, Division of Pollution Prevention and Environmental Assistance, 1639 Mail Service Center, Raleigh, N.C. 27699-1639; phone: 919-715-6508; fax: 919-715-6794; gary.hunt@ncmail.net

Hazardous Waste Management Focus: The project is multi-media and will include identifying incentives related to hazardous waste management. It will also include the goals of the Resource Conservation Challenge in developing the environmental priorities discussed in Task IV.

Funded with or by another federal or EPA program: No

Federal regulatory flexibility potentially needed: Unknown at this point, will be determined during the project

Secretary knows of and supports project: DENR Assistant Secretary for Operations and Development Jimmy Carter has given his full endorsement and support of this project. Secretary Bill Ross initiated the Environmental Stewardship Initiative and continues to offer full support to program implementation and program members.

Investigation into Increased Incentives for Performance-Based Program Participants
Pre-Proposal Project Narrative

The N.C. Department of Environment and Natural Resource’s (DENR) Division of Pollution Prevention and Environmental Assistance (DPPEA) proposes a project to identify and implement additional regulatory and non-regulatory incentives that can be offered to participants in voluntary state and federal environmental performance-based programs. Data currently collected through DENR’s performance-based leadership program shows significant reductions and prevention of environmental impacts by program participants. New incentives will serve as a recruiting tool for increased participation in state and federal performance-based programs resulting in improved environmental performance.

In April 2002, DENR launched a voluntary state environmental performance–based leadership program called the Environmental Stewardship Initiative (ESI). Similar to the federal National Environmental Performance Track program, the ESI is designed to promote and encourage superior environmental performance by North Carolina’s regulated community by establishing incentives to stimulate the use of pollution prevention and innovative approaches to meet and go beyond regulatory requirements. The program offers assistance to reduce impacts on air, water and waste using an environmental management system as a framework to achieve and exceed compliance. More information on the N.C. ESI program can be found at http://www.p2pays.org/esi/index.asp Exit Disclaimer.

The ESI has two supporting workgroups:

The ESI is a program sponsored by DENR with the DPPEA serving as the lead agency providing program support. DPPEA is also the primary agency tracking PTrack in North Carolina.

Currently, there are 44 Partners, eight Rising Stewards and five Stewards in North Carolina’s program. Two of the three North Carolina Ptrack sites are also ESI Stewards. DPPEA proposes to look at development and implementation of incentives from both within and outside state government as well as support of environmental priorities.

The environmental outcomes of the ESI project are measurable reductions in emissions reported annually by the member organizations. In the initiative’s first year 23 Partners reported reductions of: air emissions by 203 tons; water pollutants by 422 tons; water use by 814 million gallons; solid waste by 58,529 tons; hazardous waste by 14.5 tons; and energy use by 4,958 MMBtu. The proposed project will help increase the number of participants and the related reductions. These are directly related to the strategic targets in the three sub-objectives under Objective 5.2: “Improve Environmental Performance through Pollution Prevention and Innovation.” Additionally this project will help the specific pollution reductions in sub-objectives and strategic targets under Objective 1.1: Outdoor Air; 1.5: Greenhouse Gas Intensity; 2.2 Protect Water Quality; 3.1: Preserve Land.

Project Tasks

TASK I. EXPLORE REGULATORY INCENTIVES

DPPEA proposes to work with the ESI and Ptrack members, the advisory and DENR internal workgroups, DENR senior management and regional staff to solicit specific ideas, steps and barriers for incentives for performance-based program participants. DPPEA will build on the work of the DENR Stewardship Through Enforcement Principles Team and recommendations in its report including the principle “DENR will support the development and use of alternative tools to traditional enforcement that achieve compliance and encourage going beyond compliance.” In discussions the focus on incentives will be those that reduce time, uncertainty and administrative burdens, are transferable to other state or federal programs, will produce measurable environmental reductions and complement rather that replace regulations. Barriers to implementation and how they can be overcome and cost-effective approaches will also be discussed. By Oct. 1, 2006, a report on feasible regulatory incentives and resource savings will be completed.

Activity 1. DPPEA proposes to solicit input from external partners on possible incentives by surveying the current ESI participants, convening a focus group discussion with ESI Stewards and the DENR secretary, and discussing incentives with the ESI Advisory Workgroup.

Activity 2. DPPEA proposes to work closely with its DENR internal workgroup to identify how each media program adopts incentives and how they might more readily adopt new incentives in the future, particularly in consideration of proposed Ptrack incentives such as use of the Clean Water State Revolving Fund monies to support EMS development. The internal workgroup will also be asked to share ideas for additional incentives. DPPEA will hold workshops in each of DENR’s seven regions to discuss ESI and Ptrack criteria, results-to-date and incentives with field inspectors. DPPEA already held workshops on EMS and ESI in several of the regional offices as well as had media staff accompany the ESI on-site verification team during visits. DPPEA plans to build on this communication to increase program awareness and support. DPPEA will develop a form for regional staff to refer facilities with excellent environmental compliance and cooperation to the program for follow-up or to refer facilities that are interested in joining at the Partner level and beginning work on an EMS.

Activity 3. DPPEA will meet with senior DENR environmental managers and division directors to identify possible incentives. Specifically, this group will be asked to focus on proposing incentives that may reduce the burden on state agencies to meet its obligations and steps that may be taken to allow ESI work to count for required enforcement and compliance assistance efforts.

TASK II. EXPLORE NON-REGULATORY INCENTIVES

DPPEA has had an active partnership with the N.C. Department of Commerce (DOC) working with existing industry specialists to improve industry environmental performance and to share information on ISO 14001 and EMS development resources. DPPEA proposes to work with DOC’s existing industry specialists, the university system and business schools including the Center for Sustainable Enterprise at the University of North Carolina, NGOs and state business trade associations to identify non-regulatory incentives for ESI members. By July 1, 2007, a report on feasible non-regulatory incentives will be completed.

Activity 1. DPPEA will conduct focus groups with DOC, universities and others to identify state resources that could show preference or offer priority to high performing facilities, to suggest communication channels to better educate and engage financial sectors on ESI, and identify specific opportunities for this audience to incorporate information on performance programs into their systems.

Activity 2. DPPEA will host a workshop in conjunction with Sustainable North Carolina, a state NGO and active member on the ESI Advisory Workgroup. Targeted participants will include banks and investment firm staff, DOC existing industry specialists, staff from the university system and business schools, state business trade associations and NGO’s. The workshop will focus on feedback regarding incentives, their feasibility and how they could be implemented.

TASK III. PRESENT INCENTIVES FOR RECOMMENDATION

DPPEA will prepare and present a summary report to the ESI Advisory Workgroup for recommendations to the secretary on new incentives and conduct follow-up. By Feb. 1, 2008, a report on incentives approved by the DENR secretary for adoption will begin being implemented and recommendations from the DENR secretary to other identified agencies on implementation of incentives will be completed.

Activity 1. DPPEA will summarize information collected on the regulatory and non-regulatory incentive suggestions, research barriers and compile this information into a report. The report will include recommendations for prioritizing incentive adoption for both short and long term, responsible party and a timeline for adoption. The report will be presented to the ESI Advisory Workgroup for recommendation to the secretary on new incentives.

Activity 2. DPPEA will present advisory workgroup recommendations to the secretary for adoption. For incentives that require legislation, DENR will prepare a report for the General Assembly’s Environmental Review Commission. A report will be prepared for the DOC secretary listing financial incentives and for other agencies as needed. DPPEA will work with outside stakeholders to implement any identified non-state incentives.

Activity 3. DPPEA will incorporate measures for new incentives adopted, new participants, cost savings (including those due to incentives) and pollutant reductions into the existing ESI annual report database.

TASK IV. SET ENVIRONMENTAL PRIORITIES AND INCORPORATE INTO ESI APPLICATION PROCESS

Through its application process, DPPEA proposes to influence facilities to set environmental performance goals that also support state, regional and national environmental priorities by clearly identifying and tracking performance against these indicators. By April 1, 2007, guidelines on incorporating state and federal environmental priorities into the ESI application process will be completed.

Activity 1. DPPEA will facilitate discussion with senior media program managers and staff to identify state environmental priorities that may be supported by ESI members and that build on the adopted DENR Strategic Plan.

Activity 2. DPPEA will take state environmental priorities, any Region 4 Challenge Commitments and federal priorities, such as the Resource Conservation Challenge, and develop specific guidelines for Rising Steward and Steward applicants to incorporate these environmental priorities into site environmental performance goals. Guidelines will become part of the application cycle and will be used when considering if a site’s goals meet program criteria of “setting aggressive goals” as determined by the advisory workgroup.

Activity 3. DPPEA will track required site annual reports for progress toward state, regional and national environmental priorities. The annual aggregate ESI program summary will report overall progress and copies will be made available to interested parties as well as posted on the ESI website.

TASK V. OUTREACH REGARDING INCENTIVES

By Sept. 30, 2008, DPPEA will provide outreach on project results and lessons learned.

Activity 1. DPPEA will post reports, forms and other project products to its Web site, www. p2pays.org. Staff will make presentations at regional and national conferences. North Carolina will provide documents, materials, consultation and mentoring to any state that wants to implement an environmental excellence program similar to the ESI.

Performance Outcomes and Measures

The performance outcomes for this project are as follows:

The environmental reductions and member cost savings will be measured each year from the required annual reports. These reports include reductions in: air emissions, water pollution, water use, solid waste, hazardous waste and energy use, and also a category for cost savings (including any from incentives) will be included. The savings to DENR will be measured in the reduction in man-hours resulting from any applicable incentives. Outcome measures will continue to be reported to EPA for three years following the end of the project.

The output measures are as follows:

This will be measured through the required annual reports and interviews with members.

Project Schedule and Time Frame

Project start date: 10/1/05

Program Criteria

1. Target priority environmental issues

The state environmental performance recognition program called the Environmental Stewardship Initiative is designed to promote and encourage superior environmental performance by North Carolina’s regulated community by establishing incentives to stimulate the use of pollution prevention and innovative approaches to meet and go beyond regulatory requirements. The program offers assistance to reduce impacts on air, water and waste using an EMS as a framework to reach and go beyond compliance. This project will identify and implement additional regulatory and non-regulatory incentives that can be offered to ESI and Ptrack participants. This will include permit-based incentives, which could include flexible permitting, and will address all media. Data currently collected through ESI annual reports shows significant reductions and prevention of environmental impacts by organizations in the ESI. New incentives will serve as a recruiting tool for increased participation in state performance-based programs and Ptrack resulting in improved environmental performance.

2. Improvement in results from project implementation

2.1. ESI is designed to promote and encourage superior environmental performance by the regulated community by establishing incentives to stimulate the use of approaches to meet and go beyond regulatory requirements rather than the traditional command and control approach.

2.2. The ESI program is built on the lessons learned from other state and federal excellence programs, such as Virginia, Texas, Wisconsin and PTrack.

2.3. The results of the project will be measured in reduction of pollution from the additional organizations that join ESI though more incentives and through a targeted approach to priority areas.

2.4. Incentives will include those that reduce time, uncertainty and administrative burden of DENR’s regulatory divisions and allow the efficient use of scarce resources. The ability of any incentive to reduce the administrative burden of DENR’s regulatory divisions will be measured, along with an estimate of any resource savings.

2.5. Any savings by ESI member firms using the new incentives will be identified and captured in the required annual reporting process.

2.6. The advisory workgroup is made up of representatives from academia, small business, large business, business trade group, NGO, local government, military installation, Steward facilities and a DENR representative. A workshop for stakeholders will provide additional public input into incentive identification and implementation.

2.7. Representatives from local governments and NGO’s are on the ESI Advisory Workgroup and will be able to identify any environmental justice issues.

3. Measuring improvement and accountability

3.1 New incentives, increase in membership and additional emission and waste reductions and utility savings will be the outcome measures. This data will be obtained from ESI members’ required annual reports.

3.2. All reductions are reported annually from the first of each year. Baseline incentives will be those that are currently provided by the ESI program.

3.3. All ESI facilities are required to annually report on a calendar-year basis their emission and waste reductions and utility savings. The ESI program managers will track the number of new incentives and increase in membership.

3.4. The number of new incentives that are implemented.

3.5. An increase in new ESI members and the corresponding reduction in emission and waste reductions and utility savings. These will be captured in the required annual facility reports.

4. Transferring Innovation

4.1. A Web page will provide all reports and results, presentations at regional and national conferences and direct discussions with other state P2 programs.

4.2. Any states that have or are establishing an environmental excellence program and PTrack can draw on the projects results and lessons learned.

4.3. The ESI is the basis for fundamentally changing the way DENR does business and is being embraced by the department as the key to developing and using alternative tools to traditional enforcement that achieve compliance and encourage going beyond compliance.

4.4. North Carolina will provide documents, materials, consultation and mentoring to any state that wants to implement an environmental excellence program similar to the ESI.

Preliminary Budget Proposal

State : North Carolina
Agency : Department of Environmental and Natural Resources, Division of Pollution Prevention and Environmental Assistance
Contact: Gary Hunt, Division of Pollution Prevention and Environmental Assistance, 1639 Mail Service Center, Raleigh, NC 27699-1639; phone: 919-715-6508; fax: 919-715-6794; gary.hunt@ncmail.net
Project Title: Investigation into Increased Incentives for Performance-Based Program Participants

[Budget Info Removed by EPA]

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