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Project Summary

2003-2004 State Innovation Grant Category:
Innovation in Environmental Permitting
Project Title and Location:
"Industrial Footprint Reduction Project," Statewide - Washington State
State Agency Applicant:
Washington State Department of Ecology
Project Contact:
Carol Kraege; Department of Ecology; P.O. Box 47600; Olympia, WA 98504-7600; Phone: (360) 407-6906; Fax: (360) 407-6102; Email: ckra461@ecy.wa.gov
RCRA Component:
The project is multi-media, including RCRA hazardous waste management. A RCRA permitting component is unlikely, based on the targeted industry sectors.
Other Federal Funding:
The project is not being executed in cooperation with or funded by another federal program.
Regulatory Flexibility from the Federal Government:
The project involves providing regulatory and other incentives to industry in exchange for significant reductions in the industry's environmental footprint. We anticipate that flexibility to re-interpret state and/or federal rules, policies and guidelines may be an important means to provide these regulatory incentives. We will work through Region 10 staff throughout the project to assure acceptance of any reinterpretation by EPA programs. It is also possible that site-specific rule modifications may be requested of EPA if they are necessary to achieve the goals of the project. We are considering National Environmental Performance Track as a means for Ecology, industry and EPA to interact on this project. EPA programs potentially affected are Air, Water and RCRA.

Endorsement by State Agency Director:
This project is known to and has the endorsement of the Department of Ecology Interim Director, Linda Hoffman. If this proposal is selected for application, a letter of endorsement will be provided with the final application.

Budget Summary Information Page

State Project Contact:
Project Title:
"Industrial Footprint Reduction Project"
Expected Costs:

< Budgetary Information Withheld by U.S. EPA>

Pre-Proposal Project Narrative

Industrial Footprint Reduction Project

This proposal will test an alternative approach to traditional permitting of high-profile, major point source industries with multi-media, multi-program regulatory interactions. The "Footprint" approach centers the agency-industry relationship on the needs and opportunities for reducing the industry's footprint across all environmental media through a collaborative process. In the current command-and-control system, regulatory goals and priorities are determined by the many media-specific laws and regulations applicable to that facility, not by the overall significance and relative importance of the various impacts on the surrounding communities and environment. "Footprint" will use a collaborative process, involve stakeholders, offer regulatory and other incentives for substantial improvements, and result in contractual agreements that operate in lieu of, or incorporate, permits. It may include (but is not constrained to) the use of a collaborative environmental management system (EMS) process as a tool for accomplishing these objectives. We also may engage EPA through Performance Track.

The proposal builds on EPA's Innovation Strategy by putting into action the five points in the strategy's vision statement: 1) Focus on environmental performance and results; 2) Emphasize greater environmental responsibility, not just pollution control; 3) Integrate environmental management more fully across facilities, problems, and media; 4) Use market-based incentives to achieve environmental goals; and, 5) emphasize partnership and stakeholder collaboration. It also supports Region 10's strategic plan, and ECOS/EPA efforts to model new approaches to joint state/EPA planning and priority setting. Through this project, Ecology intends to create a model for use in Washington's environmental programs as well as those in other states. Specific performance measures will be determined through the course of the project, and will include measures that will allow comparison of "Footprint" facility performance with that of traditionally-regulated facilities. A comprehensive set of "footprint" measures will be adapted from the Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines, giving broader coverage to sustainability issues and life-cycle impacts.

Project Need:
The current regulatory framework - standards, permits, inspections, enforcement - is widely recognized both as having achieved major environmental gains in the past, and as being cumbersome and sometimes ineffective for achieving future environmental gains. Ecology, other state regulatory agencies, and EPA, as well as regulated industries, expend substantial effort and resources on permits and compliance for what, in many instances, is little or no environmental improvement. Laws and regulations often impose substantial administrative and financial burdens in areas of little environmental significance, while emergent, important environmental issues remain unaddressed. Due to its multi-media, one-stop permitting responsibilities, Ecology's Industrial Section is uniquely able to see significant opportunities for environmental improvement at the major industries we regulate - opportunities the industries are often unwilling to pursue because their priorities are instead directed by a prescriptive set of laws and regulations that may or may not target the most important environmental issues at their facilities.

Project Description:
The Department of Ecology proposes to use a collaborative process as a primary tool for achieving superior environmental results and reducing industry's overall environmental footprint. An agreement will replace or augment traditional air and water permits and hazardous waste regulation.

Specifically, we propose to recruit willing industrial facilities one at a time, as their permit status and our capacity afford the opportunity, adapting as we gain experience. We will look first within the pulp & paper, primary metals, and petroleum refining sectors, which are managed by Ecology's multi-media Industrial Section. Following recruitment of each industry volunteer, we will conduct a consultation process with the industry, stakeholders and regulators to identify the environmental and sustainability indicators to be included in the footprint baseline measurement. We will then work with each facility to prepare a baseline profile of its footprint, using data presently reported and data readily available for selected sustainability indicators from the GRI guidelines.

The baseline profile will then be used as a starting point for a collaborative process between Ecology and the facility to identify significant environmental aspects and opportunities for their reduction, which will then be addressed by a contractual agreement to be developed between the facility and Ecology with the objective of reducing the industry's footprint to the extent practical in the most significant impact areas. At milestones during the process, public consultation will occur to apprise stakeholders of the issues to be addressed and the approach proposed for addressing them, and to obtain feedback. The agreement will be developed with the goal of replacing required permits, or if this is impractical, incorporating them. It will include goals, timelines, appropriate means for verifying compliance, and terms for accountability and enforcement.

All relevant impacts will be considered in setting priorities and developing the agreement, including regulated wastes and pollutants as well as presently unregulated ones, such as greenhouse gas emissions and water and energy conservation. Regulatory flexibility and other incentives will be identified and considered, with the goal of providing sufficient benefits to motivate the industry to achieve the desired results. The goal will be to bring about measurable and substantial overall environmental improvement (footprint reduction) while not allowing any aspect of the facility's current performance to regress, and in doing so, making more efficient use of agency and industry resources. Any barriers to implementation will be evaluated for possible solutions, and at the very least documented for possible further action (e.g. rulemaking or legislative recommendations).

As an example, the footprint measurement may reveal that an industry is a major source of greenhouse gas emissions, and the agreement process may lead to substantial reductions in them in exchange for greater flexibility and reduced administrative burdens in meeting standards for other emissions not causing environmental harm.

Within the grant timeframe and resources, we expect that baseline measurement and agreement development could be completed at one or two facilities. Others would follow, guided by evaluation of our experience during this period.

Program Criteria (refer to Solicitation Notice):

5.2.1. Target Priority Environmental Issues - The State Innovation Program Grant Solicitation Notice indicates that proposals should focus either on priority environmental issues identified in the Innovation Strategy, or on priority issues identified through other State-Federal collaboration processes such as a Performance Partnership Agreement (PPA). The notice further indicates that states must propose projects that integrate innovation into permitting programs or apply innovation as an alternative to permitting to achieve improved environmental performance. Principles identified in the current Ecology/Region 10 Environmental Performance Partnership Agreement include, "support innovative approaches to regulatory programs that improve environmental results, save money and resources, and minimize process steps," and " work to bring innovative initiatives and strategies into the mainstream." More specifically, the PPA states that, "Ecology's Industrial Section, with EPA assistance, will look for innovation in the development and administration of permits specifically the major industrial sectors (pulp and paper, aluminum reduction oil refining)." Further, the PPA states that "EPA and Ecology will also work together to encourage the implementation of Environmental Management Systems within facilities, and to support environmental stewardship through their joint work on innovation programs such as the National Environmental Performance Track program." In a related effort, a recent, jointly-negotiated addition to Region 10's strategic plan commits EPA and Washington State to work together to explore alternative approaches to improve environmental results, and to assess and document successes of this specific project and other projects. In turn, this agreement supports our involvement as a pilot state in a national effort by ECOS and EPA to facilitate proactive engagement to present state strategic priorities to EPA for consideration before EPA priorities and commitments are locked in place, and to provide a vehicle for states and EPA to agree on results based, innovative systems through the PPA process. This proposal aims to fulfill these objectives.

5.2.2 Likely Improvement in Results from Project Implementation - The project will address air, water, and hazardous waste, and will also address other environmental concerns identified as significant through the course of the project. These could include PBT reduction, conservation in the use of water, energy, and other resources, increased recycling and use of recycled material, and others. An objective of the project is to achieve greater reduction in the industry's overall environmental footprint than would be achieved through traditional regulation. Participants in the project will be tasked with meeting this objective and demonstrating its achievement through appropriate measures. How does the proposed tool or approach differ from current methods? Currently, state and federal laws and regulations drive priorities for environmental management and expenditures through a one-size-fits-all, command-and-control process. This proposal differs in that we will use measurement and analysis of the facility's environmental footprint to drive a more customized set of facility improvements through a collaborative process. How does the project build on "lessons learned" from prior experience? Lessons learned through traditional regulation are many, and are capsulated in the preceding "Project Need" statement. In addition, Ecology has reviewed many state and federal innovation programs and interviewed individuals involved in or familiar with them. We have drawn on this body of knowledge in developing this proposal and expect the project to provide additional knowledge useful to other states and EPA. What are the quantifiable improvements in environmental outcomes expected to result from implementation of this innovation? See combined response below. What are the measurable improvements in administrative efficiency and program operational costs that may result from the program? See combined response below. What are the quantifiable costs and efficiency improvements for the permit holders/regulated entities resulting from implementation of this innovation? See combined response below.

5.2.3. Measuring Improvement and Accountability What are the goals for environmental improvement? See combined response below. What are the indicators that will be used to show environmental improvement? See combined response below. How and when will the baseline measurements be developed? Facility baseline measurement will be completed by approximately December, 2004. See combined response below regarding "how." What is the plan, timeframe and commitment for measuring and evaluating how well the project meets its goals and objectives? See Project Schedule and Time Frame below. What are the expected short-term (1-3 years) results to be obtained through this innovation and how will they be measured? See combined response below. What are the expected long-term results to be obtained through this innovation, how will they be measured, and what is the time span for those results? See combined response below.

5.2.4. Transferring Innovation What methods will be used to document the outcomes and methods of this innovation and make the information available to other jurisdictions? See response to below. What is the specific potential for widespread application or use of the tool/approach for "next generation" environmental protection? We believe a collaborative, results-oriented approach could produce greater environmental gains than traditional regulation at many industrial facilities, and in the longer term may save time and money for agencies and industry. Regulations may continue to serve as an effective backstop and motivator for voluntary participation, and may also continue to be the most effective way to deal with facilities that are less inclined toward collaboration with government and stakeholders to improve their environmental performance. How will the application of this innovation be used to promote organizational system change, or develop a culture of innovative environmental problem-solving as a "way of doing business" within the State or more broadly? Based on our successes and experience gained with pilot facilities, we intend to promote wider application within our state and beyond by documenting the results through case studies, providing training for regulatory staff, developing a more formal process for industries to gain entry into this alternative, providing information to national organizations that act as clearinghouses for innovation, and providing information via the internet. What commitments can the state make to provide consultation and mentoring to other states wishing to adopt similar innovations? See response to above.

Combined response to through,, and These cannot be quantified up-front, since the project involves the use of a collaborative process to identify and achieve environmental improvements, and it is through this process that these will be quantified and measured. However, the overall purpose of the project is to achieve greater overall reduction in industry's environmental footprint (i.e. improved environmental outcomes) for the time, effort and resources that we and industry put into it. The entire design and conduct of the project will be aimed at achieving and measurably demonstrating these results. Facility baseline and progress will be measured using an indicator set derived from GRI Sustainability guidelines and adapted to the specific facility, based on consultation with industry and the public. Periodic (likely annual) measurements using the same method to measure progress and to compare with similar non-participating facilities. These measurements will continue over the duration of the funded project, and for as long as an agreement is in effect at the pilot facilities - likely one to two permit cycles, or 5-10 years.

Project Schedule and Time Frame:

Following are estimated completion dates for project tasks. Earlier tasks will proceed without grant funding. This schedule assumes grant award will come by about May, 2004. Grant funds will only be applied to work carried out following grant award; state funds will be used prior to that date.

5-10 years
Task Estimated Timeframe* Estimated Completion*
I. Recruit the first industrial facility
2 months
May, 2004
II. Initial stakeholder consultation
3 months
August, 2004
III. Conduct baseline measurement
4 months
December, 2004
IV. Intermediate stakeholder consultation
2 months
March, 2005
V. Recruit next industrial facility
(Repeat the steps described for the first)
1 month
June, 2005
VI. Develop footprint reduction strategies
18 months
January, 2006
VII. Draft agreement
3 months
January, 2006
VIII. Final stakeholder consultation
2 months
January, 2006
IX. Implement agreement**  
X. Evaluate and make recommendations
2 months
March, 2006
XI. Prepare final report to EPA
3 months
June, 2006
XII. Evaluate long-term results and Adapt based on lessons learned**
April, 2006 and beyond
XIII. Apply to other industries**
April, 2006 and beyond

* Timeframes and completion dates are best estimates. Due to the uncertainty of this as with any innovation, however, Ecology intends to request the full 3-year duration for this grant to avoid the possible need for later extensions.
** These tasks represent a continuation of the project but go beyond the timeframe of this grant

Project Work Products:

  1. A measurement system for measuring industrial facilities' environmental footprints
  2. Baseline and follow-up footprint measurements at one or more facilities
  3. A method for a collaborative process for industrial footprint reduction and case studies for each facility tested
  4. Tools for transferring the method to other industries and jurisdictions
  5. A final project report

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