There are many tools of governance that we may use to combat global warming.  In addition to taxes and trading there are also right-to-know and self-reporting requirements, liability rules, and conditioning new and existing permits.  There are management system certifications (self or third-party), technical assistance and education, good faith enforcement policies, forms of negotiated settlements that advance shared technological capabilities, and all manner of subsidies.  The problem of global warming is so big that we should be using a “full toolbox” approach of actively considering all the available tools of governance, and how they can be used in concert.

Greenhouse Gas (GHG) Reduction Planning is one option that should be considered.  Planning requirements have been instituted to address stormwater pollution, to minimize hazardous waste, to prevent and respond to emergencies, to ensure safety, and to reduce toxics use.  It is a flexible though limited tool that is usually used in such a way that nothing is actually required – the idea is that the planner will learn that it makes sense to do the right thing.  Although it could be coupled with requirements to implement or achieve certain levels of progress, as generally used, to make people examine options, it is by no means a complete answer to our problems.  But considered within a full context that includes enforcement to ensure planning gets done, and assistance and education so that planning gets done well, it should be an extremely useful complement to other approaches, such as taxes, cap-and-trade, reporting, permits and subsidies.  All of these other approaches are to make people reduce greenhouse gas emissions.  Planning gets them to see how they could do it.  It ensures they really take a look at the options.  Some will do the right thing after they see that they do make sense.

That planning alone, without performance requirements, doesn’t force change, can seem weak, but it has the same virtue that attracts policy-makers to the idea of pollution rights trading: this is a way to find the most economically efficient changes.  Moreover, the economic motivation is not subject to the vicissitudes of a market in one variable (the price of a ton of carbon), but relates to an infinite variety of factors and is thus arguably more robust as a continuous motivator.  Planning results in the perception of economic value when it illuminates viable options that reduce costs as well as the bad thing planning seeks to address (hazardous waste, stormwater pollution, emergencies, greenhouse gases).

There are those so entranced by faith in business that they assume no such options exist, because businesses would have already found them.  But the experience of planning programs does not bear this out.  The National Pollution Prevention Roundtable issued a report in 2006 estimating that dozens of state programs have helped businesses find and eliminate more than 60 billion pounds of pollution that businesses did not find, on their own.   CEOs may be expert money hunters, but they hunt in a different part of the forest.  Planning makes them hunt in parts they usually ignore.

Unlike pollution rights trading, planning does not confer a right to pollute.  Instead, it imposes an obligation, the responsibility for each large emitter to try to reduce its emissions.   A requirement that one must write a plan for bringing about reductions in one’s own sphere of operations is a firm and strong statement of that responsibility.  Unlike trading, which adds a new expression of proprietary interest to an existing authorization to pollute (the permit that has no limits on GHG emissions), and thus is morally confusing, a planning requirement is well-grounded in terms of fundamental philosophy.  It reasserts the common interest and ensures that such markets are in accord with our sense of what is just and right.  A full toolbox approach is about how strategies can work together.  It makes sense to require GHG reduction planning of all significant emitters who want the right to buy pollution credits.

A requirement that plans be documented and kept on site available for an inspector could be effective in ensuring that they are performed as prescribed, as long as there is a credible expectation of inspection.  This formula works generally well, at least in theory, with tax returns, and has generally succeeded in the context of Toxics Use Reduction planning in Massachusetts.  (See, for example, the Massachusetts Commonwealth’s 1997 Toxics Use Reduction Program Evaluation, that found companies covered by the TUR Act’s requirements invested millions in toxics use reduction options discovered through planning.  The companies claimed they saved more money than compliance cost them). 

Plans should be preventive.  It is easier for some to consider capturing the carbon dioxide that spews out of a furnace, because they cannot imagine changing their fuel source.  Planning would make them take a serious look at energy efficiency and cleaner energy sources.   Eliminating wasteful energy practices will benefit each planning facility and the economy, as well as the environment.

Of course even when horses are led to water, they cannot be made to drink.  So even companies that learn, through planning, that they could cut the burning of high-pollution fuels with solar, wind, efficiency, and many other options, and eventually put themselves in a position of much lower operating cost, might still decline to lay out all the capital and wait for a multi-year payback.  But if planning is seen as part of a suite of governance tools, we can have companies doing plans and learning about their options for reducing GHG emissions and then using grants, loans, and tax incentives to make them more cost-effective to implement.  If companies have the right education they may see and understand the big picture; and if they have the right technical assistance, they may do better at identifying their options.

The plan should begin with a declaration of intent, an expression of management policy that is communicated to all staff.  The next matter to be addressed is measurement.  The facility should commit to effective measurement of GHG emissions from the site of its operations, first, and secondly, to the off-site emissions to which it is a contributory cause.  Necessary components of effective planning are source identification and cause and cost allocation.  What is the source of the problem?  What is it that causes the emissions and resulting costs? Source identification and cause allocation should be coupled with functional analysis, in order to enable effective options identification.  In other words, why is that vat being heated?  Is it being heated in order to reduce the viscosity of a substance so that it can flow?  Understanding this allows the examination of options for accomplishing the same task in another way.  Is it possible that the substance can be mixed with water, or could low-friction surfaces help, to reduce or eliminate the need for heating? 

A good plan should map important greenhouse gas sources and causes because doing this makes sure they are found and shows their relationship to each other and to other activities.  It should involve a team of people with various perspectives brainstorming because the best choice and implementation of options flows from a group that works in an integrated fashion.  A good plan is not an extra, ancillary task.  A good planning process is an opportunity for enlivening and enriching the core tasks of the entity.  The team should interact with all personnel who might have an idea or insight to offer, thus leading to greater cohesion and a spirit of cooperation and innovation.  The process of options identification should be incorporated into ordinary business so that it is not disruptive, and so that it is accepted and made part of continuous operations. 

When the team has successfully fostered the generation of a list of ideas worth exploring, management should choose options to investigate, using a method of comparing each idea to current activities.  The problem that must be overcome at this point is the bias for things as they are, and other biases that may result because of the comfort level that various influential people will have with certain alternatives. Once the options have been identified and compared to current practice, then the plan needs to consider implementation.   However the steps of a plan are delineated, it is important to remember that the plan exists for a purpose – to get the company to do X if it possibly can.  If the company decides to just do X, no one should be kicking because they skipped some planning steps.  The principle that the goal is results, not process, can be used to simplify the plan for anyone who finds it daunting. 

This approach has been tried before.  It has been tried with toxic chemical use, hazardous waste, wastewater discharges, energy use, solid waste generation, and water use.   It works.  It is not the be all and end all, but it is a proven tool for making a positive difference.  It doesn’t give away anything.  The government can still step in more resolutely if it must.  But why not first try a flexible, user-friendly approach that might even bring great benefits to the people who do it?

Further reading

“Management-Based Strategies for Improving Private Sector Environmental Performance”, Cary Coglianese and Jennifer Nash, March 2005, Kennedy School of Government Working Paper No. RWP05-025, Harvard Public Law Working Paper No. 110.

There are many tools of governance that we may use to combat global warming.  In addition to taxes and trading there are also right-to-know and self-reporting requirements, liability rules, and conditioning new and existing permits.  There are management system certifications (self or third-party), technical assistance and education, good faith enforcement policies, forms of negotiated settlements that advance shared technological capabilities, and all manner of subsidies.  The problem of global warming is so big that we should be using a “full toolbox” approach of actively considering all the available tools of governance, and how they can be used in concert.

Greenhouse Gas (GHG) Reduction Planning is one option that should be considered.  Planning requirements have been instituted to address stormwater pollution, to minimize hazardous waste, to prevent and respond to emergencies, to ensure safety, and to reduce toxics use.  It is a flexible though limited tool that is usually used in such a way that nothing is actually required – the idea is that the planner will learn that it makes sense to do the right thing.  Although it could be coupled with requirements to implement or achieve certain levels of progress, as generally used, to make people examine options, it is by no means a complete answer to our problems.  But considered within a full context that includes enforcement to ensure planning gets done, and assistance and education so that planning gets done well, it should be an extremely useful complement to other approaches, such as taxes, cap-and-trade, reporting, permits and subsidies.  All of these other approaches are to make people reduce greenhouse gas emissions.  Planning gets them to see how they could do it.  It ensures they really take a look at the options.  Some will do the right thing after they see that they do make sense.

That planning alone, without performance requirements, doesn’t force change, can seem weak, but it has the same virtue that attracts policy-makers to the idea of pollution rights trading: this is a way to find the most economically efficient changes.  Moreover, the economic motivation is not subject to the vicissitudes of a market in one variable (the price of a ton of carbon), but relates to an infinite variety of factors and is thus arguably more robust as a continuous motivator.  Planning results in the perception of economic value when it illuminates viable options that reduce costs as well as the bad thing planning seeks to address (hazardous waste, stormwater pollution, emergencies, greenhouse gases).

There are those so entranced by faith in business that they assume no such options exist, because businesses would have already found them.  But the experience of planning programs does not bear this out.  The National Pollution Prevention Roundtable issued a report in 2006 estimating that dozens of state programs have helped businesses find and eliminate more than 60 billion pounds of pollution that businesses did not find, on their own.   CEOs may be expert money hunters, but they hunt in a different part of the forest.  Planning makes them hunt in parts they usually ignore.

Unlike pollution rights trading, planning does not confer a right to pollute.  Instead, it imposes an obligation, the responsibility for each large emitter to try to reduce its emissions.   A requirement that one must write a plan for bringing about reductions in one’s own sphere of operations is a firm and strong statement of that responsibility.  Unlike trading, which adds a new expression of proprietary interest to an existing authorization to pollute (the permit that has no limits on GHG emissions), and thus is morally confusing, a planning requirement is well-grounded in terms of fundamental philosophy.  It reasserts the common interest and ensures that such markets are in accord with our sense of what is just and right.  A full toolbox approach is about how strategies can work together.  It makes sense to require GHG reduction planning of all significant emitters who want the right to buy pollution credits.

A requirement that plans be documented and kept on site available for an inspector could be effective in ensuring that they are performed as prescribed, as long as there is a credible expectation of inspection.  This formula works generally well, at least in theory, with tax returns, and has generally succeeded in the context of Toxics Use Reduction planning in Massachusetts.  (See, for example, the Massachusetts Commonwealth’s 1997 Toxics Use Reduction Program Evaluation, that found companies covered by the TUR Act’s requirements invested millions in toxics use reduction options discovered through planning.  The companies claimed they saved more money than compliance cost them). 

Plans should be preventive.  It is easier for some to consider capturing the carbon dioxide that spews out of a furnace, because they cannot imagine changing their fuel source.  Planning would make them take a serious look at energy efficiency and cleaner energy sources.   Eliminating wasteful energy practices will benefit each planning facility and the economy, as well as the environment.

Of course even when horses are led to water, they cannot be made to drink.  So even companies that learn, through planning, that they could cut the burning of high-pollution fuels with solar, wind, efficiency, and many other options, and eventually put themselves in a position of much lower operating cost, might still decline to lay out all the capital and wait for a multi-year payback.  But if planning is seen as part of a suite of governance tools, we can have companies doing plans and learning about their options for reducing GHG emissions and then using grants, loans, and tax incentives to make them more cost-effective to implement.  If companies have the right education they may see and understand the big picture; and if they have the right technical assistance, they may do better at identifying their options.

The plan should begin with a declaration of intent, an expression of management policy that is communicated to all staff.  The next matter to be addressed is measurement.  The facility should commit to effective measurement of GHG emissions from the site of its operations, first, and secondly, to the off-site emissions to which it is a contributory cause.  Necessary components of effective planning are source identification and cause and cost allocation.  What is the source of the problem?  What is it that causes the emissions and resulting costs? Source identification and cause allocation should be coupled with functional analysis, in order to enable effective options identification.  In other words, why is that vat being heated?  Is it being heated in order to reduce the viscosity of a substance so that it can flow?  Understanding this allows the examination of options for accomplishing the same task in another way.  Is it possible that the substance can be mixed with water, or could low-friction surfaces help, to reduce or eliminate the need for heating? 

A good plan should map important greenhouse gas sources and causes because doing this makes sure they are found and shows their relationship to each other and to other activities.  It should involve a team of people with various perspectives brainstorming because the best choice and implementation of options flows from a group that works in an integrated fashion.  A good plan is not an extra, ancillary task.  A good planning process is an opportunity for enlivening and enriching the core tasks of the entity.  The team should interact with all personnel who might have an idea or insight to offer, thus leading to greater cohesion and a spirit of cooperation and innovation.  The process of options identification should be incorporated into ordinary business so that it is not disruptive, and so that it is accepted and made part of continuous operations. 

When the team has successfully fostered the generation of a list of ideas worth exploring, management should choose options to investigate, using a method of comparing each idea to current activities.  The problem that must be overcome at this point is the bias for things as they are, and other biases that may result because of the comfort level that various influential people will have with certain alternatives. Once the options have been identified and compared to current practice, then the plan needs to consider implementation.   However the steps of a plan are delineated, it is important to remember that the plan exists for a purpose – to get the company to do X if it possibly can.  If the company decides to just do X, no one should be kicking because they skipped some planning steps.  The principle that the goal is results, not process, can be used to simplify the plan for anyone who finds it daunting. 

This approach has been tried before.  It has been tried with toxic chemical use, hazardous waste, wastewater discharges, energy use, solid waste generation, and water use.   It works.  It is not the be all and end all, but it is a proven tool for making a positive difference.  It doesn’t give away anything.  The government can still step in more resolutely if it must.  But why not first try a flexible, user-friendly approach that might even bring great benefits to the people who do it?

Further reading

“Management-Based Strategies for Improving Private Sector Environmental Performance”, Cary Coglianese and Jennifer Nash, March 2005, Kennedy School of Government Working Paper No. RWP05-025, Harvard Public Law Working Paper No. 110.