Environmental quality gains require major policy changes

March 21, 2000

CHAPEL HILL -- U.S. environmental policies have brought dramatic improvements in air and water quality in this country over the past 25 years, but further expansion of "command-and-control regulation" will deliver diminishing returns, say researchers at the University of North Carolina at Chapel Hill's Kenan Institute of Private Enterprise.

"In the future, significant gains in environmental quality are more likely to come from widespread adoption of pollution prevention practices than from more stringent regulation of end-of-pipe emissions," say Dennis A. Rondinelli and Michael A. Berry.

Rondinelli is Glaxo distinguished international professor of management and director of the Center for Global Business Research, and Berry is research professor at the center. In a new policy paper, "Corporate Environmental Management and Public Policy: Bridging the Gap," the two make a case for a fundamental shift in U.S. environmental policy.

Their report, forthcoming in a special 2000 issue of the American Behavioral Scientist, traces changes occurring in the way American corporations handle environmental issues. Since the late 1980s, an increasing number of U.S. manufacturers and multinational enterprises operating here have adopted active environmental management systems. Such policies not only commit firms to comply with regulations but also to seek ways of preventing pollution at the source rather than simply cleaning it up afterwards.

Although some companies still see regulatory compliance as a burden and attempt to minimize costs, most large corporations and many smaller ones now consider environmental protection as a necessary part of total quality management. Many corporations integrate proactive environmental management practices into their overall business strategies to reduce costs, improve efficiency, compete more effectively and develop new products and services.

The U.S. Environmental Protection Agency is not set up to regulate industry's operations effectively or to provide adequate incentives for firms to go beyond regulatory compliance, Rondinelli and Berry wrote. National, state and local public policies do not yet reflect the new trends in corporate environmental management.

Because of fragmented adoption of and amendments to environmental legislation in Congress, the EPA has no comprehensive policy for improving environmental quality, they said. The complex, costly and inflexible regulatory system that still dominates environmental policy in the United States neither encourages nor rewards corporate environmental management systems that exceed compliance requirements.

"New policies must provide a holistic and integrated approach to environmental management that focuses on performance improvements rather than regulatory compliance, uses economic incentives to encourage clean manufacturing and the adoption of pollution prevention technologies and processes and forges public-private partnerships for improving environmental quality," the researchers wrote.

Ultimately, bridging the gap between public policy and corporate environmental management requires adopting a new philosophy in both public and private sectors that emphasizes what the World Business Council for Sustainable Development calls "eco-efficiency." Firms attain eco-efficiency by reducing the energy- and material-intensity of goods and services, reducing toxic dispersion, enhancing recyclability, maximizing use of renewable resources, extending product durability and improving goods and services.

Public policies can play a crucial role in encouraging businesses to integrate eco-efficiency practices into their overall business strategies and in rewarding them for doing it, Rondinelli and Berry wrote.
Note: Copies of the paper are available from Rondinelli at the Kenan Institute, (919) 962-8201 or via e-mail at dennis_rondinelli@unc.edu.

News Services Contact: David Williamson, 962-8596.

University of North Carolina at Chapel Hill

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