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Predictability. A steady public policy is critical to corporate decision making-particularly at small companies, which often lack comfortable financial cushions. Unpredictable variations in governmental regulations and programs suppress innovation, discourage investment, and produce market uncertainties. The recent budget battles between Congress and the Clinton administration created a climate of uncertainty among those in business charged with conforming to environmental laws and responding to environmental incentives. Industry’s decision making was paralyzed for months as companies waited for the dust to settle in the Washington tug of war between those who would maintain and improve upon our existing regulatory system and those who sought to reverse many of the environmental gains made over the past 25 years.

Cohesiveness. Even if stability is maintained, the existing mosaic of policies, programs, and regulations slows the ability of many U.S. businesses to turn environmental innovation into profits and competitive advantage. A better integration of policies across government agencies and among federal, state, and local decision makers would facilitate environmental leadership in industry by creating a clearer path for the commercialization of new ideas.

The multibillion-dollar market in the United States for environmental goods and services ought to encourage technology developers. But because regulatory and permitting policies differ from state to state, and even from county to county, this market is broken up into many, smaller pieces. Both the New England and Western Governors’ Associations have developed reciprocity agreements among states to begin to address this problem. An example of program integration at the federal level is the new Rapid Commercialization Initiative (RCI), in which four agencies-the Environmental Protection Agency and the departments of Commerce, Defense, and Energy-work together to accelerate the introduction of environmental technologies into the marketplace. RCI helps companies find appropriate sites for demonstrating innovative ways of monitoring and controlling pollution, assists in verifying the technologies’ performance and cost, and expedites permits.

Speed. Finally, public policymakers need to understand that time matters. In six to eight months-the half-life of many government permit and grant applications-entire new product lines can be developed and launched. Without significant increases in speed, the public sector risks becoming a drag on private-sector innovation. In one helpful step, the new Pollution Prevention Permits Program in Title V of the Clean Air Act allows companies to switch to environmentally superior processes without automatically triggering expensive and time-consuming modifications to their plant-operating permits. For companies making process changes every 18 to 24 months, such flexibility is critical in reducing time to market.

We will probably always need a system of environmental policies to deal with “bad actors.” But ensuring that policymaking is predictable, cohesive, and time-sensitive will allow innovative and well-intentioned companies-the good actors-to focus a new generation of technical and managerial tools on environmental problems without being hamstrung by uncertainty and red tape.

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