Regulatory Reinvention: EPA's Common Sense Initiative Needs an Improved
Operating Framework and Progress Measures (Chapter Report, 07/18/97,
GAO/RCED-97-164).

Pursuant to a congressional request, GAO examined the progress of the
Environmental Protection Agency's (EPA) Common Sense Initiative toward
its goal of finding "cleaner, cheaper, smarter" ways of reducing or
preventing pollution and the methods EPA uses to measure progress.

GAO noted that: (1) in the almost 3 years the Initiative has been
underway, it has produced three formal recommendations to EPA, none of
which has suggested the types of changes in the existing approach to
environmental management that EPA expected; (2) although stakeholders
have begun to work collaboratively on environmental solutions, progress
toward the Initiative's goal has been limited by several factors, such
as the length of time needed to collect and analyze data, the
difficulties stakeholders have had in reaching consensus on the
approaches needed to address large, complex issues or policies, and
variations in stakeholders' commitments of time and understanding of the
technical aspects of environmental issues; (3) in addition, the Council
and its subcommittees and workgroups have spent considerable time
discussing how they would carry out their work and developing their own
operating standards; (4) an improved operating framework that better
defined the Initiative's goal and expected results and included the
specific guidance on how the Initiative would accomplish its work would
enable the Council and its industrial sector subcommittees and
workgroups to concentrate more of their effort on substantive issues;
(5) EPA gauges the progress of the Initiative primarily on the basis of
accomplishments associated with its various processes or activities,
such as stakeholder meetings, and not on the basis of its results; (6)
although such process--oriented information is important, it does not
measure the agency's progress in meeting the Initiative's goal,
consistent with the Government Performance and Results Act's intent; (7)
as a result, EPA cannot determine the extent to which the Initiative may
cost-effectively reduce or prevent pollution or ascertain whether such
improvements are due to changes in the agency's approach to
environmental management; (8) in addition, the Initiative's projects
typically do not establish or provide for performance measures to gauge
the extent to which they are decreasing pollution and/or reducing costs;
(9) GAO found that 11 of the 15 ongoing projects it reviewed did not
provide for measuring results; and (10) without such measures, it is
difficult to assess progress or demonstrate whether a project's expected
outcome has occurred.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-97-164
     TITLE:  Regulatory Reinvention: EPA's Common Sense Initiative Needs 
             an Improved Operating Framework and Progress
             Measures
      DATE:  07/18/97
   SUBJECT:  Pollution control
             Industrial pollution
             Data collection
             Environmental research
             Cost effectiveness analysis
             Pollution monitoring
             Environmental policies
IDENTIFIER:  EPA Common Sense Initiative
             National Performance Review
             
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Cover
================================================================ COVER


Report to Congressional Requesters

July 1997

REGULATORY REINVENTION - EPA'S
COMMON SENSE INITIATIVE NEEDS AN
IMPROVED OPERATING FRAMEWORK AND
PROGRESS MEASURES

GAO/RCED-97-164

EPA's Common Sense Initiatives

(160361)


Abbreviations
=============================================================== ABBREV

  DFO - designated federal officer
  EPA - Environmental Protection Agency
  FACA - Federal Advisory Committee Act
  FTE - full-time equivalent
  GPRA - Government Performance and Results Act
  NPR - National Performance Review
  R&D - research and development
  VOC - volatile organic compound

Letter
=============================================================== LETTER


B-277140

July 18, 1997

Congressional Requesters

In response to your request, this report examines the progress of the
Environmental Protection Agency's (EPA) Common Sense Initiative
toward its goal of finding "cleaner, cheaper, smarter" ways of
reducing or preventing pollution and the methods EPA uses to measure
progress. 

We are sending copies of this report to other appropriate
congressional committees; the Administrator, EPA; and the Director,
Office of Management and Budget.  We will also make copies available
to others upon request. 

Please call me at (202) 512-4907 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
III. 

Peter F.  Guerrero
Director, Environmental Protection
 Issues


List of Requesters

The Honorable John Chafee
Chairman, Committee on Environment
 and Public Works
United States Senate

The Honorable Christopher Bond
Chairman, Subcommittee on VA, HUD,
 and Independent Agencies
Committtee on Appropriations
United States Senate

The Honorable Tom Bliley
Chairman, Committee on Commerce
House of Representatives

The Honorable Michael G.  Oxley
Chairman, Subcommittee on Finance
 and Hazardous Materials
Committee on Commerce
House of Representatives

The Honorable Bud Shuster
Chairman, Committee on Transportation
 and Infrastructure
House of Representatives

The Honorable Sherwood Boehlert
Chairman, Subcommittee on Water
 Resources and Environment
Committee on Transportation
 and Infrastructure
House of Representatives

The Honorable Jerry Lewis
Chairman, Subcommittee on VA, HUD,
 and Independent Agencies
Committee on Appropriations
House of Representatives


The Honorable David M.  McIntosh
Chairman, Subcommittee on National
 Economic Growth, Natural Resources,
 and Regulatory Affairs
Committee on Government Reform
 and Oversight
House of Representatives


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

Although the United States has made significant progress in
environmental protection, the Environmental Protection Agency (EPA)
believes that resolving future environmental challenges will require
a fundamentally different approach, which the agency calls
"regulatory reinvention." In July 1994, EPA began its Common Sense
Initiative--termed the "centerpiece" of its regulatory reinvention
efforts--with a goal of finding "cleaner, cheaper, smarter" ways of
reducing or preventing pollution and recommending changes in the
existing approach to environmental management, including the existing
statutes and regulations.  To accomplish this goal, EPA established
an advisory forum with industry and other affected stakeholders to
achieve both higher environmental protection standards than are
currently required and more cost-effective results for industry and
the public. 

Congressional committees and others have questioned the progress of
EPA's reinvention efforts and of the Common Sense Initiative in
particular.  To better understand the Initiative and the progress it
has made, Senate and House Committee and Subcommittee Chairmen asked
GAO to assess (1) EPA's progress in achieving the goal the agency set
for the Initiative and (2) the methods EPA uses to measure the
progress of the Initiative toward its goal. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

EPA's Common Sense Initiative was designed to achieve greater
environmental protection at less cost by creating strategies for
controlling and preventing pollution for individual industries rather
than for individual pollutants, as is currently done.  The Initiative
is organized under the Federal Advisory Committee Act (FACA) and
consists of a Council and specialized subcommittees that focus on
selected industrial sectors and carry out studies and projects to
develop recommendations, based on consensus among stakeholders, for
administrative, regulatory, and statutory changes. 

EPA administers the Initiative, determines its multistakeholder
membership, and publicly reports on its FACA-based operations,
activities, and costs, as well as on the results of Council and
subcommittee meetings.  EPA selected six industrial
sectors--automobile manufacturing, computers and electronics, iron
and steel, metal finishing, petroleum refining, and printing--to
participate in the Initiative.  As of April 1997, the Council's
industrial sector subcommittees were carrying out about 40 projects
in areas such as pollution prevention, streamlined permitting and
reporting, enhanced public participation in environmental management,
the use of innovative technologies, and the setting of environmental
goals and indicators. 

In reviewing EPA's progress in achieving the Initiative's goal, GAO
applied concepts underlying the Government Performance and Results
Act of 1993.  The act--known as GPRA or the Results Act--focuses on
program outcomes, comparing the results of a program activity to its
intended purpose rather than focusing on activity levels and tasks
completed.  GAO applied the concepts to 15 of the Initiative's 36
projects that were ongoing in September 1996. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

In the almost 3 years the Initiative has been under way, it has
produced three formal recommendations to EPA, none of which has
suggested the types of changes in the existing approach to
environmental management that EPA expected.  Although stakeholders
have begun to work collaboratively on environmental solutions,
progress toward the Initiative's goal has been limited by several
factors, such as the length of time needed to collect and analyze
data; the difficulties stakeholders have had in reaching consensus on
the approaches needed to address large, complex issues or policies;
and variations in stakeholders' commitments of time and understanding
of the technical aspects of environmental issues.  In addition, the
Council and its subcommittees and workgroups have spent considerable
time discussing how they would carry out their work and developing
their own operating standards.  An improved operating framework that
better defined the Initiative's goal and expected results and
included specific guidance on how the Initiative would accomplish its
work would enable the Council and its industrial sector subcommittees
and workgroups to concentrate more of their effort on substantive
issues. 

EPA gauges the progress of the Initiative primarily on the basis of
accomplishments associated with its various processes or activities,
such as stakeholder meetings, and not on the basis of its results. 
Although such process-oriented information is important, it does not
measure the agency's progress in meeting the Initiative's goal,
consistent with GPRA's intent.  As a result, EPA cannot determine the
extent to which the Initiative may cost-effectively reduce or prevent
pollution or ascertain whether such improvements are due to changes
in the agency's approach to environmental management.  In addition,
the Initiative's projects typically do not establish or provide for
performance measures to gauge the extent to which they are decreasing
pollution and/or reducing costs.  GAO found that 11 of the 15 ongoing
projects it reviewed did not provide for measuring results.  Without
such measures, it is difficult to assess progress or demonstrate
whether a project's expected outcome has occurred. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      SEVERAL FACTORS HAVE LIMITED
      THE PROGRESS OF THE
      INITIATIVE TOWARD ITS GOAL
-------------------------------------------------------- Chapter 0:4.1

EPA expected that, within the first year, the Common Sense Initiative
Council would make recommendations for changes that would provide the
basis for a new approach to environmental management.  Such
recommendations have not been made, in part because the subcommittee
workgroups that conduct the studies and projects to develop
recommendations need considerable time to gather data and to design,
test, and analyze reinvention alternatives.  Most of the projects
that were ongoing as of April 1997 were initiated during 1995, the
Council's first full year of operation.  Furthermore, primarily
because their participants hold diverse viewpoints, many of the
workgroups have not been able to reach agreement on the objectives
for their projects or on the approaches needed to address big issues
or policies and have therefore tended to undertake more narrowly
focused projects.  At this point, it is uncertain how EPA and other
stakeholders will address broad, complex issues and whether the
stakeholders will be willing and able to provide the time and
resources necessary to carry out the program. 

Various subcommittees and workgroups have also spent considerable
time on process-related issues, such as how consensus is defined,
when and at what level it is necessary, and whether all stakeholder
groups need to be represented in projects and workgroups.  Such
issues raise questions about the adequacy of the guidance and of the
operating framework that EPA provided for carrying out the Council's
and subcommittees' activities.  Because progress has been slow, some
stakeholders have expressed concerns about the time and resources
required and the lack of tangible results, and some industry
representatives have questioned their continued participation in the
program.  Another factor that could affect the Initiative's future
progress is uncertainty about the degree of flexibility in existing
federal, state, or local laws and regulations and about whether
legislative or regulatory changes will be required before some pilot
projects can be carried out.  For example, statutory and regulatory
permitting requirements that differ for the various environmental
laws could make it more difficult to develop and implement a
multimedia permit program. 


      RESULTS-ORIENTED MEASURES
      ARE NEEDED TO ASSESS
      PROGRESS
-------------------------------------------------------- Chapter 0:4.2

The agency has not yet established results- or outcome-based measures
for assessing the extent to which the Initiative has reduced or
prevented pollution at less cost to industry and the taxpayer through
regulatory reinvention.  A 1997 EPA contractor study\1 of the
Initiative identified the program's complexity and relatively early
stage as key reasons why EPA has not yet established such measures. 
EPA is considering the study's findings and conclusions; however, at
the time of GAO's review, it was not clear what changes would be
forthcoming. 

In the absence of results-oriented performance measures for assessing
progress, EPA has focused, for the most part, on processes and
activities--such as meetings, workshops, and conferences--and not on
the results and outcomes that are expected under the Initiative.  In
addition, the industrial sectors' projects, which are the program's
principal means for testing regulatory reinvention alternatives,
typically do not contain, or provide for in their design, performance
measures to gauge their progress toward achieving their individual
objectives.  The 1997 EPA contractor study stressed the importance of
developing appropriate results-oriented performance measures for
assessing the extent to which the Initiative's goal and individual
projects' objectives are achieved.  EPA needs such measures to
accurately track the Initiative's progress. 


--------------------
\1 Review of the Common Sense Initiative, The Scientific Consulting
Group, Inc.  (Feb.  19, 1997). 


   RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5

To permit the Initiative's subcommittees and workgroups to devote
more of their attention to substantive issues, GAO recommends that
the Administrator, EPA, provide an improved operating framework that
(1) more clearly defines the Initiative's "cleaner, cheaper, smarter"
environmental protection goal--including its expected results--and
(2) specifies how the Council and its subcommittees and workgroups
will accomplish their work, clarifying issues such as how and when
consensus will be achieved, how the Initiative's goal should be
interpreted and applied to individual projects, and to what extent
representatives of all stakeholder groups should be included in
activities at each level of the Initiative, including its projects
and workgroups. 

To provide a basis for evaluating the progress of the Initiative in
cost-effectively reducing or preventing pollution, GAO recommends
that the Administrator, EPA, require the development of
results-oriented performance measures for assessing the extent to
which the Council's and subcommittees' actions have produced real,
measurable environmental improvements at less cost to industry and
the public. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

EPA provided written comments on a draft of this report (see app. 
II).  EPA agreed with the report's recommendations and stated that
the agency has begun to address the recommendations in the changes
being implemented and considered for the Initiative.  However, EPA
expressed concern that the focus of GAO's review on the Initiative's
progress in accomplishing regulatory, statutory, or administrative
changes (1) does not adequately recognize the breadth of the
Initiative's accomplishments and (2) is an unfair measure of the
Initiative's progress at this point in its development. 

GAO recognizes that the Initiative is complex and that its success is
dependent on accomplishing numerous tasks and activities.  GAO
believes, however, that emphasizing the statutory, regulatory, and
administrative changes expected to result from the Initiative is
appropriate and that this report adequately recognizes the breadth of
the accomplishments that EPA is reporting for the Initiative.  GAO
believes its focus is appropriate, given that EPA (1) considers the
Initiative "the centerpiece" of its regulatory reinvention efforts
and (2) established a goal for the Initiative of finding "cleaner,
cheaper, smarter" ways of reducing or preventing pollution and
recommending changes in the existing approach to environmental
management, including existing statutes and regulations.  Also, as
the report points out, GAO used an approach that applies the concepts
underlying GPRA, which focuses on program outcomes, comparing the
results of a program activity to its intended purpose rather than
focusing on activity levels and tasks completed.  As the report
states, the accomplishments reported by EPA include various processes
and activities that the Initiative has undertaken to achieve its
goal.  Although GAO did not discuss all of these accomplishments, the
report summarizes them and recognizes their importance and utility as
a means for achieving the expected statutory, regulatory, and
administrative changes. 

GAO agrees that it takes time to identify, test, and evaluate
innovative approaches to achieving environmental improvements. 
However, GAO also believes that the report fairly assesses the
progress of the Initiative toward its stated goal at the time of
GAO's review and discusses the factors that prevented the Initiative
from achieving the Administrator's expectation--namely, that it would
bring about a fundamental change in the approach to environmental
protection and achieve tangible results in the first year.  The
report points out that the progress of the Initiative to date has
been slow in view of the high expectations EPA set for it and
discusses a number of factors that contributed to this slow progress. 
In its comments on GAO's draft report, EPA agreed that it
underestimated the time required to do the things needed to allow the
development of recommendations for regulatory, statutory, or
administrative changes.  It said, however, that barriers had to be
reduced before environmental results could be accomplished. 


INTRODUCTION
============================================================ Chapter 1

While the current system of environmental regulation in the United
States is the most advanced in the world, it is complex and
prescriptive and often results in conflict and gridlock.  This
regulatory structure has impaired EPA's ability to experiment with
innovative and more cost-effective ways of reducing pollution (such
as preventing pollution by eliminating or minimizing it at its
source, instead of containing it at the end of the pipe) or using
market-based incentives (such as taxing pollution or trading emission
"rights").  In addition, the structure has restricted EPA's ability
to exercise flexibility with regulated entities, states,
environmental groups, and other "stakeholders" in the regulatory
process.  EPA has reported that it is subject to over 600 lawsuits at
any given time and that the current process often diverts valuable
resources from the real work of protecting the environment and public
health. 

In response to various legislative mandates, EPA has organized its
activities around environmental media (such as air, water, or land)
and the substances it regulates (such as hazardous waste, pesticides,
and toxic substances)--resulting in a regulatory structure that
closely parallels the statutes authorizing its activities.  Each of
EPA's program offices focuses primarily on implementing the
medium-specific or substance-specific responsibilities detailed in
individual statutes, rather than addressing the full range of
pollution sources in a cross-cutting manner.  The agency's
medium-specific focus can result in both the intended and unintended
transfer of pollution from one medium to another.  For example,
removing contaminants from public sewage systems or industrial
smokestacks can create sludge and waste that themselves can be toxic
and lead to further air, water, or land pollution.  As a result, EPA
and others have acknowledged a need for increased attention to such
intermedia transfers to ensure that the agency's pollution reduction
strategies have the best overall impact on the environment. 

To fundamentally reexamine and reshape its efforts to protect the
environment, EPA is attempting to apply common sense, flexibility,
and creativity through a number of initiatives designed to move
beyond the "one-size-fits-all system of the past" and better protect
public health and the environment at a reduced cost.  In 1994, as
part of the agency's new approach to "reinvent" environmental
protection, EPA began its Common Sense Initiative (Initiative). 


   STATUS OF THE COMMON SENSE
   INITIATIVE
---------------------------------------------------------- Chapter 1:1

The goal of EPA's Common Sense Initiative--termed the "centerpiece"
of the agency's regulatory reinvention efforts--is to find "cleaner,
cheaper, smarter" ways of reducing or preventing pollution and to
recommend changes in the existing approach to environmental
management, including the existing statutes and regulations. 
According to EPA, "cleaner" means that participating industries would
achieve real, measurable improvements in environmental protection;
"cheaper" means that tailoring environmental protection requirements
to individual industries would save billions of dollars; and
"smarter" means that giving industry more flexibility in meeting
strong environmental goals would promote creativity and encourage the
development of innovative technology. 

The Initiative was designed to achieve greater environmental
protection at less cost by creating strategies for controlling and
preventing pollution for individual industries rather than for
individual pollutants, as is currently done.  EPA selected six
industrial sectors--automobile manufacturing, computers and
electronics, iron and steel, metal finishing, petroleum refining, and
printing--to participate in the Initiative. 

The Initiative is organized under the Federal Advisory Committee Act
(FACA) and comprises a Council and six specialized subcommittees,
each of which focuses on a particular industrial sector and carries
out studies and projects to develop recommendations to the EPA
Administrator for administrative, regulatory, and statutory changes. 
EPA administers the Initiative; determines its multistakeholder
membership; and publicly reports on its FACA-based operations,
activities, and costs, as well as on the results of Council and
subcommittee meetings. 


      INITIATIVE'S CHARTER AND
      ORGANIZATION
-------------------------------------------------------- Chapter 1:1.1

In accordance with the requirements of FACA, a charter establishing
the Council was filed with the Congress in October 1994.  According
to the charter, the Initiative is designed to bring affected
stakeholders together to find "cleaner, cheaper, smarter"
environmental management solutions.  The objectives and scope of the
Council's activities include holding meetings, analyzing issues,
conducting reviews, performing studies and site-specific projects,
producing reports, and making consensus recommendations on issues
related to the following program elements:  regulation; pollution
prevention; recordkeeping and reporting; compliance and enforcement;
permitting; and environmental technology.  The charter also provides
for expanding activities to include additional elements.\2 While the
Initiative's charter was originally established for 2 years, it was
renewed for 2 more years in October 1996. 

Under the charter, the Council consists of a group of independent
experts appointed by the EPA Administrator.  These experts are
selected from industry; state and local regulatory agencies; national
and local environmental groups; and other stakeholder categories such
as labor, tribal, environmental justice, and community organizations. 
Members are sought in a variety of ways, including consultation with
affected stakeholders, industries and industry associations, senior
EPA managers, agency staff involved in supporting the Council,
Council members, and the general public. 

The charter also provides for the Administrator to designate members
to serve as the Chair and Vice-Chair of the Council and its
subcommittees.  Currently, the Council is chaired by the EPA
Administrator and cochaired by the Deputy Administrator, while each
subcommittee is cochaired by an EPA assistant administrator and
regional, or deputy regional, administrator.  The Council and its
subcommittees are supported by a team of headquarters and regional
EPA staff. 

Among other policies, FACA requires open meetings of the Council and
its subcommittees and provides for interested persons to attend
Council meetings and appear before or file statements with the
Council.  EPA employees act as the designated federal officers (DFO)
for the Council and its subcommittees, and the DFO assigned to each
committee is present at all federal advisory committee meetings. 


--------------------
\2 Current projects are also addressing issues such as community
technical assistance/community involvement, brownfields, publicly
owned treatment works, access to capital, and industry strategic
planning. 


      INITIATIVE'S ACTIVITIES
-------------------------------------------------------- Chapter 1:1.2

As of April 1997, the Council's subcommittees were testing new
concepts in about 40 projects addressing such areas as pollution
prevention, streamlined permitting and reporting, enhanced public
participation in environmental management, brownfields\3

redevelopment, the use of innovative technologies, and the setting of
environmental goals and indicators.  The Council and its
subcommittees anticipate that these projects will lead to significant
recommendations for changes in regulatory structure and approach,
which will result in "cleaner, cheaper, smarter" environmental
management. 


--------------------
\3 Brownfields are abandoned or underused facilities, usually in
industrial or commercial areas, where redevelopment is hampered by
real or perceived environmental contamination. 


      INITIATIVE'S COSTS
-------------------------------------------------------- Chapter 1:1.3

Each year, EPA is required to report the costs associated with its
federal advisory councils to the General Services Administration,
which in turn prepares a report on all federal advisory committees
for the Office of Management and Budget.  For fiscal year 1995, EPA
reported that the Council incurred costs of $2.8 million and employed
19.6 full-time equivalent (FTE) staff.  For fiscal year 1996,
reported costs and staffing were $3.6 million and 27.3 FTEs.  The
costs reported by EPA, however, include only the costs directly
associated with the scope and duties of the Council and its
subcommittees--such as portions of the salaries of the designated
federal officers and other administrative costs for scheduling
meetings, funding invitational travel, and complying with other
reporting requirements under the act--and do not include such items
as grants or the costs of contracts for the individual subcommittee
projects, which are funded by EPA's program offices.  For fiscal year
1997, EPA estimated costs of $4.3 million and staffing of 30.4 FTEs
for the Council. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:2

To address questions about EPA's Common Sense Initiative and the
progress it has made, the Chairman, Subcommittee on VA, HUD, and
Independent Agencies, Senate Committee on Appropriations; Chairman,
Senate Committee on Environment and Public Works; Chairmen, House
Committee on Commerce and its Subcommittee on Finance and Hazardous
Materials; Chairmen, House Committee on Transportation and
Infrastructure and its Subcommittee on Water Resources and
Environment; Chairman, Subcommittee on VA, HUD, and Independent
Agencies, House Committee on Appropriations; and the Chairman,
Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs, House Committee on Government Reform and
Oversight, asked GAO to assess (1) EPA's progress in achieving the
goal the agency set for the Initiative, and (2) the methods EPA uses
to measure the progress of the Initiative toward its goal. 

To address these objectives, we reviewed the Initiative's program and
project files and interviewed program officials and staff, as well as
subcommittee sector officials and project team leaders.  We also
attended meetings of the Council, its subcommittees, and project
workgroups.  In addition, we obtained program information from EPA's
Common Sense Initiative World Wide Web Internet site.\4

We also reviewed reports on the Initiative, including a February 1997
EPA-funded study, a March 1996 EPA Inspector General's report
discussing increases in FACA-related costs, and two reports critical
of the Initiative--one by the House Transportation and Infrastructure
Committee on EPA's reinvention efforts and the other by Resources for
the Future.\5

In addition, we identified and reviewed the goals and objectives for
36 of the Initiative's projects that were ongoing as of September
1996.  We further reviewed 15 of the 36 projects using a
results-oriented performance measurement model to aid in determining
whether the projects were designed to (1) achieve the Initiative's
cleaner, cheaper environmental management objectives and (2) measure
progress toward achieving those objectives.  Our model applies the
concepts underlying the Government Performance and Results Act (GPRA)
of 1993, which focuses on program outcomes, comparing the results of
a program activity to its intended purpose rather than focusing on
activity levels and tasks completed.  The act--known as GPRA or the
Results Act--also incorporates performance measurement as one of its
most important features.  Appendix I describes our performance
measurement model and lists the projects reviewed using this model. 
Our detailed review of 15 projects represents a cross section of
projects from each of the six industrial sectors and 10 of the
program elements (e.g., permitting, innovative technology,
compliance, and pollution prevention) addressed by the projects. 

We conducted our work from July 1996 through June 1997 in accordance
with generally accepted government auditing standards. 


--------------------
\4 EPA's Common Sense Initiative Internet address is: 
http://www.epa.gov/commonsense

\5 Review of the Common Sense Initiative, The Scientific Consulting
Group, Inc.  (Feb.  19, 1997); EPA FACA Committees' Costs Increase,
EPA, Office of Inspector General (Audit Report No. 
E1XMG5-13-0071-6100147, Mar.  29, 1996); An Assessment of EPA's
Reinvention, House Committee on Transportation and Infrastructure
(Sept.  17, 1996); and Industry Incentives for Environmental
Improvement:  Evaluation of U.S.  Federal Initiatives, Resources for
the Future (Sept.  1996).  Resources for the Future is an independent
nonprofit organization that conducts research and public education on
natural resources and environmental issues. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 1:3

We provided a draft of this report to EPA for review and comment. 
EPA provided written comments, which are reproduced in appendix II. 
EPA agreed with the report's recommendations and stated that the
agency has begun to address the recommendations in the changes being
implemented and considered for the Common Sense Initiative.  However,
EPA expressed concern that our review's focus on the Initiative's
progress in accomplishing regulatory, statutory, or administrative
changes (1) does not adequately recognize the breadth of the
Initiative's accomplishments and (2) is an unfair measure of the
Initiative's progress at this point in its development. 

We recognize that the Initiative is complex and that its success is
dependent on accomplishing numerous tasks and activities.  We
believe, however, that our emphasis on the statutory, regulatory, and
administrative changes expected to result from the Initiative is
appropriate and that we have adequately recognized the breadth of
accomplishments that EPA is reporting for the Initiative.  We believe
our focus is appropriate, given that EPA (1) considers the Initiative
"the centerpiece" of its regulatory reinvention efforts and (2)
established a goal for the Initiative of finding "cleaner, cheaper,
smarter" ways of reducing or preventing pollution and recommending
changes in the existing approach to environmental management,
including the existing statutes and regulations.  Also, as our report
points out, we used an approach that applies the concepts underlying
GPRA, which focuses on program outcomes--the results of a program
activity compared to its intended purpose--rather than activity
levels and tasks completed.  As our report states, the
accomplishments reported by EPA include various processes and
activities that the Initiative has undertaken to achieve its goal. 
Although we did not discuss all of these accomplishments, the report
summarizes them and recognizes their importance and utility as a
means for achieving the expected statutory, regulatory, and
administrative changes. 

We agree that time is required to identify, test, and evaluate
innovative approaches to achieving environmental improvements. 
However, we also believe that our report fairly assesses the progress
of the Initiative toward its stated goal at the time of our review
and discusses the factors that prevented it from achieving the
Administrator's expectation--namely, that it would bring about a
fundamental change in the approach to environmental protection and
achieve tangible results in the first year.  Our report points out
that the progress of the Initiative to date has been slow in view of
the high expectations EPA set for it and discusses a number of
factors that contributed to this slow progress.  In its comments on
our draft report, EPA agreed that it underestimated the time required
to do the things needed to allow the development of recommendations
for regulatory, statutory, or administrative changes.  It said,
however, that barriers had to be reduced before environmental results
could be accomplished. 


SEVERAL FACTORS HAVE LIMITED THE
INITIATIVE'S PROGRESS IN BRINGING
ABOUT CHANGES IN ENVIRONMENTAL
MANAGEMENT
============================================================ Chapter 2

EPA expected the Common Sense Initiative to result in significant
improvements to current regulations, as well as proposals for the
Congress to consider when legislative reform might be required.  The
Administrator, recognizing that some changes would take longer,
expressed her belief that the Council could recommend tangible
changes in the first year.  Although the Initiative's six
subcommittees moved quickly to identify issues and develop projects,
few recommendations have been developed.  To date, the Council has
made three formal recommendations to EPA.  None of these
recommendations suggested the types of changes in existing
regulations or legislation that EPA had expected.  (The
recommendations are discussed further in ch.  3.)

Several factors have contributed to the Initiative's slow pace in
developing recommendations to EPA.  Some of these factors include (1)
the time needed to collect and analyze data; (2) stakeholders'
difficulty in obtaining consensus on projects addressing broad,
complex issues; (3) stakeholders' time commitments and differences in
stakeholders' understanding of the technical aspects of environmental
issues; and (4) the time spent resolving questions about work
processes. 

The lack of tangible results has caused some industry representatives
to question their continued participation in the Initiative.  To
determine the effectiveness of the Initiative's process, EPA
contracted for an independent review.  The contractor reported that,
overall, the Initiative has value, but identified several areas where
improvements in the process could be made.  EPA and the Council are
now considering various options for correcting problems in the
process identified by the contractor. 


   RECOMMENDATIONS FOR CHANGE WERE
   EXPECTED IN THE INITIATIVE'S
   FIRST YEAR
---------------------------------------------------------- Chapter 2:1

In July 1994, when the EPA Administrator announced the establishment
of the Common Sense Initiative, she said that consensus proposals
generated by the Initiative would be designed to better protect the
environment, reduce U.S.  pollution overall, and reduce the costs
that industries face by billions of dollars.  Consistent with the
Administrator's belief that the Council could make recommendations
for change within the first year, soon after the Council and its six
subcommittees were established and began meeting in late 1994 and
early 1995, the senior EPA officials who chair each of the
subcommittees challenged their groups to quickly define issues and
develop projects to carry out their mission.  In opening remarks to
the May 1995 meeting of the computers and electronics subcommittee,
the EPA assistant administrator cochairing the meeting said that the
success of the Initiative depends, in part, on the development and
implementation of concrete activities that represent a new way to do
business.  In this meeting, as well as in another subcommittee
meeting, the senior EPA officials indicated that the subcommittee
members should try to have proposals or recommendations to the full
Council within 6 to 12 months. 


   SEVERAL FACTORS HAVE
   CONTRIBUTED TO THE INITIATIVE'S
   LIMITED PROGRESS
---------------------------------------------------------- Chapter 2:2

The subcommittees have had difficulty completing projects that
provide a basis for making recommendations to the Council.  Many of
the projects initially undertaken by the subcommittees' workgroups
are still in progress.  Twenty-nine of the 38 projects we identified
as ongoing as of April 1997 were begun in 1995--the first full year
of the Council's operation.  Several factors, as discussed below,
have contributed to the length of time it is taking to complete
projects that provide a basis for the subcommittees to make
recommendations to the Council. 


      DATA COLLECTION AND ANALYSIS
      ADD TIME TO PROCESS
-------------------------------------------------------- Chapter 2:2.1

As some workgroups began projects, they found that the information
they needed to carry out the projects was not readily available.  In
some cases, the information could be obtained by doing a literature
search.  For example, within the automobile manufacturing sector, the
team working on the alternative sector regulatory system/community
technical assistance project found that it needed to gather
information on community and plant interactions into a database to
inform the project's process.  Through on-line research, the team
developed a bibliography that met its needs. 

In other cases, however, workgroups needed considerable time to
develop information through surveys of stakeholders or contracted
studies.  Obtaining the information has, in some cases, taken months. 
For example, in 1995, the reporting and information access workgroup
in the computers and electronics sector undertook a project to
develop a combined uniform report for the environment.  They then
decided to develop this report through a pilot project in one state. 
First, they had a contractor identify all of the reporting
requirements that a computer and electronics firm in the state would
have to meet.  Next, they began to identify the environmental
information needs of the various stakeholder groups.  A contractor is
developing this information through the use of focus groups. 
Gathering information for the needs assessment alone is expected to
take about 6 months.  Several more steps, which will take more than a
year, are planned before the project can be completed. 

Other information requested by workgroups and subcommittees--only
some of which is readily available, particularly by
industry--includes information on wastes, hazardous waste sites,
accidents and spills, human health and safety, environmental effects,
chemical use and releases, water and energy use, compliance
histories, descriptions of processes, profiles of stakeholders,
demographic information, cost accounting information needed to
determine environmental costs, reviews of environmental programs, and
existing laws and regulations. 

EPA is not always able to provide the information requested by the
workgroups.  In some instances, the information is difficult for the
agency to obtain.  For example, if EPA requests data through a survey
of 10 or more entities, it must have the survey approved by the
Office of Management and Budget and must estimate the paperwork
burden associated with the request.  In these instances, EPA has
suggested that stakeholder groups obtain the information by polling
their members.  In other instances, the information may be
confidential and EPA cannot release it.  For example, a subcommittee
that wanted to assist EPA in developing effluent guidelines for the
iron and steel industry asked whether the results of a survey to be
conducted could be made available to the subcommittee's members. 
Because the survey's results would contain confidential business
information, EPA could not release the results without separating the
data from specific facilities.  According to an EPA official, this
effort might take a year.  Subsequently, the workgroup decided not to
pursue this project. 


      STAKEHOLDERS HAVE HAD
      DIFFICULTY OBTAINING
      CONSENSUS ON APPROACHES TO
      PROJECTS
-------------------------------------------------------- Chapter 2:2.2

Although some projects have been designed to address complex
multimedia issues, some workgroups have not been able to reach
agreement on specific objectives for their projects or on the
approach to be used, particularly when complex issues are involved. 
In some cases, to reach agreement, the project's scope or the product
has been modified or narrowed.  For example, in March 1995, the iron
and steel subcommittee was considering a proposal by one of its
workgroups to develop and pilot-test a multimedia permit for a plant. 
The subcommittee sent the proposal back to the workgroup for
reassessment, expressing concern about the feasibility of the
project, in part because (1) EPA was currently developing new
air-permitting requirements that alone would be difficult to
implement and (2) EPA had tried and failed to develop a less
extensive consolidated permit approach in the 1980s.  The
subcommittee suggested that the workgroup talk to individuals who had
been involved in the earlier process or focus on a smaller facility,
or a limited process within a facility.  The proposed project was
subsequently modified to, among other things, be tested in a smaller
facility, and it is now in progress. 

When the automobile manufacturing subcommittee met in February 1996,
the spokesperson for one project team, commenting on two interim
reports from the team, said that the team was looking for potential
recommendations, but he questioned the ability of the team to reach
consensus on any recommendations.  The subcommittee plans to submit
these two reports without recommendations to the Council at its July
1997 meeting. 

At an August 1996 meeting of the automobile manufacturing
subcommittee, some members expressed concern about the complexity of
the issues being dealt with in project teams, the lack of common
understanding among the team members, and the slow pace of dealing
with complex issues.  To address these concerns, the EPA cochair of
this subcommittee noted that a variety of technical assistance and
support continued to be available for those who needed it.  At that
same meeting, another participant suggested that the Initiative's
whole process was too abstract and that the goal of designing a new
system was beyond the subcommittee's abilities; therefore the group
should focus on developing the new system one project at a time. 
Still another participant noted that the subcommittee is attempting
to address the big picture and suggested that the group might be more
comfortable working at a more pragmatic level.  As discussed in the
next section, stakeholders' difficulty in achieving consensus on
projects that involve broad, complex issues has resulted, in part, in
narrowing the scope of some projects. 


      NARROW-SCOPE PROJECTS HAVE
      ACHIEVED SOME SUCCESS
-------------------------------------------------------- Chapter 2:2.3

Generally, subcommittees have had more success in designing and
implementing narrow-scoped projects.  For example, one such project
within the computers and electronics sector appears to be making
progress and will likely result in a recommendation to the Council. 
This project, undertaken by the computers and electronics
subcommittee's reporting and public access workgroup in 1996, was
designed to streamline the emergency response planning process.  It
will do this by consolidating various requirements for an emergency
response plan so that only one document will meet the needs of all
stakeholders (including emergency responders, the community, facility
workers, and regulatory agencies).  This project, which could be
completed within the year, has an objective similar to that of the
project to develop a combined uniform report for the environment
(discussed earlier in this chapter).  However, because this project
addresses only one reporting requirement for emergency response
plans, it will be completed much sooner than the combined uniform
report for the environment, which addresses all environmental
reporting requirements for firms in the computers and electronics
industry.  One workgroup member compared the two projects, saying
that the emergency response project was "just the toe of the
elephant," whereas the combined uniform report for the environment
project was "the entire elephant."

Whether narrowly scoped projects, such as those designed to provide
information alone, will produce results consistent with the
Initiative's goal of developing recommendations for change is
unclear.  For example, a workgroup in the iron and steel subcommittee
sponsored a spent pickle liquor\6 workshop for the subcommittee
members, and a workgroup in the computers and electronics
subcommittee cosponsored, with the National Safety Council, an
electronic product recovery and recycling conference.  The primary
purpose of both of these projects was to provide a forum for
exchanging and disseminating information.  Although the information
obtained in these forums may assist the workgroups in making
recommendations to the Council and ultimately to EPA, neither of
these projects was designed to result in recommendations to the
Council. 


--------------------
\6 Pickle liquor is the acidic chemical solution used to remove
surface scale and other impurities from steel.  It becomes spent
after its effectiveness has been exhausted. 


      STAKEHOLDERS' TIME
      COMMITMENTS AND
      UNDERSTANDING OF TECHNICAL
      ISSUES VARY
-------------------------------------------------------- Chapter 2:2.4

Limits on stakeholders' time commitments and understanding of the
technical aspects of various environmental issues have also slowed
the pace of projects.  EPA has recognized that participating in the
Council requires a large commitment of time and effort from its
members, but once they were selected, they were expected to
participate.  However, sporadic attendance and attrition have been
problems for the Council and some of its committees and workgroups. 
In the computers and electronics subcommittee, for example, the
cochair noted in August 1995 that some individuals did not attend
enough meetings to completely understand what was going on and were
therefore slowing down the decision-making process. 

In addition, stakeholders' understanding of the technical aspects of
environmental issues varies, and insufficient understanding on the
part of some has slowed some projects.  After hearing from some
workgroup members that they did not fully understand the issues being
discussed, the cochair of the automobile manufacturing subcommittee
promised to slow the current pace of the subcommittee and its
workgroups to accommodate individuals who needed time to become
familiar with the technical aspects of the issues. 

The Council recognized that people have different amounts of time to
invest in projects.  To correct the problem of poor or sporadic
attendance, an EPA official proposed undertaking fewer projects in
order to make sure that they had adequate resources.  Reducing the
number of projects could, however, limit the range of issues that the
Initiative is able to address. 


      WORK PROCESS ISSUES HAVE
      CONSUMED CONSIDERABLE TIME
-------------------------------------------------------- Chapter 2:2.5

In addition to discussing substantive work on projects, subcommittee
and workgroup members have spent much of their meeting time
discussing processes.  In particular, they have discussed (1) the
definition of consensus and how it would be applied within the
subcommittees and workgroups; (2) the scope of the standard
individual projects or groups of projects had to meet--whether
"cleaner, cheaper, and smarter" criteria or a "cleaner, cheaper, or
smarter" criterion--and, (3) the representation of stakeholders on
subcommittees, workgroups, and projects.  Because EPA's guidance for
the Initiative did not adequately clarify these issues, the
subcommittees and workgroups took time to develop their own answers. 

Although the Council's operating principles, published in June 1996,
contain an operating definition of consensus, stakeholders are not
certain whether the same definition applies to workgroups.  As late
as August 1996, the automobile manufacturing subcommittee was
discussing whether workgroups needed to reach consensus.  The
workgroups were encouraged to bring issues on which they could not
agree to the full subcommittee for discussion.  One subcommittee
member pointed out, however, that consensus is difficult to obtain
unless projects contain something for everyone.  In order to
facilitate reaching agreement on projects, the sector decided that
members of workgroups who were not also members of the subcommittee
could sit at the subcommittee table to present their views. 

In some instances, reaching consensus on which projects should be
undertaken was difficult or impossible because workgroup and
subcommittee members held differing views on whether and how the
Initiative's "cleaner, cheaper, smarter" environmental management
goal should be incorporated into projects and the overall work of the
subcommittees and workgroups.  In carrying out the Initiative,
"cleaner" is seen as the principal interest of the environmental
representatives and "cheaper" is seen as the principal interest of
the industry representatives.  In several groups, a project's
approval or progress was hindered as members discussed the need for
balance between these elements.  For example, in an iron and steel
subcommittee's workgroup considering multimedia permitting, the
workgroup was able to reach consensus on solutions for 12 of the 50
permit issues it had identified.  According to a workgroup member,
the solutions developed through the process included cleaner,
cheaper, and smarter elements.  The need to consider all three of
these elements was also a factor discussed during the process for
approving a project within another of the iron and steel
subcommittee's workgroups, which was considering alternative
compliance strategies.  Subcommittee members expressed concern that
under the project's plan, the project would provide regulatory relief
(cheaper) but would not provide for increased environmental
protection (cleaner).  In this case, the problem was resolved by
eliminating any reference to potential solutions until an initial
data-gathering and analysis phase could be completed. 

For one of the automobile manufacturing subcommittee's workgroups, a
team considering regulatory initiatives tentatively agreed on a
proposal that a regulatory determination requiring the use of the
best available control technology be based on the best technology
available at the time the application for a permit is submitted. 
However, because some members of the team believed the proposal
addressed the "cheaper" and possibly the "smarter" but not the
"cleaner" element, they would not allow the proposal to be brought to
the subcommittee until a package of proposals addressing all three
elements could be developed.  The activities of that workgroup were
later suspended, and that proposal was not forwarded to the
subcommittee. 

The representation of stakeholders within workgroups has also been
the subject of much discussion.  In designing a project to identify
regulatory, statutory, and administrative barriers that hinder the
development and implementation of technology, a workgroup within the
iron and steel subcommittee proposed to address the definition of
solid waste as one of those barriers.  At meetings where the proposal
was discussed, members of both the subcommittee and the workgroup
were concerned because no representative of an environmental group
was included in the workgroup.  Initially, efforts to recruit an
environmental stakeholder for this workgroup failed.  According to
one subcommittee member, the difficulty in getting a representative
from an environmental group to participate in this workgroup was
directly related to the issue of defining solid waste.  This member
said that the issue is highly contentious and could not previously be
resolved through consensus; therefore, environmental groups do not
want to be drawn into a debate on it again.  Without a representative
from an environmental group, the workgroup proposed that it would
limit its work to discussing the issue and would not develop
recommendations.  Members of the subcommittee suggested, however,
that the workgroup stop working on the issue until an environmental
stakeholder could be recruited.  After about 5 months, an
environmental representative was found.  Two months later, the
workgroup reported that the solid waste issue was being dropped
because consensus could not be reached. 

In another industrial sector, in July 1996, after discussing the need
for including representatives of all stakeholder groups in a proposed
pilot project, a workgroup decided to seek the subcommittee's
guidance on which stakeholder groups needed to be represented in a
pilot project to ensure a credible process and a high-quality
outcome.  The group also asked about providing financial support to
ensure participation and about EPA's determination that it was not
legal to provide grant funds to support a local nongovernmental
organization's participation in an Initiative workgroup. 

Subcommittees and workgroups also discussed other work process issues
such as (1) how funding levels for projects were determined; (2) what
types of projects were appropriate for workgroups to undertake, what
types of products were appropriate to forward to the Council, and how
the success of the products and of the subcommittees would be
determined; and (3) how the Initiative's projects would be
coordinated with the work of other EPA programs addressing the same
issues. 


      SLOW PROGRESS HAS LED SOME
      INDUSTRY REPRESENTATIVES TO
      QUESTION THEIR CONTINUED
      PARTICIPATION
-------------------------------------------------------- Chapter 2:2.6

The difficulty in making progress within certain subcommittees has
led the representatives of some industries to question the value of
their continued participation in the Initiative.  In early 1997,
groups representing two industrial sectors--automobile manufacturing
and petroleum refining--indicated that their members would not
participate in any new sector activities.  Some representatives of
these two industrial sectors stated that their companies could not
justify their continued participation without tangible results. 
Since the Initiative began, the two sectors have forwarded only one
recommendation to the Council. 

Although some individual members chose not to continue their
participation in the Initiative, most of them did agree to continue
for another year so that they could judge whether changes in the
Initiative, expected in response to our review and the contractor's
(described below), would allow the Council to function more
effectively. 


   EPA AND THE COUNCIL ARE
   CONSIDERING OPTIONS TO ADDRESS
   ISSUES IDENTIFIED IN A
   CONTRACTOR'S REVIEW
---------------------------------------------------------- Chapter 2:3

Recognizing that some of these factors had slowed the Council's
progress, EPA, in November 1996, retained a contractor to perform an
independent review of the Initiative.  The purpose of the study was
to review the Initiative after 2 years of operation, determine its
level of success, and identify any changes needed to maximize its
effectiveness.  The contractor's report, issued on February 19, 1997,
concluded that the Initiative has significant value, particularly as
a tool to improve environmental policy and management.  Its value for
developing more effective environmental protection approaches,
according to the report, is that it includes all relevant
stakeholders in a nonadversarial, consensus-based forum to address
environmental issues by industrial sectors in a comprehensive,
multimedia fashion. 

According to the contractor's report, the Initiative could not
realistically be expected to establish itself; form working
relationships among disparate stakeholders; and accomplish changes in
regulations, reductions in reporting burdens, or other time-intensive
changes in the relatively short term of its existence.  The report
identified four major unresolved issues--consistent with those we
identified during our review--including (1) the Initiative's lack of
specific objectives, (2) the lack of a clearly defined role for the
Council, (3) the perceived need for unanimity to obtain consensus,
and (4) the slow pace of the process.  However, the report did not
make any recommendations to resolve these issues.  EPA and the
Council are now considering a number of options for addressing the
issues identified in the contractor's report. 


   NEED FOR LEGISLATIVE OR
   REGULATORY CHANGES IS UNCLEAR
   AND COULD DELAY SOME PROJECTS'
   IMPLEMENTATION
---------------------------------------------------------- Chapter 2:4

Nine of the Initiative's 38 projects ongoing as of April 1997 involve
developing pilot projects to test multimedia permitting, reporting,
or flexible regulation.  Stakeholders and others involved in these
types of projects have raised questions about whether EPA has the
legislative or regulatory authority to carry out such pilot projects. 
In one pilot multimedia permitting project, for example, a February
1997 contractor's report\7 to EPA said that the state where the pilot
project is located was considering legislation that would provide for
enforceable agreements with facilities that would modify or waive
existing statutory or regulatory requirements if the proposed
pollution prevention, reduction, or control strategies resulted in
equivalent or greater overall benefits to human health and the
environment.  The contractor's report noted that the proposed state
legislation could eliminate any potential problems for a multimedia
permit with state statutory or regulatory requirements; however, it
would not eliminate any potential conflicts with federal statutory or
regulatory requirements.  For example, federal statutes and
regulations governing the various environmental media may impose
different monitoring, reporting, and other requirements that may make
it more difficult for a multimedia permit program to be developed and
implemented. 

Generally, EPA has maintained that it has the authority to carry out
these types of pilot projects under the current statutory framework. 
However, whether regulatory or legislative changes will be needed to
carry out specific Initiative projects has not been fully evaluated. 
Uncertainty about the degree of flexibility in existing federal,
state, or local regulations could delay some projects, particularly
those involving multimedia permitting, reporting, or flexible
regulatory approaches.  As we noted in an earlier report, this issue
affects other EPA reinvention programs as well as the Initiative.\8
According to the Deputy Administrator of EPA, the agency will
reexamine this issue when it receives the recommendations of a key
advisory group (the Enterprise for the Environment) later this year. 


--------------------
\7 Multi-Media Permit Process Report, Eastern Research Group, Inc. 
(Feb.  1997). 

\8 Environmental Protection:  Challenges Facing EPA's Efforts to
Reinvent Environmental Regulation (GAO/RCED-97-155, July 2, 1997). 


   CONCLUSIONS
---------------------------------------------------------- Chapter 2:5

Although some projects are under way to test approaches for
reinventing EPA's regulatory approach to environmental protection,
the progress of the Initiative has been slow in view of the high
expectations EPA set for it.  In setting these expectations, EPA
underestimated the time required to (1) gather and analyze the
information needed as a basis for developing recommendations and (2)
establish the relationships among the various stakeholder groups
needed for them to reach agreement on complex issues.  Although most
stakeholders have agreed to continue their participation in the short
term, now that the process is taking longer than expected, it is
unclear whether stakeholders, as a group or individually, will be
willing and able to invest the resources required by a longer-term
process.  We believe that the process could be expedited if EPA would
provide an improved operating framework better defining the
Initiative's goal and expected results and including specific
guidance on how the Initiative will accomplish its work. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 2:6

To permit the Initiative's subcommittees and workgroups to devote
more of their attention to substantive issues, GAO recommends that
the Administrator, EPA, provide an improved operating framework that
(1) more clearly defines the Initiative's "cleaner, cheaper, smarter"
environmental protection goal--including its expected results--and
(2) specifies how the Council and its subcommittees and workgroups
will accomplish their work, clarifying issues such as how and when
consensus will be achieved, how the Initiative's goal should be
interpreted and applied to individual projects, and to what extent
representatives of all stakeholder groups should be included in
activities at each level of the Initiative, including projects and
workgroups. 


RESULTS-ORIENTED MEASURES OF
PROGRESS ARE NEEDED
============================================================ Chapter 3

The Environmental Protection Agency considers the Initiative to be
the most significant cross-program, multimedia initiative ever
undertaken.  The agency believes that its Council and subcommittees
will make significant consensus recommendations to the EPA
Administrator for changes in regulatory structure and approach. 
Moreover, according to the agency, the Initiative has already
produced significant accomplishments on several fronts.  The
accomplishments, however, primarily reflect the completion of steps
in the Initiative's process--such as stakeholder meetings, pilot
projects, and various other subcommittee work products or activities. 
Although such accomplishments are important, they do not reflect the
agency's progress in meeting the Initiative's goal, consistent with
GPRA's intent to have federal agencies focus on program results and
outcomes.  EPA has not yet established results- or outcome-based
measures for assessing the extent to which the Initiative has reduced
or prevented pollution at less cost to industry and the taxpayer
through regulatory reinvention.  The 1997 EPA contractor study of the
Initiative noted that the program's complexity and relatively early
stage were key reasons why EPA did not have such measures. 

Without performance-based measures for assessing the progress of the
Initiative in achieving its expected outcomes, EPA cannot determine
to what extent the Council's or subcommittees' activities have
reduced or prevented pollution at less cost to industry and the
public.  Particularly for the subcommittee projects used to test
reinvention alternatives, such measures are needed to demonstrate
that an expected outcome has been achieved and that a subcommittee's
resulting recommendation for administrative, regulatory, or statutory
change is warranted. 


   INITIATIVE PROMISES SIGNIFICANT
   REGULATORY REINVENTION
---------------------------------------------------------- Chapter 3:1

In launching the Initiative in July 1994, the EPA Administrator
established high expectations for its success, describing it as
unprecedented in scope and almost immediate in impact.  According to
the Administrator, the Initiative is the "centerpiece" of the
agency's regulatory reinvention effort and a new paradigm for
environmental management and regulatory reform.  The Administrator
presented the Initiative as a multifaceted alternative to the status
quo--capable of producing significant improvements in environmental
protection rather than incremental successes, substituting
recommendations based on consensus for command and control
regulation, and achieving tangible results within the first year. 

EPA also said that all aspects of environmental policy--from
reporting requirements to significant statutory reform--would be on
the table and that consensus solutions within EPA's control would be
implemented immediately.  EPA further stated that if agreement
emerged for legislative change, then the EPA Administrator would use
that support in working with the Congress to change the law. 

Clearly, EPA's expectation for the Common Sense Initiative was that
it would bring about fundamental change in the approach to
environmental protection and achieve tangible results in the first
year.  As discussed below, however, the accomplishments reported by
EPA appear to emphasize steps in the Initiative's process rather than
the achievement of the fundamentally "cleaner, cheaper, smarter"
environmental solutions that EPA expected. 


   ACCOMPLISHMENTS FOCUS
   PRINCIPALLY ON PROCESSES AND
   NOT ON REGULATORY CHANGES
---------------------------------------------------------- Chapter 3:2

In the almost 3 years since the Common Sense Initiative's start, EPA
has reported significant results on many levels, including six
recommendations made by subcommittees to the Council.  Three of these
recommendations were formally approved by the Council and forwarded
to EPA for implementation.  For the most part, however, the
accomplishments that EPA reported are steps in the process that EPA
designed to produce recommendations for the Council's and,
ultimately, the EPA Administrator's, consideration.  Generally, they
are not the significant "cleaner, cheaper, smarter" outcomes or
results that EPA said it expects from the process. 


      SUBCOMMITTEES'
      RECOMMENDATIONS TO THE
      COUNCIL
-------------------------------------------------------- Chapter 3:2.1

According to EPA, at the time of our review, four of the six
subcommittees had formally presented recommendations to the Council
for approval.  In order of presentation to the Council, they were as
follows: 

  -- In October 1995, the metal finishing subcommittee recommended
     that EPA remove iron and aluminum from the list of pretreatment
     standards for its then-proposed metals products and machinery
     phase I effluent limitations guidelines. 

  -- In October 1995, the computers and electronics subcommittee
     recommended that EPA establish a process to ensure that EPA's
     regulatory interpretations and determinations--intended to
     affect the environmental management practices of the regulated
     community--be compiled, made easily accessible, and publicized
     to interested stakeholders. 

  -- In October 1995, the auto manufacturing subcommittee recommended
     that EPA expeditiously implement the streamlining of the 1990
     Clean Air Act's title V permit process as outlined in a July
     1995 EPA white paper.\9

  -- In March 1996, the iron and steel subcommittee recommended that
     the Council transmit to EPA 10 guiding principles that the
     subcommittee proposed for EPA to apply, as appropriate, in
     establishing principles for use in the development of iron and
     steel brownfields sites. 

  -- In June 1996, the computers and electronics subcommittee
     recommended that the Council (1) endorse the vision, goals, and
     objectives contained in its proposed outline for a
     facility-based alternative system of environmental protection
     for the computers and electronics industry and (2) pass its
     proposal forward to EPA to be used as a framework for the many
     reinvention efforts going on at EPA. 

  -- In February 1997, the metal finishing subcommittee requested
     that the Council support its national metal finishing
     environmental research and development (R&D) plan, which
     recommended that (1) EPA and other federal agencies use the plan
     to coordinate and support research and development directed
     toward the needs of the metal finishing industry and (2) EPA use
     the plan as a possible approach for other industrial sectors'
     research and development plans. 

Of the three recommendations presented in October 1995, all but the
metal finishing subcommittee's recommendation were approved by the
Council and, according to EPA, were being implemented by the agency
at the time of our review.  EPA reported that the Council also
approved the metal finishing subcommittee's recommendation in concept
but returned it to the subcommittee for further work needed to
resolve a technical issue that prevented consensus from being reached
at the subcommittee level.  According to EPA officials, however, the
agency's Office of Water was independently implementing the proposed
recommendation as a result of the Council's discussion of its merits. 

The Council also returned both of the 1996 recommendations to their
respective subcommittees for further work.  According to Council
documents,

  -- the iron and steel subcommittee's guiding principles for the
     development of brownfields sites were returned with improvements
     suggested during the Council's discussion and the principles'
     formal transmission to EPA was postponed so that the
     subcommittee could respond to the Council's suggestions and test
     the guidelines in planned pilot projects and

  -- the computers and electronics subcommittee's proposed
     alternative system of environmental protection was returned for
     pilot testing at the subcommittee level. 

In reviewing the guiding principles for the development of iron and
steel brownfields sites, Council members expressed concern about
their language and policy implications and decided to send the
guidelines back to the subcommittee describing the Council's concerns
and stressing the need for testing.  According to the Council's chair
(the EPA Administrator), the Council acted appropriately, given the
diverse responses to the subcommittee's proposal, and EPA had already
benefited from the discussion even without formally sending the
recommendation forward. 

Responding to the computers and electronics subcommittee's
recommendation, the Council indicated its support for the
subcommittee's vision for an alternative system of environmental
protection but wanted further development of alternative regulatory
strategies through pilot projects addressing issues raised during the
Council's discussions.  The Council urged other sectors to use the
subcommittee's vision document, as appropriate and consistent with
the Council's comments, in their discussion of alternative
strategies.  Of specific concern to the Council was the need to
establish criteria for determining which facilities would qualify for
an alternative system. 

According to EPA officials, the Council granted the metal finishing
subcommittee's February 1997 request for support of its national
metal finishing environmental R&D plan.  Instead of discussing the
subcommittee's recommendation, the Council provided its members with
a copy of the plan and a "review and mail-back" form on which they
were asked to indicate whether they did or did not support the plan
and whether they had any comments.  According to EPA officials, all
of the responses supported the plan and the subcommittee was notified
of the Council's approval, which will be officially recorded at the
Council's next meeting, scheduled for July 1997.  According to the
subcommittee, with the Council's support, the plan will be sent to
senior management and research and development leaders in federal
agencies and private-sector organizations and meetings will be
arranged to discuss the plan's implementation. 

We observed during our review that, for the most part, the six
subcommittee recommendations forwarded to the Council for approval
generally did not request changes in existing regulation or a basic
change in the way EPA carries out its programs.  In fact, the iron
and steel subcommittee specifically requested in its recommendation
on the iron and steel industry's brownfields sites that its proposed
guiding principles not be formalized by EPA as a policy directive or
regulation.  Instead, the subcommittee believed that the principles
should be regarded as a group of goals to be reached when considering
what a brownfields policy should accomplish.  We also observed during
our review that none of the three recommendations approved by the
Council and forwarded to EPA suggested the types of changes in the
existing approach to environmental management that EPA expected. 

Although the recommendations approved thus far have not suggested
changes in existing statutes or regulations, EPA believes that some
of the Initiative's current projects will result in such
recommendations.  In May 1997, EPA identified two ongoing projects
that the agency believes will lead to recommendations for regulatory
or statutory change in 1997 and nine projects that could lead to such
recommendations between now and 1999. 


--------------------
\9 White Paper for Streamlined Development of Part 70 Permit
Applications, EPA, Office of Air Quality Planning and Standards (July
10, 1995). 


      INITIATIVE'S PROCESSES AND
      ACTIVITIES
-------------------------------------------------------- Chapter 3:2.2

In addition to counting formal recommendations, EPA also measures the
Initiative's progress by the various processes and activities that
the Initiative has undertaken to achieve its stated purpose. 
According to EPA, these include

  -- the Initiative's ability to draw diverse stakeholders--some of
     them traditional adversaries--to the table with a commitment to
     work together to build trust in areas where, historically, there
     has been little gain or interaction;

  -- more than 300 meetings held by the Council and its subcommittees
     and their workgroups during fiscal years 1995 and 1996 to first
     "sort out the process" and then to achieve common ground and
     develop new ways of achieving stronger, yet more flexible and
     cost-effective ways to protect public health and the
     environment;

  -- almost 40 sectorwide projects that are under way and have the
     potential for significant change in environmental policy and
     management at all levels;

  -- products and activities that are a part of the sectorwide
     projects, such as the pilot projects being used to test
     alternatives for achieving regulatory flexibility and
     streamlined permitting or reporting processes or the development
     of tools for sharing information and providing guidance;

  -- various other actions taken by subcommittees that did not
     require support from the Council or changes by EPA and are being
     implemented directly by the subcommittees, such as collaborative
     information exchange activities that involve trade associations,
     community organizations, government agencies, and others and
     include the establishment of advisory groups and cosponsored
     conferences; and

  -- "catalytic benefits" that occurred, EPA said, only because
     stakeholders came together as part of the Initiative and include
     improved working relationships between domestic and
     international manufacturers on environmental matters and new
     customer-supplier relationships involving the recycling and
     recovery of certain materials. 

Such process-oriented activities make up the majority of the
accomplishments that EPA reported for the Initiative at the time of
our review.  However, such measures of progress are not focused on
outcomes and do not clearly indicate what specific contributions the
activities have made or are expected to make in bringing about the
ambitious results that EPA has established as expectations for the
Initiative.  For example, one of the claimed accomplishments is a
subcommittee's production of a draft guidance document.  This
document is intended to assist firms in meeting their environmental
requirements and to encourage their adoption of alternatives for
preventing pollution.  Eventually, when the document has been
finalized and its guidance has been implemented, it may produce
outcomes consistent with the Initiative's goals, including improved
compliance and reduced pollution.  At this stage, however, the
document's production is simply a step in the process of implementing
the Initiative and counting its production as an accomplishment does
not measure the Initiative's progress in terms of environmental
results. 

The formal recommendations acted on by the Council and the
process-oriented accomplishments together appear to provide the
principal measures of success that EPA is using to assess the
Initiative's progress.  For example, they are the measures of
progress that EPA has used in official status reports prepared to
recharter the Council and to annually report its progress under
FACA's requirements.  Also, as discussed below, EPA officials told us
they had not yet established results-oriented performance measures
for assessing the extent to which the Initiative or many of its
subcommittees' projects have produced the expected "cleaner, cheaper,
smarter" environmental protection solutions. 


   EPA LACKS RESULTS-ORIENTED
   MEASURES FOR ASSESSING PROGRESS
   TOWARD ACHIEVING THE
   INITIATIVE'S GOAL
---------------------------------------------------------- Chapter 3:3

Although the Congress, the administration, and EPA have stressed the
importance of establishing results-oriented performance measures for
evaluating programs' success, EPA has not yet established performance
measures for assessing the Initiative's results.  According to the
1997 EPA contractor study of the Initiative, the program's complexity
and relatively early stage were key reasons why EPA did not have such
measures.  Our review found that the subcommittees' projects, like
the Initiative as a whole, generally do not establish or provide for
performance measures to gauge their progress toward finding cleaner,
cheaper approaches to environmental management. 

In an era of tight budgeting, the federal government is emphasizing
results-oriented performance and requiring agencies to demonstrate
the outcomes their programs are accomplishing with the funds
appropriated to them.  In 1993, before EPA established the
Initiative, the Congress enacted GPRA and the administration put in
place the National Performance Review (NPR), both of which called for
establishing performance measures to assess programs' results. 
Specifically, GPRA requires agencies to clearly define their
missions, set goals, link activities and resources to goals, measure
their performance, and report on their accomplishments in a manner
that focuses on programs' expected outcomes and measurable results. 
In addition, a number of NPR recommendations were intended to achieve
more results-oriented management.  These included a recommendation
that EPA establish measurable environmental goals and develop
performance measures for selected goals and strategies consistent
with GPRA.  Collectively, these actions seek to focus federal
management and oversight on the outcomes or results of federal
programs. 

In November 1993, EPA established the National Environmental Goals
Project, which was designed, in part, to address GPRA's and NPR's
objectives.  In December 1996, EPA issued a draft report\10 on the
project's results for government agencies to review.  It stated the
importance of having clear, measurable environmental goals for
establishing tangible results that national environmental programs,
such as the Initiative, should aim to deliver, and for assessing real
environmental progress.  The draft report specifically stated that
such goals provide an environmental results context for the
Initiative and establish a basis for measuring its environmental
progress and effectiveness. 

According to EPA officials and the agency's February 1997 contractor
study of the Initiative, EPA has not established results-oriented
performance measures for the Initiative, in part because of the
Initiative's complexity and the need for a range of measures to gauge
performance.  EPA officials said that they found it difficult to
measure successes under the Initiative and have "agonized over how to
evaluate" its projects.  According to the February 1997 study,
several factors made it difficult to develop and apply valid and
appropriate measures of the Initiative's success.  The factors
include the following: 

  -- The Initiative is at a relatively early stage.  Most activities
     are still in process and their effects have not yet been felt. 

  -- The Initiative lacks measurable objectives, and participants
     bring their own agendas and objectives to the table. 

  -- It is difficult to demonstrate that the Initiative has caused
     particular environmental effects.  Many factors affect
     environmental performance, and distinguishing the Initiative's
     effects from other influences will always be difficult. 

The study also noted that the Initiative is a complex program that
cannot measure success by a few quantitative indicators.  The study
concluded that

  -- a wide variety of measures are needed to capture the
     Initiative's effectiveness;

  -- the Initiative should be evaluated at all levels, from
     individual projects to overall activities, and specific measures
     should be established for each of these levels;

  -- evaluation and self-assessment should be built into the
     Initiative's components and used to indicate success as well as
     to improve processes and products;

  -- only a few aspects of the Initiative--its individual projects,
     for example--can be measured quantitatively using traditional
     measures of output and effect unless its goals for such things
     as environmental improvements or reductions in reporting burdens
     are made more specific and are quantified; and

  -- good ideas on measures of success should be shared within the
     Initiative and with other reinvention efforts that are facing
     similar measurement challenges. 

To emphasize the importance of developing appropriate quantitative
and qualitative measures for the Initiative and its individual
projects, the study cautioned against generating numbers and
statistics on activities that do not capture the Initiative's
important aspects.  It noted, for example, that counting the numbers
of projects initiated or meetings held has some limited utility but
does not reflect the quality of the projects or their appropriateness
to an individual sector or to the Initiative as a whole.  Instead,
the Initiative should measure its success in terms of results
achieved.  According to the study, quantitative measures of success
will be most feasible at the project level.  For example, some
projects will be able to estimate emission reductions, cost savings,
or other measurable targets.  As discussed below, however, our
detailed review of individual projects found that few had such
measures, either in place or included in their design. 


--------------------
\10 Environmental Goals for America With Milestones for 2005, EPA
draft proposal (Dec.  20, 1996). 


      SUCCESS OF INDIVIDUAL
      PROJECTS IS DIFFICULT TO
      DETERMINE BECAUSE PROJECTS
      LACK PERFORMANCE MEASURES
-------------------------------------------------------- Chapter 3:3.1

The Initiative's subcommittees are to carry out studies and projects
to develop recommendations for administrative, regulatory, and
statutory changes.  The recommendations and other ideas developed by
these subcommittees are to be presented to the Council, which in turn
will deliberate and provide advice directly to the EPA Administrator. 
While the subcommittees' projects are typically designed to find
cleaner and cheaper approaches to environmental management, we found
that the projects do not typically establish or provide for
performance measures to gauge their progress toward achieving this
goal. 

We identified and reviewed the goals and objectives of 36 projects
that were ongoing as of September 1996.  We further reviewed 15 of
the 36 projects using a results-oriented performance measurement
model (discussed in app.  I) to help determine whether the projects
were designed to (1) achieve the Initiative's cleaner, cheaper
environmental management objectives and (2) measure progress toward
achieving those objectives.  The projects we reviewed were typically
designed to develop methods of reducing pollution and/or reducing the
cost and burden associated with pollution prevention; however, the
projects did not typically establish or provide for performance
measures to gauge their progress toward achieving either their own
objectives or the Initiative's goal. 

Minimizing and/or preventing pollution was a common goal for the
subcommittee projects we reviewed, and reducing or minimizing the
costs and burdens associated with preventing pollution was frequently
cited as an expected outcome, as in the following examples: 

  -- The iron and steel subcommittee's multimedia permitting project
     is expected to, among other things, develop a permitting system
     that will create opportunities for preventing pollution, will be
     less costly than the individual medium-specific permits issued
     currently, and will reduce the paperwork and administrative
     burdens imposed on facilities and regulators by the current
     system. 

  -- The computers and electronics subcommittee's consolidated
     emergency response reporting project is expected to streamline
     the emergency response planning process by consolidating the
     requirements for various emergency response plans into one
     document that meets the needs of all stakeholder groups (e.g. 
     emergency responders, the community, facility workers, and
     regulatory agencies). 

These projects, like all of those we reviewed, were generally
designed to find ways to reduce or prevent pollution and/or reduce
its associated costs.  However, the previously described projects
were among those that had not established performance measures to
gauge the extent to which they would reduce pollution and/or its
costs.  For example, the iron and steel subcommittee's project
describes the advantages of a multimedia permitting approach (e.g.,
time and cost savings, reduced paperwork and administrative burden,
and pollution prevention opportunities) but does not provide for
measuring the extent to which the project would reduce pollution or
its costs. 


      FEW PROJECTS PROVIDE FOR
      MEASURING PERFORMANCE TO
      DEMONSTRATE THEIR SUCCESS
-------------------------------------------------------- Chapter 3:3.2

Of the 15 projects we reviewed in detail, 4 appeared to provide
clearly for measuring the extent to which pollution would be
decreased and/or its costs would be reduced.  For example, the
petroleum refining subcommittee's equipment leaks project is expected
to result in the more focused monitoring and control of the
components that are most likely to leak, as well as more
cost-effective operations for individual refineries that are given
the flexibility to meet particular performance standards.  This
project's design includes the development of a performance-based
audit system for assessing whether the use of an alternative approach
has cost-effectively improved environmental performance and reduced
emissions.  In addition, the subcommittee's one-stop reporting and
public access project for developing a sector-based air emissions
reporting system includes in its design an assessment of the time and
cost savings expected from the revised system. 

Although performance measures were not specifically built into
another project's design, this project appeared to be establishing
such measures.  The printing subcommittee's New York education
project, whose goal is to incorporate the philosophy of pollution
prevention into everyday work practices through education and
outreach, currently has a "measurement team" working on how to
measure the project's success. 

A fourth project provides for measuring the cumulative performance of
all of the metal finishing subcommittee's projects.  The
subcommittee's strategic goals initiative--essentially a strategic
planning project to pull together the sector's various activities and
findings--was designed to establish performance measures to assess
the cumulative effects of the subcommittee's other ongoing projects. 
This project is examining methods for benchmarking performance for
metal-finishing facilities and for the industrial sector.  For
example, measures planned for facilities include percentage
improvements in resource utilization, percentage reductions in water
and energy use, percentage reductions in organic and inorganic
hazardous emissions, and reductions in compliance costs. 

While the metal finishing subcommittee is establishing performance
measures to assess the cumulative effect of all of its projects
through its strategic goals initiative, the subcommittee's other
projects apparently do not have performance measures to allow the
subcommittee, and subsequently the Council, to gauge their individual
success and assess whether a recommended change is warranted.  Of the
three other metal finishing subcommittee projects we reviewed, none
specified individual performance measures for assessing whether the
expected outcome was achieved. 

  -- The subcommittee expects that the widespread use of its metal
     finishing guidance manual will lead to improved compliance rates
     throughout the industry, particularly among smaller,
     information-poor shops.  The project does not, however, provide
     for assessing whether the manual's use has been widespread or
     has improved compliance rates throughout the industry and among
     specific industry segments. 

  -- The subcommittee's promoting improved performance flexible track
     project is designed to promote improved performance through an
     alternative regulatory program for top-tier firms that might
     receive flexibility and incentives to seek ambitious
     environmental goals.  The project is expected, among other
     things, to maximize environmental improvements and minimize
     costs.  Although project data included some quantified "cleaner"
     and "cheaper" benefit goals, it was not clear how progress
     toward those goals would be measured.  According to an EPA
     official, such measures will be part of test facilities' project
     plans and memorandums of agreement that were not yet developed
     at the time of our review. 

  -- The subcommittee expects that the reengineered compliance
     reporting process, developed through the regulatory information
     inventory team evaluation project, will provide measurable
     benefits for regulators, industry, and nongovernmental
     organizations.  The expected benefits include some quantified
     forms consolidation improvement goals, and the project's
     workgroup has identified the need to develop a benchmarking
     mechanism for evaluating the project's success.  However, the
     project's design did not specify how progress toward the
     expected outcomes would be assessed. 


      EPA IS CONSIDERING
      PERFORMANCE MEASUREMENT
      NEEDS
-------------------------------------------------------- Chapter 3:3.3

As noted previously, EPA's February 1997 contractor study concluded
that specific measures should be developed for evaluating the
Initiative's success at all levels of activity, including the project
level--which should lend itself best to the use of quantitative
measures for assessing emission reductions, cost savings, or other
measurable targets.  Such measures will likely be needed for projects
to demonstrate that an expected cleaner and/or cheaper outcome has
been achieved and that a recommended change is needed.  Currently,
although the subcommittees' projects are generally designed to
achieve cleaner, cheaper environmental performance and to lead to
recommendations for administrative, regulatory, or statutory change,
the projects' success will be difficult to demonstrate without
appropriate performance measures.  Consequently, the projects that do
not have appropriate performance measures and cannot otherwise
demonstrate the achievement of their expected outcomes will not
likely have a sufficient basis for recommending a change in
environmental approach. 

At the time of our review, EPA officials and other Initiative
stakeholders were considering the February 1997 study's findings and
conclusions and the results of the Council's mid-February 1997
meeting, which focused on opportunities for strengthening and
improving the Initiative's process and the Council's role.  In
addition, EPA has asked an advisory committee\11 to identify criteria
for evaluating the progress and success of the agency's various
reinvention efforts--including the Initiative.  The Council's next
meeting is scheduled for July 1997, and it is not clear what changes
will be forthcoming. 


--------------------
\11 The committee is part of EPA's National Advisory Council for
Environmental Policy and Technology.  The Council is a federal
advisory committee organized under the Federal Advisory Committee Act
to provide information and advice to the EPA Administrator and other
EPA officials on policies for managing the environment.  The
Council's members include senior-level representatives of a wide
range of EPA's constituents, including business and industry;
academic, educational, and training institutions; federal, state, and
local government agencies and international organizations;
environmental groups; and nonprofit entities. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 3:4

While EPA's Common Sense Initiative has made some progress in
bringing stakeholders together to work collaboratively on the Council
and its subcommittees, the agency does not have results-oriented
performance measures for assessing whether or to what extent the
Council's or subcommittees' activities have reduced or prevented
pollution at less cost to industry and the public through expected
fundamental changes in EPA's regulatory approach.  In the absence of
such measures, much of the success that EPA claims for the program is
being measured by the completion of activities or products that are a
part of the Initiative's process for achieving desired goals or
desired outcomes but are not focused on outcomes.  However, the
February 1997 EPA contractor study of the Initiative recognizes the
limited usefulness of such measures for assessing progress.  Although
the measures have value and involve important elements, they focus on
the means to the outcome that the Initiative is trying to achieve and
not on the "cleaner, cheaper, smarter" environmental results that are
its goal.  In addition, EPA itself acknowledges the importance of
outcome-based performance measures for assessing program progress,
consistent with GPRA's emphasis on the need for agencies to focus on
and achieve measurable program results. 

Although EPA recognizes the need for outcome-based performance
measures, the agency has not developed such measures, in part because
of the Initiative's complexity and the need for a range of measures
to gauge performance.  While we agree that the program's complexity
makes establishing performance measures difficult, in our opinion,
results-oriented performance measures focused on the program's
expected outcomes are essential for EPA and others to assess the
progress of the Initiative toward its goal, at both the Council and
the subcommittee levels, and to determine whether subcommittee
projects have achieved their expected outcomes.  Such outcomes are
intended to provide a basis for subcommittees, and subsequently the
Council, to recommend that an administrative, regulatory, or
statutory change is warranted. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 3:5

To provide a basis for evaluating the progress of the Initiative in
cost-effectively reducing or preventing pollution, GAO recommends
that the Administrator, EPA, require the development of
results-oriented performance measures for assessing the extent to
which the Council's and subcommittees' actions have produced real,
measurable environmental improvements at less cost to industry and
the public. 


GAO'S PERFORMANCE MEASUREMENT
MODEL AND THE PROJECTS REVIEWED
=========================================================== Appendix I

GAO's performance measurement model, shown in figure I.1, applies the
concepts underlying the Government Performance and Results Act of
1993, which focus on program outcomes--the results of a program
activity compared to its intended purpose--rather than activity
levels and tasks completed.  GPRA also incorporates performance
measurement as one of its most important features.  The model
provides the basis for assessing the extent to which a project is
results-oriented and has a mechanism for measuring the degree to
which an expected outcome has been achieved. 

In applying our model, we answered the following questions for each
of the Initiative's 15 projects (see pp.  43-45) that we reviewed: 

1.  To which of the Initiative's program element(s) has the project
been linked and what is the program element's stated purpose? 
(Program elements are discussed on p.  13.)

2.  What is (are) the project's stated objective(s)? 

3.  Is there a clear link between the project's stated objective(s)
and the program element's stated purpose? 

4.  What is the project's design and status of completion? 

5.  What product or service will result (e.g., guidance manual,
modified reporting process, streamlined permitting)? 

6.  What is the project's expected outcome (i.e., result, effect,
impact)--as distinguished from its product or service? 

7.  Does the project's design include a results-oriented mechanism to
measure whether and to what extent the project has achieved its
expected outcome(s)? 

8.  Is there a clear link between outcome(s) of the project and the
program element(s)?  Does the project's design provide a mechanism
for assessing the degree of such linkage or agreement? 

9.  Will the project result in fundamental change (e.g., regulatory
reinvention, legislative reform) or a redesigned process (e.g.,
streamlined permitting or reporting)? 

10.Does the project measure whether the outcome reduced or prevented
pollution at less cost to industry and the taxpayer? 

11.Is the project linked to any other Initiative or non-Initiative
project(s)? 

   Figure I.1:  GAO's Performance
   Measurement Model

   (See figure in printed
   edition.)

We applied our model to the following 15 projects, which are grouped
according to the subcommittee sponsoring each project: 


      AUTOMOBILE MANUFACTURING
      SUBCOMMITTEE
------------------------------------------------------- Appendix I:0.1

Alternative Sector Regulatory System/Community Technical Assistance
Project to develop alternative regulatory system principles that will
provide the basis for plant-specific implementation and to encourage
better understanding of and greater participation in environmental
quality and economic development issues by the potentially affected
communities. 

Regulatory Project Team Area/VOCs Mini-Group Project to determine
whether a more flexible and easier-to-implement surface area approach
for calculating and establishing emission limits for the volatile
organic compounds (VOC) associated with specific processes (e.g.,
painting operations) used in the automobile manufacturing industry
could replace or enhance the existing method for calculating and
establishing those limits. 


      COMPUTERS AND ELECTRONICS
      SUBCOMMITTEE
------------------------------------------------------- Appendix I:0.2

Consolidated Emergency Response Reporting to streamline the emergency
response planning process by consolidating various emergency response
plan requirements so that only one document will meet the needs of
all stakeholder groups (including emergency responders, the
community, facility workers, and regulatory agencies). 

Consolidated Uniform Report for the Environment to design and test a
new comprehensive environmental report and to provide streamlined and
consolidated reporting while providing for electronic reporting and
increased public access to information. 


      IRON AND STEEL SUBCOMMITTEE
------------------------------------------------------- Appendix I:0.3

Brownfields Demonstration Project to develop, pilot test, and
document a process for redeveloping iron and steel brownfields sites. 

Multimedia Permitting Project to develop a multimedia permitting
process covering air, water, and waste for a steel mini-mill. 

Spent Pickle Liquor Workshop to convene a 1-day workshop at which
panelists and technical consultants will inform all stakeholders
about the problems (technical and regulatory) associated with spent
pickle liquor. 


      METAL FINISHING SUBCOMMITTEE
------------------------------------------------------- Appendix I:0.4

Promoting Improved Performance (Metal Finishing 2000) Flexible Track
Project to promote improved performance through an alternative
regulatory program for top-tier firms (i.e., tier 1 and tier 2
industry performance leaders) that might receive flexibility and
incentives to seek ambitious environmental goals. 

Metal Finishing Guidance Manual Project to create a shop floor "how
to" tool for facilities to maintain compliance and pursue pollution
prevention. 

Regulatory Information Inventory Team Evaluation Project to examine
federal, state, and local reporting requirements for metal finishers
across all environmental media and to explore ways to reduce
paperwork burden, improve public access to data, and promote better
environmental performance. 

Strategic Goals Initiative Project to develop a set of national
performance goals along with an implementation plan for the metal
finishing industry and the government and public entities that
interact with the industry. 


      PETROLEUM REFINING
      SUBCOMMITTEE
------------------------------------------------------- Appendix I:0.5

One-Stop Reporting and Public Access Project to examine federal and
state air emission reporting requirements for petroleum refiners to
identify and recommend modifications to duplicative and/or obsolete
requirements and improve community access to and understanding of
reported data. 

Equipment Leaks Project to reduce the loss of process fluids/vapors
through equipment leaks more efficiently. 


      PRINTING SUBCOMMITTEE
------------------------------------------------------- Appendix I:0.6

New York Education Project to achieve fundamental change within the
printing sector to incorporate the philosophy of pollution prevention
into everyday work practices through education and outreach. 

Multimedia Flexible Permitting Pollution Prevention Project to
develop a permit system applicable to printers that (1) allows for
operational flexibility; pollution reduction across all media; and
improved protection of the environment, workplace, and community and
(2) is simpler to implement and manage for regulatory agencies and
businesses alike to ensure compliance and access to the public. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE ENVIRONMENTAL
PROTECTION AGENCY
=========================================================== Appendix I



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION, WASHINGTON,
D.C. 

Susan D.  Kladiva
J.  Kenneth McDowell
Raymond M.  Ridgeway
William H.  Roach, Jr.
Elizabeth R.  Eisenstadt
Martin H.  Emmrich

OFFICE OF GENERAL COUNSEL

Karen K.  Keegan

GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C. 

Curtis W.  Copeland
Edward G.  Joseph


*** End of document. ***