Building Science for Environmental Protection in the 21st Century - Science For Environmental Protection: The Road Ahead - page 107

However, the process by which EPA provides incentives for private-sector
investment and innovation is not without its challenges. Among them are
 Overly Prescriptive Rules. Regulations that use a true performance
standard for emissions and discharges can encourage innovation; rules that, in
essence, base emission standards on the best current technology (without regular
updating) can take away all private incentives for further investment in research
and development. For example, the “categorical pretreatment standards” for
industrial wastewater discharges locked into place standards based on technolo-
gies that were available at the time of promulgation, whereas the “best available
control technology” requirements of the Clean Air Act are a “rolling” standard,
expressed as performance-based emissions limits that can advance as technology
improves. Economic research on innovation and environmental regulation finds
that flexible policy instruments that provide rewards for continual environmental
improvement and cost reduction tend to promote innovation whereas policies
that mandate a specific behavior can deter innovation (Popp et al. 2010).
 Defensive Rule-Making. In the current climate in which nearly every
action taken by EPA is challenged, the rules that are issued may be written in a
conservative fashion that hews tightly to narrow interpretations of the statutes or
to past practice and thus may be less likely to encourage innovation once im-
plemented.
 Reliance Solely on Existing Testing Protocols. To meet toxicity-testing
requirements, EPA often specifies testing protocols in detail, generally on the
basis of the state of the art. That practice reduces the incentive to innovate in
testing and assessment because of the difficulty of getting new approaches and
results accepted.
There are several examples where EPA has been successful in leveraging
private sector research. One example is in the Technology and Economic As-
sessment panels of the Montreal Protocol and the various research and develop-
ment consortiums designed to find substitute chemicals and technologies for
ozone depleting substances (EPA 2007, 2010a). Another example is the Green
Lights program for energy efficient light bulbs, the Energy Star program for
energy efficient appliances, and the Golden Carrot program for energy efficient
refrigerators (EPA 1992; Feist et al. 1994; EPA 2011d; Energy Star 2012). If
those examples could be replicated in other situations, EPA would be able to
mobilize more industry research and development and implementation to protect
the environment.
Finding: EPA has recognized that innovation in environmental science, tech-
nology, and regulatory strategies will be essential if it is to continue to perform
its mission in a robust and cost-effective manner. However, to date, the agency's
approach has been modest in scale and insufficiently systematic.