The American Bar Association (ABA) Section of Environment, Energy, and Resources (SEER) is pleased to make available the results of a comprehensive review of the core federal environmental statutes to assess the suitability of each to address issues pertinent to human health and the environment arising from applications of nanotechnology. Earlier this year, the Section offered to brief representatives of the U.S. Environmental Protection Agency (EPA) Office of General Counsel (OGC) and pertinent other EPA representatives in EPA program offices on legal and regulatory issues arising in connection with the application of existing statutory and regulatory authorities to engineered nanoscale materials. Specifically, the Section offered to prepare detailed briefing documents on each of the six core environmental statutes, and a briefing document on innovative governance mechanisms, that identify key legal and regulatory issues EPA can be expected to encounter as it considers how best to address issues likely to arise in connection with nanotechnology.

Section Nanotechnology Project Home Page

EMS/Innovative Regulatory Approaches

Welcome to the homepage of the Committee on Innovation, Management Systems and Trading (formerly known as the Special Committee on Second Generation Issues). Established just a few years ago, the Committee is a young organization that welcomes new members and ideas.

As reflected in its name, the Committee has three, principal areas of focus: environmental regulatory innovation, environmental management systems (EMS), and trading initiatives. These three areas are related. Each supplements traditional regulation by offering an alternative that aspires to be more protective of the environment, more effective, and more efficient. In so doing, each holds the potential for furthering the ideals of environmental stewardship and sustainable development. While these three areas are related, each presents its own set of themes and current issues:

Environmental Regulatory Innovation
Environmental regulatory innovation consists of a set of emerging policies, implemented at the federal and state levels, that offer alternatives to traditional regulatory approaches. Traditional environmental regulation is nationally-uniform, technology-based and focused on "end-of-pipe" solutions. By contrast, innovative programs often emphasize environmental performance over the specific technologies, and prefer pollution prevention to end-of-pipe controls. These programs can provide more flexibility as to how such performance is achieved. Many of these initiatives also seek to enhance accountability by increasing stakeholder participation. The hope is that aggressive performance measures, combined with flexibility in implementation and greater stakeholder involvement might offer improved environmental protection, for less cost, with greater accountability than traditional. regulation alone does. Examples of current regulatory innovation programs include the following:

1. Habitat Conservation Program: This innovative Endangered Species Act program brings together stakeholders to arrive at a comprehensive plan that attempts to enhance species protection while also allowing development in less critical areas.
2. Performance track programs: These state and federal initiatives develop an alternative regulatory track for top environmental performers. Those that qualify for the "performance track" are often entitled to social recognition and more flexible regulation.
3. Integrated Permitting, Multi-Media Regulation and Pollution Prevention Planning: Several states are experimenting with more holistic approaches to permitting that break down the traditional, media-specific boundaries. These integrated, multi-media permitting programs can also require that facilities engage in pollution prevention planning.

Environmental Management Systems
Corporations, government organizations and others are increasingly turning to environmental management systems (EMS) as a means of ensuring compliance and improving environmental performance. Environmental management systems establish compliance and performance goals, put an organizational system into place for achieving these objectives, and provide for regular monitoring and continuous improvement. Often, these systems are adopted voluntarily, although they may be implemented as part of an enforcement settlement. The potential of EMS for improving compliance and environmental performance make this an important new area of environmental policy and law. Current legal and policy issues related to EMS include:

1. EMS's and Enforcement: EPA and DOJ are increasingly integrating EMS's into enforcement policies. For example, EMS's are appearing as a requirement in consent decrees. In addition, the adoption of a quality EMS, and its use in the discovery and self-reporting of violations, figures importantly in EPA's self-disclosure policy.
2. EMS's and Security: In the wake of 9/11, facilities have become increasingly aware of their vulnerabilities to terrorist attack. This has led to an effort to better track and protect highly toxic and explosive materials on-site. Environmental management systems provide useful tools for achieving this and have been adapted to this new, environmental exigency.
3. EMS's and Corporate Governance: In the post-Enron world, there has been increasing concern about transparency and accountability in the area of corporate environmental performance. Environmental management systems, particularly those that involve third-party certification and stakeholder involvement, are one of the important tools being used to address these concerns and foster improvement.

Trading
Trading programs may represent the most significant alternative to emerge on the regulatory landscape in recent years. At bottom, these programs share the idea that one party or location may control its pollution or environmental impact beyond the required level, and then transfer the ensuing "reduction credit" to another party of location that can use it achieve compliance with its requirements. For example, a "cap-and-trade" approach allocates to each covered facility an allowable level of pollution. Those facilities that reduce their pollution beyond the required amount generate a reduction credit. They can then sell that credit to another facility that can apply it against its own emissions so as to achieve compliance with its allocation. In theory, such approaches should result in reductions being made by those who can achieve them most cheaply, and purchased by those who would otherwise have to spend more to create the reductions themselves. Trading thus has the potential to enhance regulatory efficiency and to spur innovation in pollution controls as parties seek new ways to achieve reductions cheaply. Examples of current trading initiatives include:

1. Clean Air Act SO₂ Trading, and Multi-pollutant Legislation: Title IV of the Clean Air Act sets up a nationwide "cap-and-trade" system for the trading of sulfur dioxide emission reductions among utilities and other significant emitters. Several bills submitted to Congress in recent years would expand the Title IV cap-and-trade approach to other Clean Air Act pollutants such as ozone, particulate matter, and mercury.
2. Effluent trading: State and federal regulators are beginning to implement watershed-based effluent trading programs that will allow dischargers within a given watershed to trade reduction credits with each other. U.S. EPA has recently announced a Water Quality Trading Policy that will seek to increase the use of this regulatory approach.
3. Wetlands Mitigation Banking and Trading: Trading is also being used in the area of wetlands mitigation under Section 404 of the Clean Water Act. Parties have the opportunity to develop new wetlands, "bank" them, and then trade these credits to mitigate the loss of other wetlands.
4. Critical habitat trading: A recent policy would allow parties to bank and trade critical habitat for endangered species. This application of the trading approach to the resources area (the ESA) represents an important, new application of the trading concept.

Each of the three areas profiled above provides new opportunities, and challenges, for the environment and for clients. The Committee on Innovation, Management Systems and Trading seeks to educate the bar on these new approaches and serve as a forum for examining the policy and legal issues that they raise. The Committee pursues this mission in a number of ways.

• It sponsors programs at major Section events. For example, the Committee sponsored a program on Trading Initiatives Under the Clean Air Act and Clean Water Act at the 2003 Section Fall Meeting
• It puts on special brown-bag events especially for Committee members. These programs are designed to provide the latest information on second generation initiatives and practice opportunities. For example, in Spring 2004 the Committee plans to put on a brown-bag on the uses of EMS in enforcement
• It runs a pro bono project aimed at matching volunteer attorneys with community groups that are involved in innovative environmental initiatives
• It publishes a regular newsletter that keeps members informed of current policy and legal developments and provides expert perspectives on these topics
• It maintains a website and list serve through which members can provide each other with information and discuss the most significant issues related to the Committee's areas of focus

The Innovation, Management Systems and Trading Committee is a diverse group of attorneys with a common interest in alternative approaches to environmental regulation. Such policies are often characterized by better environmental performance, greater flexibility in the way that this performance is achieved, and an enhanced role for stakeholders and the public. They are integrally related to current notions of sustainability and stewardship.

While alternative regulatory policies are growing in importance, there have been few opportunities for practicing environmental lawyers to learn about these initiatives and the opportunities that they present for clients, the environment, and legal practice. The Innovation, Management Systems and Trading Committee seeks to fill this gap. Its primary goals are to educate the environmental bar on alternative regulatory approaches, and to serve as a forum for discussion of the policy and legal issues that these innovative programs often raise. The Committee actively pursues these goals on a number of fronts:

Section Programs: The Committee sponsors programs at major Section events. For example, at the Section's 2003 Fall Meeting, the Committee sponsored a program on Trading Initiatives Under the Clean Air Act and Clean Water Act. It also sponsored a program that examined innovative approaches to species protection under the Endangered Species Act. For information on Committee programs, or to get involved in this area of the Committee's work, contact our Programs Vice Chair, Leah Dundon.

Committee Brown-bag Events: The Committee also puts on regular brown-bag events especially for its own members. These programs, which offer a free teleconference option for members, focus on cutting-edge developments in the area of second generation policy and law. One recent program featured the Director of EPA's Performance Track Program, as well as several program participants and commentators, who provided the latest updates on the program and described the opportunities for participation.

Newsletter: The Committee publishes a regular newsletter. Each issue focuses on a specific environmental topic and provides important information and perspectives from experts. Recent issues have addressed: innovative approaches to stakeholder involvement; the use of environmental management systems in environmental compliance and corporate strategy; and trading of greenhouse gas (GHG) emissions.

Pro Bono Project: The Committee has created its own pro bono program, the Pro Bono Legal Assistance for Communities project. The PBLAC project matches volunteer attorneys with community groups seeking to participate as stakeholders in second generation initiatives, especially those involving integrated, place-based environmental planning. The attorneys provide legal support on defined tasks such as legal analysis, drafting of sustainable development tools (e.g. conservation easements), or policy analysis. To find out more about the PBLAC project, or to volunteer, contact our Public Service Vice Chair, Howard Hoffman.

Website and list serve: The Committee hosts a website and list serve. The website provides information about the Committee, its activities and leadership, as well as links to important resources related to innovation, management systems and trading. The list serve provides an important conduit for sharing information about the latest policy developments and events. To learn more, contact our Technology Vice Chair, Scott A Young.

Membership: We welcome your participation in the Innovation, Management Systems and Trading Committee. To join the Committee, please complete the Committee Preference Form.

Membership Benefits: The Innovation, Management Systems and Trading Committee provides many benefits to members, including:

Committee Programs: The Committee hosts quarterly brown bag lunches on cutting edge second generation environmental issues. These programs can be attended in person or accessed by telephone for the convenience of members. Topics of recent programs include: "Experience to Date in EPA's 'Performance Track' Program".

Newsletters: The Committee publishes a newsletter three times per year. Each issue focuses on a specific second generation environmental issue and provides important information and perspectives from experts. Upcoming issues will address: trading initiatives under the Clean Air Act and Clean Water Act and innovative approaches to enhancing stakeholder involvement.

List serve: Committee members may use the Committee list serve to post announcements or pose questions to other Committee members.

Programs at ABA and Section Conferences: The Committee co-sponsors programs at Section and ABA conferences. At the Fall 2002 meeting, the Committee co-sponsored a well-received program on Future Directions in Environmental Law.

Web Site: The web site is a resource for those interested in alterative approaches to environmental regulation and will provide information on hot topics, recent studies and reports, government programs and links to the best web resources.

To Join the Committee: To join, simply complete the Committee Preference Form.

You must be a lawyer member of the ABA Section of Environment, Energy, and Resources to join the Committee. As a Section lawyer member you are entitled to membership in five committees.

For More Information: For additional information about the Committee contact our Chair, LeRoy Paddock, at (202) 994-0417, lpaddock@law.gwu.edu. You may also call the Section at 312-988-5724, or e-mail the Section at environ@abanet.org.

Chair:
LeRoy Paddock

Vice Chairs:
Committee Newsletters
Michael Wallander

Membership
Rebekah Reynolds

Programs
Leah Dundon

Public Service
Howard J. Hoffman

Technology
Scott A. Young

The Year in Review
M. Joel Bolstein

Additional
Robert M. Sussman

Cary Coglianese

Joseph M. Dawley

Ira Feldman

Dennis D. Hirsch

J.B. Ruhl