Policy Study

Environmental Flexibility in Action

A Minnesota Case Study

Executive Summary

Over the past few decades, Minnesota has generally followed a command-and-control approach to managing and protecting its environment. Once an environmental problem was identified, regulators prescribed uniform pollution-control remedies and environmental standards across the state. This approach to managing the environment commanded a growing share of resources.

But the advent of differing and varied environmental problems, coupled with the shortcomings of commandand- control regulations, prompted Minnesota’s environmental authority?the Minnesota Pollution Control Agency (MPCA)?to begin adopting a new vision of environmental policy. State regulators and others are exploring new ways to utilize environmental protection dollars more effectively and efficiently.

Three case studies highlight the MPCA’s move toward flexibility in protecting the environment. These programs emphasize attaining environmental performance goals instead of relying solely on traditional punitive measures and compliance with prescribed standards:

  • A voluntary program to remediate brownfields is helping companies avoid the cumbersome Superfund process while ensuring the clean-up of unused industrial sites;
  • A breakthrough pollution-trading program by the Rahr Malting Company has applied market mechanisms to water pollution control; achieving cleaner water than under the old system, and
  • Experimentation with multimedia, facilitywide standards is underway at the Andersen Window Corporation, reducing regulatory burden while protecting the environment.

Besides demonstrating an effective alternative to traditional command-and-control regulation, the Minnesota experience also illustrates some of the challenges faced by those orchestrating a shift to more flexible, results-focused policy. Other states that are interested in moving away from command-and-control methods can profit from the lessons that Minnesota learned:

  • Focus on Local Priorities. One of the paramount lessons from Minnesota is the need to bring decisionmaking close to those directly affected. Minnesota’s shift toward geographical districts and toward a multimedia orientation was a crucial step in restructuring incentives for environmental protection.
  • Involve All Legitimate Interests. The success of the Rahr permit, in addition to the MPCA’s willingness to be flexible, resulted from the involvement of those directly affected. Involving all legitimately interested parties, even if it doesn’t result in a consensus, alerts all sides to prevalent concerns and priorities.
  • Grant Liability Assurances. Superfund’s hazy liability rules discourages brownfield redevelopment. Insuring that owners are only liable for damage they cause encourages more remediation efforts.
  • Be Persistent. Not every innovation will be perfectly crafted in its first iteration, and repeated experimentation and political skirmishes are often necessary to determine the best method of environmental protection. Experimentation in flexibility must often confront pre-existing interests and procedural inertia, so it is better to start on a small scale, with a less visible or noncontroversial area, rather than attempting a high-profile case at the outset.
  • Preserve Balance. A backdrop of enforcement against intentional wrongdoing needs to go hand in hand with compliance assistance, or flexibility could result in avoidance of pollution-abatement responsibility.

Allowing Minnesotans the freedom to discover innovative ways to meet environmental goals should lead to large environmental gains. This means allowing individuals and businesses the freedom to decide how they will achieve pollution reduction. Market-based solutions, such as the Rahr example of point-to-nonpoint trading and the Andersen project, allow people to find better and cheaper ways to treat waste.

Attachments

Christopher A. Hartwell is an environmental policy analyst at Reason Public Policy Institute, and is project manager for RPPI's State Innovations Project, which examines the continuing trend towards state and local-based environmental management. He is the author of Reason Public Policy Institute policy study 253, Simplify, Simplify: Alternative Permitting at the State Level, which examines the development of permitting innovation across the United States, and co-author of Reason Public Policy Institute study 259, Rivers Among Us: Local Watershed Preservation and Resource Management in the Western United States.

Prior to his work at Reason Public Policy Institute , Mr. Hartwell was at the Harvard Institute for International Development (HIID), where he was involved with environmental economics in the Czech Republic, editing an economics textbook for researchers at Charles University in Prague. Mr. Hartwell has also worked at the German Ministry for Economics in their European Department and at the U.S. Department of Labor. Mr. Hartwell received his B.A. in political science and economics from the University of Pennsylvania and his Master's of Public Policy from Harvard University.

David W. Riggs is Director of Land and Natural Resource Policy at the Competitive Enterprise Institute, a Washington, D.C.-based public interest group dedicated to the principles of free enterprise and limited government. Currently, his research and analysis is focused on urban sprawl, federal lands, and endangered species.

Prior to joining CEI, Dr. Riggs was senior fellow for economic and environmental studies at Center of the American Experiment, a state-based public policy think tank in Minneapolis, Minnesota. From 1995 to 1997, he held a joint appointment in the Texas A & M University System, where he worked as an economist for a state-level public agency and taught economics at Tarleton State University. He earned a B.A. at the University of North Carolina at Wilmington, and a Ph.D. in Applied Economics at Clemson University. Dr. Riggs has published articles in professional journals, edited volumes, and newspaper op-eds.