The Natural Step and Its Implication for a Sustainable Future, 7 Hastings West Northwest J

Hastings Environmental Law Journal Volume 7 Article 8 Number 1 Fall 2000

1-1-2000 The aN tural Step and Its Implication for a Sustainable Future Alex Tynberg

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Recommended Citation Alex Tynberg, The Natural Step and Its Implication for a Sustainable Future, 7 Hastings West Northwest J. of Envtl. L. & Pol'y 73 (2001) Available at: https://repository.uchastings.edu/hastings_environmental_law_journal/vol7/iss1/8

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I. Introduction

The current economic and legal system in the United States fails to guide society toward a sustainable future. A sustainable future is one that involves the just and efficient use of natural resources, wealth, and opportunities in a manner that equitably preserves the natural environment for future generations.1 The key to achieving sustainability is to change the practices of commerce, which presently exist unen- The Natural Step and cumbered by real connections to the environ- Its Implication for a ment. Through adoption of The Natural Step model and other significant influences, com- Sustainable Future merce, and society, can develop into a more sustainable, restorative existence. By Alex Tynberg The goal of this article is to introduce The Natural Step to the legal community and to illustrate the value of The Natural Step model, which establishes a set of first-order principles of sustainability.2 The Natural Step principles, when combined with legal and other approaches, can productively influence commercial practices, and society in general, to function more in harmony with the rules of nature. This article seeks to demonstrate how lawyers can use The Natural Step to effectuate positive change toward sustainability. In fact, effective use of the law is essential to attaining a sustainable future according to The Natural Step principles. Part I of this article illustrates that sustainability is absent from the majority of commercial life. This reality poses a significant threat to our long-term prosperity. Part II demon-

Alex Tynberg is a practicing attorney in San Francisco, California. The author thanks University of Oregon School of Law Professor Robin Morris Collin, University of California, Hastings College of the Law Professor Naomi Roht-Arriaza, Karl Henrik Robèrt, of The Natural Step International, and Jill Rosenblum, of The Natural Step United States, for their editorial advice and assistance. The conclusions of this Article are solely the author's personal views. All errors and omissions are the responsibility of the author. 1. See John Baldwin, University of Oregon Planning, Public Policy, and Management Department Professor (1998) (Sustainable Development course materials on file with author); cf. Robin Morris Collin & Robert William Collin, Where Did All the Blue Skies Go? Sustainability and Equity: The New Paradigm, 9 J. ENVTL. L. & LITIG. 399, 407-11 (1994). This definition of future generations refers to all living species. 2. See discussion infra Part III.A.2; see also Karl-Henrik Robèrt, The Natural Step: A Framework for Achieving Sustainability in Our Organizations, INNOVATIONS IN MGMT. SERIES 8-9 (1997).

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strates that the current economic and legal are aligned with these principles. The section system does not adequately provide the neces- illustrates a number of effective approaches sary regulation or incentive to guide commerce that can be implemented to transform com- toward sustainable practices. Therefore, we merce and society. These approaches demon- must modify the rules of commerce so that strate that a sustainable future can only come they better conform to the rules of nature. about through sweeping reform of existing law Part III introduces The Natural Step and and significant changes in the ways in which demonstrates its significance as a model for government operates and influences behavior. sustainability. The Natural Step sets forth an Finally, the conclusion illustrates the need for easily understandable and concrete set of all segments of society to work toward the guidelines that all members of society can use same goal. Government leaders, lawyers and to monitor whether they, or the institutions in the business community must all proactively which they are involved, are acting according become involved if we are to bring about a new to sustainable principles. This section high- and sustainable economy. lights the benefits that governments, businesses and lawyers gain as a result of The Natural II. Commerce and Its Unsustainable Ways Step's systems-based methodology. Through adoption of The Natural Step's framework and Commercial activity has perpetuated by implementing its policies, businesses can extraordinary ecological consequences that decrease their environmental liabilities, severely jeopardize the earth's ability to sus- increase energy efficiencies, gain a competitive tain itself.3 Due to commerce's unsustainable advantage, and improve their bottom line. The practices, environmental problems have multi- section further demonstrates The Natural plied and changed drastically as they have Step's value in that, when combined with an become increasingly more complex, perma- environmental management system, it pro- nent, and global in nature. The result is a sys- vides the system with a much needed frame- tematic threat to the long-term prosperity of work for implementation of The Natural Step's our environment and our economy. principles. The section also raises additional The environmental problems we face are issues that should be considered when apply- caused by the fact that commerce is ignoring ing The Natural Step as a sustainability pro- the laws of nature.4 Conventional accounting gram on a broad-based level. Furthermore, the principles have never placed "natural capital," section evidences the practical application comprised of both the resources we use and results that businesses worldwide have the services they provide, on the balance attained through use of The Natural Step principles. sheet.5 Furthermore, the current trend of com- Part IV discusses the role of lawyers in pro- merce to pursue greater levels of global activi- moting change toward a sustainable future. ty is making it increasingly difficult for soci- This section sets forth a strategic implementa- eties to move toward a sustainable path.6 As tion program to complement The Natural Step long as society fails to require commerce to take model and identifies the current programs and responsibility for its role in depleting natural projects undertaken by the United States capital, environmental problems will only worsen.7 Environmental Protection Agency ("EPA") that With environmental problems, complicated

3. See Karl-Henrik Robèrt et al., A Compass for Sustainable Apr., 1997, at 42; HUEY D. JOHNSON, GREEN PLANS: GREENPRINT FOR Development, 4 INT’L J. SUSTAINABLE DEV.& WORLD ECOLOGY 79, 87 SUSTAINABILITY 136 (1995). (1997); see generally MATHIS WACKERNAGEL & WILLIAM REES, OUR 5. See Hawken, supra note 4, at 42; see generally COSTANZA & ECOLOGICAL FOOTPRINT: REDUCING HUMAN IMPACT ON THE EARTH (1996); DALY, supra note 3; HERMAN E. DALY, BEYOND GROWTH (1996). 1 ROBERT COSTANZA & HERMAN E. DALY, NATURAL CAPITALISM AND SUSTAINABLE DEVELOPMENT, CONSERVATION BIOLOGY (1992); BRIAN 6. See Sara Dillon, Trade and the Environment: A Challenge to the NATTRASS & MARY ALTOMARE, THE NATURAL STEP FOR BUSINESS: WEALTH GATT/WTO Principle of Ever-Freer Trade, 11 ST. JOHN’S J. LEGAL ECOLOGY AND THE EVOLUTIONARY CORPORATION (1999). COMMENT. 351, 378 (1996); see generally WACKERNAGEL & REES, supra note 3. 4. See Paul Hawken, Natural Capitalism, MOTHER JONES, Mar.- 7. Cf. JOHNSON, supra note 4, at 136.

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Fall 2000 The Natural Step NORTHWEST issues of social justice, race, gender, and and do business unencumbered by real con- poverty have often been exacerbated by unsus- nections to the environment.12 This type of tainable commercial activity.8 Consequently, commercial operation will persist until busi- the failure of commerce to operate in a respon- nesses voluntarily change their policies or the sible manner has caused detrimental repercus- government steps in to create the necessary sions throughout all of society. incentives to change their behavior. Because businesses inherently will exclude particular III. The Current Economic and Legal costs, such as the true costs of destroying nat- System Fails to Promote Sustainability ural capital, unless otherwise influenced to Within Commerce become accountable for them, this problem is likely to persist as long as government action "In many ways business economics makes and leadership remain ineffective. itself up as it progresses, and essentially lacks The current "command and control" regula- any guiding principles to relate it to such fun- tory model does not promote sustainability damental and critical concepts as evolution, because it allows the business community to biological diversity, carrying capacity, and the exist free from legitimate environmental and health of the commons."9 Moreover, the eco- social responsibility.13 The major environmen- nomic market is unable to incorporate a sus- tal laws, such as the Clean Air Act,14 Clean tainability evaluation in its own terms. While Water Act,15 Resource Conservation and economic theory can account for pollution and Recovery Act,16 Comprehensive Environmental depletion of finite resources, it is difficult to Response, Compensation, and Liability Act,17 find methods that fully evaluate these aspects Toxic Substances Control Act,18 Federal in monetary terms. "In such efforts, attempts Insecticide, Fungicide, and Rodenticide Act,19 are made to evaluate the costs for marginal National Environmental Policy Act,20 Federal changes without reference or consideration to Land Policy and Management Act,21 and the overall conditions for sustainability."10 The Endangered Species Act,22 do not get to the result is that "costs tend not to escalate until root of environmental problems because they something dramatic occurs, which means that do not regulate based on the well-established feedback comes too late."11 laws of nature.23 The media-by-media Prevailing commercial practices are guided approaches governed by our environmental by the promise that we can stay the way we are laws fail to focus on the fact that our natural

8. Cf. Collin & Collin, supra note 1, at 445-49. intended to incorporate an integrative approach to environmental management, but in fact have had little impact on the gov- 9. PAUL HAWKEN, THE ECOLOGY OF COMMERCE: A DECLARATION ernment's media policies. See Bradford C. Mank, The Environmental OF SUSTAINABILITY 5 (1993). Protection Agency's Project XL and Other Regulatory Reform Initiatives: The 10. Robèrt, supra note 3, at 81. Need for Legislative Authorization, 25 ECOLOGY L.Q. 1, 6 (1998). 11. Id. 19. 7 U.S.C. §§ 136-136(y) (2000). 12. See HAWKEN, supra note 9, at 11. 20. 42 U.S.C. §§ 4321-4370(d) (2000). 13. See J.B. Ruhl, Thinking of Environmental Law as a 21. 43 U.S.C. §§ 1701-1785 (2000). Complex Adaptive System: How to Clean Up the Environment by 22. 16 U.S.C. §§ 1531-1534 (2000). Making a Mess of Environmental Law, 34 HOUS. L. REV. 933, 992 (1997); see also William D. Ruckelshaus, Stopping the Pendulum, ENVTL. 23. See Barton H. Thompson, The Search for Regulatory FORUM, Nov.-Dec. 1995 at 28, 29; PHILIP K. HOWARD, THE DEATH OF Alternatives, 15 STAN. ENVTL. L.J. 8 (1996) (discussing our failure to COMMON SENSE, HOW LAW IS SUFFOCATING AMERICA (1994); Bruce A. meet environmental goals). However, the Clean Water Action Ackerman & Richard B. Stewart, Reforming Environmental Law, 37 Plan attempts to take a watershed approach to clean water pro- STAN. L. REV. 1333 (1985). tection. See Statement by the President on the Clean Water Action 14. 42 U.S.C. §§ 7401-7671(q) (2000). Plan, White House Press Release (Feb. 19, 1998); see also 63 Fed. Reg. 14,109 (1998). 15. 33 U.S.C. §§ 1251-1387 (2000). 16. 42 U.S.C. §§ 6901-6992(k) (2000). 17. 42 U.S.C. §§ 9601-9675 (2000). 18. 15 U.S.C. §§ 1206-2692 (2000). The Toxic Substances Control Act and the National Environmental Policy Act were

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resource base is an integral component of the independently of how it is economically evalu- ecosphere.24 Consequently, these laws do not ated."29 Because "[t]here is no guarantee that require commerce to face its three most critical all environmental costs can ever be internal- issues: what it takes, what it makes, and what it ized [so] that prices alone will provide enough wastes- all of which have profound implica- information to foster [sustainable commercial tions for the environment's natural cycle.25 practices]. . . . monetary models must be com- "First, [commerce] takes too much from the plemented with models based on physical environment and does so in a harmful way; indicators that measure society's development second, the products it makes require exces- towards or away from sustainability."30 Thus, we sive amounts of energy, toxins, and pollutants; need multidimensional and multilevel meas- and finally, the method of manufacture and the ures that focus early in the cause and effect very products themselves produce extraordi- chain and which derive from a comprehensive nary waste and cause harm to present and description of the overall physical conditions future generations of all species including that must be met in a sustainable society.31 humans."26 Until commerce squarely deals with Once this change occurs and "[natural capital] these fundamental issues, pollution and is included, not as a free amenity or as a puta- depletion of our natural resources will contin- tive infinite supply, but as an integral and valu- ue at alarming rates. able part of the production process, everything By not compelling commerce to bear its changes. Prices, costs, and what is and isn't full costs, government gives ecologically economically sound change dramatically."32 destructive business operations an enormous subsidy.27 We cannot afford for this policy to IV. The Natural Step as a Solution continue. We therefore are at a point where we need to modify the rules of commerce "so that The Natural Step is a theoretical model of they conform to the rules of the biophysical sustainability that was developed among one world which cannot be amended, changed or hundred eminent Swedish scientists and coor- negotiated."28 We must proceed using the over- dinated in 1988 by cancer physician Dr. Karl- all physical conditions for sustainability as the Henrik Robèrt.33 The Natural Step model was basis for any approach, as "nature must survive the result of twenty-one drafts that Robèrt sent

24. See Robert W. Collin & Robin Morris Collin, The Role of 33. See Letter from Karl-Henrik Robèrt, Co-Chair of The Communities in Environmental Decisions: Communities Speaking For Natural Step Foundation, to author 2 (May 18, 1998) (on file with Themselves, 13 J. ENVTL. L. & LITIG. 37, 39 (1998). Rather, the media- author); see also Dorie Kranz & Susan Burns, Combining The Natural by-media approaches lead to a disjunctive fragmentation of Step and ISO 14001, PERSPS. ON BUS. & GLOBAL CHANGE, Dec. 1997, nature and its systems. See JOHNSON, supra note 4, at 13. at 8. Furthermore, this scattered approach to environmental protec- In the course of his review of literature pertaining to health- tion has important policy implications, most significantly pro- related effects of environmental contamination, Dr. Robèrt hibiting the government regulators from prioritizing the nation's became aware that effective action on environmental problems environmental problems in a broad, strategic fashion. See was being held back by endless disagreement over details. This Elizabeth Glass Geltman & Andrew E. Skroback, Reinventing the insight convinced him that what was needed was a way to EPA to Conform with the New Environmentality, 23 COLUM. J. ENVTL. L. address environmental issues as an entire system rather than as 1, 7 (1998). a series of disparate symptoms. 25. See HAWKEN, supra note 9, at 12. See id. While the model was developed in 1988, the organi- 26. Id. zation that bears the same name, The Natural Step, was founded 27. See Robert E. Hudec, Differences in National Environmental in 1989. See id. The Natural Step model should not be confused with The Natural Step as an organization. See NATTRASS & Standards: The Level-Playing-Field Dimension, 5 MINN. J. GLOBAL TRADE 1, 14 (1996). ALTOMORE, supra note 3, at 162. "The Natural Step organization is an international network of non-profit organizations, generally 28. Robèrt, supra note 3, at 80. constituted for the purpose of sustainability education, dialogue, 29. Id. at 81. and continued learning." Id. This article addresses The Natural Step model. Although initially devised in 1988, the model has 30. Id. been "further developed in a growing network of scientists all 31. See discussion infra Part IV. over the world." Letter from Karl-Henrik Robèrt, supra. 32. Hawken, supra note 4, at 42.

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Fall 2000 The Natural Step NORTHWEST to all of the scientists, inviting feedback until sites to a sustainable society. The first system they agreed upon a final consensus document condition requires that "the functions and biodiver- on ecological principles.34 sity of the ecosphere must not be systematically39 undermined by increasing concentrations of substances A. The Natural Step and Its Potential extracted from the lithosphere"40—meaning that "fos- Influence sil fuels, metals, and other minerals must not "The power and originality of [The Natural be extracted and dispersed at a faster pace Step] is that it distills complex scientific prin- than their slow redeposit and reintegration ciples into [four easily understandable con- into the earth's crust."41 The second system cepts]."35 This quality allows any person, condition requires that "the functions and biodiver- whether a company president or chemical sity of the ecosphere are not systematically undermined engineer, to work with others in his or her own by . . . increasing concentrations of substances produced way, toward a common goal.36 Because every- in the technosphere"42—meaning that substances one can comprehend the same basic concepts (molecules and nuclides) "must not be pro- set forth in The Natural Step model, individu- duced and dispersed" by human society "at a als, organizations, communities and govern- faster pace than they can be broken down and ments gain the ability to think strategically integrated into the cycles of nature or be together about the best approaches that can deposited into the earth's crust."43 The third be taken to invest in a sustainable future. The system condition requires that "the functions and Natural Step model also provides "a framework biodiversity of the ecosphere are not systematically for thinking that helps clarify and identify the undermined by . . . physical impoverishment from right questions with respect to sustainability manipulation or overharvesting"44—meaning that and a way to map out the steps for formulating the ecosystem must not be harvested, mis- and testing solutions."37 Consequently, The managed, or displaced in such a way that its Natural Step framework, together with a strate- productive capacity and diversity systematical- gic program, provides a concrete model, a ly deteriorate.45 The fourth system condition compass, that can guide society toward sus- requires that the "use of resources is fair and efficient tainability.38 enough to meet vital human needs everywhere"46— meaning basic human needs must be met with 1. The Four System Conditions the most resource-efficient methods possible The Natural Step incorporates four basic and meeting these needs must take prece- system conditions, all of which are prerequi- dence over luxury consumption.47 Furthermore,

34. See THE OREGON NATURAL STEP NETWORK, THE NATURAL INDUS. ECOLOGY). STEP TO SUSTAINABILITY 1 (1998) (WINGSPREAD JOURNAL, Spring 1997, 40. Id. at 3 (footnote omitted). reprint) (on file with author). 41. Robèrt, supra note 3, at 85; see also Holmberg & Robèrt, 35. Kranz & Burns, supra note 33, at 16. Furthermore, supra note 39, at 3-4. because the core concepts of The Natural Step are scientifically based and derived through consensus among scientists, they 42. Holmberg & Robèrt, supra note 39, at 3 (footnote omitted). "offer common ground where people of disparate beliefs and val- 43. Robèrt, supra note 3, at 86; see also Holmberg & Robèrt, ues can discuss environmental and economic concerns without supra note 39, at 4. drowning in disputes." Id. at 17. 44. Holmberg & Robèrt, supra note 39, at 3 (footnote omit- 36. Id. at 16. ted). Impoverishment refers to negatively affecting "the thickness 37. NATTRASS & ALTOMORE, supra note 3, at 164. of the productive soils, nutrient contents, ground water, genetic variation, etc." Id. at 13 n.3. 38. See Robèrt, supra note 3, at 88. 45. Robèrt, supra note 3, at 86; see also Holmberg & Robèrt, 39. In this context, "systematically" means either "(i) the supra note 39, at 4. deviation from the natural state must not systematically increase…due to the influence from society," or "(ii) the society 46. Holmberg & Robèrt, supra note 39, at 3 (footnote omit- must not be organized in such a way that it makes itself system- ted). The term "fair" is an efficiency parameter that evaluates atically dependent on activities that cause such (i) effects." John resource use both geographically and over time. Id. at 13 n.4. Holmberg & Karl-Henrik Robèrt, The System Conditions for 47. See Robèrt, supra note 3, at 86; see also Holmberg & Sustainability: A Tool for Strategic Planning 13 n.2 (1998 draft) Robèrt, supra note 39, at 4. (unpublished manuscript, on file with author) (submitted to J.

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a "just resource distribution is necessary to which to bring about fundamental transforma- ensure the social stability and cooperation tion in commerce and throughout society. In needed for making the changes in due time."48 particular, it gives lawyers a methodology with which to assist their clients to decrease their 2. The Natural Step Demonstrates its liabilities by going beyond compliance, to Value as a Successful Model for increase their efficiencies and to improve their Sustainability bottom line.54 The clients further gain a com- The Natural Step satisfies all of the petitive advantage, eliminate the potential for requirements for a successful model of sus- incurring the exorbitant legal costs typically tainability. First, The Natural Step model is involved with environmental-related litigation based on scientifically accepted principles. The and better ensure the business's security in model proceeds from well-established laws of surviving the uncertainties of the twenty-first nature (the laws of physics, thermodynamics, century. and evolutionary biology) and from the fact The Natural Step model also "can be used that humanity must exist within a limited envi- as an integrating framework to seamlessly tie ronment.49 together many different components of a sys- Second, the model contains a scientifically tem into one coherent whole, such as different supportable definition of sustainability. The and disparate environmental programs within Natural Step model follows the general rule an organization."55 Moreover, the model is uni- that substantial divergences from the natural versally applicable in having all components of state (i.e., when compared to natural fluctua- society to meet the four system conditions.56 tions) must be avoided.50 Furthermore, by Thus, individuals will be able to see how their focusing on the underlying mechanisms rather actions aggregately affect both the micro and than the effects in nature, the model avoids the macro levels and can understand their role in requirement of knowing all the complex poten- the overall movement toward sustainability.57 tial effects downstream.51 Rather, the model Fourth, the micro-economic perspective encourages people to think "upstream" in the within The Natural Step model does not cause and effect chains to the first-order prin- require individuals to act against their self- ciples of any system, which enables people to interest. Compliance with the model's frame- better understand and more easily address work is and will continue to be in the long-term problems.52 self-interest (economic and other) of individu- Third, The Natural Step model is applica- als and institutions.58 ble at different levels and views the economy Fifth, The Natural Step model is "pedagog- as a subsystem of the ecosystem at each level. ical and simple to disseminate [whereby] it can By proceeding from a whole systems perspec- support a public consensus necessary to be tive (the ecosphere), the model provides an put into practice democratically."59 The model's absolute frame of reference rather than a sum purpose "is to stimulate informed democratic of varying details.53 This component of The decisions in politics and industry through the Natural Step demonstrates its extraordinary creation of public understanding of scientific value. The incorporation of a systems-based matters in the simplest possible way, but with- approach provides a government, a business or out ending up in reductionism."60 The model a lawyer with the framework and skill-set in describes an overall framework "for the relation

48. See Kranz & Burns, supra note 33, at 15-16. 55. NATTRASS & ALTOMORE, supra note 3, at 163. 49. See Robèrt, supra note 3, at 88. 56. See Robèrt, supra note 3, at 88. 50. See id. 57. See id. at 80. 51. See id. 58. See id. at 89.

52. See NATTRASS & ALTOMORE, supra note 3, at 163. 59. Id. at 81. 53. Robèrt, supra note 3, at 88. 60. Id. at 89. Thus, the overall picture will be kept in mind 54. See discussion infra Part III.D. when applying the model to specific individual levels.

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Fall 2000 The Natural Step NORTHWEST of the subsystem (economy) to the total sys- heart of the problem, and sets forth an effec- tem (nature and society)."61 tive method in which to begin to move society Sixth, The Natural Step model is not adver- forward to a new, sustainable existence. sarial nor does it engender unnecessary resistance. The Natural Step's "applicability at vari- B. Additional Considerations Not ous geographic scales, reliance on self interest, Addressed by The Natural Step Model and accessible pedagogy, all combine to give The Natural Step model was not intended the model a bridge-building function."62 By to be an all-encompassing model covering the leaving the specific details of implementation whole area of sustainability.69 Its purpose was to individuals, the model "stimulates engage- to set forth an irrefutable set of scientifically- ment and respect rather than defence [sic] based principles to educate the public and to mechanisms."63 Furthermore, it engenders edu- help guide society toward sustainability.70 The cation and consensus-building among those Natural Step model's objective is to serve "as a involved in the process of applying the model shared mental model for the structuring of to a particular organization or legislation. thoughts within universities, business corpora- Seventh, The Natural Step model is capa- tions and municipalities."71 While The Natural ble of implementation without first requiring Step principles set forth a general model for large-scale societal changes. Consequently, creating a sustainable future, there are some corporations, political parties, and all seg- details that, by design, have been excluded. ments of the public are able to use the model They have been left out because they are, in a directly in today's economic reality.64 The sense, separate issues from a sustainability model immediately can be put into practice model. These issues include remedying histor- and can be implemented through small steps ical inequities and implementing the four sys- of behavioral change.65 tem conditions in the current political reality. Even though these issues may not have a place Finally, The Natural Step model "can be in a non-prescriptive model, such as The used as a starting point for developing 'new Natural Step, they must be faced when con- economies'" that "recognize a new and larger templating any comprehensive sustainability pattern of scarcity to which old and basic economic framework and are essential to establishing a principles must be applied."66 Accordingly, the sustainable future. Thus, they should be ana- prices that guide can be those that incorporate lyzed here in the context of using The Natural the full costs to society and which include the Step model as a means to effectuate broad- cost of maintaining environmental sustainabil- based change throughout a nation, such as the ity.67 Therefore, "once the market is constrained United States. by [The Natural Step's] four System Conditions," market prices would be those 1. The Issue of Historical Inequities "that internalize the previously external cost of "Inequitable distribution of industrial ben- non-sustainability."68 efits [i.e. natural resources, wealth, and oppor- The Natural Step model represents a suc- tunities] and burdens throughout national and cessful and comprehensive approach to global industrialized economies created the achieving sustainability. By embracing com- inequities in post-industrial societies."72 This mercial activity, The Natural Step goes to the distribution was unequal among race, gender,

61. Id. 67. See id. at 90; see also discussion infra Part IV.B.3. 62. Id. 68. Robèrt, supra note 3, at 90. 63. Id. at 90. 69. See id. at 79. 64. See id. at 81. 70. See id. 65. See id. at 90. 71. Holmberg & Robèrt, supra note 39, at 10. 66. Id. at 81. 72. Collin & Collin, supra note 1, at 452.

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and income classes.73 Consequently, any com- a sustainable society, at least in the United prehensive framework for sustainability should States, "basic human needs should be met seek to remedy this critical problem. In fact, with the most resource-efficient methods pos- this should be a primary goal because any sible."81 Rather, the approach must seek to gen- comprehensive sustainability approach "will erate further equality among the excessively require historically disenfranchised people to rich and those minority low-income popula- be personally committed to the program."74 tions that have been historically oppressed. A Because Sweden, the birthplace of The stronger emphasis on this issue is necessary in Natural Step, is a relatively homogenous soci- order to achieve true sustainability. For ety, Sweden most likely has not experienced instance, tax revenue, subsidies, and other substantial minority populations that have forms of government spending should be used faced significant injustices.75 "Moreover, the as economic means to address historical number of people living in poverty [in Sweden] inequities in the current system.82 The redistri- is relatively small, and the difference in income bution of wealth and other opportunities is an level between average income and low income obvious first step for the government to take. continues to be moderate."76 Therefore, One example of how social inequities can Sweden has not encountered the magnitude of be remedied is through green taxes,83 which problems concerning historical inequity that will result in a tax shift from the higher pro- other nations, such as the United States, duction costs that are passed on to the con- have.77 Thus, when using The Natural Step sumer. Imposing taxes on environmentally model as a broad-based scheme in a country unsound products (such as those which are such as the United States, there must be a con- energy intense or pollutant generating), will certed effort to address the historical cause their prices to rise. This price increase inequities issue, which is more problematic will have an extra burdensome impact on the and poses greater obstacles to achieving sus- poor, because the poor then will be unable to tainability than it does in other parts of the afford many of these necessary products and world. services. In this context, any green tax scheme The Natural Step model recognizes the would be to "change what is taxed, not who is importance of equity in its fourth system con- taxed. But no tax shift is uniform, and without dition, which requires a "[f]air and efficient use adjustments for lower incomes, a shift toward of resources with respect to meeting human taxing resources would likely be regressive."84 needs… everywhere today and in the future."78 Thus, government policies that seek to support Inherent in the model is the understanding The Natural Step four system conditions can that "such fairness [and efficiency] is essential be used so that they will benefit the lower class for social stability and the cooperation needed and those who have been unjustly impacted by for making the large-scale changes."79 This con- present economic and legal policy. It is time dition means that "if we are more efficient, that a new system comes into place that seeks technically, in organization and socially, more to remedy past inequities and to address the services with the possibility of meeting human environment and social inequities in the same needs can be provided for a given level of influ- step. We should use increases in tax revenues ence on nature."80 and shifts in subsidy policy to restore societal However, it seems that in order to achieve equality.

73. See id. 78. Robèrt, supra note 3, at 86. 74. Id. at 457. 79. Robèrt, supra note 2, at 9. 75. See Deborah Kenn, One Nation's Dream, Another's Reality: 80. Holmberg & Robèrt, supra note 39, at 4. Housing Justice in Sweden, 22 BROOK. J. INT’L L. 63, 79 (1996); Jay Rand, 81. Robèrt, supra note 3, at 86. Note, Employment Protection for the Substance Abuser: A Comparison of the Swedish and American Approaches, 9 COMP. LAB. L.J. 450, 472 (1988). 82. See discussion infra Part IV.B. 76. Kenn, supra note 75, at 102. 83. See discussion infra Part IV.B.3. 77. See id. at 79; Rand, supra note 75, at page 472. 84. See Hawken, supra note 4, at 53.

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Moreover, minorities, women, and lower "stimulates engagement and respect rather income populations also should benefit from than defence [sic] mechanisms."90 an economic marketplace comprised of com- The Natural Step model was intended to mercial enterprises that are more accountable supplement strategic government programs to their communities. Businesses in a sustain- which use the model as guidance, in creating able economy will generate greater employ- necessary incentives to foster and promote the ment opportunities and a sense of value to model's principles throughout society.91 The "people whose jobs [in the current system] Natural Step does not attempt to describe this have been downsized, re-engineered, or necessary strategic program, but rather has restructured out of existence [and who] are established a useful framework that leaves it being told that we have created an economic up to individual government leaders to devise system so ingenious that it doesn't need the conditions into their own guidelines and them… ."85 Furthermore, stakeholder decision- policies.92 In fact, The Natural Step is effective making approaches involve empowering and because it is not a prescriptive program. Due to educating the public by giving all of its mem- the complexity of the issues involved, it would bers knowledge and understanding of critical be impossible to create a strict program that societal issues.86 These strategies, combined would apply to all situations. Through educa- with a more localized and community involved tion, The Natural Step provides the public with government, will allow those who previously a critical basic understanding and leaves it up have been economically and politically disen- to individuals and government leaders to fig- franchised to achieve a genuine stake in the ure out how to achieve the changes that are process.87 needed. Again, here is an area where lawyers can and must have a role. Lawyers should 2. The Issue of Implementation actively seek to work within the political One of the virtues of The Natural Step is process to change the laws so as to influence that it does not coerce individuals to change societal behaviors in ways that will better com- their behavior in particular ways according to a ply with The Natural Step's system condi- prescriptive detailed program.88 The model was tions.93 Any approach must involve "environ- designed to be applicable "on a general level mentally concerned customers, stricter legisla- [so that] different actors within business, tion, and higher costs and fees for resources as organisations [sic] and municipalities…can well as pollution" which lawyers can promote draw conclusions about what these restrictions and establish.94 imply for their specific activities."89 The Natural Because The Natural Step, by design, is Step seeks to educate the public so that indi- only a theoretical model, it does not address viduals will determine on their own how they today's problematic political reality that large will comply with the model. By leaving this corporations have taken over our political sys- determination to individuals, the Natural Step tem.95 Given this predicament, it will be

85. Id. at 49. 89. Holmberg & Robèrt, supra note 39, at 11. 86. See discussion infra Part IV.B. 90. Robèrt, supra note 3, at 89-90. Much has been written 87. See Collin & Collin, supra note 1, at 456; see also discus- to demonstrate ways in which businesses, organizations, and sion infra Part IV.B.2. individuals can use The Natural Step system conditions through "backcasting" and a "focus on low hanging fruit." See Holmberg & 88. See Robèrt, supra note 3, at 89-90. "Rather than cam- Robèrt, supra note 39, at 7-9. paigning, which pressures people to change, The Natural Step presents undisputed information in nonthreatening ways, and 91. See Robèrt, supra note 3, at 88. invites listeners to open a dialogue in order to explore the issue 92. See Holmberg & Robèrt, supra note 39, at 7. of sustainability. In this way the responsibility for action remains 93. See discussion infra Part III.A. with those in a position to act." Robèrt, supra note 2, at 1. Nonetheless, The Natural Step organization has been criticized 94. Robèrt, supra note 3, at 87; see discussion infra Part IV. as not assisting companies enough in "implementation strate- 95. See HAWKEN, supra note 9, at 167; see also JANE JACOBS, gies, tactics or tools…after the companies [have] received [a] SYSTEMS OF SURVIVAL: A DIALOGUE ON THE MORAL FOUNDATION OF general education in the framework." NATTRASS & ALTOMARE, supra COMMERCE AND POLITICS 21 (1992). note 3, at 164.

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extremely difficult to bring about stricter legis- C. The Natural Step Benefit to an lation to promote the four system conditions. Environmental Management Systems Furthermore, even if stricter legislation can be Approach implemented, the political reality will still An Environmental Management System remain- that corporations would still have ("EMS") assists an organization in understand- tremendous influence on the political system. ing its environmental effects. EMSs seek to Thus, additional measures must be taken to evaluate and typically improve the environ- keep the commercial and government, or mental impacts of an organization's activities guardian, entities isolated from guidance of (i.e. the environmental performance of the roles within the other system.96 Because "all organization).100 An EMS is based on the notion thousand mile journeys commence with one that having better systems in place will lead to step the model should be implemented within improved environmental performance and will today's economic reality by taking relatively generate less pollution.101 Although current small steps in the right direction."97 EMS regulation is legally voluntary in nature, Nonetheless, due to current regulatory and EMSs are increasingly being implemented by compliance issues, it is becoming apparent businesses nationwide and worldwide. As that business and other organizational entities demonstrated in the following section, The will be forced to substantially improve their Natural Step can assist a company's EMS in pollution prevention methods to better comply expanding from merely focusing on compli- with The Natural Step system condition frame- ance and incremental environmental improve- work. Ultimately, the parties responsible for ments, to simultaneously enhancing the com- our environmental degradation will have to pany's environmental and economic perform- reevaluate what they take, what they make, and ance while strategically bringing about a com- what they waste so as to limit their ecological parative advantage. Thus, organizations that harm.98 At the same time, businesses and other are implementing an EMS should strongly con- entities presently are increasing their profits sider aligning the EMS with The Natural Step and becoming more economically competitive strategy. as a direct result of changing their operations The International Standards Organization's to ones that function more in line with the ("ISO") 14001 environmental standard series is rules of nature.99 The case studies discussed in expected to become the most widely accepted Part III.D demonstrate that The Natural Step global environmental management standard strategies have improved companies' bottom and is also expected to become a condition of lines. Thus, the marketplace itself rewards and doing business with numerous companies and will continue to reward those organizations corporations worldwide.102 Therefore, the fol- that operate more sustainably. lowing analysis will demonstrate the benefits of applying The Natural Step to the ISO 14001

96. See JACOBS, supra note 95, at 81; see also discussion infra 102. Rechtschaffen, supra note 100, at 1258; see also Marc E. Part IV.A. Gold, ISO 14000: A New Global Business Benchmark, 12 ENVTL. 97. Robèrt, supra note 3, at 90. COMPLIANCE & LITIG. STRATEGY 1 (1995).

98. See HAWKEN, supra note 9, at 12 (discussing what businesses will need to face).

99. See generally NATTRASS & ALTOMARE, supra note 3. 100. See Clifford Rechtschaffen, Deterrence v. Cooperation and the Evolving Theory of Environmental Enforcement, 71 S. CAL. L. REV. 1181, 1257-58 (1998).

101. See id. at 1258; see also MERIT PARTNERSHIP FOR POLLUTION PREVENTION, U.S. EPA REGION IX ENVIRONMENTAL MANAGEMENT SYSTEMS AND FINANCIAL INCENTIVES—A MERIT PARTNERSHIP FOR POLLUTION PREVENTION PROJECT: DISCUSSIONS WITH INDUSTRY ABOUT ENVIRONMENTAL MANAGEMENT (1998).

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Fall 2000 The Natural Step NORTHWEST program. Nevertheless, The Natural Step pro- review.108 Under this analysis, the organization vides value to any EMS, regardless of whether ideally would improve its environmental per- it is an ISO 14001.103 formance with each cycle. Unfortunately, how- The management standard of ISO 14001 ever, ISO 14001 fails to ensure that an organi- consists of several key components.104 The first zation will realize any specific compliance ben- component is planning—top management efits because the standard does not prescribe must institute an environmental policy for the fixed performance standards or require emis- organization, identify "environmental aspects" sions and discharge reductions. In other of the organization's activities, products and words, "ISO 14001 can be viewed primarily as a services, and the applicable legal require- framework and tool for implementing perform- ments, and establish environmental objectives ance requirements set elsewhere" (e.g. the and targets through a detailed program.105 The objective of the ISO 14001 standard is to second component is implementation—organ- achieve goals, not to set them).109 The organi- izations must institute internal processes to zation can choose what aspects it wants to implement their policies and objectives, improve and at what degree of improvement is including designation of environmental man- desired, without having to formulate any con- agers, training programs, and communication crete solutions to its environmental problems. systems and operating procedures.106 The final Although ISO 14001 provides a system for component is monitoring and review- organi- managing information, processing feedback, zations must regularly monitor their environ- and assisting a company to design, implement, mental progress and must regularly conduct and improve programs aimed at environmental management system audits to verify compli- improvements, it fails to provide a vision of the ance with ISO 14001.107 direction that companies need to go to devel- The management system outlined in ISO op into more sustainable organizations. The 14001 is cyclic. The cycle begins by setting an Natural Step provides organizations with environmental policy, planning how it will be much-needed guidance because it focuses on carried out, implementing those plans, moni- content, rather than process. toring and ensuring compliance, reviewing the The Natural Step will ensure that an organ- program's efficacy, and beginning a new cycle ization implementing ISO 14001 will incorpo- with a revised policy and program based on the rate "a framework for decision-making that

103. See Allowing Voluntary Participation by Companies in cant environmental issues of relevance [and] information about the Industrial Sector in a Community Eco-Management and emissions, waste generation, consumption of resources, and Audit Scheme, Council Regulation 1836/93, art. 1(2) (1993) [here- other factors regarding environmental performance." Id. at art. inafter Council Regulation] (which promulgates The European 6.1-7. Union Eco Management and Audit Scheme (EMAS)). EMAS was 104. See International Standards Organization 14001, the first government regulation that explicitly encouraged the Environmental Management Systems-General Guidelines on adoption and practice of environmental management and audit- Principles, Systems and Supporting Techniques, 4.0-4.1 (1996) ing in a comprehensive and detailed manner. See Eric W. Orts, [hereinafter ISO 14001]; see also TOM TIBOR, ISO 14000: A GUIDE TO Reflexive Environmental Law, 89 NW. U. L. REV. 1227, 1287-88 (1995). THE NEW ENVIRONMENTAL MANAGEMENT STANDARDS (1996) (setting The current versions of the EMAS and ISO 14001 contain some forth a detailed description of the standards). minor but distinct differences. See Rechtschaffen, supra note 100, at 1259-60. Essentially, the EMAS proposes to achieve its objec- 105. See Rechtschaffen, supra note 100, at 1259. In this tive through environmental management policies and programs, stage, organizations should carry out an initial environmental environmental auditing systems and public environmental dis- review ("EIR") which should consist of (1) an examination of the closure statements. See Council Regulation, supra, at art. 1(2). For organization's existing environmental management practices; (2) each participating site, organizations must develop an environ- an assessment of feedback from the investigation of previous mental program that describes its EMAS and its environmental accidents; (3) an analysis of the legal and regulatory require- protection objectives. See id. at Annex I, C. Organizations must ments applicable to the organization; and (4) an identification of implement their policies and programs through a variety of inter- the organization's significant environmental "aspects." nal systems, including maintaining a registry of significant envi- Christopher Sheldon & Ed Rowland, ONE STEP BEYOND: Making ISO ronmental effects at each site. See id. at Annex I, A-C. Each site 14001 and TNS Work Together 7 (1998 draft) (on file with author). must institute an environmental audit at least every three years 106. See Rechtschaffen, supra note 100, at 1259. that reviews both the facility's management system and its compliance issues. See id. at Annex II, C. Furthermore, each facility 107. See id. at 1260. must prepare and produce to the public summaries of the inter- 108. See Kranz & Burns, supra note 33, at 9. nal audits which must include an assessment of "all the signifi- 109. Sheldon & Rowland, supra note 105, at 4.

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supports a big enough strategic vision to make and/or engage in those other activities to meet the investment pay off."110 "Any company seek- the system conditions.116 This stage will define ing ISO 14001 certification will need some type the frame and sustainable vision for the organ- of framework to analyze its environmental ization and should have significant influence impacts and prioritize options for continual on the policies and programs implemented by improvement… The Natural Step (TNS), the organization.117 Third, the organization because it focuses on content (not process) develops programs that will assist it in achiev- and is based on a systems perspective, and ing its defined future vision.118 This will enable focuses on root causes of environmental prob- the organization to use the goal as the starting lems, fits particularly well with ISO 14001."111 point for development of the program and The long-term vision provided by The Natural "look[] back from there and work[] out how to Step will serve as the anchor for the ISO 14001 chart a path toward that future. This approach program and will enable the program to reflect [is] known as systems planning through 'back- the principles of sustainability embraced with- casting.'"119 Here, the organization should in The Natural Step model. Moreover, it pro- embark upon a "a broad strategic and expan- vides value to those implementing an ISO sive consideration of the types of measures 140001 program in all phases of the cycle- and initiatives that can be taken at each identifying those environmental aspects in stage.120 Finally, top management must support which to improve, setting targets and objec- the policies and programs, establishing that tives, training all employees within the organi- their application is carried through. zation about the policy and program, and per- forming the periodic management review and D. Practical Application Results in the analysis.112 Commercial Setting The specific area where The Natural Step The Natural Step model already has will be most influential in its impact on an ISO demonstrated its own applicability. The model 14001 program is in its benchmarking capacity. is "spreading among corporations and munici- Here, The Natural Step's system conditions are palities in and outside of Sweden that learn to utilized to help an organization evaluate its apply it in an autonomous way."121 Many com- current situation, gain a vision of where it panies that have adopted The Natural Step's needs to go and develop a program for achiev- model have achieved increased environmental ing its goals.113 First, "an examination is carried compliance and eco and energy efficiencies, out [regarding the] organisation's [sic] envi- reduced costs and liabilities, improved life- ronmental aspects and impacts" to identify cycle performance and gained a competitive "how the organisation's [sic] goods and servic- advantage.122 These companies demonstrate es and other activities violate the system con- that it is in their long-term best interest for ditions."114 The Natural Step system conditions businesses to adopt The Natural Step princi- can be used to classify those findings in terms ples, ensuring that the business continues well of discerning which areas are the most ecolog- into the twenty-first century. The four compa- ically harmful.115 Second, the organization ana- nies discussed in detail below- IKEA, Scandic lyzes the ways in which it could perform those Hotels, Interface and Collins Pine Company- operations, manufacture those products all have reported significant cost savings from

110. Kranz & Burns, supra note 33, at 12. themselves the fundamental question, i.e. 'what essential servic- 111. Id. at 13. es is the organisation [sic] providing and how could it provide those services while meeting the system conditions?'" Id. 112. See NATTRASS & ALTOMARE, supra note 3, at 177-84. 118. See id. 113. See Sheldon & Rowland, supra note 105, at 3. 119. Id. at 8. 114. Id. 120. Id. 115. See id. at 8. 121. Robèrt, supra note 3, at 90-91. 116. See id. at 3. 122. See generally NATTRASS & ALTOMARE, supra note 3. 117. Here "organisations [sic] are encouraged to ask

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Fall 2000 The Natural Step NORTHWEST their sustainability initiatives, that directly formance in every component of its activities, result in benefit to the companies' bottom including material use, product design, future lines.123 disassembly and recycling of its products, and IKEA, the Scandinavian-designed house- its transportation and distribution systems. "In hold products retailer, began applying The the U.S., IKEA is working with the United Natural Step to the company's practices in States Environmental Protection Agency on 1990.124 The company embraced The Natural their Green Lights Program which encourages Step based on input from their customers in the use of energy-efficient lighting."132 As a the mid-to-late 1980s over concerns about the result, IKEA U.S. has "reduced its kilowatt environmental and health effects of their prod- demand by 781 kw and kilowatt hour usage by ucts and as a result of stricter environmental more than three million."133 In particular, IKEA regulations pertaining to the maximum level of has learned that retrofitting its stores with flo- emissions allowed from formaldehyde off- rescent lighting can generate up to $86,000 in gassing in their products. During this time, annual savings per store.134 The expected sav- IKEA was also being criticized for its packaging ings to IKEA from various components of that waste, its use of PVC plastic (which contain program exceed $500,000 annually.135 The com- dioxins), its catalog regarding the amount of pany has made a remarkable transformation trees felled each year, the use of chlorine, and over the last decade, becoming a model for the the amount of waste generated in its produc- sustainability movement. By achieving annual tion.126 IKEA was eventually sued by the Danish worldwide sales in excess of $7 billion, which is government in the mid-1980s for violating the more than double its revenues from 1990, IKEA country's formaldehyde emissions regulation has demonstrated that improving a company's and for destroying the company's public environmental performance can better its bot- image, resulting in a 20% drop in sales in the tom line.136 Danish market.127 Furthermore, in 1992, the Scandic Hotels began using The Natural company was forced to recall all of its book- Step in 1993 when Scandic's CEO "decided that shelves containing formaldehyde which "cost concern for the environment needed to be a IKEA and its suppliers tens of millions of dol- core unifying value for the company."137 At the lars."128 time, the hotel chain was on the verge of bank- Consequently, IKEA began to take environ- ruptcy and had generated up to $50 million in mental issues very seriously.129 Based on The losses from the previous three years of opera- Natural Step principles, the company devel- tion.138 Scandic has been very successful at oped an "Eco-Plus" line of products and has integrating environmental considerations into revolutionized its organization to integrate all aspects of its day-to-day operations.139 The sustainability principles into daily decisions company developed an environmental barom- and practices in a comprehensive and broad- eter and index to track its environmental based manner.130 The Natural Step has helped progress.140 Scandic also created a program the company to improve its environmental per- focusing on resource efficiency, sustainability

123. See id. 133. Id. 124. See id. at 44; see also id. at 47-74 (providing for a 134. See Heidi Owens, IKEA: A Natural Step Case Study detailed analysis of IKEA's environmental policies and its adop- (Feb. 1998) (unpublished manuscript, on file with the Northwest tion of The Natural Step). Earth Institute). 125. See id. at 50. 135. See id.

126. See id. at 51. 136. See NATTRASS & ALTOMARE, supra note 3, at 47-49. 127. See id. 137. Id. at 81; see also id. at 75-100 (providing for a detailed 128. Id. at 52. analysis of Scandic Hotel’s environmental policies and its adoption of The Natural Step). 129. See id. 138. See id. at 76. 130. Id. at 59-74. 139. See id. at 89. 131. See id. at 65-66, 68-69. 140. See id. 132. Id. at 70.

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and dematerialization that measures "the total in industrial ecology and to be a model for sus- energy and water consumption, and unsorted tainable, or even restorative, enterprises waste, at each hotel on a monthly basis."141 worldwide.152 Climate and other factors, such as the number of guests per night, also are keyed into the pro- We see the cyclical nature of ecosys- gram in order to make true comparisons of the tems as providing a clear design for percentage savings of energy and water and our future. Interface will use these waste.142 By increasing efficiency in these areas, principles as a guide to reduce its Scandic believes it will have a competitive impact and footprint on the planet. At advantage in the future, especially in those the same time, we will actively and countries where the prices of resources are ris- creatively design new means of manu- ing faster than inflation.143 The company esti- facturing that will eliminate the waste mates that savings from this program "go we now create. Thus it is a long-term straight to the bottom line as increased prof- commitment, one that cannot succeed its."144 In 1997, the most recent year of record, overnight . . . . We have much to do, the program generated roughly $800,000 in but much to work with.153 savings.145 "To date, Scandic has documented over Interface believes that to be financially 2,000 individual measures" resulting in envi- sustainable, the company must first become ronmental performance improvements.146 The environmentally sustainable.154 In order to most intriguing, perhaps, is "the innovation of reach this goal, Interface implemented a pro- a 97 percent recyclable" (or biodegradable) gram called EcoSense, which measures its hotel room.147 Scandic realized that, in the environmental performance and its progress long-term, these rooms were less expensive to toward sustainability.155 Interface tracks and operate than their non-ecologically friendly analyzes all of the materials and energy used counterparts.148 Energized by its sustainability by the company.156 It also developed a zero- transformation, Scandic is enjoying record waste ideology waged through a program profits, reaching more than $25 million for called Quality Utilizing Employee Suggestions 1997 "and has become one of Europe's most and Teamwork ("QUEST") which aims to "elim- successful hotel chains."149 inate the concept of waste from Interface oper- Interface, Inc., "the world's largest produc- ations."157 Specific targeted priority is also er of contract commercial carpet", began using given to the use of benign emissions, renew- The Natural Step in 1996.150 Interface was the able energy, resource-efficient transportation, first American company to adopt The Natural the delivery of services instead of materials, Step framework.151 Interface seeks to be the first and the redesign of processes and products

141. Id. at 90. detailed analysis of Interface, Inc.'s environmental policies and 142. See id. its adoption of The Natural Step); RAY C. ANDERSON, MID-COURSE CORRECTION—TOWARD A SUSTAINABLE ENTERPRISE: THE INTERFACE 143. See id. at 90-91. MODEL (1998) (describing the transformation of Interface, Inc. by 144. Id. at 91. the founder, Chairman and CEO of the corporation). Additional information can be found in Interface's own sustainability report 145. See id. at 92. which it is a detailed analysis of the company's 1996 performance 146. Id. at 76. data and their long-term goals and solutions. See generally 147. Id. at 96. "Approximately 2,000 rooms are being refur- Interface Sustainability Report (1997) (on file with author). bished each year [into 97 percent recyclable rooms] with an esti- 151. See NATTRASS &ALTOMARE, supra note 3, at 112. mated decrease per year of 90 tons of plastic, 15 tons of metals, 152. See id. at 111. and 50 percent of mercury." Id. at 97. To date, approximately one- quarter of Scandic's rooms in the Nordic region are these new 153. Interface Sustainability Report, supra note 150, at 11. eco-rooms. See id. 154. See NATTRASS &ALTOMARE, supra note 3, at 101. 148. See id. 155. See id. at 111-22. 149. Id. at 76-77. 156. See id. at 115. 150. Id. at 44, 103; see also id. at 101-24 (providing for a 157. Id. at 116.

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Fall 2000 The Natural Step NORTHWEST into cyclical flows.158 Collins [Pine] to examine every aspect of its In fact, the company has integrated a sus- business through the lens of 'strategic sustain- tainability vision into every aspect of its opera- ability.'"167 The Natural Step framework has tions.159 Meanwhile, The Natural Step provides enabled the company to develop the following Interface with a much-needed compass to indi- initiatives: (1) curtail point source emissions; cate whether the company is on course to its (2) attain zero waste water at all sources; (3) final destination. In the first four years follow- eliminate waste to landfills; (4) maximize use ing implementation of sustainability initia- of renewable energy; (5) educate and inspire all tives, Interface saved approximately $76 mil- employees; and (6) provide support to the lion by eliminating resource waste.160 In addi- community.168 tion, its innovative carpet designs, prompted by sustainable criteria,161 show real promise of With a vigorous commitment from the significantly reducing the required quantity of company's top management, Collins input per unit of output.162 The company is educated every employee about sus- thriving financially: since 1993, Interface's tainability, utilizing a simultaneous sales have nearly doubled, growing to $1.135 top-down/bottom-up approach. Managers billion in 1997.163 now review all expenditures to ensure Collins Pine Company, like Interface, began that new capital investments are con- using The Natural Step in 1996. In the logging sistent with the four system conditions industry, Collins Pine has proven itself as an . . . . Beyond this, they are reviewing ecological steward due to the manner in which long-range strategic decisions to the health of the forest land owned and man- ensure their alignment with a sustain- aged by the company is maintained. For exam- ability perspective. Twenty-one proj- ple, the company's Almanor forest land, com- ects currently comprise the company's prising 94,000 acres (nearly one-third of its "Journey to Sustainability" initiative.169 total forest holdings), has been logged contin- uously since 1943; however, "this forest has a While the initiatives are still in their early higher inventory of wood standing and growing stages, Collins Pine already has realized some than when logging began" over five decades tangible benefits from The Natural Step influ- ago."164 Under Collins Pine's philosophy the ence. By recycling sander dust from their parti- company “reaps the interest on the growth of cle board production process, the company their forest while protecting the principal."165 generated from $500,000 to $750,000 savings The company has "understood that the trio of a because they did not have to upgrade the boil- healthy forest ecosystem, jobs in the commu- er used to burn such materials.170 The company nity, and profits for the company [are] inter- also eliminated the need to spend an estimat- twined and [form] an unbreakable web. ed $520,000 a year on other raw material costs Destroy or overharvest the ecosystem and you because the company found ways in which to destroy the chance of sustainable jobs and use the recycled sander dust.171 "Savings for sustainable profits."166 reduced powerhouse steam is estimated to be The Natural Step "perspective has helped $152,000/year ,and the replacement of six

158. See id. 165. Id. 159. See id. at 115. 166. Id. at 125. 160. See id. at 120. 167. Russell S. Barton, For Collins Pine: The Journey to 161. See id. at 44; see also id. at 125-145 (providing for a Sustainability Follows The Natural Step, UNDERSTORY: SUSTAINABLE detailed analysis of the Collins Pine Company's environmental DEVELOPMENTS FROM THE WORLD OF WOOD, Spring 1998, at 5. policies and its adoption of The Natural Step). 168. See NATTRASS &ALTOMARE, supra note 3, at 136. 162. See id. at 192. 169. Barton, supra note 167, at 5.

163. See id. at 103. 170. See NATTRASS &ALTOMARE, supra note 3, at 142. 164. Id. at 126. 171. See id.

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Pallmann generators provided savings of program already know what direction approximately $118,000/year."172 The company's they need to go in. [The Natural Step] renovated "waste traps are recovering more informs many things, but will become than 90 percent of what previously was going even more useful as a framework later into wastewater, at estimated cost savings of on when people start to think of the $25,000/ year due to reduction in natural gas, next step.177 electricity to pump water, and chemicals."173 Other examples of commercial enterprises Oki Semiconductor also has begun to that have begun to use The Natural Step frame- adopt The Natural Step.178 The Natural Step work in their business operations in the United principles have helped Oki Semiconductor to States include Placon, Inc., Mitsubishi Electric reduce the company's use of toxics by ninety- America, and Oki Semiconductor. Placon is eight percent and related toxic waste by seven- currently working on several initiatives to build ty-seven percent which results in $60,000 sustainability into their operations.174 These annual savings for the company.179 initiatives include Furthermore, the switch to The Natural Step practice has lowered the company's insurance developing a design database to aid in premiums by $5,000 annually because of the the assessment of materials for pack- company's improved environmental perform- aging that are more in line with the ance.180 four System Conditions, considering a The companies discussed above demon- new product line designed around the strate that The Natural Step has proven itself principles of sustainability, developing as a valuable planning model for concrete eco- a project to shift the sources and use of nomic practice. For businesses wanting to energy in our plant and building oper- make skillful investments, use of The Natural ations, and conducting company-wide Step framework will result in cost savings over education on The Natural Step.175 the long-term and also will reveal how a business can direct its activities to avoid exposing Mitsubishi Electric America is using The it to the uncertainties of future ecological, reg- Natural Step "principles as a framework to tie ulatory, and public pressures because when its environmental initiatives together, and it such issues develop, these complications is…incorporating [The Natural Step] model directly result in costing the organization time, into its ISO 14001 implementation process."176 money and/or good-standing among its customer community.181 All of these factors direct- At each step, the [Mitsubishi Electric ly affect a company's bottom line, whether it be America] plants implementing ISO from increased costs in handling the problem 14001 are looking at ISO through [The or decreased profits from its customers choos- Natural Step] lens, . . . Most of the ing to take their businesses elsewhere. The plants are still writing procedures and Natural Step can help to ensure that these developing systems. However, the environmentally-related problems never arise plants are already doing so much to and can provide a crucial strategy for gaining a reduce waste, toxics use, and energy competitive advantage. By empowering the use that the people building the ISO company with a greater understanding of envi-

172. Id. at 142-43. 177. Id. at 2 (quoting Susan Burns). 173. Id. at 141. 178. See Interview with Larray Chalfan, President and CEO 174. See Joan McNulty, The Whole Package: Placon, Inc., of Oki Semiconductor Manufacturing, in Eugene, Ore. (Nov. 15, 1998) (on file with author). THE NAT. STEP NEWSLETTER, Spring 1998, at 7. 175. Id. 179. See id. 176. Mitsubishi Electric America Combines ISO 14001 and 180. See id. The Natural Step, BUS. AND THE ENV’T (Cutter Information Corp., 181. See Kranz & Burns, supra note 33, at 8. Arlington, Mass.) 1998, at 1 (reprint from Vol. 9, No. 2).

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Fall 2000 The Natural Step NORTHWEST ronmental issues, The Natural Step can enthusiasm and morale and employee satis- improve the company's ability to "antici- faction, which results in lower staff turnovers.189 pate…changes in the market and in society."182 This in turn enables companies to attract and Furthermore, as society continues to use up retain the best available employees in the mar- the remaining available natural resources, the ketplace which would generate an overall high- "cost of moving toward sustainability" is er quality work product.190 It also enables com- increasing.183 In other words, the cost of not panies to form "long-term customer relations moving toward sustainability can only increase through increased consumer awareness of the over time.184 "Some companies will be put out environment."191 By holding similar visions or of business by these costs, and others will mental models of sustainability, the company spend a lot playing 'catch-up'-following as develops a closer relationship with its cus- quickly as they can in the tracks of industry tomers and its public image is enhanced. "How leaders or reacting to unexpected changes in a company is perceived [by the public] is vital public mood or legal requirements."185 Gaining to its success."192 this competitive advantage is critical. Thus, it The Natural Step model also provides "a is indisputable that it is in a company's best rational, science-based platform" upon which interest to ensure that it addresses these to base a strong positive vision for an organi- issues in ways that will benefit the company in zation.193 It "stimulates innovation and out-of- the long-term.186 If a company can eliminate the box thinking [by providing] a framework for these uncertainties in a cost-effective manner, design innovation."194 Examples from the four the company gains value and, in addition, companies discussed in detail above demon- becomes a part of the solution toward a sus- strate that numerous product innovations tainable, or even restorative, economy. develop as a direct result of a proactive sus- Not only has The Natural Step assisted tainability program based on The Natural Step businesses improve their bottom line, it has model. Furthermore, by attaining better envi- also proven valuable in other ways as well. By ronmental performance, a company improves applying "a systems approach to explaining the the prospect that it will survive as a successful linkages between the ecology and the econo- and profitable organization, gaining valuable my, The Natural Step is a remarkably effective security in its future. educational tool."187 The Natural Step distills the complexity of environmental issues, pro- V. Combining Legal Approaches With The vides a common language to the concepts and Natural Step perceptions, and helps to create awareness, understanding, and enthusiasm for sustain- Attaining a sustainable economic system ability initiatives. It provides a means to assist can only come about through a sweeping business employees to "understand their rela- reform of existing law that is complemented by tionship as a company and as individuals, to a number of additional approaches.195 This will the natural world."188 Moreover, embracing The entail establishing a more accountable govern- Natural Step principles has been shown to ment that can institute "a broad array of policy generate other beneficial effects on an organi- changes on issues of global trade, education, zation's workforce by increasing employee economic development, econometrics (includ-

182. See NATTRASS &ALTOMARE, supra note 3, at 85. 189. See id. at 195. 183. Id. at 198. 190. See id. 184. See id. 191. Id. at 85. 185. Id. 192. Id. at 197. 186. Moreover, implementing these changes at a later 193. Id. at 98. stage can result in higher costs. See id. at 135. 194. Id. at 74. 187. Kranz & Burns, supra note 33, at 8. 195. See e.g. Hawken, supra note 4, at 53. 188. NATTRASS &ALTOMARE, supra note 3, at 73.

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ing measures of growth and well-being), and raised when a concentration of environmental scientific research." It will also include signifi- hazards exists in urban areas affecting low- cantly changing the way in which government income minority communities at dispropor- operates and how it influences societal behavior.196 tionate rates when compared to those of the While there are many issues that need to rest of society.198 be addressed when developing a strategy to Maintaining a dominant small business bring about a sustainable economy, this article force is critical to a sustainable economy. Due focuses on the following: keeping the functions to their size, small businesses are closer to of government and commerce separate; incor- their customers and "are in a better position to porating localized governance and stakeholder organize and educate those customers to per- involvement; and establishing subsidies, taxes, ceive the difference between a product made and other economic incentives for sustainable sustainably and one that is not."199 While cur- commercial behavior. This article concentrates rently, the government institutes elaborate sys- on these three issues because of their impor- tems of subsidies to big business, government tance in fostering The Natural Step framework. must reverse this trend to allow the smaller, Depending upon the type of environmental entrepreneurial, and restorative businesses to improvements that take place from furthering gain the competitive advantage.200 Many of the these policies, such progress could result in decisions businesses make fail to recognize the meeting any or all of The Natural Step's four benefits of being smaller and more localized, system conditions. Furthermore, lawyers can which enable them to be in a better position to have a significant role in bringing about sub- adapt to changing ecological and regulatory stantial changes in these areas as well.197 constraints as well as the constantly evolving In a holistic view, the issues that also commercial marketplace.201 Furthermore, using should be examined in the sustainability con- behavioral psychology as an approach to text include environmental justice, devising a achieving The Natural Step principles can more localized business focus, and using prove to be an effective means to change social behavioral psychology to generate a greater values, habits, aspirations, and actions.202 understanding of sustainable principles. Multi-level behavioral psychology strategies Environmental justice involves the notion of can affect behavior at all levels of society (from fairness. Environmental justice issues are the personal and family level to the neighbor-

196. Id. are large corporations acting ethically and responsibly, the major 197. See discussion infra Part IV.A. threats we face, both environmentally and politically, stem from these large corporations as well. See id. 198. See Douglas A. McWilliams, Environmental Justice and Industrial Redevelopment: Economics and Equality in Urban Revitalization, 202. See Collin & Collin, supra note 1, at 412; Russell E. Glasgow et al., A Behavioral Systems Approach to Transportation: 21 ECOLOGY L.Q. 705, 758-61 (1994); see also Robert R. Kuehn, The Environmental Justice Implications of Quantitative Risk Assessment, 1996 Conceptual Framework and Intervention Implications for Reducing Vehicle Miles Traveled 4 (1997) (unpublished manu- U. ILL. L. REV. 103 (1996); Luke W. Cole, Environmental Justice script, on file with the Oregon Research Institute). Litigation: Another Stone in David's Sling, 21 FORDHAM URB. L.J. 523 (1994).

199. HAWKEN, supra note 9, at 138. 200. See id. Large corporations have created a multi-billion dollar industry of lobbyists, public relation firms, and other forms of influences that have domineered our legislative and judicial processes and have taken over our political system. See id. at 109, 123. 201. Nevertheless, an opposing argument states that large transnational corporations, rather than small businesses, have the most potential to disseminate good ethical standards because they have the capacity to spend time, effort, and money doing so. See Letter from Karl-Henrik Robèrt, supra note 3, at 1. "It is statistically demonstrated that it is big companies that are close to customers, that have spent relatively [more] [of the] resources on 'moral' issues like the environment." Id. While there

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Fall 2000 The Natural Step NORTHWEST hood/community and media/policy/culture lev- which imposes upon them the obligation to els).203 In addition to being multi-leveled, inter- take on a greater role in effectuating societal vention strategies also should be multi- change. Accordingly, lawyers should proactive- faceted204 and they should focus on both ly seek to implement changes through the antecedents/stimuli and consequences of political process, through their role as govern- behavior (in social, political, and economic ment regulators, and through their interaction contexts).205 with clients, whether they be individuals, corporations, municipalities, or other organiza- A. The Lawyer's Role tional entities. By serving as a classical "instrument of The nature of a lawyer's role in managing social cohesion and social discourse about his or her clients may be changing quite rapid- critical concerns and community resources… ly. We have reached a time when certain activi- [law has] developed a rhetorical capacity of ties are known with scientific certainty to cause influencing right action."206 The law can keep particular social and environmental harms. As government responsible and honest, generate we have seen with the tobacco industry, we are more localized governance by fostering broad now in an era where these destructive activi- citizenship participation and democratic con- ties, while continuing to be conducted with the sensus in the decision-making process, assist knowledge that they cause public harm, will in promoting public understanding of critical lead to expanding widespread tort claims to social issues, and establish subsidies and eco- repay society for the damages they have nomic incentives to encourage sustainable caused. Thus, the duty of directors of corpora- activity- all of which are vital to successfully tions in this new arena of socially responsible implementing The Natural Step in a compre- business will mean more than merely having to hensive manner. comply with environmental regulatory Lawyers can help in bringing about the schemes. Tort liability (among others) will necessary changes in government that are increase the duty of care that they owe to the needed to guide society on a sustainable path. public in the ecological context.209 In fact, the In fact, lawyers are responsible for examining Security Exchange Commission's environmen- and challenging critical societal problems and tal disclosure requirements already establish dilemmas.207 Members of the legal profession the duty to disclose to the public certain envi- and the government have a duty to the rest of ronmental information.210 society to improve the law in a manner that Thus, lawyers, as counsel to these organi- promotes the public good.208 Unlike most other zational entities, also must shift their thinking. professions, lawyers are in a unique situation The duty that lawyers owe their clients would

203. See Shawn M. Boles et al., The Role of Behavioral 205. See Boles, supra note 195, at 7. Science in Addressing Environmental Problems: Psychological 206. Collin & Collin, supra note 1, at 455. Approaches to Sustainability and Equity 9 (April 21, 1996) (unpublished manuscript, on file with the Oregon Research Institute). 207. See MODEL RULES OF PROFESSIONAL CONDUCT Preamble, Environmental behaviors can be conceptualized at five different 1, 6 (1996). levels, which are (1) personal, (2) family/significant other, (3) work- 208. See id. site/school/organization, (4) neighborhood/community, and (5) media/policy/culture. See id. at 8. The levels can be represented as 209. See REVISED MODEL BUSINESS CODE ACT §8.30 (1994) portions of a pyramid, with the personal level at the top of the (where activities in furtherance of widespread ecological damage pyramid and the media/policy/culture level at the bottom. See id. could be viewed as clear and gross negligence). Some authors "The pyramid shape is utilized to illustrate the point that the reasoned that EMSs, such as the ones described supra Part III.C- more distal factors, those toward the bottom of the pyramid, D, may comprise the applicable standard of care. See Naomi impact far larger numbers of persons: these larger social factors Roht-Arriaza, Shifting the Point of Regulation: The International have a broader reach and correspondingly occupy a larger portion Organization for Standardization and Global Lawmaking on Trade and the of the pyramid." Id. Accordingly, advertising and publicity cam- Environment, 22 ECOLOGY L.Q. 479, 517 (1995). paigns, and outreach programs have proven successful in gener- 210. See generally Robert H. Feller, Environmental ating environmental awareness in the Netherlands. See JOHNSON, Disclosure and the Securities Laws, 22 B.C. ENVTL AFF. L. REV. supra note 4, at 159-60. 225 (1995); Tracy Soehle, Comment, SEC Disclosure 204. See Glasgow, supra note 194, at 7. Requirements for Environmental Liabilities, 8 TUL. ENVTL. L.J. 527 (1995).

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necessitate a drastic change in their counsel of ities, realize eco and energy efficiencies and business policy. As legal counsel, a lawyer's gain a competitive advantage. The reduction or role would require that she recommend that elimination of environmental liabilities can her clients exist more in line with The Natural potentially save the client thousands, if not Step principles in order to avoid potential millions, of dollars in exposure to future legal future liability.211 fees and lawsuit verdicts. Moreover, adoption The Model Rules of Professional Conduct of The Natural Step model can lead to signifi- set forth that, when advising a client, a lawyer cant cost savings, better design innovation, may consider "moral,… social and political fac- improved public perception, and greater work- tors that may be relevant to the client's situa- er satisfaction, all of which can benefit the tion."212 Because a lawyer may volunteer advice company's bottom line. These attributes pro- without being asked, lawyers should take a vide a further basis for lawyers to recommend more proactive role in bringing about greater implementation of The Natural Step principles socially responsible behavior among their to their clients. clients.213 A lawyer's duty justifies that they Furthermore, lawyers have a critical role in incorporate a long-term analysis and vision in advancing the three concepts discussed in the order to promote long-term prosperity for their following section: keeping the functions of gov- client as a primary goal. ernment and commerce separate; incorporat- Corporate lawyers who acquire this long- ing localized governance and stakeholder term vision and who are employed by compa- involvement; and establishing subsidies, taxes, nies working toward sustainable practices also and other economic incentives for sustainable need to become actively involved in establish- commercial behavior. ing good public policy. These lawyers should use their legal skills and knowledge to change B. Government Reinvention of laws in ways that would increase environmen- Environmental Regulation tal regulatory standards to those which their The Natural Step framework provides an organizations currently comply with or are important set of criteria for determining working toward meeting in the future. In doing whether government is supporting and pro- so, their clients or employers will gain an enor- moting sound ecological principles in its regu- mous competitive advantage while the lawyers latory efforts. Likewise, The Natural Step pro- in turn, serve the public good trying to protect vides a framework for government to take a our natural ecosystem more effectively . more systems-based approach to environmen- Consequently, an additional significant tal regulation. value of The Natural Step is its ability to help In many ways, The Natural Step comple- lawyers attain a systems-based perspective ments many of the existing laws and programs and approach to client counseling and deci- already in place.214 Under the Clinton sion-making. Lawyers with knowledge and Administration, the United States Environmental understanding of The Natural Step acquire an Protection Agency ("EPA") has brought a multi- important and tangible benefit. These lawyers tude of government reinvention efforts, total- gain a set of skills that will enable them to take ing more than sixty programs.215 Most of EPA's their clients beyond compliance to substan- initiatives are structured as voluntary efforts, tially reduce or eliminate environmental liabil- giving industry and the public an opportunity

211. See MODEL RULES OF PROFESSIONAL CONDUCT, Rule 2.1. Environmental Management Systems," was passed on June 8, 212. Id. 1999 as House Bill 6830, Senate Amendment A. See id. 213. See id. at Rule 1.4. 215. See United States Environmental Protection Agency, EPA Reinvention Activities: Full Listing (last modified Dec. 22, 1998) 214. At the state level, The Natural Step already has been ; see also U.S. included as a definitional reference of sustainability in a State of Environmental Protection Agency, Reinventing Environmental Connecticut law. See State of Connecticut General Assembly, Regulation (1995); U.S. Environmental Protection Agency, Common- January Session, 1999 (visited Aug. 22, 1999) Sense Strategies to Protect Public Health: A Progress Report on Reinventing . The law, entitled "An Act Concerning Exemplary

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Fall 2000 The Natural Step NORTHWEST to participate, as opposed to mandating new focuses on the health of an ecosystem and the regulatory approaches. In fact, many of the pro- behavior of humans who live within the ecosys- grams "depend on industry to bring forth specific tem's boundaries.220 The CBEP approach also proposals, placing both government regulators incorporates stakeholder involvement, which and private sector public interest representa- in turn facilitates comprehensive identification tives in a fundamentally reactive posture."216 of local environmental problems, the setting of Thus, "without industry cooperation, reinven- priorities and goals that reflect overall commu- tion cannot proceed."217 While many of the ini- nity concerns, and the generation of compre- tiatives include concepts that this article hensive, long-term solutions.221 Because of its emphasizes as critical to bringing about a sus- holistic focus, in theory CBEP meets all four tainable future, such as allowing the regulated system conditions. Like The Natural Step, community greater flexibility to reach perform- CBEP's ecosystem-based approach to environ- ance standards, more localized governance mental protection addresses the rate of extrac- and increased stakeholder involvement in the tion and dispersion of materials from the decision-making process, and establishing var- earth's crust (first system condition), the rate ious financial incentives for sustainable com- that substances are produced and dispersed by mercial behavior, few incorporate a holistic or human society (second system condition), the ecosphere-based approach to comprehensive- condition of the productive capacity and diver- ly foster The Natural Step framework. The EPA sity of the ecosphere (third system condition), programs that have significant overlapping and the fair and efficient use of resources philosophies with The Natural Step model are (fourth system condition).222 Community-Based Environmental Protection, Brownfields are "[a]bandoned, idled or Brownfields, and the Common Sense under-used industrial and commercial facili- Initiative.218 ties where expansion or redevelopment is EPA's Community-Based Environmental complicated by real or perceived environmen- Protection ("CBEP") is perhaps the most simi- tal contamination."223 The purpose of EPA's lar program to The Natural Step philosophy. Its Brownfields Initiative is to clean up these approach is "place-based" and not media or abandoned, idled or under-used sites so that issue-based.219 Thus, instead of concentrating they can be developed and restored to their on a medium or a particular problem, CBEP productive uses once again. The initiative takes

216. Rena I. Steinzor, Reinventing Environmental Regulation: The grams such as the National Estuary Program, the Chesapeake Bay Dangerous Journey from Command to Self-Control, 22 HARV. ENVTL. L. Program, and the Great Lakes Program . . . [which] have demon- REV. 103, 111-12 (1998); see also 60 Fed. Reg. 59,658 (1995) (stating strated on a large scale the advantages of a CBEP approach." that the programs use "innovative, non-prescriptive, consensus- About CBEP, supra note 219. EPA's Industrial Communities Project based techniques to achieve environmental and public goals takes a very similar approach to that of CBEP. It seeks to generate beyond those set by existing laws"). a "place-based" focus to improve environmental protection pro- 217. Id. at 112. grams in heavily industrialized and densely populated regions in a manner consistent with local economic and community priori- 218. EPA's Sustainable Development Challenge Grants ties. United States Environmental Protection Agency, Industrial and Sustainable Industry also entail holistic approaches to envi- Communities Project (last modified Jan. 29, 1997) . In addition, EPA's Environmental Protection Agency, EPA Reinvention (visited Jan. 19, Multi-Media Permitting pilot project and Partners for the 1999) ; United States Environmental Protection Agency, lems more holistically to bring about better pollution prevention EPA Reinvention (visited Jan. 19, 1999) . Multi-media Permitting (last modified Mar. 28, 1998) 219. United States Environmental Protection Agency, ; United States About CBEP (last modified Sept. 30, 1998) . ment>. 223. United States Environmental Protection Agency, 220. See id. Brownfields Glossary (last modified Sept. 30, 1997) ; see also OFFICE OF TECHNOLOGY 221. See id; see also discussion infra Part IV.B.2. ASSESSMENT, STATE OF THE STATES ON BROWNFIELDS: PROGRAMS FOR 222. "EPA's involvement in place-based, collaborative, CLEANUP AND REUSE OF CONTAMINATED SITES I (1995) [hereinafter and holistic environmental protection includes geographic pro- State of the States on Brownfields]; H.R. 3352 at 1.

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advantage of the existing infrastructure and multiple stakeholders were invited to partici- other urban systems, such as electricity, sewer, pate in the dialogue.230 The diverse stakehold- water, transportation, and human resources, ers seek ways to improve environmental per- already in place at the site.224 In addition, the formance within their specific industry both by Initiative seeks to empower states, communi- looking at the traditional regulatory functions ties, and other stakeholders in economic and by searching for new opportunities that development to work together to "prevent, have yet to be investigated or recognized.231 assess, safely clean up, and sustainably reuse While many proposals have been brought forth brownfields."225 Thus, if followed according to within the CSI subcommittees, the jury is still its mission, the Initiative would meet The out on whether CSI will achieve its goals and Natural Step's third and fourth system condi- generate improved environmental perform- tions.226 By preventing contamination, cleaning ance among the industrial sectors involved.232 up, and sustainably reusing brownfields, the Depending upon the nature and substance of program satisfies the third system condition environmental improvement that results from requirement that the ecosystem not be mis- the program, CSI could meet any or all of The managed or displaced in such a way that sys- Natural Step's four system conditions.233 tematically deteriorates its productive capacity and its diversity. Likewise, because brownfields 1. Keeping the Functions of Government exist in low-income minority communities at and Commerce Separate disproportionate rates when compared with The interaction between government and the rest of society, cleaning up these sites sat- commerce must be separated. We must create isfies the fourth system condition requirement a form of government that can perform its gov- that the use of resources be fair and efficient.227 ernmental functions without the influence of EPA's Common Sense Initiative ("CSI") corporate business.234 On the other hand, com- incorporates a distinct approach to environ- merce must be allowed to operate on its own mental protection and pollution prevention. terms once the government takes political CSI addresses environmental management by responsibility for enacting policies into law.235 industrial sector rather than by environmental Commercial enterprise has proven over and medium (air, water, and land).228 EPA selected over again that it has the ability to generate the automobile manufacturing, computer and remarkable solutions through its vision and electronics, iron and steel, metal finishing, ingenuity. Accordingly, The Natural Step princi- petroleum refining, and printing industries to ples can be met if government leaders lay serve as CSI pilots to explore the industry- down the policies, are serious about enforcing based, multi-stakeholder approach to environ- them, and keep their own hands off com- mental regulation.229 In order to include all rel- merce's ways and means of complying.236 In this evant interests in the decision-making process, framework, there should be a flexible regulato-

224. See STATE OF THE STATES ON BROWNFIELDS, supra note 223, 230. See id. "Stakeholder" refers to anyone who has some at 1. tangible or intangible interest in the outcome of the decision- 225. United States Environmental Protection Agency, making process. See also discussion infra Part IV.B.2. Brownfields Mission (last modified Sept. 30, 1997) . 232. See GENERAL ACCOUNTING OFFICE, PUB. NO. 226. See Robèrt, supra note 3, at 86. GAO/RCED-97-164, REGULATORY REINVENTION: EPA'S COM- 227. See Holmberg & Robèrt, supra note 39, at 3; see also MON-SENSE INITIATIVE NEEDS AN IMPROVED OPERATING McWilliams, supra note 198. FRAMEWORK AND PROGRESS MEASURES (1997). 228. See Common Sense Initiative Council Federal 233. See Robèrt, supra note 3, at 86. Advisory Committee; Establishment, 59 Fed. Reg. 55,117, 55,117 234. JACOBS, supra note 92, at 81. (1994). The CSI was started in 1993. See Collin & Collin, supra note 235. See id. at 178; see also Steinzor, supra note 208, at 112 24, at 75. (discussing how reinvention projects give industry the flexibility 229. See United States Environmental Protection Agency, CSI to try new approaches). Home Page (visited Jan. 19, 1999) . supra note 4.

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Fall 2000 The Natural Step NORTHWEST ry approach that establishes strict environ- standard.239 PIT seeks to involve public per- mental performance standards but allows formance-based permitting which allows flexi- competition in industry to establish how those bility as to how a permittee will meet perform- standards will be met.237 Critics of the present ance standards by shifting the focus towards regulatory framework claim that the system, by the measurement and assurance of perform- requiring the installation of a given technology, ance. Such a shift would improve the compa- chills technological innovation and eliminates ny's environmental performance with respect meaningful incentives for business to innovate to The Natural Step's second system condi- for pollution prevention because business has tion.240 Although the PIT program is still in its no mechanism for obtaining approval of alter- conceptual stage, its goals are very promis- native approaches and no way to recover the ing.241 costs of their original investment.238 Project XL, which stands for "eXcellence Lawyers can play integral roles in estab- and Leadership,"242 is perhaps EPA's most lishing these policies. They can ensure that the prominent reinvention program. The pilot pro- types of laws and programs put in place will gram allows the EPA to establish site-specific keep the functions of government and com- agreements with project sponsors to help the merce separate. Through their work, lawyers Agency redesign current approaches to public can confirm that environmental protection health and environmental protection.243 laws are based on sound ecological principles "Sponsor" is defined broadly to include every- and that the laws require that commerce meet thing from a single manufacturing plant to a strict environmental standards. Lawyers also unit of local government to a military base or can help to maintain that the regulatory struc- other facility.244 Project XL allows individual ture is being properly followed and suitably facilities the flexibility to develop their own enforced. innovative strategies to environmental man- Many of the Clinton Administration's rein- agement and protection to achieve environ- vention projects incorporate a more flexible mental results "superior" (either directly or regulatory approach in meeting environmental indirectly through reinvestment of cost sav- standards. EPA's Permits Improvement Team ings) to those reached by conventional regula- ("PIT") program does so while conceivably tory and policy approaches.245 EPA uses a two- establishing a more protective performance part method for determining whether an XL

237. See Tom Lindley, Green Plans: The Working Definition 241. See id. EPA's Reinventing Effluent Guidelines, of Sustainability Panel Remarks at the 1998 Public Interest Reinventing PCB Disposal Regulations, and Reinventing Storm Environmental Law Conference (Mar. 7, 1998). Lindley also advo- Water Permitting encompass similar objectives. See United States cates a sectoral-based approach, like with CSI, which breaks busi- Environmental Protection Agency, Reinventing Effluent nesses down into particular industries and regulates them in that Guidelines (last modified Mar. 28, 1998) ; United States Environmental of Sustainability Panel-Remarks at the 1998 Public Interest Protection Agency, Reinventing PCB Disposal Regulations (last Environmental Law Conference (Mar. 7, 1998); see also Collin & modified Mar. 28, 1998) ; United States Environmental Protection Agency, approach to United States environmental policy as demonstrat- Reinventing Storm Water Permitting (last modified Mar. 28, 1998) ed by the CSI). . 238. See Cass R. Sunstein, Paradoxes of the Regulatory 242. Project XL for Communities is a similar EPA program State, 57 U. CHI. L. REV. 407, 420-21 (1990); see also Richard B. that allows Project XL participation by communities that have Stewart, Economics, Environment, and the Limits of Legal developed particular projects. See Regulatory Reinvention (XL) Control, 9 HARV. ENVTL. L. REV. 1, 9 (1985). Pilot Projects, 60 Fed. Reg. 27,282, 27,282 (1995). 239. Higher environmental standards may be gained 243. United States Environmental Protection Agency, XL through the consideration of ecosystem and community-based at a Glance (visited Jan. 19, 1999) . Protection Agency, Final Draft of Concept Paper on 244. See Regulatory Reinvention (XL) Pilot Projects, 60 Environmental Permitting and Task Force Recommendations Fed. Reg. 27,282 (1995). (visited Jan. 19, 1999) . 245. United States Environmental Protection Agency, XL at a Glance (visited Jan. 19, 1999) . proven or verified, there would be less need to perform technical reviews and less need to formally modify the permits. See id.

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project will achieve superior environmental ed changes to attempt to address the problem performance. First, EPA develops a quantita- that "superior" environmental performance is tive baseline estimate of what would have hap- not being delivered as intended. Furthermore, pened to the environment absent the project participation from industry has been much less and compares that baseline estimate against than expected, as industry is "increasingly dis- the project's anticipated environmental per- couraged by the unexpectedly high transaction formance. Second, EPA considers both quanti- costs of participation, "confused over the role tative and qualitative measures in determining of stakeholders, and frustrated over the length whether the project's anticipated performance of the project review process and the conflict- will be superior to the baseline. ing signals from different levels of EPA staff."251 EPA states that regulatory flexibility can be Consequently, an unknown EPA staff member provided by establishing "site specific rules, coined the slogan, "If it isn't illegal, it isn't alternative permits and waiver processes," in XL.252" addition to "offering flexibility in its policies, guidance, procedures and other approaches."246 2. Green Plans: Localized Governance "Firms participate in XL for many reasons. and Stakeholder Involvement However, in general, firms that successfully In the new, restorative economy, the solu- develop and implement XL projects utilize the tion lies in local and regional leadership.253 In flexibility offered by the program to reap finan- order to achieve a sustainable society, it will cial, competitive, and community benefits."247 have to come from the grassroots up.254 It will Virtually any regulatory requirement can be have to take on a process of inclusive dialogue waived in exchange for the achievement of where all viewpoints are represented and "superior" environmental performance.248 Such involved.255 It involves a "holistic, bottom-up, strategies must be supported by stakeholders community-based, multi-issue, cross-cutting, as well as affected State, local and tribal gov- integrative, and unifying paradigm for achiev- ernments.249 The program guidelines prescribe ing healthy and sustainable communities."256 that project sponsors should provide stakeholders Government needs to rethink its approach to with any needed training on technical issues achieving social goals and must acknowledge and collaborative processes. Unfortunately, its limits- that its lack of money, people, and this training does not appear to be a require- knowledge make it impossible to oversee and ment. Notwithstanding the perceived "superi- calibrate all societal relationships.257 It is more or" environmental performance that should efficient and effective to give people a vision result, Project XL has been "under constant fire and let them figure out how to get there them- from national and local environmentalists and selves. Therefore, government must facilitate community representatives, who condemn it the calibrations and get relationships in place on the basis of both substance and process."250 so that they can work out their own agree- EPA has admitted making mistakes in the ini- ments.258 tial design of the program and has implement-

246. Id. ronmental laws." Geltman & Skroback, supra note 24, at 33. 247. Regulatory Reinvention (XL) Pilot Projects, 62 Fed. 253. See HAWKEN, supra note 9, at 175. Reg. 19,872, 19,877 (1997). 254. See id. at 161. 248. See Steinzor, supra note 216, at 122-23. 255. See Collin & Collin, supra note 1, at 450. 249. United States Environmental Protection Agency, XL 256. National Environmental Justice Advisory Council at a Glance (visited Jan. 19, 1999) . RONMENTAL PROTECTION AGENCY, PUB. NO. EPA 500-R-96- 250. Steinzor, supra note 216, at 125. 002, Environmental Justice, Urban Revitalization, and 251. TERRY DAVIES & JAN MAZUREK, INDUSTRY INCEN- Brownfields: The Search for Authentic Signs of Hope 3 (1996). TIVES FOR ENVIRONMENTAL IMPROVEMENT: EVALUATION OF 257. See Collin & Collin, supra note 1, at 431; see also Collin U.S. FEDERAL INITIATIVES 3 (1996). & Collin, note 24, at 45-47. 252. Steinzor, supra note 216, at 147. Other authors have 258. See Collin & Collin, supra note 1, at 431. noted that Project XL "may violate the letter of the nation's envi-

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Green plans, which are government strate- mental laws. Green plans also reduce bureau- gies aimed at moving society toward sustain- cracy, delegate responsibility to the appropri- ability, should be established, as they have in ate parties, secure broad, long-term support such nations as the Netherlands,259 New and, most importantly, achieve results.266 As Zealand,260 Canada,261 and Singapore,262 where such, green plans can bring about all of the they have achieved success (whereby the recommendations discussed in the sections Netherlands and New Zealand provide the above.267 principal examples).263 In addition to being While green plans set environmental stan- comprehensive, integrated, and large-scale, dards at national and regional levels, they are green plans also are based on the critically not directed from the top down.268 Rather, they important premise that our social and eco- delegate to local authorities the responsibility nomic well-being depends on a healthy envi- for managing local environmental problems ronment, and that we must manage our natu- and implementing much of the respective ral and physical environment in a sustainable components of the plan.269 A "green plan is not fashion if we want to continue to meet our own a project, but a process, one that involves a needs and to allow future generations to meet shift in thinking about the ways in which we theirs.264 Green plans replace single-issue poli- interact with the environment."270 In particular, cies and incorporate comprehensive environ- through government mandate, green plans can mental, economic, and equity strategies devel- empower communities to take on many of the oped through consultation with the major government's functions in order to implement societal sectors.265 Green plans incorporate a government policy and monitor commercial systems-based approach to solving environ- activity more effectively and efficiently.271 mental problems. They provide the govern- Accordingly, communities will possess a more mental leadership with the methodology to active role in environmental public policy take society beyond the media-by-media determinations. As they have in other coun- approach that currently governs our environ- tries, the government should contribute fund-

259. See Resource Renewal Institute, A Summary of the Dutch 264. See id. at 3. (NEPP) National Environmental Policy Plan (visited Jan. 12, 1999) 265. See Resource Renewal Institute, What are Green Plans ; see also Resource (visited Jan. 12, 1999) . This Renewal Institute, National Environmental Policy Plan 2: Evaluation of article outlines the characteristics of a green plan: (1) A dynamic, Industry (visited Jan. 12, 1999) (providing an industry viewpoint of the green plan). (2) sensitivity to public concerns; (3) clear goals and timetables, 260. See Resource Renewal Institute, Managing Resources in supported by modern information systems; (4) partnerships New Zealand (visited Jan. 12, 1999) ; see also Resource Renewal Institute, New See id. Zealand Resource Management Act (visited Jan. 12, 1999) 266. See id. (discussing the New Zealand Resource Management Act which implements the 267. In particular, the President's Council on Sustainable green plan); Resource Renewal Institute, A Green Plan at the Development's Environmental Task Force Workplan demon- Crossroads-New Zealand's Resource Management Act: The Transition From strates a vision of a green plan in the United States that would Theory to Practice (visited Jan. 12, 1999) . comprehensively pursues environmental, economic and social equity goals than does our current system. See President's 261. See Resource Renewal Institute, Canada's Green Plan: Council on Sustainable Development, Environmental Management Working Together for a Sustainable Future (visited Jan. 12, 1999) Task Force (visited Sept. 6, 1999) . Canada's Green PCSD/tforce/emtf/index.html#wplan>; see generally PHILLIP A. Plan's goals include (1) Assuring clean air, water and land for all GREENBERG, TOWARD A U.S. GREEN PLAN: THINKING ABOUT citizens; (2) Promoting sustainable use of renewable resources; A U.S. STRATEGY FOR SUSTAINABLE DEVELOPMENT (1993) (3) protecting our special spaces and species; (3) preserving the (describing the blueprint of a green plan in the United States). integrity of our North; (5) Ensuring global environmental security; (6) implementing environmentally responsible decision-mak- 268. JOHNSON, supra note 4, at 3. ing; and (7) minimizing the impact of environmental emergen- 269. See id. cies. See id. 270. Id. at 123. 262. See Resource Renewal Institute, Where are Green Plans Already in Place (visited Jan. 12, 1999) . Sustainability Panel Remarks at the 1998 Public Interest Environmental Law Conference (Mar. 7, 1998). 263. see generally JOHNSON, supra note 4.

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ing to cover the costs of community efforts and and affected parties are represented, monitor provide competent and objective technical the consensus process and guarantee that end assistance.272 Lawyers can help to promote results effectively become passed into local green plans by assisting in the development of law. laws that provide for their implementation on In its involvement in the EPA Stakeholder national, regional and local levels.273 Involvement Action Plan, EPA maintains it has "A major component of the government learned a great deal about the value and bene- decision-making in any green plan is a process fit of stakeholder involvement in environmen- that involves stakeholder involvement."274 This tal decision-making processes and the Agency new approach involves a consensus model "in has taken steps to increase opportunities for, which the constituencies that make up a com- and the quality of, stakeholder involvement in munity work together to articulate a common its regulatory and non-regulatory programs.277 vision of the future and to articulate strategies The Common Sense Initiative provides a sub- for its achievement."275 In this framework, rep- stantive example of the Agency's use of stake- resentatives from all sides of an issue are holder involvement. To ensure that all relevant involved and all authority and responsibility interests are brought to bear on the changes rests with the group itself.276 It means early, that evolve under CSI, the program invited the ongoing and meaningful public participation, participation of multiple stakeholders.278 In whereby mechanisms are established to addition, EPA's Regulatory Negotiation and ensure that all community members have full Consensus-Based Rulemaking program aims participation, including training and support to "increase the use of regulatory negotiation for community groups, technical assistance and other consensus-based decision process- grants and community advisory groups. es" through the use of "increased community Consequently, the decisions made by the con- and stakeholder involvement, partnership pro- sensus group must be supported by govern- grams, and consensus-based project development and implemented into local law. This ment."279 Industry, government regulators, approach achieves the best possible result labor unions, environmental organizations and because the decision-makers are better able to environmental justice groups have been understand the complexity of the issues. In brought together to explore and promote inno- addition, it allows for all opposing viewpoints vative reforms in order to improve traditional to be heard, assures that stakeholders will not regulatory approaches within the specific sec- feel compromised and generates trust within tors.280 Project XL also incorporates a stake- the community. Lawyers can have a significant holder element. For this purpose, EPA has role in stakeholder decision-making approach- defined "stakeholder" to include "communities es. They can help to establish the decision- near the project, local or state governments, making framework, assure that all interested businesses, environmental or other public

272. In Project XL, EPA offered to make "its own technical 276. See generally JOHNSON, supra note 4, at 59 (describing expertise" available to the public and promised to provide up to stakeholder group decision making in the Netherlands). $25,000 per project "in order to assure that necessary technical 277. See United States Environmental Protection Agency, assistance is available to support meaningful stakeholder EPA Stakeholder Involvement Action Plan 12/1/98 (last modified Jan. involvement." Regulatory Reinvention (XL) Pilot Projects, 62 Fed. 13, 1999) . Reg. 19,872, 19,881 (1997). However, "EPA attached so many strings to the use of the money that this token effort is likely to 278. See United States Environmental Protection Agency, CSI prove unsatisfactory to most potential public interest partici- Homepage (visited Jan. 19, 1999) . 273. Many communities throughout the United States 279. See United States Environmental Protection Agency, have developed green plan strategies. See Resource Renewal Regulatory Negotiation and Consensus-based Rulemaking (last modified Institute, Communities that Are Developing Green Plans (visited Jan. 23, Mar. 28, 1998) . 1999) . 280. See United States Environmental Protection Agency, CSI 274. JOHNSON, supra note 4, at 58-62. Homepage (visited Jan. 19, 1999) . 275. Collin & Collin, supra note 1, at 451.

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Fall 2000 The Natural Step NORTHWEST interest groups, or other similar entities."281 ment before it will implement stakeholder EPA later added, "this definition includes both involvement processes in the future.287 Some of those stakeholders in the proximity of the proj- the problems that have existed in the past ect and those stakeholders interested in the include the following: (1) confusion as to how broader implementation of the concepts being stakeholder involvement contributes to actual tested in the project, such as state, regional or Agency decisions, which has led to stakeholder national environmental groups."282 Every deci- "frustration as participant expectations do not sion within each subcommittee must be con- coincide with Agency actions;" (2) misconcep- sensus-based "which means giving all voices tions as to the type of stakeholder involvement an equal chance to speak; treating all options, most appropriate for the decision being made suggestions, and opinions as worthy of consid- and the type of results needed; (3) the reality eration; and promoting flexibility."283 Both CSI that "some outside groups and interests find and Project XL require industry applicants to that it is difficult to commit the time and negotiate proposals with a full range of inter- resources needed for effective participation in ested constituents before EPA will sign off on a all of the activities to which they are invited;" project.284 Due to its strong public participation and (4) EPA staff, at times, is unable to provide component, CSI should generate meaningful the planning and managing which is needed community involvement in the decision-mak- for ongoing stakeholder involvement activities. 288 ing process. The Project XL pilot project at the Intel site The Community-Based Environmental in Arizona demonstrates many of the chal- Protection scheme tends to generate an even lenges that can result from a stakeholder greater and more diverse number of stakehold- process.289 The stakeholder team identified the ers because the program "affects all individu- diverse frames of reference among stakehold- als, groups, and industries concerned with the ers, the inefficiency of the process and the health and sustainability of a certain geo- institutional inertia that exists with reinven- graphic area."285 Such stakeholders include EPA tion techniques as the "pesky but surmount- Headquarters officials, EPA Regional officials, able challenges" that the stakeholder process state officials, city planners, environmental faced.290 In particular, the conflicting frames of groups, non-governmental organizations, trib- reference between stakeholder representatives al leaders, regulated communities, community created delays because common ground was groups, academics and concerned citizens."286 difficult to identify on a few major issues.291 The This program appears to embody the truest stakeholders also concluded that the stake- form of stakeholder decision-making, given holder process was inefficient in direct propor- that all parties retain an equal voice through- tion to its openness.292 Finally, institutional out the process and the final decisions are fol- inertia became a common obstacle as man- lowed accordingly. agers were "unfamiliar with the process and Based on its experience using stakeholder skeptical of experimentation," attorneys were involvement processes, EPA maintains that concerned about potential litigation, and there are some key issues that need improve- advocates "dubious about extending trust"

281. Regulatory Reinvention (XL) Pilot Projects, 60 Fed. 286. See id. Reg. 27,282, 27,287 (1995). 287. See United States Environmental Protection Agency, 282. Regulatory Reinvention (XL) Pilot Projects, 62 Fed. Stakeholder Involvement Action Plan (last modified Jan. 13, 1999) Reg. 19,872, 19,877 (1997). . 283. United States Environmental Protection Agency, CSI 288. Id. Homepage (visited Jan. 19, 1999) . Stakeholder Process (last modified Feb. 12, 1998) . 285. United States Environmental Protection Agency, 290. Id. About CBEP (last modified Sept. 30, 1998) 291. See id. . 292. See id.

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were adverse to experimentation.293 These strated that it can achieve greater overall ben- problems are inherent in any stakeholder efits than can other, more traditional involvement process and pose serious obstacles for approaches.297 In addition, the process empow- the use of stakeholders in government action. ers citizens, educates them about important The Stakeholder Involvement Workgroup societal issues and promotes a sense of identi- has attempted to tackle these issues and has fication among citizens with their communi- adopted an Action Plan to further research ties.298 When people become rooted in their techniques and approaches to improving the community and feel as if they have a meaning- stakeholder involvement process.294 The Action ful interest in its future, they will be more Plan is based on the recommendations of par- compelled to act as stewards of their natural ticipants involved with the CSI process. Some environment. of these recommendations include: "using Lawyers can help foster this transforma- common vocabulary and the typology of stake- tion to bring about a greater educated public holder involvement techniques to build com- and a more involved and effective governmen- mon understanding among participants," tal structure by generating empowerment with- "using analytical tools to enhance effective- in the communities in which they work and ness," and establishing "coordinating mecha- live. Within this new framework, government nisms to build internal and external capacity."295 along with local communities should establish Other potential problems with stakeholder indicators to monitor particular environmental involvement is determining where the involve- aspects relating to the health of the local ment is to occur. For example, involvement ecosystem. Analysis of long-term trends could exist on a per-plant level, on a per-cor- toward sustainability are not prevalent in gov- poration level, a per-industry level or on a ernment activity.299 These indicators include national (i.e. green plan) level. The decision to such factors as air quality, watershed quality, include stakeholders at any or all levels has and species diversity.300 All indicators must be varying ramifications on the organizations accurate, reliable, and relevant. Government affected. Because industry, in general, does not then must effectively monitor the indicators to like to give out information, the more times evaluate where improvement is needed. that a specific company has to go through the Finally, government, through a ranking system, stakeholder process, the greater resistance must act upon the areas that the indicators industry most likely will impose.296 demonstrate warrant government assistance.301 Nonetheless, stakeholder involvement in Furthermore, the community should be environmental decision-making has demon- allowed independent review of business activi-

293. Id. environment, "no agency or department in the federal govern- 294. See United States Environmental Protection Agency, ment is responsible for what is arguably one of the federal gov- EPA Stakeholder Involvement Action Plan (last modified Jan. 13, 1999) ernment's most important functions: assessing the current state . and long-term trends of the environment." Id at 813 n.34. See also Council on Environmental Quality, Environmental Quality: The 295. Id. Twenty-Second Annual Report of the Council on Environmental 296. For example, one could look to the audit privilege Quality 187 (1992). debate or the problems with ISO 14000 pilot projects whereby the 300. See, e.g., ALLEN HAMMOND ET AL., ENVIRONMEN- industry involved has demonstrated reluctance to sharing envi- TAL INDICATORS: A SYSTEMATIC APPROACH TO MEASURING ronmental data. AND REPORTING ON ENVIRONMENTAL POLICY PERFOR- 297. See discussion of green plans supra Part IV.B.2. MANCE IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT (1995). The World Resources Institute has identified many of the 298. See Collin & Collin, supra note 1, at 454. essential environmental indicators that should be measured and 299. The absence of analysis is both a symptom and a monitored. See World Resources Institute, Environmental Indicators (vis- cause of the limited role of environmental objectives in the pres- ited Mar. 16, 1999) , ent environmental regulatory system. See Michael P. ; see also Vandenbergh, An Alternative to Ready, Fire, Aim: A New United Nations Development Programme [sic], Development Watch: Monitoring Framework to Link Environmental Targets in Environmental Law, Progress on Sustainable Development (visited Aug. 28, 1999) 85 KY. L.J. 803, 814 (1996). With the exception of the Council on . Environmental Quality, which acknowledges its own limited 301. see generally JOHNSON, supra note 4, at 133, 176. understanding of the status and trends in the condition of the

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Fall 2000 The Natural Step NORTHWEST ties in order to better manage environmental setting of performance standards, but also in hazards.302 Inherent in this analysis is a require- "the measurement and judgment of perform- ment that industrial sites perform environmen- ance."309 Hopefully, the PIT program and other tal audits at least annually.303 EPA has conclud- government regulatory schemes can increase ed that public access to information may be the public involvement with environmental the necessary factor that leads to improved monitoring efforts. environmental results in individual facility activities with less governmental involve- 3. Establishing Subsidies, Taxes and ment.304 Thus, citizens should have access to Other Economic Incentives for commercial facilities and be involved in gath- Sustainable Commercial Behavior ering and monitoring their own health and Many of the Clinton Administration's rein- environmental quality.305 Workplace and envi- vention projects incorporate incentives for bet- ronmental monitoring, performed at least ter environmental performance. EPA's quarterly by community members, would test Compliance Incentives for Small Business is a the worksite, employee exposure indicators program that encourages small businesses to and environmental emissions.306 Properly expeditiously remedy violations discovered trained community residents can provide infor- through compliance assistance and environ- mation that is as rigorous as data provided by mental audits by setting forth a settlement paid professionals. Data quality is strongest penalty policy that financially rewards such when the people collecting it are the first to behavior (via penalty modifications where the use it. Professional monitors often do not col- amounts waived are used to bring the entity lect enough representative data because they into compliance) and providing guidance for do not use it, and because of the time and cost states and local governments to offer the same of collecting many samples in an area that may incentives.310 Likewise, EPA's Flexible State be unfamiliar to them. Volunteer resident mon- Enforcement Responses to Small Community itors generally have a much denser spatial and Violations gives states enforcement flexibility temporal mix of sampling sites than is possible to provide compliance incentives when for public agencies struggling to bring indus- addressing a small community's environmen- tries into minimum compliance with environ- tal violations.311 This will afford states the abil- mental laws.307 This role for communities pro- ity to develop small community environmental vides the background of routine environmental compliance assistance programs tailored to monitoring necessary for public agencies and local conditions and specific state needs.312 industry to uncover environmental contamina- EPA also created the Flexible Compliance tion, mismanagement of environmental Agreements for Specific Industries and resources and threats to the natural system.308 Incentives for Auditing, Disclosure, and EPA's Permits Improvement Team ("PIT") pro- Correction programs which aim to increase gram seeks to involve the public not only in the compliance "by allowing companies to dis-

302. SANFORD LEWIS, THE GOOD NEIGHBOR HAND- 308. See id. at 84. BOOK 8-2 to 8-4 (1992); see also Collin & Collin, supra, note 24, at 309. United States Environmental Protection Agency, EPA 82-84. Reinvention (visited Jan. 19, 1999) 303. LEWIS, supra note 302, at 8-2; see also ELIZABETH . GLASS GELTMAN, A COMPLETE GUIDE TO ENVIRONMENTAL 310. See United States Environmental Protection Agency, AUDITS (1997) (providing a comprehensive discussion of envi- Policy on Compliance Incentives for Small Businesses (last modified Feb. ronmental audits). 27, 1998) . 304. See United States Environmental Protection Agency, 311. See United States Environmental Protection Agency, Policy on Final Draft of Concept Paper on Environmental Permitting and Task Force Flexible State Enforcement Responses to Small Community Violators (last modified Recommendations (visited Jan. 19, 1999) . epaoswer/hazwaste/permit/pit/pitdoc.txt>. 312. See id. 305. See LEWIS, supra note 302, at 8-2 to 8-4. 306. See id. 307. See Collin, supra note 24, at 83.

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close violations and correct them in a timely enforce the payment of full costs.319 The result manner."313 While these programs deserve merit will create a pathway to innovation by provid- for encouraging compliance among the regu- ing incentives for producers to lower their lated community, they operate within the pres- costs and, in effect, reduce the negative effects ent regulatory structure and do not create they cause to the environment.320 Furthermore, incentives to generate environmental perform- the nation's energy, agricultural and trans- ance that goes beyond compliance.314 portation policies should be changed to Through the use of subsidies, taxes and become more responsive to environmental other economic incentives, government must concerns.320 Lawyers can play an integral role to influence businesses to move beyond compli- bring about such reforms. ance toward the development of sustainable, Government must create the necessary restorative organizations according to The incentives for businesses to design their Natural Step principles.315 Government must processes and products in more sustainable stop subsidizing activities that exploit the ways.322 EPA's Design for the Environment environment (such as cars, waste disposal, and ("DfE") program323 helps businesses incorpo- nuclear fission) and start subsidizing activities rate environmental considerations into the such as "clean technologies that will lead to design and redesign of products, processes, more jobs and innovation."316 Clean technolo- and technical and management systems gies are those that operate according to The through voluntary partnerships with industry, Natural Step principles. universities, research institutions, public inter- The current tax system generally fails to tax est groups, and other government agencies.324 environmentally damaging practices.317 Another EPA program, the Environmental Government should revise the tax system to Accounting Project ("EA Project"), encourages stop encouraging undesirable behaviors, such and motivates business to better understand as resource depletion and pollution, and stop the full spectrum of their environmental costs taxing desirable behaviors, such as income and so that business will integrate these costs into work.318 If taxes are used in this way, they can decision-making.325 Similarly, EPA's Environmental

313. See United States Environmental Protection Agency, the tax on ozone-depleting chemicals. I.R.C. § 4682 (2000). Flexible Compliance Agreements for Specific Industries (last modified Mar. 318. See, e.g., Hawken, supra note 4, at 50, 53; Alan Thein 28, 1998) ; Durning & Yoram Bauman, Tax Shift, Northwest Environment United States Environmental Protection Agency, EPA Reinvention Watch Report No. 7 (1998); Robert V. Percival, Regulatory (last modified Dec. 7, 1998) . LEGAL F. 159, 196 (1997); JOHNSON, supra note 4, at 126-29. 314. The Environmental Leadership Program also was Europe currently is establishing taxes that address these issues. designed to recognize and provide incentives to facilities willing 319. See Hawken, supra note 4, at 53. Presently, permits to to develop and demonstrate accountability for compliance with pollute are free, which gives the polluter no incentive to reduce existing laws. See Environmental Leadership Program: Request his wastes below the permitted amount; see Steinzor, supra note for Pilot Project Proposals, 59 Fed. Reg. 32,062, 32,062 (June, 21 216, at 115 n.39. 1994). The program was designed to improve corporate accountability for compliance in exchange for promises by the govern- 320. HAWKEN, supra note 9, at 82-83; see also Orts, supra ment to forego short-term enforcement if violations nevertheless note 103, at 1269-71 (discussing the benefits and drawbacks of occur. Participants in the program "accept the substantive con- the pigouvian tax system). straints of the existing regulatory scheme, focusing their efforts 321. See Percival, supra note 318. on experimentation with managerial and organizational approaches." Steinzor, supra note 216, at 110-11. Unfortunately, at 322. See generally John E. Young & Aaron Sachs, The Next the time the research for this Article was conducted, implemen- Efficiency Revolution: Creating a Sustainable Materials Economy, tation of the program was still on hold. United States Worldwatch Paper No. 121 (1994). Environmental Protection Agency, Environmental Leadership Program 323. See U.S. Environmental Protection Agency, The Design (ELP) Home Page (last modified Mar. 18, 1998) for the Environment Program: Cleaner Technologies for a Safer Future . (1993). 315. Other methods include government lending and 324. See United States Environmental Protection Agency, insurance for businesses that extensively adopt The Natural Step Design for the Environment (DFE) Program Home (last modified Jan. 8, principles. 1999) . 316. Hawken, supra note 4, at 53. 325. See United States Environmental Protection Agency, EA 317. The only current federal environmental tax in place is Project (last modified Apr. 14, 1998) .

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Technology Initiative ("ETI") promotes improved the heart of The Natural Step's second system public health and environmental protection by condition- that substances must not be pro- advancing the development and use of innovative duced and dispersed at a faster rate then they environmental technologies.3326 Environmental can be broken down and integrated into the technologies "prevent pollution, control and cycles of nature or deposited into the earth's treat air and water pollution, remediate con- crust.332 This system initiates a cradle-to-cradle taminated soil and groundwater, assess and philosophy by holding manufacturers liable for monitor exposure levels and manage environ- all that they produce, which, in theory, will mental information."327 While DfE, EA Project, eliminate all non-biodegradable waste and and ETI all are steps in the right direction (and non-recyclable components from their produc- support The Natural Step's first, second and tion processes.333 This would prove an extreme- third system conditions), due to their voluntary ly useful doctrine to implement through law, nature, the programs fail to go far enough to which would establish that the least expensive foster the type of design that would eliminate means of manufacturing a product will be the non-biodegradable waste and unrecyclable most environmentally benign and constructive components from production processes.328 means.334 Furthermore, public utilities should Systems of feedback and accountability be established to regulate the supply and pro- can be established in commerce by having duction of raw materials and resources in order industry dovetail their material and waste to ensure the long-term viability of the flows to eliminate pollution.329 EPA's- resource.335 The utility would be managed to WasteWise program addresses this issue in its maximize income from its fees (for use of the promotion of solid waste reduction.330 While resource), and therefore it would have no eco- WasteWise assists organizations to design nomic interest in over-utilization or exploita- innovations that eliminate waste from their tion, since any form of degradation would processes, the program also is only voluntary reduce the value of the utility to its owners.336 and fails to generate the industrial ecological The utility would monitor usage of the raw framework that is required (where the out materials or the resource so that income was product of one factory is the raw input of maximized-where the utility would assure con- another). As a way to take this process a step tinued fees in the future. Many resource sys- further and eliminate waste altogether, govern- tems in the world, such as oil, timber, grass- ment could create an "intelligent product sys- lands and salmon "are presently over-exploited tem."331 An intelligent product system goes to and could benefit from becoming a utility that

326. See United States Environmental Protection Agency, and electronics. See Rod Hunter & Koen Muylle, European Environmental Technology Initiative (visited Jan. 19, 1999) Community: Product-Related Regulation and Liability, 29 ENVTL. . L. REP. 10515, 10518 (1999). Although Europe has encountered 327. Id. many problems with implementation of its take-back laws, resulting from the conflicting fees and additional requirements 328. Europe has implemented far more laws that generate involved, these laws are rapidly becoming administered through- incentives for industry to adopt environmentally superior manu- out the world. See Raymond Communications, Recycling Laws facturing and product design. See Raymond Communications, International (visited Jan. 12, 1999) . See generally Hunter, supra (discussing Europe's take- mond.com/rlisum.htm>. In particular, Germany's "Green Dot" back legislation and related environmental regulations). law, a form of take-back legislation, has required industry to "take back" packaging materials on its products, generating the incen- 329. See generally WACKERNAGEL & REES, supra note 3. tive to use less packaging and to manufacture packaging that is 330. See United States Environmental Protection Agency, recyclable. However, critics have proclaimed that the "Green Dot" WasteWise Homepage (last modified Dec. 19, 1998) law, with its extreme "manufacturers' responsibility" system for . package recycling, has not really succeeded in reducing use of 331. HAWKEN, supra note 9, at 67. packaging, even though it forces industry to pay about $2.3 billion in fees to ensure "take back" in a separate system run by the 332. See Robèrt, supra note 3, at 86. Duales System Deutschland. See Raymond Communications, 333. See HAWKEN, supra note 9, at 68-69. German Packaging Ordinance Still Haunts Industry (visited Jan. 12, 1999) . 334. See id. at 74. European law has extended the take-back model from pack- 335. See id. at 190. aging to other consumer goods, most notably vehicles, batteries 336. See id. at 191.

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is publicly regulated, privately managed, and Business leaders also will have to recog- market-based."337 Thus, government should nize the need for dramatic changes within their take these resource systems and develop pub- institutions. They must accept environment's lic utility regulatory strategies for their long- limited capacity and avoid continuing to be the term protection. An additional approach would central obstacle to the new, restorative econo- be the development of public common law to my. Business leaders will need to actively initi- regulate natural resources.338 Such a law is ate a complete overhaul of current business implicit in the Constitution and it needs to be practices and systems and take the lead to made explicit. demonstrate that they are capable of operating sustainable enterprises. V. Conclusion Given all that we must accomplish, The Natural Step model provides a compass with We must create a constituency for change. which to guide us to a sustainable future. Its We must generate an educated, activist net- principles have proven useful and effective. work of people dedicated to attaining a society Nevertheless, because The Natural Step is only that exists according to The Natural Step prin- a theoretical model, a strategic implementa- ciples.339 Everyone within society will need to tion program must supplement the model to participate toward the same goal-a goal that bring about more effective regulatory meas- our government leaders will need to clearly ures, powerful economic incentives within the establish, clarify and promote. Government commercial marketplace and a more localized leaders will have to become more responsible and publicly involved governmental approach. to the public and develop a more long-term Through the adoption of The Natural Step model vision when making policy determinations. and these other methods, we can develop toward a Accordingly, the role and function of govern- more sustainable, restorative existence. ment must be transformed and entirely rede- fined. In this new paradigm, lawyers must assume a more proactive role in bringing about this change. Lawyers need to be responsible for framing important issues and generating broad public dialogue and decision making to solve societal problems.340 They must recognize their obligations as guardians of social cohesion by better educating the public, by demon- strating to people what they can do with information and knowledge, and by empowering communities to take action.341 They must be a force that moves society toward sustainability.

337. Id. at 192. Enormous political obstacles must be over- come to generate such transformations in the way that resource systems are managed. Nevertheless, an example of a private regime having public oversight can be found in the commercial fishing industry where individual fishing quotas have been implemented for particular species. 338. See Winona La Duke, Keynote Address at the 1998 Public Interest Environmental Law Conference (Mar. 8, 1998). 339. See Robin Morris Collin, Brownfields Redevelopment: Industry Meets Post-Industrial World Panel, Remarks at the Public Interest Environmental Law Conference 13 (March 16, 1997) (transcript available with author); see also, e.g., Collin & Collin, supra note 24, at 44-47; JOHNSON, supra note 4, at 154-57. 340. See Collin & Collin, supra note 1, at 455. 341. See id.

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