Statement before US House on July 15, 1994

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Mister Chairman, members of the Committee, thank you for thisopportunity to testify on the Administration's plans for accelerating thedevelopment and application of new environme ntal technologies.

This hearing brings together two of the most important themes of theAdministration's technology policy--protecting the environment and spurring thedevelopment of new technologies. The President firmly believes technology can help provide solutions to many of the environmental problems we face. It canhelp us detect, monitor, and treat pollution, but more importantly it candramatically reduce the amount of pollution produced in the first place. Forexample, most cars produ ced today emit less than 5 percent of the pollutantsproduced by cars on the road thirty years ago. This improvement was madepossible by electronic fuel injection, catalytic converters, lighter materials,and dozens of other technological innovations. Technology has led to andcontinues to lead to similar, dramatic reductions in pollution from steelmills, chemical processing plants, and hundreds of types of other facilities aswell.

In many cases, the technologies used to protect the environme nt can save moneyas well. The Vice President often points out that pollution is a sure sign ofinefficiency since, after all, pollution represents wasted materials and wastedenergy. Thousands of U.S. companies have found that pollution prevention make ssense not only for the environment, but also for their bottom line. MichaelPorter, from Harvard University, has argued that companies in countries withstricter environmental regulations tend to use more advanced technology, whichmakes them more comp etitive in world markets. In addition, companies that havedeveloped new technologies to meet strict regulations have been in theforefront in selling environmental technologies in other countries adoptingsimilar regulations.

The Administration's environmental policy has three components: (1)environmental research and monitoring, which is essential if we are toidentify, understand, and address environmental problems, (2) environme ntalregulation and economic incentives to reduce pollution and use of non-renewableresources, and (3) environmental technology programs to develop and promote theuse of new, more environmentally-sound products and processes.

Environmental Research and Monitoring. Several of the agencies whichfall under this Committee's jurisdiction, including the National Aeronauticsand Space Administration (NASA), the National Science Foundation (NSF), theNational Oceanic and Atmospheric Administr ation (NOAA), the Department ofEnergy (DOE), the Department of Interior (DOI), and the EnvironmentalProtection Agency (EPA), have key roles to play in assessing and monitoring theenvironmental damage caused by human activities. The White House Office ofScience and Technology Policy (OSTP) is coordinating these activities throughthe Federal Coordinating Council for Science, Engineering, and Technology(FCCSET), which I chair. We are presently determining how OSTP can improveinteragency coordination of environmental research, particularly with regardsto local and regional environmental problems, and how we can better link theresults of that research to other Federal research activities and to thepolicy-making process.

Environmental Reg ulations. A key goal of the Administration'senvironmental strategy will be to find better ways of using regulations andeconomic incentives to promote environmental protection. There is generalagreement that we must move beyond the "command-and-co ntrol" regulatoryapproaches developed during the 1970s and 1980s and find more flexible,market-oriented solutions typified by the emissions trading systems establishedby last year's Clean Air Act amendments. The White House Office onEnvironmental Pol icy and EPA will have key roles in this effort, although theDepartment of Energy, the Department of Interior, OSTP, and other agencieswill be deeply involved, as well.

Environmental Technologies. The third leg of our environmentalpolic y--environmental technologies--is the focus of this hearing and an area inwhich OSTP has a key role to play. OSTP has responsibility for coordinatingFederal technology programs and implementing the Administration's technologypolicy, which was released in February by the President and the Vice President.Entitled "Technology for America's Economic Growth--A New Direction to BuildEconomic Strength," it provides a framework for Federal technology programs.Not surprisingly, environmental technologies ar e a key part of thatframework.

A wide range of technologies can be called "environmentaltechnologies." If you list every technology that can be used to clean up orprevent pollution, you end up with a very long list that would include almostall the "critical technologies" that the Defense Department, the CommerceDepartment, OSTP, and almost every major country have determined are key totheir economic well-being and national security, i ncluding:

This shows how difficult it can be to define the phrase "environme ntaltechnology" and how futile it would be to consider environmental technology inisolation from other technologies.

It is useful to divide environmental technologies into two categories, whichsome have labelled "dark green technologies" and " light green technologies."Dark green technologies are developed to solve particular environmentalproblems. For example, a filter or a treatment process that removes lead orhydrocarbons from water would be an example of a dark green technology. Theca talytic converter is another example.

On the other hand, light green technologies may serve many purposes, mostunrelated to environmental protection. For instance, advanced manufacturingtechnology was developed to reduce defect rates and thus improve quality andproductivity; but it can also reduce waste and energy consumption. Thedevelopment and use of such technologies can be justified without evenconsidering the environmental benefits. Yet, it may be that light greentechnologies will, in the long run, provide more environmental protection thandark green technologies. Clearly, for our policies on environmental technologyto be effective, we must promote the development and use of both shades ofgreen technology.

The Administration's efforts to accelerate the development, dissemination, andapplication of environmental technology fall into five broad areas:

2) Using the Federal government's purchasing power to spur the development ofa market for environmental products and services;

3) Assistance to businesses trying to commercialize or export environmentalproducts and services;

4 ) Updating environmental regulations to encourage use of new environmentaltechnologies; and

5) Education and training of scientists, engineers, and managers who willdevelop and deploy these technologies.

I would like to highlight some of the initiatives the Administration isundertaking in these areas and then focus on those with which OSTP has beenmost involved. The Administration's FY94 budget request included a number ofinitiatives that will accelerate the development and application o fenvironmental technologies. These include:

(1) expanding Federal funding at DOE, EPA, and other agencies for thedevelopment of environmental technologies, energy conservation technology, andalternate energy technology;

(2) implementing an energy tax that will reduce energy use and associatedpollution;

(3) expanding energy efficiency programs by 35 percent to improve the energyefficiency of Federal and other buildings, Federally-subsidized housing,transportation, and industry;

( 4) expanding the Environmental Protection Agency's Green Lights program andother similar programs in order to encourage more businesses to utilize moreefficient lighting, computers, and appliances; and

In addition, in April, on Earth Day, the President released a white paper onprotecting the global environment, which included the following initiatives:

(2) using Federal purchasing power to buy energy-efficient computer technologyand other environmentally-friendly products like recycled goods; and

(3) producing a Climate Action Plan that will call on American creativity andingenuity to find ne w technologies for reducing greenhouse gas emissions.

These programs are a key part of the Administration's overall environmentalstrategy, which includes significant new investments in environmental programsin FY94 and over the next five years. These investments will pay hugedividends for years to come in terms of a cleaner environment, better healthfor our citizens, and reduced energy consumption. In addition, this investmentwill create new jobs in the rapidly growing environment products and servicesindustry, an industry the United States has historically dominated but in whichother countries, particularly Japan and Germany, have become leading players.

The most cost-effective way for the Federal government to invest in newenvironmental technologies is to make development of green technology anintegral part of technology programs throughout the government. Our goalshould be to encourage Federally -supported researchers developing newtechnologies to consider environmental applications of their discoveries,whether their work is supported by the Defense Department, NASA, the Departmentof Commerce, the Department of Agriculture (USDA), or another a gency.Unfortunately, too often agencies focus too narrowly on their missions and missthe opportunity to explore how the technologies being developed in their labsmight be used by other agencies and by the private sector to fulfill othermissions as wel l. For instance, the same sensors that the Defense Departmenthas developed to detect minuscule traces of nerve gas and other chemical agentscould be used to monitor and track air pollution--if the money and thetechnical talent were available to explor e that possibility. In many cases,finding technological solutions to environmental problems does not requiredeveloping new technologies, it merely requires finding new uses for existingtechnologies.

Unfortunately, we do not have a lot of new money to devote to these efforts.That is why the Administration has focussed on using existing programs andmechanisms to help accelerate the development and application of greentechnologies, and why it is essential that we mobilize private sectorcreat ivity. After all, it is the private sector that is the source of most newcivilian technology development in this country.

EPA's Environmental Technology Initiative. One new program thatexemplifies the Administration's approach to enviro nmental technology is a newmulti-agency program led by EPA. This program is designed to build linksbetween EPA and agencies such as the Department of Commerce, the Department ofEnergy (DOE), the National Science Foundation (NSF), the U.S. Department o fAgriculture (USDA), and NASA. Doing so would give EPA regulators a betteridea of what technology can and cannot do to reduce pollution and, equallyimportantly, it would help Federally-supported scientists and engineers at ournational labs, in our u niversities, and in industry identify where theirresearch might provide important environmental spin-offs. It is particularlyimportant that technology agencies work with EPA to anticipate the need for newtechnologies to meet future regulations. The J apanese have been particularlyeffective in this area. For instance, in order to implement the MontrealProtocol banning CFCs and other ozone-depleting chemicals, the Japanesegovernment worked closely with industry to find new substitutes. There haveb een similar programs in the United States; NASA has worked with the aircraftindustry on a focussed research program to reduce aircraft noise so that U.S.aircraft can meet FAA airport noise regulations. NASA has also signed amemorandum of understanding with EPA that establishes a framework forcooperative activities by which the two agencies can share their uniqueexpertise and research capabilities. Unfortunately, this kind of inter-agencycoordination is far too rare.

For FY94, EPA has reque sted $36 million for this new program. Two-thirds ofthe funding for the program would be for contracts with other agencies todevelop and promote the use of new environmental technologies. This willleverage existing Federal technology programs by bri nging together people atEPA, who can identify our most pressing environmental problems, with scientistsand engineers in other agencies, who can identify technologies that could beused to address those problems. Some of the funding will be spent at Fe derallaboratories, but most of it would probably be awarded as competitive grantsand contracts to industrial and university researchers working on leading-edgetechnologies through programs like the Advanced Technology Program at theDepartment of Comme rce, the grant programs at the National Science Foundation,or the Superfund Research Program of the Department of Health and HumanServices (HHS). These existing programs have been very successful inidentifying and funding top-flight scientists and eng ineers who have used thegrant money to develop "generic" technology that helps make American companiesmore competitive. With the funding provided by this new program, theseprograms will be able to target those technologies that provide environmentalb enefits as well.

This multi-agency approach provides many benefits. It creates links amongFederal researchers and EPA environmental experts, ensuring that technologiesdeveloped under the program address critical environmental needs. It willac celerate the "greening" of federal technology program at the Department ofCommerce, the Department of Energy, USDA, and elsewhere and puts environmentaltechnology on the agenda of every Federal research agency. Most importantly,this approach, by build ing on existing technology programs, can provideimmediate, tangible results. This approach has been tried before in the 1970swith the Federal Interagency Energy/Environment R&D Program, which provedto be very successful. Unfortunately, it was eli minated at the start of theReagan Administration.

This program is just one of several Administration initiatives that will buildupon existing technology programs. There are many R&D programs at DOE,NASA, the Department of Commerce, and oth er agencies which can and willcontribute towards the development of new environmental technologies. Forinstance, the DOE labs have entered into numerous Cooperative R&DAgreements (CRADAs) with industry to develop green technology for use in many different industrial sectors.

OSTP has a key role to play in ensuring that Federal agency programsdesigned to promote environmental technology are well-coordinated and properlyfocussed. Programs like the new EPA-led program can only succeed if agenciesare working together toward a common goal.

To provide this coordination, OSTP and other White House offices are forming ahigh-level, multi-agency working group on green technology. It will be similarto several multi-agency, deputy-level working groups created by the WhiteHouse in April to implement the Administration's technology policy. Thesegroups were created to coordinate policy development in much the same wayFCCSET has coordinat ed research programs.

The new working group will help promote the use of green technologiesdeveloped by Federal research programs and by the private sector. It will makesure that Federal procurement, trade, fiscal, and regulatory policies hel p, nothinder, the development of these technologies.

It will do this in several ways. First, it will work with the researchagencies to ensure that all technology programs, not just those focussed onenvironmental technologies, are considerin g the environmental applications ofthe technologies they are developing. In this way, it will promote the"greening" of research agencies like DOE and NASA.

The working group will also bring together technologists from researchagencies and poli cy makers at EPA and other agencies and find ways to provideincentives to industry and to individuals to adopt cleaner, greenertechnologies.

In short, this group will be in charge of carrying out the Administration'sagenda for environmental tec hnology. It will work in several different arenas,including (1) technology development, (2) assistance to industry, and (3)regulatory reform needed to promote development of new technologies.

In order to do this it will work with two alread y-established multi-agencycommittees:

(1) A new subcommittee of the Federal Coordinating Council on Science,Engineering, and Technology to provide high-level coordination of agencyprograms to develop environmental technologies.

(2) A multi- agency committee led by the Department of Commerce and involvingEPA, the Energy Department, and OSTP, to promote commercial use ofenvironmental technologies both here and abroad.

FCCSET Subcommittee on Environmental Technology. To provid ecoordination for Federal environmental technology programs, my office hascreated a subcommittee of the Federal Coordinating Council for Science,Engineering, and Technology (FCCSET), which will focus on environmentaltechnology. I chair the FCCSET and the acting chairman of this new Federalsubcommittee is Joe Bordogna, the Assistant Director for Engineering at NSF.Other agencies involved include EPA, DOE, NASA, USDA, HHS, the Department ofCommerce, and others. Working together, these agencies will identifyopportunities for joint programs and coordinate their individual efforts todevelop environmental technologies to ensure that there is no duplication ofeffort or missed opportunities.

This group will focus primarily on technology deve lopment and primarily on"dark green" technologies. One of their first tasks will be to conduct aninventory of on-going technology programs that are or could provide funding fordevelopment of new environmental technologies. This group will also explor eopportunities for cooperative multi-agency R&D projects similar to thoseundertaken under the U.S. Global Change Research Program. Lastly, this newsubcommittee will help OSTP and the research agencies formulate priorities forthe FY95 budget in th e area of environmental technologies. Given the budgetdeficit, it is critical that Federal research dollars are spent wisely andwell. That means identifying those research opportunities that offer thegreatest potential return and not being afraid to terminate research programsthat have outlived their usefulness.

Working Group on Environmental Technology and Trade. According to theOECD, the worldwide market for environmental technology is projected to growfrom $200 billion today to at least $300 billion by the year 2000.Unfortunately, most of the American companies providing environmental goods andservices are relatively small and need special assistance in locating andselling into foreign markets. We need to make sure that Fed eral tradepromotion programs help these companies exploit this expanding world market.

As the President noted in his Earth Day speech this April, there is a largeand growing market in environmental technologies and services. To help U.S.compan ies exploit that market, the Commerce Department has formed aninteragency working group, chaired by Dr. Kathy Sullivan, the Chief Scientistof NOAA, to formulate a strategy to improve U.S. export opportunities andmarket share in this important sector. The Department of Commerce is workingwith EPA, DOE, the Export-Import Bank, U.S. AID, OSTP and--most importantly,the relevant business community--to identify the strengths and weaknesses ofexisting Federal efforts in this area.

The working g roup will identify factors that both promote and impede thetechnical capabilities and business reach of U.S. technology and servicecompanies. Some of these are inherent in our approach to environmentalregulation, while others are related to the organi zation of our trade promotionand financing programs. It will critically review current effort, bothgovernmental and private, to promote exports in this sector. We clearlyunderstand that U.S. business is the customer and primary player in this area,s o the working group is firmly committed to getting comment and recommendationsfrom business representatives, trade association leaders and academics who areexperts in this sector domestically and internationally. A true public-privatepartnership is es sential in both the deliberations on strategy and theimplementation of that strategy.

The working group's report is due in October and will provide theAdministration with recommendations which will improve both the domesticstrength and the expo rt posture of U.S. environmental companies. I expect thework of this group will be a visible, dramatic example of reinventedgovernment, in which multiple government agencies pull together in aconstructive, focussed fashion, with clear guidance from th e affected businesscommunity, to provide U.S. businesses with coherent, effective support andassistance.

Many of the recommendations of this working group will be implemented by theTrade Promotion Coordinating Committee (TPCC). The TPCC, which has created anEnergy, Environment, and Infrastructure Working Group, was given a statutorymandate last year in the Export Enhancement Act of 1992 to help coordinateFederal environmental export programs.

As you can see, the Administration is serious about promoting the developmentand application of environmental technologies. Agencies are working togetherto develop cost-effective strategies and coordinated research plans. We haverequested additional funding for FY94 and are in the process of redirectingexisting resources. These efforts will help ensure the United States is at theleading edge in environmental technology and will not only help us protect ourenvironment but will also help American companies ca pture a larger share of thelarge, growing world market for pollution monitoring, clean-up, and preventiontechnologies.

But there is still much to be done. I look forward to working with theScience Committee, which is a critical player on envir