Reinventing Environmental Regulation Lessons from Project XL

Under Project XL, businesses promised better performance in exchange for a regulatory approach focused more on results than means, with the Environmental Protection Agency (EPA) measuring pollution reduction across rather than at individual sources within a facility.

Reinventing Environmental Regulation is a compelling account of the breakdown in negotiations to implement Project XL at a tape manufacturing plant of 3M, a company widely recognized as environmentally progressive. Authors Marcus, Geffen, and Sexton discuss the conflicting goals of participants, the influences of personality and organizational culture, and complications caused by changes in 3M's external business environment. They compare the 3M case with EPA negotiations involving Intel, Merck, and Weyerhaeuser, finding similarly contentious, though less fatal disagreements about the meaning of "superior environmental performance."

Project XL (eXcellence and Leadership) was the flagship effort by the Clinton administration for "cleaner, cheaper, and smarter" regulation. Other recent proposals also emphasize flexibility and voluntary efforts. Marcus and his coauthors demonstrate the difficulty of putting these ideas into practice, while stressing the need for continued innovation. They suggest more successful outcomes through clearer definitions and expectations, better communication, and negotiations that keep pace with changes in the world beyond.

Project XL (eXcellence and Leadership) was the flagship effort by the Clinton administration for 'cleaner, cheaper, and smarter' regulation. Under Project XL, business promised better performance in exchange for a regulatory approach focused more on results than means, with the Environmental Protection Agency (EPA) measuring pollution reduction across rather than at individual sources within a facility. Reinventing Environmental Regulation is a compelling account of the breakdown in negotiations to implement Project XL at a tape manufacturing plant of 3M, a company widely recognized as environmentally progressive. Marcus, Geffen, and Sexton discuss the conflicting goals of participants, the influences of personality and organizational culture, and complications caused by changes in 3M‘s external business environment. They compare the 3M case with EPA negotiations involving Intel, Merck, and Weyerhaeuser, finding similarly contentious, though less fatal disagreements about the meaning of 'superior environmental performance.' In common with other recent proposals, Project XL emphasized cooperative, flexible regulatory approaches. Reinventing Environmental Regulation demonstrates the difficulty of putting these appealing ideas into practice, while offering encouragement for continued innovations.

1. Environmental Policy in Transition 2. Quid Pro Quo and the Birth of Project XL 3. Conflicting Goals 4. Complicating Factors 5. Drafting the 3M Proposal 6. Gaining EPA Support for the Agreement 7. Trying to Overcome Deadlock: The Practical Impediments 8. Intel, Merck, and Weyerhaeuser: Three XL Projects that Gained Approval 9. Comparing the Approved Projects with 3M's Proposal 10. Roadblocks to Cooperative Solutions 11. Creating a Platform for Experiments Appendix A: The Comparable Actions Test Appendix B: Next Steps at 3M-Hutchinson Appendix C: A More Unambiguous Definition of Superior Environmental Performance? References Acknowledgements Index About the Authors

Alfred A. Marcus is a professor in the Carlson School of Management, University of Minnesota. Donald A. Geffen is research associate at the Strategic Management Research Center at the Carlson School of Management, University of Minnesota. Ken Sexton is Bond Professor of Environmental Health Policy at the University of Minnesota.