A COMMISSION REPORT 

Intergovernmental 

Decisionmaking 

for Environmental Protection 

and Public Works 

U.S. Advisory Commission on 

Intergovernmental Relations 

A- 122 

November 1992 
U.S. Advisory Commission on 

Intergovernmentd Relations 

800 K Street, NW 

South Building 

Suite 450 

Washington, DC 20575 

(202) 653-5640 

FAX (202) 653-5429 

ii U.S. Advisory Commission on Intergovernmental Relations 
Executive Summary 

As the population and economy of the United States 

grow, the nation needs new highways, airports, dams, 

wastewater treatment plants, and solid waste facilities. At 

the same time, the United States is committed to meeting 

increasingly rigorous environmental goals to improve the 

quality of air, water, and wildlife habitat; to halt wetlands 

conversions; to preserve wilderness areas; and to elimi- nate the emission of toxic substances. 

Federal environmental laws and review processes (per- mitting, licensing, approval or veto, impact reviews) have 

helped reduce the adverse environmental effects of public 

works projects during the past two decades. Yet, Americans’ 

lifestyle choices-how we live, produce, consume, farm, travel-continue to threaten the health of the environment. 

This study, Intergovernmental Decisionmaking for Environmental Protection and Public Works, identifies conflicts 

between proposed state and local public works projects 

and the federal environmental decisionmaking process. 

The two goals of protecting the environment and providing adequate infrastructure are compatible in theory, but 

often they do not mesh well under existing policies. 

The principal findings of the study are: 

1. With respect to infrastructure, federal rules 

and procedures governing decisionmaking 

for protecting the environment often are 

complex, conflicting, difficult to apply, adversarial, costly, inflexible, and uncertain. 

2. Federal decisionmaking rules and procedures too often result in delay, wasted effort 

and money, lost opportunities to accommodate both environmental protection and infrastructure objectives, prolonged litigation, 

and more process without necessarily provid- ing more environmental protection. 

There are five main reasons for the current 

difficulties in environmental decisionmaking: 

3. 

Some environmental standards, or their 

application, are unnecessarily arbitrary. 

Federal decisionmaking frequently has 

too many sequential steps and too many 

potential veto points, and is too detailed, 

pervasive, and distant from the site to be 

efficient, effective, and realistic. 

There are many agencies having different 

environmental responsibilities, multiple 

veto points, and diverse triggers for vetoes, 

but not enough data, analyses, expertise, 

money, time, and personnel to coordinate 

their activities. 

Mechanisms for balancing diverse needs 

and values and avoiding impasses and litigation are underdeveloped. 

Frequently, there is a failure to internal- ize full environmental costs within the 

total project costs that should be shared 

among all of the benefited parties. 

Federal legislation establishing a framework for integrating federal environmental review actions has been in 

place for two decades in the National Environmental Policy 

Act (NEPA). Federal and state agencies seek to coordinate 

federal permit, license, and review requirements-including studies and data gathering, public review, and agency 

consultation-within the environmental impact statement process. Sometimes, public officials have difficulty 

doing this because of competing and incompatible statutory and regulatory mandates. 

Under some federal laws, such as the Clean Air Act, 

Clean Water Act, Endangered Species Act, and Department 

of Transportation Act, a federal permit, license, or grant 

may not be approved if the project does not comply fully 

with specific uniform standards. Federal environmental laws 

and regulations also encompass two types of criteria for 

approving a public works project or for selecting the ‘%best” 

alternative. For example, laws such as NEPA, the Federal 

Power Act, and the Electric Consumers Protection Act call for 

balancing environmental, economic, and social objectives. 

Others, such as the Clean Air and Clean Water acts’ emissions 

and effluent standards, the Clean Water Act Section 404 

wetlands “dredge-and-fill” regulations, and the Endangered 

Species Act, apply definitive environmental standards regardless of other needs. 

Integration and coordination of the federal review 

and decisionmaking requirements and procedures can reduce project delays and costs while improving services to 

the public and protecting the environment. Several federal and state agencies have recently demonstrated that 

coordination, combined with consideration of the environment at every stage of project development, can increase 

the efficiency and effectiveness of the federal environmental review process. 

The intergovernmental review process should clanfy 

the environmental protection and infrastructure responsibilities of the federal, state, and local governments. Moreover, 

it should recognize a key role for the states in reconciling and 

mediating the interests of citizens, local governments, states, 

Indian tribes, and the federal government. 

Although federal, state, and local agencies have made 

progress toward streamlining the process, more could be 

done within the present regulatory framework. It has been 

suggested that government officials get diverse public and 

private parties together early and often; foster and reward 

cooperation and compromise; conduct a single set of stu- dies, analyses, and public hearings to meet multiple environmental requirements; and integrate review and 

decision criteria and methods. Other proposals include 

encouraging the use of administrative dispute resolution 

in place of litigation (Administrative Dispute Resolution Act 

of 1990 and the Negotiuted Rulemaking Act of 1990), and 

allocating adequate federal funding to implement federal 

environmental review requirements. 

Changing our expectations about how public works 

and environmental goals can mesh satisfactorily will require additional education and training, research and de- velopment, and taxpayerkitizen commitment. It will also 

require changes in government processes. 

U.S. Advisory Commission on Intergovernmental Relations iii 
Preface 

Two pressing national goals-protecting the environ- 

.ent and providing public works-are compatible in 

ieory but frequently conflict under current government 

Aicies. As a result, the U.S. Advisory Commission on 

itergovernmental Relations (ACIR) has become con- 

:med that intergovernmental decisionmaking in this 

.ea may be approaching gridlock. Certainly, reasonable 

:ople will disagree about solutions, but in this field the 

‘ocess itself is often an obstacle to efficient and effective 

:cisionmaking. ACIR’s aim, therefore, is to find better 

iys to make decisions-ways that will respect both envilnmental and infrastructure needs. 

The Commission has found considerable frustration 

:nerated by overlapping requirements, duplicative regutions, and delays that make planning more difficult and 

stly for public officials and agencies without necessarily 

ihancing environmental protection. 

In developing this report, ACIR consulted widely and 

snvened a panel of experts who gave the Commission 

,st-hand information about how decisions are made. 

ieir suggestions helped us formulate recornmendations 

at we think are sound, reasonable, and workable. 

The National Environmental Policy Act (NEPA) has 

lpropriate procedures for resolving many of the difficul- 

:s, but decisionmakers do not always follow those rules. 

1 realize the true potential of this crosscutting environmtal law-frequently identified with the environmenimpact statement (EIS) process-requires new 

;islation. The aim is make NEPA do the job that the 

mgress intended when it enacted the law in 1969. 

We propose that Congress give the Council on Environmental Quality (CEQ) statutory authority for the EIS 

regulations. The council is charged with coordinating the 

implementation of environmental requirements by federal 

agencies. The CEQ regulations cover many of the problems-integration of interagency requirements, coordination, length of documents, delay, duplication, and 

arbitration. The council is increasingly innovative in providing better guidance to agencies, but our goal is to 

strengthen that effort. 

ACIR also recommends that public works providers 

consider the environment at all stages of a project, and 

that federal, state, and local governments coordinate their 

overlapping procedures and requirements. Another reform would be to require realistic schedules that give 

certainty to the process. Policymakers can recognize the 

need for change. For example, federal agencies responsible for protection of the nation’s wetlands are working to 

streamline the regulatory process relating to transporta- tion programs. 

Environmental protection and infrastructure must 

coexist. We hope this report and our recommendations will 

aid federal, state, and local governments in their efforts to 

improve the decisionmaking processes required to protect 

the environment and provide needed public works. 

Robert B. Hawkins, Jr. 

Chairman 

J.S. Advisory Commission on Intergovernmental Relations 
Acknowledgments 

The principal investigators and authors of this report 

were Daniel R. Mandelker, Stamper Professor of Law, 

Washington, University, St. Louis (Chapter 1); and Michael C. Rubino and Kenneth I. Rubin of Apogee Research, Inc., Bethesda, Maryland (Chapters 2 and 3). 

Members of the U.S. Advisory Commission on Intergovernmental Relations (ACIR) who served on a special 

committee to review the report and develop the recommendations were Debra Rae Anderson, Dave Durenberger, Robert M. Isaac, Samuel B. Nunez, Jr., Stan Stephens, 

and D. Michael Stewart. 

ACIR is grateful to the following individuals who 

reviewed and commented on the study: Roy Arnold, Larry 

Babich, Bruce L. Bandurski, Carl Bausch, Ray Beurket, 

John Bosley, Dail Brown, Judith A. Burrell, William 

Canary, Joseph Canny, Jo Clark, Eugene Cleckley, John 

Clements, William G. Colman, Tom Curtis, Abby Diedreikson, Greg Evans, Debra Gutenson, Paul Guthrie, 

Andrea Hillyer, Louise Jacobs, Harry Kelso, Rick Kuhlenberg, Stephen Light, Sanford McAllister, William 

Marmura, Nancy Miller, Marian Mlay, Debra Nesbitt, 

Bruce Noble, Konrad Perlman, Ray Prince, Hank Schilling, Phil Shimer, Jay Shrewder, Ethan T. Smith, James 

Souby, John H. Sullivan, Thomas Wehri, William Werick, 

Carolyn Van Schaik, Alex Varela, and Ken Voytek. 

Thanks also go to Robert Tonsing, Edward Osann, Max 

Whitman, and Dinah Bear, who appeared before the 

Commission to provide expert views and answer questions. 

Our acknowledgment of the assistance of these persons does not mean that they endorsed the report in whole 

or in part. The Commission and its staff remain responsible for the final product. 

At ACIR, Patti Pride and Sharon Lawrence assisted 

with the project, and Joan Casey edited the report for 

publication. Secretarial assistance was provided by Suzanne Spence. 

John Kincaid 

Executive Director 

Bruce D. McDowell 

Director, Government Policy Research 

U.S. Advisory Commission on Intergovernmental Relations v 
vi U.S. Advisory Commission on Intergovernmental Relations 
Contents 

Principles. Findings. and Recommendations ............................................................ Principles ....................................................................................... Findings ........................................................................................ Recommendations ................................................................................ Recommendation 1- 1 ntegrated Administration of Federal Environmental Protection Laws through 

the National Environmental Policy Ad and the Council on Environmental Quality ... Recommendation 2-Administration of Environmental Decisionmaking by Executive Order ........... Recommendation 3-Integration of Federal Pollution Control Laws ................................. Recommendation &State Implementation of Federal Environmental Protection Laws ................ Recommendation 5-Federal and State Use of Environmental Mediation for Dispute Resolution 

and Negotiated Rulemaking ................................................. Recommendation 6-Federal Reimbursement of Mandated Environmental Protection Costs ........... Recommendation 7-The Scientific Basis for Ecological Management ............................... 

Purpose of This Study ............................................................................ Legislation and Public Works ...................................................................... 

Public Works Needs and Environmental Quality ..................................................... 

Potential Strategies ............................................................................... 

Introduction ......................................................................................... 

Concerns Raised by Federal Environmental Decisionmaking Processes ................................. 

Sustainable Development ......................................................................... 

PlanoftheReport ............................................................................... 

The Legal Framework for Environmental Review of State and Local Public Works Projects ....... Introduction ..................................................................................... Chapter I . 

The Interlocking Legal Matrix ................................................................. Alternative Choices for Environmental Regulation ........................................... Informal Decisionmaking vs . Adjudication ................................................... The Coordination Problem: Fragmented Environmental Review ................................ The Constitutional Basis for Environmental Review Requirements ................................. State and Local Public Works Projects .......................................................... How State and Local Projects Become Subject to Federal Environmental Review Requirements ........... Federal Assistance ............................................................................ Federal Permits for State and Local Public Works Projects ........................................ Supplemental Federal Environmental Permits ................................................... Supplemental Federal Environmental Reviews ................................................... Veto Points ...................................................................................... Environmental Requirements in Federal Assistance Legislation .................................... Section 4(f) of the Department of Transportation Act ........................................... Additional Environmental Requirements for Transportation Projects ........................... Environmental Review for Wastewater Treatment and Water Resource Projects .................. Environmental Requirements in Federal Permit Legislation ....................................... 

Clean Water Act Dredge-and-Fill Permits for Wetlands ........................................ Air Quality Permits ....................................................................... Federal Environmental Review without Permits .................................................. Compliance with Pollution Control Legislation ............................................... The National Environmental Policy Act ....................................................... The National Historic Preservation Act 

The Endangered Species Act ................................................................ Federally Authorized Environmental Review by the States ........................................ State Certification under Section 401 of the Clean Water Act ................................... Federal Consistency Requirements in the Coastal Zone Management Act ......................... Accommoclating Environmental Reviews ............................................................ The Limited Scope of Accommodation .......................................................... Legislative Axamnodation ................................................................... 

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U.S. Advisory Commission on Intergovernmental Relations vii 
Crosscutting Requirements ................................................................ Exemptions from Review Legislation ........................................................ Multiple Agency Referral. Comments. and Recommendations ................................. Deferring to Other Federal Agencies ....................................................... Reverse Federalism ....................................................................... Agency Accommodation through Joint Processing and Mediation .................................. 

Comparable Interpretation of Environmental Review Provisions ............................... The Functional Equivalence Doctrine under NEPA ........................................... Bamers to Accommodation ....................................................................... Legislative Problems .......................................................................... Conflicts and Ambiguity in Federal Legislation ............................................... Conflicts in Congressional Committee Jurisdiction and Interest Group Representation ........... Difficulties in Defer and Refer Requirements and Reverse Federalism .......................... Federal Agency Problems ..................................................................... Failure to Comply with Environmental Mandates: The Mission Agency Problem ................. 

Judicial Interpretation ........................................................................ 

Divided Agency Jurisdiction and Dispersed Environmental Responsibility ....................... 

Chapter 2 . Analytical Techniques in Federal Environmental Decisionmaking ............................... Types of Assessment and Decision Methods Used .................................................... The National Environmental Policy Act and the Environmental Impact Statement ..................... Permit and License Review and Decisions ....................................................... Section 404 of the Clean Water Act: Wetlands ................................................ Wastewater and Stormwater Discharge Permits: NPDES ...................................... Air Quality Permits ....................................................................... Federal Energy Regulatory Commission Licensing ............................................ Environmental Reviews ....................................................................... Endangered Species ...................................................................... DOT Environmental Review Guidelines ..................................................... Historic Preservation ...................................................................... Economic and Analytical Techniques that Might Be Used in Decisionmaking ............................ Economic Analysis ........................................................................... Use of Economic Analysis in Federal Environmental Decisionmaking ........................... Estimating Nonmonetary Costs and Benefits ................................................. Limitations of Economic Analysis ........................................................... Future Directions of Economic Analysis ..................................................... Multiple Objective Analysis ................................................................... Sustainable Development as a Project Analysis Method ........................................... Sustainability at the Project Level .......................................................... Sustainability at the Program Level ......................................................... Limitation on Practical Applications of Sustainability ......................................... Examples of Sustainability Measures in Practice .............................................. Risk Analysis ................................................................................ Social Impact Analysis ........................................................................ Business and Corporate Efficiency and Management Techniques ................................... 

Chapter 3 . Intergovernmental Processes and Procedures for Environmental Decisionmaking ................ Problems with the Intergovernmental Environmental Decisionmaking Process ........................... 

Separate Federal Statutes and Organizations ................................................. Number of Federal. State. and Local Agencies ............................................... Lack of Budget and Staff Resources ........................................................ Differences between EIS and PermMReview Processes and Requirements 

Lack of Processes for Accommodation 

Public Participation ....................................................................... EIS Procedures and Paperwork ............................................................. 

without State Decisionmaking Authority ........................................................ 

Sequential Decisionmaking Analysis and Information Gathering ................................... 

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viii U.S. Advisory Commission on Intergovernmental Relations 
Needs and Objectives of Federal. State. and Local Governments Differ ......................... 

Retain Decisionmaking Power .......................................................... Federal Requirements and Traditional State Prerogatives ...................................... Lack of Funds for Federal Environmental Programs Delegated to States ........................ State NEPAs and Requirements ............................................................ Environmental Constraints: Section 404 of the Clean Water Act .................................... Delegation of the 404 Program to the States ................................................. Lack of Coordinated and Comprehensive Wetlands Programs .................................. EPAs Section 404 Veto Powers ............................................................. Design of Environmentally Sensitive Projects .................................................... Approaches to Integration. Coordination. and Accommodation ........................................ 

Early Review of Project Designs or Applications .............................................. NEPA Integration: Concurrent Environmental Reviews ....................................... Improvements to the EIS Process ........................................................... Formal. Scheduled Interagency Coordination ................................................ General Permits .......................................................................... Interstate and Regional Programs .......................................................... Information Management ................................................................. State and Local Government Innovation ........................................................ State Implementation of Federal Law ........................................................... Setting Priorities ............................................................................. Advance Designation and Ecosystem Management ........................................... Negotiation. Mediation. and Environmental Dispute Resolution ................................... Alternative Sources of Funding and Public-Private Partnerships .................................... Mitigation ................................................................................... Use of Mitigation in Federal Programs ...................................................... Effectiveness of Mitigation ................................................................ Definitions of Mitigation and Compensation ................................................. Consideration of the Environment at the Design Stage ........................................... Legislative and Administrative Reform Proposals .................................................... Reinvigorating the NEPA Process .............................................................. Changes to the EIS/NEPA Procedures and Process ............................................... Regulatory Flexibility and State/Local Implementation ............................................ Communication. Education. and Research and Development ...................................... Consolidated Federal Environmental Statute .................................................... Benefits of a Single Environmental Act ..................................................... Conservation Foundation Proposal .......................................................... Raising EPA to Cabinet Status ................................................................. Consolidating Federal Environmental Agencies .................................................. Specific Environmental Legislation Changes ..................................................... Decisionmaking Criteria and Administrative Discretion ........................................... Market and Economic Approaches ......................................................... 

State and Local Governments Implement National Programs but Federal Agencies 

Coordination ................................................................................ 

Benefits and Costs of the Time Delay in the Federal Environmental Decisionmaking Process ......... 

Tables 

Table 1-1 

Table 1-2 

Table 1-3 

Table 1-4 

Table 1-5 

Table 2-1 

Table 2-2 

Table 2-3 

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Use of Economic Analysis in Federal Environmental Programs ................................ Public Laws Providing for the Regulation of Exposures to Carcinogens .......................... 

Federal Environmental Review and Permit Legislation (Environmental Resource Protected) ...... Federal Environmental Decision Criteria .................................................... 

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U.S. Advisory Commission on Intergovernmental Relations ix 
x U.S. Advisory Commission on Intergovernmental Relations 
Principles, Fi n d i ngs, and Recommendations 

PRINCIPLES 

1. The nation's environment requires protection. 

The nation is committed to achieving increasingly 

effective protection of the environment. Federal government review processes have reduced the adverse environmental effects of public works projects during the past two 

decades; yet, our lifestyle choices-how we live, consume, 

farm, travel, and produce products-continue to threaten 

the health of the environment. 

2. The nation's economic well-being requires public and 

private infiastructure investment, 

America requires new highways, airports, drinking water supplies, sewage treatment plants, and solid waste facilities to meet growing population, economic development, 

international competitiveness, and quality of life needs. 

3. The intergovernmental processes used to achieve environmentalprotection and infrastructuregoals in mutually satisfactory ways should be clear, cooperative, 

consistent, efficient, flexible, definitive, responsive, and 

fair to all concerns. 

These two goals-protecting the environment and 

providing adequate infrastructure-are compatible in 

theory, but often do not mesh well under existing policies. 

Changing our expectations about how public works and 

environmental goals can mesh satisfactorily will require 

additional education and training, research and development, and taxpayerlcitizen commitment. It will also require changes in government processes. 

Federal legislation establishing a framework for integrating federal environmental review actions has been in 

place for two decades in the form of the National Environmental Policy Act (NEPA). Federal and state agencies seek 

to coordinate federal permit, license, and review requirements-including studies and data gathering, public review, and agency consultation-within the environmental 

impact statement (EIS) process. Sometimes, public officials have great difficulty doing this because of competing 

and incompatible statutory and regulatory mandates. 

Integration and coordination of federal review and 

decisionmaking requirements and procedures concerning 

state and local public works projects can reduce project 

delays and costs while improving services to the public and 

protecting the environment. Several federal and state 

agencies-especially in highway programs-have recently 

demonstrated that agency coordination, combined with 

consideration of the environment at every stage of project 

development, can increase the efficiency and effectiveness, and decrease the time required for, the federal environmental review process. 

4. The intergovernmental mkw process also should clariifL the 

environmental protection and irtfimcture reJponsiilitim 

of the federal, state, and local governments. Moreow it 

should recognize a key role for the states in reconciling and 

mediating the interests of citizens, local governs, states, 

Indian tribes, and the federal gowmmm. 

Although federal, state, and local agencies have made 

progress toward streamlining the process, more could be 

done within the present regulatory framework. It has been 

suggested that government officials get diverse public and 

private parties together early and often; foster and reward 

cooperation and compromise; conduct a single set of studies, 

analyses, and public hearings to meet multiple environmental requirements; and integrate review and decision criteria 

and methods. Other proposals include encouraging the use 

of administrative dispute resolution in place of litigation, and 

allocating adequate federal funding to implement federal 

environmental review requirements. 

FINDINGS 

1. With respect to infrastnrcture, present federal rules and 

procedures governing decisionmaking for protecting the 

environment often are complex, conflicting, difficult to 

apply, adversarial, costly, inflexible, and uncertain. 

Federal environmental laws affect the nature and 

timing of state and local public works by requiring (1) 

environmental permits (or licenses), (2) approval for grant 

funding subject to environmental constraints, and/or (3) 

environmental impact reviews. Although NEPA requires 

federal and state agencies to integrate and coordinate the 

review and decision processes, many projects go through a 

long series of sequential and distinct review and/or decision steps to satisfy federal environmental requirements. 

For example, approval for dam construction may include the licensing review requirements of the Federal 

Energy Regulatory Commission (FERC); the preparation 

of an environmental impact statement (EIS); a Clean Water Act Section 404 permit from the U.S. Army Corps of 

Engineers and review of that permit by the Environmental 

Protection Agency; determination of impacts on endangered species by the U.S. Fish and Wildlife Service; and 

separate state and local government reviews. 

U.S. Advisory Commission on Intergovernmental Relations 1 
The reasons for lack of coordination include separate 

and overlapping federal environmental laws, legislative 

committee jurisdictions, and implementing agency responsibilities; the large number of federal, state, and local 

agencies involved in decisionmaking; the gap between environmental agency responsibilities and the staff and budget resources to undertake the job; inadequate processes 

for accommodating differences; and insufficient communication and public participation. 

2. The present federal decisionmaking rules and procedures 

too often result in delay, wasted effort and money, lost 

opportunities to accommodate both environmental protection and infrastructure objectives, prolonged litigation, 

and more process without necessarily providing more environmental protection. 

Some experts contend that many conflicts between 

federal environmental decisionmaking and state and local 

public works projects could be avoided by considering the 

environment at all stages of planning, design, and implementation; identifying and addressing environmental 

priorities based on the degree of health and environmental risk; and developing public works designs and nonstructural solutions to public works needs that do not 

create environmental permit and review problems. 

Proponents say these actions will reduce the number 

of cases in which state and local projects generate difficult 

or adverse federal environmental funding and permit decisions; help avoid surprises at the permit or funding stage; 

decrease the potential for conflict between public works 

needs and environmental needs; and reduce project delays and unnecessary costs. Some public works agenciesbut too few-view a healthy environment as a design 

criterion. The Federal Highway Administration, for example, is sponsoring pilot projects for state and local governments to encourage early and continuing inclusion of 

environmental considerations in transportation and road 

planning and design. 

3. There are jive main reasons for the current difficulties 

with environmental decisionmaking: 

(a) Some environmental standards, or their application, are unnecessarily arbitrary. 

(b) Federal government decisionmaking frequently 

has too many sequential steps and too many 

potential veto points, and is too detailed, too 

pervasive, and too distant from‘the site to be 

efficient, efective, and realistic. 

(c) There are many agencies having different envi- ronmental responsibilities, multiple veto points, 

and diverse triggers for vetoes, but not enough 

data, analyses, expertise, money, time, and personnel to coordinate their activities. 

(d) Mechanisms for balancing diverse needs and 

values, and avoiding impasses and litigation, are 

underdeveloped. 

(e) Frequently, there is a failure to internalize fill 

environmental costs within the total project 

costs that should be shared among all of the 

benefited parties. 

The EIS and permit processes are fundamentally different from each other. An EIS may provide valuable 

information for project design, open the review process to 

public comment, delay a project, add to aproject’s costs, or 

stop a project on procedural grounds. The permit (or 

license or grant review) decision focuses on two alternative results: either a project is allowed to proceed or it is 

stopped. Although mitigation can be negotiated in the 

permit process, there is frequently much greater opportunity for affected parties to be involved in the EIS process. 

In some instances, permitting, licensing, and funding requirements take precedence over the findings of an EIS. 

Under some federal laws, such as the Clean Air Act, 

Clean Water Act, Endangered Species Act, and Department 

of Transportation Act, a federal permit, license, or grant 

may not be approved if the project does not comply fully 

with very specific uniform standards for protecting wetlands, endangered species, and air or water purity. Assessments prepared to support federal permits and 

grantmaking decisions often include data gathering and 

analysis similar to, but separate from, an EIS. However, 

the permit or grant review analysis is designed to determine on much narrower grounds whether the proposed 

project meets specific regulatory requirements. 

In addition to these procedural differences, federal 

environmental laws and regulations encompass two types 

of criteria for approving a public works project or for 

selecting the “best” project alternative. First, laws such as 

NEPA and the Federal Power Act (and Electric Consumers 

Protection Act) call for balancing environmental, economic, and social objectives. But others, such as emissions and 

effluent standards under the Clean Air and Clean Water 

acts, wetlands “dredge-and-fill” regulations under Section 404 of the Clean WaterAct, and the Endangered Species 

Act, apply definitive environmental standards regardless 

of other needs. These definitive standards emphasize the 

potential to veto rather than to suitably accommodate 

public works projects. They may be highly prescriptive and 

inflexible and may leave little room to account for 

site-specific differences or for the resource limitations of 

small communities. 

When disagreements over public works projects can- not be resolved through normal channels, alternative dispute-resolution methods offer another means of avoiding 

costly and lengthy litigation. Dispute resolution has been 

used in several cases that included political controversies, 

a long time horizon, many stakeholders, and complex issues. Implementation of the federal Administrative Dispute Resolution Act of 1990 and the Negotiated Rulemaking 

Act of I990 may encourage use of dispute resolution in 

cases where compromise or accommodation can be 

reached. The agreement recently reached between the 

Environmental Protection Agency, oil companies, and environmental advocacy groups on the reformulated fuels 

required by the 1990 Clean Air Act is an example of how 

this process can work. 

These coordination activities, however, are labor intensive. It takes “up front” money and staff resources to 

2 U.S. Advisory Commission on Intergovernmental Relations 
save money later in the form of reduced project delays and 

associated costs. The widening gap between growing environmental agency responsibilities and shrinking staff and 

budget resources to undertake the job (one of the principal causes of conflicts and delays) will make coordination 

activities increasingly difficult and unreliable in the future, unless changes are made in the system. 

Adjustments in federal cost sharing for environmental mandates should be based on objective principles, with 

the federal government responsible for paying the costs of 

benefits that cross state lines, adjusting costs among states 

based on the relative strengths of their combined stateand 

local tax bases, and absorbing the costs of repairing environmental damage done in the past as a result of federal 

programs and policies. Private parties gaining specific 

identifiable benefits should pay the costs of providing 

those benefits, and state and local governments should 

share in paying the remaining costs. 

RECOMMENDATIONS 

Recommendation 7 

Integrated Administration 

of Federal Environmental Protection laws 

through the National €nvironmenfa/ Policy Act 

and the Council on Environmental Quality 

The Commission finds that the National Environmental Policy Act, administered by the Council on Environmental Quality (CEQ) and frequently identified with the 

environmental impact statement (EIS) process, provides 

principles for integrating a wide range of environmental 

decisionmaking requirements. Most concerns about environmental decisionmaking and public works can be addressed through the EIS process. Council regulations 

cover the following problems: integration of interagency 

requirements, coordination, length of documents, delay, 

duplication, and arbitration. However, the Council does 

not have statutory authority for the regulations, nor does 

it have adequate resources to properly implement the act. 

Additional explicit statutory language could make the process work better for all governments-federal, state, and 

local. Such statutory authority also might help reduce the 

judicial challenges that frequently cause uncertainty and 

delay in the decisionmaking process. 

The Commission recommends, therefore, that the National 

Environmental Policy Act (NEPA) be strengthened to make 

the intergovernmental decisionmaking process more cooperative, consistent, flaible, definitive, and fair to all concerns. 

The US. Council on Environmental Quality (CEQ) should be 

given statutory authority over the NEPA regulations and adequate resources for coordinating implementation by agencies. 

Administrative procedures should be reviewed, under authority of the amended act, to improve decisionmaking by: 

(a) Developing a coherent strategy for avoiding or mitigating conflicts between environmental protection and public 

works goals, based on: 

w Com‘deration of environmental protection goals 

at all stages ofplanning, design, and implementation, begnning from the earliest stages bef0.e altmnative projects are developed or considmd; 

Nonstructural and otherproject designs that do 

not lead to environmental permit and review 

problems; 

Sound ecosystem management practices; and 

A clear, scientifically informed understanding of 

the environmental and project costs; 

(b) Requiring federal agencies to cooperate with all the 

parties to identi’ as early aspossible a project-specific list of 

the criteria to be applied to the evaluation of a project, including the benefits inherent in the need andpurpose of the project 

and the benefits to accrue from mitigating the environmental 

impacts of projects, The criteria should be clearly related to 

federal statutory authorization and sufficiently specific for the 

state or local govemment project sponsor to make responsive 

decisions regarding altemahves, mitigation, and project modijicabons. State and local govemments should be able to rely on the 

fact that these criteria, to be applied to the evaluation of aproject, 

owe established, will not change mept as required @ law or 

modijication of the project applicatiow 

(c) Directing each federal agency to ewrcise itspermitting 

grantmaking, licensing, and evaluation responsibilities in a 

cooperative, consultative fashion; to be receptive to state and 

local requests for administrative dispute resolution under E1L. 

101-552; and to provide assistance to state and local governments to advance the public purposes ofproposed infrastructure projects by helping to identify cost-effective alternatives 

that can be granted permits; 

(d) Requiring federal agencies to set forth complete infor- mation, including all of the required elements for an application and procedures for appeals; 

(e) Establishing a single point of contact forprocessing the 

application; 

cr) Setting a schedule that will be followed-and not 

arbitrarily extended under threat of a negative decision -to 

produce timely decisions clearly justified by the record; 

(g) Mandating notification at the earliest possible time 

about any delays in processing the application; 

(h) Giving CEQ clear authority to serve as mediator in 

disputes among federal agencies to resolve and eliminate in- consistencies among policy interpretations, definitions, stan- dards, agency procedures, data requirements, and project 

evaluation criteria; and 

(i) In the event of a proposed federal decision ovem’ding 

state or local decisions implementing federal environmental 

standards, require the federal government to provide the parties at interest reasonable access to and time to review and 

rebut information in the pubic record on which a federal 

decision is to be based. In addition, the final decision should 

be required to be accompanied by a written explanation setting 

forth specifically the decision and the basis for that decision in 

relation to the criteria established for evaluating the project. 

The “record of decision” requirement in NEPA provides a 

good model for this procedure. 

w Comparative environmental risk assessmarts; 

w 

rn 

w 

U.S. Advisory Commission on Intergovernmental Relations 3 
Recommendation 2 

Administration of Environmental Decisionmaking 

by Executive Order 

The Commission finds that additional coordination of 

federal environmental decisionmaking activities can be 

achieved within the statutory framework of the National 

Environmental Policy Act if that goal is supported by strong 

presidential leadership. Indeed, improved coordination 

under this act was begun with an executive order in 1977 

(E.O. 11991) that expanded the role of the Council on 

Environmental Quality. Additional steps under this act 

still need to be taken. 

The Commission recommends, therefore, that the President issue an executive order going as far as present law will 

allow to achieve a coherent strategy within the erecutive 

branch for avoiding or mitigating conflicts between environmental protection and public works goals as outlined in Recommendation 1 of this report. This executive order should be 

administered by the Council on Environmental Quality. 

Recommendation 3 

Integration of Federal Pollution Control laws 

The Commission finds that the nation's pollution control laws are fragmented, overlapping, and often contradictory. State and local governments seeking the best 

answers to air quality, water quality, and waste disposal 

problems find it difficult to administer their programs in 

ways that are responsive to the natural relationships that 

exist between these three media because they are separated legally. These separations between discharge laws 

have proven to he counterproductive and frustrating. 

The Commission recommends, therefore, that the Congress enact a multimedia environmental law covering discharges to air, water, and land. The Commission recommends, 

furthermore, that the President issue an executive order directing the Environmental Protection Agency to integrate its regulations for controllingpollution of air, water, and land. 

Recommendation 4 

State Implementation 

of Federal Environmental Protection laws 

The Commission finds that federal law often provides 

for state administration of federal environmental laws 

when the federal government certifies that state adminis- tration is substantially equivalent to the federal requirements. The delegation of federal programs to the states was 

instituted to take advantage of the benefits of decentraliza- tion: state and local governments have first-hand knowledge 

of the project needs, issues, and constituents, and have 

greater understanding of local conditions; state implementation avoids federal-state agency overlap and duplication of 

effort; and local approaches stimulate innovation. However, 

states do not always exploit this opportunity fully. 

Federal confidence in its delegation to a state requires 

that the state have a clear understanding of federal expecta- tions. Only then can there be a phasing out of day-to-day 

federal involvement. State interest in assuming a federal 

delegation of authority requires assurance to the states that 

their good faith and lawful activities under this delegation 

will not be arbitrarily reversed by the federal government. 

Increased technical and other support for state programs by 

the federal government and innovative ways to monitor state 

activities without undue paperwork are additional factors in 

encouraging states to seek delegated powers. 

The Commission recommends, therefore, that the federal 

government encourage the states to administer a greater number of federal environmental standards with appropriate safeguards and oversight. Furthermore, to encourage states to 

accept delegation of federal programs, the federal government 

should institute finding and program changes and give assurances that the states will not be overruled arbitrarily. 

Recommendation 5 

Federal and State Use 

of Environmental Mediation 

for Dispute Resolution 

and Negotiated Rulemaking 

The Commission finds that when environmental regulations are written with sensitivity to diverse viewpoints 

on many matters of interpretation, the number and nature 

of disputes that may arise when the regulations are implemented can be reduced significantly. Negotiated 

rulemaking procedures are a promising means of achieving this result. The Commission found examples of success with this procedure. 

When disagreements over public works projects cannot 

be resolved through normal administrative channels, alternative dispute-resolution methods offer another means of 

avoiding costly, lengthy, winner-take-all litigation. Dispute 

resolution has been used in several cases that included politi- cal controversies, a long time horizon, many stakeholders, 

and complex issues. Dispute resolution can be expected to 

reduce the need for judicial review in many cases. However, 

if all else fails, judicial remedies remain available. 

The Commission, recommends, therefore, that the federal 

government (1) create an environmental mediation service to 

he@ settle disputes and negotiate new regulations and (2) 

enhance the capacity of state and localgovernments toprovide 

for mediation of diverse views. Such a service should provide 

for public involvement. 

The Commission recommends, further, that the federal 

government take everypossible opportunity to rely on state and 

local governments to convene the parties at interest, help broker suitable compromises, and make the situation-specific 

decisions necessary to implement standards established by the 

federal government. Federal agencies participating in thisprocess should respect lawful state and local determinations of 

infrastructure needs, absent clear evidence of violation of 

federal law, and refrain from substituting federal agency discretion for the determinations made by the duly elected ojj'icials of state and local governments. Means of enhancing the 

capaciv of state and local govemmem to provide for mediation 

of diverse views, to he@ broker mutually satisfactory accornmodations of competing goals, to make ecologically and economically sound development decisions, and to apply these decisions 

fairly, effectively, and eficientb, should include technology transfe6 education, training, and financial assistance. 

4 U.S. Advisory Commission on Intergovernmental Relations 
Recommendation 6 

Federal Reimbursement 

of Mandated Environmental Protection Costs 

The Commission finds that the costs to state and local 

governments of complying with many federal environmental protection requirements are high, and that many 

state and local governments have difficulty financing the 

necessary expenditures. In some cases, federal standards 

and regulations do not allow state and local governments 

to comply with these requirements in the most efficient 

and cost-effective ways. 

The Commission recommends, therefore, that the Congress and the President enact legislation requiring the federal 

government to reimburse state and local governments for the 

additional costs of complying with federal environmental 

standards, over and above the costs ofproviding strictly state, 

local, and private benefits. The costs to be shared equitably 

among all of the benefittedparties should include the fill costs 

of maintaining healthy and stable ecologies over the long run. 

Recommendation 7 

The Scientific Basis for Ecological Management 

The Commission finds that management of specific 

ecosystems may offer better prospects for balancing 

environmental protection and public works needs than 

a series of individual and unrelated standards for protecting single-media environmental resources. Ecosystem management includes a collection of operational 

strategies and land use decisions that attempt to sustain 

the functions of a healthy environment, even if parts of 

the ecosystem are separated by political or land-ownership boundaries. Government agencies and nonprofit 

and private sector groups are beginning to manage developed and natural areas together as parts of larger 

regional ecosystems. 

The Commission also finds, however, that the operation of natural and man-made ecosystems and their interrelationships are not fully understood. One result of this 

inadequate knowledge is the substitution of description 

for analysis. Documents are sometimes longer than needed, but contain little significant ecological analysis. 

The Commission recommends, therefore, a strengthening of the scientific basis for understanding the operation, 

health, and stabiliq of ecological systems through research, 

long-term data collection, and development of improved 

analytical, management, and regulatory techniques. This 

requires cooperative federal-state-local research and information -sharing programs. 

U.S. Advisory Commission on Intergovernmental Relations 5 
6 U.S. Advisory Commission on Intergovernmental Relations 
Introduction 

As the population and economy of the United States 

grow, the nation needs new highways, airports, dams, 

wastewater treatment plants, and solid waste facilities. 

Many, if not most, of these public works facilities are 

planned, financed, built, and maintained by state or local 

governments. At the same time, the United States is attempting to meet increasingly rigorous environmental 

goals to improve the quality of air, water, and wildlife 

habitat; to halt wetland conversions; to preserve wilderness areas; and to eliminate the emission of toxic substances. Federal environmental laws enacted largely in 

the 1970s, such as the Clean Water Act and the Clean Air 

Act, established procedures for federal agency environmental review, permitting, and licensing of major public 

works projects. This review process has helped reduce the 

adverse environmental effects of public works projects 

during the past two decades. However, the process has 

also become complex, confusing, costly, uncertain, and 

adversarial in many cases. 

PURPOSE OF THIS STUDY 

The purpose of this study is to identify conflicts between state and local provision of public works and the 

federal environmental decisions concerning these proposed public works. The federal environmental decisionmaking process includes federal agency permitting, 

licensing, review (approval/disapproval), and veto of state 

and local public works projects. Where conflicts are defined 

and appear unmanageable, this study will propose and assess 

alternative solutions that could improve the efficiency and 

timeliness of public works processes while protecting the 

environment. This study addresses several questions: 

1. What kinds of environmental review decisions are made by federal agencies concerning state and local public works projects? 

2. How are those decisions made? 

3. What problems are encountered in the 

decisionmaking process? 

4. What can be done to improve the decisionmaking process and to encourage the implementation of public works projects that meet both 

development needs and environmental goals? 

To respond to these questions this study: 

1. Reviews the major legal, economic, and regulatory considerations in the federal environmental review process of state and local 

public works projects; 

Identifies the types of environmental review 

decisions made by federal agencies; 

Identifies the major veto points, rigidities, 

and roadblocks in the federal environmental 

process of approving state and local public 

works projects; 

4. Examines developments in the methods used 

to analyze public works projects; and 

5. Identifies promising ways within the environmental review process of balancing the objectives of growth and environment and of 

encouraging developments that are environmentally sensitive. 

2. 

3. 

legislation and Public Works 

This study examines federal environmental decisionmaking issues for certain types of public works and se- lected major federal environmental laws. The types of 

public works are highways, mass transit, airports, wastewater treatment, water resources development, solid waste, 

and power generation. In addition, the study is limited to 

the following federal environmental statutes: the Clean 

Water Act, the Clean Air Act, the Endangered Species Act, 

the National Coastal Zone Management Act, the National 

Environmental Policy Act (NEPA), the National Historic 

Preservation Act, and federal statutes specific to particular 

public works, such as the Department of Transportation Act. 

State and local environmental requirements play an 

important role in the design and development of public 

works projects, but they are not the focus of this study. 

State environmental regulations are increasingly integrated with or based on federal requirements. State water 

discharge permits, for example, typically include both federal technology-based standards or limits and state water 

quality standards based on the uses of the water. Some 

states have permit standards that are more stringent or 

comprehensive (such as cross media) than federal guidelines. Also, about half the states have their own environmental assessment requirements (“little NEPAs”) that 

mirror the requirements of the federal law. 

Concerns Raised by Federal Environmental 

Decision maki ng Processes 

State and local governments must obtain one or more 

federal environmental permits for public works projects, 

U.S. Advisory Commission on Intergovernmental Relations 7 
submit projects to federal environmental review, or obtain 

federal administrative approvals for projects receiving 

federal funds. These requirements are specified in many 

separate and overlapping federal environmental laws and 

regulations. Each federal agency, following the guidance 

of the National Environmental Policy Act (NEPA), has regulations outlining coordination of information gathering, 

analysis, public and agency review, and separate regulatory requirements so as to avoid unnecessary overlap, paperwork, and delays. Many federal and state agencies attempt 

to work together to streamline the process. However, 

many projects still go through distinct, sequential steps. 

For example, the approval process for a dam may include 

the licensing review requirements of the Federal Energy 

Regulatory Commission (FERC), the preparation of an 

environmental impact statement (EIS), a permit from the 

U.S. Army Corps of Engineers under Section 404 of the 

Clean Water Act if wetlands are involved, and determination of impacts on endangered species by theU.S. Fish and 

Wildlife Service. These various requirements can create 

conflicts between public works and environmental quality 

objectives and impose costly delays on public works projects. The requirements also create the need for interagency cooperation to navigate the federal environmental 

decisionmaking process and to encourage sustainable development approaches to public works. This combination 

of potential conflict and need for cooperation is echoed, 

for example, by water resources managers: 

Disputes among water and environmentally 

related agencies and/or levels of government 

have been increasing in frequency, while at the 

same time these same agencies are becoming 

more and more dependent on one another for information, resources, and policy decisions. . . . The complexity and fragmentation of the nation’s 

water institutions are undermining their capacity 

to solve vital water resource and related socioeconomic problems. . . . The challenges of (a) improving intergovernmental relations to provide 

more efficient and equitable water policy, and (b) 

developing a new ethic of shared intergovernmental stewardship of the water resource, are becoming more paramount as the 21st Century 

approaches.’ 

Concerns about the complexity, costs, and adversarial 

nature of the federal environmental decisionmaking process have been identified in congressional testimony and 

in reports issued during the past few years by the Western 

Governors’ Association, the U.S. General Accounting Office (GAO), the Conservation Foundation, Resources for 

the Future, Project 88 Harnessing Market Forces to Protect the Environment, and the Engineering Foundation.2 

The costs and benefits of the federal review and decisionmaking process are discussed is this report and illustrated 

by examples. However, the report does not attempt to 

quantify the problems in the federal environmental review of state and local public works in terms of tabulated 

time delays, number of canceled public works projects, or 

economic and other societal costs. Nor does the report 

compare these costs to the numerous benefits of environmental review, such as improved project design and 

avoided ecological impacts. 

There are many reasons why coordinating and accommodating public works needs and environmental goals 

within the environmental review process have become 

difficult. As an example in the water area, Water Quality 

2000, a consortium of more than 80 public, private, and 

nonprofit organizations, concluded in 19% that many of 

our current lifestyle choices- how we live, consume, 

farm, transport people, and produce products-threaten 

the health of the environment. Water Quality 2000 work 

groups identified shorter term opportunities to address 

impediments posed by current water programs, including 

narrowly focused water policy (prescriptive, fragmented, 

and sometimes inflexible federal and state mandates); 

institutional conflicts; legislative overlaps; divergence between expectations and levels of funding; and inadequate 

research and development, education and training, and 

communications. Differences of opinion between governments and between interest groups about how to implement national environmental goals set by the Congress 

are inevitable in a pluralistic and geographically diverse 

society. Unfortunately, some of the federal environmental statutes make no provision for compromise and accommodation of diverse views. 

Public Works Needs 

and Environmental Quality 

These concerns about the federal environmental 

decisionmaking process are likely to be magnified in the 

future as numerous major public works needs are addressed. A few examples illustrate the magnitude of public works needs, the seriousness of the environmental 

challenge posed by public works projects, the context within which the federal environmental decisionmaking process takes place, and the importance of resolving 

difficulties in the review process. 

Public works are essential to the nation’s well-being. 

Clean water, efficient transportation, reliable delivery of 

energy, and safe disposal of wastes are fundamental to an 

industrialized economy. This infrastructure must be continually repaired, replaced, and improved to maintain 

America’s economic growth, productivity, and high standard of living. However, by several measures, overall capital investment in public works has declined during the last 

two decades. In addition, current spending is lower than 

estimates of needed expenditures to maintain public 

works infrastructure: annual federal, state, and local government spending on public works averaged about $50 

billion per year during the 1980~;~ estimates of annual 

capital investment needs for public works projects during 

the next decade range from $63 billion to $143 billion in 

1989 dollars: This compares to a net capital asset base of 

public works in the United States of between $900 billion 

and $1 trilli~n.~ Public works improvements are required 

in every area of infrastructure: 

w Many roads and bridges are aging and require repair and replacement. At the same 

time, the quality of highway service in terms 

8 U.S. Advisory Commission on Intergovernmental Relations 
of congestion is declining. Highway travel 

delays in urban areas now total more than 

two billion hours annually, costing billions 

of dollars in lost working hours.6 New roads 

and mass transit systems are needed to 

transport people. 

Airport and airspace congestion has increased 

as a result of traffic growth. Twenty-one primary airports now experience more than 20,OOO 

hours of annual flight delays at a yearly cost to 

airlines and American businesses of at least $5 

billion.7 New airports or airport expansions are 

planned in many states. 

Many states are running out of solid waste 

disposal capacity as old landfills close for capacity and environmental reasons. For example, New Jersey is exporting 60 percent or 5.5 

million tons of its solid waste per year to 

other states while planning new landfills, recycling centers, and waste-to-energy plants? 

Water storage and distribution systems are 

deteriorating in some older cities, and supplies are limited in some parts of the West 

and several cities along the East Coast. Additional water supply held in new reservoirs 

may be needed in fast growing areas of the 

United States, such as California and the 

Southwest. A report prepared for the Clean 

Water Council projects a funding shortfall of 

over $100 billion by public water utilities attempting to achieve federal water quality and 

wastewater treatment standards? 

The electric utility industry plans to add 

94,000 net megawatts, about 14 percent of 

current capacity, in the 199Os.lO A variety of 

state and local public works projects may be 

associated with these new power projects. 

While state and local governments work to design, 

site, finance, and maintain public works, they must also be 

conscious of pressing environmental challenges: 

The National Water Quality Inventory that 

summarizes state water quality reports indicates that despite significant progress in 

cleaning up water pollution some persistent 

pollution problems remain, especially contamination by toxic substances.” 

More than half of the 215 million acres of 

original wetlands in the contiguous 48 states 

have been filled or drained. During the past 

20 years, wetland losses have averaged 

458,000 acres annually, an area about half the 

size of Rhode Island.12 

Although great progress has been made in 

cleaning up the nation’s air, tons of airpollutants continue to be emitted from cars, factories, and other sources. Ambitious new goals 

established in the 1990 amendments to the 

Clean Air Act to cut toxic emissions and reduce smog and acid rain may cost $25 billion a 

year by 2005.13 

Animal and plant species are vanishing on a 

grand scale. There are 1,116 imperiled species on the Endangered Species List in the 

United States, with an additional 3,600 species being candidates for 1i~ting.l~ 

Sustainable Development 

Although “sustainability is fast becoming a ‘motherhood and apple pie’ concept which everyone supports but 

no one defines consi~tently,”~~ the concept gets to the crux 

of many issues debated in this report: ways to distinguish 

circumstances where economic development and environmental protection are complementary and where 

trade-offs have to be made. Sustainable growth, sustainable development, and sustainable resource use are terms 

coined in recent years to describe environmentally friendly economic development. 

Sustainable development is defined in a variety of 

ways depending on the context and the interests of those 

using the term. Defined by the Bruntland Commission as 

development that meets the needs of the present without 

compromising the ability of future generations to meet 

their own needs, sustainable development recognizes that 

the human species is part of nature, that our existence 

depends on our ability to draw sustenance from a finite 

natural world, and that our survival depends on our ability 

to abstain from destroying the natural systems that regenerate this world.16 The goal of sustainability is to adjust 

economic activity so that it does not damage the natural 

systems that underpin all functioning economies. Popular 

uses of the term “sustainable development” stem from E. 

F. Schumacher’s book Small Is Beautiful: Economics as if 

People M&ered17 (smaller/flexible projects rather than large 

inflexible/irreversible ones), as well as calls to maintain biological diversity and to promote ecosystem management, 

alternative agriculture (using the land on a sustainable basis 

and minimizing environmental impacts), and a symbiosis 

between development and environment.’* 

Potential Strategies 

Efforts to foster sustainable public works and to reconcile differences between state and local government 

development of public works and federal environmental 

protection rules can be grouped into three general approaches: 

1. Improve the process through: 

(a) Better use of analytical information to 

assess project alternatives and use of 

that assessment in decisionmaking (selecting the “best” alternative); 

(b) Coordinating the current federal environmental decisionmaking process by 

such means as greater cooperation beU.S. Advisory Commission on Intergovernmental Relations 9 
tween agencies and governments, planning, streamlining the permitheview 

process, accommodation, and mitigation. 

2. Change the decisionmaking rules through new 

legislation, dlfferent definitions of or approaches to federal environmental decisionmaking, different definitions of factors that 

triger a need for permit or environmental 

review, and new methods of cooperation between local, state, and federal agencies. 

3. Avoid the need to submit a project to federal 

environmental decisionmaking by: 

Finding nonstructural solutions (such as 

conservation or joint or systems operation of water supplies in a river basin); 

Selecting public works designs that do 

not create environmental permit and review problems; and 

Eliminating federal funding of projects 

and certain federal decisionmaking that 

accompanies the funds. 

Plan of the Report 

Chapter 1 reviews the legal framework for federal 

environmental review of state and local public works projects. The first section provides an introduction to environmental review requirements in federal legislation and 

explains how state and local projects become subject to 

federal environmental reviews. The next section describes 

the federal assistance, permit, and review programs that 

make specific types of state and local public works subject 

to fe6e.ral envhonmental .review. The chap7 then ex- amines the “veto points” in environmental reviews that 

apply to state and local public works, and concludes by 

describing the accommodations that have been made in 

federal legislation and practice to improve environmental 

reviews, the legal bamers to better accommodation, and 

how accommodation can be improved. 

Chapter 2 reviews the economic and analytical considerations in the federal environmental review process, 

and identifies the types of economic and analytical information currently gathered during permit and other environmental reviews of public works are identified. 

Examples include wetlands definitions, threats to endangered species and their habitats, coastal zone management 

policies, wastewater discharge and air quality standards, 

and economic impact evaluations. In addition, the types of 

decisionmaking methods used by the federal agencies for 

each type of review or permit decision are identified. The 

chapter then reviews the types of information and techniques that could be included for environmental decisionmaking for public works and environmental goals, and to 

encourage environmentally sensitive projects and accommodation in decisionmaking. Examples of these economic 

and analytical techniques include economic and benefit-cost analysis, multiple objective analysis, sustainable 

development analysis, risk analysis, social impact assessment, and value engineering. 

The first part of Chapter 3 identifies the problem 

areas in federal environmental decisionmaking and the 

methods that local, state, and federal agencies have devised to navigate the process. Agencies have adopted a 

variety of methods, including permit streamlining by state 

agencies; state “primacy” programs to implement federal 

laws; interstate coordination; general classes of permits; 

risk management planning; and negotiation, mediation, 

and environmental dispute resolution. Some of the issues 

raised by the environmental review process include federal agency deference to state decisions (proper federal role, 

states’ rights), regional flexibility, access to information, 

funding sources, and burden of cost. The second half of 

Chapter 3 outlines legislative and administrative reform 

proposals to change or improve the federal environmental 

review process. Examples include: 

Reinvigorate the NEPA process; 

Increase regulatory flexibility and the use of 

“performance” based regulation; 

Address communication, education, media, 

R&D, and human resource needs; 

Allow greater state implementation of federal environmental goals; 

Employ business and corporate efficiency 

and management techniques; 

Enact a single federal environmental statute; 

Consolidate federal environmental agencies; 

Raise EPA to cabinet-level status; 

Amend the Clean Water Act to make it more 

attractive for states to adopt the Section 404 

dredge-and-fill (wetlands) permitting program; 

Address administrative discretion and 

decisionmaking consistency issues; and 

Adopt economic and market approaches to 

environmental programs. 

Notes 

‘Stephen S. Light and John R. Wodraska, “Forging a New 

State-Federal Alliance in Water Management,” Natural Re- sources Journal 30 (Summer 1990): 477. 

’ Statusof theNation’s Wetlandrand LawsRelated Thereto, Hearings before the House Committee on Public Works, Subcommittee on Water Resources, April 12, 14, and 18, May 12 and 

15,1989, February27 and 28, March 13,1990 (Committee Print 

10149,1991); Water Quality u)oo, “Phase I1 Report Problem 

Identification” (Alexandria, August 3, 1990); Western Governors’ Association, “White Paper on Federal Water Policy 

Coordination” (Denver, May 11, 1989); US. General Accounting Office, Environmental Protection Agency: Protecting 

Human Health and the Environment through Improved Man- agement (Washington, DC, August 1988); Teny Davies, “The 

Environmental Protection Act” (Washington, DC: The Conservation Foundation, September 1988); Paul R. Portney, ed., 

Public Policies for Environmental Protection (Washington, DC 

Resources for the Future, 1990); Timothy E. Wirth and John 

Heinz, sponsors, Project 88: Harnessing Madcet Forces to Protect 

Our Environment (Washington, DC, 1988); Engineering Foun10 U.S. Advisory Commission on Intergovernmental Relations 
dation and Universities Council on Water Resources Confer- ence, Water Resources Planning and Management in the United 

States Federal System, Ptvceedings, July 6-11,1986. 

National Council on Public Works Improvement, Fmgile 

Foundations: A Report on America’s Public Works (Washington, 

DC, 1988). p. 7. 

41bid., p. 38. 

Ibid., p. 43. 

US. Department of Transportation, Moving America. New Di- rections, New Opportunities (Washington, DC, February 1990) p. 

24. 

’ Ibid. 

‘National Solid Waste Management Association, Special Report: Interstate Movement of Municipal Solid Waste (Washing- ton, DC, October 1990), p. 4. 

Apogee Research, America’s Environmental Infrastructure: A 

Water and Wastewater Investment Study (Washington, DC 

Clean Water Council, 1991). 

lo “Utilities: Changes Are Thundering Along,” Business Week, 

January 14, 1991, p. 96. 

U.S. Environmental Protection Agency, Office of Water, National Water Quality Inventory: 1986 (Washington, DC, Novem- ber 1987). 

l2 US. Council on Environmental Quality, Environmental 

Trend (Washington, D.C., 1989), p. 100. 

l3 Michael Lemonick, “Forecast Clear Skies: The Revised Clean 

Air Act Is Costly but Well Worth the Price,” Time, November 

l4 John Lancaster, “3,600 Domestic Species Await Place on Endangered List, Washington Post, October 23, 1990. 

l5 John Pezzy, Economic Analysk of Sustainable Growth and Sustainable Development, Environment Department Wonking Paper 

No. 15 (Washington, DC The World Bank, 1989). p. 1. 

16World Commission on Environment and Development, Our 

Common Future (New York Oxford University Press, 1987). 

E. E Schumacher, Small Is Beautiful: Economics as if People 

Mattered (New York Harper and Row, 1989). 

’’ National Research Council, Alternative Agriculture (Washington, DC National Academy Press, 1989); Jeffrey A. McNeely, 

et al., Consewing the World’s Biological Divemity (Washington, 

DC: The World Bank, 1990); Gunter Schramm and Jeremy J. 

Warford, eds., Environmental Management and Economic De- velopment (Baltimore: Johns Hopkins University Press, 1989). 

5, 1990, p. 33. 

U.S. Advisory Commission on Intergovernmental Relations 11 
12 U.S. Advisory Commission on Intergovernmental Relations 
1 

Chapter 7. The Legal Framework for Environmental Review 

of State and local Public Works Proiects 

INTRODUCTION 

Environmental review requirements for state and local public works projects changed dramatically between 

1970 and 1990.’ Before 1970, federal assistance for such 

projects had been available, and some projects required 

federal permits, but federal agencies usually ignored environmental problems. Federal legislation required agencies with assistance and permit responsibilities to consider 

only the need for state and local public works projects and 

did not usually require environmental reviews. 

Since 1970, the Congress has created a complex, interlocking matrix of funding, permit, and environmental 

review programs that apply to state and local public works. 

Federal agencies must now consider environmental values 

when they fund or issue a permit for a state or local public 

works project. 

This change in the basis for federal funding and permit decisions is environmentally beneficial, but it also 

imposes costs. Environmental review requirements overlap and can slow or veto needed state and local public 

works projects. Provisions for accommodating environmental values without erecting unnecessary barriers to 

state and local public works projects are needed. 

This chapter examines federal environmental review 

requirements for state and local public works, the veto 

points they create in federal funding and permitting, and 

accommodations that could improve the review process. 

The first section introduces environmental review re- quirements in federal legislation, explains the constitutional basis for such reviews of state and local public works 

projects, and describes selected projects. The next sec- tions examine environmental reviews in federal assistance, permit, and review legislation that create “veto 

points” in federal funding, and permit programs for state 

and local public works. The chapter concludes by describing the accommodations in federal legislation and practice 

that have improved environmental reviews, the barriers 

that exist to better compromises and improvements that 

can be made in the accommodation process.* 

The Interlocking Legal Matrix 

Federal legislation that applies environmental reviews to state and local public works creates an interlocking legal matrix in which federal assistance and permit 

programs and environmental review legislation interact. It 

is important to understand how this legal matrix developed, and the political and policy choices that produced it. 

Alternative Choices for Environmental Regulation 

Understanding the federal environmental matrix that 

applies to state and local public works projects requires an 

examination of the alternatives available to the Congress 

when it decides to adopt an environmental program. Dan 

Tarlock has outlined these alternatives as f01lows:~ 

i. Agency decisionmakers could be required 

to consider additional information, including information on environmental consequences. This 

is the approach taken by the National Environmental Policy Act (NEPA).4 

ii. Congress could prohibit or restrictively 

regulate development in designated natural resource areas or give environmentally sensitive 

agencies a veto over development. The Endangered Species Act exemplifies this approach. 

iii. Agencies could be authorized to adopt environmental standards and to prohibit development that violates these standards, as is done in 

the Clean Air and Clean Water acts. 

The Congress has adopted widely different approaches to 

ensure environmental protection. Each of these alternatives is used in environmental review legislation that applies to state and local public works. 

Environmental legislation produces very different impacts on state and local public works projects. In some cases, 

as ’&lock indicates, legislation affects decisions about the 

area in which a public works project may be located. An 

example is the Clean Wizfer Act Section 404 requirement for 

dredge-and-fill permits in wetlands. 

Other environmental review legislation affects and 

usually increases the cost of a public works project but 

does not affect its location, at least not directly. Airpollution emission controls adopted under the Clean AirAct are 

an example. These controls may indirectly prompt the 

relocation of a public works project if it is less costly to do so. 

Informal Decisionmaking vs. Adjudication 

Federal environmental review decisions may be made 

either by an informal process, which does not require 

trial-type adjudication, or in an adjudication that requires 

U.S. Advisory Commission on Intergovernmental Relations 13 
a trial-type hearing. Most of the environmental review 

programs discussed in this chapter require only informal 

decisionmaking by the federal agency. This means that the 

agency makes its decision without first holding a trial-type 

hearing in which witnesses are heard and cross-examined 

and a record is made on which the agency’s decision is based. 

Federal assistance programs are in this category. Federal 

agency decisions under NEPA, such as whether to prepare 

an environmental impact statement, are another example of 

informal decisionmaking. Even federal permits for state and 

local public works, such as the dredge-and-fill permits required under the Clean WaterAct, may not require an adjudicatory hearing.’ 

These differences make it difficult to reconcile the 

environmental review processes that different agencies 

apply to state and local public works. Loosely structured 

informal decisionmaking by different agencies may make 

coordination of environmental reviews difficult, while the 

differences between informal decisionmaking and formal 

adjudication may frustrate coordination attempts. The absence of a formal administrative record in informal 

decisionmaking makes judicial review difficult and may 

also make it hard to know precisely the basis on which the 

agency made its decision. Formal adjudicative proceedings 

can be unwieldy and may limit the ability of an agency to 

consider policy issues. 

The Coordination Problem: 

Fragmented Environmental Review 

Coordinating environmental reviews is difficult because requirements are fragmented throughout federal 

programs. The National Environmental Policy Act, which 

was enacted in 1969, provided an early opportunity and 

potential for coordination because it was the first statute 

to impose an environmental review requirement on all 

federal agencies. This did not happen for a number of 

reasons. One was that the Congress gave the implementation and administration of NEPA to a newly created Council on Environmental Quality (CEQ). The council is located 

in the Executive Office of the President, but has limited 

authority. CEQ’s statutory authority does not even allow it 

to adopt regulations to implement NEPA. Although it now 

has this authority under a presidential Executive Order, it is 

limited to NEPA alone! CEQ’s regulations have provided a 

basis for implementing NEPA by federal agencies, but CEQ 

cannot coordinate the many environmental review statutes 

adopted by the Congress after NEPA. 

Another reason why NEPA cannot provide a coordinating mechanism is that NEPA-like environmental reviews have spread to statutes authorizing federal 

assistance and permit programs that are outside CEQ’s 

jurisdiction, including the highway assistance and hydroelectric power permit programs. 

The proliferation of environmental review requirements in federal assistance and permit legislation creates 

a number of problems. One is that these review requirements supplement those in NEPA. Some agencies, such as 

the Federal Highway Administration, combine compliance with all environmental review requirements in a 

single procedure, but this is not always done. 

Another problem is that some of the legislation containing NEPA-like provisions requires only an environmental review of state and local public works projects, 

while other legislation contains environmental standards 

that must be met by these projects. One example is a 

statute that restricts the location of transportation projects in parks, historic sites, and other protected places.’ 

This complex set of requirements in federal programs 

creates a fragmented matrix for environmental reviews of 

state and local public works? 

The Constitutional Basis 

for Environmental Review Requirements 

The application of federal environmental review legislation to state and local public works projects initially 

raised constitutional issues that now have been litigated 

and resolved. The constitutionality of these requirements 

is no longer in doubt. 

One set of constitutional issues concerned federal 

assistance. When the Congress grants federal assistance 

under the spending clause of the federal Constitution, 

which authorizes the Congress to “to provide for the . . . General Welfare of the United States,’* the constitutional 

issue is whether the Congress may properly attach environmental review requirements as conditions to federal aid. 

The constitutional limits placed on the power of the 

Congress to attach conditions to federal assistance were 

considered by the U.S. Supreme Court in South Dakota v. 

Dole.’O The Court upheld a federal highway law provision 

authorizing highway funds to be withheld from states that 

allow persons under 21 years of age to purchase alcoholic 

beverages. The principles set forth in the case are that: (1) 

an expenditure must serve “general public purposes,” but 

courts should defer to the judgment of the Congress that a 

public purpose is served by a particular expenditure; (2) 

the Congress must unambiguously condition the receipt of 

federal assistance by a state if the condition is to be 

upheld; (3) conditions on federal grants must be related to 

the “federal interest” in national projects and programs; 

and (4) other constitutional limitations can provide an 

“independent bar” to the conditional grant of federal 

funds. The Court has not yet invalidated a condition on a 

federal grant because it violated an independent constitutional provision. 

South Dakota v. Dole is important to the constitutionality of environmental review requirements attached to 

federal assistance because any such requirement that is 

stated unambiguously would clearlybe related to a federal 

interest in the program or project. The federal interest arises 

from the need to ensure for the general welfare that environmental harm is avoided, or at least mitigated, in the 

spending of federal funds for state and local public works. 

The federal environmental permit process rests on 

the Congress’s constitutional ‘‘[plower . . . To regulate 

commerce. . . among the several States.”” The constitutional issue is whether this clause authorizes the regulation only of interstate commerce or also of intrastate 

commerce if interstate commerce is affected. Requiring a 

water pollution discharge permit for a public wastewater 

treatment plant, for example, would seem to be a regulation 

14 U.S. Advisory Commission on Intergovernmental Relations 
of intrastate commerce not authorized by the interstate commerce clause if the discharge is to a local body of water. 

Nevertheless, the Supreme Court does not take this 

position. It hasbeen clear for a halfentwy, since Wickard v. 

E;ilbum,12 that the power to regulate mmmerce extends to 

intrastate activities that might have a substantial effect on 

interstate commerce in the aggregate. This does not seriously limit congressional jurisdiction over environmental permit 

legislation, such as the Clean Air and Clean Water acts, that 

can apply to wholly intrastate sources of pollution. 

More difficult constitutional problems of agency jurisdiction arise under the dredge-and-fill permit program 

of the Clean WaterAct, especially as it applies to wetlands. 

Historically, federal jurisdiction over water resources was 

limited to “navigable” waters. The requirement for dredgeand-fill permits in wetlands stretches the concept of navigability as it was defined over decades, even though the courts 

gradually expanded the reach of navigability jurisdiction. 

Dredge-and-fill permits are required by the Clean 

Water Act for discharges into “navigable waters,” defined 

as the “waters of the United The question is 

whether this definition goes further than the historic definition of navigability to include the broader interstate 

commerce clause jurisdiction made available by Wickard. 

If interstate commerce clause jurisdiction applies, there is 

little difficulty in requiring dredge-and-fill permits for 

state and local public works projects in wetlands areas. 

The Supreme Court held that the dredge-and-fill permit program was based on interstate commerce clause 

jurisdiction in United States v. Riverside Bayview Homes, 

The Court upheld a U.S. Army Corps of Engineers’ 

definition of wetlands that included areas saturated but 

not inundated by adjacent bodies of water. Bayview Homes 

means that the Constitution places few, if any, limits on 

the jurisdiction of the federal government over water resources. The only issue is whether the Congress has restricted the constitutional limits of its jurisdiction. 

State and local Public Works Projects 

It is not possible in this study to examine all of the 

state and local public works projects subject to federal 

environmental review requirements. This chapter is limited, therefore, to a selected group of projects that are 

important to state and local governments and that have 

been subject to federal environmental review requirements for some time. 

Highway, urban mass transit, and airport projects administered by the Department of Transportation are one 

such group. All of the federal assistance statutes that 

provide federal funding for these programs have environmental review req~irements.’~ In addition, transportation 

projects have produced a substantial amount of litigation 

under NEPA. Highway projects comprise one of the largest groups of federally funded projects that come under 

NEPA’s requirements. 

Wastewater treatment plants constitute the second 

group of projects studied. Although several federal pro- grams fund these projects,I6 the most important is the 

funding for publicly owned wastewater treatment works in 

the Clean Water Act, administered by the Environmental 

Protection Agency (EPA).” The program for waste disposal projects administered by the Rural Development Ad- ministration of the Department of Agriculture (formerly 

by the Farmers Home Administration),I8 although not 

funded as extensively as the Clean Water Act program, is 

important because of its availability in rural areas and 

smaller communities, where it raises a distinctive set of 

environmental problems. 

The water resource program funded under the Small 

Reclamation Projects Act and administered by the Bureau 

of Reclamation in the Department of the Interior19 provides federal funding to local governments for the construction and rehabilitation of small reclamation projects, 

such as irrigation. The program differs from funding for 

large-scale reclamation projects, which is provided by the 

Congress on a case-by-case basis. 

Finally, this chapter considers hydroelectric power 

projects permitted by the Federal Energy Regulatory 

Commission (FERC) under the Federal Power ActZo and 

the additional environmental protection requirements for 

power projects contained in the Northwest Power Act.21 

Power generation projects have been environmentally 

controversial, primarily because of their effects on fish 

and wildlife. Environmental protection requirements in 

these statutes attempt to accommodate conflicting interests in power generation and fish and wildlife protection. 

How STATE AND LOCAL PROJECTS BECOME SUBJECT 

TO FEDERAL ENVIRONMENTAL REVIEW REQUIREMENTS 

Federal environmental reviews are required for state 

and local public works projects whenever a federal trigger 

or “nexus” brings these projects within the provisions of 

federal legislation. Environmental review requirements 

are contained in federal assistance and permit legislation 

and in legislation that requires supplemental environmental reviews, such as NEPA. To understand the environmental reviews required, one must also understand how 

these statutes are administered and how they affect the 

state programs that receive federal aid. 

Federal environmental review-and-permit legislation 

often is administered by more than one agency. The following table lists the environmental review-and-permit 

legislation that is discussed in this chapter and indicates 

the agencies responsible for its administration. 

Federal Assistance 

One type of federal assistance available for state and 

local public works projects is categorical grants and loans. 

These voluntary programs require an application and federal agency approval for specific projects authorized for 

funding. The legislation authorizing these grants may contain environmental review requirements. The federal government also makes assistance available to state and local 

governments through block grants that can be used for a 

variety of public projects. Block grant legislation may also 

require environmental reviews. 

Compliance with the provisions of a federal assistance 

statute, such as environmental requirements, is a condition attached to federal aid. Some assistance statutes also 

contain sanctions that authorize the federal agency to withU.S. Advisory Commission on Intergovernmental Relations 15 
~~ 

Table 1-1 

Federal Environmental Review and Permit Legislation 

ResDonsible Federal Agencies 

Historic Interior Northwest 

Preserva- Fishand NOAA Power 

Corps of tion Wildlife Marine Planning Engineers CEQ EPA FERC FHWA Council Service Fisheries Council 

Clean Air Act 

Emissions Standards 

Ambient Air Standards 

State Implementation Plans 

Effluent Standards 

Endangered Species Act 

National Environmental 

Fish & Wildlife Coordination Act 

Historic Preservation Act 

Federal Power Act 

Northwest Power Act 

Clean Water Act 

Dredge & Fill Permit X 

Policy Act X 

X 

X 

X X 

X 

X 

X X 

X 

X 

X 

X 

hold assistance if a governmental unit does not comply 

with conditions on the receipt of federal aid.22 An example 

is the provision in the federal highway law authorizing the 

federal agency to withhold a percentage of highway aid 

from states that allow the sale of alcoholic beverages to 

persons under 21 years of age. 

The legal remedy when the provisions of a federal assistance act are violated is the sanction provided by the act, not 

invalidation of state or local legislation through preemption. 

For example, if a state adopted a statute that allowed the sale 

of alcoholic beverages to persons under 21, the law would 

not be invalid but federal aid could be withheld. 

Federal Permits 

for State and local Public Works Projects 

The only federal permit requirement for state and 

local public works included in this study is that from the 

Federal Energy Regulatory Commission (FERC) for public hydroelectric power projects. The legislation authorizing a federal permit is regulatory, directly affecting the 

regulated governmental entity, and can preempt state and 

local legislation. This has the effect of displacing state and 

local legislation and making it invalid. This issue has arisen 

under the Federal Power Act. 

Supplemental Federal Environmental Permits 

State and local public works projects are also subject 

to federal environmental review if they must obtain 

supplemental federal permits. A supplemental federal 

environmental permit is required only if the state and 

local public works project falls within the jurisdiction of 

the environmental permit statute. 

This chapter reviews the supplemental environmental permits required by the Clean Air and Clean Water acts 

State and local public works may require a permit under 

these laws even if they are not federally funded if they 

discharge or emit pollutants that are covered by these acts. 

Municipal waste incinerators are an example of a locally 

funded project that requires a permit under the Clean Air 

Publicly owned wastewater treatment works require 

pollutant discharge permits under the Clean Water 

Supplemental Federal Environmental Reviews 

The National Environmental Policy Act and other federal statutes require environmental reviews without requiring a federal permit. Either federal funding under a 

categorical assistance statute or a permit under theFederal 

Power Act may make a project subject to the environmental review requirements. 

The application of supplemental environmental reviews is a matter of some complexity when a state and local 

public works project requires only a supplemental permit 

under the Clean Air Act or Clean Water Act. NEPA illustrates the problem. Actions taken by EPA under the Clean 

Air Act are exempt by another statute from the impact 

statement requirements of NEPA.” The Clean Water Act 

exempts from NEPA discharge permits for existing 

sources of pollution but not for pollution from new 

sources.z6 A pollution discharge permit for a new, publicly 

owned treatment works is a new-source permit. 

In addition, any source of pollution requiring a 

dredge-and-fill permit under the Clean Water Act is subject to NEPA because the dredge-and-fill permit is also a 

permit for a new source of pollution.27 A source of pollution that requires a dredge-and-fill permit could be any state 

or local public works project, whether or not it is federally 

funded, if it comes within the jurisdiction of that program. 

The complex and overlapping environmental reviews 

that may be required for a state or local public works 

project is illustrated by a state highway project funded by 

the federal highway act. Such a project is subject to the 

16 U.S. Advisory Commission on Intergovernmental Relations 
environmental review requirements in the federal highway legislation; it also is subject to NEPA if it is a major 

federal action significantly affecting the human environment. It requires a dredge-and-fill permit as well if it is 

located in a wetlands. The highway also is subject to (1) 

statutory prohibitions on location in a park or other protected site, (2) the Endangered Species Act if a habitat of an 

endangered species is affected, and (3) review under the 

NutionalHistOrc preservation Act if an historic site is affected. 

VETO POINTS 

Having illustrated a number of environmental “veto 

points” that apply to state and local public works, we now 

discuss these points and the review requirements they 

impose on state and local public works projects.2s 

Environmental Requirements 

in Federal Assistance Legislation 

lhbles 1-2 and 1-3 indicate the types of environmental 

requirements found in federal assistance legislation and 

the natural resources they protect. The tables outline the 

environmental requirements in federal assistance legislation that are discussed below. 

Section 4(f) of the Department 

of Transportation Act 

All federally funded transportation projects, such as 

highways and mass transit, must satisfy the environmental 

protection requirement in Section 4(f) of the Department 

of Transportation Act. This act requires the protection of 

parks, historic sites, and similar areas from transportation 

projects. It provides: 

The Secretary of Transportation may approve a 

transportation program or project requiring the 

use . . . of publicly owned land of a public park, 

recreation area, or wildlife and waterfowl refuge 

of national, state, or local significance, or land of 

an historic site of national, state, or local significance . . . only if 

(1) there is no prudent and feasible alternative to using that land; and 

(2) the program or project includes all 

possible planning to minimize harm to 

the park, recreation area, wildlife and 

waterfowl refuge, or historic site resulting from that use.29 

This provision was one of the first environmental protection statutes. It was enacted in 1968 to protect a park in 

San Antonio, Texas, from a federally funded highway, although the highway was finally approved by the Congress. 

An initial problem with the statute was uncertainty about 

whether the Secretary of Transportation was required only 

to balance the benefits of a transportation project against the 

environmental costs of going through a protected area or to 

sat@ a substantive environmental standard. 

In an important case, Citizens to Preserve Overton Park 

v. Vb‘olpe,30 the Supreme Court considered the “feasible 

and prudent” alternative part of the statute’s two-part 

test. A highway was proposed to go through Overton Park 

in Memphis, Tennessee. The Transportation Secretary 

claimed the statute required only a “balancing” of project 

benefits against environmental costs, and that he could 

exercise his nonreviewable discretion to decide whether a 

project should be approved in a park. This interpretation 

arguably was consistent with the statute’s legislative history. 

The Court disagreed and held there was “law to apply” to the secretary’s decision. It adopted a presumption 

against the use of parks for highways. It held that the 

secretary could reject an alternative to a park location only 

if “truly unusual factors . . . or the cost of community 

disruption resulting from alternative routes reached extraordinary magnitudes.” This is a substantive test. It 

means the secretary and the courts, in applying the statute, 

must apply a presumption that parks and other protected 

areas are not suitable locations for transportation projects. 

The Supreme Court has not considered the second 

requirement in the statute, that a program contain “all 

possible planning to minimize harm” to a park or other 

protected site. This is a mitigation of environmental harm 

requirement. A leading lower federal court case held that 

this requirement contains an implicit limitation, similar to 

the one expressly included in the section on alternatives, 

that mitigation measures are required only if they are 

reasonable and prudent.31 

Section 4(f) illustrates a number of characteristics 

typical of environmental review legislation. It is limited in 

scope because it applies only to a single category of state 

and local public works. It requires the selection of alternatives and the adoption of mitigation measures. It imposes 

these environmental protection requirements in ambiguous and open-ended statutory language. In addition, the 

statute does not contain a mechanism for balancing the 

environmental protection objectives it enacts with other 

environmental protection requirements or with the need 

for the transportation projects that are covered by the 

statute. Finally, it leads to litigation, with all of its costs in 

terms of time, money, and animosity. 

Additional Environmental Requirements 

for Transportation Projects 

Federal aid legislation for transportation projects 

contains additional environmental review requirements. 

A provision in the federal highway act requires the secretary to publish guidelines to “assure that possible adverse 

economic, social, and environmental effects” relating to 

any highway project are “fully con~idered.”~~ Thisprovision also requires the federal highway agency to take “into 

consideration . . . the costs of eliminating or minimizing 

such adverse effects” as well as air, noise, and water pollution and the “destruction or disruption of manmade and 

natural resources.” 

Because automobile traffic on highways contributes 

substantially to air pollution, another provision in the 

federal highway act links federal aid to implementation of 

the Clean Air Act. This provision requires the adoption of 

guidelines to assure that highways constructed with federal 

U.S. Advisory Commission on Intergovernmental Relations 17 
c. 

00 

F 

Y 

9 

2. 

3 

g. Table 1-2 

1 Federal Assistance Legislation 

01 

n 5 'hes of Provisions 

Accommodation/ F 

i3 Standards Sanctions Procedural Substantive Analysis RefeP Defe8 Mitigation Participation4 Exemptions d 

j 

a g Department of 'Ransportation Act X 

C Airport & Airway 

CL rn 

Environmental Financial Vetoes' Vetoes' Reviews/ Mediation/ Public 

X X X X 

Federal Highway Act X X X X X X 

Federal 'Ransit Act X X X X X 

D Clean Water Act (wastewater) X X X X X 

2. Improvement Act X X X X X 

Rural Development Act v) 

(wastewater) X X X X 

Small Reclamation Projects Act X X X X 

Coastal Zone Management Act X X X X X X 

X 

Authority of federal agencies to carry out procedural reviews or exercise substantive vetoes of state and local public works projects. 

Projects must be referred to a state or another federal agency for comments that the approving federal agency must consider. 

The federal agency that has the authority to approve a project must defer to decisions by a state or another federal agency under criteria in their legislation. 

Through the comment process, hearings, notice-andcomment rulemaking, or adjudicatory proceedings. 

X 
Table 1-3 

Federal Assistance Legislation 

Environmental Resource Protected 

Natural Land 

Habitat Air Water Historic Wetlands Use 

Department of ’kansportation Act X X X 

Federal Highway Act X X X X X X 

Federal ’kansit Act X X X X X X 

Airport and Airway Improvement Act X X X X X X 

Clean Water Act (wastewater) X X X X 

Rural Development Act (wastewater) X X 

Small Reclamation Projects Act X 

Coastal Zone Management Act X X X X X 

aid are consistent with the implementation plans that 

states must adopt to provide a strategy for attaining national ambient air quality standards. A related provision in 

the Clean Air Act prohibits any federal assistance, including assistance for highways, that does not conform to a 

state implementation plan.33 Another provision states 

that the Secretary of Transportation may not approve any 

grants for highway projects if there is no approved state 

implementation plan in operation in an area that has not 

attained the national air quality standards, if a state has 

not submitted the required plan, or if EPA has disapproved a ~lan.3~ 

Environmental review requirements are also contained in the Airport and Airway Improvement Act. Some of 

these requirements are related to acceptability of an airport project. The Secretary of Transportation, for example, may require provision for high- intensity runway and 

other lighting if this is deemed necessary “for the safe and 

efficient use of the airport by aircraft.”35 

Other provisions in the act add additional environmental reviews. The secretary must be satisfied that “fair 

consideration has been given” to the interests of nearby 

c~mrnunities.~~ A more explicit environmental requirement sets forth a “national policy that airport development projects . . . shall provide for the protection and 

enhancement of the natural resources and quality of environment of the nation.”37 The act implements this policy 

through a consultation process. The Secretary of Transportation must consult with the Secretary of the Interior 

and the Administrator of EPA on any project having a 

“significant impact on natural resources.” 

The Secretary of Transportation may not authorize an 

airport project that has a “significant adverse effect” unless “no feasible and prudent alternative exists and . . . all 

reasonable steps have been taken to minimize such adverse effect.” This is a substantive environmental requirement similar to the alternatives requirement in Section 

4(f) of the Department of Transportation Act and is also 

found in other transportation project assistance legislati~n.~~ The Airport Act also requires compliance with 

“applicable air and water quality standards” adopted under the Clean Air and Clean Water 

The Federal Transit Act contains numerous environmental review provisions. One provision states that the 

Secretary of Transportation, when approving a mass transit project, is to take “into consideration” the effect of the 

project on a number of environmental resource problems, 

including air pollution.“O This is not a substantive requirement, like the requirements in the Clean Air Act and the 

other transportation acts. This provision requires the secretary only to consider air pollution problems, not to reject 

or modify a grant if problems exist. Urban mass transit is 

exempt from the Clean Air Act compliance provision because it is assumed that mass transit, by reducing dependence on the automobile, will help improve air quality. 

As shown by the highway project example given earlier, federal assistance for transportation projects can also 

trigger environmental reviews under other environmental 

legislation. This overlapping matrix of review requirements creates multiple environmental veto points. There 

is no attempt in the statutes to integrate or coordinate 

these requirements or to establish priorities. 

Environmental Review for Wastewater Treatment 

and Water Resource Projects 

Legislation authorizing these federal assistance programs does not have environmental review requirements 

as extensive as those in transportation assistance legislation. There are two reasons for this difference. One is that 

some of these programs are presumed to be environmentally positive. Another reason is that some of these programs antedate the environmental movement. 

The statute that authorizes the Rural Development 

Administration to make grants for waste disposal facilities 

requires compliance with state and federal water pollution control standard~.~~ Thisis a crosscutting environmental compliance requirement similar to the 

requirement that makes state implementation plans 

adopted under the Clean Air Act binding on federally 

funded highway projects. 

A less binding requirement is contained in the statute 

providing financial assistance for small reclamation projects. Planning and construction of these projects are subject to the consultation provisions of the Ash and Wildlife 

Coordination This act requires federal agencies proposing or issuing permits for projects affecting streams, 

lakes, or other watercourses to consult with the Fish and 

Wildlife Service of the Department of the Interior and 

with state fish and wildlife agencies before approving a 

project. The courts have held that a failure by the fish and 

U.S. Advisory Commission on Intergovernmental Relations 19 
wildlife agencies to consider comments adequately can 

make an agency action arbitrary.43 

Another statute in this group, the Clean Water Act, 

provides federal assistance to local governments for 

wastewater treatment works. This act initially authorized 

federal grants for treatment works, and the environmental review requirements of the National Environmental 

Policy Act applied.44 In 1987, the Congress terminated the 

federal assistance program, effective 1994, and substituted a new program under which the federal government 

provides “capitalization grants” to capitalize state revolving funds. The states contribute 20 percent of these funds 

and make loans to local governments for the construction 

of publicly owned treatment works. The Clean Water Act 

amendments of 1987 modified the application of the National Environmental Policy Act to treatment works constructed with loans from state revolving funds. NEPA 

applies to treatment works constructed with funds “directly made available by [federal] capitalization grants” prior 

to 1995.45 EPA regulations require a less detailed environmental review for treatment works projects that are not 

funded from federal capitalization grants.& 

The text next discusses environmental requirements 

in federal permit and review legislation. Tmbles 1-4 and 1-5 

indicate the types of environmental requirements and the 

natural resources they protect. 

Environmental Requirements 

in Federal Permit Legislation 

The only statute in this group is the Federal Power Act. 

This statute requires a license or exemption from FERC 

for all nonfederal hydroelectric projects meeting the jurisdictional requirements of the act, including state and local 

hydroelectric power projects. Environmental review requirements in this legislation address the conflict between 

the need to meet energy demands and the need to protect 

fish and wildlife. One provision requires that FERC, when 

issuing a permit, give conservation interests “equal consideration” with development interests in determining the 

overall public interest in the project to be licensed.47 Conservation interests include energy conservation, fish and wildlife 

protection, the protection of recreational opportunities, and 

preservation of other aspects of environmental quality. 

Another important provision requires FERC to ensure that licensed projects will be “best adapted to a comprehensive plan” that includes provision for “the 

adequate protection, mitigation, and enhancement of fish 

and wildlife.”48 This provision, along with a Clean Water 

Act provision requiring state certification of compliance 

with state water quality standards, gives state and local 

governments an opportunity to inject environmental concerns into the FERC permitting process. Finally, the FederalPowerAct requires FERC to impose license conditions 

to adequately protect, mitigate damages to, and enhance 

fish and wildlife.49 These conditions are to be based on 

recommendations from federal and state fish and wildlife 

agencies. This provision complements consultation provisions in the Fish and Wildlife Coordination 

These provisions in the Federal Power Act are augmented for the Pacific Northwest by the Northwest Power 

Act, which creates a Northwest Power Planning Council 

with the responsibility to prepare a regional conservation 

and electric power plan.51 The plan is to give priority to 

resources that are “cost effective,” a term defined to include consideration of environmental costs and benefits.52 

The plan must include measures for environmental quality and for the “protection, mitigation, and enhancement 

of fish and wildlife.”53 The act also requires the council to 

adopt a program “to protect, mitigate, and enhance fish 

and wildlife.”54 The program must balance these protective measures with the need to assure an adequate supply 

of power for the Pacific North~est.~’ Consultation with 

federal and state fish and wildlife agencies is again required.”j Federal agencies, such as FERC, that regulate 

hydroelectric power facilities must consider any fish and 

wildlife programs adopted by the council and the purposes 

of the Northwest Power Act, which include provisions to 

protect fish and ~ildlife.~’ These requirements supplement thebroader environmental responsibilities imposed 

on FERC by the Federal Power Act. 

Like most federal environmental review statutes, the 

federal power acts are a mixture of procedure and substance and do not assign objective weights for competing 

resource values. In the federal power acts, the unanswered question is how much “balancing” is required between the goals of assuring an adequate power supply and 

assuring protection of fish and wildlife and other natural 

 resource^.^^ These environmental requirements do 

change the prior balance in the commission’s decisionmaking. They make environmental concerns of equal dignity in the decisionmaking process, thus making it harder 

for the commission to ignore them. 

All applications for a FERC license or exemption are 

also subject to the broad and comprehensive environmental analysis required by NEPA. The federal license or 

exemption provides the necessary federal link to make the 

project a federal action under NEPA. The question is 

whether the project also is a major federal action significantly affecting the environment. Most major power projects would fall into this category, and a number of court 

cases have considered the application of NEPA to federally licensed hydroelectric power projects.59 

Recall also that permit legislation like the Federal 

Power Act can preempt state statutes and regulatory requirements, which may provide more or less protection of 

environmental resources than that provided by the federal 

agency under its statutes. The Supreme Court held, for 

example, that the Federal Power Act preempts the authority of states to set minimum stream flows for fish and 

wildlife protection, except for exempted projects.@’ Federal preemption as an environmental veto point is the converse of legislation, such as the National Coastal Zone 

Management Act, which requires federal agencies to defer 

to state regulation. 

Federal Environmental Permits 

Environmental veto points also are contained in legislation requiring permits for state and local public works 

not having a federal link, such as federal assistance. The 

environmental review requirements of this legislation are 

20 U.S. Advisory Commission on Intergovernmental Relations 
Table 1-4 

Federal Environmental Review and Permit Legislation 

Accommodation/ 

Environmental Financial Vetoes' Vetoes' Reviews/ Mediation/ Public 

Standards Sanctions Procedural Substantive Analysis Refer;! Defe8 Mitigation Participation4 Exemptions 

Clean Air Act 

Emissions Standards 

Ambient Air Standards 

State Implementation Plans 

Effluent Standards 

Dredge and Fill Permit 

Federal Permit/ 

State Certification 

9 Endangered Species Act 

m National Environmental 

9 Policy Act 

Fish and Wildlife 

t' Coordination Act a" Historic Preservation Act 3 Federal Power Act 

Clean Water Act 

Northwest Power Act ! 

X 

X 

X 

X 

X 

X 

X 

X 

X X X 

X 

X 

X 

X 

X 

X X X X 

X 

X 

X 

X 

X 

X 

X 

X X X X 

X X X X X X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X 

X X 

X 

X 

X - 

C. 

v) 

E. ' Authority of federal agencies to cany out procedural reviews or exercise substantive vetoes of state and local public works projects. 

*Projects must be referred to a state or another federal agency for comments that the approving federal agency must consider. 

9 The federal agency that has the authority to approve a project must defer to decisions by a state or another federal agency under criteria in their legislation. 

Through the comment process, hearings, notice-andcomment mlemaking, or adjudicatory proceedings. CL rD 

0 

rD < 

2 

a 

z? 

6 =. 

0 

v) 3 
Table 1-5 

Federal Environmental Review and Permit Legislation 

Environmental Resource Protected 

Natural Land 

Habitat Air Water Historic Wetlands Use 

Clean Air Act 

Emissions Standards 

Ambient Air Standards 

State Implementation Plans 

Effluent Standards 

Federal Permit/State Certification X 

National Environmental Policy Act X 

Fish and Wildlife Coordination Act X 

Historic Preservation Act 

Federal Power Act X 

Northwest Power Act X 

Clean Water Act 

Dredge and Fill Permit X 

Endangered Species Act X 

X 

X 

X 

X 

X 

X X 

X X 

X X 

X X X 

X 

X 

X 

x 

X 

X X 

triggered whenever a state and local public works project 

falls within the jurisdiction of the environmental permit 

program. The result is that each of these permit programs 

imposes an environmental review requirement that is independent of and not coordinated with those in other 

federal legislation. 

Clean Wafer Act Dredge-and-Fill Permits 

for Wetlands 

The Clean Water Act authorizes the Secretary of the 

Army, acting through the U.S. Army Corps of Engineers, 

to issue a permit “for the discharge of dredged or fill 

material into the navigable waters of the United States.”61 

This permit requirement applies to any state and local 

public works project located in wetlands because jurisdiction over “navigable waters” includes jurisdiction over 

wetlands. Dredging and filling are necessary for state and 

local public works located in wetlands. 

The Clean Wafer Act gives the Corps of Engineers and 

the Environmental Protection Agency joint regulatory 

authority in the program. The act authorizes the Corps to 

issue dredge-and-fill permits but does not contain standards for making the decisions. EPA’s authority is provided 

by a section in the act authorizing the agency to specify 

disposal sites for dredge-and-fill material through the 

application of guidelines based on statutory ocean discharge criteria. EPA guidelines also must consider the 

economic impact of the site on navigation and anchorage 

in any case in which the guidelines alone would result in 

disapproval of a permit?* Another section of the act authorizes EPA to veto a site for the discharge of 

dredge-and-fill material whenever the discharge “will 

have an unacceptable adverse effect on municipal water 

supplies, shellfish beds and fishery areas . . . , wildlife, or 

recreational areas.”63 

Both EPA and the Corps have extensive regulations 

that provide criteria for administering the dredge-and-fill 

permit program. The Corps has adopted regulations that 

call for a “public interest” review similar to the review of 

environmental impacts carried out under NEPA. The regulations are lengthy and specify a number of factors the 

Corps is to consider. As applied to wetlands, the regulations state in part: 

No permit will be granted which involves the 

alteration of. . . [important wetlands or dredgeand-fill activities with cumulative effects] unless 

the [Corps] district engineer concludes. . . [on the 

basis of a public interest review] that the benefits 

of the proposed alteration outweigh the damage 

to the wetlands resource.64 

The regulations also require the consideration of alternatives to the proposed development. 

EPA has wetlands regulations that elaborate on its 

responsibility to specify disposal sites and to veto 

dredge-and-fill projects. These regulations contain an important “water dependency” test that enacts a preference 

for water-dependent dredge-and-fill projects. As applied 

to wetlands, the water dependency test means a project 

must be dependent on a wetlands area if it is to be allowed 

there. For example, a marina or port would have to be 

located in a wetlands area at the edge of a navigable water 

body. If the project is not water dependent, then “practicable alternatives that do not include specific aquatic sites 

are presumed to be a~ailable.”~~ 

These regulations contain substantive standards for 

permit decisions. These standards make it very difficult 

for most state and local public works projects to locate in 

wetlands because these projects are not usually water 

dependent. A football stadium is an example. Court cases 

have applied these standards and have disapproved permits the Corps has granted for dredge-and-fill projects 

that violated the standards.% 

NEPA applies to dredge-and-fill permits, and an impact statement must be prepared under NEPA if the permit is for a major action significantly affecting the 

environment. The interrelationship between NEPA and 

the dredge-and-fill permit program can be quite complex. 

Sierra Club v. SigleP held inadequate an environmental 

22 U.S. Advisory Commission on Intergovernmental Relations 
impact statement for a deepwater port facility that also 

received a dredge-and-fill permit. The court also held that 

the inadequate environmental impact statement “tainted” 

the decisionmaking process for the dredge-and- fill permit 

program and prevented the careful weighing of all factors 

required by the Corps’ public interest review. 

Like the legislation that protects parks and historic 

sites from transportation projects, the dredge-and-fill per- mit program contains a preference for natural resource 

protection over other environmental goals, and thereby 

places limits on the construction of state and local public 

works projects. This preference is important. The dredge- and-fill program defines wetlands broadly, so that there will 

often be situations where state and local public works projects are proposed in wetlands and require a dredge-and-fill 

permit. The effect of this requirement may be to force the 

project to an another location or require its modification or 

rejection.68 The Two Forks Dam and Reservoir in Colorado, 

which was vetoed by EPA, is an example. 

Air Quality Permits 

The Clean Air Act includes an extensive permit program that implements the air quality and emission standards that must be attained to achieve compliance with the 

act. The 1990 amendments to the act considerably 

strengthened the program.@ 

One of the purposes of the permit program is to implement the act’s air quality emission limitations for stationary sources of air pollution. Afactory or similar facility 

that emits air pollutants is an example of a stationary 

source. Emission limitations are adopted for pollutants 

designated by EPA as “criteria” pollutants. There are two 

types of emission limitations. One type is adopted nationally by EPAfor new stationary sources of air pollution. The 

other type is adopted by the states for existing stationary 

sources of air pollution. EPAcan delegate to the states the 

authority to administer the program of national emission 

limitations for new sources of air poll~tion.’~ 

Air quality emission limitations do not directly affect the 

location of a project. A project can be constructed at any 

location where it meets emission limitations. Cases may still 

arise where the application of emission limitations will require the relocation of a project. The act provides, for example, that a new stationary source of air pollution cannot 

locate in an area that has not attained the national air quality 

standards unless there is a reduction in pollution from existing stationary sources.71 Compliance with this requirement is 

usually achieved through the purchase of air pollution rights 

by a new source of pollution from existing sources. If a new 

source of pollution cannot comply with this requirement, it 

cannot locate in a nonattainment area. 

Air quality permits are required primarily for privately 

owned stationary sources that emit air pollution, but some 

state and local public works projects come under the permit 

program. Municipal waste incinerators are an important ex- ample because many local governments rely on incineration 

for waste disposal.72 The Congress amended the Clean Air 

Act in 1990 to provide for the adoption of performance 

standards and other requirements for waste incineration 

plants.73 These standards are to cover toxic pollutants not 

covered by emission limitations for the criteria pollutants. 

Other environmental problems are raised by waste 

incineration. Some of the waste burned in incinerators can 

be recycled, and it is argued that recycling should be preferred so as to avoid environmentally hazardous by-products 

from incineration. Although EPA at first proposed regulations to require the recycling of trash as the basis for an air 

quality permit,74 it dropped this requirement when the 

proposal was opposed by the Vice President’s Council on 

Competitivenes~.~~ A second related problem of incineration is the creation of fly ash as a residue from incineration. During the 1990 debate on the Clean Air Act, the 

Congress deferred action on this controversial issue for at 

least two years.76 

Federal Environmental Review without Permits 

A number of federal statutes require environmental 

review of state and local public works projects but do not 

require a permit. Several of these review requirements 

are discussed in this section. They include compliance 

with pollution control standards and environmental reviews required by NEPA, the Endangered Species Act, and 

the National Historic Preservation Act. 

Compliance with Pollution Control legislation 

As noted in the last section, a number of federal 

assistance statutes require compliance with pollution control standards in the Clean Air and Clean Water acts but do 

not require pollution control permits. Examples are 

grants for rural wastewater treatment facilities administered by the Rural Development Admini~tration~~ and

grants for highways administered by the Federal Highway 

Administration?8 

These requirements are reinforced by provisions in 

the Clean Air Act that require all activities funded, permitted, or approved by the federal government to conform 

to state implementation plans (SIPS) adopted under the 

act.79 The application of this requirement to highway projects demands special attention because it illustrates the 

tensions that can arise when one federal program must 

comply with the environmental review requirements of 

another. The interpretation of this requirement produced 

serious disagreement between the Department of Transportation, which administers the highway program, and 

EPA, which administers the Clean Air Act. 

The Clean AirAct requires the states to prepare transportation control plans that are part of the state implementation plan for attaining the national air quality 

standards. Preparation of transportation control plans is 

coordinated with regional transportation plans by regional 

transportation agencies under the federal highway act. 

The 1990 amendments to the Clean Air Act strengthened 

the transportation control measures required for areas 

that have not attained the national air quality standards.8O 

According to testimony before the Congress,8l the 

Department of Transportation claimed a highway project 

was in conformity with a state implementation plan if the 

highway did not interfere with the timely administration of 

transportation control measures contained in a state implementation plan.82 EPA claimed conformity existed 

only if a highway project contributed to the attainment and 

U.S. Advisory Commission on Intergovernmental Relations 23 
maintenance of a national air quality standard and did not 

cause a violation of an air quality standard or aggravate an 

existing one. EPA’s interpretation would require more of a 

showing about the impact on air quality than the Department of Transportation interpretation. 

The 1990 amendments to the Clean Air Act specify in 

greater detail the requirements that must be met for all 

federally funded projects, including highway projects, if 

they are to be found in compliance with state implementation ~lans.8~ These amendments appear to adopt the position taken by EPA in the congressional hearings. As noted 

earlier, the 1990 amendments to the Cleun Air Act also 

revised and strengthened the sanctions for failure to attain the national air quality standardse4 

A similar provision requiring compliance with pollution control standards appears in the National Coastal 

Zone Management Act. All state coastal management programs funded by the act must comply with all Clean &Act 

and Clean Water Act requirement^.^^ This condition is like 

the compliance requirement for highway projects because 

it imposes a federal standard on state programs. The effect 

of the requirement is that state air and water quality standards are carried directly into state coastal management 

programs that receive assistance under the federal act. The 

difference is that the National Comd Zone Management Act 

requirement applies to state regulatory programs, not programs for the construction of state and local public works. 

State coastal regulatory programs can apply to state and local 

public works projects that are in the coastal zone. 

The National Environmental Policy Act 

The National Environmental Policy Act establishes the 

most comprehensive and far-reaching environmental review requirements in federal legislation. The reason is 

that the environmental review required by NEPA is not 

limited to a single resource, such as endangered species or 

historic sites. Instead, NEPA requires the preparation of a 

“detailed statement” on all “major federal actions significantly affecting the quality of the human environment.’’86 The “detailed statement” is now called an 

environmental impact statement (EIS). The congressional declaration of a national environmental policy in 

the act is broad enough to include all elements of the 

urban as well as the natural en~ironment.~~ 

As in other federal environmental review statutes, a 

federal link or nexus is required to make state and local 

public works projects subject to NEPA. This nexus is provided by the requirement that NEPA applies to any “federal” action.88 The courts have held that this term includes 

federal permits or assistance,w including those for state 

and local public works projects. 

NEPA’s importance cannot be overstated. The federal 

link established by the law is broad enough to include 

almost every conceivable federal assistance and permit 

program?O As one federal court held in an early case, 

NEPA makes environmental review the mandate of all 

federal agencies?’ 

Assume a federal statute authorizes a federal agency 

to makegrants to stategovernmentsforflood control.The 

statute authorizing this assistance contains a number of 

grant requirements, covering the type of projects that will 

be funded, the state share of the project, and so on. NEPA 

applies to grants made under this statute because they are 

actions of the federal government. If the grant is major 

and if it significantly affects the human environment, the 

agency will have to comply with the environmental review 

requirements of NEPA as well as the statutory requirements in its own legislation. There are marginal cases 

where the federal government is so minimally involved that a 

federal link is not but the state and local public 

works projects covered by this study are usually so extensive 

that there will almost always be a federal link. 

The “small handle” problem illustrates a type of case 

in which NEPA might not apply to a state and local public 

works project because the federal link is minimal. Assume 

a publicly owned electric utility decides to construct a 

high-voltage power line 60 miles long. Assume also that 

the only federal permit required for the power line is from 

the Army Corps of Engineers for a one-mile crossing over 

a river. Some courts have held that this “small” federal 

permit “handle” is not enough to bring the entire power 

line under NEPA.93 Only the power line segment that 

requires a permit is covered. 

By requiring environmental reviews in decisionmaking by federal agencies, NEPA expanded the range of 

issues that must be taken into account. The courts and the 

Council on Environmental Quality have construed the 

environmental obligations imposed by the statute to include more than just the immediate consequences of an 

agency action. Secondary and cumulative environmental 

impacts of proposals also must be con~idered.9~ In an important early highway case, for example, a federal court 

held that the federal highway agency had to consider not 

only the direct impacts of the highway but also the impact 

of any new urban development that would be stimulated 

by the high~ay.9~ Finally, NEPA requires an agency to 

consider preferable alternatives and measures that will 

mitigate the environmental consequences of its 

These requirements are similar, in many ways, to environmental review requirements in other federal legislation. The difference is that NEPA’s broad coverage of all 

federal agencies and almost every conceivable environmental impact make the review it requires especially important. Indeed, programs that fund or permit state and local 

public works make up a sipfkant portion of the envkonmental reviews carried out under NEPA. 

This does not mean that NEPA imposes a substantive 

obligation on federal agencies to make decisions that are 

environmentally sound. NEPA imposes a “procedural” 

duty on an agency to consider and disclose the environmental impacts of its actions. A federal agency may consider and disclose adverse environmental impacts and still 

decide to carry out the project. As the Supreme Court 

pointed out, if an agency adequately identifies and evaluates the adverse environmental effects of its proposed 

action, it may still decide that other values outweigh the 

environmental c0sts.9~ 

NEPA still has bite even though it does not have a 

substantive effect. A court may order a remedy if an 

agency prepares an inadequate EIS. It may require the 

24 U.S. Advisory Commission on Intergovernmental Relations 
agency to prepare a new and adequate impact statement. 

In some cases, the deficiencies may be so extreme that 

preparation of an adequate impact statement is not possible. This can effectively stop a The procedural 

duty imposed by the EIS requirement also has an important effect on decisionmaking, compelling an agency to 

consider the environmental consequences of its actions. 

Furthermore, the public comment and referrals to other 

agencies required by NEPA open the agency’s decisionmaking process to outside review.w 

The National Historic Preservation Act 

The National Historic Preservation Act also may require a federal environmental review of state and local 

public works projects. This act created a National Register 

of Historic Places and provides a process for protecting 

sites and buildings, including consultation to minimize the 

impact of federal undertakings on properties listed in or 

eligible for the national register. The act is administered 

by an Advisory Council on Historic Preservation and by 

the Secretary of the Interior through the National Park 

Service. The act concisely states the duties it imposes: 

The head of any federal agency having direct or 

indirect jurisdiction over a Federal or federally 

assisted undertaking . . . [or] authority to license 

any undertaking shall, prior to the approval of the 

expenditure of any Federal funds on the undertaking or prior to the issuance of any license. . . take into account the effect of undertaking on any 

district, site, building, structure, or object that is included in or eligible for inclusion in the National 

Register. The head of any such Federal agency shall 

afford the Advisory Council on Historic Presemtion . . . a reasonable opportunity to comment with 

regard to such undertaking.100 

The requirement that there be a federal “undertaking” requires a federal link with a project to trigger the act. 

A state and local public works project could be subject to 

the act if it is planned for an historic site, or even if it is 

nearby and has an effect on the site. The federal link 

requirement will not be met if federal participation in a 

project is marginal.’O’ 

Regulations adopted by the advisory council require 

federal agencies to apply “Criteria of Adverse Effect” to 

undertakings found to have an effect on historic properties.’Oz A consultation process may be initiated if an adverse effect is found and a memorandum of agreement is 

executed that resolves the dispute. If a memorandum of 

agreement is not executed, the advisory council may file 

comments on the undertaking, which the responsible federal agency need only take into account. 

Note that the statute authorizes consultation. It does 

not require a substantive decision from a federal agency 

that modifies or rejects a project because of an adverse 

effect on an historic site orbuilding. In this respect, the act 

resembles NEPA. Although the act states that it is not to 

be interpreted to require the preparation of an environmental impact statement under NEPA,lo3 projects which 

are undertakings under the act may also be major federal 

actions that do require an impact statement. 

The National Historic Preservation Act does not command any particular result to protect historic sites and 

buildings. The process it creates is intended to help assure 

the preservation of historic properties, but it does not give 

preservation a substantive priority superior to the “primary missions” of federal agencies. 

The Endangered Species Act 

The Endangered Species Act is another federal environmental statute that may impose review requirements 

on state and local public works. Unlike other environmental review statutes, such as NEPA, the Endangered Species 

Act imposes substantive environmental review requirements on projects. 

The act applies to “any action authorized, funded, or 

carried out by such [federal] agency.”’04 The environmentally protective features of this act are triggered by a “listing” of an endangered species, which may be based on any 

one of a number of statutory factors.105 The Secretary of 

the Interior also is to designate the “critical habitat” for a 

listed endangered species,’06 defined to include areas “essential for the conservation of the species.”’o7 The effect 

of a listing is to protect not only the endangered species 

but also its habitat.’” This statutory protection may restrict the areas where state and local public works projects 

can be located. 

The act provides a number of protections. One key 

provision requires federal agencies to: 

insure that any action authorized, funded, or carried out by such agency. . . is not likely to jeopardize the continued existence of any endangered 

species or threatened species or result in the destruction or adverse modification of habitat of 

such species. . . [which the Secretary of Interior 

determines to be ~ritical.]’~ 

If it is concluded that a species or its habitat will be 

jeopardized, the secretary is to suggest “reasonable and 

prudent alternatives” to be implemented by the federal 

agency or the applicant for a federal license or funding. A 

leading Supreme Court case held that the prohibitions 

and restrictions in this provision are absolute.”o The 

Court found an “explicit congressional decision” to afford 

“first priority” to saving endangered species, and a “conscious decision” by the Congress to give endangered species 

priority over the “primary missions” of federal agencies.’” 

After this decision, the Congress authorized an exemption 

from the statutory prohibition if the agency or applicant for a 

federal license or funding can show that the value of the 

project outweighs the protection of the species.112 

The consequences of a jeopardy finding under the 

Endangered Species Act are enormous because the act prohibits completion of a project in such a case. For this 

reason, the jeopardy standard in the Endangered Species 

Act is interpreted to require a higher threshold of environmental harm than thesignificance standard in other review 

legislation, such as NEPA. 

Other provisions of the Endangered Species Act provide additional protection for endangered species and 

their habitats. The act prohibits any “taking” of an endanU.S. Advisory Commission on Intergovernmental Relations 25 
gered species.l13 Cases have held that this provision includes indirect takings as well as direct physical takings, 

even though a project is found not to jeopardize an endangered species or its habitat. An indirect taking occurs, for 

example, if the construction of a public works project, such 

as a treatment plant, disturbs the habitat of an endangered 

species, even though the project does not jeopardize the 

species.l14 The impact of the taking prohibition is lessened 

somewhat by a provision in the act that authorizes the 

Secretary of the Interior to grant an exemption if the 

taking is found to be incidental and mitigated.ll5 

Finally, another provision of the Endangered Species 

Act requires federal agencies other than the Interior Department to execute their programs in a manner consistent with the conservation of endangered and threatened 

species.l16 A federal court has held that this provision is 

not absolute and leaves some discretion with an agency.”’ 

The court held that an agency does not have to adopt an 

alternative to a proposed action, even though the alternative is equally effective in serving the government’s interest and would enhance the conservation of a protected 

species to an equal or greater extent. 

Unlike some environmental review legislation, the 

Endangered Species Act establishes a substantive obligation 

that applies to federal agencies and that gives the protection of endangered species priority over the primary missions 

of these agencies. This priority makes it difficult to awmmodate the environmental protection provisions of this act 

with other environmental review legislation, or with the 

purposes or missions of federal agencies charged with funding or licensing state and local public works projects. 

Federally Authorized Environmental Review 

by the States 

A number of federal statutes transfer the environmental review of state and local public works to the states. 

This creates a “reverse federalism” by which the acceptability of a federal agency decision under federal law is 

dependent on state approval. The federal agency cannot 

act without state permission. Two important examples of 

this concept are the Clean Water Act and the National 

Coastal Zone Management Act. 

State Certification under Section 401 

of the CIean Water Act 

Section 401 of the Clean Water Act requires certification from the affected state for all applicants for federal 

licenses and permits on projects that may result in a discharge of pollution into the waters of the United States. 

The state must certify that the license or permit is in 

compliance with state water quality standards and with 

“appropriate requirements” of state law.”* The appropriate requirements language means that the license or permit must comply with more than just the effluent 

limitations and other regulatory standards contained in 

the federal law. 

The meaning of the appropriate requirements provision and how it affects interlocking state and federal environmental review requirements is illustrated by Arnold 

Irrigation Co. v. Department of Environmental Quality, an 

Oregon case.l19 The court held that an applicant for a 

license from the Federal Energy Regulatory CommissionlZ0 was not required by Section 401 to comply with a 

county land use plan unless the plan affected water quality. The court also held that states have inherent and independent authority when making certifications under 

Section 401 to protect and plan the use of their waters, and 

that this section allows the states to enforce all water 

quality-related statutes and rules. The court remanded 

the case so that the Department of Environmental Quality could determine which provisions of the land use plan 

were sufficiently related to water quality to be enforced 

against the licensee under Section 401.121 

Federal Consistency Requirements 

in the Coastal Zone Management Act 

The Coastal Zone Management Act contains another 

example of reverse federalism: the federal consistency 

provision. This provision is stated differently, depending 

on the federal program, but it generally requires federal 

activities and federally funded and permitted activities to 

be consistent with state coastal programs.1zz The Congress 

strengthened this provision in 1990 by extending it to offshore lease sales authorized by the federal government, 

an amendment that overruled a Supreme Court decision.lZ3 Coastal states make the initial consistency determination for federal permits and licenses, subject to an 

appeal to the Secretary of Commerce, where the agency that 

administers the federal coastal zone program is located. 

State and local public works projects permitted or 

funded by federal agencies are subject to the federal consistency requirement if they affect land or water uses in a 

state’s coastal zone. This means that state and local public 

works projects must obtain permission from the stateauthorized coastal agency, which may be a local government. State requirements in coastal zone legislation and 

coastal programs may be more stringent than requirements imposed under federal legislation and may provide 

an additional environmental veto point. 

A number of coastal states have adopted coastal zone 

legislation that requires permits for development. Some 

of this legislation applies to state and local public works 

projects in coastal zones when they receive federal assistance or a federal permit. New Jersey’s Coastal Area 

Facility Review Act is one of the most effective coastal 

permit laws,lZ4 which applies to a 1,375-square-mile coasta1 area designated by the legislature but not to areas protected under the state’s wetlands law. Permits from the 

state environmental agency are required for a large number of state and local public works, such as power generation facilities, waste incinerators, and road, airport, and 

highway 

Permit applications may be approved only if they meet 

statutory criteria that are similar to the environmentally 

protective criteria applied to federal agency actions in 

federal environmental review legislation. The New Jersey 

law generally authorizes the issuance of a permit only if 

the facility will minimize adverse environmental effects in 

the area in which it is located.lZ6 A facility may be disap26 U.S. Advisory Commission on Intergovernmental Relations 
proved if it “would materially contribute to an already 

serious and unacceptable level of environmental degradation and resource exhaustion.”127 

Other state coastal legislation requires the adoption 

of plans and programs for coastal areas. The California 

Coastal Act is the most elaborate of the state statutes,IB 

with a detailed set of policies based partly on a 447-page 

state coastal plan. Local governments in the coastal zone 

must adopt local coastal programs that are consistent with 

the statutory policies. These programs are approved by 

regional coastal commissions, subject to an appeal to the 

state coastal commission. Local programs include a coastal plan, zoning ordinances, and other implementing actions. Once the programs have state approval, any 

development in the coastal zone must receive a development permit from the local government that has jurisdiction. Coastal development permits must be consistent 

with the local coastal program and may be appealed to the 

state commission in a limited number of cases. An environmental impact statement must be prepared on coastal 

development permits under the state’s equivalent of 

NEPA. These brief examples only begin to illustrate the 

wide variety of regulatory controls in state coastal programs that are applied through the federal consistency 

requirement to state and local public works projects. 

ACCOMMODATI NC ENVIRONMENTAL REVIEWS 

The Limited Scope of Accommodation 

The preceding discussion of veto points in federal 

environmental review legislation has documented extensive diversity. Environmental review is divided among a 

variety of federal agencies in different departments. Accommodation of the diverse federal environmental reviews required for state and local public works projects 

would help ease the barriers that environmental veto 

points create for these projects. The difficulty is that opportunities for accommodating multiple environmental 

reviews to one another are limited. This section describes 

several examples of accommodation that have occurred 

through legislative, agency, and judicial action. 

Legislative Accommodation 

Federal environmental statutes contain a number of 

provisions that accommodate multiple reviews. Several of 

these legislative provisions, and the way in which they accommodate environmental reviews, are discussed in the sections that follow. These legislative provisions also may 

complicate and present barriers to environmental accommodation. These problems are discussed later in this chapter. 

Crosscutting Requirements 

A crosscutting requirement is one of the most effective ways to accommodate multiple environmental reviews. A crosscutting requirement is a provision that 

applies to all federal agencies. .The advantage of crosscutting legislation is that it imposes conditions that all federal 

agencies must follow and places implementation authority 

in a single federal agency. An example is the obligation 

that all federal agencies base their NEPA regulations on 

guidelines adopted by the Council on Environmental 

Quality. NEPA is unique because it is the only federal environmental statute that requires implementation by every 

federal agency. Other environmental review statutes, such 

as the NationaI Historic preservation Act, apply to all federal 

agencies, but there is only one implementing agency. 

Exemptions from Review Legislation 

Some statutes accommodate conflicts in environmental reviews by exempting certain federal agency actions. 

These statutes accommodate environmental reviews with 

the program needs of federal agencies, but they do not 

apply comprehensively throughout all federal programs. 

The National Environmental Policy Act is the best example of a statute that provides exemptions from its environmental review requirements. The broad reach of this 

statute has led the Congress, both in NEPA and other 

environmental legislation, to provide exemptions from 

NEPA’s review requirements. 

One important exemption in NEPA is contained in 

the “nonderogation” clause, which is common in federal 

legislation. It makes clear that NEPA does not affect the 

duties of other federal agencies. The nonderogation 

clause provides: 

Nothing in . . . [the environmental review requirements of NEPA] shall in any way affect the 

specific statutory obligations of any Federal 

agency (1) to comply with criteria or standards of 

environmental quality, (2) to coordinate or consult with any other Federal or State agency, or (3) 

to act, or refrain from acting contingent upon the 

recommendations or certification of any other 

Federal or State agency.lm 

This section was added as part of a compromise between 

Senators Henry M. Jackson and Edmund S. Muskie when 

NEPA was enacted to ensure that the act would not affect 

pollution control standards adopted under pollution control laws. 

There has been surprisingly little judicial interpretation of the nonderogation clause. The leading case is an 

early and influential decision from the Court of Appeals 

of the District of Columbia, Culvert Clifls’ Coordinating 

Committee v. Atomic Energy Commi~sion.‘~~ Commission 

regulations required it to accept water quality and other 

environmental standards adopted by other federal and 

state agencies in licensing proceedings. The court held 

that this abdication of responsibility was not a proper 

interpretation of the nonderogation clause. NEPA required a complete environmental review by the agency 

responsible for the project so that a full balancing of costs 

and benefits could be conducted. The court read the nonderogation clause to reaffirm specific obligations in other 

federal statutes. NEPA’s environmental review mandate 

applies unless other statutory obligations are plainly mutually exclusive with the NEPA obligations. 

The Clean Air and Clean Water Acts also contain exemptions from NEPA. An express exemption for actions 

taken under the Clean Air Act is provided by the Energy 

U.S. Advisory Commission on Intergovernmental Relations 27 
Supply and Environmental Coordination Act of 1974.131 

More complicated provisions exempt actions taken under 

the Clean Water Act. One provision states that NEPA does 

not authorize any agency to “impose” as a condition to a 

license or permit any effluent limitation on the discharge 

of pollutants other than a limitation adopted under the 

Clean Water 

A court decision indicates how complex the application of this provision can be in the interlocking matrix of 

federal environmental reviews.133 EPA adopted an effluent limitation for an Ocean discharge by an electric power 

plant. The plant also required a dredge-and-fill permit 

from the Corps of Engineers. The court held that the 

Corps had to prepare an impact statement on its permit 

even though the environmental impacts disclosed in the 

statement might lead the Corps to deny or modify the 

dredge-and-fill permit. A denial or modification for this 

reason would not “impose” an effluent limitation on the 

power plant. 

Other statutes also contain specific exemptions from 

NEPA. The Disaster Relief Act of 1974, for example, exempts from NEPA the restoration of facilities substantially as they existed prior to a This exemption 

could apply to state and local public works projects. The 

Congress also has, from time to time, exempted specific 

state and local public works projects from NEPA in cases 

where they were blocked by NEPA litigation. The San 

Antonio freeway is an e~amp1e.l~~ 

Other exemptions from NEPA arise from the judicial 

interpretation of possible conflicts between NEPA and 

other federal legislation. In a leading Supreme Court 

case, the Court held that NEPA did not apply to a decision 

by the Department of Housing and Urban Development 

to approve a subdivision of land under the Interstate Land 

Sales Disclosure Act. The Court held that the short time 

limitation contained in the act prevented compliance with 

NEPA, which required a much longer time period.136 This 

case is not likely to apply to federal assistance and permit 

programs for state and local public works, but it establishes the principle that the Congress contemplated exemptions from NEPA. 

Federal agencies have successfully claimed exemption from NEPA for other reasons. In Pacific Legal Foundation v. Andr~s,~~~ the circuit court held the Fish and 

Wildlife Service was not required to file an environmental 

impact statement on the listing of an endangered species 

under the Endangered Species Act. The court held that the 

listing of a species under the act was a nondiscretionary 

decision based on nonenvironmental criteria included in 

the act, and that an agency does not have to prepare an 

impact statement where it does not have the authority to 

consider environmental factors. This case is not entirely 

consistent with other cases that require compliance with 

NEPA because NEPA provides an agency with supplementary authority to consider environmental factors in its 

decisions.138 The implication in these cases is that an 

agency cannot escape NEPA by arguing that it does not 

have the authority to consider environmental impacts because NEPA supplements agency statutes by conferring 

this authority. 

Multiple Agency Referral, Comments, 

and Recommendations 

One of the important innovations in environmental 

review legislation is the recognition that environmental 

problems often are complex and require analysis and participation by more than one federal agency. As the discussion 

of environmental veto points showed, federal legislation 

often requires federal environmental agencies to com- ment on and make recommendations for projects permitted or funded by other federal agencies that do not 

have environmental expertise. The fish and Wildrife Coor- dination Act is one important example. 

NEPA requires that an agency responsible for an environmental impact statement obtain the comments of 

any other federal agency “which has jurisdiction by law or 

special expertise with respect to any environmental im- pact involved.”139 This provision also states that the impact 

statement and the “comments and views” of appropriate 

federal, state, and local agencies “authorized to develop 

and enforce environmental standards” must be made 

available to the President, the Council on Environmental 

Quality, and the public through the Freedom of Znfomtatin 

Act.14o The courts have held that the federal agency responsible for the impact statement must make a reasoned re- sponse to comments, but that commenting agencies do not 

hold a veto power over the responsible agency’s decision.141 

Section 309 of the Clean AirAct is another example of 

a statutory referral-and-comment provision.142 This section applies to EPA, which is one of the federal agencies 

authorized by NEPA to comment on impact statements. 

Section 309 extends EPA’s commenting authority to federal construction projects and any other major federal 

agency action that requires an impact statement, even 

though EPA does not have authority over the environmental problem covered by the statement. 

The courts have held that EPA’s authority under Section 309 is comparable to the review authority conferred 

by similar environmental legislation. In State of Alaska v. 

Andr~s,*~~ EPA determined under Section 309 that an 

offshore oil lease was unsatisfactory, and the Council on 

Environmental Quality concurred. The court indicated in 

a footnote that Section 309 was intended to do more than 

the comment-and-review provisions of NEPA. An unsatisfactory Section 309 determination did not bar an agency 

from proceeding with its decision, but did give rise to a 

“heightened obligation” to explain more clearly the 

agency’s reasons for proceeding. 

Deferring to Other Federal Agencies 

Some of the environmental review legislation discussed in this chapter requires one federal agency to defer 

to and apply the environmental standards of another. Important examples are the provisions in the Highwuy and 

Clean Air acts that make the requirements of state implementation plans adopted under the Clean AirAct binding on 

federally funded highways. Provisions for deferring accommodate environmental review because they give the environmental objectives of one program a priority over another. 

Attaining air quality standards, for example, is given priority 

over the construction of federally funded highways. 

28 U.S. Advisory Commission on Intergovernmental Relations 
Reverse Federalism 

Reverse federalism provisions are another example of 

legislative environmental accommodation. These provisions require a federal agency either to consider the recommendations of a state environmental agency or to defer 

to state environmental requirements. An important example of deferring is the provision in the Clean Water Act 

allowing a state to apply water quality and other “appropriate” requirements to federal permits and licenses. Reverse 

federalism can accommodate environmental review by giving priority to the environmental policy of a state agency. 

Agency Accommodation 

through Joint Processing and Mediation 

There are many examples of agency regulations that 

provide for environmental accommodation through joint 

processing and mediation. A common example is the joint 

processing of environmental reviews required by other 

legislation with the environmental review required by 

NEPA. CEQ’s NEPA regulations, for example, encourage 

the preparation of draft environmental impact statements 

“concurrently and integrated with environmental impact 

analyses and related surveys and studies” required by the 

Fish and Wildrife Coordination Act, the National Historic 

Preservation Act, the Endangered Species Act, and “other 

environmental review laws and executive orders.”lU 

When more than one federal agency participates in the 

preparation of an environmental impact statement, 

CEQ’s regulations require the selection of a “lead 

agency” to prepare the impact statement.145 

CEQ also has a role in resolving environmental disputes among federal agencies. NEPA provides for the 

referral of environmental impact statements and comments on these statements to the council. EPA is also 

authorized by Section 309 of the Clean Air Act to refer any 

matters it finds environmentally unsatisfactory to the 

council. CEQ’s regulations provide procedures under 

which the council resolves these “environmental referrals.”146 The regulations apply to “interagency disagreements concerning proposed major Federal actions that 

might cause unsatisfactory environmental effects.”14’ Criteria for making referrals emphasize the national importance of the matter referred. Referral procedures include 

a statement from the referring agency indicating why it believes the proposal is environmentally unsatisfactory and a 

response from the agency whose action was referred. 

CEQ may take a number of actions on environmental 

referrals, including publication of its findings and recommendations, mediation, and a request for negotiation.la 

Although CEQ’s referral process has considerable potential as a method of resolving environmental conflicts, a 

CEQ study found that only 22 referrals had been made in 

17 years. The stringent “national importance” standard 

adopted by CEQ had discouraged referrals, and the availability of the process encouraged the informal resolution 

of environmental disputes between agencies. The study 

found that the referral process was generally effective, 

except that CEQ’s role as a mediator was uncertain. Mediation was a problem because agency positions were fmly 

entrenched at the time of the referral, and CEQ was 

viewed as having a substantive concern with the implementation of NEPA.149 

Another example of regulatory accommodation ap- pears in the joint interpretive regulations adopted for the 

Endangered Species Act by the Fish and Wildlife Service 

and the Marine Fisheries Service, two agencies in differ- ent departments charged to administer the act.lS0 These 

regulations provide that the consultation, conference, and 

biological assessment procedures required by the Endan- gered Species Act may be consolidated with interagency 

cooperation procedures required by other acts, such as 

NEPA and the Fish and Wildrife Coordination Act.lS1 The 

regulations make it clear that satisfying the procedures of 

these other acts does not relieve a federal agency from 

compliance with the substantive requirements of the Endangered Species Act. Regulations for accommodating en- vironmental reviews appear in federal assistance 

programs for state and local public works projects. Regu- lations of the Federal Highway Administration, for instance, combine the environmental review required under 

the parks and historic sites protection provision with the 

environmental review required under NEPA. lS2 Regulations adopted by the Rural Development Administration 

for the environmental review of its programs, including 

the rural wastewater facilities program, integrate environ- mental reviews under 19 statutes, executive orders, and 

departmental regulations. lS3 The statutes include those reviewed in this report as well as other federal environmental 

legislation, such as the Wild and Scenic Rivers Act.lS4 

A number of federal agencies have cooperated in 

developing joint processing procedures for the application 

of both NEPA and the dredge-and-fill permit program of 

the Clean Water Act to highway projects.155 Accommodation is needed because a highway project located in a 

wetlands may require both a dredge-and-fill permit and an 

environmental review under NEPA. Coordination of 

these environmental review requirements with highway 

construction presents problems because of differences in 

statutory requirements and differences in the timing of 

necessary environmental permits and approvals. 

Agencies have developed a variety of techniques to 

facilitate joint reviews of highway projects under these 

environmental review programs. These techniques include the “scoping” process required by NEPA regulations, which is intended to determine the environmental 

problems that NEPA requires for review.ls6 The 

dredge-and-fill permit process requires a similar early 

evaluation of environmental impacts. Joint scoping can 

improve coordination of projects that require both a 

NEPA review and a dredge-and-fill perrnit.ls7 

Federal Energy Regulatory Commission regulations 

for hydroelectric power permits provide for an extensive 

two-part pre-filing consultation process. 15* The regulations call for an analysis of environmental impacts on signrficant resources and provide guidance on referrals to the 

states for the certification required by the Clean Water Act. 

Judicial Interpretation 

Opportunities for accommodation occur in the judicial interpretation of environmental review provisions in 

federal statutes. Many of these statutes contain similar 

U.S. Advisory Commission on Intergovernmental Relations 29 
environmental review requirements, and courts can simplify that process if they provide comparable interpretations of similar statutory language. The courts also have 

developed a “functional equivalence” doctrine in the im- plementation of NEPA that provides another method 

through which courts can accommodate multiple require- ments within the environmental review process under 

diverse federal laws. 

Comparable Interpretation 

of Environmental Review Provisions 

Federal environmental review statutes use a common 

terminology. Examples are the requirement in the National Environmental Policy Act for the preparation of an impact statement on federal actions that “significantly” 

affect the environment and the provision in the Endangered Species Act prohibiting federal undertakings that 

“jeopardize” an endangered species. Federal assistance 

statutes contain similar language requiring federal agen- cies to consider the environmental impacts of state and 

local public works projects they review for funding. 

Many federal statutes also contain provisions requir- ing, or are interpreted to require, agencies to consider 

alternatives to proposed federal actions that affect the 

environment and to consider measures to mitigate adverse environmental impacts. NEPA and Section 4(f) of 

the Department of Transportation Act are examples. This 

common terminology should give the federal courts an 

opportunity to adopt comparable interpretations of the 

terms used in environmental review legislation. 

Despite these examples of similar legislative requirements and terminology, a number of limitations prevent 

the courts from adopting comparable interpretations of 

many environmental statutes. One problem is that the 

statutes impose different types of environmental restrictions. Some statutes, like NEPA, require federal agencies 

to engage in a process in which they consider environmental values but do not require a decision based on substantive environmental standards. Other statutes, like the 

Endangered Species Act, prohibit agency actions if the environmental standard is violated. These differences prevent 

the courts from providing comparable interpretations of 

key statutory language. 

Other environmental statutes do not use terms such 

as significance or jeopardy in defining the environmental 

obligations of federal agencies. The air and water quality 

acts, for example, authorize the adoption of pollution 

control standards that contemplate the use of a particular 

control technology. These statutes also may require an 

environmental review, but it is part of a process in which a 

pollution standard is adopted, not part of a process for 

considering the environmental impact of an agency action. 

This makes a difference. 

Other federal statutes that govern state and local 

public works, such as the Federal Power Act and the Northwest Power Act, contain specific restrictions intended to 

protect a particular natural resource, namely, the fish and 

wildlife endangered by hydroelectric power projects. This 

difference in the type of environmental protection required 

also makes comparable judicial interpretations difficult. 

In addition to variations in their restrictions and requirements, federal environmental review legislation 

serves different purposes. The Endangered Species Act is 

intended to protect endangered species. The parks and 

historic sites provision in the Department of Zansportation 

Act is intended to protect parks, historic sites, and similar 

areas. Differences in purpose also prevent the courts from 

adopting comparable judicial interpretations of key environmental requirements. 

Legislative history also inhibits comparable interpretation of similar environmental statutes. Even if the language used in a statute is similar to language used 

elsewhere, legislative history may indicate that another 

interpretation was intended, possibly because the statute 

serves a different environmental purpose. 

For all these reasons, federal cases interpreting federal environmental review requirements often do not 

cross-cite cases that interpret similar legislation. This tendency is illustrated by Pyramid Lake Paiute Tribe of Indians 

v. United States Department of the Navy,1s9 a case interpret- ing the Endangered Species Act. The tribe argued that the 

act required an agency proposing a project to adopt an 

alternative suggested by another agency or objector that 

would be a “less burdensome” alternative on an endangered species. The court rejected this argument, but did not 

cite NEPA cases that considered the extent to which NEPA 

requires the consideration of alternatives to agency actions. 

National Wildlye Federation v. Federal Energy Regulato~~ 

Commissionlm provides another example of different interpretations by a court of a similar problem that arose 

under two environmental statutes, in this case the Federal 

Power Act and NEPA. The issue was whether FERC must 

consider the cumulative impact of the second phase of a 

hydroelectric power project when it approves the project’s 

first phase, but the two statutes handle the problem differently. The argument under the Federal Power Act was that 

cumulative impact analysis was required by the statutory 

obligation to determine whether a power project is “best 

adapted to a comprehensive plan.” This requirement is 

potentially a more affirmative and extensive environmental requirement than the environmental review process 

required by NEPA. The argument under NEPA was that 

regulations adopted by the Council on Environmental 

Quality required a cumulative impact analysis, although 

the act does not contain a provision dealing with this 

problem. The court rejected both arguments but interpreted the two statutes differently. 

Another limit on the ability of courts to provide comparable judicial interpretations of environmental statutes 

is the standard of judicial review that courts apply to 

agency decisions and to an agency’s interpretation of its 

legislation. Judicial review of federal agency actions has 

always been deferential, an approach reinforced in envi- ronmental law by recent Supreme Court cases under the 

Clean Air and NEPA.16* These cases adopted an 

“arbitrary and capricious” standard for judicial review of 

agency decisionmaking. This standard means that an 

agency’s interpretation of its statute will be upheld unless 

it is clearly wrong. As a result, the federal courts may not be 

able to adopt comparable interpretations of similar statutes 

30 U.S. Advisory Commission on Intergovernmental Relations 
because they defer to agency interpretations, which may 

differ. Agencies are free to interpret their own statutes with 

only a limited possibility they will be overruled. 

An example of the arbitrary and capricious standard 

of judicial review is the treatment of agency responses to 

comments by other federal agencies on the environmental 

impact of a proposed action. This requirement is contained in a number of statutes, and the courts often hold 

that an agency’s decision on whether to rely on another’s 

environmental comments is not arbitrary and capricious. 

In one case, for example, the court held that the Federal 

Highway Administration did not act arbitrarily when it 

relied on a Fish and Wildlife Service comment that a 

highway project was not likely to jeopardize the existence 

of an endangered species.163 

Federal courts apply a similar standard of judicial 

review to formal adjudications by agencies, such as that by 

the Federal Energy Regulatory Commission on an application for a hydroelectric power permit. The courts 

uphold adjudicative agency decisions if they are based on 

substantial evidence. In a hydroelectric power permit 

case,’” for example, the court considered a provision of 

the Federal Power Act that requires FERC to consider 

recommendations of federal and state environmental 

agencies for the protection of fish and wildlife. The court 

held that FERC’s refusal to follow recommendations 

from these agencies was supported by substantial evidence 

on the record. 

It is true that judges often state in environmental 

cases that courts should take a “hard look” at the environmental problems raised by federal agency decisions.“j5 

This doctrine competes directly with the arbitrary and 

capricious standard, although in recent years that standard has prevailed despite judicial acknowledgement that 

the “hard look” standard also exists. The distinction may 

be that courts tend to take a harder look at federal agency 

decisions when the problem involves a conflict between 

the “primary mission” of an agency and compliance with 

environmental review requirements. 

Despite these limits on the ability of courts to provide 

comparable interpretations of environmental review statutes, there are cases in which the courts have construed 

similar environmental statutes in similar ways. In one 

case, for example, the court held that the standard for 

determining environmental significance was the same under the Airport and Airway Improvement Act as under the 

National Environmental Policy Act.1a In another case, the 

court held that the Secretary of Transportation could integrate consideration of the impact of a highway on parks 

and other protected land with consideration of the highway’s impacts on agricultural land.167 Consideration of the 

impacts of federal projects on agricultural land is required 

by another federal statute.168 In a fair number of cases, the 

courts have applied a common analysis to the environmental review provisions of NEPA and Section 4(f) of the 

Department of Transportation Act.‘- 

The Functional Equivalence Doctrine under NEPA 

Another doctrine that allows the federal courts to 

accommodate environmental reviews is the functional 

equivalence doctrine adopted by the courts under 

NEPA.17’ This doctrine exempts agencies from NEPA if 

they provide an environmental review process that is functionally equivalent to NEPA’s. Federal legislation that 

requires environmental reviews for state and local public 

works projects may be able to qua@ under the functional 

equivalence doctrine. 

The courts fmt adopted the functional equivalence doctrine in a case reviewing an emission limitation adopted by 

EPA for a new source of air pollution.171 The court held that 

the Clean Air Act required EPA to take environmental 

considerations into account when it set emission limitations for new sources. This statutory requirement excused 

EPA from complying with NEPA, even though it did not 

provide all of the advantages of a “structured” NEPA 

determination. EPA actions taken under the Clean AirAct 

were later exempted from NEPA by another statute. 

The courts have considered the application of the 

functional equivalence doctrine to a number of federal 

environmental statutes. Although the boundaries of the 

doctrine are unclear, the courts have regularly applied it 

only to actions taken by EPA under its various environmental review statutes. They have not applied the doctrine to actions taken by other agencies under other 

environmental statutes. The courts may believe that only 

when EPA takes action under an environmental statute 

can a court be certain that the action is sufficientlybenign 

to be protected from review under NEPAby the functional 

equivalence doctrine. As one court stated in refusing to 

apply the functional equivalence doctrine to actions taken 

under the Marine Mammal Protection Act, the mere fact 

that an agency has the authority to implement an environ- mental statute is not enough to apply the functional equiv- alence doctrine. NEPA would be considerably weakened, 

the court held, if the functional equivalence doctrine were 

extended to all cases in which an agency administers a 

statute designed to protect the envir~nment.’~~ 

BARRIERS TO ACCOMMODATION 

legislative Problems 

Conflicts and Ambiguity in Federal Legislation 

Conflicts and ambiguities in federal legislation aggravate the accommodation problem. Federal assistance legislation is an example. The Congress enacts federal 

assistance legislation to fund state and local public works 

for which there is a demonstrated need, such as highways 

and airports. The Congress also may add environmental 

review requirements, but may fail to strike a balance between competing needs for public facilities and the need 

to protect the environment. The Congress usually addresses this problem by directing the federal agency to 

“consider” the environmental impact of its funding decisions, but this direction does not provide clear statutory 

guidance and leaves difficult policy choices to the agency. 

This type of statute creates opportunities for conflicts in 

decisionmaking. 

The problem of balancing the primary funding mission of federal agencies with demands for environmental 

protection is aggravated by the tendency to fund some of 

these programs through “trust” funds. These funds are 

U.S. Advisory Commission on Intergovernmental Relations 31 
financed by special taxes, such as the tax on gasoline that 

feeds the highway fund, and can be used only for specified 

purposes limited to the program they support. The airport 

development program has a similar fund. These trust 

funds may encourage the Congress to authorize expenditures to meet program needs and the agencies to ignore 

environmental problems raised by projects that have a 

guaranteed funding source. 

The problem of balance is even more serious in federal permit legislation, such as the Federal Power Act. This 

statute requires the Federal Energy Regulatory Commission to take a number of factors into account when it 

makes a permit decision on a hydroelectric power plant. 

Environmental impact is only one of these factors, and 

FERC is comparatively free to balance environmental 

protection against the need for hydroelectric power. 

Nafional Wildlife Feder&’on v. Federal Energy Regulatory 

Commission’73 is an example of the ambiguities created by 

the commission’s exercise of its balancing responsibility. 

In this case, the court considered a provision of the Federal 

Power Act that requires FERC, when deciding whether to 

issue a license, to give equal consideration to (inter alia) 

“the protection of. . . environmental quality” along with 

“the power and development purposes for which licenses 

are The National Wildlife Federation argued 

that FERC could not consider the water supply benefits in 

deciding whether to issue a license. Rather, it contended, 

the statute required the commission to weigh only the 

power and development purposes of a project against its 

environmental costs. 

Because the project had no navigation benefits and 

minimal power benefits, the National Wildlife Federation 

argued that the costs of the project outweighed its power 

and development purposes. The commission adopted a 

different interpretation. The project had water supply 

benefits, and the commission argued that it could consider 

these benefits as part of the “development” purposes it 

was authorized to weigh against environmental costs. 

FERC concluded that the water supply benefits justified 

the project despite its costs. 

The court upheld the commission. It found the commission’s construction of the statute to be entitled to judicial deference because the Congress did not directly 

address the precise question on which the parties disagreed. The commission, the court stated, was correct in 

concluding that water supply benefits could be considered 

as part of the development purposes of a project. The 

court emphasized the explicit role of the Congress in 

defining FERC’s jurisdiction: 

The Commission has traditionally exercised jurisdiction to license even those dams which are not exclusively or even primarily built for the purpose of 

power generation. Congress would not likely confer 

upon the Commission jurisdiction to approve or reject such projects and then bar it from considering 

other than the power and navigation benefits of the 

proposed projects in making its decisions.175 

Conflicts also arise in environmental review legislation, 

whether or not it requires a pennit, because some of this 

legislation contains substantive standards and some only requires that the federal agency engage in an environmental 

review process. The result is that the legal effect of the 

legislation on a state and local public works project will differ 

depending on which alternative the law has adopted. 

The Endangered Species Act, for example, imposes a 

substantive requirement that prohibits the funding of 

state and local public works that jeopardize an endangered 

species and its habitat. NEPA requires an environmental 

review but does not require a federal agency to make a 

decision to reject or modify a project because of the environmental impacts disclosed by the review. 

Another reason why accommodation is difficult is the 

vague and ambiguous nature of environmental legislation. 

This problem occurs in all legislation, but the problem is 

aggravated in environmental legislation for a number of 

reasons. One reason is that the Congress has used broadly 

phrased language in environmental legislation that delegates major interpretive responsibilities to the agencies. 

Why the Congress has legislated in this way is not entirely 

clear. The Congress may be reluctant to resolve the many 

policy conflicts that environmental legislation creates and 

may decide to hand this problem on to the agen~ies.”~ 

Another explanation may lie in the polycentric nature 

of decisionmaking on environmental issues.177 Federal environmental legislation usually includes environmental 

factors as only one of the elements an agency is to take into 

account in its decisions. All factors must be considered, 

but the legislation usually does not weight these elements or 

provide decision criteria indicating how the agency is to 

balance the statutory factors in its decision. The agency must 

balance and assign weights to the statutory criteria that guide 

its decisionmaking process. Any decision is possible. 

There are exceptions to this rule, as in the legislation 

protecting parks and other sites from transportation projects. The U.S. Supreme Court interpreted this legislation 

to include a presumption against using these sites as locations for these projects. The Congress also legislated specific standards in other environmental legislation, as in the 

acid rain provisions of the 1990 amendments to the Clean 

Air Act.”* This type of specific substantive standard is the 

exception and may be extreme. The Congress should strive 

to strike a better balance between vague aspirational commands and detailed legislative direction. 

Another explanation for broad or ambiguous environmental legislation may be the influence on environmental 

legislation of the National Environmental Policy Act. This 

act appeared to recognize the polycentric nature of 

decisionmaking that includes environmental factors, although the legislative history is incomplete and what the 

Congress intended is only speculative. The list of environmental impacts to be considered in impact statements is 

open ended. NEPA gives agencies an opportunity to balance the environmental values of a project against the 

benefits it confers without a statutory direction that indicates how agencies are to factor environmental values into 

their decisions. Much environmental legislation that followed NEPA also contemplates this kind of open-ended, 

polycentric balancing. 

32 U.S. Advisory Commission on Intergovernmental Relations 
Ambiguity also appears in the terminology used in 

environmental review legislation. One example is the statutory terminology that determines the threshold at which 

an environmental review is required. NEPA’s requirement 

is that an impact statement must be prepared only when 

environmental impacts are “significant.” Other environmental legislation for state and local public works either 

incorporates the significance requirement or uses similar 

terminology. This language makes accommodation difficult because ambiguous legislation gives agencies considerable discretion in interpreting congressional mandates. 

Agency interpretations may differ, so that the basis for 

conducting an environmental review will differ from one 

program to the other. Conversely, however, this ambiguity 

can be viewed as the flexibility necessary to negotiate reasonable and prudent accommodations in diverse situations. 

Conflicts in Congressional Committee Jurisdiction 

and Interest Group Representation 

The fragmented jurisdiction of congressional committees is another reason why the accommodation of environmental reviews is difficult.lm Environmental legislation 

spans a wide variety of public programs and interests and is 

split among a large number of congressional committees and 

subcommittees. Often, the committee structure for a particularly important piece of legislation, such as the Clean Air 

Act, is not the same in the House and Senate. This division in 

jurisdiction makes accommodation difficult because congressional committees have different missions and may take 

contradictory views of the same environmental problem or 

program. This split in jurisdiction is aggravated by differences in the leadership roles played by key committee chairs 

and subcommittees in the development and enactment of 

environmental legislation. 

The problem of divided congressional jurisdiction is 

aggravated by the conflicting representation of interest 

groups that is typical of the environmental legislative agenda. Interest group representation in environmental legislative conflicts is different from many other areas of public 

concern in which there are only two major protagonists. 

Conflict between industry and organized labor, for example, 

marks the consideration and enactment of labor legislation. 

This is not true in the environmental field. Like environmental legislation, interest group involvement in environmental politics is polycentric. A number of groups 

compete for influence, their positions change depending 

on the legislation at issue, and coalitions shift. An example 

is the shift in position among some industry representatives to favor rather than oppose a strengthening of federal pesticide legislation. The reason is industry’s concern 

about more stringent state legislation, which many states 

have adopted to remedy the gap left by federal legislation 

in the control of pesticides. 

Difficulties in Defer and Refer Requirements 

and Reverse Federalism 

Legislation requiring a federal agency to consider the 

comments of, or to defer to a decision by, another federal 

or state agency is an example of environmental accommodation. These requirements may help facilitate accommodation, but they have inherent difficulties because they 

divide authority between at least two federal agencies and 

sometimes a state agency as well. Conflict and controversy 

may result, as in the application of the Clean Air Act’s 

requirements for federally funded highways. The courts 

have not compelled one federal agency to accept recommendations by another federal agency, except when there 

is a very clear justification. 

Reverse federalism creates similar problems. Sometimes, the scope of state agency authority is unclear, as it is 

in the Clean WaterAct provision giving states the authority 

to refuse certification of federal permits. In other instances, the state veto depends on state policymaking that 

is governed by ambiguous and open-ended federal statutory direction, as in the state coastal programs funded by 

the Coastal Zone Management Act. 

The Congress can modify the power it has given the 

states in reverse federalism, but this is not likely in an age 

in which the delegation of program responsibilities to the 

states has become politically popular. 

Federal Agency Problems 

Problems in federal agency administration of environmental review and assistance legislation also limit accommodation. These problems mirror the difficulties that are 

created for the Congress by conflicts in committee jurisdiction and interest group representation. Federal agencies are client caretakers of federal programs shaped by 

the interest groups whose specialized interests are reflected in congressional committees. Agencies often reflect these narrow interests in their administration of 

statutory programs. Accommodation suffers as a result. 

Failure to Comply with Environmental Mandates: 

The Mission Agency Problem 

The phrase “mission agency” describes an agency 

whose primary program responsibility is to carry out a 

mission assigned by the Congress. This mission can be 

funding additional airports to meet the needs of airline 

travel or permitting additional hydroelectric power plants 

to meet energy needs. 

Until the Congress adopted environmental review legislation, the primary missions of federal agencies often overrode any environmental problems. The construction of 

highways on straight lines through environmentally sensitive 

areas, no matter what the cost, was one example. Federal 

legislation actually imposed this requirement at one time. 

Congressional balancing of mission agency responsibilities with the need to consider environmental problems 

modifies the primary missions of federal agencies. Federal 

agency reluctance to accept this modification, however, 

can be a barrier to accommodation. Some commentators, 

for example, are critical of the Federal Energy Regulatory 

Commission’s record in recognizing its environmental responsibilities.lsO Legislation was also introduced in the 

Congress making NEPA expressly applicable to independent regulatory agencies.”’ 

Supporters of state and local public works projects 

may believe that federal agency hesitancy to implement 

U.S. Advisory Commission on Intergovernmental Relations 33 
environmental mandates is exemplary because it facilitates the construction of public works projects by removing environmental review obstacles. However, this 

perception may be erroneous. Federal agency resistance 

to environmental review mandates often leads to frustration and delay in the funding and approval of public works 

projects. Congressional committees hold oversight hearings, corrective legislation is introduced, and environmental and other interest groups bring litigation to challenge 

the agency’s interpretation of environmental responsibilities they consider incorrect. 

Divided Agency Jurisdiction 

and Dispersed Environmental Responsibility 

A second barrier to accommodation in federal agencies is the division that has occurred in agency jurisdiction 

and the dispersal of environmental responsibilities among 

several agencies. Multiple jurisdiction also occurs when a 

federal agency must refer its action to another federal 

agency for comment, or defer to decisions by another 

federal or state agency. 

In many cases, division of jurisdiction has prevented 

the development of a consistent national policy on a number of issues affecting state and local public works. There 

is, for example, no clear federal policy on supplying electrical power. Jurisdiction over the electrical power industry is dispersed among a number of federal agencies 

having different missions.’82 Neither is there a coherent 

federal transportation policy that balances the need for 

competing forms of transportation with the need to protect the environment. The federal transportation agencies 

recently have tried to remedy this problem.183 

Divisions may even be so deep within a single agency 

that different programs remain uncoordinated. This is 

true of EPA, which has had difficulty developing a program to deal adequately with cross-media pollution. This 

problem arises when pollution problems created by one 

pollution control program spill over on another. Sludge 

disposal is an example. 

The dispersion of environmental responsibilities 

among several federal agencies aggravates the problem of 

accommodating environmental reviews. No comprehensive environmental policy is binding on all federal agencies, and there is no easy way to produce one. 

Elevating EPA to Cabinet status might have only a 

limited effect. Although EPA has responsibilities for removing, limiting, or preventing air, water, and other types 

of pollution, it does not administer federal assistance programs for state and local public works, except for the 

wastewater treatment construction program now structured as a state revolving loan fund. CEQ’s broad environmental policy role is dampened by its small size and its 

limited statutory and regulatory mandate. Other environmental review responsibilities are dispersed among agencies, such as the Fish and Wildlife Service, whose primary 

missions are to protect narrow environmental concerns. 

Some of the potentially most effective environmental protection provisions are administered at least semi-independently by federal agencies with missions to provide grants 

and loans to state and local public works agencies. 

In summary, although there are many barriers to developing a more effective and efficient coordination of 

federal environmental review requirements, opportunities for better coordination can be found in existing legislation and court decisions, and more coordination could 

be achieved by presidential and congressional action. 

Notes 

‘In this chapter, an “environmental review requirement” is a 

statutory requirement that either requires a process in which 

the environmental impacts of state and local public works are 

considered or a statutory requirement that applies environmental standards to state and local publicworks. The National 

Environmental Policy Act is an example of a statute that re- quires a process for reviewing the environmental impacts of 

state and local public works. The Clean Water Act is an example of a statute that applies environmental standards to state 

and local public works. 

We wish to thank Peggy McDermott, Research Librarian, and 

Done Bertram, Government Documents Librarian, at Washington University School of Law, and Professor A. Dan Tarlock, Chicago Kent College of Law, for their invaluable 

assistance in the preparation of this chapter. 

A. Dan Tarlock, “Balancing Environmental Considerations 

and Energy Demands: A Comment on Calvert Cliffs’ Coordi- nating Committee, Inc. v. AEC,” Indiana Law Journal 47 

(Summer 1972): 645-659. 

42 U.S.C. Sec. 4321 et. seq. All statutory citations are current as 

of June 30, 1992. 

Buttrey v. United States, 690 E2d 1170 (5th Cir. 1982) cert. de- nied, 461 U.S. 927 (1983). 

6Executive Order 11991,3 C.ER. Sec. 123 (May 24, 1977). 

749 U.S.C. Sec. 303(b). 

For a discussion of the environmental problems due to frag- mented jurisdiction that are likely to arise in the construction 

of the proposed National Highway System, see Nicholas J. Masucci, “Slow Construction Ahead,” Environmental Forum (July/August 1991): 18. 

’Art. I, Sec. 8, cl. 1. 

lo 483 U.S. 203 (1987). 

I1Art. I, Sec. 8, cl. 3. 

12317 U.S. 111 (1942). 

”33 U.S.C. Sec. 136x7). 

l4 474 U.S. 121 (1987). 

1523 U.S.C. Sec. 101 et. seq. (highways); 16 U.S.C. Sec. 1601 et. 

seq. (urban mass transportation); 49 U.S.C. Sec. 2201 et. seq. 

(airports). 

l6 Library of Congress, Congressional Research Service, Environmental and Natural Resources Policy Division, “Federal 

Assistance for Water and Sewer Systems” (1989). 

1733 U.S.C. Sec 1293. 

l8 7 U.S.C. Sec. 1925 et. seq. 

l9 43 U.S.C. Sec 422a et. seq. 

16 U.S.C. Sec. 801 et. seq. 

21 16 U.S.C. Sec. 839 et. seq. 

22Federal Highway Act, 23 U.S.C. Sec. 101 et. seq. 

23 Comment, “Municipal Waste Combustion: A Wasted Investment,” University ofHawaii Law Review 12 (Summer 1990): 153. 

24 33 U.S.C. Sec. 1342. 

25 Energy Supply and Environmental Coordination Act of 1974, 

15 U.S.C. Sec. 793(cXl). 

34 U.S. Advisory Commission on Intergovernmental Relations 
2633 U.S.C. Sec. 1371(cx1). 

27A dredge-and-fill permit is required for a “discharge,” 33 

U.S.C. Sec. 1344(1), which is defined as a “discharge of a pol- lutant” (Sec. 1362(16). 

28 For another view of this problem, see Michael S. Hamilton, 

“Regulatory Federalism: A Useful Concept for Natural Resources and Environmental Management?” in Michael S. 

Hamilton, ed., Regulatory Federalism, Natural Resources, and 

Environmental Management (Washington, DC: American So- ciety for Public Administration, 1991). 

29 49 U.S.C. Sec. 303(c). 

30 401 U.S. 402 (1971). 

31 Louisiana Environmental Society, Inc. v. Coleman @I), 527 

3223 U.S.C. Sec. 10901). 

33 42 U.S.C. Sec. 7506. 

34 42 U.S.C. Sec. 7509. 

35 16 U.S.C. Sec. 2208(bX3). 

36 16 U.S.C. Sec. 2208(bx4). 

37 16 U.S.C. Sec. 2208(bX5). 

38 49 U.S.C. Sec. 1610 (airport projects). 

”49 U.S.C. Sec. 2208(aX7)(A). 

49 U.S.C. Sec. 1604(hX2XA). 

41 7 U.S.C. Sec. 1926(CxlOXll). 

4243 U.C.C. Sec. 422h. 

43 Sierra Club v. United States Army Corps of Engineers, 697 

E2d 297 (26 Cir. 1982) (dredge-and-fill permit under Clean 

Water Act). 

E2d 79 (5th Cir. 1983). 

44 33 U.S.C. Sec. 1371(c). 

4533 U.S.C. Sec. 1382(bX6). 

&55 Federal Regziter 10176 (May 24, 1990) (interim regulation). 

47 16 U.S.C. Sec. 797(e). 

16 U.S.C. Sec. 803 (aX1). For discussion of this provision, see 

Note, The “Comprehensive Plan” Requirement of the Federal 

Power Act: A Senator’s Dream, A Congressional Mandate, 

and a Parameter for Agency Discretion, Boston College Law 

Review 28 (1987): 523. See also 16 U.S.C. Sec. 803(gxl). 

49 16 U.S.C. Sec. 8036). 

16 U.S.C. Sea. 661, 662. 

” 16 U.S.C. Sec. 839b(d). 

52 16 U.S.C. Sec. 839(aX4)@). 

53 16 U.S.C. Sec. 839b. 

54 16 U.S.C. Sec. 839b(hXlXA). 

55 16 U.S.C. Sec. 839b(h)(5). 

16 U.S.C. Sec. 839b(hX2). 

57 16 U.S.C. Sec 839b(hXll). Another important statute, not included in this study, that affects hydroelectric power development is the Wild and Scenic Rivers Act. See Note, Piloting the 

Preservation/Development Balance on the Wild and Scenic 

Rivers, Duke Law Journal (Novemberl988): 1044. 

58 Michael 0. Early and Egio Krogh, “Balancing Power Costs 

and Fisheries Values under the Northwest Power Act,” Universify of Puget Sound Law Review 13 (Winter 1990): 281. 

59 ‘Annotation, Necessity and Sufficiency of Environmental Impact Statements under Sec. 102(2)(C) of National Environmental Policy Act of 1969” (42 U.S.C. Sec. 4332(2XC)), in 

Cases Involving Power Projects, 66 ALR. Fed. 395 (1984). 

California v. Federal Energy Regulatory Commission, 110 S. 

Ct. 2024 (1990). This issue is important because stream flow 

volume can affect the survival of fish species. See Michael C. 

Blumm, “Federalism, Hydroelectric Licensing and the Future 

of Minimum Stream Flows after California v. Federal Regula- tory Energy Commission,” Environmental Law 21 (1991): 113. 

61 33 U.S.C. Sec. 1344(a). 

62 33 U.S.C. Sec. 1344(b). 

63 33 U.S.C. Sec. 1344(c). 

6.1 33 C.ER. Sec. 320.4@)(4). 

65 40 C.ER. Sec. 230.1qa). 

66E.g., Van Abbema v. Fornell, 807 E2d 633 (7th Cir. 1987) (coal 

67 695 E2d 957 (5th Cir. 1983). 

loading facility in historic area of river town). 

See generally, The Administration of Section 404 of the Clean 

WaferAct, Hearing before the US. Congress, House Committee on Public Works and Transportation, Subcommittee on Investigations and Oversight, 100th Congress, 26 Session, 

September 14, 1988. 

69 Clean Air Act Amendments of 1990, Title V. 

70 EPA can also issue emission limitations to control emissions of 

pollutants not listed as criteria pollutants. 42 U.S.C. Sea. 

7401-7228. 

71 42 U.S.C. Sec. 7503. 

’2 “Municipal Waste Combustion: A Wasted Investment?,” University of Hawaii Law Review 12 (Summer 1990): 153. 

73 Clean Air Act Sec. 129, to be codified as 42 U.S.C. Sec. 7429. 

See also Federal Register 56 (1991): 5488 (EPA final rules on 

emissions from incinerators pending revisions in accordance 

with Sec. 129). 

74 Environment Reporter 20 (January 1990): 1508. 

75 FederalRegister56 (1991): 5488. See “Defeat of EPA Trash Re- cycling Plan Harshly Criticized by Environmentalists,” Inside 

EPA (January 4, 1991): 3. 

76 Clean Air Act Amendments of 1990, Sec. 306, Pub. L. No. 101 

549 (1990). Environment Reporter 21 (October 1990): 1171. 

777 U.S.C. Sec. 1926(cXIOXIl). 

78 23 U.S.C. Sec. 1096) (must comply with State Implementation 

7942 U.S.C. Sec. 7506. 

8042 U.S.C. Sec. 7504. 

81 The Impact of Air Qualify Regulation on Federal Highway and 

Transit Programs and on Fuel Ta Collections, Hearing before 

the U.S. Congress, House of Representatives, Committee on 

Public Works and Transportation, Subcommittee on Investigations and Oversight, lOlst Congress, 1st Session, November 

9, 1989. Also U.S. General Accounting Office, Air Pollution: 

EPA Nee& More Data From FHWA on Changes to Highwq 

Projects (Washington, DC, 1990). 

Plans adopted under Clean Air Act). 

8223 C.ER. Pt. 770. 

83 42 U.S.C. Sec. 7506. 

84 42 U.S.C. Sec. 7509. 

85 16 U.S.C. Sec. 1456(f). 

8642 U.S.C. Sec. 4332(2XC). 

8742 U.S.C. Sec. 4331. 

88 42 U.S.C. Sec. 4332(2XC). 

@Daniel R. Mandelker, NEPA Law and Litigation (Chicago, 

Callaghan & Company, 1984 and 1991 Supplements), Sea. 

8: 16,8: 17. 

U.S. Advisory Commission on Intergovernmental Relations 35 
90 Ibid., Secs. 815-820. 

91 Calvert Cliffs’ Coordinating Committee v. Atomic Energy 

Commission, 449 E2d 1109 (D.C. Cir. 1971). 

92E.g., Winnebago Tribe of Nebraska v. Ray, 621 E2d 269 (8th 

Cir.) (permit for small portion of power transmission line not 

enough of a federal link), cert. denied, 449 U.S. 836 (1980). 

93 Mandelker, NEPA Law and Litigation, Sec. 8:16. 

94 Ibid., Sea. 10:36, 10:37. 

95City of Davis v. Coleman, 521 E2d 661 (9th Cir. 1975). 

96 Mandelker, NEPA Law and Litigation, Secs. 10:22-10:27,10:38, 

97 Robertson v. Methow Valley Citizens Council, 109 S. Ct. 1835 

(1989). 

98 Sierra Club v. United States Army Corps of Engineers, 772 

E2d 1043 (26 Cir. 1985) (Westway highway project in New York 

City). 

99 For discussion of the extent to which federal agencies have in- ternalized the environmental review process demanded by 

NEPA, see Serge Taylor, “Making Bureaucracies Work The 

Environmental Impact Statement Strategy of Administrative 

Reform” (Stanford: Stanford University Press, 1984). 

10:38-10:50. 

loo 16 U.S.C. Sec. 470f. 

lo’ View Carre Property Owners, Residents and Associates., Inc. 

v. Bro\Ln, 875 E2d 452 (5th Cir. 1989) (act not triggered by instructions from federal agency to developers to submit final 

plans or by continued federal agency monitoring of project). 

36 C.ER. Sec. 800.3@). 

lo3 16 U.S.C. Sec. 470h 2(i). 

lo4 16 U.S.C. Sec. 1636(aX2). 

lo’ 16 U.S.C. See. 1533(aX1). The discussion of this act is based on 

A. Dan Tarlock, Law of Wter Rights and Resources (New York, 

Clark Boardman Co., 1988), Sec. 9.06[4]. 

lo6 16 U.S.C. Sec. 1533. 

lo7 16 U.S.C. Sec. 1532(5)(A). 

“‘See Katherine S. Yagerman, “Protecting Critical Habitat un- der the Federal Endangered Species Act,” Environment Law 

20 (1990): 811. 

‘09 16 U.S.C. Sec. 1536. 

”‘Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978). 

‘12 16 U.S.C. Sec. 1636(h). 

‘13 16 U.S.C. Sec. 1538(aXlXB). 

Ibid., 185. 

Palila v. Hawaii Department of Land and Natural Resources, 

471 E Supp. 985 (D. Hawaii 1979) (state’s maintenance of goat 

and sheep herd in area that endangered a listed species held to 

be a taking), aff‘d, 639 E2d 495 (9th Cir. 1981). 

11’ 16 U.S.C. Sec. 1539. 

‘16 16 U.S.C. Sec. 1536(aXl). 

l17Pyramid Lake Paiute Tribe of Indians v. Department of the 

11’ 33 U.S.C. Sec. 1341(aXl), (d). 

Navy, 898 E2d 1410 (9th Cir. 1990). 

717 P2d 1274 (Ore. App. 1986). Also, Fourth Branch Associates v. New YorkState Department of Environmental Quality, 

550 N.Y.S.2d 769 (Sup. Ct. 1990) (Section 401 does not authorize state to require environmental review of FERC permit under state law comparable to NEPA). 

120For FERC regulations see 18 C.ER. Sec. 4.38. 

12’ Commonwealth Department of Environmental Resources v. 

City of Harrisburg, 578 A.2d 563 (Pennsylvania Common- wealth 1990) (state environmental review under Sec. 401 limited by Clean Water Act). 

12* 16 U.S.C. Sec. 1456. 

123 Congressional Record 136 (October 26, 1990): H12695. 

124N.J. Stat. Ann. Secs. 13:19-1 to 13:19-24. See also Bany G. 

Rabe, “Environmental Regulation in New Jersey: Innovations 

and Limitations,” Publius: The Journal of Fedemlism 21 (winter 1991): 83-103. 

125N.J. Stat. Ann. Sec. 13:19-3. 

IZ6N.J. Stat. Ann. Sec. 13:19-10. 

127N.J. Stat. Ann. Sec. 13:19-11. 

12’ Cal. Pub. Res. Code Sea. 30000-30900. 

129 42 U.S.C. Sec. 4334. 

13’ 449 E2d 1109 (D.C. Cir. 1971). 

131 15 U.S.C. Sec. 793(c)(l). 

132 33 U.S.C. Sec. 1371(cX2D). 

133 Mahelona v. Hawaiian Electric Company, Inc., 418 E Supp. 

13442 U.S.C. Sec. 575. 

135Pub. L No. 93-87, Sec. 154, 87 Stat. 250 (1983). 

136Flint Ridge Development Company v. Scenic Rivers Associ- ation, 426 U.S. 776 (1976). 

137 657 E2d 829 (6th Cir. 1981). 

13’E.g, Environmental Defense Fund, Inc. v. Matheus, 410 E 

Supp. 336 (D.D.C. 1976). 

139 42 U.S.C. Sec. 4332(2XC). 

‘““5 U.S.C. Sec. 552. 

14’See State of California v. Block, 690 E2d 753 (9th Cir. 1982) 

(program impact statement on allocation of land in roadless 

wilderness areas to land management categories). 

1328 (D. Hawaii 1976). 

142 42 U.S.C. Sec. 7609. 

143 580 E2d 465 D.C. Cir. (1978). 

144 40 C.ER. Sec. 1502.25(a). 

14540 C.ER. Sec. 1501.5. 

lM40 C.ER. Sea. 1504.1-1504.3. 

14’40 C.ER. Sec. 1504.l(a). 

14’ 40 C.ER. Sec. 1504.3(f). 

149 U.S. Council on Environmental Quality, “Environmental Re- ferrals and the Council on Environmental Quality,” Special 

Report (17th Annual Report.) (Washington, DC, 1988) 

15’ 50 C.ER. Sec. 402.01 et. seq. 

151 50 C.ER. Sec. 402.06. 

15223 C.ER. Sec. 771.135. 

153 7 C.ER. Sec. 1940.301. 

lS4 16 U.S.C. Sec. 1271. 

155 U.S. Department of Transportation, Federal Highway Administration, Applying the Section 404 Permit Process to Fedeml-Aid 

Highway Projects (Washington, DC, 1988). 

15640 C.ER. Sea. 1501.7, 1508.25. 

157 Federal Highway Administration,Applying the Section 404 Permit Process to Federal-Aid Highway Pmjects, ch. 5. 

158 18 C.ER. Sec. 4.38. 

893 E2d 1410 (9th Cir. 1990). 

160912 E2d 1471 (D.C. Cir. 1990). 

36 U.S. Advisory Commission on Intergovernmental Relations 
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 

Inc., 467 US. 837 (1984). 

162Marsh v. Oregon Natural Resources Council, 109 S. Ct. 1851 

(1989). 

163 Stop H-3 Association v. Dole, 740 E2d 1442 (9th Cir. 1984), 

cert. denied, 471 U.S. 1108 (1985). 

lW National Wildlife Federation v. Federal Energy Regulatory 

Commission, 912 E2d 1479 (D.C. Cir. 1990). 

For examination of the “hard look” doctrine see Frederick R. 

Anderson, Daniel R. Mandelker and A. Dan Tarlock, Environmental Protection: Law and Policy, 26 ed. (Boston: Little Brown 

and Company, 1990), pp. 123-144. 

166 CARE Now, Inc. v. Federal Aviation Administration, 844 E2d 

1569 (11th 1990). 

167Eagle Foundation, Inc. v. Dole, 813 E2d 798 (7th Cir. 1990). 

Farmland Protection Policy Act, 7 U.S.C. Sec. 4201(b). 

‘@ Mandelker, NEPA Law and Litigation, Sec. 219. 

17’Ibid., Sec. 515. 

171Portland Cement Association v. Ruckelshaus, 486 E2d 375 

17*People of Village of Gambell v. Hodel, 774 E2d 1414 (9th Cir. 

173 912 E2d 1471 (D.C. Cir. 1990). 

174 16 U.S.C. Sec. 797(e). 

1751bid., 1482-1483. 

176 For an explanation of this theory, see N. William Hines, ‘ADecade of Nondegradation Policy in Congress and the Courts: 

(D.C. Cir. 1973). 

1985), reviewed on other grounds, 480 U.S. 531 (1987). 

The Erratic Pursuit of Clean Air and Water,” Iowa Law Review 

177 See Daniel R. Mandelker, Environment and Equity: A Regulatory ChalIenge (New York: McGraw Hill, 1981), pp. 64-66. 

17’Clean Air Act, Tit. N, added by Pub. L No. 101-549 (1990). 

179 Richard J. Lazarus, “The Neglected Question of CongressicF 

nal Oversight of EPA Quis Custodiet Ipsos Custodes (Who 

Shall Watch the Watchers Themselves),” Law and Contempomy Problem 54 (1991): 205 (author concludes that poorly 

drafted and designed laws result from fragmentation in congressional com m i t tee jurisdictions). 

l’’ Judith A. Beani and William R. Wilkerson, ‘Accommodating 

Fish and Wildlife Interests under the PA, NatumlResources& 

Environment 4 (Spring 1990): 20; Murray D. Feldman,” Na- tional Wildlife Federation v. FERC and Washington State Department of Fisheries v. FERC: Federal Energy Regulatory 

Commission Ignores Ninth Circuit Rebuke on Hydropower 

Permitting,” Ecology Law Quarterly 15 (1988): 19. 

Is1H.R. 1113, Sec. 3, lOlst Congress, 1st Session (1989)(expressly 

making NEPA applicable to independent regulatory agencies); 

H.R. Rep. No. 101-219, lOlst Congress, 1st Session (1989) 

(making express reference to Federal Energy Regulatory 

Commission as included within Sec. 3). 

lS2 Peter Huber, “Electricity and the Environment: In Search of 

Regulatory Authority,” Harvard Law Review 100 (March 

1987): 1002. 

lS3 National Transportation Policy statement in U.S. Department 

of Transportation, “Moving America” (1990). Also, Federal 

Highway Administration, Environmental Policy Statement 

(1990). 

62 (February 1977): 647. 

U.S. Advisory Commission on Intergovernmental Relations 37 
38 U.S. Advisory Commission on Intergovernmental Relations 
Chapter 2. Analytical Techniques in Federal Environmental Decisionmaking: 

In the nineties, we will be forced to make increasingly difficult decisions about resource use. 

The quality of those decisions, as well as the ability 

to make them in a reasonably democratic society, 

requires the ability to compare consequences. 

Resource evaluation methods can provide this 

standard-but the methods and their application 

must meet the demands of the problems at hand.’ 

This chapter first outlines the types of information, 

assessment, and methods used in federal environmental 

decisionmaking, and, second, reviews other economic and 

analytical decisionmaking techniques that might be used. 

Difficult choices-trade-offs-often must be made to 

minimize environmental impacts when providing for public works. Decisionmaking by engineers, scientists, designers, planners, and elected officials, and the environmental 

review of public works projects, requires two types of 

analysis: 

1. An assessment ofproject alternatives that analyzes and presents economic, engineering, 

social, environmental, and other information 

about the alternatives; and 

2. Decisionmaking: a selection of the preferred or 

%best” alternative based on an evaluation and 

ranking of project alternatives following decision rules, statutory or regulatory direction, 

legal case precedent, or best professional 

judgment. 

The assessment organizes, analyzes, and discovers linkages between scientific, physical, ecological, economic, 

and social data. Evaluation uses the analysis to select the 

best project alternative based on a variety of decision 

criteria. In deciding which project alternative should be 

chosen, a financial/economic analysis is almost always required because projects are constrained by limited capital 

and operating budgets. Today, in addition, analysts and 

decisionmakers are expected not only to devise novel 

technological solutions and financing packages but to consider environmental, resource conservation, and social 

objectives in selecting project alternatives. 

Project planners use different methods to analyze the 

effects of public works projects on economic, social, and 

Analytical Techniques Used 

to Inform the Decision Process 

Economic, risk, engineering, systems, environmental, and other analyses can help with these decisions 

by providing information on the pros and cons of particular courses of action, eliminating inefficient alternatives and alternatives with unacceptable social 

impacts, costs, and risks. The tools and methods include architectural-engineering principles; a variety 

of financial and economic analyses; systems, input-output, optimization, and matrix analyses; and 

water hydrology, pollution transport, habitat, wetland, ecosystem, and population models. 

environmental systems and to select a project alternative. 

Although each analytical method has advantages and limitations, the methods are, in general, well developed. The 

question for this study is how these techniques are used in 

federal environmental decisionmaking. 

The methods used to rank project alternatives and to 

guide the selection of the “best” alternative include the 

following: 

Environmental regulations that constrain the 

alternatives. Governments, through legislation and regulations, may specify actions that 

may or may not be taken (air and wastewater 

emissions standards and protection of wetlands, endangered species, or historic buildings). The public works project alternatives 

are then evaluated within the guidelines set 

by the environmental regulations, and project options are eliminated or redesigned to 

conform with the regulations. 

Benefit-cost, net benefit, or economic optimization analyses that put the costs and benefits of each alternative in monetary terms, 

including monetary estimates of the nonpecuniary environmental values, thereby reducing all criteria or objectives to one 

measurable criterion (efficiency) expressed 

in monetary terms. 

U.S. Advisory Commission on Intergovernmental Relations 39 
rn Multiple objective analysis, by which economic 

effects are compared to or weighed along 

with other decision criteria (presented in 

quantitative and qualitative terms), such as 

environmental quality, income distribution, 

social/cultural effects, and regional development. 

Best professional or government agency judgment based on a variety of data and information inputs, which may include regulations; 

policy; economic, engineering, scientific, and 

environmental analyses; and legal case precedents. 

The applicability and appropriateness of using these 

methods to evaluate the environmental effects of public 

works projects is discussed below. 

Some federal environmental laws and agency practices involve a balancing process (e.g., the National Environmental Policy Act and the Toxic Substances Control Act); 

others evaluate a project against abiological imperative or 

environmental constraint (e.g., air and water emissions, 

Section 404 of the Clean Water Act for wetlands, and endangered species). A public works project applicant may 

face different federal environmental decisionmaking criteria for different permits and reviews. Are federal environmental decisionmaking criteria inconsistent? Or do 

different types of environmental issues require different 

types of criteria? Is a more consistent approach possible, 

feasible, and desirable from the perspective of the public 

works applicant? Some of this report’s recommendations 

address these questions. 

Environmental protection also presents special 

decisionmaking and valuation issues. First, although eco- nomic analysis is typically based on valuing alternatives in 

terms of goods and services that have market prices, many 

environmental goods and services are not expressed in 

terms of market prices. It’s an “apples and oranges” problem. Second, economic criteria are not the only ones used 

in environmental decisionmaking. Environmental and so- cial criteria may be difficult to compare to economic criteria. Third, describing ecosystem functions and measuring 

environmental impacts pose difficulties due to imprecise 

data and the nature of ecosystems (dynamics, irreversibility thresholds, cumulative impacts, feedbacks). The challenge is to devise workable and acceptable decision 

methods to account for environmental values and for potential trade-offs between the benefits of public works 

projects and the costs of the environmental impacts. 

TYPES OF ASSESSMENT 

AND DECISION METHODS USED 

Different types of economic and analytical assessment and evaluation methods are required by federal 

law, regulations, and court decisions to be used in the 

federal review of the environmental effects of public 

works projects. The methods can be divided into assessment and evaluation or decisionmaking categories. 

Assessment includes information and analysis to inform the decisionmaking process, such as that presented in an environmental impact statement (EIS). 

For a federal environmental review or permit, information and data are gathered and analyzed to determine if a project meets or is subject to permit criteria 

or guidelines mandated by federal regulations (e.g., 

physical, biological, engineering, or other environmental standards or wetlands definitiondimpacts). 

Decision methods include those that rank project alternatives, determine acceptance or rejection of the project based on environmental criteria, and/or balance 

competing policies or criteria (e.g., by use of multiple 1 objective methods or best professional judgment). 

The assessment and decision methods and criteria 

used in several major federal environmental programs are 

summarized in the following subsections by statute and in 

Table 2-1 (the types of public works likely to be affected by 

each method are listed in the right column). Most federal 

environmental permit and review decisions are based on 

some combination of comparing project effects against 

environmental standards, best professional judgment, 

agency policies, case precedents, and some sort of economic impact or cost-effectiveness analysis. Few if any 

federal environmental decisions concerning state and local public works projects are based on information marshalled into a format that ranks project alternatives by a 

single decision criteria, such as net economic benefits. 

The National Environmental Policy Act 

and the Environmental Impact Statement 

All major public works projects are likely to require 

the completion of an environmental impact statement 

(EIS), as outlined in NEPA and subsequent regulations 

issued by the Council on Environmental Quality (CEQ), 

to bring together, coordinate, and review the environmental effects of alternative ways of meeting human needs 

targeted by a proposed project that may have significant 

environmental effects. “The NEPA process is intended to 

help public officials make decisions that are based on 

understanding of environmental consequences, and take 

actions that protect, restore, and enhance the environment.”2 The EIS is an informational document intended 

to “provide full and fair discussion of significant environmental impacts and . . . inform decision makers and the 

public of the reasonable alternatives which would avoid or 

minimize adverse impact^."^ Therefore, EIS findings are 

not binding: project approval or rejection decisions are 

made by federal agencies in the permit and program funding reviews. 

In many respects, an EIS goes beyond informing to 

shape the nature of the decision process by: 

Raising issues, exploring alternatives including those that minimize environmental impacts and the “no project” alternative, and 

outlining mitigation measures; 

40 U.S. Advisory Commission on Intergovernmental Relations 
Table 2-1 

Federal Environmental Decision Criteria 

Decisionmaking 

Legislation and Program Agency ’Qpe of Action Decision Criteria 

Public Works 

Affected 

National Environmental Policy Act All EIS EIS is an informational document. EIS influences decisions by 

identifying environmental impacts of alternatives, recommending 

mitigation measures, and including public comments. 

All 

Clean Water Act Corps of Engineers Permit (1) Screening exercise to determine least damaging alternative All 

Section 404 Wetlands Protections and a few states (based on biological, environmental, social, economic, and other 

criteria) and effect of federal, state, and local laws on alternatives; 

(2) public interest review to balance benefits of the project 

against damage to wetlands based on public response, Corps of 

Engineers best professional judgment, and case precedents. 

Clean Water Act EPA 

Section 404 Wetlands Protections 

Veto Unacceptable project is defined by EPA on a case-bycase basis 

and includes a screening exercise similar to 404 permit process. 

All 

Clean Water Act EPA or state agency Permit Permit based on federal engineering and effluent standards (BPT, Sewage treatment, 

NPDES Pollution Abatement BAT, or stormwater guidelines) and on state water quality-based 

effluent standards. Economic and other analyses used to deter- mine standards but not individual permits. 

stormwater 

F 

I” 

+ Clean Air Act EPA, state or local Permit Permits based on BPT/BAT engineering and effluent standards. Highways, 4 (point source discharges) agency Similar to Clean Water Act. sewage treatment 

a“ Electric Consumers Protection Act/ FERC License License decision shouid give equal consideration to power and Dams, energy, 2 Federal Power Act non-power values including energy conservation, fish and wildlife, water resources 

B 

B 

5’ 

v) 

and recreation. Decisions based on FERC staff best professional 

judgment and case precedents. g. 

Endangered Species Act FWS/NMFS Review of permits Biological determination as to whether project jeopardizes spe- All 

and funding cies or habitat. Data collected by various agencies as part of EIS, 

404 permit, FERC license, DOT funding review, or other federal 

review. Reviewed by FWS or NMFS. FWS or NMFS decision can 

be appealed to interagency federal review board, which can weigh 

biological and economic impacts. 

0 

3 

F 

fi 

4 

Ei 

2 

4 

(O i Department of Transportation Act DOT (e.g., FHWA, Review of funding Section 4(f) includes specific provisions to protect parks, recre- Transportation 

ation areas, wildlife refuges, and historic sites. Project may not 

“significantly affect” these areas. (Section qf)) FAA) 3 

5er 

0 f. National Historic Preservation Act Federal agencies Review of permits Federal agencies must consider project impacts on historical, All 

v1 3 

P measures to protect them. 

and funding cultural, architectural, and archaeological resources and take 

r 
~~~ ~ 

Significant Environmental Impact 

As interpretedby CEQ regulations and case law, major 

federal actions include a wide range of actions, more 

than the construction projects most commonly asso- ciated with NEPA compliance. The question of what is 

“signrfiCant,” thus making EIS preparation necessary, 

has been the most frequent reason for NEPAlitigation. 

CEQ regulations do not define what is significant; rather they provide a discussion of facts that should be considered by each agency, including the societal and environmental “context” and the “intensity” or degree to 

which proposed action affects health and safety and environmental resources. 

Source: Dinah Bear, “NEPA at 19: Primer on an ‘Old’ law with 

Solutions to New Problems,” Environmntal Lnw RepoHer 

19 (February 1989): 10063. 

Involving citizens in the formulation and review of the EIS; and 

Increasing the time and cost required to initiate a 

public works project (some cost millions of dollars and on average take a year to complete). 

Therefore, the factors that trigger the EIS requirement or 

allow for the simpler environmental assessment (EA), 

which does not require public participation or extensive 

analysis, become important. An EIS is applied to “major 

federal action significantly affecting the quality of the 

human environment” (NEPA Section 102). The definition 

of “significant” becomes important. A dam or new airport 

almost always has “significant environmental impacts.” In 

other cases, the definition is not clear-cut. For example, 

the purchase of 25 Boston railroad cars by a new Northern 

Virginia commuter rail line may require the completion of 

an EIS because the Boston cars are partially owned by the 

Federal Transit Administrati~n.~ The commuter railway officials argue that their operation would have a minimal impact 

on the environment because the line would run on tracks 

used by Amtrak and freight railroads, but proving their contention could take 18 months to three years of study. 

An environmental im act statement (EIS) 

must include t R e following: 

(1) The environmental impact of the proposed action; 

(2) Any adverse environmental effects that cannot 

be avoided should the proposal be implemented; 

(3) Alternatives to the proposed action; 

(4) The relationship between local short-term uses 

of man’s environment and the maintenance and 

enhancement of long-term productivity; and 

(5) Any irreversible and irretrievable commitments 

of resources that would be involved in the proposed action should it be implemented. 

Source: National Environmental Policy Act, Sec. 102(C). 

An EIS typically includes a description of the affected 

environment (e.g., land uses, socioeconomic characteristics, air and water quality, floodplains, biotic communities, 

farmland, and historic sites) and the environmental consequences of various alternatives. An EIS may also outline 

mitigation measures for noise, wetland, and construction 

impacts. For example, a recent EIS for expansion of the 

DallaslFort Worth airport compared runway expansion 

alternatives in terms of effects on noise; land use; social; 

economic; air and water quality; historic, architectural, 

archaeological, and cultural resources; biotic communities; endangered and threatened fauna; wetlands; floodplains; farmlands; energy supply and natural resources; 

solid waste; and construction impacts.’ 

According to CEQ regulations, an EIS may include a 

formal benefit-cost analysis in an appendix, but few are 

reported to do SO.^ In general, economic analyses in an EIS 

are in the form of impact analysis with elements similar to 

“regulatory impact analysis” practiced by EPA and “urban 

and community impact analysis” practiced by federal 

agencies in the 1970s and 1980s. 

NEPA requires that a preliminary analysis called an 

“environmental assessment” (EA) be conducted for all 

major federal projects to determine if the proposed action 

may involve a significant impact on the environment. In 

that case, a full EIS is required. The EA briefly considers 

the environmental factors included in an EIS. An EA is 

followed either by a “Finding of No Significant Impact” 

(FONSI) or a decision to prepare an EIS. The U.S. Army 

Corps of Engineers, for example, prepares approximately 

13,000 EAs per year, most of which do not lead to a full 

EIS; in 1990, the Corps started 13 statements, had 44 

pending, and filed 9.7 

Another NEPA requirement is that at the time of 

decision about a project, each agency must prepare a public “record of decision.” This record states the decision, 

identifies the alternatives considered, specifies which alternatives were considered to be environmentally preferable, and discusses factors that were balanced by the 

EIS Benefits at EPA 

In 1980, an EPA report entitled “Evaluation of EPA’s 

EIS Program for Wastewater Treatment Facilities’’ 

presented the results of a study of the effects of 

NEPA on EPA’s programs. The report also examined 

58 statements prepared in the ten EPA regional offices, most of which were related to the grants that 

EPA provides for construction of wastewater treatment facilities. The study found that EIS preparation 

was effective in (1) causing major changes in projects, 

(2) providing more protection for the environment, 

(3) improving opportunities for public participation 

in the decisionmaking process, and (4) producing cost 

savings as a result of project changes prompted by the 

EIS. More recent EPA studies of the benefits derived 

from the NEPAprocess confirm the results of the 1980 

study. Findings of the EPA studies are presented in 

CEQ’s Twentieth Annual Report (1990), pp. 31-37. 

42 U.S. Advisory Commission on Intergovernmental Relations 
decisionmaker. The decision record also should state 

whether all practical methods to avoid or minimize environmental harm are being adopted.* 

Although it is a question often asked of CEQ, very 

little work has been done on comparing the costs and 

benefits of undertaking an EIS.9 A general answer is that 

“an ounce of prevention is worth a pound of cure.” The 

preparation of an EIS has become relatively “routine.” 

However, an EIS can be expensive to prepare. If EIS and 

other federal environmental decision processes are integrated, the duplication of data gathering and analysis is 

avoided and the costs of the EIS and the decision process 

are minimized. In its annual reports, CEQ has documented the environmental, cost-saving, and publicparticipation benefits engendered by an EIS. 

Permit and License Review and Decisions 

Many state and local public works projects must obtain one or more federal environmental permits concerning wetlands impacts, air and water discharges, or dam 

construction. While an EIS may delay a project and add to 

the costs, the permit decision either allows a project to 

proceed or stops it. The following subsections review the 

criteria used in permit decisions. 

Section 404 of the Clean Water Act: Wetlands 

Almost every major road project, dam, airport, power 

plant, and sewage treatment plant is likely to affect wetlands. The U.S. Army Corps of Engineers (or the state 

government in a handful of states that have received permission to administer the program) writes 11,000 Section 

404 dredge-and-fill permits per year. Some of these permits are for public works projects. The 404 permit generally is the most time-consuming and costly permit that must 

be obtained for a highway project, in part because it is 

combined with endangered species and other federal requirements.1° The importance of Section 404 permits to 

highway projects is underscored by the Federal Highway 

Administration’s (FHWA) efforts to coordinate project 

reviews with the Corps of Engineers. FHWAs report 4- 

plying the Section 404 Permit Process to Federal-Aid Highway 

Projects outlines techniques to coordinate and process 

permit and review requirements of FHWA, the Corps, 

EPA, the Fish and Wildlife Service (FWS), National Marine Fisheries Service (NMFS), and state and local governments. 

Evaluation of a Section 404 permit is a two-part test: 

1. To determine whether the project complies 

with the Section 404 (b)(l) guidelines defined 

by EPA (33 CFR 320.4(b)(4)) and 

2. To provide a public interest review conducted 

by the Corps of Engineers. 

The guidelines center around requirements that a proposed action not have an unacceptable adverse impact on 

the aquatic ecosystem, especially wetlands. No permit can 

be granted if there is a practicable alternative with less 

adverse impact on the environment or if the action would 

Section 404(b)(l) Guidelines 

“No permit shall be granted which involves the alteration of wetlands identified as important . . . unless 

the district engineer concludes on the basis of the analysis required in paragraph (a) of this section, that the 

benefits of the proposed alteration outweigh the damage to the wetlands resource. In evaluating whether a 

particular discharge activity should be permitted, the 

district engineer shall apply the section W(bX1) guidelines (40 CFR Part 230, lqaxl), (2), (3).” 

Paragraph (a) simply lists relevant factors, such as 

conservation, economics, aesthetics, general environmental concerns, wetlands, historic properties, 

fish and wildlife values, flood hazards, floodplain Values, land use, navigation, erosion, recreation, water 

supply and quality, energy needs, safety, food production, and the needs and welfare of the people. 

violate other applicable laws, such as state water quality 

standards and the Endangered Species Act. The Corps of 

Engineers’ public interest review is a balancing test in 

which the public and private benefits of a project are 

weighed against its adverse impacts to the environment. 

In practice, there is no single method or criteria used 

by Corps for determining whether to grant a 404 permit. 

The decisions are based on a screening exercise, a process 

of elimination-finding the least damaging alternative; 

finding the alternative that does not violate federal, state, 

and local laws; successively examining the rules of each 

applicable regulation or law; and submitting project alternatives to the public interest review. The public interest 

review includes the public response to a proposed project, 

best professional judgment by the Corps, and precedent.I2 

The balancing of benefits and environmental impacts is 

not undertaken with a formal method like benefit-cost or 

the so-called Principles and Guidelines used in deciding the 

fate of other federal water projects. 

The Corps of Engineers and other federal agencies 

use a variety of tools, application procedures, manuals, 

and guidelines in their Section 404 evaluations. Environmental and biological criteria and wetlands models help 

define whether a proposed project affects wetlands and 

potential wetlands. 

Under the authority of Section 404(c), EPA may prohibit, withdraw, or restrict (“veto”) the discharge of 

dredged or fill material into the waters of the United 

States if the discharge would have unacceptable adverse 

effects on water supplies, shellfish, fisheries, wildlife, and 

I Wetlands Models and Evaluation Methods 

HECII 

m 

USFWS Habitat Evaluation Procedure 

Federal Manual for Identifying and Delineating 

Jurisdictional Wetlands 

Wetland Evaluation Technique (WET) 2.0 

U.S. Advisory Commission on Intergovernmental Relations 43 
recreational areas. “Unacceptable” is defined by EPA and 

includes a screening exercise similar to that used by the 

Corps of Engineers in 404 decisions. 

Wastewater and Stormwater Discharge Permits: 

NPDES 

Federal National Pollution Discharge Elimination 

System (NPDES) wastewater permits are required under 

the Clean Water Act for several types of public works, 

including municipal sewage treatment plants, power 

plants, and urban stormwater discharges. The permits are 

based on federal engineering and technology-based effluent standards for “point-source” discharges and on engineering standards for stormwater structures. The 

point-source standards were formulated by EPA after it 

examined the technological measures available to control, 

reduce, or treat the effluents: best practicable technology 

(BPT) and, for toxic substances, best available technology 

economically achievable (BAT).13 Permit applications require information about the type and composition of the 

effluent and the production process. In addition, 

point-source discharges are subject to state water quality-based standards that reflect the uses of the waterway 

receiving the effluent (standards that must follow federal 

guidelines and are subject to federal review).14 

Permit requirements for stormwater discharges include engineering and environmental standards for con- struction site controls, revegetation requirements, 

domestic waste recycling programs for toxic products and 

oil, regulation of domestic application of fertilizers, pesticides, and herbicides, controls for highway runoff, retention, detention, and infiltration ~ystems.’~ Final EPA 

stormwater regulations promulgated in 1990 will affect 

173 cities and 47 counties (cities and counties with populations greater than 100,000). 

Economic or social analyses are not conducted before 

issuing NPDES permits. However, EPA undertook economic or regulatory impact analyses of each BPT and BAT 

regulation by major industrial and municipal discharge 

category to assess alternative standards.lb In addition, 

EPA is working on potential applications of economic 

analysis methods that states might use to formulate state 

water quality-based guidelines.” Section 401 of the Clean 

Water Act also requires a certification that the discharge 

associated with the activities of applicants for federal licenses or permits meets relevant provisions of the law. 

This includes an anti-degradation policy’* requiring that 

water quality be maintained unless the state finds that 

lowering quality is necessary to allow “important” social or 

economic development. Decision rules to judge what is 

“important” to social or economic development are not 

defined. However, if degradation occurs, water quality 

must be maintained to protect existing uses. 

Air Quality Permits 

Federal air quality permits, many of which are administered by state governments, are required for fossil fuel 

power plants, sewage treatment plants, and some highway 

construction projects. The Clean Air Act requires state and 

local governments to control air pollution discharges within their jurisdictions so that the maximum concentration 

of common air pollutants in their jurisdiction meets federal national air quality standards. New highway projects, for 

example, must be consistent with a state’s air quality implementation plan (designed to meet the national standards or nonattainment standards). If the highway project 

does not conform because too much air pollution will be 

emitted by the increased traffic, then the project must be 

redesigned or halted. 

Permits for stationary point sources of air pollution 

are based on best-technology standards similar to wastewater discharge standards. Cost impact and benefit-cost 

analyses were used by EPA in drafting several air quality 

standard~.’~ 

Federal Energy Regulatory Commission 

licensing 

The Electric Consumers Protection Act of 1986 

amended the Federal Power Acr by specifying that the Federal Energy Regulatory Commission (FERC) should give 

equal consideration to nonpower values (e.g., energy consemation, fish, wildlife, and recreation) as well as to power 

values when making license decisions for dams (including 

state and local power and water development projects). 

The law and FERC regulations do not define how to 

provide equal consideration because each case is unique, 

complex, and fact-specific.20 FERC’s licensing decisions 

are based on the best professional judgment of its staff 

after gathering all evidence of engineering, economic, 

environmental, and mitigation factors (including an EA or 

an EIS) and reviewing case precedents.21 Recent FERC 

cases detail the considerations included in licensing decisions.22 Although benefit-cost analysis has not been 

applied by FERC when relicensing nonfederal hydro project~,~~ the commission is considering combining benefit-cost analysis with “decision analysis” (adding 

probability distribution ranges to monetary estimates of 

nonpecuniary environmental values) developed by the 

Electric Power Research Institute.24 

Environmental Reviews 

In addition to obtaining federal permits, many public 

works projects must be reviewed and approved by one or 

more federal agencies if the project receives federal 

funds, jeopardizes endangered species, or affects historic, 

cultural, or archaeological sites. 

Endangered Species 

The Endangered Species Act requires every federal 

agency to ensure that any action that it authorizes, funds, 

or carries out is not likely to jeopardize the continued 

existence of listed endangered species or the destruction 

or adverse modification of critical habitat.zs This requirement applies to all state and local public works projects 

that must obtain one or more federal permits or approvals. 

Endangered species can affect a number of major public 

works projects in an area. For example, protection of habitat for the California least tern, an endangered species, 

44 U.S. Advisory Commission on Intergovernmental Relations 
California least Tern 

Construction was well under way on an $18 million 

ocean outfall booster pump station for the County 

Sanitation Districts of Orange County, California, 

when a representative from the California Department of Fish and Game noticed that groundwater 

from a tidewater operation was leaking into an estuary adjacent to the construction site. The estuary is a 

nesting area for the California least tern, an endangered species. Favorite nesting areas of the least tern 

are the wetlands and estuaries near the mouth of the 

Santa Ana River, a flood control channel. To ensure 

that the tern’s habitat is not adversely affected, a $4.2 

million Thlbert Channel Outlet Mitigation Plan was 

designed with the participation of local citizens’ 

groups and federal agencies. Mitigation includes 

lowering parking lot lighting at a nearby beach near 

nesting sites and installation of tern predator control 

devices around the construction site. This area is the 

focus of several large-scale projects that must consider the California least tern: the Army Corps of Engineers is widening the Santa Ana River; CALTRANS 

is widening the Pacific Coast Highway where it crosses the river’s outlet; the County Sanitation District of 

Orange County is installing a 120-inch pipeline adjacent to the river; and the Orange County Environmental Management Agency is relocating the Blbert Flood Control Channel outlet from its Santa 

Ana River outlet to a position north of the river. 

must be considered by coastal public works projects in 

Orange County, California. 

The federal agencies enter into early consultation 

with the U.S. Fish and Wildlife Service or the National 

Marine Fisheries Service to determine whether the action 

is likely to jeopardize endangered species. Biological 

assessments are required if listed species or critical habitat 

may be present in the area affected by any majorconstruction activity. If a federal agency disagrees with the biological opinion of FWS or NMFS, the agency may appeal to a 

committee of senior federal officials for an exemption. 

This appeal committee, dubbed the “God Squad” by some 

pundits, can make an exemption when overriding economic interests are present.26 

DOT Environmental Review Guidelines 

Public works projects, such as highways and airports, 

that seek federal funding from the Department of Transportation (DOT) and its agencies, such as the Federal 

Highway Administration (FHWA) and the Federal Aviation Administration (FAA), are subject to DOT environmental review guidelines. Section 4(f) of the Department of 

Transportation Act of 1966 as amended, includes specific 

provisions providing protection to public parks, recreational areas, wildlife, and waterfowl refuges, and all historic sites. Land from one of these special areas may not 

be used unless there is no feasible and prudent alternative, and the action includes all possible planning to minimize harm to the property resulting from the use. The 

courts “construing the term ‘use’ under section 4(f) have 

focused on whether the proposed project actually takes or 

significantly adversely affects the site in q~estion.”~’ The 

EIS/EA process has been integrated by DOT agencies 

into their project funding review process as a way of considering a range of objectives and criteria.28 

Historic Preservation 

As part of a federal environmental permit or funding 

approval, public works projects must meet the requirements of Section 106 of the National Historic Preservation 

Act. Regulations promulgated by the Advisory Council on 

Historic Preservation require that the effects of federal 

decisions on sites, structure, or objects of national importance be taken into account. 

ECONOMIC AND ANALYTICAL TECHNIQUES 

THAT MIGHT BE USED IN DECISIONMAKING 

This section reviews analytical and decision methods 

that could be included in federal environmental decisionmaking to balance public works and environmental objectives. These methods have been recommended by think 

tanks (such as Resources for the Future), academics, and 

EPA’s Science Advisory Board, and in reports commissioned by federal agencies and international organizations. Some of these methods, such as economic and risk 

analysis, are used by some federal, state, and local agencies to address development and environmental protection; the methods could be adapted for public works reviews. 

Other techniques, such as multiple objective analysis or value engineering, are not in wide use but could improve public 

works environmental decisionmaking if used in conjunction 

with other methods. The methods reviewed in this section 

include economic analysis, multiple objective analysis, sustainable development evaluation, risk analysis, social impact 

analysis, and value engineering. 

Several practical considerations that apply to all of 

these decisionmaking methods are important in designing 

and selecting an evaluation method: the nature and complexity of the evaluation problem; the identity of the 

decisionmakers and the budget, time, and staff resources 

available to them; and the data requirements of the method. An increase in the complexity of the evaluation methods used will increase the data needs, and, up to a point, 

the understanding of the problem. Models that are overly 

complex, however, may confuse the decisionmakers and 

public, stray from the analytical questions, and become 

too costly to execute.29 

The acceptance of analysis by affected citizens also 

must be considered. Legislators and public officials 

struggle to find a balance between laws and regulations 

that dictate decision methods with little flexibility and 

more flexible decision methods allowing administrative 

discretion but generating decisions that may appear arbitrary. Public opinion polls show a steady erosion of faith in 

experts.30 This means that economic and other analyses 

are met by skepticism in some quarters because they depend on expert opinion or findings that may be poorly 

understood or are simply not accepted by those who deal 

U.S. Advisory Commission on Intergovernmental Relations 45 
in absolutes. In addition, some will focus on monetary 

figures in an analysis and miss the qualitative information 

presented-numbers can be taken out of context to support preferred policies. 

Economic Analysis 

In deciding which public works project alternative 

should be chosen, an economic analysis is almost always 

required because projects are constrained by limited budgets. The economic analysis may be used to compare alternatives, eliminate those that are not cost effective, and 

estimate the benefits or effects on the economy. One of 

the virtues of economics is its focus on what are called 

opportunity costs, on scarcity, i.e., what society must give 

up in the form of other desirable things in order to pursue 

a desired goal such as reduced environmental risklimpact. 

An economic perspective on costs provides valuable insights about the nature and magnitude of these forgone 

opportunities. Like other methods, economic analysis has 

limitations. For example, it leaves out or has difficulty 

including some aspects of public works projects, such as 

distributional impacts and environmental values, that 

might be better covered by other types of analysis. Also, 

because there are many techniques for valuing benefits 

and costs, especially nonpecuniary ones, all of which invariably produce different outcomes, none is able to reproject alternative. However, economic techniques at least 

make people ask perceptive questions and think more 

coherently-even if the questions do not always receive 

firm answers. Economic analysis was never intended to be 

the exclusive basis for decisionmaking; rather, it is one way 

to guide, inform, and support decisionmaking. Practitioners argue that it should be used in conjunction with other 

decision tools, such as environmental, social, and risk criteria; engineering; and input-output, systems, optimization, econometric, risk, cost-effectiveness, regional 

development, fiscal, and multiple objective analysis. 

In applying economic analysis to public works projects, economists distinguish between three general types 

of analysis: 

I solve conflicts between interest groups over the “best” 

Cost or economic impact analysis estimates 

the cost or monetary loss of those affected by 

a project (e.g., loss of employment, plant 

closings, profitability, lost revenues) and/or 

the increased economic activity generated by 

a project. 

Cost-effectiveness analysis identifies the least 

costly way to accomplish a particular project 

objective. 

Benefit-cost analysis derives the net economic 

benefits or ratio of benefits to costs of a project or project alternative^.^^ 

rn 

Using economics to inform decisionmakers about the cost 

impacts or cost-effectiveness of different options is relatively straightforward. The analytical assumptions become 

more complicated when benefitast analysis is used to anEconomic Impacts and Net Benefits 

The difference between cost impact and benefit-cost 

analysis also can be explained as the difference between economic impact and economic value (net 

economic benefits). For example, the economic impact of opening the striped bass fishery to recreational fishermen can be measured by the economic activity generated by the fishing: anglers’ expenditures for 

bait, tackle, food, fuel, charter boat, and the multiplier effects of these expenditures. The economic value 

is the net economic benefit of recreational fishing: 

the gross amount that fishermen are willing to pay to 

catch striped bass (measured by some combination of 

market prices and survey techniques) minus the costs 

of catching the fish. A similar analysis can be conducted for commercial fishermen. It would be incorrect to make policy decisions based solely on either 

approach. Economic or cost impact does not indicate 

whether the impact is good or bad, while a net benefits analysis reduces the decision to the criteria of 

economic efficiency and may leave out important so- cial and environmental criteria. 

swer nonnative questions about what we ought to do, such as 

deciding which public works option is the ‘%est.” If we pursue a particular project alternative, what good will come of it 

and what will we have to sadice to get it? It is a simple 

extension to ask whether the former is worth the latter. 

Use of Economic Analysis 

in Federal Environmental Decisionmaking 

Although net benefit analysis can clarify the pros and 

cons of taking particular actions, it has not been applied 

generally as a key decision criteria in the federal environmental regulatory process for permits, licenses, and environmental review (veto decisions) for state and local 

public works projects. As described earlier, wetlands permits, FERC licensing, DOT environmental reviews, and 

endangered species decisions can include economic considerations, but not in any formal, normative, or consistent 

format. Advocates of economic analysis argue that economic methods, especially net benefit analysis, could be 

used more widely and consistently in federal environmental decisionmaking. Economic analysis is used in a variety 

of federal environmental programs, and these techniques 

could be adapted for environmental decisionmaking concerning public works projects. Many of the uses of economic analysis in federal environmental programs are 

listed in Xible 2-2. In addition, several applications of 

economic analysis to public works projects are outlined 

below: benefit-cost and risk-benefit analysis of the health 

effects of toxics in the Toxic Substances Control Act of 1976 

and the Federal Insecticide, Fungicide, and Rodenticide Act 

~$1972, regulatory impact analyses of EPA programs, and 

natural resource damage assessments. 

The Principles and Guidelines project evaluation 

methodology, used by all federal agencies that administer 

federal water projects, is described in greater detail in the 

46 U.S. Advisory Commission on Intergovernmental Relations 
Table 2-2 

Use of Economic Analysis in Federal Environmental Programs 

f 

(0 2. 

E. 

0 

1 

Legislation and Program Agency ljpe of Action Notes 

National Environmental Policy Act Federal 

Agencies 

EIS Economic and regional economic impacts of project altematim listed in an EIS; benefitcost analysis may be included as an appendix. 

Clean Water Act corps Permit Economic impacts considered in screening process. Economic benefits weighed against 

Section 404 Wetlands Protections of Engineers 

EPA 

wetlands impacts in public interest review (no formal method). 

Economic and regulatory impact and cost effectiveness used to evaluate regulatory options in formulating regulations. 

Clean Water Act Regulations 

NPDES Pollution Abatement 

Clean Air Act EPA Regulations Economic and regulatory impact, cost effectiveness, and benefitcost analysis used to 

evaluate various regulatory options. 

Electric Consumers Protection Act FERC License Economic analysis enters licensing decision, but no formal or consistent method. 

Endangered Species Act FWS/NMFS Review of permit 

and funding 

Water Resources Principles Review of federal 

and Guidelines water agencies water projects ect alternative that maximized net national economic benefits. 

Toxic Substances Control Act and Federal EPA Licensing Benefitcost and risk-benefit analyses. 

Insecticide, Fungicide, and Rodenticide Act 

Interagency federal appeal committee may weigh economic and biological considerations, but no formal methods. 

All federal Multiple objective analysis, including a benefit-cost analysis and determination of projSafe Drinking Water Act 

~~ 

EPA Drinking water 

regulations 

The maximum contaminant level is based on health effects, taking into account technology, treatment, and cost considerations. 

Resource Conservation and Recovery Act EPA Solid waste 

regulations 

Rulemaking based on protecting human health and environment, but EPA considers 

cost effectiveness in choosing among alternatives. 

Comprehensive Environmental Response, EPA Remedial action Like RCRA, EPA considers cost-effectiveness. 

Compensation, and Liability Act measures for 

hazardous substances ~~~ 

Comprehensive Environmental Response, Interior, 

Compensation, and Liability Act Commerce assessment ry) environmental values. 

Damage Cost impacts, including lost net economic benefits and array of estimated (non-monetaFish and Wildlife Service Habitat 

Management Plans 

FWS Habitat May include benefitcost and cost effectiveness. 

management plans 

National Marine Fisheries Service 

Economic Valuation Guidelines 

NMFS Economic valuation Estimating techniques for environmental values. 

guidelines for 

recreational fishing 
Flood Control Act of 1933 

All of these applications of economic and benefit-cost analysis in federal programs start with the 

Flood Control Act of 1933 (amended in 1936), which 

states that the government would undertake public 

works on rivers and harbors “if the benefits to whomsoever they may accrue are in excess of the estimated 

costs, and if the lives and social security of people are 

otherwise adversely affected (Section l), the legislation compelled government agencies to make “explicit estimates of the gains and losses to be expected 

from their proposals.” 

section on multiple objective analysis below. Other appli- cations of economic analysis in federal environmental pro- grams include the Fish and Wildlife Service’s Habitat 

Management Plans, which require benefit-cost, cost ef- fectiveness, and other economic analyses, and the Nation- al Marine Fisheries Service guidelines on economic 

valuation of marine recreational fishing. 

TSCA and FIFRA. EPA considers many aspects of 

benefit-cost analysis in establishing rules under the Toic 

Substances Control Act (TSCA) and the Federal Insecticide, 

Fungicide, and Rodenticide Act (FIFRA). The language in 

TSCAcalls for consideration of health and environmental 

effects as well as economic consequences: 

(a) the effects. . . on health and the magnitude of 

exposure to human beings. . . , (b) the effects. . . on the environment and the magnitude of the exposure of the environment. . . , (c) the benefits of 

such substance or mixture for various uses and 

the availability of substitutes for such uses, and 

(d) the reasonably ascertainable economic consequences of the rule, after consideration of the effects on the national economy, small business, 

technological innovation, the environment, and 

public health.32 

Regulatory Impact Analyses. Executive Order 12291 

requires that EPA conduct a regulatory impact analysis 

(RIA) or economic impact analyses (EIA) for any major 

new federal regulations with impacts in excess of $100 

million annually. For example, EPA has conducted RIAs 

or EIAs for discharge regulations issued under the Clean 

Water Act and Clean Air Act. EPAs practitioners of economic analysis argue that such analysis often results in 

regulatory improvements worth many times its In 

addition, they contend that the analyses have at times led 

to more efficient regulations by showing how more stringent alternatives would bring about a greater reduction in 

pollution without a commensurate increase in costs. In 

two instances (lead in fuels and small-quantity generators), this led to the adoption of regulations that were 

more stringent than originally contemplated. At other 

times, the analysis showed that the costs of more stringent 

regulations would be disproportional to the expected 

benefits (e.g., used oil, TSCApremanufacture review, and 

FIFRA data requirements). 

Damage Assessments under CERCLA. Damage assessments under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) are 

relatively new applications of net benefit-cost analysis and 

economic methods for valuing environmental resources.34 

The stakes are high: monetary estimates of damage based 

on studies conducted by physical scientists, biologists, and 

economists will be used in determining court-mandated 

payments or out-of-court settlements for injuries from oil 

spills and other natural resources damage events. Assessing such values may have been strengthened by a federal 

court ruling in July 1989 in a case filed against the Department of the Interior by environmental groups.35 The court 

found that polluters who dump oil or toxic chemicals must 

restore the environment to its original condition. If that is 

not possible, they have to pay compensation for the total 

value of the damages-including the loss of nonmarket 

benefits. The natural resources damage assessment methodologies will also help define which net benefit methodologies will stand up to the rules of evidence in a court of 

law. Environmental values will figure in court cases and in 

settlement of cases, and their worth is becoming increasingly important. For example, Exxon Corporation and the 

state of Alaska have been assessing the damage to wildlife 

and recreational users in Prince William Sound as they 

manage the settlement of their case and move forward to 

restore the damaged environment. 

Estimating Nonmonetary Costs and Benefits 

Because environmental or public goods and services, 

such as clean water and air, are unpriced in traditional 

economic markets, they can easily be undervalued in or 

left out of economic analyses. During the past 20 years, 

economists and ecologists have grappled with the question 

of how to value environmental resources that have no 

market price and how to bring environmental values into a 

net benefits analysis by estimating their monetary value. 

Decisionmakers must somehow assess and compare economic, environmental, social, and other criteria. Inclusion 

of environmental values in a decisionmaking process can 

be accomplished in a variety of ways. Analysts have attempted to account for nonpecuniary values, impacts, and 

goals within an economic analysis and by combining, comparing, and weighing economic, ecological, social, physical, and other criteria. Benefit-cost analysis is an example 

of the first approach; different types of multiple objective, 

systems, and matrix analysis are examples of the second. 

Probability, risk, and uncertainty components, as well as 

best professional judgment, can be added to most approaches: However, even if extensive environmental im- pact data can be obtained to assist in the evaluation of 

alternative project proposals, valuation difficulties confront decisionmakers. An example demonstrates the 

unit-of-measure problem inherent in valuation for 

decisionmaking: 

If a wetlands dredging project produces environmental disturbances . . . can these biological 

effects be described on an economic (quantitative) basis? If such quantification is not feasible, 

one is left with a summary similar to, “Dredging 

of the proposed shipping channel will result in 

48 U.S. Advisory Commission on Intergovernmental Relations 
some loss of benthic organisms, local fish populations, and 100 acres of wetlands.” In an EIS, such 

a conclusion could be weighed against such possible facts as, “The new shipping channel will generate $25 million of new business for the local 

port city and adjacent counties. Commercial fishing boats will have easier access to the Ocean and 

save $1.1 million per year in fuel costs. Also the 

deeper channel will decrease grounding and 

shoaling by 80%, which last year, resulted in $1.9 

million in lost revenues and damages to shippers 

and recreational boaters.” . . . The fact remains that 

where biological effects are compared to economic 

impacts on an unequal basis, the outcome favors 

economics. Most people, especially government 

and industry leaders who will be making the environmental decisions, can more readily grasp the 

meaning of a $10 million increase in business than a 

25% reduction in primary prod~ctivity.~~ 

Economists have developed techniques for estimating the values of unpriced resource servi~es.~’Some ofthe 

methods devised to estimate the market value of environmental goods and services are straightforward. Others 

may be costly, inaccurate, unsuitable, or even farfetched. 

Some values simply cannot be quantified. Some of these 

methods are used regularly in federal water project analysis following the Principles and Guidelines method, in 

TSCA and FIFRA benefit-cost and risk-benefit analyses, 

and in natural resource damage assessments. Inevitably, 

value judgments may be involved in the choice as well as in 

the use of decision criteria. Social beliefs, values, ethics, 

politics, customs, and cultural values help shape our laws 

and regulations and the decisionmaking methods 

employed by public officials. 

Including environmental values in decisionmaking by 

one or more of the methods listed above frequently will 

affect the ranking of project alternatives. A water resources example indicates the policy implications: 

Methods for Estimating Environmental Values 

A hierarchy of approaches for estimating environmental values in rough decreasing order of reliance 

on market process includes: 

The use of market prices of goods and supported by environmental factors; valuation of 

the economic costs imposed by environmental 

degradation; use of marketable goods and services as substitutes for environmental (including property values); restoration costs; survey 

techniques (e.g., travel cost and contingent 

valuation methods using techniques from 

marketing and psychological research); and 

techniques for weighing the estimated values 

relative to other values. Another approach is 

energy analysis that quantifies the values of an 

ecosystem using the energy captured by the eco- system (not human utility) as a basis of value. 

Use and Nonuse Values 

To analyze these questions, economists distinguish 

between two types of values that people hold for nonmarket or environmental resources, termed “use” 

and “nonuse” values. Use values are the direct effects of an environmental resource-the value 

derived from the consumption of the good (e.g., the 

value of a day of fishing). Nonuse value refers to the 

value derived from the knowledge of the existence of 

the good (option, value, existence, and bequest value). Measuring use values can be difficult, but real 

data can be measured: people pay to visit national 

parks; cornparing the prices of similar houses in quiet 

and noisy streets gives some guide to the value of 

calm. A polluted river will discourage fishing and 

swimming, and the value of the lost recreational opportunities can be estimated. The loss to fisheries 

following an oil spill can be quantified once scientific 

studies establish the relationship between the spilled 

oil and the harvest rates of commercial species of 

fish. Nonuse values include those people might put 

on the “option” of using an environmental resource 

or the pleasure they might derive from the mere “existence” of the Grand Canyon or clean air in Los Angeles. The only way to value these is to ask people 

how much they would be willing to pay, for an improvement in air quality or the protection of an endangered species. 

A review of studies that estimate the value of 

water in alternative uses indicates that a wide variety of valuation approaches are being applied. As 

the studies cited demonstrate, the economic value 

of instream flows can be measured so as to be comparable to the value of water in offstream agricultural, municipal, and industrial uses. Comparisons 

of the value of water in alternative uses will help to 

identlfy economically beneficial alterations in water 

allocation between competing offstream and instream uses. Without information comparing benefits generated by different water uses, federal and 

state water policy decisions will continue to emphasize diversions for offstream uses such as irrigation, 

mining, and urban de~elopment.~~ 

Limitations of Economic Analysis 

For the uses of economic analysis to increase, some of 

its limitations and problems, and objections, must be addressed. The litany of these well documented limitations 

includes the following: 

Provides only oneperspective-a single measure 

of “economic efficiency,” such as net benefits, 

can never present a complete picture for such 

complex issues as risks to health and environmental degradation and the panoply of functions and values of natural systems. 

Estimating merhods-economists are hobbled 

by the limitations of available tools when 

U.S. Advisory Commission on Intergovernmental Relations 49 
they try to value environmental resources. 

Reliance on “willingness to pay” techniques 

works best when people have experience 

buying similar goods. But willingness to pay 

can undervalue aspects of ecosystems with 

which people are unfamiliar. The value of 

things people never think about is a “wobbly 

concept” and has distorted our understanding 

of the value of natural resources, according to 

some critics.39 For example, while some people 

may not care about wetlands and assign no 

value to their existence, such areas still provide 

valuable ecosystem semices to this and future 

generations. Others object to survey techniques for different reasons: ‘The oil industry 

is not ready to write a check for someone’s 

sense of moral outrage watching otters die on 

Tc: says an oil industry source.”4o 

Distributional issues-benefit-cost analysis is 

distributionally neutral: a dollar of benefit or 

cost is worth the same no matter where or to 

whom it accrues. Yet, distributional issues, 

such as who bears the costs and receives the 

benefits of acid rain, are almost always important. Benefit-cost analysis is silent on the 

question of whether the losers from a public 

works project should be compensated. Even 

projects that result in aggregate positive net 

benefits leave some people worse off, and it 

is natural for the losers to oppose the project. 

Discount rate-another limitation is the practice of using the “present vaiue” of projects 

as the basis for adding up the costs and benefits of a project over time. A discount rate 

converts future dollars into current equivalents to calculate net “present” project value.4l Discounting works well for measuring 

the value of a resource today versus what it 

would be worth delivered a year from now: 

when economies are working efficiently, the 

discount rate is equal to the interest rate. But 

the choice of discount rates becomes increasingly problematic in the long time frame of 

environmental impacts. Decisions affecting 

future generations are even more difficult. 

Valuing future benefits and costs is particularly important in cases of great uncertainty 

about irreversible use of nonrenewable resources. EPA’s Science Advisory Board concluded that: 

methodology that presumes the future value of an ecological resource 

necessarily must be less than its 

present value will not be a useful 

analytical tool for sustaining economic development over the long 

term. The standard practice of discounting future resource values is 

inappropriate, and it results in policies that lead to the depletion of 

irreplaceable natural resources.42 

rn Imprecise infonnation-economic analysis relies on the data from physical, biological, and 

engineering systems as well as on economic 

factors (e.g., air dispersion, groundwater 

chemical plume dispersion, exposure models, wetlandlhabitat, and fish and wildlife 

population models). The scientific questions, 

such as the magnitude of environmental impacts, are often difficult to answer. 

Other objections to economic analyses-some 

shy away from economic arguments and from 

assigning economic value to environmental 

resources because these resources have so 

many intangibles and nonpecuniary values 

that are not fully considered by economics. 

Some wildlife managers, for example, have 

resisted the “commercialization” implied by 

the application of economic val~es.4~ 

Future Directions of Economic Analysis 

In its 1990 report Reducing Risk: Setting Priorities and 

Strategies for Environmental Protection, EPA’s Science Advisory Board called for development of improved methods 

to value natural resources, to account for long-term environmental effects in economic analysis, and to incorporate ecological investments into a concept of sustainable 

growth. One tack is to “continue to explore the wondrous 

world of alternative surplus measures,”44 in other words, 

to polish existing techniques. Argues one economist: “The 

more analysts can narrow the sources of error in the use of 

methods over which, admittedly, reasonable people can 

disagree, the greater the precision of our measuring rod. . . opportunities for manipulation are reduced by improvements in methods and consensus over best 

The quality of the contingent valuation, travel cost, and 

survey methods has improved over the past few years, the 

questions are becoming more realistic, and the techniques 

have evolved to the point where people are willing to get 

up in court and defend their numbers.& EPA continues to 

refine its use of benefit-cost, cost-impact, and cost-effectiveness analyses. For example, EPA’s guidelines for regulatory impact analyses are being revi~ed.4~ Other tacks 

include greater use of multiple objective analysis and of 

merging ecological and economic analysis (see sections 

below on multiple objective and sustainable development methods). 

Another fruitful direction might be educational efforts to convey the value, uses, and limitations of economic studies. These efforts would be important not just for 

analytical exercises but also for resource management. 

For example, some observers argue that economic principles need to be increasingly brought to bear in wildlife 

programs and that wildlife agencies need to overcome 

their reluctance to use economic justifications and the 

information gleaned from socioeconomic surveys.48 

Otherwise, wildlife will be considered a marginal spe50 U.S. Advisory Commission on Intergovernmental Relations 
cial-interest luxury product. Economic arguments help 

show that wildlife has significant economic benefits to 

local and national economies and that wildlife is an indicator of environmental and public health, or of sustainable 

development. However, this socioeconomic information 

must make its way into the decisionmaking and political 

process for economic arguments to be useful. At a time 

when there is intense political debate over how much to 

spend on the environment, including these nonmarket 

economic values may strengthen the case for sustainable 

development approaches. 

Multiple Objective Analysis 

Multiple objective analysis connotes a variety of procedures to evaluate alternative project proposals against 

several policy objective^.^^ In other words, multiple objective analysis is a way to address the “apples and oranges,” 

monetaryhonmonetary, and environment/development 

valuation issues confronted in environmental decisionmaking concerning public works. Objectives may include 

national economic benefits, environmental quality, regional development, employment creation, income redistribution, and environmental and cultural goals. Several 

types of systems analysis and matrix analysis are forms of 

multiple objective analysis. One multiple objective approach examines how proposed project alternatives measure up to a set of different objectives. Another approach 

is to design several project alternatives (or combinations 

of alternatives), each intended to maximize or satisfy a 

different objective. In either case, the decision problem is 

how to compare the alternatives. 

The U.S. Water Resources Council proposed a multiple objective evaluation framework entitled Principles and 

Standards for use by federal agencies in evaluating alternative water resources projects. Principles and Standards 

and its successor Principles and Guidelines have been 

applied to many federal water projects during the past two 

decades. The techniques could be adapted for state and 

local public works projects. Principles and Standards proposed that an explicit trade-off be made between the nationl economic development (NED) and environmental 

quality (EQ) accounts in the decisionmaking process. 

Principles and Standards was changed into the Principles and Guidelines method, which is now in use by all 

federal agencies that administer federal water projects, 

such as the Army Corps of Engineers, the Bureau of 

Reclamation, the Forest Service, and the Soil Conservz ~ ~~ 

Multiple Use or Joint Production 

The multiple objective evaluation problem is similar 

to that posed by multiple use or joint production possibilities where different products are measured by 

noncomparable yardsticks. Multiple use is often associated with goods and services produced by a forest. Varying amounts of different types of forest outputs are feasible: timber (value measured in dollars), 

water (acre-feet), recreation (visitor days), and wildlife 

(deer harvested, bird count). The decision problem is 

how to compare the value of different products. 

Principles and Standards 

The evaluation method called for comparing project 

alternatives by measuring and appraising their differences and the “without project” alternative. Four accounts were used to facilitate evaluation and to display the effects of each plan: 

0 The national economic development (NED) account displays changes in the economic value of 

the national output of goods and services (a 

benefit-cost analysis from a national accounting 

perspective). 

The environmental quality (EQ) account displays nonmonetary effects on ecological, cultural, and aesthetic resources. 

The regional economic development (RED) 

account registers changes in regional economic 

activity. 

The other social effects (OSE) account registers 

plan effects from perspectives that are relevant 

to the planning process but are not reflected in 

the three other accounts. 

0 

tion Sewice. principles and Guidelines is similar to the earlier 

version. However, the trade-off between NED and EQ was 

replaced with a constrained maximization of NED. The preferred plan is the one that maximizes net economic development benefits consistent with protecting the nation’s 

environment (the “NED plan”). Other plans that reduce 

NED benefits in order to address other federal, state, and 

local concerns are also formulated. However, the NED Plan 

is selected unless an exception is justified and granted by the 

agency director. Principh and Guidelines is subject to the 

same criticism as benefit-cost analysis: economic analysis 

undervalues environmental resources. The Corps of Engineers is studymg the possibility of using a Principles and 

Standud approach to include sustainable development concepts and objectives.So The South Florida Water Management District is considering the use of a multiple objective 

evaluation method similar to principles and Stdw& for 

water use management planning.51 

Several methods have been advanced to evaluate 

trade-offs among alternatives in order to select an optimal 

or preferred alternative. If the decisionmaker’s values, 

and thereby the relative importance of the objectives, can 

be defined by quantitative weights, an “optimal” project 

alternative can be determined. This is an attempt to derive 

a single-value answer like benefit-cost analysis. In order 

to do so, it is necessary to establish weighing functions (or 

“shadow prices”) for all nonmonetary objectives. If such 

weights can be found and agreed on by the variouscontesting groups, the nonmonetary costs and benefits can be 

translated into their monetary equivalents. This approach 

has been developed extensively in the context of the economic development literature. Use of weights turns the 

exercise into a benefit-cost or optimization analysis. Focus 

groups of experts may be used to determine the weights. 

There are several methods for varying the weights system- atically to eliminate inferior alternatives. 

U.S. Advisory Commission on Intergovernmental Relations 51 
South Florida Water Management District: 

Multiple Objective Analysis 

The method would have four accounts: economic efficiency, social and cultural, regional development and 

fiscal, and ecological and related aesthetic, including 

water quality contributions to ecological properties. 

The account also could have subaccounts to distinguish, for example in the economic and social accounts, 

effects on water use and supply, flood and storm control, and recreation. The ecological account might be 

subdivided into estuarine, wetlands, free-flowing 

stream, and lake subaccounts, and include the output 

of hydrology, pollutant transport, and ecosystem models. Once the attribute values for each project are 

known, the alternatives would be “screened” to select 

plans that perform well under different hydrological 

conditions and for a variety of attribute values, weights, 

and risk preferences. Scaling and weighing schemes, 

determined by focus groups, are attached to the four 

accounts to compare alternatives. 

In the more likely case that weights (or even objec- tives) are not defined by the decisionmakers, the other 

approach is to develop a multiple objective accounting 

framework that traces the consequences of various project 

alternatives, and relates them not only to monetary ef- fects, but also to environmental, social, regional development, and other objectives. Where possible, these 

consequences are defined in monetary terms. Where not, 

accounts are shown in the physical, quantitative, and qual- itative terms that best reflect their values. Results can be 

presented in a format to describe the potential economic 

and other trade-offs among multiple goals. Ian McHarg’s 

overlay method, the Leopold type matrix, elements of 

Principles and Standards designed by the U.S. Water Re- sources Council, and planning tools such as the Multi- Attribute Trade-off System (MATS), are among the techniques used in multiple objective Such a frame- work will not provide a simple, singular answer, telling 

what is better or what is worse. However, the analysis will 

help officials to make value and political judgments and 

project decisions. 

Sustainable Development 

as a Project Analysis Method 

Sustainable development is identified here as a concept 

that gets to the heart of the challenge of combining public 

works development and environmental quality. Can “sus- tainable development” concepts be used in project analysis? 

To do so, the various definitions of sustainability need to be 

distinguished. John Pezzy distinguishes between: 

Sustainable growth: nondeclining or positive 

and nondeclining economic output or con- sumpt ion; 

Sustainable development: nondeclining utility 

(human utility or well being); 

Sustainable resource use: nondeclining renewable and/or nonrenewable resources and/or 

nonincreasing poll~tion.~~ 

Applying these definitions to project analysis is likely to 

be difficult. Several World Bank and other reports analyze sustainability in terms of conventional economic 

theory (this theory views capital stock, technology, and 

environmental qualityhatural resources as factors that 

affect production, consumption, and utility). Also, the 

reports explain why free market forces may not achieve 

sustainability and how policy intervention may help or 

hinder su~tainability.~~ 

Sustainability at the Project Level 

How could a sustainability criterion work at a proj- ect level, where a project is only a small part of the 

overall system that is to be sustained? Indeed, there is a 

conceptual problem, deriving from the definition of sustainability as a constraint (like an environmental standard or regulation) rather than a maximization rule like 

optimality or net economic benefits. Sustainability 

could be introduced into economic analysis by setting a 

constraint on the depletion of the stock of natural capital: projects maximizing net benefits should be undertaken subject to the requirement that environmental 

damage shouldbe zero or negative. However, applied at 

the level of each project, such a requirement could be 

stultifying. Does every resource need to be conserved, 

or are trade-offs acceptable? 

Sustainability at the Program Level 

At the program level, however, sustainability criteria 

might be applied with greater flexibility: netted out across 

a set of projects (program), the sum of project damages 

should be zero or negati~e.~’ Compensatory projects or 

measures could help make a sustainable program operational. As a World Bank report noted: “Promoting growth, 

alleviating poverty, and protecting the environment are 

mutually supportive objectives in the long run. . . . In the 

short run, however, the objectives are not always compatible. . . .”56 The Memorandum of Agreement between 

EPA and the Corps of Engineers concerning the determination of mitigation under the Clean WaterAct Section 404 

guidelines contains a similar distinction between each 

project decision or the short-run and the overall 

long-term “no net loss” goal of wetlands protecti~n.~’ 

EPA-Corps of Engineers Memorandum 

on Mitigation 

“The level of mitigation determined to be appropriate and practicable . . . may lead to individual permit 

decisions which do not fully meet this goal because 

the mitigation measures necessary to meet this goal 

are not feasible. . . . Consequently, it is recognized that 

no net loss of wetlands functions and values may not 

be achieved in each and every permit action. However, it remains a goal of the Section 404 regulatory 

program to contribute to the national goal of no overall net loss of the nation’s remaining wetlands base.” 

52 U.S. Advisory Commission on Intergovernmental Relations 
1 

Limitation on Practical Applications 

of Sustainability 

As an analytical tool, a sustainability criterion would 

have all of the measurement problems of valuing environmental goods and services and addressing intergenerational 

equity and irreversible losses of nonrenewable resources. 

Deriving sustainability conditions will require judgments on 

which natural and manmade resources are essential to production and to welfare, and on the extent to which these 

resources can be substituted for each other. The existence of 

natural thresholds, beyond which environmental damage is 

irreversible and possibly catastrophic, may represent a signif- icant limit to the substitutability of capital and technological 

knowledge for natural resources. 

Examples of Sustainability Measures in Practice 

Despite the theoretical and practical difficulties of 

translating sustainability into an analysis tool, several efforts examining sustainability are under way. 

Energy Analysis. One approach popular among some 

wetlands ecologists and ecological economists is energy 

analysis, that is, to calculate energy balances on the assumption that energy supplies (measured by units of solar 

energy) represent the ultimate constraint on human activity. By measuring the amount of energy absorbed by a 

wetland, for example, an economic value of the wetland 

can be calculated: the dollar value of the fossil fuel equivalent of the solar energy that the wetland converts to plant 

biomass.58 This technique has also been applied to agriculture and aquaculture. The solar energy input-output anal- ysis of a project (linked to sustainability criteria) may 

provide another analytical input into decisionmaking. But 

solar energy values do not necessarily reflect observable 

human economic activitie~.~~ 

Natural Resources Accounting in National or Regional Income Accounts. Another effort is to incorporate environmental factors in basic accounts used to measure 

national output (GNP, GDP) or in regional models. National accounting schemes typically characterize revenues 

generated by activities that deplete or degrade environ- mental resources as “income” while failing to account for 

the reduction of society’s environmental capital assets. 

Including the environment as a capital asset is a feature of 

studies conducted by international organizations and an 

EPA study of the Chesapeake Bay.60 Resource accounting 

may help decisionmakers make judgments about 

trade-offs between public works projects and environmental protection within the context of sustainability of the 

ecosystem functions of the Chesapeake Bay. 

Carrying Capacity and Sustained Yield. Sustained 

yield and carrying capacity are two concepts drawn from 

agriculture/fisheries and ecology, respectively, with applications and similarities to sustainable development!’ Sustained yield is a yield that can be maintained over long 

periods without significant reduction in the rate of production. Maximum sustained yield is used to describe the 

maximum harvest possible in fish, wildlife, or foresty. 

Carrying capacity, an ecological attriiute of the environment, refers to the number of individuals of a species that 

can be stably sustained by that environment. Carrying capacity and sustained yield have been applied to many studies. As 

decisionmaking criteria for public works projects, carrying 

capacity and sustained yield would share the same limitations as sustainable development discussed above. 

Risk Analysis 

Uncertainty is an integral part of project decisions. 

Risk analysis recognizes that forecasting project impacts is 

an uncertain business and incorporates, in probabilistic 

statements of future conditions, analysts’best guesses and 

historical data about the extent of uncertainty. The process of quantifying risks attempts to generate objective 

information from empirical data or when data do not exist, 

through constructing models of physical and other processes. Professional judgment is used to fill in the knowledge gaps. Risk analysis has long been used as part of the 

engineering design of a public works project, for example, 

as part of structural, reliability, or safety analysis. For use 

in environmental decisions concerning public works, the 

human health, ecosystem, and environmental risks of the 

public works project must be assessed. Many risk analysis 

techniques are in use in other federal environmental programs and could be adapted for use in public works reviews. 

A summary of federal risk assessments of cancer-causing 

agents in the environment is given in nble 2-3. 

Engineering Risk Analysis 

Risk cost-effectiveness analyses are undertaken for 

public works projects at the engineering/design 

phase. Engineers seek to determine the most costeffective project alternatives within the constraints 

of structural or project reliability or safety. Reliability 

and safety information in turn is based on known historical risks of particular designs and structures, hydrological data, and best professional judgment. In 

dam projects, for example, “buffering” or “redundance” are built into a project for a resilient design 

that will reliably provide water, power, and flood control with a high degree of safety. 

Distinction between Risk Assessment and Risk Management. Risk-based decisionmaking or risk analysis encompasses both risk assessment and risk management as 

defined by the National Academy of Sciences: 

Risk assessment is the use of the factual base to 

defhe the health effects of exposure of individuals or populations to hazardous materials and situations. Risk management is the process of 

weighing policy alternatives and selecting the 

most appropriate regulatory action, integrating 

the results of risk assessment with engineering 

data and with social, economic, and political concerns to reach a decision.62 

Undertaking risk analysis is resource and data intensive. 

For example, although EPA has neither the budget nor the 

time to extensively test thousands of chemicals for health 

risks, the agency is being asked, by its Science Advisory 

U.S. Advisory Commission on Intergovernmental Relations 53 
VI 

P 

F 

r 

0 

8 

Table 2-3 

Public Laws Providing for the Regulation of Exposures to Carcinogens 

Definition of Toxics Agents Regulated 

Legislation or Hazards for Regulation as Carcinogens 

(Agency) of Carcinogens Degree of Protection (or Proposed Regulation) Basis of Legislation Remarks 

Federal Food, 

Drug, and Cosmetic 

Act (FDA) 

Food carcinogenicity for additive 

defined by Delaney Clause 

contaminants 

Drugs carcinogenicity defined as risk 

Cosmetics “substance injurious under 

conditions of use prescribed” 

no risk permitted, ban of 

additive 

“necessary for the protec- tion of public health” Sec. 

risk and benefits of drug 

balanced 

406 (346) 

action taken on basis that 

cosmetic is adulterated 

21 food additives and risk 

colors 

three substances: Ma- balancing 

toxin, PCBs, nitrosamines 

not determined balancing 

not determined risk (no health claims 

allowed for “cosmetics”; 

cosmetic becomes a 

“drug” if claims made) 

Occupational not defined in act (OSHA Ge- “adequately assures to the 20 substances technology (or balancSafety and Health neric Cancer Policy defines extent feasible that no ing) 

Act carcinogens on basis of animal employee will suffer material impairment of 

health or financial capac- 

(OSHA) 

ity” Sec. 6@X5) 

test results or epidemiology) 

Clean Air Act 

@PA) 

Sec. 112 

(stationary 

sources) 

“an air pollutant. . . which. . . may cause or contribute to an 

increase in mortality or an increase 

in serious, irreversible, or incapaci- tating reversible illness” (Sec 

1WX1) 

Sec. 202 

(vehicles) 

“an air pollutant from any . . . new 

motor vehicles. . . or engine . . . which. . . caw or contribute to 

air pollution which may reasonably 

be anticipated to endanger public 

health or welfare” Sec 202A(aX1) 

“an ample margin of 

safety to protect the pub- lic health” Sec. 

11WX1xB) 

“standards which reflect 

the greatest degree of 

emission reduction 

achievable through.. . technology. . . available” 

Sec. 202(bX3XaXl) 

asbestos, beryllium, risk 

mercury, vinyl chloride, 

benzene, radionuclides, 

and arsenic (an addi- tional 24 substances are 

being considered) 

diesel particulates stan- technology (Sec. 

dard 202@)(4)(B) includes 

no-risk test for deciding 

between pollutant that 

might result from con- trol attempts) 

basis of the Airborne 

Carcinogen Policy 

Sec 2M@)(4XA) specifies 

that no pollution control 

device, system, or element 

shall be allowed if it pres- ents an unreasonable risk 

to health, wlfare, or safety 
Table 2-3 (cont.) 

Public Laws Providing for the Regulation of Exposures to Carcinogens 

0 

Y 

Definition of Toxics Agents Reguiated 

Legislation or Hazards for Regulation as Carcinogens 

(Agency) of Carcinogens Degree of Protection (or Proposed Regulation) Basis of Legislation Remarks 

Sec. 211 same as above Sec. 211(cX1) 

(fuel additives) 211(cX2Xa) 

same as above Sec. balancing (technology requires cost-benefit 

based with consideration comparison of competing 

of costs, but health based control technologies 

in requirement that 

standards provide ample 

margin of safety 

Clean Water Act toxic pollutants listed in House defined by applying BAT 49 substances listed as technology 

(EPA) Sec. 307 Committee Report 95-30 (Commit- economically achievable carcinogens by CAG 

tee on Public Works and Tmportation); list from consent decree 

between EDF, NRDC, Citizens for 

Better Environment, and EPA 

Sec. 307(aX2), but effluent 

levels are to “provide an 

ample margin of safety” 

(Sec. 307(a)(4)) 

Federal Insecticide, one that results in “unreasonable not specified 

Fungicide, and 

Rodenticide Act 

and the Federal 

Environmental species declared endangered“ 

Pesticide Control 

Act (EPA) 

adverse effects on the environment or will involve unreason- able hazard to the survival of a 

14 rebuttable presump balancing “unreason- “unreasonable adverse 

tions against registra- able adverse effects” effects” means “unreasontions either initiated or able risk to man or the 

completed; nine pesti- environment, taking into 

cides voluntarily with- account the economic, 

drawn from market social, and environmental 

costs and benefits” 

Sec. 2@b) 

Resource one that “may cause or significant- “that necessary to protect 74 substances proposed risk (the administrator 

Conservation and ly contribute to an increase in human health and the for listing as hazardous can order monitoring 

Recovery Act mortality or an increase in serious environment” Sec. wastes and set standards for 

(EPA) irreversible, or incapacitating 3002-04 sites) 

reversible illness; or pose a . . . hazard to human health or the 

environment” Sec 1004(5XA@3) 

Safe Drinking 

Water Act (EPA) 

“contaminant(s) which . . . may 

have an adverse effect on the cals formed by reactions 

health of persons” Sec. between chlonne used as 

1401( 1XB) disinfectant and organic 

chemicals; 2 pesticides 

and 2 metals classified as 

carcinogens by CAG but 

regulated because of 

other toxicities 

“to the extent feasible . . . trihalomethanes, chemi- balancing 

(taking costs into consideration)” Sec 1412(a)(2) 
Table 2-3 (cont.) 

Public Laws Providing for the Regulation of Exposures to Carcinogens 

Definition of Toxics Agents Regulated 

Legislation or Hazards for Regulation as Carcinogens 

(Agency) of Carcinogens Degree of Protection (or Proposed Regulation) Basis of Legislation Remarks 

Toxic Substance 

Control Act (EPA) 

Sec. 4 

(to require 

testing) 

Sec. 6 

(to regulate) 

Sec. 7 

(to commence 

civil action against 

imminent 

hazards) 

substances that “may present an 

unreasonable risk of injury to 

health or the environment” Sec. 

substances that “present or will 

present an unreasonable risk of 

injury to health or the environ- ment Sec. qa) 

“imminently hazardous chemical 

substance or mixture means a. . . substance or mixture which pres- ents an imminent and unreason- able risk of serious or widespread 

injury to health or the environ- ment 

4(aXlXAXi) 

not specified site chemicals used to 

make plastics pliable able risk” 

balancing “unreason- 

“to protect adequately PCBs regulated as di- balancing “unreason- against such risk using the rected by law able risk” 

least burdensome require- ment” Sec. qa) 

based on degree of pro- tection in Sec. 6 rected by the law able risk“ 

PCBs regulated as di- balancing “unreasonFederal Hazardous 

Substances Act 

(CPSC) 

“any substance (other than a 

radioactive substane) which has 

the capacity to produce a personal 

injury or illness” 15 USC l2.61(g) 

Consumer Product 

Safety Act (CPSC) 

“products which present unrea- sonable risks of injury . . . in 

commerce” and “risk of injury” 

means a risk of death, personal 

injury, or serious or frequent 

injury“ 15 USC 2051 

“imminently hazardous consumer 

product” means consumer 

product that presents imminent 

and unreasonable risk of death, 

serious illness or severe personal 

injury“ 15 USC 2061 

“establish such reasonable 

variations or additional 

label requirements . . . necessary for the protec- tion of public health and 

safety” 15 USC 1262(b) 

risk “highly toxic defined as 

capacity to cause death, 

thus toxicity may be lim- ited to acute toxicity 

“standard shall be reason- ably necessary to prevent 

or reduce an unreason- able risk of injury” 15 

USC 2056 

5 substances: asbestos, balancing “unreason- standards to be expressed, 

benzene, benzidine able risk” whenever feasible, as per- 

(and benzidine-based formance requirements 

dyes and pigments), 

vinyl chloride, “tris” 

~ 

Source: US. Congress, Office of Technology Assessment, Technologies for Determining Cancer Risks from the Environment, 1981. 
Board, to devote more resources to quantifying ecosystem 

risks. Risk management, as a form of planning, can be 

used to determine which risk assessments to conduct by 

setting EPA's agenda and priorities. EPA has adopted the 

risk assessment strategy and terminology set out in the 

National Academy of Science's report on risk assessment 

activities in the federal g~vernment.~~ 

Health Risk Analysis. The National Academy of 

Sciences characterized risk assessment as containing some 

or all of the following four steps:" 

rn Hazard identification: determine whether a 

particular chemical is or is not causally linked 

to particular health effects; 

Dose-response assessment: determine the rela- tion between the magnitude of exposure and 

the probability of occurrence of the health 

effects in question; 

Exposure assessment: determine the extent of 

human exposure before or after application 

of regulatory controls; and 

Risk characterization: describe the nature and 

the magnitude of human risk, including attendant uncertainty. 

rn 

rn 

rn 

In each step, decision points occur where risk to human 

health can only be inferred from the available evidence. 

Both scientific judgments and policy choices may be involved 

in selecting from among possible inferential bridges. 

Ecosystem and Environmental Risks. Scientists have 

made some progress in developing quantitative measures for 

use in comparing different risks to human health. Although 

current ability to quanta ecological risks is not as well developed, an increased capacity for comparing different kinds of 

risks more systematically would help determine which problems are most serious and deserving of the most urgent 

attention, according to EPAs Science Advisory B0ard.6~ An 

improved ability to compare risks in common terms would 

help society choose more wisely among the range of policy 

options available for reducing risks. 

Implications and Uses of Risk Assessment. A high 

degree of uncertainty about the effects of a public works 

project will influence the selection of project alternatives. 

For example, the implications of a high degree of risk in 

the case of a major dam include the following: 

rn Do not invest in irreversible, inflexible, 

large-scale, and high-cost measures. 

rn Design, modify, and rehabilitate structures 

and operating procedures that will provide 

robust and resilient water resource systems 

under different climate scenarios. 

Implement a wide variety of measures for reducing demand, as long as they do not reduce 

the robustness and resilience of the systems. 

Risk analysis can be added to, or combined with, 

other analytical methods, such as benefit-cost analysis. 

The economicanalysis is extended to capture the uncertainty by including probability, sensitivity, or other 

forms of risk analysis. 

rn 

Implementation of Risk Assessment. The basic problem in risk assessment is the sparseness and uncertainty of 

the scientific knowledge of certain types of health and 

environmental hazards. This problem has no ready solution.& Risk assessment draws extensively on science and 

depends for reliability on the quality of data. A strong 

scientific basis has developed for linking exposure to 

chemicals and to chronic health effects. Water and high- way projects have relatively well defined risks due to years 

of experience with typical designs and historical (e.g., hy- drological) data. However, uncertainty is particularly 

great for noncancer health effects and ecosystem impacts 

(due to such factors as irreversibility thresholds, cumula- tive impacts, and feedback effects.). Few of these risks can 

be quantified accurately, resulting in risk management 

decisions based more on judgment than on specific data. 

The U.S. General Accounting Office (GAO) concluded in 

a 1988 study that large and extensive gaps exist in information needed to perform risk assessments at EPA. The 

nature of the information gaps include poor or nonexis- tent exposure and other data, a lack of methodologies for 

assessing ecological or noncancer risks, and a lack of understanding of basic global environmental processes.67 

The lack of accurate data and resources to obtain such 

data is felt at all levels of government. State representatives at a National Governors' Association workshop on 

risk analysis in November 1990 agreed with the conclusions of the EPA Science Advisory Board study that risk 

analysis is a valuable policy tool. But the conference par- ticipants indicated that state agencies generally do not 

have enough data to use risk analysis at the project or 

program level and that risk analysis is not refined enough 

to use to set priorities.a 

Over the last two decades, most federal agencies re- sponsible for risk assessment have improved their techniques through research and demonstration projects, and 

they have sought to develop guidelines to provide a sys- tematic way of meeting regulatory requirements. These 

guidelines vary widely as to the degree of comprehensiveness, flexibility, and legal authority vested in them. EPA's 

Science Advisory Board, in its September 1990 report on 

risk, recommended that EPA 

rn Develop a long-term strategy for improving 

the methodology for assessing and ranking 

environmental risks and for assessing the alternative strategies that can reduce risks; 

To the extent possible, merge the evaluations 

of (1) cancer and noncancer risks and (2) ecological and welfare risks; 

Improve the data and analytical methodologies 

that support the assessment, comparison, and 

reduction of different environmental risks; and 

Develop improved analytical methods to value natural resources and to account for 

long-term environmental effects in its economic analyses.@ 

Risk assessment analyses face a variety of external 

pressures, including public concern with health protection 

and different definitions of acceptable risk by interest 

groups. Much of the controversy is general; it reflects the 

conflict in values between different groups in society, particularly with regard to the relative importance of ecorn 

rn 

U.S. Advisory Commission on Intergovernmental Relations 57 
nomic factors and health and environmental protection in 

the formulation of regulatory decisions. Consensus on the 

value of mortality risks, for example, is difficult to obtain 

(e.g., labor’s willingness to accept increased risks in exchange for additional wages is one method). The necessity 

of placing a monetary value on human life is a source of 

deep-seated conflicts of values and beliefs, and it indicates 

one of the problems of linking risk and economic analyses. 

The “right” to be risk free, a perception of some citizens, is 

another problem with communicating the results of a risk 

analysis. Nothing is risk free, and decisionmakers often 

must make trade-offs. 

As long as there are large gaps in key data sets, efforts 

to evaluate risk on a consistent, rigorous basis, or to define 

optimum risk-reduction strategies, necessarily will be incomplete. Thus, the results will be uncertain enough to 

limit the decisionmaking uses of risk analysis. However, 

like benefit-cost analysis, risk analysis is not intended to be 

used as the sole basis for decisionmaking. Risk analysis is 

used as one means to inform decisionmaking. 

. . . in any attempt to compare and rank environmental risks [it] is the inevitable value judgments 

that must be made. For example, are health risks 

posed to the aged more or less serious than health 

risks posed to infants? . . . Comparing the risks 

posed to human populations with the risks posed 

to ecosystems may be even more difficult. It 

seems clear that subjective values always willand should-influence the ranking of relative environmental risks, no matter how sophisticated 

the technical and analytical tools become.70 

Other critics question whether current practices ade- quately safeguard the quality of the scientific interpretations needed for risk assessment. With a scientific base 

that is expanding, with large uncertainties to be addressed 

in each decision, and with the presence of great external 

pressures, the National Academy of Sciences warned that 

the scientific interpretations in risk assessment could be 

distorted by policy considerations and called for new institutional safeguards to ensure that risk assessments are 

protected from inappropriate policy influences and for 

uniform guidelines for carrying out risk as~essment.~~ 

Social Impact Analysis 

Social and cultural impact analyses (SIA) include 

methods for describing the social, cultural, distributional, 

and community impacts of project alternative^.'^ Some 

analysts argue that there is a legal or regulatory require- ment for a systematic interdisciplinary approach in NEPA 

and NEPA regulations (“economic, social, and physical 

impacts”). Yet “in over 80 EISs in the first decade after the 

enactment of NEPA, fewer than 10 percent mentioned 

primary or secondary social relationships” and “no social 

research method could be observed in 86 percent” of the 

EISs, according to a 1986 study.73 However, social, cultur- al, and applied anthropology studies are now a regular 

feature of many federal environmental reviews, especially 

for major projects such as hazardous and nuclear waste 

disposal, impacts on Native Americans, and the supercol- lider-superconductor projects. 

SIA is used by some as more than an analysis tool. SIA 

and the NEPA process can be used to highlight value 

choices, increase public involvement in decisionmaking, 

give more democratic or public direction to the decision 

process, and take into account the broader policymaking 

context of the decision process and choices. 

Business and Corporate Efficiency 

and Management Techniques 

A variety of interrelated techniques used in business 

to generate effective, cost-efficient, and marketable products could be applied to the federal environmental 

decisionmaking process. The techniques include performance management, fast-tracking, and value engineering.74 

Value engineering, for example, is the search for and 

selection of new means to reduce cost and improve value 

(in a business sense) during the design phase of a commercial product. The concepts grew from cost-prevention 

campaigns sponsored by the government in the 1940s. 

Value engineering is an organized effort to identify and 

eliminate unnecessary costs without sacrificing quality or 

reliability. The effort is sometimes undertaken by an independent team of experts. Process capabilities, product 

design, and inspection practices are considered in minimizing the total cost of quality assurance. Alternative 

methods are sought to reach the desired product and 

quality (a preferred level for the quality of goods and 

services balances the cost of attaining that quality against 

the value placed on the quality by consumers). Value engineering has been applied to a superfund cleanup site.7s 

Performance management generally has to do with 

using a labor force efficiently and effectively. GAO has 

recommended that EPAadopt several management, organizational, financial management, and efficiency measures that are similar to these corporate efficiency 

~ncepts.~~ 

Application of Value Engineering 

to Superfund Cleanup 

The Kansas City District of the Army Corps of Engineers, under the direction of EPA Region 11, is the lead 

agency for the multimillion dollar remediation of the 

Marathon Battery Superfund Site in Putnam County, 

New York. Scientists and engineers from the Corps, 

EPA, the remediation engineering company, and members of the remedial investigation/feasibility (RIFS) 

team convened for five days to evaluate the RIES plan 

using value engineering. The group’s charge was to 

take a close, impartial look at the problem and identlfy 

economical alternatives that were at least as effective 

as the proposed measures. The brainstorming sessions 

encouraged exchange of ideas and helped to speed resolution of technical questions. The group’s recommendations were included in the remedial design and saved 

the project $8 million in 1988 dollars, reducing the hitial estimated cost by 40 percent. 

58 U.S. Advisory Commission on Intergovernmental Relations 
Notes 

V. Keny Smith, “Resource Evaluation at the Crossroads,” Resou~es 90 (Winter 1988): 6. 

’40 CFR 1500.1. 

340 CFR 1502 

Brooke A. Masters, “Red Tape May Delay Virginia Commuter 

Rail,” Washington Post, April 4, 1991. 

’ U.S. Department of Transportation, Federal Aviation Administration, Drap Environmental Impact Statement: DalIasIFort 

Worth International Airport, Volume 1: Documentation (Washington, DC, July 1990). 

ti Dinah Bear, General Counsel, U.S. Council on Environmental Quality, personal communication, February 21, 1991. 

Jack Chowning, U.S. Army Corps of Engineers, Regulatory 

Branch, personal communication, February 22, 1991. 

Dinah Bear. 

lo Eugene W. Cleckley, Chief, Environmental Operations Divi- sion, Federal Highway Administration, Office of Environmental Policy, personal communication, April 17, 1991. 

l1 U.S. Department of Transportation, Federal Highway Admin- istration, Applying the Section 404 Permit Process to Federal-Aid 

Highway Projects (Washington, DC, September 1988). 

l2 U.S. Congress, Office of Technology Assessment, Wetlandr: 

Their Use and Regulation (Washington, DC, March 1984); 

David G. Burke et al., Protecting Nontidal Wetlands (Chicago: 

American Planning Association, December 1988); U.S. General Accounting Office (GAO), Wetlandr: The Corps of Engi- neers’ Administration of the Section 404 Prow (Washington, 

DC, July 1988). 

‘40 CFR 1505.2. 

l3 40 CFR Parts 400 699. 

l4 See U.S. Environmental Protection Agency (EPA), Office of 

Water, Water Quality Standards Handbook (Washington, DC, 

December 1983). 

See EPA, Office of Policy Planning and Evaluation, EPA’s Use 

of Benefit-Cost Analysis: 1981-1986 (Washington, DC, 1986); 

and A. Myrick Freeman 111, “Water Pollution Policy,” in Paul 

R. Portney, ed., Public Policies for Environmental Protection 

(Washington, DC: Resources for the Future, 1990), p. 106. 

17Deborah Nicole, EPA, Office of Water, and Brett Snyder, 

EPA, Office of Policy Analysis, personal communication, February 7,1991. 

“40 CFR 131.12. 

l9 See EPA, EPA’s Use of Benefit-Cost Analysis: 1981-1986; Paul 

R. Portney, “Air Pollution Policy,” in Portney, ed., Public Policies for Environmental Protection, pp. 27-96. 

2o John H. Clements, Deputy Director, U.S. Federal Energy 

Regulatory Commission, Office of Licensing, letter to Bruce 

McDowell, U.S. Advisory Commission on Intergovernmental 

Relations, May 15, 1991. 

21 Decision Focus Incorporated, Evaluating Hydro Relicensing 

Alternatives: Impacts on Power and Nonpower Values of Water 

Resources (Los Altos, CA: Electric Power Research Institute, 

August 1990); Ed Folkes, Federal Energy Regulatory Commission, personal communication, February 20, 1991. 

22 See Possum Kingdom, Project No. 1490, order issued Septem- ber 14, 1989, 48 FERC 62190; Mahoning Creek, Project No. 

10521, order issued May 7,1990,51 FERC 62098; Brandon Is- land, Project No. 3944, order issued August 16,1990,52 FERC 

62161. 

l5 Federal Register 55 (November 16, 1990): 47990. 

23 Decision Focus Incorporated, Evaluating Hydro Relicensing 

24Ed Folkes; and Jennie Rice, Decision Focus Incorporated, 

zs 50 CFR Part 402. 

’tiTed Gup, “Down with the God Squad,” Time, November 5, 

27 Fedeml Register 52 (1987): 32657. 

”DOT Order 5610.1C. 

29 C.S. Holling, Adaptive Environmental Assessment and Manage- ment (Chichester: 1978), p. 65. 

30 A. Myrick Freeman I11 and Paul R. Portney, “Economics Clarifies Choices about Managing Risk,” Resources 95 (Spring 

1989): 4. 

31 The theoretical underpinnings of benefitcost analysis and the 

concept of economic benefits are found in “welfare economics” and a theory of consumer preferences. The assumptions 

include (1) Pareto Optimality and other measures of “efficien- cy,” (2) the purpose of economic activity is to increase the wellbeing of the individuals as measured in terms of material goods 

and services valued by prices in an efficiently operating market 

system, and (3) more is preferred to less. Distributional effects 

are not included in a benefitcost analysis. Defining and measuring net economic benefits is based on individuals’ “willingness to pay” (or demand curves), the amount for goods and 

services minus the costs of acquiring the goods and services. 

Willingness to pay includes the price paid for the goods and 

services as well as any amount over and above the price that 

the individual would have been willing to pay, which is called 

consumer surplus. Consumer surplus is derived by estimating 

what people would be willing to pay using a technique drawn 

from survey and market research. Analogous to the concept of 

consumer surplus, producer surplus is the measure of a change 

in the well-being of a firm. The change in consumer and producer surplus provides the conceptual basis for measuring net 

economic benefits. For more on benefitcost issues and appli- cations, see Maynard M. Hufschmidt et al., Environment, Natural Systems, and Development: An Economic Valuation Guide 

(Baltimore: Johns Hopkins University Press, 1983); Charles W. 

How, Benefit-Cost Analysis for Water System Planning (Wash- ington, DC: American Geophysical Union, 1971); John V. 

Kmtilla and Anthony C. Fisher, The EconomicsofNatural En- vironments (Baltimore: Johns Hopkins University Press, 1975); 

Portney, ed., Public Policies forEnvironmental Protection; EPA, 

Office of Water, The Economics of Improved Estuarine Water 

Quality: An NEP Manual for Measuring Benefits, (Washington, 

DC, September 1990). 

Alternatives, p. S-1; Ed Folkes. 

personal communication, February 22, 1991. 

1990, p. 102. 

325 U.S.C. 2601. 

33 EPA, Office of Policy Planning and Evaluation, “EPA’s Use of 

Benefit-Cost Analysis: 1981 1986”; GAO, “Cost-Benefit Anal- ysis Can Be Useful in Assessing Environmental Regulations, 

Despite Limitations” (Washington, DC, April 1984). 

34Department of the Interior damage assessment rules are in 43 

CFR Part 11; also see William H. Desvousges and Venetia A. 

Skahen, ‘‘Tw B Technical Information Document: Tech- niques to Measure Damages to Natural Resources,” Report to 

the Department of the Interior (Research Triangle Park, N.C.: 

Research Triangle Institute, September 1985); Raymond J. 

Kopp and V. Keny Smith, “Damage Assessment Goes to 

Court: The Case of Natural Resource Damage Assessments,” 

Discussion Paper (Washington, DC: Resources for the Future, 

1989). 

35 Raymond J. Kopp, Paul R. Portney, and V. Keny Smith, ‘An 

Economic Appraisal of the DC Appeals Court Ruling on the 

DO1 Regulations for Natural Resource Damage Assessment,” 

Discussion Paper QE90 08 (Washington, DC: Resources for 

the Future, 1989). 

U.S. Advisory Commission on Intergovernmental Relations 59 
36 Peter N. Close, “Quantification of Environmental Impacts in 

the Coastal Zone,” in V.S. Kennedy ed., Estuarine Perspective 

(New York: Academic Press, 1980), p. 33. 

37There are many review and guides to estimating the value of 

environmental resources, including: John C. Bergstrom, 

“Concepts and Measures of the Economic Value of Environ- mental Quality: A Review,” Journal of Environmental Manage- ment 31 (1990): 215-228; John A. Dixon and Paul B. Sherman, 

Economics of Protected Areas (Washington, DC: Island Press, 

1990); Aaron J. Douglas, ‘Annotated Bibliography of Eco- nomic Literature on Wetlands,” Biological Report 89(19) 

(Washington, DC: U.S. Department of the Interior, Fish and 

Wildlife Service, September 1989); E Gregory Hayden, “Survey Methodologies for Valuing Externalities and Public 

Goods,” Report to EPA, Office of Environmental Planning, 

September 1989; Maynard M. Hufschmidt et al., Environment, 

Natural System, and Development: An Economic Valuation 

Guide (Baltimore: John Hopkins University Press, 1983); V. 

Keny Smith, “Can We Measure the Economic Value of Environmental Amenities?” Discussion Paper (Washington, DC: 

Resources for the Future, 1989). Energy analysis methods are 

described in S. Farber and Robert Costanza, “The Economic 

Value of Wetlands Systems,” Journal of Environmental Man- agement 24 (1987): 41-51; R.M. Pope and J.G. Gosselink, “A 

Tool for Use in Making Land Management Decision Involv- ing Tidal Marshland,” Coastal Zone Management Joumal 1 

38 Bonnie G. Colby, “Estimating the Value of Water in Alterna- tive Uses,” Natural Resources Journal 29 (Spring 1989): 527. 

39 Michael J. Mandel, “How Much Is a Sea Otter Worth?” Busi- ness Week (August 21,1989): 62; E Gregory Hayden, “Survey 

Methodologies for Valuing Externalities and Public Goods,” 

Report to EPA, Office of Environmental Planning, September 

1989; EPA, Science Advisory Board, Reducing Risk: Setting 

Priorities and Strategies forEnvironmental Protection (Washing- ton, DC: September 1990), p. 8. 

Mandel, “How Much Is a Sea Otter Worth?” 

41 Robert W. Hartman, “One Thousand Points of Light Seeking 

aNumber A Case Study of CBO’s Search for a Discount Rate 

Policy,” Journal of Environmental Economics and Management 

(1973): 65-74. 

18 (Much 1990): S-3/S-7. 

42 EPA, Reducing Risk. 

43 Daniel 3. Decker and Gary R. Goff, eds., Valuing Wild1ife:Economic and Social Perspectives (Boulder: Westview Press, 1987). 

44 Daniel W. Bromley, “The Ideology of Efficiency: Searching for 

a Theory of Policy Analysis,” Journal of Environmental Economics and Management 19 (1990): 100. 

45 V. Keny Smith, “Resource Evaluation at the Crossroads,” Resources 90 (Winter 1988): 6. 

, “Can We Measure the Economic Value of Environmental Amenities?” 

46 

47 Brett Snyder. 

48 Decker and Goff, eds., Valuing Wildlqe: Economic and Social 

Penpectives. 

49See Daniel P. Loucks, “Planning for Multiple Goals,” in 

Charles R. Blitzer, Peter B. Clark, and LanceTaylor, eds.,Economy-Wide Models and Development Planning (New York: Oxford University Press for the World Bank, 1975); Charles W. 

How, Benefit-Cost Analysis for Water System Planning (Washington, DC American Geophysical Union, 1971). 

”Eugene Stakhiv, U.S. Army Corps of Engineers, personal 

communication, March 1, 1991. 

51 Apogee Research, Inc., “Multi-Objective Evaluation Method 

for Water Use Management Planning,” Report to the South 

Florida Water Management District (July 31, 1989). 

52 Luna B. Leopold et al., ‘A Procedure for Evaluating Environmental Impact,” Geological Survey Circular 645 (Washington, 

DC U.S. Geological Survey, 1971); James McEvoy I11 and 

Thomas Dietz, Handbook for Environmental Planning (New 

York: John Wiley & Sons, 1977); Ian McHarg, Design with Na- ture (Garden City, N.Y.: Natural History Press, 1969). 

53 John Pezzy, “Economic Analysis of Sustainable Growth and 

Sustainable Development,” Environment Department Working Paper 15 (Washington, DC The World Bank, 1989) p. 13. 

54Herman E. Daly, “Toward Some Operational Principles of 

Sustainable Development” 2 (April 1990): 1-6; Pezzy, “Economic Analysis of Sustainable Growth and Sustainable Development”; Gunter Schramm and Jeremy J. Warford, eds., 

Environmental Management and Economic Development @altimore: Johns Hopkins University Press, 1989). 

55 Ibid., p. 57. 

56 World Bank, “Environment, Growth, and Development.” De- velopment Committee Pamphlet 14 (Washington, DC, 1987). 

57 Memorandum of Agreement between the U.S. Environmental Protection Agency and the Department of the Army Concerning the Determination of Mitigation under the Clean 

Water Act Section 404(b)(l) Guidelines (February 6,1990) p. 2 

58 Farber and Costanza, “The Economic Value of Wetlands Systems’’; Howard T. Odum, “Self-Organization, Transformity, 

and Information,” Science 242 (November 25, 1988): 

1132-1139; Pope and Gosselink, “A Tool for Use in Making 

Land Management Decisions Involving Tidal Marshland”; 

Carl Folke and Nils Kautsky, “The Role of Ecosystems for a 

Sustainable Development of Aquaculture,” Ambio 18 (1989): 

234-243. 

” Douglas, Annotated Bibliography of Economic Litemture on 

Wetlandr, p. iv. 

Yusuf J. Ahmad, Salah El Serafy, and Ernst Lutz, eds., Envi- ronmental Accounting for Sustainable Development (Washing- ton, DC The World Bank, 1989); Thomas W. Hale, US. 

Environmental Protection Agency, Office of Policy, personal 

communication, February 19, 1991; Brett Snyder. 

61 Herman E. Daly, “Carrying Capacity as a Tool of Development Policy: The Ecuadoran Amazon and the Paraguayan 

Chaco” Ecological Economics 2 (October 1990): 187-196; National Research Council, Ecological Aspects of Development in 

the Tropics (Washington, DC: National Academy Press, 1982). 

62National Research Council, Risk Assessment in the Federal 

Government: Managingthe Process (Washington, DC: National 

Academy Press, 1983). 

63 EPA, Office of Health and Environmental Assessment, Die 

Risk Assessment Guidelines of 1986 (Washington, DC, August 

1987). 

@National Research Council, Risk Assessment in the Federal 

Government. 

65 EPA, Reducing Risk. 

66National Research Council, Risk Assessment in the Federal 

Government. 

67 GAO, Environmental Protection Agency: Protecting Human 

Health and the Environment through Improved Management, 

(Washington, DC, August 1988) p. 116. 

Heidi Snow, National Governors’ Association, personal communication, February 1, 1991. 

69 EPA, Reducing Risk. 

’O Ibid., p. 8. 

60 U.S. Advisory Commission on Intergovernmental Relations 
71National Research Council, Risk Assessment in the Fedeml 

Government. 

72 Donna Craig, “Social Impact Assessment: Politically Oriented 

Approaches and Applications,” Environmental Impact Assess- ment Review 10 (1990): 37-54; MCEVOY and Diet29 Handbook 

for Environmental Planning; Roy E. Rickson, John S. Western, 

and Rabel J. Burdge, “Social Impact Assessment: Knowledge 

and Development,” Environmental Impact Assessment Review 

10 (March/June 1990): 1-10. 

73 W.R. Freudenburg, “Social Impact Assessment,” Annual Re- views of Sociology (1986): 451-478. 

74 See James L Riggs and Thomas M. West, Engineering Economics (New York McGraw Hill, 1986), pp. 556-589. 

75 Jeffrey R. Bennett, et al., “First Appli~tion of value Engineering to Superfund Cleanup Saves Millions,” WaterEnvironment & Technology 2 (June 1990): 26. 

76 GAO, Environmental Protection Agency. 

U.S. Advisory Commission on Intergovernmental Relations 61 
62 U.S. Advisory Commission on Intergovernmental Relations 
Chapter 3. Intergovernmental Processes and Procedures 

for Environmental Decisionmaking 

Despite the problems inherent in the federal environmental decisionmaking process for public works projects, 

many federal and state agencies attempt to work together 

to streamline the process. There are success stories, but 

effective management of all federal environmental decision- making requirements is hindered by separate federal stat- utes and agency missions, the distribution of powers 

between state and local governments, lack of staff and 

budget resources, the absence of incentives for inter- agency cooperation, and lack of information exchange 

1. To foster a consideration of environmental 

consequences (an environmental “ethic”) at 

all levels of project planning, design, 

decisionmaking, and implementation; and 

2. To serve as an umbrella under which all federal, state, and local environmental require- ments are coordinated or integrated 

(concurrent rather than consecutive) and un- dertaken in a timely fashion. 

with the public and between agencies. This chapter-is 

diyjded AID thm smIions; 

Are these two facets of NEPA working? What are the 

Dmblem arras an# salu~ans? mere are differences of 

Problems that prevent or discourage efficient and integrated management of the 

federal environmental decisionmaking 

process and accommodation of divergent 

views and objectives. 

Methods used to address and speed up the 

federal environmental decisionmaking process by local, state, and federal agencies. 

Options to improve the federal environmental decisionmaking process. One set of op- tions focuses on improvements within the 

existing framework of laws and regulations; 

other options include radical overhauls of 

statutes and regulations. 

Improvements might move federal decisionmaking in the 

following directions: 

w Beyond an EIS paperwork focus to instilling 

an environmental ethic in agency planning 

and decisionmaking; 

Beyond agency “turf wars” and sequential 

decisions to shared and integrated decisionmaking; 

Beyond federal-state/local conflicts over environmental decisions to a balanced partnership. 

Three perspectives highlight the importance of intergovernmental processes to public works and environmental decisionmaking: the National Environmental Policy Act 

(NEPA), the applicant-federal agency relationship, and 

the federal-state/local relationship. 

The mandates of the law include NEPA‘Yntegration,” 

a term that encompasses two distinct but interrelated 

goals as defined in the law and related regulations:’ 

H 

H 

opinion about what NEPA integration requires in concept 

and in practice. 

The interactions between the applicant (state or local 

public works project), the public, and the federal agencies 

affect the process and outcome of the federal environmental review. The applicant wants to know what to do to 

satisfy federal requirements and how to achieve greater 

predictability and consistency of process, time frame, and 

decisionmaking criteria. Citizens, public interest groups, 

and private companies want to influence the outcome of 

the federal environmental decision concerning the public 

works project. Some of them may fear sweetheart deals 

between the applicant and federal agency, and some may 

not want the project in their backyard. Federal agencies 

want to maintain accountability for implementing federal 

laws and seek to have state and local public works projects 

comply with federal requirements. If these parties pro- ceed independently, they are likely to reach different conclusions and create frustrations for each other. 

Many aspects of the day-to-day operation of federal 

environmental programs have been delegated to the 

states. As their implementation and funding roles have 

increased, many state and local governments have sought 

greater decisionmaking responsibility and discretion. Federal agencies, in turn, are attempting to balance state and 

local concerns with the federal agencies’ need for program 

accountability. Federal agencies now depend on state and 

local agencies to carry out many aspects of federal environmental programs, but they retain key decisionmaking 

and review authority. What are the elements of a balanced 

federal-state-local partnership for environmental programs? Should federal involvement start at the local or 

state public works planning stage, or at the environmental 

impact statement (EIS) or permit stage, to make certain 

that federal environmental goals are implemented, or to 

encourage NEPA-like thinking, or to head off problems as 

early as possible in the permit application/decision process? 

U.S. Advisory Commission on Intergovernmental Relations 63 
PROBLEMS WITH THE INTERGOVERNMENTAL 

ENVIRONMENTAL DECISIONMAKING PROCESS 

Complaints about the federal environmental 

decisionmaking process for state and local public works 

projects are numerous. Section 404 of the Clean Water Act 

has received perhaps the greatest media attention and 

generated the largest number of complaints in recent 

years. However, as with other environmental regulations, 

the problem may be broader than a specific section of the 

law and include the way the law is applied. The institution- al and intergovernmental environmental decisionmaking 

problems are grouped under the following headings for 

purposes of discussion: 

rn Sequential rather than concurrent, integrated 

decisionmaking and the reasons for lack of 

coordination, such as separate and overlap- ping federal environmental laws and implementing agencies, budgetlstaff constraints, 

lack of accommodation processes, and inade- quate public participation and information 

exchange; 

Allocations of powers between the federal, 

state, and local governments; 

Environmental constraints on public works 

projects, such as Section 404 of the Clean 

Water Act; and 

rn 

Insuflcient consideration of the environment in 

the design of public works. 

Sequential Decisionmaking Analysis 

and Information Gathering 

The regulations of the Council on Environmental Quality (CEQ) state: “Integrate the requirements of NEPA with 

other planning and environmental review procedures re- quired by law or by agency practice so that all such proce- dures run concurrently rather than consecutively.”* Despite 

NEPA requirements, federal environmental decisions about 

public works projects are often not made through a coordi- nated process; sequential decisionmaking and review pro- cesses still OcNr on a wide scale? For example, a dam project 

may include the licensing review requirements of the Feder- al Energy Regulatory Commission (FERC), the preparation 

of an EIS, a Section 404 permit from the US. Army Corps of 

Engineers, determination of impacts on endangered species 

by the Fish and Wildlife Service (FWS), consideration of 

historic preservation effects, and state and local permits and 

reviews. The lack of coordination can delay a project and the 

public works benefits, increase costs, waste taxpayer dollars 

and agency resources, and divert attention and resources 

from the most important public and environmental needs. 

Is NEPA integration (the coordination of environmental reviews under the NEPA umbrella) necessary or 

desirable? NEPA, CEO, and many efficiency reasons ar- gue for it. Others, however, contend that reviewsbymultiple agencies do not necessarily represent a duplication of 

effort because each agency has a different responsibility 

under the law and examines an issue from a different 

perspective? Environmental agencies also may be concerned that a public works development agency, such as 

the Federal Highway Administration (FHWA), has as its 

primary mandate building highways, not promoting envi- ronmental quality. This illustrates the “fox watching the 

henhouse” problem. Despite these different agency man- dates, however, many tasks could be integrated: informa- tion gathering, analysis, public review, hearings. This is 

what NEPA charges federal, state, and local agencies to do. 

Coordinating federal, state, and local permit and review requirements and the EIS process faces many obstacles reviewed below: conflicting laws and agency 

agendas; the number of federal, state, and local agencies; 

lack of resources, budget, and staff; lack of enforceable 

penalties for not complying with NEPA integration requirements; differences between the EIS and permitlreview processes; lack of procedures for accommodation; 

inadequate public participation; and concern for EIS paperwork and legal challenges. 

Forces against Interagency Cooperation 

Different agency mandates, goals, and program- matic agendas. 

“Report card” issue: agency staff is held accountable to its own agency’s mandates and programs, 

not to another’s. Usually, interagency cooperation is not recorded or rewarded. 

Agencies may be afraid of losing decisionmaking 

power to the lead agency, of losing control of 

timing, scope, and action. Big agencies fear they 

will be slowed by small agencies, small agencies 

fear they will be overwhelmed by the large ones. 

Coordination and power sharing requires agencies to make compromises and trade-offs that 

may be complicated and complex. 

Separate organizations create different cultures 

and a lack of mutual concern. 

Lack of resources, staff, and budget. 

No agreed-on beliefs that guide national environmental or public works policy and decisionmaking criteria and methods. 

Limited information exchange. 

Separate Federal Statutes and Organizations 

Federal agencies with environmental responsibilities 

affecting state and local public works have different, overlapping, and conflicting goals, mandates, and measures of 

success. To some extent, these differences are a positive 

reflection of our nation’s pluralistic society and the complex nature of environmental and public works issues. But 

when these differences are not managed properly, the 

public welfare and the environment may suffer as a result 

of the delays and conflicts. Narrowly focused policies impede solutions that could address cross-media effects, incentives for pollution prevention, integration of federal 

environmental permits, priorities to focus greatest attention on the most serious environmental and health risks, 

and most efficient management to achieve the best environmental results. Almost every study consulted and ev64 U.S. Advisory Commission on Intergovernmental Relations 
ery person contacted for this study pointed to fragmented 

legislative authority as one of the chief obstacles to an 

integrated, cross-media approach. “Hortatory language to 

blend together to save time and money in the NEPA process does not mean much when agency authority is at 

stake. The incentives to preserve decisionmaking power 

are stronger than the incentives to save paper.”5 

Even within a single agency, lack of coordination and 

different goals and methods are a problem. The Environmental Protection Agency (EPA) was established as the 

primary federal agency responsible for implementing the 

nation’s environmental laws. EPA, over time, created an 

administrative structure with separate program offices 

primarily responsible for implementing specific laws. 

Consequently, the efforts of the different, vertically integrated programs are difficult to coordinate, even though 

they are often attempting to control different aspects of 

the same multimedia or cross-media problem. This fragmented approach makes it more difficult to set priorities, 

allocate resources according to environmental needs, and 

spend budget dollars efficiently and wisely. 

Sometimes, if the problems are very complicated and 

there is no lead agency, no one is in charge and nothing 

gets done. Salmon in the Pacific Northwest is an example: 

Salmon Summit 

In response to the potential effects on the northwest 

region’s economy of listing certain runs of salmon as 

endangered species, Sen. Mark 0. Hatfield (R-OR) 

convened what has become known as the Salmon 

Summit. The Salmon Summit is a regional task force 

that aims to have the region develop a plan to improve the status of the petitioned salmon stocks in 

time for the National Marine Fisheries Service to 

consider the plan in its listing decision due in the 

spring of 1992. 

The Corps of Engineers and the Bureau of Reclamation own and operate the dams in the region. Many 

agencies and interest groups are represented on the 

task force. The Bonneville Power Administration 

markets the power. The Northwest Power Planning 

Council, with representatives from the four northwest states, develops power plans and fish and wild- life programs. Various agencies of the departments 

of Agriculture and the Interior, Indian tribes, and 

state and local governments maintain interests in 

land management in the region. Other agencies 

manage fish and wildlife: National Marine Fisheries 

Service, Fish and Wildlife Service, the Pacific Fisheries Management Council, state agencies, and 

tribes. Special interest groups represent various seg- ments of the public. 

These agencies and interest groups had been unable 

to agree on how to address the challenge of improving salmon stock and how to conduct a shortened EIS 

process of evaluating action alternatives. However, 

under the auspices of the Salmon Summit, they are 

now in the final stages of negotiation over a management plan to protect the fish. 

Number of Federal, State, and local Agencies 

The size and breadth of the federal, state, and local 

environmental management structure are formidable and 

complicate coordinated decisionmaking. For water resources alone, at last count, there were 18 federal agencies 

in seven departments and seven independent agencies, 

and 25 separate water programs with some 70 separate 

appropriations accounts. There are 23 congressional com- mittees and subcommittees and approximately 200 federal 

rules and regulations. There are 123 interstate compacts 

dealing with water, bridges, ports, and environmental protection. There also are more than 100,000 state and local 

water agencies of every size and description.’ 

lack of Budget and Staff Resources 

A widening gap between environmental agency responsibilities and resources one of the principal causes of 

the conflicts and delays in the decisionmaking process. 

Federal, state, and local agencies are being asked to shoul- der greater responsibilities with less money. Environmen- tal legislation reauthorized or proposed by the Congress in 

recent years places significant additional resource requirements on all governments, increasing their costs and 

demands on staff time. For example, EPA projects that 

about 54 new regulations will be needed to implement 

provisions of the 1990 Clean Air Act amendments in the 

first two years after their enactment.* The Corps of Engineers has only 600 staff to evaluate 15,000 permit applications and 40,000 “general permit” decisions per year? New 

federal environmental requirements and pending legislation and regulations include new sludge disposal regulations, more stringent water quality and drinking water 

standards, increased emphasis on groundwater pollution, 

new landfill performance criteria and siting restrictions, 

and increased requirements for wellhead protection. 

EPA’s operating budget is smaller in real terms than it was 

ten years ago, even though the agency has been given new 

responsibilities by the Congress.’O As federal funding programs have been reduced or made more restrictive, and as 

the demands and expectations of environmental programs 

have increased, the staffing and budgetary constraints on 

governments have been tightened. This is a recipe for 

falling behind on public works permitireview case loads. 

Early coordination, interagency consultation, and 

preapplication consultation are the classic ways to avoid 

interagency problems. However, these activities (NEPA 

integration) are labor intensive. Because EPA, the Corps of 

Engineers, and other agencies do not have enough staff to 

address their permit and program responsibilities, they may 

not send staff to early coordination/consultation sessions and 

may not want to enter the decision process until all of their 

mandatory commitments have been met. This perpetuates 

sequential decisionmaking. As the number of public works 

projects increases to meet expected demand for services, 

agency resources may be stretched further unless budgetary, 

staff, and coordination constraints are loosened. 

Differences between EIS 

and PermiVReview Processes and Requirements 

There are fundamental differences between an EIS and 

a permit-federal review decision that work against integraU.S. Advisory Commission on Intergovernmental Relations 65 
tion and cause duplication of effort by the applicant and by 

federal agencies. The EIS is a disclosure, analysis, and informational tool-a procedural step. A Section 404 permit or 

an endangered species jeopardy ruling is a “hammer” or 

decision point that depends on specific details concerning 

decision criteria (e.g., biological impacts on wetlands in the 

case of Section 404). The types of alternatives analysis conducted for an EIS and a 404 permit may also differ. The EIS 

considers reasonable alternatives, any one of which could 

be selected; a 404 permit applicant must show that it does 

not have an alternative with less effect on the environment than its preferred option. Some permit or review 

agency offices shelve the EIS and conduct their own analysis. In general, local, state, and federal permit and review 

processes are likely to have a greater influence than the 

EIS on where and whether public works will be built. The 

EIS is only one document of several and is not necessarily 

important in decisionmaking. 

The person who makes the decision (404 permit, endangered species jeopardy determination) is not the same 

person who approves the EIS. The permit decisionmaker 

does not control the EIS process. This may encourage 

different approaches and assessments. The decisionmaker has to balance the decisionmaking criteria/factors following the rules established by the agency’s statute or 

regulations. The EIS preparer is concerned about legal 

defensibility, agency or personal ideas about impact assessment, determining what is a “reasonable” range of alternatives, and mitigation commitments that maybe included in 

the record of decision that accompanies a final EIS. 

lack of Processes for Accommodation 

Despite interagency and federal-state memoranda of 

agreement (MOA), guidebooks on wetlands and interagency coordination, and the use of dispute-resolution 

techniques in some cases, government agencies encounter 

irreconcilable differences over aspects of state and local 

public works projects. Methods for accommodating these 

diverse views may be inadequate. 

Public Participation 

Public participation is one of the hallmarks of federal 

environmental legislation. Most federal environmental 

decisionmaking processes include notice and opportunity for 

interested parties to participate, the generation of a public 

record at public hearings, and agency decisions that can be 

appealed. The public participation process, however, can be 

adversarial, time consuming, costly, cumbersome, litigious, 

and likely to heighten antagonistic relationships between 

government, industry, and the public. Members of the public 

often get frustrated by the real or perceived lack of give and 

take, access to information, and substantive participation in 

the decision process. Public works projects may attract attention from the media, special interest groups, and “not in my 

backyard” (NZMBY) opponents. The public is sometimes 

uninformed or misinformed about federal environmental 

decisions concerning public works projects.” Government 

agency management and encouragement of public participation in environmental decisions requires staff, budget resources, and communication that allows public 

understanding of the issues. An uninformed public cannot 

contribute. A misinformed public with little trust in government may not be constructive. 

Another potential problem may be insufficient time 

for public review. No federal decision on a proposed action on draft and final EIS may be made for 90 days and 30 

days, respectively, after notice of their availability is published in the Federal Register by EPA. The public interest 

review period for a Section 404 Corps of Engineers permit 

application is 30 to 60 days. 

EIS Procedures and Paperwork 

Agencies are concerned with fulfilling EIS requirements and producing a document that will stand up in 

court if challenged. This preoccupation to avoid litigation 

may have overshadowed NEPAs broader goals of instilling 

an environmental ethic in all federal activities and of integrating and streamlining federal permitting and review processes.12 The EIS can involve a substantial commitment of 

agency resources and time, and it opens the review process 

to public scrutiny. Therefore, federal agencies may try to 

avoid having to undertake an EIS with all these complications. The environmental assessment (EA) is sometimes 

used to justify an operational alternative rather than to 

explore environmental impacts. Some EAs are as long and 

detailed as an EIS in part because the agency wants to be 

ready in case it is forced to undertake an EIS for a proposed project. In addition, an EIS is sometimes prepared 

as justification of project decisions after the fact. 

Separation of Powers and Shift 

to State Responsibility 

for Environmental Programs 

without State Decisionmaking Authority 

The federal environmental regulatory and decisionmaking processes now involve federal, state, tribal, and local 

governments. The Congress sets goals, EPA and executive 

branch agencies promulgate federal regulations, and states 

that choose to assume primacy adopt their own implementation programs. In many cases, local governments and Indian 

tribes implement state programs. The traditional distribution 

of powers between federal, state, and local governments 

presents inherent roadblocks to environmental decisionmaking because of the following factors: 

Needs and objectives of federal, state, and 

local governments differ. 

State and local governments have assumed 

much of the burden of implementing national programs but federal agencies retah 

decisionmaking authority. 

Federal environmental programs may conflict with what had been state prerogatives. 

Federal funding of state and local environmental programs has been reduced. 

Separate federal and state permits must be 

obtained in some states. 

66 U.S. Advisory Commission on Intergovernmental Relations 
Historical Chan es 

The responsibility for implementing and funding environmental programs has swung back and forth between federal and state governments. Environmental quality before 1970 was almost entirely in the 

hands of state and local governments. The federal 

environmental statutes of the 1970s imposed national goals and solutions on state and local governments. To encourage state and local compliance, the 

federal government sent grants to states and localities to cover a portion of their costs for construction 

of sewage treatment plants and other state programs. 

Now, the pendulum is swinging again, returning responsibility to state and local governments to implement and fund federal programs. 

in Federal-State Environmenta B Responsibilities 

Needs and Objectives of Federal, State, 

and Local Governments Differ 

Problems naturally arise when the federal, state, and 

local governments have different interpretations of how 

to implement the goals set by the Congress. This occurs 

because state, local, and federal agencies have different 

needs and objectives. The state and local governments 

want flexibility to tailor programs and permits to local 

conditions, to influence federal decisions that affect them, 

and to create a climate of mutual respect. The federal 

agencies do not want to hand over total control because 

the President, the Congress, and the public may hold them 

responsible even if the programs are implemented by oth- ers. To satisfy their need for accountability, federal agencies issue regulations, standards, and detailed guidance 

documents; supply financial and technical assistance to 

states; monitor state performance; and, in some cases, 

review state permit decisions. According to the U.S. General Accounting Office (GAO), some EPA staff members 

do not want to give more authority to state agencies because they fear inconsistent performance in meeting federal environmental mandates. Increased state flexibility 

and decreased EPA control of delegated programs would 

make it more difficult to ensure that the states take the 

necessary actions to achieve national g0a1s.l~ 

I State and Local Governments Implement 

National Programs but Federal Agencies 

Retain Decisionmaking Power 

The problems can be compounded when state and 

local governments assume much of the burden of implementing and funding national programs while the federal 

agencies retain final say in many cases. Through its 

decisionmaking or environmental veto powers, the federal government oversees programs delegated to states and 

retains final authority on many permits, licenses, and 

funding reviews. Some observers argue that the federal 

government’s role of establishing national goals has given 

way to dictating minute program requirements that state 

and local governments are mandated to implement, often 

at their own expense.14 

Building an effective federal-state relationship for 

environmental decisionmaking has been the subject of a 

number of studies during the past decade.15 These studies 

point to difficulties in phasing out day-to-day federal control of programs delegated to the states, federal retention 

of a “senior partner” role in the federal-state relationship, 

standards and regulations that do not allow enough state 

flexibility, and excessive oversight (such as EPA review of 

major NPDES permits). 

Regulating Stormwater 

“The stormwater program proposal goes far beyond 

simply setting the parameters of state authority in 

determining minimum standards for regulation. This 

heavy-handed approach not only is impractical in its 

disregard for regional variances in climatology and 

topography, it practically mandates an antagonistic 

state-local relationship by upsetting the established 

balance in local land use decisionmaking and by precluding state and local governments from pursuing 

efforts that make better sense. . . . [I]t would be 

enough for the Agency (EPA) to identify the various 

program areas to be addressed in the stormwater 

rule, the goals to be achieved by those programs, and 

to focus its efforts on continuing the development of 

guidelines for local control strategies and technologies. Beyond that, the Agency should relegate its 

oversight role to determining that state proposed 

programs are adequate, assuring that states continue 

to make reasonable efforts toward the goal of reducing stormwater pollution. . . resolving interstate and 

interjurisdictional disputes. . . , and establishing a national clearing house for information.” 

Source: City of Colorado Springs,Testimony at the Public Hearing 

on Restoring Balance in the Federal System, Council of 

State Governments and ACIR, June 9, 1989, p. 13. 

Federal Requirements 

and Traditional State Prerogatives 

Some federal environmental programs conflict with 

what had been state prerogatives. In particular, FERC 

authority under the Public Utilities Regulatov Act of 1978 

for hydroelectric power licensing and Corps of Engineers 

and EPA authority under Section 404 of the Clean Water 

Act for wetlands and instream flow can supersede state 

control over water allocation. 

lack of Funds for Federal Environmental Programs 

Delegated to States 

As the role of the states expands, federal funding for 

many environmental programs is either being reduced or 

is not growing as quickly as total program costs; therefore, 

states are funding a growing percentage of the costs.16 

Some state and local governments complain that they are 

overburdened by their new responsibilities and are, or will 

be, unable to raise the necessary revenues to continue to 

manage and enforce existing programs and develop new 

ones (especially ~tormwater).’~ 

U.S. Advisory Commission on Intergovernmental Relations 67 
State NEPAs and Requirements 

About a dozen states have their own NEPA laws and 

requirements (“little NEPAs”). Many states patterned the 

state law on the federal one and strive to integrate the 

federal and state information gathering and process requirements.’* However, some states maintain separate 

processes and documentation requirements, and substantive and procedural requirements of federal and state 

NEPAs are not the same in some cases.19 In states that do 

not operate the federal NPDES wastewater discharge 

program, facility development may have to obtain both 

state and federal discharge permits (e.g., Louisiana and 

Texas).*O In many states, applicants must obtain separate 

federal, state, and local wetlands permits. 

Environmental Constraints: 

Section 404 of the Clean Water Acf 

All of the problems concerning federal environmental decisionmaking in state and local public works projects 

converge in the Section 404 wetlands permitting program. 

Section 404 of the Clean Water Act presents particular 

difficulties for state and local public works projects: 

Section 404 is an environmental constraint 

placed on public works projects, many of 

which traverse, fill, or affect wetlands. 

Large numbers of public works and other 

cases are submitted to the Corps of Engineers and to EPA for review. Staff and budget resources devoted to 404 cases are 

inadequate (see box). Time delays and lack of 

coordination among agencies are the direct 

result of this imbalance between case load 

and resources.21 

Satisfying other federal environmental requirements, such as those for endangered 

species and historic preservation, are part of 

the Section 404 permit review and therefore 

involve many agencies, compounding the 

time delays, interagency conflict, and lack of 

coordination. 

Wetlands definitions and decision criteria for 

404 permits have been altered a number of 

times during the past decade, changing the 

“rules of the game” for public works applicants. 

The Wetlands Forum and others have recommended that the 404 program, and wetlands regulatory programs in general, are 

best implemented by state and local governments. The 404 program has been delegated 

to only one state, Michigan, and only a few 

states have applied for program delegation, 

due to the costs, complexities, and limitations of the program. 

rn High expectations are placed on the 404 permit and other regulatory programs to protect 

wetlands; yet, according to one estimate, 

these programs leave about 80 percent of 

wetland losses uncovered by regulatory programs.22 Also, although the trend in federal 

programs is to encourage wetlands preservation, several federal programs still provide 

incentives for conversion. Public works projects suffer from a lack of coordinated, consistent, federal wetlands policy. 

Some 404 permits must receive approval 

from the Corps of Engineers and EPA, causing additional uncertainties, delays, and costs 

for public works applicants. 

rn 

Several problems presented by the 404 program and their 

implications for public works are outlined in the following 

subsections. Ongoing and potential solutions are addressed in later sections of the chapter. 

Corps of Engineers Annual 

404 Program Statistics 

rn 15,000 permit applications; 11,OOO applications 

issued or denied 

40,000 “general” permit decisions (for classes of 

permits with similar characteristics and minimal 

environmental impacts) 

600 staff assigned to evaluate permit applications 

regulatory expenditures ranged from $50 million 

to $70 million during past seven years; FY 1991 

budget request of $75 million 

rn 25,000 jurisdictional determinations 

rn 

rn 

Delegation of the 404 Program to the States 

The Wetlands Forum, a national forum of public, 

private, and nonprofit groups hosted by the Conservation 

Foundation in 1989, recommended that the 404 and other 

wetlands programs be implemented by state and local 

governments (with adequate federal oversight) for several 

reasons: state and local governments are closer to the 

issues/permit cases, can use local planning tools like zoning, and could increase the consistency of 404 permit decisions by tying the 404 program to comprehensive state 

wetlands programs. In addition, state adoption of the 404 

program wwld avoid the permit duplication (and concomitant delays and costs) faced by public works applicants. 

However, unlike most national environmental programs, 

only one state, Michigan, has received Corps of Engineers 

permission to implement 404 permitting at the state level 

(a few other states administer selected portions of the 

program). The reasons include:23 

rn Federal grants are not provided to assist 

states to operate the program. 

Only permitting for nonnavigable wetlands 

can be delegated to the states. 

rn 

68 U.S. Advisory Commission on Intergovernmental Relations 
rn States cannot assume jurisdiction of the program gradually; it’s all or nothing. 

States fear excessive federal oversight. 

There is some indication that when states implement 

federal environmental programs, there are fewer problems 

with NEPA integration and coordination requirements. 

NPDES water pollution, historic preservation, and Coustd 

Zone Management Act provisions of federal programs, for 

example, do not appear to cause as many decisionmaking 

conflicts between federal and state-local governments and 

between federal agencies as do Section 404 cases. 

lack of Coordinated 

and Comprehensive Wetlands Programs 

Although Section 404 is worded as a pollution control 

dredge-and-fill discharge program, it has become one of 

the key elements in a national effort to maintain, enhance, 

and restore wetlands. Greater consistency and predictability of public works permit decisions (with accompanying reductions in delays and costs) might occur if Section 

404 was part of a comprehensive federal and state wetlands program. Federal wetlands policies remain inconsistent and direct activities in opposing directions. For 

example, wetlands conversions are encouraged by agricultural subsidies and flood-control and some drainage projects 

of the Cop of Engineers and U.S. Department of Agriculture (USDA). At the same time, other programs administered by EPA, the Corps of Engineers, FWS, and USDA 

emurage and subsidize wetlands preservation and restrict 

their uses. The Project 88 report summarized some of the 

issues in federal wetlands policy that need to be resolved: 

Federal wetland protection and acquisition programs are not up to the challenge. Budgets for 

wetland acquisition are limited and regulatory 

defects, plentiful. Restricted jurisdiction and limited statutory authority leave about 80% of wetland losses uncovered by regulatory programs; for 

those wetlands which are covered, regulatory authorities often underassess developmental impacts, especially cumulative ones. Penalties are too 

low to discourage violations of law, and despite 

much talk about new forms of mitigation, the fact 

remains that the techniques for creating and restoring wetlands are experimental at best.24 

EPA’s Section 404 Veto Powers 

Differences between EPA and the Corps of Engineers 

authority over proposed Section 404 permits can present 

additional difficulties for state and local public works projects. The law gives EPA authority to reject Corps permits for 

projects affecting wetlands. EPA has used the power sparingly, vetoing only eleven projects in the past 18 years from the 

more than 10,ooO permits per year issued by the Corp~.~ 

EPA Administrator William Reilly recently said that use of 

EPA’s 404 veto power is “a sign the system is not working.”26 

EPA’s 1990 veto of the Two Forks Dam in Colorado, 

the largest proposed nonfederal water project in the West, 

demonstrated the magnitude of the difficulties posed by 

the federal environmental review The City of 

Denver planned to dam the South Platte River to supply 

water for its burgeoning suburbs. EPA’s veto decision in 

November 1990 cited unacceptable adverse effects of the 

dam, including significant loss and damage to the area’s 

wetlands, fisheries, and recreational opportunities, and 

inadequate mitigation of potential wetlands losses.28 

EPA’s veto came after a ten-year planning process involving dozens of Colorado state and local agencies and citizen 

groups, $40 million of local funds spent on studies, including a major EIS that reviewed all of Denver’s water supply 

options, a dispute resolution process, $90 million promised in mitigation measures, and approval of the dam by 

state and local governments, the Corps of Engineers, and 

the regional office of EPA. 

A project applicant can take EPA to court to have a 

Section 404 veto overruled. James City County, Virginia, 

did just that, and a federal judge overruled EPA’s veto in 

December 1990 by agreeing with the county that a proposed 

reservoir was the only reasonable alternative for the county’s 

pressing water needs and that the EPA veto showed little 

understanding of the county’s water problems.29 

Design of Environmentally Sensitive Projects 

Designing public works to reduce adverse environmental effects would lessen potential conflicts with environmental regulations and, in some cases, avoid the need 

to submit a project to federal environmental decisionmaking. This is another way of saying that NEPA and Section 

404 encourage or require consideration of the environment and of alternatives with the least environmental 

impacts at every stage of a project. Federal environmental 

laws and regulations have been enacted and promulgated 

for a reason: Americans want to maintain and improve 

environmental quality. Many obstacles stand in the way of 

sustainable development with public works projects that 

meet the needs of both economic development and environmental quality. 

Many people contend that current lifestyles-how we 

live, consume, farm, transport people, produce products, 

and plan for the future-too often threaten the health of 

the environment and work against the goal of sustainable 

de~elopment.~~ Usually, there are many alternative ways 

of meeting a public works need. For example, a high-speed 

rail link may be more efficient and cost effective and cause 

less environmental damage than building new airports in 

heavily traveled corridors, such as the Northeast and California. America’s road, auto, and petroleum approach to 

transportation-as opposed to high-speed rail, mass transit, alternative fuels, and cluster development-is one 

example of how these alternatives can have profound implications for public works and environmental quality. 

Changing approaches to public works is difficult, however, 

in part because many groups have a vested interest in the 

status quo and consumers change their habits slowly. Using the transportation example, although mass transit revenues (including local, state, and federal subsidies) have 

increased from about $8.5 billion in 1980 to $14 billion in 

1990, ridership has remained about the same, and transit’s 

U.S. Advisory Commission on Intergovernmental Relations 69 
share of all trips taken by individuals continues to decline.31 

The reasons are many and include suburbanization, tax advantages of homeownership, people’s preference for automobile travel, and the small number of mass transit facilities 

relative to roads and highways. The net capital asset value 

of the nation’s highways is 14 times larger than that of 

mass transit facilities ($470 billion versus $34 billion in 

1984 The fragmented nature of federal, state, 

and local responsibilities makes it difficult for agencies to 

think broadly at the policy or program level rather than 

the project level (e.g., airport, road, and rail project decisions rather than a transportation program). 

APPROACHES TO INTEGRATION, COORDINATION, 

AND ACCOMMODATION 

Despite seemingly intractable problems, many local, 

state, and federal agencies get the job done. The environmental ethic of NEPA is taken to heart by many agencies, 

which also strive to cooperate and to integrate information gathering, procedures, and environmental decision 

processes affecting public works. Some of the approaches 

include: coordination, including early review of projects, 

NEPA integration, improvements to the EIS, interagency 

coordination, general permits, regional cooperation, and 

information management; state and local innovation; 

state implementation of federal law; setting priorities; 

advance designation and ecosystem management; environmental dispute resolution; alternative sources of funding and public-private partnerships; and mitigation. 

Coordination 

Coordination takes many forms: early review of project 

design and applications, state management of the federal 

environmental review process, interstate and regional approaches, federal agency coordination, NEPA integration, 

and information exchange. 

Early Review of Project Designs or Applications 

Meet and negotiate early and often. This adage is 

invariably at or near the top of everyone’s list when discussing the federal environmental decisionmaking process. Scoping sessions, preapplication conferences, and 

early identification of potential problems are key aspects 

of developing a project. All agencies involved in the decision process must participate for the early coordination 

approach to work. Early candor as to an agency’s likely 

reception or ruling on a project may also help avoid potential problems. 

EPA and other federal agencies could not complete 

their work without extensive cooperation with state and 

local governments. Whether led by a state, local, or federal agency, there are many examples of early coordination. 

Preapplication consultation between an applicant and the 

Corps of Engineers for a Section 404 permit is a fairly 

routine procedure. Many states have instituted permit 

streamlining, one-stop permit shopping coordinated by a 

lead state agency, to assist local government or private 

applicants (e.g., South Carolina for aquaculture projArkansas Highway Planning 

and NEPA Integration 

The Arkansas State Highway and Transportation Department’s planning staff is multidisciplinary, prepares environmental impact statements and environmental assessments in-house, and works closely with 

the department’s engineering staff. Environmental 

considerations are included from the beginning of 

the design stage. The department maintains an excellent rapport with other state and federal agencies 

(including FHWA, the Corps of Engineers, EPA, and 

FWS regional offices). Completing the federal review process is also assisted by the department’s sophisticated and trained staff, a top-down management emphasis on environment, and the rural nature 

of the state that allows moving the highway to another site to avoid 90 percent of potential conflicts with 

federal environmental regulations. 

ect~).~~ Many state and local governments take the initiative to instigate and manage the federal environmental 

review process for their public works projects. The Arkansas State Highway and Transportation Department addresses the federal review process by practicing NEPA 

integrati~n.~~ Pennsylvania’s Department of Transportation has set up a process designed to reach consensus 

between different agencies and units of government for 

major highway projects.35 

NEPA Integration: 

Concurrent Environmental Reviews 

Several federal and state agencies are making a concerted effort to embrace NEPA integration, including 

coordination of the process (concurrent rather than sequential) and consideration of environmental factors at 

the planning, design, and implementation The 

Federal Highway Administration and the Federal Aviation Administration (FAA) use NEPAas the umbrella for 

all environmental requirements for federal highway and 

airport grants. The Department of Transportation Order 

5610.1C (September 18, 1979) establishes procedures for 

consideration of environmental impacts (the order fulfills 

DOT’S responsibilities for coordinating environmental reviews as required by NEPA regulations). The procedures 

include coordination of information gathering, public review, interagency review, and department decisionmaking 

for the requirements of federal environmental legislation 

(including NEPA, EIS, Section 4(f) of the Department of 

Tiamportation Act of 1966 as amended, airport and highway legislation, and other major federal environmental 

legislation such as the Clean Water Act, Clean Air Act, 

Endangered Species Act, Coastal Zone Management Act, 

and the National Historic Preservation Act). Despite DOT’S 

efforts to coordinate federal environmental decisionmaking for public works projects, the cooperation of other 

federal agencies is not always forthcoming. 

DOT agencies encourage their state, local, and re- gional counterparts to incorporate the objectives of NEPA 

integration through planning grants, training and techni70 U.S. Advisory Commission on Intergovernmental Relations 
All phases of a major project are coordinated at joint 

monthly meetings with representatives of all concerned environmental agencies, including the Corps 

of Engineers, EPA, and state game, fish, environmental, and historic preservation agencies or commissions. At these meetings, agency representatives 

are asked for their concurrence with project need 

and purpose, the analyses of wetland and other envi- ronmental impacts, and mitigation measures. The 

meetings do not eliminate an agency’s permitting authority. Rather, the meetings allow regular scrutiny 

of projects, eliminate surprises, and diminish the 

chance of any adversarial interactions. 

Pennsylvania’s consensus process was also applied to 

a $500 million airport terminal project in Allegheny 

County. A memorandum of understanding was entered into by the county, federal and state environmental agencies, and FAA to assure the participating 

agencies that the impacts of airport development 

would be recognized and mitigation would occur in 

an environmentally satisfactory and economically 

realistic manner. The memorandum set forth procedures for mitigation of wetland and habitat impacts, 

called for water quality and stormwater management 

plans, and established coordination procedures be- 

~ tween the county and environmental agencies. 

cal assistance, and frequent contacts between federal and 

state agencies. Airport master plans that receive federal 

FAA grant assistance, for example, must complete an 

environmental assessment. Arkansas’ state highway plan- ning procedures and Pennsylvania’s consensus process for 

transportation projects are examples of NEPA integration 

and federal-state cooperation. 

Improvements to the EIS Process 

The EIS process acquired some unfortunate “bar- nacles” in the mid-1970~,~’ but there have been improve- ments during the past 15 years. The most frequent 

complaints were the about length of the EIS and the 

delays that the NEPA process was perceived to cause in 

decisionmaking. Revised NEPA regulations promulgated 

by CEQ in 1978 sought to reduce unnecessary paperwork38 

and improve coordination of all federal environmental 

reviews, including EIS preparation. ‘To some unmeasur- able but significant degree, the regulations have proven 

successful. Many (though by no means all) federal agen- cies have improved their compliance with procedural re- quirements of the statute. Litigation is decrea~ing.”~~ In 

addition, CEQ has received few written complaints about 

the process.4o 

Formal, Scheduled Interagency Coordination 

Federal agencies are making efforts to coordinate 

environmental decisionmaking for state and local public 

Federal-Aid Highway Projects 

and the 404 Permit Process 

The time, cost, and complexities faced by highway 

project applicants in the 404 permit process 

prompted FHWA to form regional work groups in 

September 1985 to identify methods to improve interagency coordination for highway 404 permits. Regional administrators of the Corps of Engineers, 

EPA, FWS, NMFS, and FHWA focused on innovative cost-effective approaches to help field offices do 

their jobs faster and better. The 1988 summary of 

their recommendations, known as the “Red Book” 

(Applying the Section 404 Permit Process to Federal-Aid 

Highway Projects), identifies opportunities for coordination at every step of the highway development process. 

works projects, including regular meetings, MOAs, and 

guidebooks outlining procedures and program or permit definitions and requirements. Federal agencies regularly comment on each others’ projects and plans to 

ensure that all federal actions include appropriate consideration of the environment and public interest. All 

major state and local public works projects are likely to 

receive comments from several federal agencies on 404 

permits, the EIS, highway and airport funding, and dam 

licensing. 

Interagency agreements address generic issues, coordination steps, thresholds for coordination, joint public 

involvement activities, scoping, programmatic approaches 

and permit considerations, agency roles and functions, 

and policies and operating procedures. For example, the 

Arkansas State Highway and Transportation Department, 

FHWA Arkansas division office, and the Corps of Engineers Memphis, Little Rock, and Vicksburg districts have 

an MOA for Section 404 permitting that addresses early 

coordination, scoping, processing, and joint hearings.41 

The regional offices of EPA, the Corps of Engineers, 

and FWS meet regularly in some regions to review upcoming and ongoing projects of significance and to cooperate, 

compromise, and “wheel and deal” on aspects of proposed 

projects (e.g., Region 3). 

Also, within the federal government, there is avariety of coordination activities concerning wetlands: ex- amples are the Domestic Policy Council’s Interagency 

Xisk Force on Wetlands in the White House, the MOA 

between EPA and Corps of Engineers on mitigation, 

and the joint “Federal Manual for Identifying and Delineating Jurisdictional Wetlands” signed by EPA, the 

Corps, FWS, and the Soil Conservation Service (SCS)in 

January 1989. The manual reconciled interagency differences in technically identifying wetlands and should 

lead to more uniform, consistent, and rapid wetlands 

 delineation^.^^ 

The regional approach of federal agencies is an attempt to work closely with state and local agencies. Half of 

EPA’s staff, for example, is located in regional offices. The 

Corps of Engineers permit decisionmaking process also is 

decentralized. 

U.S. Advisory Commission on Intergovernmental Relations 71 
General Permits 

The Corps of Engineers issues general or nationwide 

permits for classes of Section 404 activities having similar 

characteristics and minimal environmental impacts. These 

permits maybe used by all states (e.g., placement of aids to 

navigation, road and utility crossings, and nontidal “headwaters and isolated waters” activities involving wetlands 

of less than 10 acres in size).43 General permits eliminate 

some of the time and effort required for case-by-case 

review of similar projects.44 EPA is considering a general 

permit approach for classes of NPDES stormwater permits. 

Interstate and Regional Programs 

Environmental concerns cross local and state boundaries. River basin and aquifer boundaries, for example, 

often traverse or underlie portions of several states. In a 

number of cases, state, local, and federal agencies have 

addressed the intersection of public works needs and environmental quality within the context of regional and interstate cooperation. Benefits of planning and coordination 

through regional programs are more efficient provision of 

public works, reducing the need for new structural projects, and procedures for addressing problems of drought 

and air pollution. 

Regional and interstate cooperation to manage water 

resources has a long tradition in some American river 

basins. Implementing the agreements required for regional compacts and operating procedures and sharing of water 

supplies may require substantial and lengthy negotiations. 

However, the environmental benefits and cost savings can 

also be substantial. Improved coordination and management of watershed water supply systems has avoided the 

need for new reservoir projects in several cases. It has 

been estimated that coordinated water authority activities 

in the Potomac basin eliminated the need for new reservoirs (with significant environmental impacts), saving $200 

million to $1 billion.4s 

Numerous additional opportunities exist around the 

country for interstate, intrabasin, and interbasin coordination of water deliveries. In the East, consolidation of or 

coordination among fragmented urban water supply authorities can achieve economies of scale in water delivery, 

decrease the risk of shortage in one subsystem within a 

region, and provide drought management procedures. 

Other examples of interstate and regional cooperation 

that affect public works, especially sewage treatment plants, 

water supply, and electric power, include the Great Lakes 

program, the Chesapeake Bay Initiative, the Northwest 

Power Planning Council, the International Coalition in the 

Red River Basin, and EPA’s estuary management programs. 

Several interstate water authorities have significant 

allocation authority. The Delaware River Basin Commission allocates water to users in the Delaware basin and 

transfers of water to New York City under a 1954 Supreme 

Court ruling46 and 1961 federal legislation establishing the 

commission and granting it regulatory, licensing, and project construction powers. Water authorities in the Washington, DC, metropolitan area operate Potomac River 

water supply projects as integrated systems under a 1982 

agreement. Both the Delaware and Potomac regional 

compacts include provisions for drought allocation^.^' 

Overall, however, the success of interstate agreements or 

compacts is mixed. J. B. Ruhl argues that the states and 

the federal government have not used compacts to their 

full potential.‘“‘The Clean WaterAct barely mentions compacts, and the federal process for approving compacts is 

burdensome. States are equally to blame for not charging 

the interstate commissions with adequate regulatory and 

enforcement powers. And the compact process has proven even less effective in addressing air pollution and land 

development issues. 

Information Management 

Environmental statistics and data bases, the results of 

scientific studies, and wetlands mapping contribute to environmental decisionmaking. Government agencies need access to this information to make informed decisions and to 

avoid duplication of research effort. The National Governors’ Association, for example, has an EPA grant to work on 

improving cooperation with states in environmental programs delegated by the Resource Consmalion and Recovery 

Act (RCRA). NGAs work will address the organizational 

and technical difficulties that limit the collection of information needed for environmental decisionmaking and examine 

ways to promote additional data sharing.49 

State and Local Government Innovation 

By cutting federal assistance, the nation challenged 

the states to do more with fewer federal resources. “And 

they have!”so State and local governments have developed 

innovative programs, procedures, institutions, and financing methods to protect their environmental resources and 

to implement public works projects. The federal, state, 

and local roles continue to be defined and redefined. 

Federal air and water quality programs are designed with 

built-in expanding roles for state governments, and a 

growing portion of both program and funding responsibility is being delegated to states. In areas of emerging importance, such as toxic air pollution and groundwater 

contamination, states are taking the initiative to plan and 

implement programs concurrently with federal efforts. 

Some state programs are more comprehensive than their 

federal counterparts, especially in larger states with major 

environmental issues, resources, and staff. 

At the policy level (which affects project decision and 

review processes) state initiatives include New Jersey’s comprehensive, cross-media environmental permitting program; 

Arizona’s groundwater management districts; Bellevue, 

Washington’s, stormwater management programs implemented before the 1987 amendments to the Clean Water Act; 

and Florida’s efforts to halt the drying up of the Everglades. 

State Implementation of Federal Law 

State governments implement many facets of federal 

environmental programs, including federal permits. Even 

federal laws are “federalist.” In the Clean Water Act and 

the Clean Air Act, the federal government sets ambient 

environmental and sources discharge standards. Yet, the 

72 U.S. Advisory Commission on Intergovernmental Relations 
states implement (write the permits), monitor, and enforce many of the programs. Some ambient and source standards, such as water quality, are set by the state. RCRA gives 

states authority to administer all or part of EPA’s hazardous 

waste program. State primacy for federal environmental 

programs with full delegation of decisionmaking authority 

(within federal guidelines) presents a number of advantages 

for state and local public works projects:51 

State and local governments are closer to the 

public works projects and are in a better position than federal agencies to understand local needs and characteristics and to tailor 

federal programs to local situations. 

State primacy avoids the duplication of federal and state permits. 

States can combine permitting authority for 

federal programs with state comprehensive 

plans (e.g., watersheds, wetlands, or air pollution), zoning, easement, and critical areas 

programs for more effective, planned, and 

consistent environmental review of public 

works projects. 

The potential of state primacy or delegation of federal environmental programs has been limited by a variety of factors, 

including excessive federal oversight of state programs (need 

for accountability) and inconsistent state programs. 

The Clean Air Act is mentioned as an illustration of 

how some local governments believe federalism should 

The federal government establishes uniform ambient air quality health standards, the states coordinate 

the design of state implementation plans tailored to local 

conditions, and locally appointed councils coordinate local 

efforts to meet and exceed the national health standards. 

State and local governments prepare and implement state 

plans for control of existing point sources to meet national 

air quality standards. This decentralized approach was in 

part a political decision: state and local governments are 

closer to the people and companies that must bear the 

burden of changing existing emissions. The Clean Air Act 

allows local governments to retain the flexibility to implement politically palatable solutions. 

The federal NPDES wastewater discharge program is 

now administered by state agencies in more than half of 

the states. By contrast, only Michigan has been granted 

approval to implement the 404 program (for inland waters); a few others implement parts of the program (e.g., 

Maryland for inland wetlands of small sizes).53 Among the 

reasons why more states have not attempted to take over 

the federal 404 program are that state primacy for implementing a federal program requires state funds and staff 

time and still includes federal oversight (i,e., supervision, 

review, approval, and audit), difficulties in obtaining federal approval for delegation, and an absence of federal 

financial and technical assistance to states for wetland 

permitting (unlike many federal programs that delegate 

responsibility for federal programs to states).54 However, 

there are many examples of state and local initiative and 

federal, state, and local government cooperation in wetland protection and permitting.55 

EPAs oversight of delegated programs remains extensive. EPAs control tools include standards and regulations, 

guidance documents, financial and technical assistance 

grants with grant requirements, and reporting and evaluation requirements. Several EPA and GAO studies have indicated that with EPA guidance and oversight, federal-state 

relations in implementing delegated programs and the con- sistency of state performance in delegated programs can be 

The recommendations of these studies include 

providing states with a clear understanding of expectations, a 

phasing out of day-today federal involvement, increased 

federal technical and other support for state programs after 

delegation, and increased capacity to monitor state activities 

without excessive paperwork. GAO has also proposed that 

EPA recertify delegated state programs on a three-year cycle 

as a way to implement these recommendation^.^' 

State primacyladoption of federal environmental programs and acceptance of the concomitant federal grants is 

optional. Failure to apply for primacy and grants results in 

less funding and fewer conditions to be met; failure to seek 

primacy results in direct federal implementation of national goals and less state administrative costs for programs forgone.58 

Setting Priorities 

At the heart of many differences over how to implement federal environmental programs are different perspectives on priorities and the absence of priorities (or a 

lack of vision). Effective long-term planning and risk management can spur an agency to marshal resources toward 

priority objectives. By so doing, EPA and other agencies 

could devote greater resources more effectively and efficiently to review applications for permits and funds for 

state and local public works projects. Planning gives more 

bang for the buck. Planning allows public works agencies 

to anticipate and avoid environmental problems through 

alternative designs and to match up facilities with public 

works demands.59 

Public perception of risks translates into political 

pressures for action and into agency programs and spending. One of EPA’s risk management challenges is that 

public perceptions do not necessarily correspond with the 

risks identified by scientists and agency staff. There is a 

need for public education about environmental risks, for 

transfer of scientific information into language understood by the public, and for a public debate on “green” 

priorities. Radon and the destruction of wildlife habitat 

may be far greater environmental risks than hazardous 

waste dumps, which voters care far more about.60 At the 

same time, those who would identify risks should not 

exaggerate their gravity. 

During the past 20years, EPAand other federal agencies have provided environmental planning grants as an 

incentive to include federal environmental priorities in 

state and local programs and projects. Clean Water Act 

Section 208 planning grants, FHWA and FAA planning or 

airport master plan grants, and Coastal Zone Management 

Act grants offer federal funds (the “carrot”) in return for 

adopting federal environmental objectives (the “stick”). 

FAA-funded airport master planning studies must include 

U.S. Advisory Commission on Intergovernmental Relations 73 
E PA Science Advisory Board 

Recommendations 

EPAs Science Advisory Board has called for a risk management effort at EPA to identlfy priority risks to 

health and environment and to build a consensus and 

direct resources to those priorities. The board’s report, 

which has become EPAs blueprint for the future, 

states: 

For the past 20 years, EPA has been basically a 

“reactiveff agency. As environmental problems were identified, the public conveyed its 

concern to Congress, and Congress passed 

laws to try to solve the problems. . . . Because 

of EPAs tendency to react to environmental 

problems defined in specific environmental 

laws, the Agency has made little effort to 

compare the relative seriousness of different 

problems. Moreover, the Agency has made 

very little effort to anticipate environmental 

problems or to take preemptive actions that 

reduce the likelihood of an environmental 

problem occurring. 

Source: EPA, Science Advisory Board, Reducing Risk: Setting Pnotitiesandstrategies forEnvironrnentaI Protection (Washing- ton, DC, September 1990), p. 3. 

an environmental component (which usually points to 

“showstoppers” such as noise and wetlands). The approval 

of an airport layout plan (which includes an EA requirement) is the first NEPA point, or federal environmental 

review, for FAA.61 

The National Governors’ Association in 1990 surveyed the ways that states set environmental priorities, 

identify and rank the risks posed by various environmental 

contaminants, and factor such information into state budget and management decisions6* NGA found that about 

half of the states have some sort of environmental strategic plan or priorities document. Washington recently completed a report, “Washington Environment 2010,” which 

includes an agenda designed to fulfill the citizens’ vision of 

the environment in two decades.63 Florida, Connecticut, 

Iowa, and Kentucky also have completed strategic environmental plans. 

Putting together a state strategic plan is costly. EPA 

gave grants to five states to conduct pilot projects in strategic environmental planning. Washington and Colorado 

have detailed reports and action strategies. Vermont, 

Pennsylvania, and Louisiana were the other states.” 

Advance Designation and Ecosystem Management 

One approach to avoiding potential conflicts over 

land use is to identify environmentally sensitive areas that 

are not likely to obtain federal environmental approvals 

for development purposes. Under Section 230.80 of EPA’s 

404(b)(l) guidelines, EPA has been using its “advanced 

identification” authority to notify the public of areas unsuitable for fill or dredge discharges and, thereby, to steer 

development activity away from wetland areas. EPA is 

planning to expand its advance designation activitie~?~ 

and states can seek this assistance in protecting wetlands 

they regard as important. EPA also has advanced identification authority under Section 404(c) that is a binding 

designation prohibiting the use of a site for disposal.66This 

authority has not been used. The work of EPA and FWS in 

wetlands mapping is contributing to the effectiveness of 

advance designation of sensitive environmental areas. 

Also, the “special area management plan” concept added 

to the Coastal Zone Management Act in 1980 could be used 

for advance designation of coastal wetlands6’ Advance 

designation is akin to state critical areas programs or local 

zoning for growth management. 

Ecosystem management includes a collection of operational strategies, land use decisions, and land purchases that take EPA’s advance designation a step further 

by managing the areas and/or purchasing the type of land 

that would be identified.be Ecosystem management then 

becomes a design constraint for a proposed public works 

project. Ecosystem management aims to sustain the natural functions, biological diversity, and other values of the 

ecosystem in question as a unit, even if parts of the ecosystem are separated by political or land-ownership boundaries. The methods can be applied to public land, such as 

wildlife refuges, or to private land. UNESCO, The Nature 

Conservancy, and others have adopted a strategy of 

long-term conservation and preservation of ecological 

complexes entitled regional landscapes, “megasites,” or 

“greater ecosystems.” Acquisition criteria include shape, 

interconnectedness, proximity to other resources, land- scape diversity, and size. The UNESCO-designated biosphere reserves are to have core areas and buffer zones 

with limited uses. The Nature Conservancy purchases strategically located properties, especially buffers to wildlife reserves, and resells some land with conservation restrictions. 

Ecosystem management approaches are being applied to or 

have been advocated for national wildlife refuges, national 

parks and wilderness areas, the Great Lakes, EPAs National 

Estuary Program, and the Florida Everglades.@ 

Negotiation, Mediation, 

and Environmental Dispute Resolution 

Interest in finding effective means of resolving disputes regarding public works and natural resources has 

prompted consideration of a variety of approaches in addiState of Washington 

Resource Damage Valuation for Oil Spills 

The State of Washington has designed a resource 

damage valuation method for determining in advance the assessments that would be levied on oil and 

tanker companies for oil spills in the Puget Sound. 

The program is a form of advance designation. The 

environmental importance and sensitivities of each 

area or sector of Puget Sound has been mapped and a 

penalty for oil spills assigned to each sector, with high 

penalties for environmentally sensitive or important 

areas. Companies have rerouted their tankers to 

avoid the high penalty areas. 

74 U.S. Advisory Commission on Intergovernmental Relations 
tion to litigation. Dispute resolution has been used in 

several classic cases of natural resources conflict that involved political disputes, a long time horizon, many stakeholders, and complex and multiple issues. The Denver 

Water Roundtable, for example, was an attempt to mediate disputes concerning the proposed Two Forks Dam in 

Environmental dispute resolution has been 

applied to several Indian rights cases, federal coal management programs, and groundwater cleanup in California.71 Often, the approaches are not new and include the 

use of negotiation, mediation, and accommodation; what 

is new is the attempt to use such an approach in situations 

where litigation has been common. 

Typically, a dispute is triggered by a proposed action. 

People then take opposing positions because they have 

different stakes in the outcome or disagree as to the use of 

the resources. Dispute resolution is used to determine the 

use and ownership of resources. Public sector disputes are 

traditionally resolved through administrative, legislative, 

or judicial means. Supplements to these traditional methods include nonlegal, voluntary approaches, such as arbitration, mediated negotiation, and mini-trials. Gail 

Bingham reviewed 138 site-specific and 47 policy environmental conflicts submitted to some voluntary dispute resolution process between 1974 and 1984.72 Of the site-specific 

disputes, 50 percent dealt with land use, 20 percent with 

public lands, 12 percent with water resources, and 7 percent 

with energy projects. The research found that the type of 

issue was not a significant factor in whether voluntary dispute resolution was likely to be successful. 

For voluntary processes to work, the parties must find 

it in their interest to make the effort necessary to reach 

agreement.73 This suggests that there must be a recognition of interdependence (that the objective of each party 

can best be met through mutual agreement) and that the 

parties must see this process as preferable to any other 

alternative. There also must be a commitment to the process, including the execution of any agreement. Extensive 

literature descriies dispute resolution methods and case 

studies, and there is a growing number of trained dqute 

resolution professionals. Environmental dispute resolution 

is being institutionalized by municipalities, state governments, and federal agencies.74 However, environmental dispute resolution is not a panacea, does not work in many 

cases, and has been used to negotiate EPA enforcement 

actions that opponents termed “caving in” to industry.75 

Alternative Sources of Funding 

and Public-Private Partnerships 

Lack of funding, resources, and staff at environmen- tal agencies is cited by many as the cause of conflicts and 

delays in federal environmental decisionmaking. As federal funding programs have been reduced or made more 

restrictive, and as the demands and expectations of environmental programs have increased, staffing and budgetary constraints on governments have been exacerbated. In 

response to these needs, federal, state, and local agencies 

are devising new and innovative methods of financing and 

leveraging budgets of environmental and public works 

programs. The methods include public-private partnerships, federal-state and state-local revolving loan funds, 

user fees, and pollution trading or “bubble” approaches. 

One of the thrusts of these efforts is to harness the use of 

market forces by creating an institutional framework for 

private sector participation in environmental programs. 

Techniques include federal support in the form of tax 

incentives, investment credits, blending government and 

private funding, funds recycling of government grants 

through asset sales, sale/leaseback, or other refinancing 

methods. These are not new techniques, but they are 

being applied on a broader scale. 

Many of the objectives of the new financing methods 

will improve the federal decisionmaking process for state 

and local public works projects. These objectives include: 

Improve state and local government ability 

to finance environmental programs (and 

thereby increase funds for state and local 

regulatory work and better project coordination and review); 

Build public and private involvement and 

support; 

Increase private investment in environmental 

projects through market-based incentives, corporate voluntarism, and partnerships with all 

units of government (private involvement can 

increase the timeliness and cost effectiveness 

of solutions to environmental problems); and 

Increase the leverage or efficiency of federal 

resources spent on environmental programs. 

Examples of innovative financing are found in 

H 

H 

H 

all 

governments. EPAs Public-Private Partnerships Initiative 

was set up to help state and local governments develop 

new ways to finance required environmental improvements. One of the initiative’s goals is to increase private 

participation in all phases of environmental infrastructure 

development, from financing to ownership of facilities to 

state revolving funds.76 A major example of public-private 

partnerships with implications for all public works projects 

that affect bird habitat is the North American Waterfowl 

Management Plan (NAWMP), a program administered 

jointly by the Canadian Wildlife Service and FWS.77 

Utah’s Wastewater and Water Loan Program illustrates a 

state funding initiative that makes state funds available for 

local wastewater treatment, new water source development, and delivery Since 1983, the program has 

funded 75 projects, resulting in $150 million of capital 

construction using $48 million of assistance from the state. 

The program works by leveraging the state loan money at a 

ratio of three local dollars for every state dollar. 

Eighty-five percent of the funds have been used to bring 

projects into compliance with state or federal wastewater 

treatment standards. The state loan assistance comes in 

the form of loans to communities to buy municipal bond 

insurance, to purchase locally issued bonds at favorable 

interest rates, and to issue loans that can be blended with 

locally issued bonds to yield a desired repayment rate. 

Repayments to the state then are made available for other 

projects. The Utah fund is similar to the state revolving 

fund program, which is replacing EPAs Wastewater Construction Grants Program. 

U.S. Advisory Commissim on Intergovernmental Relations 75 
NAWMP: An Example 

of Public-Private Partnership 

The U.S. and Canadian wildlife services realized that 

they were unlikely to receive the budget resources 

necessary to achieve their waterfowl population objectives by purchase of land. The federal agencies now 

work with as many as 200 state, provincial, local, nonprofit, and private organizations to implement the 

North American Waterfowl Management Plan. Participants include hunting, wildlife, farm, business, 

and environmental groups. The administration of the 

program is participatory and decentralized via regional habitat joint ventures. 

Mi ti gat ion 

The term mitigation as used in federal environmental 

programs is defined broadly by NEPA to include avoiding, 

minimizing, rectifying, reducing, eliminating, or compensating for adverse environmental effects. Compensating 

for the impact entails replacing or providing substitute 

resources or environments. In an airport project, for ex- ample, mitigation may include changing runway designs or 

locations to reduce or avoid impacts on wetlands or historic sites, creating or restoring other wetlands to replace 

those unavoidably filled, and directing flight paths over 

the least populated areas to minimize noise effects. The 

costs and benefits of mitigation have to do with the effectiveness of the mitigation measures in meeting particular 

criteria. To identify and measure these costs and benefits 

requires narrower definitions of mitigation, opens up the 

Pandora’s box of valuation issues, and is constrained by the 

limited amount of data and information about the costs of 

mitigation measures. 

Use of Mitigation in Federal Programs 

Mitigation may be required for public works projects 

as a condition of Section 404 permits from the Corps of 

Engineers or licenses issued by FERC, and of federal 

grants for highway or airport projects. In addition, there 

are questions about whether NEPA requires an agency (or 

permit or federal funds recipient) to undertake mitigation 

measures outlined in the EIS record of decision. This issue 

may be addressed by the U.S. Supreme Co~rt.~ 

The federal government has a variety of wetlands 

programs that can be termed mitigation. For example, the 

Administration’s fiscal year 1993 budget proposal to the 

Congress, requested almost $800 million (35 percent more 

than the FY 1992 appropriation) for enhancement, protection, and research activities to back the “no net loss” 

wetlands policy. Over fiscal years 1993-1995, the administration proposes $800 million for easements on up to a 

million acres of wetlands as authorized under conservation reserve provisions of the 1990 farm bi11.8O 

Effectiveness of Mitigation 

The Wetlands Policy Forum concluded in 1989 that 

“limited information is available on the current extent 

oi .,ilugation requirements, and less exists on their effectiveness.’””’ For wetlands issues, the effectiveness of 

mitigation as a policy tool in terms of frequency of use 

may be limited. The Office of Technology Assessment 

estimated that in 1980 and 1981, Section 404 permit 

applications originally proposed the alteration of about 

100,000 acres of wetlands. Permit processing resulted in 

the avoidance of 50,000 acres of wetland loss annually 

(avoidance is one of NEPA’s mitigation measures). For 

the 50,000 acres that were allowed to be converted, only 

5,000 acres of compensatory mitigation were required. 

Thus, 90 percent of the permitted losses were uncompensated.82 

The memorandum of agreement between EPA and 

the Corps of Engineers on wetlands mitigation and “no 

net loss” may increase the use of compensatory mitiga- tion measures. That memorandum indicates that the 

preferred project alternative will be the one that avoids 

potential impacts to the maximum extent practicable. 

Only then will mitigation measures be considered in 

granting a 404 permit. Some developers argue that this 

policy of mitigation as a last resort (also known as “sequencing”) puts an undue burden of proof on the applicant and may foreclose alternatives with greater overall 

environmental benefits. These development arguments generally assume that wetlands creation and restoration efforts will produce environmentally valuable 

~etlands.8~ 

There is much work in the area of wetlands restora- tion and creation. The costs of wetlands restoration are 

highly variable and case spe~ific.8~ Current information 

is based on actual site-specific mitigation activities and 

on test cases conducted by university researchers. Envi- ronmental groups support the sequential mitigation ap- proach of the EPA-Corps of Engineers Memorandum of 

Agreement, assert that the role of compensatory miti- gation should be limited because efforts to create wet- lands have had limited success, and argue that avoiding 

and minimizing wetland losses in the first place should 

be the “first line of defense against wetland losses.”85 

Excerpts from the EPACorps of Engineers Memorandum 

of Agreement on Wetlands Mitigation 

“In evaluating standard Section 404 permit applications. . . , the Corps. . . first makes a determination 

that potential impacts have been avoided to the maximum extent practicable; remaining unavoidable impacts will then be mitigated to the extent appropriate 

and practicable by requiring steps to minimize impacts and, finally, compensate for aquatic resource 

values. . , . Compensatory actions (e.g., restoration of 

existing degraded wetlands or creation of man-made 

wetlands) should be undertaken, when practicable, in 

areas adjacent or contiguous to the discharge site. . . . Mitigation banking may be an acceptable form of 

compensatory mitigation under specific criteria designed to ensure an environmentally successful 

bank.” (February 6, 1990) 

76 U.S. Advisory Commission on Intergovernmental Relations 
Definitions of Mitigation and Compensation 

Unlike NEPA, others use narrow definitions of mitigation and distinguish between mitigation and compensation-compensation is a payment to someone or some 

group affected by a project; mitigation includes works or 

replacement activities at or near the project site to replace 

resources eliminated or damaged by the project. The economic efficiency and equity valuation issues of mitigation 

are complicated: 

Conventional economic analyses suggest that, all 

other things being equal, compensation will normally be a more efficient and preferred means to 

deal with losses. The assumed advantage is due to 

the lack of restrictions attached to a compensation payment which permits recipients to use the 

funds for whatever good or service is of most value to them. An equal sum spent on mitigation 

would restrict reparation to the benefits of reducing the particular harm. . . . The results of. . . studies suggest an alternative view of the relative 

merits of compensation and mitigation. People 

may view the compensation remedy as two 

events: a loss associated with the harm, and a gain 

of the money payment. As the compensation will 

be heavily discounted because it is viewed as a 

gain, more money will need to be paid to make up 

for any given harm. A mitigation measure, on the 

other hand, may well be treated as reducing the 

loss associated with the harm and will consequently be regarded as being more important. 

The strength of this intuition was borne out by 

survey results indicating that affected parties may 

well value mitigation or replacement measures 

more highly than compensation payments, even 

when the size of the payments exceeds the expenditure on the mitigation works or when the mitigation seems to serve little beneficial purpose.86 

In addition, the incidence of benefits and costs matters: a 

dollar’s worth of benefits to person A is anything but 

equivalent to a dollar going to person B, and the question 

of who should receive this dollar requires value judgments 

that often are hotly contested. 

Consideration of the Environment 

at the Design Stage 

Many conflicts could be avoided by finding nonstructural solutions or public works designs that do not create 

environmental permit and review problems. Federal laws 

enacted to protect the environment serve as a design 

constraint on public works projects and other human activities. The lack of environmentally sensitive project designs 

was identified earlier in this chapter as a cause of problems 

in the federal environmental decisionmaking process. 

Nonstructural demand management and environmentally 

sensitive ways of meeting public works needs are increasingly being considered and adopted. For example, policy 

approaches to water resources may be grouped under 

FHWA Environmental Policy Statement 

Communication and coordination 

rn System planning 

integrate transport, land use, and environmental 

interagency coordination and public involvement 

public/private initiatives 

corridor preservation 

new dollars into planning activities 

Project development 

continuity with planning 

interagency coordination and public involvement 

range of alternatives 

interdisciplinary 

integrate NEPA, FHWA, Section 404, and other 

objectives 

federal environmental requirements 

supply (or structural) approaches and demand (or nonstructural) approaches: water shortages may be addressed 

either by increasing developed supply (storage capacity) or 

decreasing water consumption and improving water quality. Many or most of the nonstructural water resources 

policy approaches have been recommended by water resource experts for 20 years. Likewise, for transportation, 

mass transit, high-speed rail links, cluster developments, 

and higher city parking fees have been proposed as ways of 

reducing the environmental deterioration caused by automobile-based transportation. 

FHWA’s 1990 environmental policy statement directs 

the agency to integrate “full” consideration of the environment at all levels of its a~tivities.8~ Special efforts are to 

be made to avoid, minimize, and mitigate environmental 

impacts; seek opportunities to enhance, restore, and replace environmental resources; and to abide by the federal 

goal of no net loss of wetlands. FHWAis supplying technical and grant assistance to three pilot projects in North 

Carolina to demonstrate that the agency’s environmental 

policy approach can work. The objective of the pilot projects is to have NEPA considerations applied at the local 

planning level before the highway lines are drawn on the 

map. FHWA also uses environmental mitigation grant 

funds as one of the keys to implementing FHWA’s environmental objectives. FHWA will provide grants (as part of 

the overall highway project cost) for mitigation activities 

required to sat* federal environmental mitigation requirements (and in some cases those required by state law).88 

In addition to changing project design and agency 

policies, lifestyles and values may have to change if public 

works needs and environmental quality are to be met in 

the next century. Educational programs and greater use of 

NEPA’s goals and objectives (integration) are ways to find 

and encourage nonstructural or other alternatives, such as 

conservation, waste minimization, structural changes in 

design or type of public works, and changes in lifestyle, to 

minimize needs for public works projects. Pollution prevention, recycling, and source reduction have public works analogies. EPA’s Science Advisory Board’s recommendations are 

but one of many recent recommendations on this subject: 

U.S. Advisory Commission on Intergovernmental Relations 77 
The sources of risk often are to be found in the 

day-to-day choices made by individuals, communities, and businesses. Environmental risks posed 

by many human activities can be reduced sharply 

if different choices are made. Choice is influenced by a number of factors, including education and ethics. Growth and reductions in 

environmental risk are not necessarily incompatible if past patterns of individual, community, and 

business choice can change.89 

Some of the pressures on federal environmental 

decisionmaking are external to the process. For example, 

the western states are and. The demands of population 

growth and development are coming up against the region’s naturally limited water supply. Changing human 

values expressed through federal legislation are directly 

affecting the uses of the region’s water, and increased 

value placed on instream flow functionsfor tourism, effluent dilution, endangered species, and wetlands is limiting 

water withdrawals for urban and agricultural uses. Similar 

situations are repeated in other sections of the country. 

LEGISLATIVE AND ADMINISTRATIVE REFORM PROPOSALS 

Changing or improving the federal environmental 

decisionmaking process can be accomplished through: 

(1) Changing or improving the existing process 

under current laws and regulations; 

(2) Changing the laws or current rules of the 

game; or 

(3) Avoiding the problems by changing the nature of the public works projects. 

Some changes and adaptations to public works projects 

occur under the first option-better coordination or early 

consultation may result in selection of an alternative with 

fewer environmental effects. Other ways of avoiding environmental impacts entail changing lifestyles and values 

and the nature of public works. 

Some proposals for reform involve undertaking more 

of the ongoing efforts described earlier: cooperation, innovation, planning, and public-private partnerships. However, given the complexity of the issues and the increasing 

demands for public works and environmental quality, 

these efforts may not be enough. One general group of 

options for changing the process focuses on additional 

improvements within the existing framework of laws and 

regulations. Many impediments to integration and accommodation can be overcome without new legislation. However, existing regulations and approaches may encompass 

fundamental structural obstacles to improving the process. The second group of options includes a radical overhaul of statutes and regulations, changes in specific 

statutes and environmental policy approaches, and 

changes in decisionmaking methods and criteria. 

Leading or promising reform options within the current rules of the game include: 

1. Reinvigorating the NEPA process; 

2. Changes to the EIS process; 

3. Regulatory flexibility and state/local implementation; and 

4. Communication, education, and research 

and development. 

Changing the legislation or rules includes: 

1. Consolidated federal environmental statute; 

2. Consolidating federal environmental agencies; 

3. Making EPA a cabinet-level department; 

4. Changes to specific laws (the Clean Water Act 

amendments); 

Consistency of decisionmaking criteria and 

administrative discretion; and 

Market and economic incentive approaches. 

5. 

6. 

Reinvigorating the NEPA Process 

NEPA remains in place after 20 years, CEQ’s regulations are generally applauded, and parts of the NEPA 

process do work. NEPA simply may need help, a reinvigoration, a rededication to its goals and objectives by the 

people who implement the process. The problem, according to these arguments, is with the federal agencies, not 

with NEPA or with environmental laws. 

Participants at a March 1991 conference hosted by 

CEQ and entitled “NEPAIntegration: Effective, Efficient 

Environmental Compliance in the 1990s” called on CEQ 

leadership to renew the NEPA “ethic” throughout federal 

agencies. Recommendations included CEQ work on 

training programs, public relations, education, uniform 

procedures, and model MOAs. There was a recognition 

that agency decisionmakers and the federal senior executive service staff need to be actively involved and committed to NEPAs goals. Methods to secure policymakers’ 

commitment included high-level meetings, conferences, 

training, and education. The conference participants also 

urged greater education about NEPA integration at the 

junior staff level. Another suggestion was to have CEQ 

conduct a systematic review of federal agencies’ implementation to determine the status of NEPA integration 

and to be better able to put pressure on agencies to implement the act. 

There also is a need to sort out what NEPA integration means in terms of interagency coordination and sequential versus combined or coordinated decisionmaking. 

The options include: 

All permit decisions combined (an ideal); 

Key permit decisionmaking factors (showstoppers) identified (a more realistic, pragmatic possibility)-if the permit cannot be 

issued when the EIS is completed, at least 

enough information for a permit would have 

78 U.S. Advisory Commission on Intergovernmental Relations 
been gathered so that the EIS information 

gathering and analysis is not duplicated; 

Tiered decisionmaking if problems occur 

with the “ripeness of the process”-tiering is 

encouraged by NEPA (e.g., first tier for a 

transportation corridor, second tier for the 

specific alignment). 

Changes to the EIS/NEPA 

Procedures and Process 

Time is money. Some state and local government 

applicants for federal permits or review might be willing to 

pay a fee (or a larger fee) to cover some federal agency 

administrative costs of permit review. Such an approach 

might be applicable to large projects but not to small 

projects or small local agencies. In addition, the fees 

would have to be related to function and go to a dedicated 

fund, not to “the bottomless pit of the Treasury.”O 

CEQ could provide additional guidance on EAs. The 

variations on the EA and the EIS include: mitigated EA, 

mitigated FONSI (finding of no significant impact), and 

EA/FONSI tiered from EIS. CEQ regulations provide 

detailed directions for the EIS but not for the EA or for 

“categorical exclusions,” actions that do not have significant effects and do not require either an EIS or EA. 

Inconsistent approaches to an EA are perceived to be a 

problem because the assessment can be used to sidestep 

the EIS process or become a surrogate EIS. 

Regulatory Flexi bi I i ty 

and State/Local Implementation 

There is a growing chorus calling for a more equitable 

balance between federal and state/local environmental 

decisionmaking power. The Western Governors’ Conference White Paper, as well as recent reports by the Engineering Foundation, Hmard University, and the Interstate 

Conference on Water Policy, call for reforms to transfer 

more of the environmental decisions and activities now 

conducted by federal agencies to state and local governments.9l These reports ask questions about thefundamental role of the states in environmental and natural 

resources policy within a federal system, building a balanced federal-state model in natural resources policy, vital functions the federal government should perform, and 

appropriate functions for state and local governments. At 

the heart of these issues is how to create a climate of 

mutual respect between governments that will allow for 

more flexibility and decentralization in implementing federal environmental policies. 

A number of state and local agencies and officials 

would like federal agencies to comply more fully with the 

spirit of Executive Order 12612 to improve intergovernmental relations and the execution and efficiency of environmental programs. In testimony at an ACIR public 

hearing, the City of Colorado Springs noted: 

At times, it seems that the federal officials forget 

that state and local officials are also representatives of the citizens that are being asked to pay for 

Excerpts from Executive Order 1261 2 

on Federalism 

In most areas of governmental concern, the states 

uniquely possess the constitutional authority, the resources, and the competence to discern sentiments of 

the people and to govern accordingly. In Thomas Jefferson’s words, the states are “the most competent administrations for our domestic concerns and the surest 

bulwarks against anti-republican tendencies.” 

The nature of our constitutional system encourages a 

healthy diversity in the public policies adopted by the 

people of the several states according to their own 

conditions, needs, and desires. In the search for enlightened public policy, individual states and communities are free to experiment with a variety of approaches to public issues. . . . 

With respect to national policies administered by the 

states, the national government should grant the 

states the maximum administrative discretion possible. Intrusive federal oversight of state administration is neither necessary nor desirable. 

(Federal Register 52 (October 30, 1987): 41 685 

these programs. It is the environmental values of 

those citizens that should drive the environmental programs, consistent with federally set goals 

and objectives. Given the appropriate climate of 

mutual respect among the various levels of government, which respect can be premised on both 

constitutional and practical considerations, it would 

become possible to achieve environmental progress 

on a cooperative, cost effective, and priority basis. 

The alternative is to risk losing the environmental 

forest by focusing on the regulatory treesy2 

Communication, Education, 

and Research and Development 

Sen. Quentin Burdick, chairman of the Senate Environment and Public Works Committee, recently wrote: 

As any parent knows, it is more effective to teach 

an infant not to throw food than to clean the 

kitchen floor after each meal. Likewise, it is easier to increase environmental awareness than it is 

continually to clean up waste, pollution, and other damage to the en~ironment.9~ 

Education, communication, and research are on everyone’s list of activities to address development and environmental issues. Two of the seven general impediments to 

water quality identified by Water Quality 2000 addressed 

training and education needs. Inadequate attention to the 

need for trained personnel has created a serious gap between a limited supply of new and retrained professionals 

and a growing demand for their skills. In addition, inadequate communication means that citizens are largely unaware of the linkages between daily life and water 

resources, what they can do to improve the quality of 

U.S. Advisory Commission on Intergovernmental Relations 79 
water and aquatic habitat, or why they should participate 

in the first place. Additional research and development in 

many areas is necessary to improve the scientific basis for 

public works environmental decisionmaking. 

Consolidated Federal Environmental Statute 

EPA’s creation more than 20 years ago was premised 

on a new vision of environmental management. As proposed by the Ash Council, which recommended the creation of EPA, pollutants would no longer be dealt with in 

media-specifk straitjackets, but through a multimedia approach to environmental management.”4 In fact, EPA has 

never shaken the media-specific approach. The Conservation Foundation and others have once again proposed an 

integrated multi-media approach to reducing health and 

environmental risk through consolidation of environmental laws into a single new ~tatute.9~ “The potential of 

reducing risks and costs simultaneously makes it an idea 

worth contemplating,” notes EPA Administrator William 

Reilly.96 A number of European and other countries have 

or are drafting a single environmental law with integrated 

pollution control (e.g., Great Britain, Germany, the Netherlands, and the Scandinavian co~ntries)?~ Russell Train, 

a former EPA administrator, wrote that it is time to bring 

all environmental laws under one statute, an “organic” 

environmental protection act: 

Management and efficiency problems that arise 

because of our fragmented and unrelated environmental laws cannot be fixed by tinkering with 

each law as it comes up for reauthorization. What 

is needed is a wholesale change in our overall approach to environmental protection. This change 

should most properly come as a federal initiative, 

rather than simply allowing state governments to 

tailor their own solutions. Although the states 

have proven their capacity to test and adopt new 

methods, these innovations are mostly reactions 

to federal policies?* 

Benefits of a Single Environmental Act 

The benefits of a single environmental act may include: 

rn Replacing numerous permits with a comprehensive permit; 

Instituting an integrated approach to the 

problems that require multimedia control solutions and creating greater opportunities for 

pollution prevention (many control technologies now used to meet regulatory requirements simply shift it around or change its form 

or delay its release into the environment); 

Reaping efficiencies through elimination of 

competition for funding sources and reducing administrative costs; 

Setting priorities among different programs 

and controVprevention measures (the existing fragmented system makes this difficult); 

rn 

rn 

rn Funding permit work through a comprehen- sive state environmental fund similar to the 

current state revolving fund and funded by a 

single larger permit fee collected from the 

applicant; 

Reducing the cost of pollution control (for 

example, work by the Electric Power Re- search Institute indicates that an integrated 

approach to pollution control applied to a 

new coal-fired power plant would reduce the 

capital and operating costs of the plant’s pol- lution control system by 25 percent);* 

Increasing popular support for the environment and a greater budgetary support link 

between popular support and willingness to 

pay for environmental quality. 

rn 

rn 

Conservation Foundation Proposal 

The highlights of the Conservation Foundation’s prorn A single permit for each major polluting 

facility; 

A unified system of control standards based 

on unreasonable risk and best available technology; “unreasonable risk” is the one primary standard for taking action; 

Innovative approaches to pollution prevention and waste reduction; 

Combining EPA and the National Oceanographic and Atmospheric Administration 

into a Cabinet Department of Environmental Protection; 

More effective enforcement against both 

mobile and stationary pollution sources; 

Much greater use of economic incentives and 

market mechanisms to protect the environment; and 

Unification of all major statutory research 

authorities. 

posed single environmental protection act include: 

w 

rn 

rn 

rn 

rn 

Raising EPA to Cabinet Status 

Some members of Congress and President Bush have 

signaled their desire to raise EPA to Cabinet status. Several members of Congress argue that making EPA a Cabinet 

department might be one small step toward giving environmental issues the priority they deserve.’OO It might also 

give EPA increased clout in obtaining budget funds, working with other departments, making national policy decisions, and negotiating with other nations that send 

Cabinet-level ministers to environmental meetings. However, given that EPA has not been able to develop a multimedia approach to environmental management, making 

the agency a Cabinet department may not solve the problem of fragmentation in environmental reviews of state 

and local public works projects. Balkanization might be 

aggravated if EPA grew in size and power. 

80 U.S. Advisory Commission on Intergovernmental Relations 
Consolidating Federal Environmental Agencies 

Combining environmental and natural resources 

functions into one Cabinet department is another suggestion for avoiding bureaucratic overlap, duplication, and 

inefficient use of resources. Should the Department of 

the Army instead of EPA be writing or overseeing domestic wetlands permits? Proponents of continuing roles for 

the Corps of Engineers and EPAin the Section 404 permit 

program argue that the two-agency approach provides for 

“checks and balances” between the environmental criteria 

of EPA and the broader range of criteria represented in 

the Corps of Engineers publicinterest review.lo1 A holistic 

or sustainable development approach points to managing 

public natural resources and environmental protection 

within the same federal department. 

Specific Environmental Legislation Changes 

It is expected that reauthorization of the Clean Water 

Act will be the focus of congressional hearings and intense 

debate during 1992. Wetlands issues and Section 404 will 

be at the center of the reauthorization debates. Proffered 

opinions about Section 404 are likely to include: make 

wetlands definitions and regulations more specific, give all 

regulatory responsibility to one agency, and allow greater 

state and local definition of wetlands and wetlands permitting. Several of these proposals may reduce costs, delays, 

and program inconsistencies that afflict state and local 

public works applying for 404 permits; these recommendations also may make state adoption of the federal 404 

program more attractive: 

Provide federal funding for stale implementation 

of the 404 program (EPA received $8.5 million 

for state wetlands programs in fiscal 1992); 

Exlend the geographical reach of wetlands that 

the state may regulate under a delegated program to all wetlands of the state, including 

navigable waters (as long as proper coordination is maintained with the Corps of Engineers and EPA); 

Focus wetlands protection eflorts on the most 

valuable wetlands and create classes (no development on high-value wetlands, some development possible on low-value wetlands); 

Encourage states to establish comprehensive 

wetlands programs (coordination of permitting, acquisition, zoning, water banks, critical 

areas, and easement programs); and 

Increase advance designation of preservation 

areas on a regional basis. 

Decisionmaking Criteria 

and Administrative Discretion 

Federal environmental laws encompass two types of 

decisionmaking criteria. As outlined in Chapter 2, some 

laws call for a balancing process, other laws call for absolutes or specific environmental constraints, such as “fishable and swimmable water,” “zero discharge,” or a 

biological imperative. In enacting NEPA, the Congress 

never intended that national environmental policy should 

ovemde other policies,”* but sought accommodation or a 

balancing of competing policies. However, one could argue either that federal environmental decisionmaking criteria are inconsistent or that different types of issues 

demand different types of decision criteria. Is a more 

consistent approach possible, feasible, desirable? 

A related issue concerns administrative discretion. 

There is increasing sentiment for specifying in federal 

environmental laws which substances or land uses are to 

be regulated and how. This loss of administrative discretion results in part from misplaced blame: EPA could not 

meet congressional deadlines in many cases because expectations were unreasonable. Complex problems, how- ever, may require flexibility and diverse instruments, not 

uniform solutions like best available technology wastewater standards or national ambient air quality standards. 

But the Congress has neither the time nor the inclination 

to provide other ~olutions.’~~ 

The Conservation Foundation’s proposal for a single 

environmental statute addresses both decisionmaking cri- teria and administrative discretion. “Unreasonable risk” 

would be the one primary standard for taking action. Although costs would be considered in deciding whether to 

undertake an action, the proposed act makes it explicit 

that such benefit-cost analysis is unfeasible and undesirable as the (only) way to make decisions. Judgment by the 

secretary of the proposed department of environment is 

necessary in almost all cases, and the act states that, if a 

choice must be made between the costs of a regulation or 

its benefits, the secretary should err on the side of benefits 

(i.e., on the side of environmental protection). In essence, 

the Conservation Foundation’s proposal would allow a 

balancing of competing policies (a goal of NEPA and the 

aim of economic and multiple objective decision methods) 

within the constraint of sustaining environmental quality. 

Market and Economic Approaches 

Economic, market, and private and other innovative 

approaches to environmental programs are being considered and, in some cases, implemented for several reasons: 

rn Pollution taxes, public-private partnerships, and other economic tools can be a 

source of additional revenue for environmental programs. 

Effluent taxes and tradeable emissions permits can provide market incentives and 

cost-effective approaches to reduce pollution. 

The goals of environmental quality and economic development (or public works projects) should complement one another if 

either of them is to be achieved. 

The nation has made substantial progress in improving environmental quality with the use of the conventional 

regulatory programs of the 1970s. These programs, however, may have tended to pit economic and environmental 

rn 

rn 

U.S. Advisory Commission on Intergovernmental Relations 81 
goals against each other instead of encouraging “sustainable development.” The environmental programs of the 

1970s and 1980s applied relatively prescriptive, command-and-control, single-media, fragmented, sometimes 

inflexible, engineering approaches to pollution control. 

Little use has been made of economic tools and other 

strategies capable of directing resources to pollution prevention and reduction, and to sustainable development. 

These alternative approaches have been proposed as supplements to the conventional command-and-control 

regulatory policies. 

Economic, market, and private sector approaches 

have been described in a variety of reports.1o4 A team of 50 

members drawn from academia, industry, environmental 

organizations, and government summarized many of the 

market techniques in “Project 88: Harnessing Market 

Forces to Protect Our Environment.” The report emphasizes the practical employment of economic forces to 

achieve increased protection of the environment at a lower cost to society. Other economic policies with potential 

environmental benefits include the gasoline tax and automobile-related fees. In the past, public, congressional, and 

interest group opposition to raising gasoline and automobile-related taxes has eliminated a potentially effective 

environmental policy tool. A number of studies indicate 

that gasoline, smog, and congestion taxes and the end to 

subsidized parking would discourage automobile driving, 

increase mass transit ridership, cut the need for new 

roads, and reduce air pollution and the cases of conflict 

between road projects and the envir~nment.’~~ 

Benefits and Costs of the Time Delay 

in the Federal Environmental 

Decis ion making Process 

Environmental decisionmaking requires time-federa1 review and permit processes, the EIS, procedural 

obstacles, citizen review, litigation. Controversies between and among citizen groups and government agencies 

contribute to delays. Environmental issues are only one 

factor in delays; others are financial, safety, labor-related, 

or technological issues. However, some well documented 

cases of delay for dams, highways, power plants, offshore 

oil and gas leases, pesticide and chemical product licens- ing, pipeline construction, and mining permits are the 

direct result of environmental issues. In the 1970s, EIS 

time requirements became excessive, according to complaints received by the Council on Environmental Quality.loa CEQ revised the EIS regulations in 1978 to 

streamline the process. Although CEQ now receives few 

if any written complaints, the average EIS takes at least a 

year to 

Some of the material in this section is based on a review 

of time-delay issues conducted in 1979 by a multidisciplinary 

team of researchers at the University of Michigan’s School 

of Natural Resources under a National Science Foundation 

grant, and on the 1984 Office of Technology Assessment 

report WetId: Their Use and ReguIalion.loB 

Time creates costs in terms of lost opportunities-resources that must be committed now or in the future as a 

consequence of the added use of time. The more time is 

required, the most costly the process will be, everything 

else remaining equal. Time-related costs include: 

1. 

2. 

3. 

4. 

5. 

The forgone net productive value of the resources already tied up in the process (the 

time costs of capital); 

Opportunity cost of the additional resources 

that must be committed to the process on an 

ongoing basis until it is resolved; 

Additional costs of hastening the completion 

of a project to meet a deadline after any delay 

(such as overtime payments for construction 

projects); 

Losses resulting from late completion (e.g., 

costs of electric power outages due to the 

unavailability of electric generating capacity); and 

Potential losses from the deterioration or reduction in value of existing resources (such as 

unchecked pollution). 

But the use of more time also may bring benefits. 

These benefits include greater opportunities to analyze 

the underlying valuation problems, accommodation of 

changing social values, creation of better information 

flows, improved layouts and designs, avoidance of 

third-party losses, and greater consensus among affected 

parties with potential beneficial results. The benefits of 

time extension are more difficult to identify and evaluate 

than the costs of delay. Many such benefits consist of 

hoped-for (or prevented) changes in environmental conditions, although there are some commercial benefits from 

delay. Commercial benefits are usually related to changes 

in the outcome of a decision process due to changes in 

laws, regulations, or standards during the delay period as the 

result of lobbying or negotiations. Temporary benefits may 

ame to a fm when activities are allowed to continue (such 

as pollution) until the decision process is completed. 

Valuing and comparing the benefits and costs of time 

delay, whether on balance these costs are justified, can 

rarely be answered with certainty because diverse value 

systems lie at the heart of these disputes. Sorting this out 

requires identifying who gains and who loses from delay 

and calculating the values of environmental resources. 

Notes 

40 CFR 1500. 

40 cm 1500.2(c). 

U.S. Council on Environmental Quality (CEQ), Envimnmental Qualify: 21sf Annual Report (Washington, DC, 1991), pp. 

189-220; Western Governors’ Association, “White Paper on 

Federal Water Policy Coordination,” May 11, 1989; Dan W. 

Reicher, “Case Study-Energy Workshop,” CEQ Conference 

on NEPA Integration: Effective, Efficient Environmental 

Compliance in the 199% Fairfax, VA, March 1991. 

Thomas l? Dunne, Acting Associate Administrator, U.S. Envi- ronmental Protection Agency, letter to John Kincaid, Executive Director, Advisory Commission on Intergovernmental 

82 U.S. Advisory Commission on Intergovernmental Relations 
Relations, with responses to ACIRs questions about intergovernmental coordination (Response No. 5). 

“NEPA Case Study: The Salmon Summit,” CEQ Conference 

on NEPA Integration. 

‘ Ibid., and “Campaign is on to save remaining salmon runs,” 

US. Water News, February 1991, p. 12. 

Stephen S. Light and John R. Wodraska, “Forging a New State-Federal Alliance in Water Management,” NaturalResources 

Journal 30 (Summer 1990): 479. 

* Howard K. Gruenspecht, “Forging New Links with Economic 

Policy,” EPA Journal 16 (September/October 1990): 38. 

John S. Doyle, Jr., Assistant Secretary of the US. Army, Public 

Works, Hearings before the House of Representatives, Committee on Public Works and Transportation, Subcommittee on 

Water Resources, Committee Print 101-69, April 12,1989, pp. 

66 and 84. 

lo U.S. General Accounting Office (GAO), Environmental Pro- tection Agency: Protecting Human Health and the Environment 

through Improved Management (Washington, DC, August 

1988), p. 21. 

l1 Reicher, “Case Study-Energy Workshop.” 

l2 Many of these concerns were expressed by participants and 

section chairmen in summarizing NEPA concerns at the CEQ 

Conference on NEPA Integration. 

l3 GAO, Environmental Protection Agency, p. 164. 

l4 City of Colorado Springs, Testimony at the Public Hearing on 

Restoring Balance in the Federal System, Council of State 

Governments and U.S. Advisory Commission on Intergovern- mental Relations, Colorado Springs, June 9, 1989; Western 

Governors’ Association, “White Paper on Federal Water 

Policy Coordination.” 

”A number of these studies are referenced in GAO, Environ- mental Protection Agency, pp. 159-161. 

l6 U.S. Congressional Budget Office, “Environmental Federal- ism: Allocating Responsibilities for Environmental Protec- tion,” Staff Working Paper, September 1988. 

l7 Gary B. Cohen, “Storm Water Permitting Deadlines Set: EPA’s 

Ambitious Regulatory Approach Will Be Costly to Communi- ties,” Environmental Deckions 3 (February 1991): 15-17; Geoff 

Wilson, Colorado Municipal League, summary of information 

received by the Colorado Advisory Commission on Intergovernmental Relations, Environmental Subcommittee, testimo- ny gathered in 1990 following Request for Information on 

Financial and Administrative Burdens Associated with Complying with Federal and State Environmental Mandates (October 11, 1990). 

U.S. Council on Environmental Quality, Environmental Quality: Twentieth Annual Report (Washington, DC, 1990), p. 41. 

l9 “Integration of the National Environmental Policy Act and 

the California Environmental Quality Act,” Case Study for 

CEQ Conference on NEPA Integration. 

2o GAO, Environmental Protection Agency. 

The imbalance between Section 404case load and staffbudget 

resources is noted by federal, state, and local officials and by 

private sector representatives in testimony in Status of the Nation’s Wetlands and Laws Related llzereto, Hearings before the 

US. House of Representatives, Committee on Public Works 

and Transportation, Subcommittee on Water Resources, 

Committee Print No. 101-69 (1991). 

22Timothy E. Wirth and John Heinz, sponsors, Project 88: 

Harnessing Market Forces to Protect our Environment (1988), p. 

64. 

23 Brenda S. Davis, Chief of Policy and Planning, State of New 

Jersey, Testimony (pp. 127-136); Henry A. Shilling, Director, 

Office of Legislative Affairs, EPA, Letter (p. 18); and David G. 

Davis, Office of Wetlands Protection, EPA, Testimony (p. 47), 

Status of the Nation’s Wetlands and Laws Related Thereto; Hal E 

Harrington, “Michigan’s 404 Program Assumption,” in Symposium Proceedings: Wetland Protection: Strengthening the Role 

of the States, September 19-21, 1984, Gainesville, Florida 

(Chester, Vermont: Association of State Wetland Managers, 

July 1985), pp. 488-492. 

24 Wirth and Heinz, p. 64. 

25 William K. Reilly, Administrator, Environmental Protection 

Administration, “A New Way with Wetlands,” Address to 

American Farmland Trust, March 7, 1991, p. 6. 

26 Ibid. 

27 For discussion of Two Forks Dam case, see Denver Water Department, “Two Forks Dam and Reservoir: An Outline of the 

Process,” Staff Paper, January 1990; Jim Schwab, “Two Forks 

Stalled-for Now,” Planning (April 1990): 26-29; Michael 

Weisskopf, “EPA’s Reilly to Veto Dam,” Wahington Post, No- vember 23,1990; Todd Sloane, “Denver Area Hits Fork on the 

Road to Water Project,” City & State, December 3-31,1990, p. 1. 

U.S. Environmental Protection Agency, Statement of EPA 

Administrator William K. Reilly on the Two Forks Dam and 

Reservoir, March 24, 1989. 

29 “Judge Upholds Virginia Pipeline,” US. Water News, April 

1990; “Judge Overrules EPA on Dam Veto,” US. WaterNews, 

January 1991, p. 1. 

30 Water Quality 2000, “Phase I1 Report Problem Identification” 

(Alexandria, Virginia, August 3, 1990); Frederick Krupp, 

“WinIWin on the Environmental Front,” EPA Journal 16 (September1October 1990): 30-31; Herman E. Daly, ed., Toward a Steady-State Economy (San Francisco: W.H. Freeman and 

Company, 1973); James A. Lee, The Environment, Public 

Health, and Human Ecology (Baltimore: Johns Hopkins Uni- versity Press for the World Bank, 1985); World Commission on 

Environment and Development, Our Common Future (New 

York Oxford University Press, 1987). 

31 US. Department of Transportation, “National Transportation 

Strategic Planning Study” (Washington, DC, March 1990), pp. 

32National Council on Public Works Improvement, Fragile 

Foundations: A Report on America’s Public Works(Washington, 

DC, February 1988), pp. 133, 144. 

33M. Richard DeVoe and Jack M. Whetstone, ‘Rn Interim 

Guide to Aquaculture Permitting in South Carolina” (Charles- ton: South Carolina Sea Grant Consortium, August 1987). 

34Arkan~as highway department information from Mike Webb, 

Environmental Division, Arkansas State Highway and Transportation Department, case study presentation at CEQ Con- ference on NEPA Integration, March 1991. 

35 Willard C. McCartney, “Balancing Development and Wetlands Preservation,” APWA Reporter (January 1991): 10-11. 

36 See examples in CEQ, Envitvnmental Quality: Twentieth Annu37 Dinah Bear, “NEPA at 19: A Primer on an ‘Old’ Law with So- lutions to New Problems,” Environmental Law Reporter 19 

(1989): 10062. 

3840 CFR 1500.2. 

39 Ibid. 

40 Dinah Bear, personal communication, February 21, 1991. 

41 U.S. Department of Transportation, Federal Highway Administration, Applying the Section 404 Permit Process to Federal-Aid 

Highway Pmjects (Washington, DC, September 1988), pp. 4 3. 

12-6 to 12-5, A2-A6. 

al Report, pp. 29-43. 

U.S. Advisory Commission on Intergovernmental Relations 83 
42For more information on federal coordination on wetlands, 

see “New EPA Water Administrator Hits the Ground Run- ning” (interview with LaJuana Wilcher), Water Environment & 

Technology (July 1990): 36-41; and Ralph Morgenwect, “US. 

Wetlands Policy: No Net Loss,” WaterEnvironment & Technol- ogy (August 1990): 120, 122. 

43 33 CFR Part 330.5(a)(26). 

44 A discussion of the advantages and disadvantages of general or 

nationwide permits is discussed in U.S. Congress, Office of 

Technology Assessment, Wetlands: Their Use and Regulation 

(Washington, DC, March 1984), pp. 172-174. 

45 Daniel P. Sheer, “Managing Water Supplies to Increase Water 

Availability,” National Water Summaty, Hydrologic Events and 

Sulfate-Water Resources (Washington, DC US. Department 

of the Interior, US. Geological Survey, 1985), pp. 101-112. 

46347 U.S. 995. 

47 William E. Harkness, Hany E Lins, and William M. Alley, 

“Drought in the Delaware Basin,” National Water Summary, 

48 J.B. Ruhl, “Interstate Pollution Control and Resource Devel- opment Planning: Outmoded Approaches or Outmoded Poli- tics?’’ Natural Resources Journal 28 (Spring 1988): 293-314. 

49 National Governors’ Association, Weekly Bulletin, September 

21, 1990. 

Light and Wodraska, “Forging a New State-Federal Alliance 

in Water Management,” p. 480. 

51 Some of these advantages are discussed by Brenda S. Davis 

and David G. Davis in Status of the Nation’s Wetlands and Laws 

Related Thereto. 

52 Paul R. Portney, “Air Pollution Policy,” in Paul R. Portney, ed., 

Public Policies for Environmental Protection (Washington, DC: 

Resources for the Future, 1990), pp. 27-96; City of Colorado 

Springs, Testimony, p. 21; Robert M. Schwab, “Environmental 

Federalism,” Resources 92 (Summer 1988): 6-9. 

53 Hamngton, “Michigan’s 404 Program Assumption”; “Wetlands Program Backed,” Washington Post, February 1, 1991; 

Office of Technology Assessment, Wetlands: Their Use and Regulation, p. 187; U.S. Army Corps of Engineers, Regulatory 

Branch, “State Program General Permits-Section 404 of the 

Clean Water Act” (November 1990). 

54 Michael S. Hamilton, “Regulatory Federalism: A Useful Con- cept for Natural Resources and Environmental Manage- ment?” in Michael s. Hamilton, ed., Regulatory Federalism, 

Natuml Resources, and Environmental Management (Washing- ton, DC American Society for Public Administration, 1990), 

pp. 25 43; Brenda Davis, Testimony. 

5s Wetland Protection: Strengthening the Role of the States and Status of the Nation’s Wetlands and Laws Related Thereto. 

56 GAO, Environmental Protection Agency, pp. 144-166. 

571bid., pp. 167-185. 

58 Hamilton, “Regulatory Federalism,” p. 33. 

59 Bruce D. McDowell, “Transportation and the Environment,” 

APWA Reporter (November 1990): 8; EPA, Science Advisory 

Board, Reducing Risk: Setting Priorities and Strategies for Environmental Protection (Washington, DC, September 1990), p. 3. 

EPA, Reducing Risk, pp. 13-14. 

61 For a description and flowcharts of the Federal Aviation Administration’s environmental review process, see ‘Rirports,” 

Case Study for CEQ Conference on NEPA Integration. 

62 Heidi Snow, National Governors’ Association, personal communication, February 1, 1991. 

1985, pp. 29-40. 

63 Chris Gergoire, “What Do You Expect of EPA? A State Offi64 Heidi Snow. 

65Reilly, ‘A New Way with Wetlands,” p. 9. 

66 David C. Burke et al., Protecting Nontidal Wetlands (Chicago: 

American Planning Association, December 1988), p. 21. 

67 Rutherford H. Platt, “Coastal Wetland Management: The Advance Designation Approach,” Environment 29 (November 

Robert Jenkins, “Long-Term Conservation and Preserve 

Complexes,” Nature Conservancy Magazine (Jan./Feb. 1989): 3; 

Jeffrey A. McNeely et al., Conserving the Worid’s Biological Diversig (Gland, Switzerland and Washington, DC: IUCN, WRI, 

CI, WWF-US, and the World Bank, 1990); Office ofTechnology Assessment, Technologies to Maintain Biological Diversity 

(Washington, DC, 1987); CEQ, Environmental Qualit): 21st 

Annual Report, pp. 141-143. 

69 EPA, Office of Water, Great Lakes Environmental Management 

Fmmewodc (Washington, DC, September 1990). 

70 Susan L Carpenter and W. 3. D. Kennedy, “The Denver Met- ropolitan Water Roundtable: A Case Study in Researching 

Agreements,” Natural Resources Journal 28 (Winter 1988): 21-36. 

71 Lawrence J. MacDonnell and Ann Painter, eds., “Environmental Dispute Resolution,” Special Issue of Natural Re- sources Joumal 28 (Winter 1988). 

72 Gail Bingham, “Resolving Environmental Disputes: A Decade of Experience” (Washington, DC Conservation Foundation, 1986), pp. 32-33, cited in Lawrence J. MacDonnell, 

“Natural Resources Dispute Resolution: An Overview,”Natuml Resources Journal 28 (Winter 1988): 9. 

cial,” EPA Journal 16 (September/October 1990): 50. 

1987): 16-20,3843. 

73 McDowell, “Natural Resources Dispute Resolution,” p, 13. 

74AI~~, Barbara Sheen Todd and Robert M. Jones, “Building 

Consensus on Development Issues, Intergovernmental Perspec- tive 18 (Winter 1992): 19-22, 38. 

75 Lloyd Burton, “Negotiating the Cleanup of Toxic Groundwa- ter Contamination: Strategy and Legitimacy,” Natural Resources Joumal 28 (Winter 1988): 106. 

76EPA, Office of Administration and Resources Management, 

Public-Private Partnership Case Studies: Profiles of Success in 

ProvidingEnvitvnmental Services (Washington DC, September 

1989). 

77 U.S. Department of the Interior, Fish and Wildlife Service, 

and Environment Canada, North American Waterfowl Mwiagement Plan: 1989 Annual Report (Washington, DC, 1989); US. 

Senate, Committee on Environment and Public Works, North 

American Wetlands Conservation Act, Committee Report 

78 Fred W Finlinson, “Meeting Tomorrow‘s Environmental 

Needs with Today’s Limited Resources,” in EPA, Office of Administration and Resources Management, Paying for Progress: 

Perspectives on Financing Environmental Protection (Washington, DC, Fall 1990), p. 60. 

U.S. Office of Management and Budget, Budget of the United 

StatesGovemment, FiscalEarl993 (Washington, DC, 1992), p. 

81 Conservation Foundation, Protecting America’s Wtlands: An 

Action Agenda- The Final Report of the National Wtlands 

Policy Forum (Washington, DC, 1989). 

a2 Office of Technology Assessment, Wetlands: Their Use and Regulation, p. 11. 

83 State of Alaska, Testimony (p. 1676); National Wetlands Coalition, Testimony (p. 1652); and National Association of Indus101-161 (1989). 

79 Bear, “NEPA at 19.” 

I 227-228. 

84 U.S. Advisory Commission on Intergovernmental Relations 
trial and Office Parks and International Council of Shopping 

Centers, Testimony @. 1616), Status of the Nation’s Wetlands 

and Laws Related Thereto. 

‘4 Office of Technology Assessment, Wetlands: Their UseandRegulation, pp. 117-138, 155; Ken Adler, EPA, Office of Policy, 

personal communication, February 22,1991; Beverly E Birkitt 

and Susan Gray, “Wetland Impact Evaluation and Mitigation: 

Comparing Apples and Oranges,” in David E Fisk, ed., Wet- lands Concerns and Successes, Symposium Proceedings, Tam- pa, Florida, September 17-22, 1989 (Bethesda, Maryland: 

American Water Resources Association, 1989), pp. 259-267; 

EPA, Bibliographic Series: Wetlands Protection, (Washington, 

DC, October 1988). 

”National Wildlife Federation, Testimony, Statusof theNation’s 

Wetlands and Laws Related Thereto, pp. 1421-1422. 

86 Jack L Knetsch, “Environmental Policy Implications of Dis- parities between Willingness to Pay and Compensation De- manded Measures of Values,” Journal of Environmental 

Economics and Management 18 (1990): 232-233. 

87 Federal Highway Administration, The Fedeml Highway Administration ’s Environmental Policy Statement (April 20,1990). 

Eugene W. Cleckley, Chief, Environmental Operations Division, Federal Highway Administration, personal communica- tion, April 18, 1991; Cleckley, “Integrating NEPA into the 

Federal aid Highway Program,” Case Study Presentation at 

CEQ Conference on NEPA Integration. 

’’ EPA, Reducing Risk, p. 11. 

Nicholas Yost, session chairman summation, CEQ Confer- ence on NEPA Integration. 

Western Governors’ Association, White Paper on Federal Wa- ter Policy Coordination; Engineering Foundation and Universities Council on Water Resources Conference, Water 

Resources Planning and Management in the United States 

Federal System, Conference Proceedings, July 6-11, 1986, 

Hennicker, New Hampshire ; Charles H.W. Foster and Peter P. 

Rogers, “Federal Water Policy: Toward an Agenda for Action,” Discussion Paper (Cambridge: Harvard University, 

John E Kennedy School of Government, Energy and Environmental Policy Center, August 1988); and Light and Wodraska. 

92 City of Colorado Springs, Testimony, p. 2. 

93 Sen. Quentin Burdick, “Starting Fresh with Environmental 

Education,” EPA Journal 16 (September/October 1990): 32. 

94Al Alm, ‘!A Dream that Hasn’t Come True,” EPA Journal 15 

(September/October 1990): 12. 

95 Teny Davies, The Environmental Protection Act (Washington, 

DC Conservation Foundation, September 1988). 

“William K. Reilly, “AVision for EPKs Future,” EPA Journal 15 

(September/October 1990): 6. 

97 “English, Welsh Environmental Laws to Emphasize Inte- grated Pollution Control,” International Environmental Re- porter (September 1988): pp. 477-478; Department of the 

Environment, United Kingdom, Water and the Environment: 

The Implementation of European Community Directives on Pollution Caused by Certain Dangerous Substances Discharged into 

the Aquatic Environment, Circular 7/89, March 30,1989; Euro- pean Community, EEC Fourth Environmental Action Programme (1987-1992) (Commission of the EC, 1987, p. 18; 

Davies, The Environmental Protection Act, p. 4. 

98Ru~~ell Train, “The Case for an Organic Environmental Pro- tection Act,” in EPA, Paying for Progress: Pempectives on Fi- nancing Environmental Protection, p. 84. 

Davies, The Environmental Protection Act, p. 3. 

loo See several articles on the subject by members of Congress in 

EPA Journal 16 (September/October 1991). 

lo’ Officials of EPA and Corps of Engineers have testified that 

they favor continuing roles for both agencies in the 404 pro- gram. See testimony of David G. Davis @. 46) and John s. 

Doyle, Jr., Principal Deputy Assistant Secretary of the Army, 

Civil Works @. 69), in Status of the Nation’s Wetlands and Laws 

Related Diereto. 

lo’ CEQ, 21st Annual Report, pp. 190-195. 

lo3 Paul R. Portney, “Overall Assessment and Future Directions,” 

in Portney, ed., Public Policies for Environmental Protection, p. 

286. 

Wirth and Heinz; a summary of Project 88 by the project’s director is in Robert N. Stavins, “Harnessing Market Forces to 

Protect the Environment,” Environment 31 (January/February 

1989): 5-7, 28-35; Kenneth I. Rubin and Mark Alderson, Financing Marine and Estuarine Programs: A Guide to Resources 

(Washington, DC: EPA, Office of Marine and Estuarine Protection, September 1988); Evelyn Shields, Funding Environ- mental Programs: An Examination of Alternatives (Washington, 

DC National Governors’ Association, 1989). 

lo’ Frederick R. Anderson et al., Environmental Improvement 

through Economic Incentives (Baltimore: Johns Hopkins University Press, 1977); Wirth and I3einz;Deborah L Bleviss and 

Peter Walzer, “Energy for Motor Vehicles,” Scientific American 263 (September 1990): 102-109. 

lo6 Bear, “NEPA at 19.” 

lo’ Bear, personal communication. 

Gunter Schramm, The Value of Time in Environmental Decision 

Processes (Ann Arbor: University of Michigan, School of Natural Resources, November 1979); Office of Technology Assessment, Wetlands : Their Use and Regulation, pp. 141-163. 

U.S. Advisory Commission on Intergovernmental Relations 85