"Improving" Project XL: Helping Adaptive Management to Work within EPA

Abstract

ABSTRACT Since 1995, the U.S. Environmental Protection Agency has struggled to implement an experiment in regulatory reinvention it calls Project XL (Excellence in Leadership). In doing so, EPA is experimenting with regulatory reform based on the theory of management, a theory that can conflict with EPA's command and control enforcement philosophy.(1) Project XL attempts to implement an adaptive approach by planning and monitoring their results for lessons that can be used to guide reform of regulatory systems. Proponents hope to encourage the private sector to collaborate with EPA to plan, run and monitor experiments in environmental compliance, rethink regulation and apply new technologies. To date, this has not occurred to the extent that XL's designers had hoped. In The Risks and Advantages of Agency Discretion: Evidence from EPA's Project XL, we concluded that EPA's history and structure make it a challenging locale in which to attempt adaptive management. Indeed, the advent of XL caused a clash of philosophies (between adaptive and command and control adherents) that generated significant tensions within EPA, and spilled over to project stakeholders outside the Agency. We believe that Project XL can be improved. To that end, this paper offers strategies designed to succeed without statutory reform or other sea changes to the existing Project's framework. We propose strategies that: can be implemented quickly and without congressional intervention; focus all stakeholders on jointly defining and achieving XL's mission; encourage EPA to use the discretion it already has to facilitate a flow of more innovative XL proposals; and promote greater efficiency in the review and approval of new XL projects. I. INTRODUCTION Since 1995, the U.S. Environmental Protection Agency has struggled to implement an experiment in regulatory reinvention it calls Project XL (Excellence in Leadership).(2) EPA envisions Project XL as a national program designed to test innovative ways of achieving better and more cost-effective ways of ensuring public health and environmental protection. Under Project XL, sponsors (private facilities, industry sectors, federal facilities and communities) are encouraged to implement innovative strategies to produce superior environmental performance by replacing specific regulatory requirements, and promoting greater accountability to stakeholders. EPA seeks to attract project sponsors by proposing to grant regulatory flexibility in exchange for commitments to achieve better environmental results - results superior to those that would otherwise have been attained through full compliance with regulations. Through site-specific agreements with project sponsors, EPA tries to gather data and project experience to help the Agency redesign its current approaches to ensuring public health and environmental protection. Thus, XL projects are meant to be real world tests of innovative strategies to achieve cleaner and less expensive results than conventional regulatory techniques. In implementing Project XL, EPA is experimenting with regulatory reform based on the theory of management - a theory that can conflict with EPA's command and control enforcement philosophy. Adaptive theory treats almost all governmental interactions as experiments, from which we can continuously learn what works and what does not.(3) Adaptive envisions a continuous process of institutional transformation, as entities their philosophies and strategies through continuous assessment and improvement. Change is driven by a constant flow of information gathered via purposeful experimentation. Thus, adaptive experiments should be of as continuous research projects through which the thought processes of dynamic institutions evolve towards increasing efficiency in meeting the goals of environmental policy. …