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Advice Letter: National Environmental Technology Competition 8/5/02

National Advisory Council for
Environmental Policy and Technology

August 5, 2002

Governor Christine Todd Whitman
Administrator
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460


Dear Governor Whitman:

On behalf of the National Advisory Council for Environmental Policy and Technology (NACEPT), I am pleased to forward the Council’s advice letter regarding the National Environmental Technology Competition. At the request of the U.S. EPA Office of Research and Development, NACEPT has reviewed EPA’s preliminary plans for the creation of the National Environmental Technology Competition (NETC). As you are aware, the NETC is an FY2003 budget initiative designed to identify the most important technological needs of the future and reward those who create the innovations to meet them.

Let me first express my sincere appreciation for the efforts of the NACEPT NETC Workgroup members who spent many hours reviewing the NETC Preliminary Implementation Strategy and other pertinent documents, and further time discussing the program’s important governmental and market implications. The Workgroup, chaired by Dan Watts of New Jersey Institute of Technology, was ably assisted in its efforts by the participation of the following experts:

• F. Henry Habicht II, CEO, Global Environment & Technology Foundation
• Harvey M. Bernstein, President and CEO, Civil Engineering Research Foundation
• Andrew Patterson, Partner, Environmental Business International
• Costis Toregas, President, Public Technology, Inc.
• David F. Stead, Executive Director, Energy & Environmental Capital Network
• Timothy C. Lindsey, Manager, Illinois Waste Management & Research Center
• Penelope Hansen, Senior Research Associate, SCG, Inc.

The advice accompanying this letter addresses the four questions posed to NACEPT by the ORD Charge on this issue (see Attachment 1), amplified by the NETC Preliminary Implementation Strategy document (Attachment 2), and modified by the information and issues raised in discussions with the experts listed above and EPA staff.


In closing, I would like to thank the EPA management and staff who worked very collegially with us on this project, Jay Benforado, Stephen Lingle, E. Timothy Oppelt, Walter Kovalick, Jr., Mark Joyce, and Sonia Altieri. And finally, let me express a note of thanks to my colleagues on the NACEPT Workgroup for their time and thoughtful contributions to this report:

• Dan Watts, New Jersey Institute of Technology (Chair)
• Randal Coburn, Empire State Development, Albany, NY
• Charles Jones, Commissioner of Douglas County, Lawrence, KS
• Marc Rogoff, HDR Engineering, Tampa, FL
• Richard Sustich, Metropolitan Water Reclamation District, Chicago, IL
• Patricia Wood, Georgia Pacific Corporation, Washington, DC

We look forward to future collaboration on NETC as it develops through the years and hope that its successful implementation by the Agency will assist in the proliferation of cost-effective environmental technologies in the United States and around the world.


Sincerely,

 

Dorothy Bowers
ChairNational Advisory Council for Environmental Policy and Technology


Enclosure

 
cc: Eileen McGinnis, Chief of Staff
 

Paul Gilman, Assistant Administrator, ORD
Jay Benforado, Deputy Associate Administrator, OPEI
Peter Preuss, Director, National Center for Environmental Research, ORD
Stephen Lingle, Director, Environmental Engineering Research Division,
National Center for Environmental Research, ORD
Timothy Oppelt, Director, National Risk Management Research Laboratory
Walter Kovalick, Director, Technology Innovations Office, OSWER
Daiva Balkus, Director, OCEM
Gordon Schisler, Deputy Director, OCEM

Attachment 1

ORD Charge to the
National Advisory Council for Environmental Policy and Technology

Background:

The President’s FY ‘03 budget request to Congress includes a $10 million initiative called the National Environmental Technology Competition (NETC). The NETC is a new public/private partnership to stimulate technology development in areas where gaps in environmental protection exist. The program seeks to recognize and reward the developers of innovative technologies that produce more effective and lower cost solutions to environmental problems. EPA will work with a broad spectrum of stakeholders to identify specific present and future environmental problems for which new technology may hold the key to cost-effective solutions. National solicitations will be announced in these areas seeking innovations and approaches that meet defined performance objectives, challenging the development community to create solutions for the twenty-first century. External panels of experts will judge these technologies, and the best will be honored with prestigious awards.

Committee Charge:

To establish a collaborative partnership with the National Advisory Council for Environmental Policy and Technology (NACEPT), ORD invites NACEPT to help us design the NETC, and to monitor its implementation and results. ORD seeks initial advice from NACEPT at the Council meeting scheduled for July 2002, and requests continued, periodic involvement as the program is developed and implemented. We understand that a workgroup consisting of a subset of the Council will be established prior to the July 2002 Council meeting. If NACEPT agrees to this partnership with ORD, we propose the following initial charge to the Council:

ORD requests that NACEPT review ORD’s proposed approach to implementing the NETC. The document accompanying this charge, NETC: A Preliminary Implementation Strategy, spells out current thinking on the goals, operating principals, and process for the program. An EPA NETC Workgroup has reviewed this document and identified the issues found below as key decisions in shaping the NETC. Comments from NACEPT are welcome, however, on any aspect of the program objectives and design.

Objectives and approach: The NETC represents a new approach to stimulating technology development that leverages normal competitive market forces by providing clear targets of need that identify market opportunity, and by offering the additional incentive of national recognition and possible monetary rewards. This approach has not been used broadly. Will this approach achieve the goal of producing technologies that are more effective and offer lower cost solutions to environmental problems? Will it stimulate technological development in areas where gaps in environmental protection exist? Will it create potential market opportunities in the future? What “stoppers” do we need to anticipate?

Environmental Technology Gaps Identification: EPA is planning to engage state and local government organizations, industry, and public interest groups through a series of meetings and workshops to receive input on the highest priority environmental problems needing new technological solutions. EPA’s research, program, and regional offices will be active participants in this process. Is this an appropriate approach to identifying gaps? Should NETC initially focus on the Agency’s priorities in its new Innovation Strategy (i.e., smog, greenhouse gases, water quality maintenance and restoration, and water infrastructure technologies) or be open from the beginning to any type of need? What criteria should be used to set priorities among individual technology types, e.g., risk, cost, potential to support emerging regulatory directions, etc.? Should challenges be broad difficult issues, e.g., replacing municipal infrastructure at a significantly reduced cost, or more reachable targeted challenges, e.g., a cheap, reliable monitor for VOCs to support emissions trading?

Technology Evaluation Process: EPA is planning to use external expert review panels to evaluate technology candidates. Special panels of experts will be convened depending on the technology category. A key issue is the level of performance information and data that the panels should have before them in order to evaluate the technologies. We are concerned that the program and the Agency would lose credibility if awards were made for technologies that ultimately proved to be ineffective. ORD believes that an independent performance evaluation, using standard protocols and data quality criteria is necessary. However, this would force responders to seek third party performance testing such as that provided by the Environmental Technology Verification (ETV) program, or equivalent processes. Does this place too much of a restriction on participation in the NETC program? If cost is an overriding issue in defining technology needs, how does EPA set cost criteria or cost protocols? Should we have stakeholders and partners do it?

Type of awards: EPA sees the awards as serving two principal purposes – an incentive to encourage technology developers to produce new technologies in targeted gap areas, and a way to help overcome certain barriers to commercialization found in the environmental marketplace. Honorary awards, e.g., the “2003 Presidential Award for Environmental Technology Innovation”, have been considered a given. The desirability of providing monetary awards, whether modest, e.g., $25 -100 K, or larger, is less clear. Does NACEPT believe such awards would increase response to the competitions? Would they add to the visibility of the program and the technologies honored by it or provide other benefits? Are there negatives to providing cash awards? Are there large company/small company issues? What other types of monetary benefits should be considered? For example, support for early field application or support for state and local organizations to assist in technology implementation?

Past or future accomplishments: Should this program be prospective only (new technologies not yet developed or in the earliest stages of commercialization) or should it also recognize past technology achievements? For example, a competition could seek companies who had been exemplary in adopting innovative technologies and achieving outstanding environmental results or cost savings. One option being considered is to partner with the Department of Commerce through the National Medal of Technology competition, which recognizes past accomplishments.

How many winners: Should we try to identify only the “best” in each technology category, or make multiple awards to all technologies that the review panels believe meet certain criteria? How should we deal with technologies that are good, but not best? Can we name one or two winners in a category, without producing a significant number of “losers” that still have good technology? And how do we deal with technologies that are clearly superior in performance, but significantly more expensive than their alternatives? This can also have a time dimension; for example, a technology gap may be addressed by a particular single or group of approaches now and by other, perhaps superior technologies that may appear within the next few years. Should competitions remain open for new innovations in the future or be one time events? Is having multiple winners or time scales either confusing or diluting to the program?

Success factors: How should we measure the effectiveness of this program and how will others judge its success? Possible criteria include the extent to which results are produced, e.g., the number of successfully developed technologies, the number of implementations of award winning technologies, improved environmental performance measures, and the quality of the process, e.g. fairness, inclusiveness, broad stakeholder participation, effective state partnerships. Are there others that should be considered?

 

Attachment 2

The National Environmental Technology Competition
NETC

A Preliminary Implementation Strategy
April 2002


“ The goal of EPA’s NETC program is to help recognize and reward innovative technologies that produce more effective and lower cost solutions to environmental problems and to stimulate development where major technology gaps exist. This competition builds public-private partnerships, fosters technological innovation through competition and promotes the development of new, cost-effective technologies that address some of our most pressing environmental challenges.”

Governor Christine Todd Whitman
EPA Administrator
February 2002


        The National Environmental Technology Competition (NETC), a FY2003 Presidential initiative, has been created to stimulate the flow of American technological innovation toward the invention and deployment of new technologies to better protect the environment. The program will result in annual Presidential awards to those technology developers who produce the best innovations to address environmental problems for which the country does not now have adequate solutions. The clear identification of technology gaps that exist today and those that are likely to exist in the future is an important part of the Competition mandate. Therefore, two broad goals are fundamental to NETC which seeks to:

        This paper offers an early view of the goals, operating principles, and procedures that are expected to be used in the execution of the program. One of the most important aspects of the NETC articulated by Governor Whitman, however, is that it will be conducted as a public-private partnership. As the partnerships between EPA and the diverse groups described below are formulated and put into practice, the operational specifics of the program will evolve and change. Many of the aspects of NETC laid out in this paper are open to discussion and modification.Readers are encouraged to comment.

Operating Principles

The following five principles are basic to the conduct of the entire NETC program and structure most of the processes that will be used to carry it out.

  1. The NETC will operate as a public/private partnership in its major functions, seeking input and participation from a broad spectrum of individuals and organizations with knowledge about both the needs of the environment and the innovative technologies that can meet them.
  2. The NETC will utilize existing resources and priority setting processes within EPA to rapidly and efficiently put in place the infrastructure necessary to assist its new partnerships in (1) identifying technology gaps or needs, (2) establishing criteria for technologies to meet those needs, and (3) evaluating commercial ready technologies submitted by the private sector for award consideration.
  3. The NETC will develop its list of technology needs through an ongoing process of identification and refinement, seeking input from state and local governments, technology buyers in both the public and private sectors, academic and technical environmental experts, and from all parts of the Environmental Protection Agency.
  4. The NETC will establish selection criteria for needed technologies that take into consideration all pertinent facets of technological performance including the ability to reduce, prevent or measure pollution, multi-media impacts, capital and operating costs, reliability and practicality of operation, and any other aspects that are deemed to be important by stakeholders.
  5. The NETC will select commercial ready technologies for awards based upon independently derived, high quality data to assure fairness to all developers and to the technology using and buying public who will look to this award program for guidance.

Public - Private Partnerships.

        Over the last decade, public-private partnerships have become increasingly common mechanisms to carry out programmatic activities that utilize private sector cost reduction and profit motivations to achieve publicly defined goals. This has been especially true in the environmental technology area in which the public goal of monitoring, decreasing, or controlling pollutants is virtually impossible to achieve without the active participation of the private sector. Bringing new technologies into the marketplace where they can be purchased and used to protect the environment involves many players. All of the groups found below would be considered primary participants and customers for the NETC.

        Public-private partnerships are used to facilitate the achievement of at least the following objectives in developing and executing a new program such as the NETC:

        Mechanisms for effective partnering are numerous and may be contractual or voluntary in nature. Both are effective in their appropriate place. Voluntary contributions such as self-supported participation in stakeholder groups and expert review of technical documents make significant contributions and save substantial amounts of money for the program. Financial support could be given to organizations such as the Environmental Council of the States (ECOS), the International City Managers Association (ICMA), or other consortia of state, local, and private entities. Some organizations may simply agree to participate. NETC has already requested and received the support of the National Advisory Council for Environmental Policy and Technology (NACEPT), which has formed a workgroup to assist the program in formulating its initial design and working through the many issues that must be decided as the program is implemented. The EPA Science Advisory Board (SAB) will be requested to review the program in the future. All of these mechanisms may be used by NETC, as appropriate.

        Finally, it is very important to assure that the goals and operating principles of the program are clearly defined and clearly conveyed to all participants before any partnerships are started. These important touchstones are returned to again and again as partners work together. Since every participant will have a slightly different motivation for his or her participation, a clear and definitive statement of what the program is and, by inference, is not aimed at achieving is critical. One of the major purposes of this Preliminary Implementation Strategy is to provide that understanding to potential NETC partners.

Program Process

As presently envisioned, the Competition process will consist of four major steps. First, technology gaps will be identified in each of four priority areas. Evaluation and testing criteria will then be established for each technology. Solicitation and evaluation of submitted technologies will be conducted by independent panels resulting in a list of recommended finalists. And finally, a National Environmental Technology Awards Board will make the selection of award recipients. Each of these steps will be characterized by the participation of important groups both inside and outside government. The first and last steps will be conducted through new partnership activities and the second and third by existing EPA partnership programs.

        Step 1 - Determine National Environmental Technology Gaps. One of the most important products of the NETC will be the public identification of environmental technology gaps that the country now has or is expected to have in the future. The analysis and listing of these gaps will evolve over time and serve as an information resource for all technology developers, whether they choose to enter the competition or not. This list will be created through input from stakeholders across society, but particularly from the EPA program and regional offices, the states, local government, consulting groups, and the technology-buying public and private sector. In order to leverage priority setting activities already underway in the agency, EPA will structure the initial list based upon its recently issued, Innovating for Better Environmental Results: A Strategy to Guide the Next Generation of Innovation at EPA.1 This document lays out a broad direction and mandate for innovative activity and stipulates four priority problem areas for particular attention. These are greenhouse gas, smog, water quality maintenance and restoration, and water infrastructure. The use of these categories is consistent with NETC’s commitment to focus on technologies that solve problems rather than those that are narrowly defined to regulatory areas. To begin the gaps identification process, EPA, after conducting appropriate background studies, will seek broad input through partnerships with organizations such as ECOS, ICMA, NACO, the Civil Engineering Research Foundation, and others. With these state, local, and private sector partners, EPA, represented by appropriate program office, regional, and research staff, will hold a series of four workshops focused on each of the four identified sectors. These workshops will result in an initial identification of technology gaps and priorities that will be sent to the Administrator for her review and public announcement. They can then be used in 2003 and 2004 to structure the rest of the NETC process. It is planned that the four partnerships will remain in existence and meet annually to review the state of the technology. Each annual meeting will result in recommendations for refinement of the evolving gaps list for each area. Other areas of concentration may be selected by EPA in the future if circumstances indicate that this is appropriate.

        1 Readers are encouraged to review this document, which has been widely vetted throughout the Agency. The four problem areas identified are very broad and will require a wide variety of both existing and new technologies to address their many causes and effects. back

        Step 2 - Determine the Technology Evaluation Criteria for Each Gap Area. Once the lists of technology gaps are enumerated and prioritized by EPA and the partnerships described in Step1, the Agency will seek input from the existing stakeholder groups and expert technology panels formed to assist the Environmental Technology Verification Program (ETV) to establish technology criteria. ETV stakeholder groups consist of federal, state and local regulators and permitters, technology developers and purchasers, consulting engineers, academic, professional, and trade associations, technology exporters and financial entities for examples). These groups give broad input on the performance needs of the individual environmental marketplace. After performance needs are identified, ETV technical panels, made up of technical specialists in the particular technology area being verified, are formed to convert these performance needs into detailed testing and quality assurance protocols. ETV now has stakeholder groups and expert technical panels operating in all of the four areas discussed above. These partnerships have as a part of their mandate:

• The formulation of specific factors that need to be known about technologies in order to determine their technical performance, practicality, and ability to be implemented. These may include control or measurement of regulated and non-regulated pollutants, operation and maintenance factors such as energy use, reliability, labor intensivity, and cost information of all types. Cost is expected to be a particularly prominent factor in NETC.

• The type and range of test procedures needed to substantiate performance,

• The data quality assurance levels needed to substantiate the tests.

The establishment of the three types of criteria described above for each technology gap area will allow NETC to stipulate the particular types and quality of data and information to be contained in technology solicitations and submittals. Technology developers will understand from the beginning what will be expected from the technology in terms of performance and what will be required in data packages submitted for Competition awards.

Step 3 - Solicit and Evaluate Technologies in Each Gap Area. Once priorities are set and evaluation criteria are determined for technology categories selected, EPA will issue competitive solicitation announcements. Allowed response time may vary from a few months to a year or more, and may include more than one response deadline to accommodate technologies in different stages of development. Technical Review Panels will be established to review and evaluate the responses to each competition. In keeping with the second principle of utilizing existing EPA capability to rapidly implement the NETC program, ORD will build on the existing peer review process and infrastructure used for its current competitive solicitations to conduct these evaluations. Review panels will be comprised of national experts for each environmental technology area. The Technical Review Panels will evaluate all submitted technology data, analysis, and information packages using the criteria established in Step 2. They will then recommend all technologies that meet the established criteria to the National Environmental Technology Awards Board as NETC Finalists. Each submitted technology will receive a written evaluation from the Technical Review Panel whether it becomes a Finalist in the Competition or not. All Finalists will receive recognition.

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        2 The Agency may choose to use other standards and test procedure design organizations in instances in which ETV does not have coverage or capacity.

      3 The first competitions of the program will start with this step to enable EPA to pilot its awardee selection process while the gap and technology criteria processes are put in place. In the first year, EPA will select one or two well known gap areas on which to focus awards selection.

 

Step 4 - Select National Environmental Technology Competition Winners. The NETC proposes to create a separate National Environmental Technology Awards Board to be composed of six to ten distinguished national figures representing both the public (a governor or mayor, for example) and private (corporation president or major academic figure) sectors. They will review and evaluate the recommendations of the individual Technical Review Panels, and make final award recommendations (multiple awards are expected) to the Administrator. The Awards Board will seek truly outstanding, break-thru technologies that are believed to significantly advance the nation toward solving the identified environmental challenges. Presidential NETC awards would be presented by the Administrator and widely publicized. In addition to the recognition and honor bestowed by these awards, additional award possibilities, both monetary and non-monetary are under consideration. These could include facilitated permitting assistance, state grant support, regional field demonstrations, cash prizes, or a combination of the above, as appropriate.

Measures of Success

NETC will ultimately be judged by several factors.

• The vision and clear thinking of a gaps process that engages all sectors of the environmental community and identifies the legitimate technological needs of the 21st Century.

• The definition of clear and comprehensive criteria and test procedures for each technology gap area identified.

• A fair technology solicitation and selection process that produces legitimate Competition Finalists and then identifies the “best of the best” as the ultimate awardees.

• And finally, the number of deployments of these technologies over a five year period after award and the extent of increased environmental protection gained because of them.

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