It's not that easy being green

With climate change finally being embraced as a bipartisan issue in Washington, we can expect an increase in legislative and regulatory action in this and other environmental areas. As an off-shoot of this event, regulators will inevitably face the question about what exactly constitutes “green” products and services. Advertisers have been touting green advantages for everything from carbon offsets to environmentally responsible clothing, hotels and light bulbs.

While green advertising claims warrant study (indeed, the Federal Trade Commission is weighing whether to update its voluntary “Green Guides” for marketers), they are part of a much larger issue looming for policymakers, businesses and lobbyists. Gone are the days when “made from recycled material” passed for innovation. How our country, and others, propose to both regulate and foster what could be dubbed the sustainability economy affects both our collective health and the environment, along with the fortunes of commercial stakeholders everywhere.

Authorities at all levels of government are trying to catch up with the sustainability economy, which is composed of products designed to be fundamentally cleaner, safer and more efficient, often through means that — while promising — are unfamiliar to, or untested by, regulators. Consider a pesticide designed to inhibit swarms with genes instead of toxins or a start-up’s bid to grow hybrid crops for biofuels harvesting. These innovations, made possible by public and private research prowess and dollars, now face inevitable questions from lawmakers. Who defines their characteristics and tests them? Which state and federal regulators should oversee them and conduct enforcement actions? With the federal government and other large organizations setting aside purchases for legitimate green and sustainable goods, how do we certify candidates for those lucrative contracts? Add to this the fact that Washington has ceded the ground of regulating emerging trends to the states (which is due in part to the current state of partisan fighting), and we see an even more difficult task for federal regulators and a more uncertain regulatory environment for business and consumers.

As any public policy veteran reconciling businesses’ interests with Washington’s political interests can attest, emerging sectors gaining momentum are prime candidates for recalibrated regulation, and thus magnets for intense lobbying. Executives accustomed to courting customers and investors suddenly turn their attention to regulators and lawmakers to protect their interests, while looking to experienced advisers for help. Start-ups, CEOs, universities, trade associations, non-governmental organizations and others claiming leadership positions in the new sustainability era currently have a significant opportunity to engage and inform policymakers.

Consider that what constituted a hybrid car in 2006 might not cover the range of hybrid vehicles today. While the IRS classifies hybrids as vehicles that have “drive trains powered by both an internal combustion engine and a rechargeable battery” and most consumers simplify that further to any vehicle with a gas tank and electric motor, policy insiders and regulators require more detailed codification. Are we talking about electric motors that kick in at stoplights, or those that propel the car the entire time it is in a city?

And it’s no longer just car manufacturers or energy generators that are compelled to develop and implement sustainability technology and practices. Name any company or industry today, from tour operators to airlines to restaurants, and you are guaranteed to find business goals aligned to becoming more green and more sustainable — comparable to how businesses reacted when plastics first began to transform everything we buy, wear, drive or eat. Policy advisers have a tremendous role to play in arranging introductions and building alliances, as the diverse array of businesses affected by sustainability oversight are unlikely to see eye-to-eye on all matters and must choose sides carefully.

The question sustainability policy advocates must influence and answer is how states and federal agencies will regulate all these newly engineered products, from standard-setting to enforcement actions. Those supporting a slow path to substantive rule changes will point to the fact that significant innovation and a growth market of sustainable goods — as well as consumers’ demand for them — occurred without “undue regulation.” Many would argue that too much regulation too soon would likely stifle much of the innovation that is currently occurring. Similarly, this philosophy generally opposes expanded action at the state level that could result in a “patchwork of laws” scenario.

In contrast, those championing more dramatic revisions are likely to contend that the sustainability economy’s rapid growth is prompting consumer confusion and warrants a re-vamp of regulations, some of which were last updated when recycling bins were novel devices. Without clear and universal regulations keeping pace with the sustainability economy, they argue, consumers will be victimized while unproven or, at worst, possibly unsafe materials will cause collective harm.

As with most public policy issues, and in keeping with how Congress generally operates, the answer to regulating sustainability will likely be some form of compromise.

Elliott P. Laws is an attorney in Pillsbury’s Public Policy, Climate Change & Sustainability and Environment, Land Use & Natural Resources practices. He formerly served as assistant administrator for Solid Waste and Emergency Response at the Environmental Protection Agency (EPA) and as president of Safety, Health and Environment at Texaco Inc. Contact him at elliott.laws@pillsburylaw.com.