GAO Report Released: Natural Resources and Environment: Funding for 10 States' Programs Supported by Four Environmental Protection Agency Categorical Grants

Recently, the Government Accountability Office (GAO) released a report, titled Natural Resources and Environment: Funding for 10 States' Programs Supported by Four Environmental Protection Agency Categorical Grants GAO-13-504R (May 6, 2013). The details of the 73-page report, available here, are discussed below:

Why GAO Did This Study

In the last 10 years, appropriations for EPA's categorical grants have generally decreased from a high of $1.17 billion in fiscal year 2004 to $1.09 billion in fiscal year 2012 (in current dollars). Members of Congress and state stakeholders have expressed concerns about the adequacy of EPA categorical grant funding in light of recent economic conditions and the effects on state budgets. 

GAO reviewed four of these grants--the Water Pollutant Control, Nonpoint Source, Air Quality, and Underground Injection Control grants--that made up 60 percent of the total budget for categorical grants in fiscal year 2012. GAO also reviewed funding for state programs that use these grants in 10 states, including Hawaii, Idaho, Michigan, Mississippi, Nebraska, New Jersey, North Dakota, Oklahoma, Vermont, and West Virginia. 

Why GAO Did This Study

GAO is not making any recommendations. GAO provided a draft to the agency for comment. EPA provided technical comments by e-mail, which were incorporated into the report as appropriate. GAO also provided relevant sections of the report to agency officials in the 10 states reviewed. The state agencies provided technical comments, which were incorporated into the report as appropriate.

UNEP Report Released: Recent Trends in Material Flows and Resource Productivity in Asia and the Pacific 2013

Recently, the United Nations Environment Programme (UNEP), released a new report titled, Recent Trends in Material Flows and Resource Productivity in Asia and the Pacific 2013. The 36-page report available here, discusses the following:

[t]his report is intended to supplement the original Resource Efficiency: Economics and Outlook for Asia and the Pacific report (UNEP 2011). The content is based on an updated material flows database which presents data up to 2008, and the onset of the Global Financial Crisis (GFC). The scope of this report is considerably narrower than the original report, focussing on deepening quantitative analyses specifically relating to primary material flows in the ten greatest resource consuming countries in Asia and the Pacific, and the trajectories of related resource efficiency indicators.

TEEB Report Released: Natural Capital at Risk: The Top 100 Externalities of Business

This month, The Economics of Ecosystems and Biodiversity (TEEB), a "a global initiative focused on drawing attention to the economic benefits of biodiversity" released its report Natural Capital at Risk: The Top 100 Externalities of Business(2013). According to the executive summary, this 43-page report available here, discusses the following:

Natural capital assets fall into two categories: those which are non-renewable and traded, such as fossil fuel and mineral “commodities”; and those which provide finite renewable goods and services for which no price typically exists, such as clean air, groundwater and biodiversity. During the past decade commodity prices erased a century-long decline in real terms, and risks are growing from over-exploitation of increasingly scarce, unpriced natural capital. Depletion of ecosystem goods and services, such as damages from climate change or land conversion, generates economic, social and environmental externalities. Growing business demand for natural capital, and falling supply due to environmental degradation and events such as drought, are contributing to natural resource constraints, including water scarcity. Government policies to address the challenge include environmental regulations and market-based instruments which may internalize natural capital costs and lower the profitability of polluting activities. In the absence of regulation, these costs usually remain externalized unless an event such as drought causes rapid internalization along supply-chains through commodity price volatility (although the costs arising from a drought will not necessarily be in proportion to the externality from any irrigation). Companies in many sectors are exposed to natural capital risks through their supply chains, especially where margins and pricing power are low. For example, Trucost’s analysis found that the profits of apparel retailers were impacted by up to 50% through cotton price volatility in recent years. Economy-wide, these risks are sufficiently large that the World Economic Forum cites ‘water supply crises’ and ‘failure of climate change adaptation’ along with several other environmental impacts among the most material risks facing the global economy.

This study monetizes the value of unpriced natural capital consumed by primary production (agriculture, forestry, fisheries, mining, oil and gas exploration, utilities) and some primary processing (cement, steel, pulp and paper, petrochemicals) (see Appendix 3) in the global economy through standard operating practices, excluding catastrophic events. For each sector in each region (region-sector), it estimates the natural capital cost broken down by six environmental key performance indicators (EKPIs), and a ranking of the top 100 costs is developed from this. It also estimates the 20 region-sectors with the highest combined impacts across all EKPIs to provide a platform for companies to begin to assess exposure to unpriced natural capital, both directly and through supply chains. In doing so it allows investors to consider how their assets may be exposed. It also highlights sector-level variation in regional exposure to impacts to identify opportunities to enhance competitive advantage. It does not attempt to assess the rate at which these costs may be internalized, and whether sectors are able to adapt, but attempts to give a high-level view of where natural capital risk lies, and what this could mean for business profitability in a more sustainable regulatory environment.

TEEB Report Released: Organizational Change for Natural Capital Management: Strategy and Implementation

This month, The Economics of Ecosystems and Biodiversity (TEEB), a "a global initiative focused on drawing attention to the economic benefits of biodiversity" released its report Organizational Change for Natural Capital Management: Strategy and Implementation (2013). The 47-page document available here, discusses the following:

Organisational Change for Natural Capital Management: Strategy and Implementation is based on data from 26 businesses across nine industrial sectors (60 per cent of them with revenues of over US$10 billion), which are implementing behavioural and organisational changes to promote natural capital management.

The main findings of the study include:

• A small group of pioneering companies, who recognise the growing business case for NCM, are moving NCM forward and expect to build it deeply into their business within the next 3 years.

• Their rationale is that they will be much better positioned than other companies to manage and thrive in a resource-constrained world that could have serious implications for business in 3-5 years.  

• Delaying the measurement and management of natural capital carries a significant business risk for companies regarding the availability of key raw materials and maintaining competitive advantage.  

• In particular, the availability of freshwater, renewable energy, climate regulation, fibre and food were identified as the most important natural capital risks in the next 3 -5 years.  

• Current barriers to change for business on NCM are at the macro-level (e.g. lack of government regulation and customer demand) and organisationally. In particular challenges at the organisational level include establishing the relevance of NCM to the business, and a lack of harmonised methods to measure, prioritise and integrate natural capital into business decision-making.

• NCM is a business innovation that changes business processes, practices, systems and strategies. It is therefore a major driver of organisational change.

UNEP Report Released: A New Angle on Sovereign Credit Risk, E-RISC: Environmental Risk Integration in Sovereign Credit Analysis

Yesterday, the United Nations Environment Programme released a new report titled, A New Angle on Sovereign Credit Risk, E-RISC: Environmental Risk Integration in Sovereign Credit Analysis (2012). The 40-page report available here, examines five test countries including Brazil, France, India, Japan and Turkey and addresses how,

[l]oss of soils, forests and fisheries, as well as rising resource costs, are likely to become increasingly important to a nation’s economic health, and may affect its ability to repay or refinance sovereign debt, says the study issued by the United Nations Environment Programme’s Finance Initiative (UNEP FI).

The report suggests that factoring the way a country manages natural assets into sovereign bond ratings may not only give investors increased transparency when making investment decisions, but also encourage governments issuing sovereign debt to manage their natural resources more sustainably in order to attract investors over the medium to long term.

Beyond 2012: Meeting the Nation's Environmental, Energy, and Resources Challenges -- ABA Webinar

This ABA sponsored CLE program will focus on law and policy challenges the nation is likely to face in mid-2013 in the environmental, energy, and resource areas, and possible approaches to address them. These challenges will exist regardless of who controls the White House and Congress at that time.

For that reason, the speakers will concentrate on assisting lawyers and clients in anticipating and responding to critical issues without regard to the outcome of the 2012 election. Many current controversies and dilemmas seem likely to persist, but the speakers, who have vast experience in their fields, will identify and comment on emerging topics as well. The program will include remarks by each speaker centered on his or her area of expertise, followed by a discussion among the speakers of topics on cross-cutting importance.

Date: Wednesday, January 18, 2012
Format: Live Webinar
Duration: 90 minutes
Time: 10:30 AM-12:00 PM Eastern