just held a hearing on risk assessment involved in environmental decision-making.

I think we have to keep in mind that not all issues are created equal, and we have to address them logically and on a global basis. We simply need to do a better job of setting priorities and focusing our efforts on the first of these priorities.

We have another interruption?

The CHAIRMAN. We are going to have to suspend temporarily. So, if you will just abide with us, we will have to leave here and go vote and come back. Be back in about 10 minutes or so.

The CHAIRMAN. We will try to get started. Ladies and gentlemen, we had another vote over there. That explains why we were gone a little bit longer.

Doctor?

Mr. BUZZELLI. Thank you. Thank you. The next time I come to town maybe we will settle on the name of general or something. We will see.

As I was saying, there are three areas, three principles that I think we need to use on environmental policy. The first one I mentioned, which was we have to establish clear priorities based on sound science and risk assessment.

The second area is something that I really believe strongly in and that is that we simply have got to begin to focus more of our policies and technologies on pollution prevention rather than endof-pipe treatment. This really has to be our ultimate goal. We really need in industry to embrace new and environmentally advanced processes and technologies and products, but we really need to focus them on the prevention side.

In our own company we believe in that. Let me give you a couple of examples because I think, unfortunately, today we are required to spend an awful lot of our environmental capital dollars on regulatory-driven as opposed to pollution-prevention initiatives. Just a couple of quick examples.

In 1992, when we go back an take a look at the amount of capital that we spend, the environmental capital in our company, which is about $200 million a year-in 1992, when we look at the portion of it that was spent on-which was required by regulation, we lost 16 percent for every dollar we invested. And when we look at the amount of money that we put in pollution prevention, which is usually our own voluntary programs in fact, always is last year we gained a positive return on investment of 53 percent. So when I look at that, quite frankly, the answer to me is quite simple. We need to get industry to switch to pollution prevention as a goal.

We really need to as a country find a way to motivate and encourage pollution prevention rather than continually focus on endof-pipe treatment, because I believe that the return to the environment will be higher and I know that the economic return will be higher.

And the third area which I believe we need to focus on is employing market initiatives that really put in place lasting environmental solutions. We are just beginning to start to look at areas like full cost accounting and full cost pricing, and starting the de

bate, quite frankly, between the private sector and the public sector on how do we really include environmental costs in our products. How do we ultimately ensure that when somebody buys a product or a service they know that the environmental costs are incorporated into the cost of that good or service?

I don't think we are ready for public policy or legislation yet in this area, but it is an emerging topic area that is not without controversy, including in the business sector by itself.

We have got some great examples in this country and in our company of where we are changing policy and changing technology to really benefit the environment from a sustainable development standpoint. I would like to kind of just mention three quick examples.

In a very basic sense, we have seen in some progressive communities a different focus on trash that is building up in the communities. Quite frankly, many communities are finding out that free trash service isn't quite so free when they have to reauthorize a landfill or find space for solid waste, and so we are seeing some communities begin to charge by the bag instead of burying the cost in their taxes. And in those communities we are beginning to see significant reductions of solid waste ending up going to landfill. Not a big surprise. When people pay directly for something, they generally conserve it.

In the area of technology development, we have just developed a new process for producing plastic foams that uses carbon dioxide as a blowing agent instead of HCFCs, and that technology, incidentally, uses carbon dioxide which is naturally occurring so we are recycling carbon dioxide, not generating new carbon dioxide.

These developments are licensed and we have patents issued, and we license this technology now around the world and have Í think right now at this point six licenses outstanding.

And a third area that I know that this committee is involved in is in the area of life-cycle assessment or life-cycle analysis. Our belief is that life-cycle analysis is a tool that is just beginning to emerge and is very, very useful in really taking a look at the entire environmental impact of a product, a good or a service.

This technology, we are finding, is not without its concerns because it can be used and it can be misused. I think there is just a beginning effort in both the United States and in Europe to begin to start to standardize on a given methodology to employ life-cycle analysis.

Well, I could give you all kinds of different examples, but the real question in my mind is in the end of how do you really balance environmental reform and economic development? How do we really move from a command and control style of regulation and policy to putting on our books incentive-based motivational processes that encourage pollution prevention and that focus on the market forces. We got a lot of examples today, and I won't share them with you, they are in my paper, of where we have found specific examples of where the current processes are really putting in place disincentives to doing the right thing. And I don't expect Congress to go in and fix every part of every regulation, but I think it is important that we all need to be aware that these disincentives do exist.

And really, we need to focus on innovative strategies and technologies, and we need to find ways to continually remove the disincentives and barriers that we have in our current system so that we really can make the kind of true progress toward sustainable development that we are all looking for.

Again, I applaud the efforts of the subcommittee and certainly pledge my support and cooperation. Thank you. The CHAIRMAN. Thank you, sir.

[The prepared statement of Mr. Buzzelli follows:]

Vice President and Corporate Director

Environment, Health & Safety and Public Affairs The Dow Chemical Company

U.S. House of Representatives
Subcommittee on Technology,

Environment and Aviation

of the

Committee on Science, Space and Technology

Thank you, Mr. Chairman. I appreciate the invitation to join you here today to share my views with you and the other members of this subcommittee.

Let me begin by commending you for having the foresight to look at new approaches to the environmental policy-making process in our country -especially as it relates to balancing environmental goals with economic goals. I think what you are doing is part of a significant shift. And it certainly is a shift in the right direction a shift from confrontation to partnership -- from gridlock to progress.

In the past, environmental policies were crafted behind closed doors with very limited input. When they surfaced, they were attacked and torn apart by different groups with a wide range of interests. As a result, we ended up with environmental policies, which, although well intended, were quite often counterproductive.

Environmental policy in the U.S. has evolved law by law and regulation by regulation. It has somewhat arbitrarily separated pollution of the air from that of land or water, and it has stressed cleanup more than prevention. As a result, environmental programs sometimes conflict with one another. We have yet to define a clear set of national environmental goals, or a coherent national strategy to achieve them. Instead, our policies have been formed in a piecemeal fashion.

Over the last few years, however, I've noticed a change. There was a point not too long ago, for instance, when industry would have never had a seat at this table. Our early input was simply not asked for. We knocked, but usually were not invited in. If we were invited in to testify, it was usually because we were in some sort of trouble.

Fortunately, as I said, that is changing. This is the third time this year I have been asked to present my views on environmental policy before a congressional committee. Dow's Chairman and CEO Frank Popoff received and accepted two invitations to do the same earlier this year. Each of these opportunities was positive and represents a step in the right direction in terms of developing national environmental policy. The more balanced the input is, the more balanced the policy will be.

In my mind, that's the key to making environmental progress -- finding the right balance. To do so, we will need to continue working together to incorporate the best policies of the past with new, innovative approaches to address today's -and tomorrow's - realities.

Today I'd like to give you a three-point overview of what that approach is likely to be. I'll mention them now, then talk more about each in greater detail.