1992, when the Tennessee Valley Authority (TVA) purchased 10,000 emission allowance credits from Wisconsin Power and Light-setting in motion an innovative mechanism for reducing air pollution. Through this and other new programs, the Bush administration pioneered the use of market incentives as an effective, efficient way to reduce and prevent pollution.

• Managing Natural Resources as Responsible Stewards. In June 1992 the DOI Bureau of Land Management and the USDA Forest Service adopted a philosophy of ecosystem management to protect and restore the integrity of soils, air, water, and biodiversity on lands under their jurisdiction. Both agencies are undertaking forestry initiatives that will phase out clearcutting as a standard practice on federal lands. Also in the past year, the President designated four new national marine sanctuaries off the coasts of Texas and Louisiana, California, Massachusetts, and Hawaii.

Commission on Environmental Quality, which I chair, implemented ten significant initiatives to improve the environment, involving more than 200 organizations. Participants from business, environmental, academic, and philanthropic organizations have shaped the commission into a creative "can do" partnership, with willing partners from groups once considered strictly adversarial.

• Developing Cooperative International Solutions. In June 1992 at the United Nations Conference on Environment and Development in Rio de Janeiro, the United States endorsed four major accords, including the Framework Convention on Climate Change. In the months leading up to Rio, the United States worked hard to shape a comprehensive, action-based climate treaty. Last fall we became the first industrialized nation to ratify the treaty; we were the first nation to set forth our action plan to reduce greenhouse gas emissions.

Preventing Pollution Before It Starts. Nineteen months after proposing a National Energy Strategy, President Bush signed into law

the National Energy Policy Act of 1992. The law sets new standards for energy efficiency, calls for a federal fleet of clean alternative-fuel vehicles, and establishes a voluntary system for private sector reporting of greenhouse gas emissions-provisions to prevent pollution at its source. The Bush administration increased funding by 66 percent to $540 million for such energy research and development as cleancoal technologies and alternative fuels.

• Enforcing Environmental Laws Firmly and Fairly. In 1992 the federal government collected record civil and criminal penalties, among them those stemming from the Exxon Valdez oil spill case-the largest environmental settlement in history. The past year was a record one for environmental enforcement, with the dollar value of federal enforcement actions approaching $2 billion. Firm and fair enforcement is acting as a powerful incentive for innovation and pollution prevention.

CEQ Year in Review

Working closely with federal colleagues, environmentalists, business people, scientists, foreign officials, and concerned citizens, the interdisciplinary team at CEQ fulfills several functions: • advising the President and other senior government officials on environment-related issues; ⚫ overseeing federal agency implementation of the National Environmental Policy Act;

collecting, analyzing, and reporting data on conditions and trends in the environment; and

⚫ coordinating various interagency efforts.

Among our priority efforts in 1992 were the following:

Environmental Data Reporting. CEQ publishes environmental trends information in the annual Environmental Quality report and in periodic issues of the award-winning publication, Environmental Trends. The Council chairs an Interagency Committee on Environmental Trends (ICET), which provides an ongoing forum for coordinating and synthesizing environmental data collection and analysis. ICET plans to issue another state-of-the-environment report by 1994, linking data on environmental stresses and human activities.

Environmental Education. CEQ chairs the ex officio committee of the nonprofit National Environmental Education and Training Foundation (NEET). The Council also participates in the work of the Federal Task Force on Environmental Education, established by the National Environmental Education Act of 1990.

International Affairs. Following two years of contributions to preparatory sessions, CEQ participated in the U.N. Conference on Environment and Development (UNCED), held in June 1992 in Rio de Janeiro. Specifically, we met frequently with foreign officials and helped resolve disputes regarding the global climate treaty, funding and structure of the Global Environment Facility, and establishment of a biodiversity research initiative. With the Department of State, the Council cochairs a working group on implementation of Agenda 21, the action plan for sustainable development adopted at UNCED. CEQ has been designated to conduct public outreach on UNCED

follow-up and we participate in working groups on UNCED initiatives and accords, such as Forests for the Future, and the U.N. Framework Convention on Climate Change.

CEQ was also a key adviser in the President's decision to accelerate the phaseout of substances that damage the Earth's ozone layer.

National Acid Precipitation Assessment Program (NAPAP). CEQ chairs the NAPAP Council, the interagency coordinating group through which federal agencies cooperate to advance acid rain research and monitoring. NAPAP has developed a long-term plan to assess the costs, benefits, and adequacy of the acid rain provisions of the Clean Air Act as they are implemented the first time such a provision has been included in a major environmental statute.

National Environmental Policy Act. CEQ issues regulations for the environmental impact assessment process that are binding on all federal agencies. In 1992, the Council published a report growing out of a series of regional workshops on consideration of biodiversity in the EIA process. CEQ also published a compendium of NEPA training courses and developed a Federal Environmental Quality Awards Program to showcase model NEPA compliance.

President's Environment and Conservation Challenge Awards. CEQ implemented and administers this awards program, established by President Bush to honor those who honor the environment. Recipients of presidential medals are selected by an independent panel of experts for outstanding achievements in the categories of environmental quality management, partner

ships, innovation, and education and communications.

President's Commission on Environmental Quality (PCEQ). CEQ organized, chaired, and provided administrative support for the commission, whose members are business, environmental, academic, and philanthropic leaders. In 1992 PCEQ launched ten initiatives to test innovative methods of pollution prevention, energy efficiency, natural resources stewardship, international cooperation, and education and communications. The Commission prepared a report to the President and the nation to be released in January 1993.

Wetlands, Coasts, and Water. As a member of the Domestic Policy Council Task Force on Wetlands, CEQ advanced the President's no net loss goal and called for a scientific study to determine the best procedures for identifying wetlands. In 1992 CEQ conferred with federal agencies on plans to reauthorize the Clean Water Act. The Council also coordinated Coastal America, an interagency initiative that is restoring, preserving, and protecting the nation's living coastal heritage. In addition to providing administrative and management support, CEQ hosted the Coastal America staff office.

Those interested in further information about these and other CEQ activities may call 202-395-5750 or write CEQ at 722 Jackson Place, NW, Washington, DC 20503.

An All-American Challenge

This, my final report as CEQ chairman, is submitted with mixed emotions with recognition of challenges

unmet but with a sense of satisfaction in the environmental accomplishments of the last four years. In keeping with the President's directive, CEQ was revitalized and staffed with dedicated, caring public servants who labor to help the President make this world a cleaner, safer place. For me, it has been a special privilege to work with this team and to serve a President whose commitment to environmental stewardship comes from the heart.

George Bush kept his promise to the American people; he was the environmental President, with an unmatched environmental record. As historians will note, no administration has done more to foster continuous environmental improvement, both in the short- and long-term.

But as President Bush once wrote, "Environmental progress must flow from action by all Americans, not just government action." The federal government plays a crucial role in research, public information, standard setting, and enforcing the law. But government action alone cannot substitute for what philosopher Aldo Leopold termed "a universal symbiosis with land, economic and esthetic, public and private." The hallmark of the Bush environmental strategy has been to expand the set of policy tools to include market incentives and voluntary partnerships, to spur actions that regulation alone cannot.

And the response has been heartening. Outstanding progress is being made from the nation's largest corporations to individuals at the grass roots. For example, one of the initiatives of the President's Commission on Environmental Quality involved 11 industrial corporations that volunteered to use the philosophy of Total Quality Management to prevent pollution at their

facilities. Practical business people found that they could cut emissions and save money at the same time.

Another example is Hazel Johnson, recipient in November 1992 of a presidential medal for environmental achievement. Ms. Johnson is the founder of a group in Chicago that serves a predominantly low-income, African-American community by assessing and reducing environmental hazards in homes and workplaces. Yet another medal recipient was the Florida Save Our Everglades program, harnessing the knowledge and energy of four different arms of government and 22 conservation groups.

As chairman of CEQ, with a responsibility to coordinate federal environmental activities, it may seem. paradoxical that I close by emphasizing the role of the private sector, the community, and individuals. Yet I do so because the most important trend in the world today is greater freedom, which is the antithesis of a command-and-control mentality. And freedom carries with it corresponding responsibilities, including stewardship of the environment we all share. The stakes are too high, and the consequences for our children too crucial to entrust this sacred responsibility to anyone other than ourselves. It is that simple and that important.