Environmental laws should replace stick with carrot.

• Position: Dennis Rondinelli interview - Brief Article

Dennis Rondinelli is the director or the Center for Global Business Research at the University of North Carolina's Kenan-Flagler Business School. He and Michael Berry, a research professor at the center, recently wrote a paper calling for an overhaul of the nation's environmental regulatory system to reconcile conflicting laws, give business more flexibility to meet environmental targets and encourage companies to adopt practices that combine environmental and economic benefits.

BNC: You say current environmental policies have improved air and water quality, yet the system needs to be rethought. Why?

Rondinelli: It's basically run its course in what it can do. It achieved a gteat deal in the early years, the 1970s and the 1980s, in making firms and individuals aware of what the impacts of environmental pollution were, and it set up a good, basic system for regulating end-of-pipe pollution, especially from businesses. But what's happened is, the environmental laws have gotten more and more complicated and been amended many, many times over the years, often independently of what previous amendments to the legislation tried to do. The regulations have become very fragmented. There are different sets of legislative regulations dealing with different types of environmental pollution that are not really even related to each other. They often cause conflicts and problems.

What practical effect does that have on the environment and on businesses trying to follow these rules?

Two examples I would point to: The attempts a year or so ago by EPA to make the air regulations more stringent by requiring higher standards for particulate matter really caused a great deal of controversy. They did it without looking at what the cost might be, and it was enormous. When this was challenged, it turns out the scientific basis for this was, at best, debatable. The other example is a more recent one, this controversy over MTBE [methyl tertiary-butyl ether, a gasoline-cleaning additive]. It basically lowered the pollution in the air, but over the 10-year period or so that EPA required this, they ignored the fact that it's toxic to water. Leakages or seepages out of gas stations that were using this stuff and other forms of spillage actually poisoned municipal water supplies.

Some environmental goals have obvious economic benefits -- waste reduction and reduced energy use are two. What are others?

A lot of companies, when they begin to get waste out of their...