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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

"The State of the Environment" Was On The Agenda For The Small Business Environmental Assistance Program Conference  Posted: June 15, 2009

The State of the Environment

A conversation at the Small Business Ombudsman /
Small Business Environmental Assistance Program
National Conference
Louisville, Kentucky
June 2, 2009


Good morning, and welcome to Louisville. I’m sure the first thing that you learned on arriving here was that it is not pronounced “Louieville” or “Louisville” but instead is “Loouhville”, of course after King “Luh”.

I appreciate Aaron’s kind words and the invitation to be here. I’m a little out of my element, being a product of the regulatory world, but having been a board member for the initial Clean Air Act Small Business Environmental Assistance Program here in Kentucky, I have an appreciation that those of you engaged in compliance assistance give real meaning to the old saw “I’m from the government and I’m here to help you.”

I wanted to talk with you this morning about the coming carbon mandate, and the important role that compliance assistance programs can play in softening the impact of the monetization of greenhouse gas emissions.

It is anticipated that Congress will enact legislation during this session that will impose limits on emissions of greenhouse gases, and that the costs of emission of carbon dioxide, methane and the other greenhouse gases will begin to be internalized in economic terms, either through a cap-and-trade system or a carbon tax, or a combination of such measures. Kentucky is ground zero among the 50 states with respect to climate change. We are the 46th poorest state in the nation, with an economy that is both significantly dependent on artificially cheap coal-fired electricity, and which has been fueled by the extractive industry that produces that coal. With an aging fleet of coal-fired power plants producing the lion’s share of our energy, we face the daunting task of accounting for carbon dioxide emissions and competing among the other states in securing the carbon allowances that will be required under a capo and trade system.

We face an equally daunting task in developing the means to capture, manage and sequester carbon dioxide emissions. Controlling those emissions, which Jim Bartis from the Rand Corporation likened in his 2007 testimony before Kentucky’s General Assembly to another Manhattan project, will make the costs and technical challenges of controlling ozone, sulfur oxides, particulate and fine particulate matter, nitrogen oxides and mercury seem like child’s play.

It’s enough to make you nostalgic for the good old days before 1990. Congress would mandate, EPA would study, round up the usual industrial suspects, adopt pollution control standards, and we’d slap more pollution control devices on the smokestacks of the major industrial sources of pollution.
Congress showed uncharacteristic wisdom in creating the environmental assistance programs as a component of the 1990 Clean Air Act – recognizing that the traditional command and control approach would not work as the nation moved from ratcheting down major source pollution to tackling the smaller, more diffuse area and mobile sources of pollution, which had become a correspondingly more significant percentage of the remaining uncontrolled emissions profile for major air pollutants of concern. It has been and remains a challenge for federal, state and local air pollution control agencies, to shift from end of pipe, end of stack approaches, to thinking about how we live, how we build, how we move people and goods from one place to another and the pollution loadings associated with these decisions.

Each of you working in environmental assistance programs has done yeoman’s work in educating area sources and improving compliance with air quality mandates. It has been a challenge, particularly for those of you whose mandate is limited to clean air compliance, because as you know the needs of small businesses are multimedia in nature.

And now, at a time when budgets are being cut to the bone, at a time when the freezing of the commercial paper market has created precarious circumstances for many small businesses, I’m here to suggest that you need to expand the array of services you offer to include not only regulatory compliance assistance, but helping your constituency plan for doing business in a carbon-constrained economy.

The focus of compliance assistance programs has traditionally been on emissions and reducing them – and it has worked. While better management has been a focus, it has been largely a matter of management through pollution controls and pollution prevention.

An area not traditionally emphasized in compliance assistance programs, particularly in “low cost” energy states like Kentucky, is efficiency both in the conversion of fuels to energy, and in energy use. Exemplary of this is our focus on controlling byproducts of coal combustion, for example, while ignoring the 70% of heat wasted in the combustion process.

By helping your small business constituency to incorporate efficiency in the conversion and utilization of energy, you can help you clients create a buffer – a hedge against the predicted sharp increase in electricity and natural gas costs as carbon is monetized.

You might be accused of “mission creep,” as has the pollution prevention center here at the University of Louisville, but in truth, energy efficiency is the flip side of the compliance coin. If you can double the efficiency in the use of a kilowatt, you have halved the carbon footprint and pollution load.

Preparing yourself to help guide your constituency in the area of energy efficiency will require that we go back to school – to get out of our comfort zone of compliance assistance. But it will be worthwhile, for you and for your clients.

This week’s conference has a great line up of resources for you – as well as several small business representatives to show how energy efficiency can be incorporated into the tool chest you have in order to help small businesses survive and thrive. In some ways, small businesses are well positioned relative to their big box counterparts. They are more flexible, less risk aversive, and they have fewer barnacles. But as is the case with the allocation of energy stimulus funds, they need you to be a voice, an advocate, and a catalyst for good.

You can play a pivotal role in helping small business adapt and thrive in a carbon constrained world, by linking with other states, with universities, with your colleagues in pollution prevention and energy efficiency programs, to become that “smart grid” you hear about.

Let me close with a reflection from Marian Wright Edelman, founder of the Children’s Defense Fund:

Lord, help me not to be a taker but a tender
Help me not to be a whiner but a worker,
Help me not to be a getter but a giver,
Help me not to be a hindrance but a help,
Help me not to be a critic but a catalyst for good.



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