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Business Voice for the Environment
Environmental Entrepreneurs Update
July 31, 2005
This Environmental Entrepreneurs (E2) newsletter is sent to all E2 members and friends of E2.
Articles in this Issue:

Paper Company Agrees to Protect Natural Forests - How Market Forces Can Transform an Industry.
Energy Bill Update: E2 TeleSalon and Congressional Activity - Final bill doesn't reduce oil dependency or increase energy security.
New York City Enacts Hybrid Taxi Bill - Mayor signs bill to green the taxi fleet.
E2 New England Helps Reverse State Funding Veto - Full analysis on safer chemical alternative will proceed.
New York Clean Cars Bill Update - E2 testifies in support of emissions standards.
Oregon Clean Cars Update - Oregon Business Association reaffirms support.
Two NRDC Reports Examine Nation's Beaches; Risks to Auto Industry - Addressing problems of beach safety and rising oil prices.
NRDC Senior Attorney Gail Feuer Appointed to LA County Superior Court - Wishing a long-time NRDC champion well.
Congress Votes to Prohibit Pesticide Testing on Humans - Vote derails effort by White House and chemical industry.
Global Warming Update - Sense of the Senate, the G8 summit, and Court Indecision on EPA Authority
California's Budget Fails to Ensure Long-Term Funding for Environment - Short-sighted bill makes no amends for funding cuts.
Court Strikes Down EPA Rollbacks of Clean Air Act - Facility construction must include pollution controls.
U.S. Supreme Court Rejects Agribusiness Attack on Environmental Laws - Water users cannot sue government over diversions.
Calendar of Events - E2 events in California, New York, New England and the Rocky Mountains

Paper Company Agrees to Protect Natural Forests

The Cumberland Plateau.
On June 29, 2005, Bowater Inc., NRDC and the Dogwood Alliance announced an agreement to protect the natural forests of the Cumberland Plateau, which extends through parts of Tennessee, Kentucky, Georgia and Alabama. The agreement is significant not only because Bowater is the largest U.S. supplier of newsprint and the largest private landholder on the Cumberland Plateau, but also because the arrangement was accomplished through "market forces." This article examines how this agreement came into being and how the market can be used to both transform the paper industry and other industries.

Bowater supplies 18 percent of all U.S. newsprint through 12 larger pulp and paper processing plants that are supported by 1.4 million acres of forest land owned or leased in the U.S. This includes approximately 360,000 acres in the Cumberland Plateau.

The Cumberland Plateau

The 6 million-acre Cumberland Plateau is among the most biologically diverse temperate forests on Earth. Each spring, millions of birds migrating from South America and the Caribbean descend on the plateau. Beneath the treetops live dozens of salamander species, more than anywhere else in the world. More than 200 kinds of fish ply the waters of the Cumberland Plateau region. Many Cumberland species are endemic, meaning they are found nowhere else in the world. The Cumberland Plateau region is also believed to have the highest concentration of caves in North America.

The region is threatened today because of the soaring global demand for paper. Natural Cumberland hardwoods - oak, hickory and red maple - have been cut at an unprecedented rate and replaced with row after row of loblolly pines in vast, single-species plantations incapable of supporting the wildlife or recreational uses native to the region.

Across the South, these tree farms have spread from just 2 million acres in 1953 to 32 million acres in 1999. Tree farms will cover almost 55 million acres over the next quarter-century unless something is done to restore a sensible, sustainable balance to forestry practices in the region.

The Paper Industry

Americans consume about 1,000 pounds of paper per person per year, seven times more than the average used in the rest of the developed world. To feed this demand, the paper industry
  • consumes about 45 percent of the forest timber cut by industry each year,
  • is the No. 1 consumer of fresh water and
  • is the third largest stationary source of global warming pollution.
The Forest Stewardship Council (FSC) is a multi-stakeholder, independent group which has an established program allowing third parties to verify that a forest owner is following FSI standards. The Sustainable Forestry Initiative (SFI) was created by the forest industry as an alternative to FSI which they could control. FSI is not a recommended standard. In fact, Bowater claims all of their practices were FSI-approved - something that would not have been possible under FSC.
The pressure on forests can be lessened by increasing the use of recycled fiber (i.e. post consumer waste paper) and by managing forest lands in a more sustainable way. The best examples of the latter are the procedures defined by the Forest Stewardship Council (FSC). By contrast, the original hardwood forests of the Cumberland Plateau region are being clear cut and then replaced with plantations of fast-growing loblolly pines. This practice not only damages the forest ecosystem, but also backfires economically since the pines are very susceptible to disease from pests like the pine bark beetle.

Four Factors for Market Forces

Although the practices of certain paper mills don’t necessarily violate the law, they still consume huge amounts of natural resources and change forest lands at a pace that is not sustainable and, ultimately, not in the best interests of the paper industry. To use the market itself to encourage change in business practices, four factors need to be in place:
  • Revenue risk to a corporation
  • Negative corporate image risk
  • A compelling local story
  • Low cost of change to the corporation
The next section will discuss how all four of these factors were in place, allowing NRDC and its allies to make the case for a major change in Bowater’s sourcing and operations.

The Cumberland Plateau Story

NRDC began its Cumberland Plateau campaign in Fall 2002. The effort included defining a common vision for a sustainable paper industry together with 56 other organizations (see Common Vision), approaching the Dogwood Alliance (an umbrella group of about 70 grassroots religious, student and community activist organizations concerned with protecting the forests of the South) as a local partner, and seeking seed funding from recycling experts and E2 members John and Wendy Neu.

Research in 2003 focused on determining the flow of fibers from forests through paper mills to major customers to determine where the biggest impact could be made on the best land. An industry research firm was hired to determine who the likely customers of the regional paper mills were and where those mills were getting their fiber. The Conservation Biology Institute located intact regions with the best biodiversity. The University of the South, located on the Cumberland Plateau at Sewanee, developed maps of the forests, helped determine land ownerships, and demonstrated patterns of clear cutting and forest conversion. The Dogwood Alliance and Tennessee Forest Watch, another NRDC partner, identified impacts to local communities. By the end of 2003, it was clear that Bowater Inc. should be the target of the campaign.

In February of 2004, NRDC sent a letter to Bowater identifying the findings of the research and recommending a set of actions Bowater should take. NRDC declared the Cumberland Plateau one of its 12 BioGems. The designation received significant press coverage in the South and BioGems activists sent 30,000 emails, letters, postcards and faxes to Bowater demanding that the company halt its destructive forestry practices. The first meeting between Bowater executives, NRDC and the Dogwood Alliance took place in March 2004, at which Bowater denied the claims against them, but was also open to looking at further evidence.

During the next two months, volunteers used GPS devices to locate the exact location of damaged areas, collected satellite images from the past five years showing 65 examples of forest locations on Bowater property which were clear cut and replaced with pine plantations, and visited several of Bowater’s major customers so they could understand that the harvesting of the fiber source for their paper purchases was unnecessarily destroying the Cumberland Plateau BioGem.

In May 2004, this evidence was presented to Bowater. At the end of the meeting, Bowater executives committed to negotiations to figure out what they could change. NRDC discovered that, in a number of cases, Bowater’s expressions of concern about prohibitive cost were based on assumptions that were never actually confirmed by calculation. Once the calculations were done, it was discovered that a lot of NRDC’s requests were cost competitive. On the other hand, Bowater was particularly concerned about the cost of obtaining and processing more recycled fiber. In that case, it turned out that costs for retrofitting were substantial and NRDC had to compromise on the request for a guarantee that Bowater use more recycled fiber. Bowater now uses 24 percent post-consumer recycled fiber.

The following 15 months of negotiations uncovered a variety of cost-saving measures. For example, it was shown that Bowater could reduce spraying from twice per year to once per year. It was also evident that Bowater’s competitors were offering paper products from FSC-certified sources and that market demands were changing. Moreover, Bowater (as with all companies) wanted and needed good relationships with its local communities. Local groups provided ample proof that they also wanted Bowater’s practices to change (See "The Tennessee Tree Massacre"). The region’s residents, who are mostly poor, suffered from physical ailments like headaches, nausea, burning lungs, nosebleeds, skin rashes, liver damage and breathing problems from exposure to the millions of pounds of pesticides, herbicides and fertilizer sprayed onto forests each year. In addition, the chemicals and cutting practices degraded the quantity and quality of the forest’s autumn foliage, eroding the region’s tourism sector.

The Agreement

The commitments Bowater made in the agreement with NRDC and Dogwood Alliance are unprecedented, establishing a model for other forest products companies throughout the southeast United States. The company will end clear cutting and conversion of hardwoods on all of their U.S. landholdings within three years, stop buying after 2007 pine fiber from plantations that have been converted from natural forests, limit the extent and frequency of its aerial chemical applications, formalize a public communication program of chemical use activities, and study and protect ecologically significant forest areas and water resources on lands it owns.


While a policy framework is the dominant mechanism for allocating business access and use of the environment we all share, the successful agreement with Bowater illustrates the benefit of using market forces. The agreement was possible because there was a significant revenue risk to the corporation, a risk to corporate image, a compelling local concern about the Cumberland Plateau and a manageable cost structure to implement the needed changes.

Since a portion of the analysis requires business skills, we see an opportunity for E2 to work with NRDC to identify and research further market transformation opportunities for companies within the forest and paper industries and eventually in other industries as well.

Our thanks go to the NRDC team: Senior Scientist Dr. Allen Hershkowitz and Resource Specialist Darby Hoover are paper industry and waste management experts (production center and downstream impacts). Senior Scientist Sami Yassa and Senior Resource Specialist Debbie Hammel are forestry industry experts (upstream impacts). NRDC President and Co-founder John Adams provided negotiation skills and connections to local community leaders and politicians.


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Energy Bill Update: E2 TeleSalon and Congressional Activity

On July 1, E2 members from around the country joined a TeleSalon briefing on the Senate energy bill, which passed June 28. NRDC’s Legislative Director Karen Wayland, Climate Center Policy Director David Doniger, and Senior Scientist Dr. Allen Hershkowitz led the update for members on the bill’s provisions dealing with global warming, a renewable electricity standard, offshore energy exploration, a renewable fuels standard, oil savings targets and tax incentives for energy efficiency and renewables. Although the bill was much better for the environment than the House version, it fell short of addressing the country’s need for a forward-thinking policy that will address our oil dependency and put us on a path to energy security. We would like to thank Karen, David and Allen for taking the time to update and inform E2 members on the Senate’s energy bill and NRDC’s advocacy work. E2 members can view this month’s special edition of Capitol Insights, which offers a quick review of the key features of the Senate’s energy bill at: .

A pork barrel version of the bill emerged from the House-Senate reconciliation committee July 26, passed the House July 28 and the Senate July 29. It is a mix of exemptions, subsidies and tax breaks for the oil and gas industries, and as a whole does nothing to increase the nation’s energy independence or security. It grants exemptions from key environmental statutes, such as the Clean Water Act, to oil and gas companies. It also adds a loophole to the Safe Drinking Water Act, allowing the injection of toxic chemicals into the ground near sources of drinking water. The bill also authorizes an expensive oil and gas inventory of the entire outer continental shelf, including areas currently under drilling moratoria, which would be conducted using seismic air guns that can harm whales, dolphins, fish and other marine life. Furthermore, a number of positive provisions that were included in the original Senate version of the bill were dropped from the final version during conference. These included a renewable portfolio standard for electricity generation, a mandatory reduction in oil consumption by 1 million barrels per day by 2015 and mandatory limits on carbon dioxide emissions.

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New York City Enacts Hybrid Taxi Bill

On July 20, New York City Mayor Michael Bloomberg signed a groundbreaking bill expanding the list of vehicles approved for use as cabs to include hybrids. The bill requires the city’s Taxi and Limousine Commission (TLC) to designate within three months of enactment one or more hybrid vehicle models that could be used (voluntarily) by all current and future taxi owners. Converting taxicabs to hybrid electric vehicles would have four primary benefits: 1) improve air quality in the city; 2) reduce global warming emissions; 3) reduce oil dependence; and 4) significantly reduce costs for taxi drivers and owners.

E2’s New York chapter worked closely with NRDC’s Mark Izeman to support this initiative. Fifty E2 members and supporters signed a letter of support, which was submitted to the mayor’s office, the TLC commissioner and the city council. E2 member Wendy Neu testified at a public hearing before the New York State Department of Environmental Conservation to outline E2’s support for this bill. Many thanks again to everyone involved in helping with the passage of this landmark bill. Mark and his team look forward to working with the City Council and the mayor to implement this law.

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E2 New England Helps Reverse State Funding Veto

On July 14 the Massachusetts legislature reversed a veto by Governor Mitt Romney and cleared the way for funding of a full analysis on safer alternatives to five of the most toxic and widely used chemicals in the state. The chemicals - lead, formaldehyde, DEHP, hexavalent chromium and perchloroethylene - have been linked to asthma, learning disabilities, reproductive disorders and other health effects. Passage of the Safer Alternatives Bill, as it is known, is an important first step to improving protection of the public and the environment from common toxic substances.

A diverse coalition of scientific, environmental, health and labor groups - including E2 -- were involved in the effort. E2’s letter of support, which was signed by 30 E2 members and supporters, was presented at a hearing to the Joint Committee on Environment, Natural Resources and Agriculture in June. E2 members Berl Hartman and Tedd Saunders also outlined E2’s support for this bill at its hearing in the state legislature.

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New York Clean Cars Bill Update

On June 23, Theo Spencer, Senior Project Manager for NRDC’s Climate Center, updated E2 on the progress of the New York Clean Cars bill. According to Theo, New York is on its way to adopting California’s strict emissions standards for passenger vehicles and light trucks. This May, the New York State Department of Environmental Conservation (DEC) issued draft regulations to amend the state’s emissions laws to mirror California’s. If adopted by December 2005, New York, like California, will require all new cars sold in the state beginning with model year 2009 to use clean technologies to reduce emissions of carbon dioxide and other global warming pollutants. Other states, such as Oregon, are also working to enlist business support for consideration of similar standards (see below).

On July 6, Theo and E2 New York co-founder, Ethan Podell, testified at a DEC hearing in Long Island City and presented E2’s support letter with over 50 signatures. Later that week, Theo and Roland Hwang, NRDC’s Vehicles Policies Director, testified at an Albany hearing at which the heads of the major auto manufacturing associations were present to lobby against the regulations.

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Oregon Clean Cars Update

Oregon Governor Ted Kulongoski is also pursuing standards in line with California’s landmark bill, and on June 30, E2 member Ron Pernick joined a panel of scientists and environmental leaders to make a case in favor of regulations to the Oregon Business Association (OBA), which is currently considering taking an organizational position on this issue. Both the Business and Environment Committees of OBA reaffirmed their votes in support of the new standards, and the organization plans to make a final decision about its stance in September. Many thanks to Ron and E2 members Sally Desipio and Nancy Floyd who have been working on gathering business support for a Clean Cars initiative in Oregon.

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Two NRDC Reports Examine Nation's Beaches; Risks to Auto Industry

According to an annual report released July 28 by NRDC, beach closings due to hazardous bacterial contamination are on the rise nationwide. The report, "Testing the Waters 2005: A Guide to Water Quality at Vacation Beaches," tallied nearly 20,000 closing and health advisory days across the country in 2004, the most since NRDC began tracking the problem 15 years ago. The report suggests ways for the federal government, state and municipal governments and citizens to improve beach water quality. Read NRDC’s media release, or download the beach report.

NRDC and the Transportation Research Institute’s Office for the Study of Automotive Transportation (OSAT) at the University of Michigan have released a report which discusses how sales, profits and American jobs will suffer if Detroit automakers continue with their current business strategies in the face of higher oil prices. "In the Tank: How Oil Prices Threaten Automakers’ Profits and Jobs" warns shareholders, management and policymakers that auto manufacturers must make fuel economy performance a top priority if they expect to compete in a world where oil prices are continually rising. The report recommends actions that automakers, government and investors can take to mitigate the risks. Read NRDC’s media release, or download the auto report.

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NRDC Senior Attorney Gail Feuer Appointed to LA County Superior Court

On July 27, California governor Arnold Schwarzenegger appointed Gail Feuer, a senior attorney who has been with NRDC for 12 years, to judgeship in the Los Angeles County Superior Court. Gail has served as senior attorney and director of NRDC’s Southern California Air Quality Program since 1993. She earned her Juris Doctorate from Harvard Law School and bachelor’s degree from State University of New York at Albany. She will be filling the vacancy left by the retirement of Judge Dean Farrar. We would like to congratulate Gail and thank her for all her work on behalf of NRDC and the environment.

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Congress Votes to Prohibit Pesticide Testing on Humans

Congress put a stop on July 27 to a coordinated effort by the White House and the chemical industry to allow widespread testing of toxic pesticides on people. A House-Senate appropriations conference committee voted to establish a moratorium on conducting or using human pesticide tests, and ordered the Environmental Protection Agency to set strict standards regulating the practice. Specifically, the EPA must issue new rules that prohibit pesticide testing on pregnant women, infants and children. Read more.

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Global Warming Update

In a rare positive move, the U.S. Senate took one important step forward by passing a "Sense of the Senate on Climate Change," a resolution declaring that the U.S. needs to adopt mandatory pollution limits to address the growing problem of global warming. This is an extremely significant victory because it puts the U.S. Senate on record for the first time as acknowledging that global warming is a real problem and that urgent action must be taken to reduce emissions of greenhouse gases. The resolution, offered by Senators Bingaman (D-NM), Specter (R-PA), Byrd (D-WV), and Domenici (R-NM), had bipartisan support and brought on board many influential members of the Senate who have never before supported mandatory action. NRDC’s Climate Policy Director, David Doniger, was instrumental in drafting the language of the resolution and pulling together a coalition of organizations that helped round up support from key Senate offices. Read NRDC’s press release.

Meanwhile, on July 8 at the Group of Eight summit in Gleneagles, Scotland, the heads of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States signed a communiqué stating that global warming is a "serious and long-term challenge" and pledged to act "with resolve and urgency" to meet the objective of "reducing greenhouse gas emissions." The leaders agreed to meet again in November to discuss ways to mitigate global warming. The communiqué represents a setback for the Bush Administration’s attempts to refute the science around global warming. Read more from NRDC.

And most recently, on July 15, the U.S. Court of Appeals in Washington, DC, failed to resolve the question of whether the Environmental Protection Agency (EPA) has the authority and responsibility to regulate the pollutants that cause global warming. The court, by a 2-1 vote, denied petitions from dozens of environmental organizations and state and municipal governments challenging the EPA’s 2003 refusal to regulate carbon dioxide (CO2) and other global warming pollution from U.S. cars and trucks. The decision will have no effect on the authority of states, such as California, to continue regulating global warming pollution from vehicles or power plants. The Petitioners are likely to seek a re-hearing before the full 11-member U.S. Court of Appeals or review by the Supreme Court. See NRDC’s press release for more information on the judges’ opinions.

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California's Budget Fails to Ensure Long-Term Funding for Environment

On July 8, the California Legislature passed a budget that environmental groups say keeps environmental and public health programs going, but doesn’t mitigate problems resulting from deep funding cuts for these programs in recent years. The new budget temporarily addresses critical funding needs, but ignores the long-term need to find funding for air and water quality protection, parks, wildlife and other natural resources. Conservation groups were dismayed by the budget agreement’s abandonment of a strategy known as "polluter pays," in which polluters and users of natural resources, rather than tax payers, shoulder the cost of environmental regulations. However, one bright spot in the budget resolution is a change in the funding of CALFED, a state-federal program to restore the San Francisco Bay-Delta. The alteration reduces state funding to purchase back-up water supplies - thereby encouraging users to pay more for the cost of pumping water from the delta - and ends funding for state participation in studies to build Shasta Dam. Read more from NRDC’s press release.

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Court Strikes Down EPA Rollbacks of Clean Air Act

The U.S. Court of Appeals for the District of Columbia Circuit struck down on June 24 key provisions of a 2002 Environmental Protection Agency regulation that would have allowed coal-fired power plants, oil refineries and factories to avoid installing air pollution control equipment when undertaking plant construction that increases soot-, smog- and acid rain-forming emissions. The decision, which concerns the Clean Air Act’s "new source review" program, came in response to a 2003 lawsuit filed by NRDC and other groups, and the governments of over 25 states and municipalities. The court rejected industry’s claim that only increases in facilities’ capacity to pollute - the most they could pollute - as opposed to increases in actual pollution, trigger cleanup requirements under the Clean Air Act. The court admonished the EPA to ensure that the surviving portions of the rule will not "result in increased emissions that harm quality and public health." Unfortunately, the court upheld certain parts of the 2002 rule, including a provision that allows facilities to increase pollution and avoid installing control equipment as long as emissions do not exceed the highest levels from the preceding decade. However, the Clean Air Act prohibits states from adopting the provisions that would make their own pollution programs less protective, and NRDC plans to work with states to ensure protections for public health are not compromised.

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U.S. Supreme Court Rejects Agribusiness Attack on Environmental Laws

The U.S. Supreme Court unanimously rejected on June 23 a lawsuit over water rights brought by several California landowners who claimed they should be paid when the U.S. Department of the Interior reduced water delivery to comply with environmental protections. The case, Orff v. United States, was the most recent effort by recipients of taxpayer-subsidized reclamation water to challenge the federal government’s compliance with environmental requirements under the Endangered Species Act and other laws. The ruling represents a major victory in efforts to protect the availability and quality of fresh water for American citizens. Justice Clarence Thomas delivered the opinion of the court.

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Calendar of Events

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E2 Membership

We hope you’ll tell your friends about E2 and NRDC. To learn about E2 and our programs please go to www.e2.org. Information about NRDC can be found at www.nrdc.org.

Thanks for your support. Comments, questions and introductions to possible new members are always welcome! Learn how to join E2 at how to join. To learn more about the leaders of E2 please read about the E2 co-founders
Bob Epstein and Nicole Lederer, Editors
bob@e2.org nicole@nicolelederer.com

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