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Accompanying Report of the National Performance Review Office of the Vice President
Washington, DC
September 1993


Executive Summary 1 Improve Implementation of Environmental Management ENV01: Improve Federal Decisionmaking Through

Environmental Cost Accounting 7 ENV02: Develop Cross-Agency Ecosystem Planning

and Management 11 Improve Environmental Performance at Federal Buildings and Facilities
ENV03: Increase Energy and Water Efficiency 21 ENV04: Increase Environmentally and Economically Beneficial Landscaping 29 Appendices
A.Summary of Actions by Implementation Category 35 B.Accompanying Reports of the National Performance Review 37

Implementation Categories
Each action is followed by a number in parentheses that indicates the necessary avenue for effective implementation. Appendix A organizes all actions according to these categories:

(1)Agency heads can do themselves
(2)President, Executive Office of the President, or Office of Management and Budget can do
(3)Requires legislative action
(4)Good idea, but will require additional work, or may be better suited for future action.


 BLM            Bureau of Land Management
 DOD            Department of Defense
 DOD (ES)       DOD Office of the Deputy Under Secretary of Defense
                for Environmental Security
 DOE            Department of Energy
 EPA            Environmental Protection Agency
 EPACT          The Energy Policy Act of 1992
 ESP            Energy Savings Performance
 FEMP           Federal Energy Management Program
 FWS            Fish and Wildlife Service
 GDP            Gross Domestic Product
 IPM            Integrated Pest Management
 NOAA           National Oceanic and Atmospheric Administration
 NPR            National Performance Review
 OEP            White House Office on Environmental Policy
 OMB            Office of Management and Budget
 OPPTS          EPA Office of Prevention, Pesticides and Toxic

Executive Summary

Along the San Francisco Bay/Delta, the most human-altered estuary on the West Coast, a one-mile stretch of shoreline may be affected by the decisions of over 400 government agencies. This one-mile stretch points up how environmental policy is marked by duplication and overlap, turf battles, and political jockeying. Numerous agencies participate.

Consider this: The Bureau of Land Management oversees 60 percent of the federal lands for multiple purposes; the Forest Service manages our National Forests; the Fish and Wildlife Service manages our National Wildlife Refuge System; the National Park Service oversees the National Parks and Grasslands for recreation and preservation; the Environmental Protection Agency implements national waste management and air and water quality laws; the National Oceanic and Atmospheric Administration manages coastal zones and living marine resources; and such agencies as the Bureau of Reclamation, the Federal Highway Administration, the Department of Energy, the Tennessee Valley Authority, and the Department of Defense run programs with significant environmental impacts.

With environmental regulation spread out among so many players, President Clinton is seeking a dramatically new approach, --ecosystem management -- exemplified by the Forest Plan that he announced shortly after his April 1993 Forest Conference in Portland, Oregon. Under the concept, land and resource managers consider how to handle natural processes and human activity within a given region. The government will organize its activities around ecosystems, not political jurisdictions.

The Federal Role.
The federal government, however, sends out signals not just through its policies but also its daily operations -- how it manages the lands, buildings, and other facilities that it owns or operates. In that arena, too, past practices have raised questions about Washington's commitment to a clean environment.

The government operates office buildings,housing developments,industrial plants, parks, and golf courses. It manages lands used in a variety of activities. It provides aid for research and development. And it regulates many private activities. To support these functions, the government owns or operates over 500,000 facilitiesabout 430,000 residential, with the rest office buildings or industrial and research facilities. The government also manages about a third of all land in the United States. Thus, the federal government's sheer size makes its impact on the environment apparent. In those daily operations, the government has generated significant amounts of pollution and caused other stresses on our ecological systems. The government and the nation continue to pay through higher operating costs, clean-up costs, and the loss of our natural resources and a clean environment. Instead of being a model environmental actor, the government has become part of the problem.

A Vision for Action
In this report, the National Performance Review (NPR) lays out a new vision for federal action, one that builds upon the changes already underway in the White House, in departments and agencies, and at the state level. The NPR foresees the federal government as a continuing force for positive change to:

        **promote sustainable economic
        **prevent environmental degradation,
        **reduce costs, and
        **maintain the long-term health of 
          the nation's ecological systems.

Our specific recommendations on "reinventing environmental management" should help create a government that, as the NPR's summary document promises, "works better and costs less". It will work better by reducing its negative impacts on the environment and ensuring productive, sustainable natural systems. And it will cost less by incorporating environmental considerations into its decisions and, from a fiscal as well as an environmental standpoint, operating its facilities and programs more efficiently.

In how it incorporates environmental matters into its activities, the federal government sends an important signal to the nation. NPR wants to help make that signal a resoundingly positive one. So, too, does President Clinton. In his 1993 Earth Day address, he stated that the federal government needs to "stop not only the waste of taxpayers' money but the waste of our natural resources."

This report offers two sets of recommendations for fundamentally new approaches.

Improve Implementation of Environmental Management.

For environmental management, Washington has traditionally used pollution control techniques, rather than the more desirable pollution prevention strategies. One key reason is the government's current accounting and financial analysis methods. Because they do not include environmental costs, these accounting and financial methods encourage public officials to choose alternatives that appear cheaper in the short term -- although government and society pay more through expensive clean-up, environmental degradation, and litigation costs over the long term. The government clearly needs to develop a system of environmental cost accounting to help federal managers evaluate all costs -- including the environmental ones -- associated with government's decisions.

The Environmental Protection Agency and the Defense Department should convene an interagency working group to develop demonstration projects, over the next two years, to test the use of environmental cost accounting in the federal government. The President then should issue a directive to implement environmental cost accounting where appropriate.

As we have seen, environmental management is divided among numerous federal agencies with inconsistent mandates and conflicting jurisdictions that follow bureaucratic, not ecological, boundaries. Consequently, the government spends far too little time focused on the health of whole ecosystems. And while several agencies have developed ecosystem management statements, they (and divisions within the agencies) differ in just what that concept means. For the concept to work, the agencies should develop collaborative programs around common goals.

Thus, the President and top administration officials must work to break down bureaucratic barriers that prevent agencies from working together to protect the environment. The President should issue a directive that would establish ecosystem management as a national policy as well as specific steps to implement it. The director of the White House Office on Environmental Policy should establish a highlevel inter-agency task force to develop ecosystem management demonstration projects, while the Office of Management and Budget should review proposed agency activities in selected ecosystems as part of the fiscal year 1995 budget process.

Improve Environmental Performance at Federal Buildings and Facilities.

In fiscal year 1991, the federal government paid nearly $3.75 billion in energy costs for its buildings. Without losses in comfort or productivity, the government likely could conserve 25 to 40 percent of the energy used in those buildings through commercially available, cost-effective, efficiency upgrades. Water conservation measures also could help alleviate not only water problems in local areas, which anticipate or have experienced water shortages or rate increases, but also reduce energy use. By conserving water, the federal government not only will help keep costs down, but will lessen local pressures for new water treatment facilities and power plants.

While the 1992 Energy Policy Act requires that the federal government conserve energy and water -- that is, cut energy usage 20 percent by the year 2000 and install all energy and water conservation measures that pay for themselves within 10 years -- current funding and procurement processes are interfering with that goal. Agencies' inability to retain cost savings achieved through energy and water efficiency projects also creates a disincentive for the agencies to carry out these projects.

In this area, the President should issue a directive that addresses the need for energy and water conservation in federal facilities and either encourages or directs agencies to adopt policies that rely on less polluting forms of energy. He also should propose legislation that would allow the Defense Department to retain savings generated through water efficiency projects. At the same time, agencies should develop rules, procedures, and legislation to allow them to keep rebates from utility companies beyond the fiscal year, and to apply them to additional energy efficiency and water conservation projects or to cut the facility's future utility bills.

Federal facilities also require substantial landscaping activities. Modified landscaping techniques not only would help the government demonstrate environmentally sound behavior, they would also save money. By using native plant species, for instance, the government can significantly improve an area's ecological value. And by using less water and chemical fertilizers, herbicides, and pesticides, the government can generate economic and environmental benefits.

Consequently, the President should issue a directive to require the use of environmentally beneficial landscaping for federal lands and facilities, and federally funded projects, where appropriate. The directive should be designed to increase the use of native plant species in all federal landscaping activities, reduce the quantity of chemicals applied to federal landscapes, use water-efficient technologies in federal landscaping projects, provide educational and conservation opportunities to the public, and create a governmentwide Environmentally Sound Landscape Program.

Improve Implementation of Environmental Management

ENV01:Improve Federal Decisionmaking Through Environmental Cost Accounting

Increased recognition that the long-term health of the economy depends upon the health of the environment is providing a new direction for economic and environmental policy. In his 1993 Earth Day address, for example, President Clinton directed the Department of Commerce to develop new methods for calculating Gross Domestic Product (GDP)[1]. These new methods would take into account changes in the value of the natural environment when calculating national income and wealth. This new "green GDP" would initially incorporate changes in the value of marketed natural resources such as oil and timber; eventually these new methods could help construct broad economic indicators that include the costs of pollution or the value of a clean environment, including clean air and water. While the President's directive focuses on the system of national accounts, it highlights the importance of linking environmental and economic factors.

The link should also be made by individual entities such as corporations and government agencies. The daily operating choices made in the private and public sectors -- which materials to purchase, goods to produce, and services to provide -- affect the environment. The key to making better economic and environmental decisions is access to accurate and timely information on environmental costs and benefits. With this information decisionmakers can evaluate alternatives and determine those which are more environmentally beneficial, as well as more economical.

Currently, however, most federal government decisionmakers do not have access to environmental cost and benefit information. The two primary reasons they do not are traditional accounting and financial analysis practices. These practices may obscure the economic benefits of pollution prevention investments and other environmentally preferable management decisions.

Traditional accounting systems often place costs not directly related to materials or labor in an overhead account, effectively obscuring them from managers. These costs normally include such things as managerial salaries, training, janitorial services, printing services, and environmental costs.

Environmental costs include such expenses as hazardous waste disposal and treatment, health care, training, and clothing and equipment for hazardous material handlers. These costs may be placed in overhead accounts or charged to a group other than the one responsible for generating the costs. As a result, even managers who would like to use this type of information find it difficult to know their organization's environmental costs.

Traditional financial analysis methods often use lowest first cost as the main criterion to evaluate a project proposal. As a result, time horizons to evaluate the costs and benefits of specific alternatives are short, and decisions often do not fully incorporate possible long term environmental degradation. In addition, the indirect costs often found in overhead are not included in the analyses. Strategies relying on control technologies may appear more cost-effective than pollution prevention alternatives when information about environmental costs is not included in the financial analysis.

Federal Efforts.

The Environmental Protection Agency's (EPA) Office of Prevention, Pesticides, and Toxic Substances (OPPTS), as part of its Design for the Environment Program, is already working with members of industry, academia, and the financial professions (e.g., accountants, lenders, and insurers) to encourage the adoption of managerial accounting and capital budgeting practices that more fully track and integrate environmental costs into private sector management decisions. These efforts, although focused on the private sector, could have similar advantages for the federal government.

Recognizing the importance of incorporating environmental considerations in the decisionmaking process, President Clinton issued an Executive Order on pollution prevention.[2] It states that to lead by example and to be good neighbors in their communities, federal agencies should develop pollution prevention strategies and goals to cut releases of toxic chemicals in half by 1999; reduce their acquisition of products containing hazardous materials; and report use of certain hazardous substances. It also directs agencies to use, to the maximum extent practicable, total cost accounting principles in deciding upon projects needed to meet the requirements of the Executive Order.

A Success Story.

The U.S. Air Force provides an example of how this might be done in the federal government. The Air Force's Pollution Prevention Program has made great strides towards incorporating environmental cost accounting. The program has specific goals to reduce purchases of hazardous materials, generation of hazardous waste, and the amount of municipal solid waste sent to landfills. The program has five major focus areas:

**incorporate environmentally preferable materials and processes into new systems;
**incorporate environmentally preferable materials and processes into existing systems;
**evaluate the operations of all installations, including governmentowned plants, and convert them to environmentally preferable practices;
**adopt non-Air Force pollution prevention technologies and develop new ones where necessary;
**establish an investment strategy to implement the program.[3]

Through the investment strategy, the Air Force created a separate pollution prevention investment account to fund projects that contribute to achieving the program's goals and have a good return on investment. In order to receive a grant from the fund, a manager must propose a project identifying the environmental costs that will be avoided as a result of the proposed project. The manager may justify the proposal based on savings that accrue to all divisions throughout the Air Force, not only those savings that accrue to his program. This provides an incentive for managers to seek out as many of the hidden costs related to a project as they can.

An example of a project that received a grant from the investment account was the procurement of an aircraft parts cleaning machine.The new machine uses water and biodegradable detergent to replace a process that used hazardous solvents. This investment was justified on the basis of the anticipated reduction of:

**hazardous materials purchases and waste disposal; **quantities of protective clothing and equipment needed; **health care costs;
**construction and maintenance of waste storage areas; **training costs for hazardous material and waste handlers; **occurrence of regulatory fines and penalties; and **any other cost attributable to the need for hazardous solvents

The Air Force has also worked with industry to develop a life cycle cost model to help make specific decisions on materials and processes for system development and acquisition projects. The life cycle cost method requires that all costs associated with an item or process over its lifetime be included in the cost calculations. Life cycle costs include acquisition, maintenance, and disposal. The model incorporates many of the costs mentioned above and strives to assist industry in meeting new requirements for contract specifications. The new F-22 Advanced Tactical Fighter is the first major acquisition program to evaluate all hazardous material and processes and make substitutions based on the life cycle cost model.

As the F-22 program continues through development and production, it will serve to establish measurable standards to determine the comparative benefits of incorporating life cycle costs.

Need for Change

The importance of developing accounting mechanisms that encourage a prevention-minded approach to procurement and industrial process design decisions is increasingly being recognized. The federal government's liabilities for cleanup of nuclear and hazardous wastes is testimony to this need.

Therefore, accounting concepts similar to the ones that EPA and the Air Force are developing should be applied more generally across the federal government. The potential value to the public sector is vast: new accounting techniques that encourage prevention could result in significant short- and long-term savings for the federal government, substantially reduce the federal government's stress on the environment, and serve as a model for state and local government and the private sector.

More comprehensive accounting practices will enable managers to uncover many of the hidden costs of environmental degradation and regulatory compliance. Full accounting for these costs would bring them into plain view and create positive incentives to avoid pollution and reduce costs of procurement and industrial process design decisions. The result should be more pollution prevention and significant savings.


  1. Develop pilot projects to demonstrate the use of environmental cost accounting by the federal government. (1)

An interagency working group should be convened by EPA and the Department of Defense Office of the Deputy Under Secretary of Defense for Environmental Security, in consultation with the Office of Management and Budget, to:

     **develop demonstration projects to test the applicability and
       effectiveness of environmental cost accounting in the federal
       government; and
     **formulate accounting guidelines for the demonstration projects.
       The demonstration projects will be developed by September 1994
       and completed by July 1995.

2. Report on the demonstration projects and make recommendations on the use of environmental cost accounting in the federal government. (1)

By October 1995, the interagency working group should report to the Director of the White House Office on Environmental Policy on the results of the demonstration projects and make recommendations on the extent to which environmental cost accounting could be implemented throughout the federal government. By March 1996, the group should develop environmental cost accounting guidelines for broader application throughout the federal government.

3. Issue a directive to implement environmental cost accounting in the federal government. (2)

Based on the recommended guidelines from the interagency working group, the President should issue a directive in April 1996 directing agencies to incorporate environmental cost accounting into the appropriate decisionmaking processes.

Cross References to Other NPR Accompanying Reports

Improving Financial Management, FM01: Accelerate the Issuance of Federal Accounting Standards. Reinventing Federal Procurement, PROC20: Streamline Buying for the Environment.


  1. President William J. Clinton, "1993 Earth Day Address," April 21, 1993.(Press package.)
  2. Executive Order 12856, "Federal Compliance with Right-to-Know Laws and Pollution Prevention Requirements," August 3, 1993.
  3. Telephone interview with Major Tom Morehouse, U.S. Air Force Pollution Prevention Division, August 13, 1993.

ENV02:Develop Cross-Agency Ecosystem Planning and Management


Our nation's diverse ecological systems, or ecosystems, provide us with food, energy, clean water, scientific information, recreational opportunities, and useful materials, like wood. Maintaining healthy ecosystems sustains their productivity and is vital to ensuring a high quality of life for future generations of Americans. To date, the economic development made possible by our country's abundant natural resources has often come with a high ecological price tag. Land development, infrastructure construction, resource extraction, and energy use have resulted in habitat loss, watershed degradation, and deforestation, all of which diminish the health and value of our ecosystems.

The President's recent "Forest Plan for a Sustainable Economy and a Sustainable Environment" (Forest Plan) exemplifies a proactive approach to federal environmental policy known as ecosystem management. In ecosystem management, land and resource managers consider both natural processes and human activities in a given geographic region. Managing ecosystems requires defining resource use and conservation goals for specific ecosystems within geographic regions. Monitoring and assessment are also important components of ecosystem management. They provide necessary information so that management goals and plans respond to new information and changing conditions. In the Forest Plan, ecosystem management planning levels included ecological regions, smaller physiographic provinces, and individual watersheds. Understanding how people and natural processes affect each other at various scales within a region improves managers' (e.g., federal, state, or local officials or private landowners) ability to efficiently and practically meet short- and long-term human needs and expectations.

Federal Agencies and Activities.
The federal government's broad responsibilities make it an important participant and leader in this approach to managing our nation's natural resources. The federal government owns approximately one third of the nation's land. The Bureau of Land Management (BLM) manages more than 60 percent of the nation's federal lands for multiple uses, including grazing, mineral extraction, wilderness areas, and recreation. The Forest Service manages our National Forests, including wilderness areas, for multiple uses, including timber production and wildlife conservation. The Fish and Wildlife Service (FWS), among other things, manages our diverse National Wildlife Refuge System. The National Park Service oversees the National Parks and Grasslands for recreation and preservation. In the major statutes governing all land management agencies except the National Park Service, Congress has basically set a goal to manage federal lands and resources to meet the present and future needs of Americans while striking a balance between resource development and conservation.[1]

Land management agencies, however, are only part of the federal environmental picture. The Environmental Protection Agency (EPA) is responsible for waste management along with implementing federal laws to regulate the nation's air and water quality. The National Oceanic and Atmospheric Administration (NOAA) manages our coastal zones and living marine resources. Numerous other agencies, such as the Department of Energy, the Bureau of Reclamation, the Federal Highway Administration, the Tennessee Valley Authority, and the Bonneville Power Administration run programs with significant impacts on the environment. The Department of Defense has vast land holdings for its military installations and the Army Corps of Engineers has substantial land and water management responsibilities as well.[2] These agencies can also make important contributions to sustaining healthy ecosystems. Agencies and programs previously not associated with ecosystems, such as the Department of Housing and Urban Development and the economic development programs in the Department of Commerce, also affect ecosystem management positively or negatively.

To date, many factors --inconsistent statutory missions, demands of special interests, incompatible data, distinct agency cultures, inconsistent planning and budgeting cycles, and differing agency organizational structures -- have hampered development of coordinated ecosystem management approaches to pursue common goals. To take the simplest example, federal agencies usually have a headquarters office in Washington, D.C., and a number of regional offices. In most cases, regional boundaries differ between agencies, which can further fragment federal management within a given area. Even within the same agency the relative independence of internal organizations or regional offices can present problems by creating significant intra-agency conflicts or inconsistencies.

Within the past two years, two agencies -- the Forest Service and BLM

Recent Ecosystem Management Initiatives Recognition of the importance of governmental management organized around ecosystems rather than political jurisdictions is not new.

**Eight state and federal agencies recently signed a Memorandum of Understanding to develop a coordinated state-wide biodiversity planning strategy for ecologically similar regions throughout California. This initiative organizes the principal land management agencies in the state under the long-term goal of conserving the natural heritage of each major region in California while sustaining economic growth and development.

**The Minnesota Department of Natural Resources is directing an integrated approach to maintain biodiversity based on watersheds, landscapes, and regions involving federal agencies, state and local governments, and the private sector. The management focus will shift from jurisdictional entities, such as state forests, to ecological land units. An example within this program is the Prairie Stewardship Partnership, which seeks to encourage environmentally sustainable economic development while protecting the health and diversity of ecosystems in the northern tallgrass prairie.[3]

In the mid-1980s, the National Park Service and the Forest Service initiated a process to develop a region-wide ecosystem management policy in the Greater Yellowstone Ecosystem, which includes parts of Wyoming, Idaho, and Montana. More than 28 federal, state, and local governments share responsibility for managing parts of the ecosystem.[4] Federal agency policies and programs in the ecosystem were not coordinated and were often conflicting. As elsewhere, agencies had to consider the needs of thousands of private landowners, businesses, interest groups, and users of public lands. Notwithstanding, certain interest groups successfully lobbied to keep the original plan from being implemented, with little resistance from higher levels of the federal government. This early federal experience with ecosystem management points to the importance of high-level support to ensure the success of new initiatives.

Need for Change
The announcement of the President's Forest Plan stated that "for too long, contradictory policies from feuding agencies have blocked progress, creating uncertainty, confusion, controversy, and pain throughout the region." It is self-evident that the federal government should do its utmost to ensure the sustainability of our human communities and the ecological systems upon which we depend. Yet, often, the federal government itself has contributed to the degradation of ecosystems -- even those with obviously high value. A large part of the problem has been an absence of the necessary political will to address decisions needed to ensure the long-term health of the environment and a sustainable economy. In closing remarks at the Forest Conference, President Clinton announced that tough decisions will now be made and that the administration will try to end the gridlock within the federal government by insisting on collaboration, not confrontation.[5]

The Importance of Environmental Health to Economic Health. The situation in the forests of the Pacific Northwest is not unique. For example, 80 percent of the coastal wetland loss in the United States has occurred in just one state, Louisiana. One cause of this loss has been the management of the Mississippi River for competing purposes -- flood control and navigation at the expense of the ecological functions of the river. Continued loss of wetlands in the Mississippi delta region may have substantial economic and social costs. The fishing industry in Louisiana, which is directly affected, accounts for approximately $1 billion per year in revenues and jobs.[6]

The San Francisco Bay/Delta is the most human-altered estuary on the west coast of North and South America. A complex array of federal, state, and local agencies, plans, and laws govern activities in the estuary. A one-mile stretch of shoreline may be affected by decisions of over 400 government agencies.[7] Federal water management policies have allowed severe disruptions of the natural hydrology of the Bay and Delta. Among other things, removal upstream of large amounts of freshwater that would otherwise enter the estuary has led to saltwater intrusions which impair the ecosystem's value and natural processes. Additionally, wetlands destruction has been authorized through the granting of federal permits. Eighty-two percent of tidal wetlands, 90 percent of Delta wetlands, and 75 percent of seasonal wetlands have been lost.[8] As a partial result, valuable salmon, striped bass, and oyster fishing industries have collapsed.

The traditional approach to managing ecosystems and the resources contained within them has been piecemeal. Responsibility has been fragmented across numerous federal and non-federal agencies and jurisdictions..An improved federal approach to ecosystem management would be based on ecological, not political, boundaries. It would then seek and consider input from all stakeholders affected by federal responsibilities in the area. Within such a framework, federal agencies, state, local, and tribal governments, businesses, public interest groups, citizens, and Congress could work in collaboration to develop specific strategies, refocus current programs and resources, and better ensure the long-term ecological and economic health of the country.

Inclusion of people and their economic needs is a fundamental part of an ecosystem management vision. Resource problems are in a sense not environmental problems but human problems created under a variety of political, social, and economic conditions.[9] Ecosystem management should bring potential conflicts between human activity and a sustainable environment to light much sooner, when there are more options available to avoid conflicts and satisfy all involved


  1. Issue an Ecosystem Management directive by September 1994. (2)

The President should issue a directive that:

**establishes a national policy to encourage sustainable economic development and ensure sustainable ecosystems through ecosystem management;
**states that this policy will be carried out through collaboration between federal agencies and coordination with state, local, and tribal governments and the public;
**calls for phased-in implementation of a cross-agency ecosystem management process for federal actions, beginning with demonstration ecosystems selected by an Interagency Ecosystem Management Task Force. This process will be expanded, as appropriate, to include additional ecosystems and to establish suitable management scales for comprehensive ecosystem management;
**establishes specific overarching goals and general guidelines for the cross-agency ecosystem planning and management process; and **directs agencies to interpret their existing authorities as broadly as possible to implement the ecosystem management policy and process.

2. Establish a high-level Interagency Ecosystem Management Task Force to begin development of a number of cross-agency ecosystem management demonstration projects. (2)

The Director of the White House Office on Environmental Policy (OEP) will establish and head an Interagency Ecosystem Management Task Force made up of relevant Assistant Secretaries. The task force will select ecosystem management demonstration projects and determine which agency will assume the lead for each project.[10]

3. Conduct management and budget reviews for the ecosystem management projects as part of the fiscal year 1995 budget process. (2)

OMB, in cooperation with the Interagency Ecosystem Management Task Force, will conduct reviews of selected ecosystem management projects to identify and analyze current and proposed agency plans and activities in the ecosystems.

4. Establish Regional Ecosystem Management Teams for each of the cross agency ecosystem management projects. (2)

By April 1994, the Interagency Ecosystem Management Task Force should establish cross-agency Ecosystem Management Teams composed of a multi-disciplinary regional staff to develop initial ecosystem management plans and cross-agency budgets for each ecosystem.

5. Develop initial ecosystem management plans for the projects, report on progress, and begin implementation. (1)

By August 1995, the Ecosystem Management Teams should complete the initial ecosystem management plans. Measurable objectives should be built into the plans. State, local, and tribal representatives and the public should participate in the early stages of the ecosystem planning process. Upon completion of the plans, the Ecosystem Management Teams should immediately begin implementation. Beginning in February 1995, the Interagency Ecosystem Management Task Force should prepare a brief annual report to the Director of the OEP on progress towards ecosystem management, along with suggested improvements for the process.

Cross References to Other NPR Accompanying Reports

Mission-Driven, Results-Oriented Budgeting, BGT06:

Streamline Budget Development.
Department of the Interior, DOI06: Rationalize

Federal Land Ownership.


  1. See The Multiple-Use and Sustained Yield Act of 1960; The Forest and Rangeland Renewable Resources Planning Act of 1974, as amended by Public Law 94-588; The National Forest Management Act of 1976; and The Federal Land Policy and Management Act of 1976. See also U.S. General Accounting Office, National Direction Required For Effective Management of America's Fish and Wildlife, RCED-81-107 (Washington, D.C., U.S. General Accounting Office, 1981).
  2. The Department of Defense manages approximately 25 million acres on its military installations and the Army Corps of Engineers has responsibility for an additional 12 million acres.
  3. Council on Environmental Quality, "Incorporating Biodiversity Considerations into Environmental Impact Analysis Under the National Environmental Policy Act," Washington, D.C., 1993, p. 9.
  4. Clark, T.W., et al., "Policy and Programs for Ecosystem Management in the Greater Yellowstone Ecosystem," Conservation Biology, 5 (3):412-422 (1991).
  5. President William J. Clinton, "Closing Remarks: The Forest Conference," April 2, 1993.
  6. U.S. Environmental Protection Agency, Office of Policy, Planning and Evaluation, Long-Term Ecological Sustainability and Economic Viability of the Gulf of Mexico Coastal Wetlands and Fisheries: Recommendations for the Mississippi Delta Region (1993). (Unpublished report.)
  7. The San Francisco Estuary Project, "Who Manages the Bay and Delta?," June 1991, p. 1. (Information sheet.)
  8. Ibid.
  9. Ludwig, et al, "Uncertainty, Resource Exploitation, and Conservation: Lessons from History," Science, vol. 260, no. 5104 (1993), pp. 17, 36.
  10. The first meeting of the Interagency Ecosystem Management Task Force was held on August 4, 1993, to discuss implementation of the NPR recommendations.

Improve Environmental Performance at Federal Buildings and Facilities


As a part of Earth Day 1993 activities, President Clinton signed three Executive Orders and called for the preparation of two others that focus on changing the way the federal government does business. The most important element contained in each of these Executive Orders is leadership. In the President's words, "The policies outlined today are part of our effort to reinvent government -- to make it your partner and not your overseer -- to lead by example and not by bureaucratic fiat."

Two of the Executive Orders focus on reducing federal energy use. One commits the federal government to accelerate the purchase of alternative fuel vehicles.[1] The other requires agencies to buy energy-efficient computers.[2] These Executive Orders will help reduce pollution and the demand for foreign oil, as well as strengthen the market for green technologies. The third Executive Order directs federal agencies to change their procurement policies to minimize the purchase and use of substances harmful to the ozone layer.[3]

The two additional Executive Orders are designed to make the federal government a leader in pollution prevention in its daily activities and to promote the use of recycled and recovered products. The pollution prevention Executive Order was signed on August 3, 1993, and the recycled products Executive Order is to be issued in the near future. President Clinton also announced that an energy and environmental audit and upgrade of the White House Complex would be conducted to mark the start of a national effort to promote energy efficiency and waste reduction. This audit will identify opportunities to reduce waste and water and energy consumption. It is expected that when the recommendations are implemented, energy consumption and operating costs will be significantly reduced. The White House audit will act as a model for other federal buildings and agencies, for state and local governments, and for businesses and homeowners.

The way the federal government incorporates environmental considerations in its activities and decisions sends a powerful signal. The President's recent actions have initiated the signal: the National Performance Review (NPR) wants to continue sending it. The following recommendations highlight more opportunities for the federal government to provide environmental leadership and be a force for positive change.

NPR recommends ways for the federal government to increase energy and water efficiency at all federal facilities and to switch to less environmentally damaging forms of energy. Conservation of both energy and water is only one part of the environmental and economic culture change the federal government should undergo. In addition, landscaping programs at federal facilities should consider the local environment in which the landscaping is done and make decisions that complement and enhance it. The NPR recommendations on environmentally sound landscaping provide avenues to save money and ensure that our ecological systems remain healthy by emphasizing the use of native plants, water-conserving techniques, and less use of chemicals.

The NPR's accompanying report on Reinventing Federal Procurement recommends "Streamlining Buying For the Environment." It pursues yet another avenue to reduce the environmental burden of the federal government's decisions. The report recommends specific changes to federal procurement processes and support programs that are designed to preserve the world's natural resources for future generations.

Cross References to Other NPR Accompanying Reports

Reinventing the Procurement System, PROC20: Streamline Buying for the Environment.


  1. Executive Order 12844, "Federal Government Use of Alternative Fuel Vehicles," April 21, 1993.
  2. Executive Order 12845, "Energy Efficient Computer Equipment Purchasing," April 21, 1993.
  3. Executive Order 12843, "Federal Agency Procurement Requirements for Ozone Depleting Substances," April 21, 1993.
  4. Executive Order 12856, "Federal Compliance With Right-to-Know Laws and Pollution Prevention Requirements," August 3, 1993.

ENV03: Increase Energy and Water Efficiency


The federal government is the nation's largest energy consumer, with an energy bill of nearly $3.75 billion in fiscal year 1991 in its own buildings.[1] The General Services Administration (GSA) estimates that federal energy costs to operate office equipment alone are $115 to $150 million a year.[2] As part of Earth Day 1993 activities, President Clinton signed an Executive Order requiring the purchase of energy efficient computers and printers, which is estimated to save the American taxpayers $40 million per year.[3] Other commercially available, cost-effective measures, including high-efficiency lighting, heating, ventilation, and air conditioning systems could likely conserve 25 to 40 percent of the energy used in federal buildings without loss of comfort or productivity.[4]

The actual annual water consumption of the federal government is unmeasured, but the known magnitude of the use offers major, costeffective opportunities for elimination of waste and improved efficiency. A recent survey showed that the federal government annually consumes a minimum of 23 billion gallons of water -- a figure that does not even include such major federal water users as the GSA, the Department of Defense (DOD), the Department of Veterans Affairs, and the U.S. Postal Service.[5] Annual expenditures for water at federal agencies are also quite significant. In 1989, for example, the Army's global water and sewer costs were almost $247 million.[6]

The federal government owns and leases approximately 500,000 buildings, including 422,000 housing units.[7] In the past two years, GSA has installed approximately 4,675 water efficiency upgrades, saving 4.1 million gallons of water per year.[8] Indoors is not the only place where water conservation measures are needed. They are needed outdoors as well. A large percentage of the water used in federal facility garden and landscape irrigation is lost to evaporation, runoff, and spillover to paved areas.[9]

The Energy Policy Act of 1992
The magnitude of federal energy consumption and the potential for conservation and cost savings it represents have formed the basis for numerous legislative efforts and Executive Orders.[10] Water conservation, meanwhile, has been almost an afterthought for government. Some of the past federal legislation set goals for reductions and some provided funding and cost-sharing mechanisms to help realize these goals. But there was little incentive for facility managers to pursue efficiency measures. Federal agencies have been offered a number of avenues for achieving energy and water conservation. They have produced mixed results.

Since 1986, the federal government has had the authority to participate in Shared Energy savings contracts, which allow agencies to share energy savings with contractors who finance and implement energy efficiency upgrades. Despite the savings sharing incentive, only 15 shared savings contracts have been negotiated in the past seven years. There are several reasons why the program has been so underused. The first is the slow and complex nature of federal procurement, which increases costs and delays savings. The second is the complicated calculations used to determine savings in the shared savings process. The third reason is the lack of high-level encouragement to pursue energy efficiency. Finally, there has also been a shortage of staff dedicated to such projects, which means that there is currently a lack of engineers, contracting officers, and project managers experienced in savings sharing contracts.[11]

The enactment of the Energy Policy Act of 1992 (EPACT) was the first time that water conservation efforts were recognized as equally important as energy conservation efforts.[12] EPACT requires each agency to install all energy efficiency and water conservation measures with a payback of 10 years or less by 2005 and to reduce energy use in federal buildings by 20 percent by the year 2000. The Department of Energy (DOE) estimated that each week the federal government did not meet the 20 percent goal in 1991 was equivalent to $20 million in lost opportunity.[13]

Since 1975, federal energy efficiency efforts have been coordinated by the DOE's Federal Energy Management Program.[14] Under EPACT, the Federal Energy Management Program was given responsibility for coordination of some water efforts in addition to its energy efficiency responsibilities. Key provisions in the EPACT are highlighted below.

Funding for Efficiency Measures.

       The EPACT established a fund in DOE to provide grants to help 
       agencies meet the statutory requirements. The fund was 
       authorized at $10 million for fiscal year 1994 and $50 million 
       for fiscal year 1995 and such sums as necessary thereafter. 
       The federal budget for fiscal year 1994 provides $6 million 
       for the fund and the President's budget calls for overall 
       expenditures of $2.2 billion for implementation of energy 
       efficiency retrofits between fiscal years 1994 and 1998. Use 
       of federal funds for direct contracting for efficiency 
       upgrades can provide taxpayers with the greatest benefit 
       because all of the savings are kept by the government.15

Energy Savings Performance Contracts.

      EPACT allows agencies to enter into Energy Savings Performance 
      (ESP) contracts which require the contractor to pay the 
      government if the project does not achieve estimated energy 
      savings. It is anticipated that the ESP contracts will be 
      easier to negotiate and implement than the older Shared Energy 
      Savings contracts.

Savings Retention.

       Civilian Agencies. EPACT allows civilian agencies to retain 
       50 percent of energy and water cost savings for additional 
       energy efficiency measures and employee incentive programs. 
       -- Department of Defense. In 1990, DOD was authorized to keep 
       two-thirds of the government's share of the energy cost 
       savings for future efficiency projects and for base welfare 
       and recreation funds.[16] This DOD authority does not allow
       retention of water-related cost savings through projects 
       or participation in water utility conservation programs.[17] 
       Since DOD was permitted to retain a larger portion of its 
       savings under the earlier legislation, it was excluded from 

Bonus Program.

      EPACT creates a bonus program to reward outstanding federal 
      facility energy managers. The bonus program was authorized for 
      $250,000 in each fiscal year -- 1993, 1994, and 1995.

Need for Change

New approaches are needed to jump start federal initiatives, create early progress, and achieve success. While EPACT recognizes the importance of water conservation, it does not contain comprehensive water efficiency language. However, EPACT still represents a significant opportunity to reduce both energy and water waste, if fully implemented. The awards for federal facility managers in EPACT will provide incentives if they are funded, but they are likely not enough to catalyze the widespread actions necessary in the energy and water efficiency area to meet the EPACT's statutory goals or to reap all of the potential savings available to the federal government.

Other fundamental changes are needed. For example, agencies should revise position descriptions and performance evaluations for facility managers so that conservation is an evaluation criterion, in order both to hold them accountable for results and to reward them for implementation. Leadership is also needed. For example, the Executive Order requiring the purchase of energy- efficient Energy Star computers fosters excellence in energy efficiency in new ways; nevertheless, many additional opportunities exist for energy and water conservation.

Many water utilities are planning price increases over the next several years, which will influence the cost of water at federal facilities. For example, Southern California's Metropolitan Water District will increase its water rates an average of 22 percent per year over the next two years, then increase them between 8 and 12 percent per year until 2000.[18] Since 1985, the Massachusetts Water Resources Authority, which supplies water and wastewater treatment services to communities in the Boston area, has increased its water and sewer charges 428 percent. The Authority now expects retail water and sewer bills to triple by 2000.[19] There are hundreds of federal buildings in these two water districts which have been and will be hit by price increases. These are not the only places where water and sewer rates will climb. In order to decrease demand for water and energy at federal buildings and lessen the fiscal impact of spiraling prices, the federal government will have to develop and promote innovative ways of achieving maximum energy and water use efficiency.

In fact, water conservation is essential to economic health in some parts of the nation. Estimates of future water demand in Southern California's Metropolitan Water District show that by 2010, the average annual water demand in Metropolitan's service area is expected to exceed the water supply, creating a water shortfall of 30 percent.[20] In 1990, the California Urban Water Agencies sponsored research that indicates that a one-year, 30 percent industrial water shortage in California would translate into an estimated $20 billion in losses and 160,000 lay-offs due to reduced production.[21] The federal government has a number of facilities in Southern California and in other areas experiencing or anticipating water shortages. To lead by example and help local governments solve pressing problems, the federal government needs to fully participate in conservation efforts.

Using less water will not only save tax dollars, but will also help postpone or eliminate the need for building new or expanded water or wastewater treatment facilities and reduce energy use. The California Energy Commission estimates that 56 percent of the state's municipal electricity use is applied to the pumping of water and the removal and treatment of wastewater.[22] Of course, using less water can also significantly reduce the adverse effects of water withdrawals from fragile aquatic ecological systems.

EPACT requires each agency to reduce energy and water use in its buildings. Although the act sets specific goals, a commitment to meet these goals is necessary. The Office of Technology Assessment estimated that it would take $2 to $3 billion to retrofit all government buildings for energy efficiency.[23] EPACT does not provide agencies with the necessary funds for achieving their resource use goals. The Department of Defense, for example, has programmed $1.1 billion for accomplishing EPACT goals, but it is believed this will not fully satisfy the requirement. The remaining funds and audits necessary to achieve the efficiency goals of the EPACT will probably need to come from the private sector, possibly through utility conservation programs and ESP contracting.

Streamlining Contracting Methods.
Despite improvements the EPACT made in the energy efficiency contracting process, the new ESP contracts still contain many of the complexities of the old Shared Energy Savings contracts. A new streamlined contracting method is currently being tested in Southern California where two federal agencies are working with state and local utilities to integrate water and energy efficiency upgrades through energy utilities' rebate and incentive programs.[24] All of the upgrades will be accomplished by modifying the existing energy utility contracts with the federal government. Working through existing contracts saves time and administrative costs, clears the red tape involved with new contracts, and gives federal facilities the opportunity to participate in more of the water and energy utility incentive/rebate programs.

This new streamlined method requires utilities to finance all of the parts and labor costs for the efficiency upgrades. The federal government will repay utilities through an agreed-upon conservation service charge for a set period of time. Utilities guarantee that the federal government's bill will never exceed the agreed-upon rate, which will generally be 20 to 30 percent lower than its current average bill.

Savings Retention and Bonus Programs.
Under EPACT, civilian agencies are allowed to retain 50 percent of the energy and water cost savings for additional energy efficiency measures and employee incentive programs. As stated earlier, however, since DOD was permitted to retain a larger portion of its savings under earlier legislation, it was excluded from EPACT. DOD interprets the exclusion to mean that it may not keep any savings from water projects, but still may keep the two-thirds allowed for energy efficiency projects under its previous legislation.

In addition to its inability to retain water savings, there are other barriers to the widespread implementation of conservation projects. For example, under the DOD conservation legislation, military installations are allowed to accept any financial incentive offered by utilities. However, those incentives cannot always be used to offset the costs of the project that triggered them. The incentive payment may be put into another fund and perhaps then become unavailable to the installation and DOD when that fund's appropriation expires. Some civilian agencies experience the same problem.

The DOE bonus program was not appropriated any funds in fiscal year 1993. Some, but by no means all, agencies have bonus programs of their own; however, most provide awards for energy projects but not water projects. The continued exclusion of water projects perpetuates the belief that water conservation measures are secondary and unrelated to energy efficiency. The intent of the bonus program and savings retention provisions is to encourage a change in "corporate culture" regarding conservation; however, with the immediate need for deficit reduction, some believe that the savings are likely to be turned back to the Treasury. There is, for the same reason, pressure to slash the relatively small bonus program budgets. It is a move that would eliminate a strong incentive for managers to save the government and the taxpayers significant amounts of money and meet statutory goals.

Renewable Energy.
Using less energy is only one part of the culture change the federal government needs to undergo. Another important element is to switch to less environmentally damaging forms of energy. Fossil fuel fired power plants produce acid rain and greenhouse gases. Petroleum use makes our nation vulnerable to dependency on foreign oil. Nuclear power plants generate hazardous nuclear waste. Hydropower dams destroy natural stream flows, degrading terrestrial and aquatic ecosystems.

In this vein, some utilities are experimenting with solar retrofits in customer facilities to manage their power demand. Solar generated power can reduce long-term energy costs and produce literally tons less pollution. For example, a water heater powered through solar technology instead of petroleum-based energy can avoid as much as one ton of carbon dioxide (CO2) emissions per year.[25]

Examples of Benefits

Aliamanu Military Reservation.
Despite the barriers to energy efficiency and water conservation detailed above, there are examples in the federal government which demonstrate savings, though they did not come easily. For example, the U.S. Army Corps of Engineers selected the Aliamanu Military Reservation at Honolulu, Hawaii, for a Shared Energy Savings contract to upgrade 2,600 housing units and support facilities. The contract was advertised in 1989, and after two years of bureaucratic wrangling and negotiating, a contract was awarded. The contractor will receive a share of the energy savings and maintenance savings generated for 15 years. The government expects to receive an estimated $7.8 million over the contract period.[26] The implementation of the proposed energy and water measures are expected to result in an annual reduction of over 24 million kilowatt hours and over 8.5 million gallons of water. This results in a reduction in annual pollution emissions of 23,655 tons of CO2, 107 tons of sulfur dioxide, and 64 tons of nitrous oxides.[27]

Tonto National Forest.
The federal government is demonstrating the energy and cost-efficiency of solar energy systems. The Department of the Interior funded a model solar project at the Cholla Recreation Site in Tonto National Forest. The solar energy system costs about one-third as much as extending the power lines to the site and does not entail a monthly service charge.[28] It provides energy to pump water from the facility's 165-foot well; powers the water disinfection process; and provides the lighting, forced air ventilation, and the power requirements for the toilets, showers, and other buildings. In addition, a solar process was adapted to produce hot water for the showers at no cost. Such models should be replicated wherever cost-effective. They may be particularly well-suited for military facilities, where command consolidations have led to increased energy demand -- a demand that could be met with less-expensive and less-polluting renewable energy sources.

Finally, federal efficiency-seeking efforts will also create new markets and incentives for innovative technologies. By itself, this should promote economic vitality and jobs in a critical industry sector.


  1. Issue a directive on energy and water efficiency in federal facilities. (2)

The President should issue a directive by March 1994 to address the need for energy and water conservation and efficiency measures at all federal facilities where cost-effective. The directive should:

      set a federal energy savings goal to encourage 
      agencies to exceed the goal established in EPACT;
      set a goal for federal water conservation; and
      stress the importance of the link between water 
      consumption and energy use.

The directive should also encourage the federal government's preference for less polluting forms of energy and:

      state that the federal government's policy shall
      be to pursue aggressively  the use of renewable 
      energy sources in federal facilities; and
      direct agencies to set goals for energy efficiency 
      projects that include  the use of renewable energy.

These goals and progress reports in meeting them should be submitted to the DOE and the White House Office on Environmental Policy as a part of the annual reports on energy efficiency currently required by legislation; and, where cost-effective, direct government agencies to install renewable energy technologies in new federal facility construction projects and in future renovation projects.

The directive should include provisions directing agencies, where costeffective, to:

      integrate energy and/or water efficiency upgrades 
      to ensure maximum cost savings;
      establish reinvention laboratories to showcase energy
      efficiency, water conservation, and renewable energy 
      technologies, as well as innovative contracting techniques;
      establish an Energy Efficiency Project Team including a 
      procurement specialist, an energy manager, and other
      relevant members, and empower the team to focus on water
      conservation measures and energy efficiency projects;
      pursue utility incentive and rebate programs;
      consider energy and water conservation in the performance 
      evaluation of facilities managers; and
      review employee incentive programs to ensure that successful 
      implementation of energy and water conservation/efficiency 
      measures are appropriately rewarded.

To assist federal energy managers in implementing energy efficiency and water conservation projects, the directive should require within 180 days issuance of:

model solicitations to contract for water and energy upgrades;

      model Energy Savings Performance contracts with a comprehensive 
      list of efficiency measures;
      guidance explaining the relationship between water use
      and energy consumption and energy savings achieved
      through water conservation measures; and
      a national list of qualified water and energy efficiency 

2. Propose legislation to allow the DOD to retain savings generated through water efficiency projects. (3)

The President should propose legislation to amend 10 U.S.C. Sec. 2865. The proposed legislative change should provide added incentive to DOD to implement water conservation measures to meet the statutory reduction goals of the Energy Policy Act of 1992 (EPACT).

3. Develop appropriate rules, procedures, or proposed legislation to allow rebates from utility companies to remain available beyond the fiscal year and to be used to fund additional energy efficiency and water conservation projects or to reduce the facility_s future utility bill. (1)

Agencies' heads should, within 120 days of the President's directive, develop appropriate rules, procedures, or proposed legislation, if necessary, to ensure:

      rebates or incentive money is returned to the site where
      the savings occurred; and 
      rebates are available to fund energy improvement or water 
      conservation projects or, alternatively, to be applied toward 
      future utility bills.

Cross References to Other NPR Accompanying Reports

Department of Energy, DOE05: Strengthen the Federal Energy Management Program.
Reinventing Federal Procurement, PROC20: Streamline Buying for the Environment.
Improving Financial Management, FM06: "Franchise" Internal Services.
Reinventing Human Resource Management, HRM04: Authorize Agencies to Develop Incentive Award and Bonus Systems to Improve Individual and Organizational Performance.


  1. The total energy bill for fiscal year 1991 was nearly $11.3 billion, including the energy costs associated with jet and diesel fuel. See U.S. Department of Energy (DOE), Annual Report to Congress on Federal Government Energy Management and Conservation Programs, Fiscal Year 1991 (Washington, D.C., October 22, 1992), p. 10. The federal government pays approximately $4 billion in subsidized energy expenses or low-income housing. See U.S. Congress, Office of Technology Assessment (OTA), Energy Efficiency in the Federal Government: Government By Good Example?, OTA-E-492 (Washington, D.C.: U.S. Government Printing Office, May 1991), p. 3.
  2. Trenkle, Anthony, "Government Customer Perspectives," Proceedings: Energy-Efficient Office Technologies: The Outlook and Market (Electric Power Research Institute, December 1992), p. 3-6.
  3. Executive Order 12845, "Energy Efficient Computer Equipment Purchasing," April 21, 1993. See also President William J. Clinton, "1993 Earth Day Address," April 21, 1993. (Press package.)
  4. Installation of efficiency measures for cooling could reduce commercial energy consumption by 30 to 70 percent and space heating energy consumption for commercial and industrial uses by 20-30 percent. Rubin, Edward S., et al., "Realistic Mitigation Options for Global Warming," Science, vol. 257 (July 10, 1992), p. 148. Installation of a series of 11 best practice technologies options available at little or no net cost could reduce electricity use in the U.S. building sector by 45 percent. Id. at p. 149 and 262. In 1991, a highly efficient cooling and heating system and several other simple changes were estimated to cut office energy consumption by 50 percent or more. "Conservation Power: It Has a New Look That's Igniting an Energy Revolution," Business Week (September 16, 1991), p. 88.
  5. The 23 billion gallons of water per year excludes most of the Department of Interior facilities and does not include any water figures from the Postal Service, the Department of Defense, the Department of Energy, the Department of Housing and Urban Development, the General Services Administration (GSA), the Department of Labor, and the Department of Veterans Affairs. "Water Efficiency in Federal Facilities and Programs," Environmental and Energy Study Institute, June 1993, pp. 1-3.6. Ibid.
  6. OTA, p. 4. The figure includes multifamily units which may be in one building.
  7. Telephone interview with Debra Yap, Office of Real Property and Management and Safety, General Services Administration, July 29, 1993.
  8. See detailed discussion of water-efficient landscaping in ENV04: Increase Environmentally and Economically Beneficial Landscaping.
  9. See Energy Policy and Conservation Act of 1975, P.L. 94-163; Energy Conservation and Production Act of 1976, P.L. 94-385; Department of Energy Organization Act of 1977, P.L. 95-91; National Energy Conservation Policy Act of 1978, P.L. 95-619; Comprehensive Omnibus Budget Reconciliation Act of 1985, P.L. 99-272; Federal Energy Management Improvement Act of 1988, P.L. 100-615; National Defense Authorization Act of 1989, P.L. 100-456; National Defense Authorization Act of 1990, P.L. 101-189; National Defense Authorization Act of 1991, P.L. 101-501; and Energy Policy Act of 1992, P.L. 102-486. Executive Orders: Executive Order 11912; Executive Order 12083; Executive Order 12374; and Executive Order 12759.
  10. OTA, p. 3.
  11. P.L. 102-486.
  12. Ginsberg, Mark, Speech to World Energy Congress, Association of Energy Engineers, Atlanta, Georgia, October 1992.
  13. The Department of Energy was established in 1977. Prior to that time the Federal Energy Management Program was located in the DOE's predecessor organization, the Federal Energy Administration.
  14. For further discussion of contracting methods for energy efficiency and water conservation measures, see Reinventing the Procurement Process, PROC20: Streamline Buying for the Environment.
  15. National Defense Authorization Act of 1991, P.L. 101-510.
  16. 10 U.S.C. -2865.
  17. Metropolitan Water District of Southern California, Proposed Executive Summary Annual Budget, 1993- 1994 Fiscal Year (April 2, 1993), p. D-18.
  18. Telephone interview with Barbara LaHage, Massachusetts Water Resources Authority, July 20, 1993.
  19. Dziegielewski, B. and D. Baumann, "The Benefits of Managing Urban Water Demands," Environment, vol. 34, no. 9 (November 1992), p. 7.
  20. The loss in revenue is tied to 1990 value of shipments. See California Urban Water Agencies, "Cost of Industrial Water Shortages," November 1991, pp. 7-10 -- 7-19.
  21. California Energy Commission.
  22. OTA, p. 7.
  23. The partnership includes the following: the GSA, the Naval Facilities Engineering Command, Metropolitan Water District of Southern California, San Diego Gas & Electric, Southern California Edison, the City of San Diego, and the San Diego County Water Authority.
  24. Personal correspondence with Mark Ginsberg, Director of the Federal Energy Management Program, Department of Energy, August 15, 1993.
  25. DOE, Annual Report to Congress, p. 18.
  26. Personal correspondence with David R. Horne, David R. Horne and Associates, July 12, 1993.
  27. The cost of extending the commercial grid power to the site was $750,000 and a monthly service charge of $1,000, while the cost of installing a solar system was only $240,000. See U.S. Department of Energy, "FY1991 Special Recognition Awards," Special Edition, No. 1, Washington, D.C., 1992, p. 2.

Increase Environmentally and Economically Beneficial Landscaping


The federal government makes landscaping and planting decisions for a wide variety of federal facilities, including military bases, park facilities, highway projects, and veterans' cemeteries.[1] These decisions significantly affect the health of the natural systems on which we depend.

Environmentally beneficial landscaping considers the make-up of the native ecosystem where the landscaping is done and strives to protect it. It is designed to minimize the effects that the landscaping will have on the surrounding environment by giving preference to regionally native plant species. It also emphasizes the use of water-conserving techniques such as efficient irrigation systems and drought-resistant plants and the reduced use of chemical fertilizers, pesticides, and herbicides.

At every level of government environmentally beneficial landscaping policies and activities are being implemented. For example, the 1987 Wildflower Act requires that 25 cents out of every $100 of landscape funding be used to plant wildflowers in federally financed highway projects.[2] This law, however, does not require the use of wildflower species native to the project area. The Department of Veterans Affairs stresses the use of native plants in its National Cemetery System to reduce mowing and water costs.[3]

The federal government also has programs that combine educational and conservation opportunities. For example, the Department of Agriculture's Soil Conservation Service helps schools and communities develop outdoor learning centers.[4] These centers provide opportunities to teach core subjects, such as science, math or English, using environmental and conservation examples. The local centers can satisfy traditional educational requirements while meeting specific conservation objectives. For example, children help design, plant, and maintain a row of trees near their school to reduce energy costs. Throughout the project, they learn the math and physics, for example, of energy conservation. At the same time, they learn how to choose environmentally appropriate tree species and how to care for them.

Several states and cities are also beginning to recognize the value of planting native species, and it is reflected in their laws and ordinances. For example, Minnesota recently passed a law to study the feasibility of requiring only native plants on public lands.

In California, state law mandates cities to institute local ordinances that require citizens to use water conservation practices in their landscaping activities.[5] The city of Austin, Texas, has several ordinances that require city planners and developers to consider the environmental impacts of their actions.[6] These ordinances include requiring the use of native species in plantings, the protection of trees on development sites, and the use of integrated pest management practices. They also require the use of water conservation techniques in plans, and the preservation of fragile ecosystems at development projects.


The federal government should serve as an example of how landscaping can incorporate environmentally beneficial practices and be both beautiful and economical.

Preserve Native Ecosystems.
Native plants add value to the complex ecosystems of which they are a part. The right selection of plants provides appropriate habitat for wildlife, creating resources for food, shelter, and nesting areas. The use of native plants can also reduce landscaping costs and pollution. In many parts of the country, however, they are not used in landscaping: sometimes because exotic species have edged them out, sometimes because they are simply not commercially available, and sometimes because they are not deemed attractive.

The introduction of exotic plants can have costly environmental and economic consequences. Throughout the country, there are approximately 14 million acres of federal lands that are infested with exotic weed species (such as English ivy).[7] For example, in California's Redwood National Forest biologists have identified 150 plant species as hazardous to the natural ecosystem. Their budget, however, provides only enough funding to do basic research on management strategies for 10 of these exotic species.[8]

Many native landscaping plants are not commercially available. Few nurseries maintain sufficient stocks of native trees, shrubs, grasses, and wildflowers in the size and quantity to meet the federal government's landscaping needs. Government specifications that require the use of native species do not always allow enough time for nurseries to develop stock. As a result, nurseries that are interested in developing a more diverse inventory of native plant species do not do so because they cannot grow them fast enough to satisfy the specifications. Therefore, few nurseries bid on the published proposals. In addition, nurseries are hesitant to enter the market because of uncertain demand, again reducing the selection of native species available to federal landscape architects.

Improve Conservation Education.
Current federal environmental and conservation educational programs do not fully exploit the opportunity for public- private partnerships in education and conservation. There are many opportunities the federal government can take to set an example and provide outreach activities to the public. The federal government is in the position to be a model for the preservation of our biological cultural heritage. Government grounds can be excellent examples of the diversity of native plant species in an area.

Reduce Landscaping Costs.
Maintenance costs can be reduced because native grasses and wildflowers do not require frequent mowing, irrigation, or fertilization. Reduced mowing lowers costs of labor, tractor repair, and fuel. It also reduces pollution.

Chemical fertilizers, pesticides, and herbicides and irrigated water expenditures can be reduced because native plants are better suited to the climate and the local insect and animal population. Therefore, they require reduced quantities of irrigated water and chemical fertilizers, herbicides, and pesticides to thrive.The use of integrated pest management (IPM) can further reduce agency expenditures for chemical fertilizers and pesticides. IPM is a method of pest control that uses biological methods to control damaging pests. For example, sterile insects can be introduced in an area to mate with the existing insects, thereby reducing their ability to reproduce and eventually their population size. This method of pest control also includes surveying infested areas and planning pesticide applications to coincide with the most vulnerable stage of the target insect population's development. This avoids blanket preventive spraying.

Implementation of effective IPM programs can reduce chemical usage and costs significantly. The National Arboretum, for example, reduced its expenditures for chemical pesticides by an estimated 75 percent when it switched to IPM.[9] Purchasing chemicals only on an as-needed basis can achieve cost savings not only by requiring fewer purchases, but also by avoiding disposal costs for unused chemicals. The use of chemicals to maintain grounds contributes to environmental, health, and safety problems. Reduced use of chemicals lowers the possibility of contaminated run-off into rivers and ground water. Chemical reductions can assist agencies in achieving compliance with the pollution prevention Executive Order, which calls for a 50 percent reduction in toxic substance use by federal agencies.[10]

Conserve Water.
Water used to irrigate lawns and landscapes can account for significant proportions of total water use during peak watering season. The selection of native plants that are adapted to the particular climate can reduce water demand by requiring less irrigated water. Grasses and trees should be selected in part based on how much water they consume. Species that are particularly thirsty should not be used in arid areas where normal rainfall does not meet most of the plant's water needs. Reduced water use conserves the fresh water supply for both the natural environmental systems and the human population.

Accordingly, federal parks, golf courses, and cemeteries should select grass varieties carefully, install efficient irrigation technologies, and schedule irrigation times according to turf needs and weather conditions. All landscapes, especially large grassy areas, should have their water needs audited to ensure that plants are receiving the appropriate level of water. Overwatering results in additional water costs, as well as unnecessary use of energy.[11]


Issue a directive to require the use of environmentally beneficial landscaping at federal facilities and federally funded projects, where appropriate. (2)

The President should issue a directive by May 1994 to:

        require agencies to use environmentally beneficial
        landscaping wherever appropriate, cost-effective, and 
        stress the links between landscaping decisions,
        protection and enhancement of the environment,
        and cost-saving opportunities; and
        announce that the federal government will lead
        by example through the implementation of
        environmentally beneficial landscaping principles
        at the White House and the Vice President's
        residence at the Naval Observatory.

Increase the use of native plant species in all federal landscaping activities.

The directive should also:

        encourage the use of native trees, shrubs,
        grasses, and wildflowers in landscaping;
        encourage agencies to develop specifications 
        with enough flexibility to encourage nurseries
        to develop sufficient stocks of native plant 
        species; and
        direct the Department of Agriculture, through
        its Agricultural Research Service and/or the
        Soil Conservation Service, to conduct research
        on the  production and use of native species as
        landscape and conservation plants.

Reduce the quantity of chemicals applied to federal landscapes.

The directive should encourage agencies to:

        reduce their use of chemical fertilizers,
        pesticides, and herbicides; and
        use an IPM approach to pest control.

Use water-efficient technologies in federal landscaping projects.

The directive should also:

         encourage agencies to use water-efficient
         technologies to the maximum extent practicable;
         encourage the use of water audits, where 
         appropriate, to establish exact needs and assist
         in planning irrigation systems and scheduling;
         encourage agencies to participate in water utility 
         conservation and rebate programs.[12]

Provide educational and conservation opportunities to the public.

The directive should encourage agencies to:

      sponsor and participate in activities that
      provide educational and conservation
      opportunities to the public, and 
      prepare interpretive exhibits and signs
      explaining the plantings and the special
      techniques used in landscaping to enhance the 

Establish a governmentwide environmentally sound landscape program.

The White House Office on Environmental Policy (OEP) should establish an interagency working group by July 1994 to develop recommendations for an Environmentally Sound Landscape Program that would:

         provide incentives to federal facility and
         landscape managers to consider the environmental
         implications of their landscaping plans; 
         recognize the contributions and efforts of
         individual managers; and 
         create an annual award to agencies that made
         significant strides in implementing the 

The actions should be reported to the Office on Environmental Policy by December 1994 and should include guidelines to federal facility managers on how to increase the use of native species, reduce the use of chemical fertilizers and pesticides, and implement water conservation techniques. These guidelines should allow for climatic and geographic differences, but should provide a framework for agencies to consider as they plan their landscape requirements. The working group should also establish criteria for agency recognition.


  1. To provide an idea of the extent of federal landscaping efforts, note that the Federal Highway Administration spent over $77.8 million on landscaping projects in 1992, the Department of Veterans Affairs maintains 114 cemeteries throughout the country encompassing 10,000 acres, and the Department of Defense manages 25 million acres of land, some of which must be landscaped and maintained.
  2. See The Surface Transportation and Uniform Relocation Assistance Act of 1987.
  3. Telephone interview with Marty Rize, National Cemetery System, Veterans Administration, July 14, 1993.
  4. Interview with Tom Leverman, Head, Educational Relations, Soil Conservation Service, USDA, July 19, 1993.
  5. Telephone interview with Marsha Prillwitz, Landscape Program Manager, Water Conservation Office, California Department of Water Resources, July 6, 1993.
  6. Telephone interview with Susan Scallon, City of Austin, Texas, July 27, 1993.
  7. The 1993 Federal Interdepartmental Weed Committee Report, estimated the extent of exotic species/weed infestations on federal lands as follows: Bureau of Land Management, 6 million acres; Forest Service, 4.9 million acres; Bureau of Indian Affairs, 1 million acres; Bureau of Reclamation, 1 million acres; National Park Service, 0.5 million acres; Fish and Wildlife Service, 0.5 million acres.
  8. Telephone interview with Steve Harris, Vegetation Ecologist, Redwood National Forest, July 15, 1993.
  9. Telephone interview with Dr. Garvey, National Arboretum, July 13, 1993.
  10. Executive Order 12856, "Federal Compliance with Right-to-Know Laws and Pollution Prevention Requirements," August 3, 1993.
  11. See discussion of the relationship between water and energy use in ENV03: Increase Energy and Water Efficiency.
  12. See discussion of water conservation opportunities in federal facilities in ENV03: Increase Energy and Water Efficiency.


Appendix A:Summary of Actions by Implementation Category

Each action item has been categorized by locus of implementation, as follows:

(1) Agency heads can do themselves:

 ENV01.1     Develop pilot projects to demonstrate the use of 
             environmental cost accounting by the federal 
 ENV01.2     Report on the demonstration projects and make 
             recommendations on the use of environmental cost
             accounting in the federal government.
 ENV02.5     Develop initial ecosystem management plans for the 
             projects, report on progress, and begin 
 ENV03.3     Develop appropriate rules, procedures, or proposed 
             legislation to allow rebates from utility companies to 
             remain available beyond the fiscal year and to be 
             used to fund additional energy efficiency and water 
             conservation projects or to reduce the facility_s future 
             utility bill.

(2) President, Executive Office of the President, or Office of Management and Budget can do:

 ENV01.3     Issue a directive to implement environmental cost 
             accounting in the federal government.
 ENV02.1     Issue an Ecosystem Management directive by September 
 ENV02.2     Establish a high-level Interagency Ecosystem
             Management Task Force to begin development of
             a number of cross-agency ecosystem management 
             demonstration projects.
 ENV02.3     Conduct management and budget reviews for the 
             ecosystem management projects as part of the
             fiscal year 1995 budget process.
 ENV02.4     Establish Regional Ecosystem Management Teams
             for each of the cross-agency ecosystem management 
 ENV03.1     Issue a directive on energy and water efficiency
             in federal facilities.
 ENV04.1     Issue a directive to require the use of
             environmentally beneficial landscaping at federal 
             facilities and federally funded projects, where 

(3) Requires legislative action:

 ENV03.2     Propose legislation to allow the DOD to retain
             savings generated through water efficiency 

Appendix B:Accompanying Reports of the National Performance Review

Governmental Systems Abbr.

Changing Internal Culture

Creating Quality Leadership and

      Management                           QUAL
 Streamlining Management Control           SMC
 Transforming Organizational 
      Structures                           ORG
 Improving Customer Service                ICS

Reinventing Processes and Systems

Mission-Driven, Results-Oriented

      Budgeting                            BGT
 Improving Financial Management            FM

Reinventing Human Resource

      Management                           HRM
 Reinventing Federal Procurement           PROC
 Reinventing Support Services              SUP
 Reengineering Through
      Information Technology               IT
 Rethinking Program Design                 DES

Restructuring the Federal Role

Strengthening the Partnership in

      Intergovernmental Service
      Delivery                             FSL
 Reinventing Environmental Management      ENV
 Improving Regulatory Systems              REG

Agencies and Departments ABBR.

 Agency for International Development      AID
 Department of Agriculture                 USD
 ADepartment of Commerce                   DOC
 Department of Defense                     DOD
 Department of Education                   ED
 Department of Energy                      DOE
 Environmental Protection Agency           EPA
 Executive Office of the President         EOP
 Federal Emergency Management Agency       FEM
 General Services Administration           GSA

Department of Health and Human Services HHS Department of Housing and Urban

      Development                          HUD
 Intelligence Community                    INTEL
 Department of the Interior                DOI
 Department of Justice                     DOJ
 Department of Labor                       DOL
 National Aeronautics and Space 
      Administration                       NASA
 National Science Foundation/Office
      of Science and Technology Policy     NSF
 Office of Personnel Management            OPM
 Small Business Administration             SBA
 Department of State/
      U.S. Information Agency              DOS
 Department of Transportation              DOT
 Department of the Treasury/ 
      Resolution Trust Corporation         TRE
 Department of Veterans Affairs            DVA