Green Tier, the state’s unique program offering a “carrot” rather than “stick” approach to environmental regulation, has been very successful, according to Matt Frank, secretary of the Department of Natural Resources.

“It’s a win-win approach,” he says, adding that the traditional “command-and-control” method of penalizing companies for not meeting minimum standards fails to support firms that achieve superior environmental performance. In contrast, when they sign voluntary Green Tier contracts with the DNR, the companies’ innovations are recognized and those innovations bring about cost savings in such areas as energy efficiency and waste reduction. At the same time, the
environment gets better and the public is served.

“Green Tier really customizes regulation for each type of business,” says Republican Sen. Neal Kedzie, who wrote the 2004 law creating the program.

The Wisconsin approach was modeled after a successful program in Bavaria.

Kedzie foresees bipartisan support for a reauthorization bill that he and Democratic Sen. Mark Miller are sponsoring in the current legislative session. The 2004 law contains a “sunset” clause, which would automatically terminate the program July 1 of this year, unless the reauthorization is approved.

So, has Green Tier lived up to Kedzie’s expectations?

“Yes and no,” the Elkhorn senator says. “Yes, in the fact the program is gaining wider acceptance and we have a number of success stories. The negative is it is still taking more time to convince some businesses that government can become a working partner. Some are still waiting for the other shoe to drop.”

Green Tier has three components. Tier 1 is the entry level that includes companies with good records of environmental compliance and a formal commitment to a certified environmental management system. Tier 2 is for companies that already have an effective environmental management system in place and also demonstrate a commitment to bringing about improvements in their industry, region or supply chain.

Green Tier also has charters with trade associations and business groups such as the Clear Water Charter in which Veridian Homes of Madison and other builders have committed to reducing runoff from construction sites.

As of January, 23 companies with a total of 33 installations had Tier 1 contracts with the DNR and two had signed Tier 2 contracts, according to Mark McDermid, director of the DNR’s Bureau of Cooperative Environmental Assistance. Five business groups had signed charters. As many as 400 Wisconsin entities have inquired about the program, Sen. Kedzie says.

How do companies benefit from signing Green Tier contracts? Besides the cost-savings from developing the environmental management systems, the DNR’s incentives include reduced red tape through a single contact person with the agency, quicker turnaround on permits and the fewest number of inspections allowable. Tier 2 participants also directly cut costs associated with regulation.

These advantages offset any additional costs from Green Tier that could put participating companies at an initial competitive disadvantage. Moreover, participants can use the Green Tier logo in their advertising and promotions.

One of the success stories of Green Tier is MEGTEC Systems of De Pere, the first participant in Tier 2. This manufacturer of air flotation dryers and air pollution-control equipment put together an environmental management system that eliminated an entire waste stream of aerosol cans, reduced hazardous waste in cleaning paint guns by 75 percent and eliminated a waste stream of customer coatings. It has worked with its supply chain to use environmentally superior products and practices, and to develop environmental management systems of their own. MEGTEC said being in Green Tier has helped it demonstrate to customers that it’s an environmental leader, a particular advantage for a company that produces and markets pollution-control equipment.

Frank says Green Tier, combined with other regulatory reforms enacted under the leadership of Gov. Jim Doyle, has been important in changing perceptions of the state’s regulatory climate. And with passage of the reauthorization bill, which removes the sunset provision, it will be here to stay.

By John Hill

You can contact John Hill by e-mail at jhoythill@sbcglobal.net.