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U.S. Environmental Protection Agency
Office of Research and Development
National Center for Environmental Research
Science to Achieve Results (STAR) Program

CLOSED - FOR REFERENCES PURPOSES ONLY

Corporate Environmental Behavior: Examining the Effectiveness of Government Interventions and Voluntary Initiatives

Opening Date: April 20, 2001
Closing Date: August 15, 2001

Introduction
Definitions
Description
Motivations Behind Regulated Entities’ Environmental Behavior
Influence of Government Interventions On Environmental Compliance And Performance
Desirable Research Characteristics
Funding
Eligibility
Instructions for Application Submission
Sorting Code
Additional Requirements: Data Development
Contacts

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INTRODUCTION

The Environmental Protection Agency (EPA) Office of Research and Development, National Center for Environmental Research (NCER), announces the second extramural grants competition supporting research in the area of corporate environmental behavior (CEB).  The solicitation will focus on analyzing the motivators that influence corporate environmental behavior and examining the effectiveness of governmental interventions and voluntary initiatives to improve corporate environmental performance.

Note: EPA supported similar socio-economic research in FY 2000 through the Corporate Environmental Performance and Effectiveness of Government Interventions, and Market Mechanisms and Incentives solicitations, and in prior years through the EPA/NSF joint program on Decision-making and Valuation for Environmental Policy. This year, subject to available funding, EPA also is advertising socio-economic solicitations addressing: health valuation; market mechanisms and incentives; and environmental decision making. Information on announcements made in these competitions may be found on the Internet at: http://www.epa.gov/ncer/rfa. The National Institute of Justice (NIJ) has sponsored similar competitions with respect to compliance with other areas of the law. Information on similar NIJ competitions may be found on the Internet at: http://www.ojp.usdoj.gov/nij/funding.htm
 

DEFINITIONS

The following are definitions of some of the terms used in this solicitation, which are intended only to clarify the present use of these terms.

Environmental performance: the physical environmental results of actions taken by regulated and non-regulated entities, i.e., quantities and concentrations of air emissions, water discharges, waste generation and on- and off-site health and environmental risks posed by industrial or chemical management processes.  Environmental performance may exceed or fall short of performance standards established by laws or regulations.  Performance is affected by pollution prevention and abatement activities.

Environmental Behavior: actions taken by regulated and non-regulated entities to improve or worsen environmental performance or compliance with environmental statutes or regulations.

Compliance: achievement of environmental standards set by law or regulations.

Deterrence: the motivation of regulated entities to comply with environmental laws and regulations through consideration of the government-induced consequences of violating these laws or regulations.

Compliance assistance: information and technical assistance provided to the regulated community to help it meet the requirements of environmental laws.

Compliance incentives: policies that provide positive incentives to regulated entities to voluntarily discover, disclose, and correct violations or clean up contaminated sites before they are identified by the government for enforcement investigation or response.  Compliance incentives may also promote superior environmental performance.

Voluntary initiatives: government sponsored voluntary programs or other non-governmental voluntary activities that encourage or enable firms to go beyond compliance to improve environmental performance.

DESCRIPTION

EPA is interested in supporting research that (1) identifies the determinants, or motivators, of regulated and non-regulated entities’ environmental behavior and performance, and (2) assesses the influence of various governmental interventions and voluntary initiatives on this behavior/performance.  Better understanding of these issues is needed to help state, local, tribal, and federal governments effectively allocate resources to achieve the greatest degree of environmental and health protection and improvement.  This understanding is hampered by a lack of empirical data on the motivations influencing corporate environmental behavior and the effectiveness of a range of government interventions and voluntary initiatives.  This is particularly important as a number of new initiatives, such as government-business partnerships, requirements for expanded environmental information, voluntary standards, and compliance assistance programs have been initiated in recent years.  These initiatives have been proposed as alternatives to traditional enforcement, yet their impacts on overall environmental performance remain uncertain.  Therefore, research is critical that will create data sources and examine the effectiveness of both traditional and alternative environmental implementation approaches on corporate behavior.

The two principal topic areas, (1) identification and analysis of the motivators of regulated and non-regulated entities’ environmental behavior and performance and (2) assessment of the influence of government interventions and voluntary initiatives on environmental compliance and performance, are addressed in separate sections below, although there are significant overlaps between the two.

Interested researchers should note that EPA recently sponsored a separate solicitation entitled, Market Mechanisms and Incentives for Environmental Management (MM&I).  That RFA addresses approaches that rely on market forces, financial mechanisms, or other instruments to encourage regulated entities to reduce emissions or improve environmental performance.  To avoid redundancy, research proposed in response to the present RFA should focus more directly on the motivations behind corporate environmental behavior and the effects on this behavior of the government interventions and voluntary initiatives cited in this solicitation.

Motivations Behind Corporate Environmental Behavior

Various authors have noted the importance of a number of motivators of corporate environmental behavior and performance, including costs, firm profitability, corporate or industry culture, geography, competitive environment, technological capability, and government interventions.  However, motivations are not the same for all firms and facilities that generate or discharge pollutants into the Nation’s water, land, and air.  Fundamental behavioral, economic, management science, legal, and other social science research is needed to better understand how different individuals, companies, and facilities respond to various influences and combinations of influences, including governmental interventions.

For virtually all firms, the cost of pollution prevention or abatement is a factor in determining how much pollution to control, as is the availability of expertise to manage pollution control systems.  The specific roles of costs and capability may differ among firms in a predictable manner.  Factors other than pollution control costs or technical capability may also affect a firm’s performance.  Significantly, most regulated entities are concerned with the consequences of not meeting environmental standards for a variety of reasons, including legal and monetary penalties. In other cases, firms seem to embrace the notion of pollution prevention because pollution represents a waste of resources and preventing it saves money on production factors.  Others may be more responsive to community pressure resulting from publication of information on plant emissions. Still others may have a corporate environmental stewardship ethic that encourages environmentally beneficial behavior beyond legal requirements.  What makes some firms go beyond compliance, while others do only the minimum to meet the letter of the law, if that?  How do different firms respond to the threat of sanctions?  Research can determine if responses to some or all of these factors vary consistently with firm type, size, or other characteristics, which can help direct resources to address specific problems.

In summary, EPA has a particular interest in two basic research questions:

1. What motivates environmental behavior to comply with or to go beyond compliance with environmental laws and regulations?

2. What are the relationships between environmental performance, and facility or business characteristics such as management structure, size, profitability, corporate policies, etc.?

Examples of research topics that address one or more of these questions include:
  • What motivates firms to attain environmental performance beyond that required by regulation?

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  • What motivates companies to monitor, dissuade, and punish poor environmental performance by their own facilities or non-compliant behavior by their employees?

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  • What organizational characteristics (e.g., centralized or decentralized, environmental management system in place) foster improved environmental performance and compliance?

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  • What (non-governmental) financial incentives exist to encourage compliance? Does pollution prevention really pay?  How and in what circumstances do improvements to environmental performance contribute to the bottom line?

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  • How does public involvement in corporate activities affect environmental performance; i.e., are corporate decision-making frameworks that involve the public conducive to improved environmental performance or better compliance?
Influence of Government Interventions and Voluntary Initiatives on Environmental Compliance and Performance

In economic terms, the effect of government interventions and voluntary initiatives either can be to increase the cost of poor environmental performance through fines, penalties, and sanctions, or to decrease the cost of improved environmental performance via cost savings from incentives, technical assistance, and reduced waste.  Government interventions that encourage compliance and/or deter violations of existing rules include: inspections and monitoring; civil and criminal enforcement; warnings; penalties and injunctive relief; compliance assistance; public notification of violations, releases, or emissions levels; and the provision of various incentives, among others.  Activities such as inspection and monitoring by public agencies affect the probability that a facility will experience extra compliance-related costs (such as penalties) and the course of intervention that the regulatory agency will pursue.  Voluntary initiatives that encourage firms to go beyond compliance are an alternative to traditional government interventions and include: government-industry partnerships, corporate recognition programs, technical assistance programs, and environmental management incentives. Voluntary activities may incur different costs than traditional interventions (such as the increase in the marginal cost of technology upgrades as a firm approaches zero emissions) or may result in cost savings for the firm as it reduces waste and avoids penalties.  The combination of some or all of these factors influences the degree to which compliance with rules or environmental performance will be achieved.

Research is needed to explore the influence and effectiveness of different government interventions and voluntary initiatives under a variety of conditions and business characteristics.  State, local, tribal, and federal agencies will benefit from research that examines the circumstances under which different environmental performance enhancement strategies will best achieve lower cost solutions and improved environmental results.

EPA has a particular interest in several basic questions on the effects of government interventions and voluntary initiatives on environmental behavior and performance:

What are the effects of compliance assurance measures (e.g., penalties, inspections, and enforcement) on: (i) compliance with regulatory requirements; and (ii) environmental performance beyond regulatory requirements?  What compliance assurance approaches are appropriate for different corporate characteristics and situations?

What are the effects of government-sponsored voluntary programs (e.g., government recognition programs such as EPA’s National Environmental Performance Track Program, local government voluntary programs to encourage water conservation in communities during low stream flow conditions, and government-industry partnership programs such as EPA’s Climate Wise program) on: i) compliance with regulatory requirements; and (ii) environmental performance beyond compliance?

What is the comparative effectiveness of regulatory versus voluntary approaches on environmental performance for different types of corporations and situations?  What are appropriate measures of effectiveness for each of these strategies?

What is the effect of the disclosure of environmental performance information on corporate environmental performance?  If information disclosure results in behavioral change, what are the pathways that induce such change, e.g., internal communication, liability concerns, stock prices, community relationships, etc.

What different intervention strategies may be appropriate for different circumstances (i.e., intentional vs. unintentional non-compliance, or small businesses with low levels of expertise vs. large businesses with substantial capability)?

What are the effects of compliance assistance measures (e.g., technical assistance, education) on: (i) compliance; (ii) environmental performance beyond compliance? What compliance assistance approaches are appropriate for different corporate characteristics and situations?

Examples of relevant research questions:
  • What characteristics determine how employees and organizations respond to the threat of sanctions?  Do penalties have any deterrent effect?  Do larger penalties have a greater deterrent effect (specific or general) than smaller penalties?

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  • How does participation in a voluntary program affect a firm’s motivation to go beyond compliance?  Does membership in a voluntary program result in financial advantages, improved public perception, or peer pressure motivators?

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  • How does disclosure of violations or emissions to the public improve environmental performance or compliance, either through market mechanisms (e.g., declining stock prices in response to pollution liability fears, or perceptions that eco-efficiency is related to profitability), or increased liabilities (e.g., torts, citizen suits, cleanups), adverse publicity, community pressure (community right-to-know)?  How does public disclosure of violations or emissions interact with enforcement and compliance assistance?  Does increased visibility of environmental noncompliance decrease detection costs or increase deterrence?

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  • What enforcement strategies would maximize general deterrent effects (i.e., compliance among entities who are not immediate enforcement targets)?  Is the general deterrent effect of an enforcement action greater within the same local area or industry?

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  • What is the optimal mix of enforcement, compliance assistance, and voluntary initiatives to maximize environmental performance?
DESIRABLE RESEARCH CHARACTERISTICS

The competition encourages proposals from researchers from all legal, behavioral, social, organizational, and economic sciences.  It encourages collaborations with non-social science disciplines when needed to answer social science-based questions.  It supports both research conducted within a single disciplinary tradition, as well as novel, collaborative, and interdisciplinary scientific efforts.



FUNDING

EPA anticipates making available up to about $1 million for this research program.  The projected range is from $50,000 to $200,000 per award per year, with durations from 1 to 3 years.  Field experiments, survey research, and multi-investigator projects may justify the higher funding level.  Awards made through this competition will depend on the availability of funds.  Proposed research can be retrospective or prospective, with prospective field experiments, survey research, and multi-investigator projects more likely to justify the higher funding level.


ELIGIBILITY

Academic and not-for-profit institutions located in the U.S., and state or local governments are eligible under all existing authorizations. Profit-making firms are not eligible to receive grants from EPA under this program.  Federal agencies, national laboratories funded by federal agencies (FFRDCs), and federal employees are not eligible to submit applications to this program and may not serve in a principal leadership role on a grant.

FFRDC employees may cooperate or collaborate with eligible applicants within the limits imposed by applicable legislation and regulations.  They may participate in planning, conducting, and analyzing the research directed by the principal investigator, but may not direct projects on behalf of the applicant organization or principal investigator.  The principal investigator's institution may provide funds through its grant to a FFRDC for research personnel, supplies, equipment, and other expenses directly related to the research.  However, salaries for permanent FFRDC employees may not be provided through this mechanism.

Federal employees may not receive salaries or in other ways augment their agency's appropriations through grants made by this program.  However, federal employees may interact with grantees so long as their involvement is not essential to achieving the basic goals of the grant1.  The principal investigator's institution may also subcontract to a federal agency to purchase unique supplies or services unavailable in the private sector.  Examples are purchase of satellite data, census data tapes, chemical reference standards, analyses or instrumentation not available elsewhere, etc.  A written justification for federal involvement by subcontract must be included in the application, along with an assurance from the federal agency involved which commits it to supply the specified service.

1EPA encourages interaction between its scientists and grant principal investigators for the purpose of exchanging information in research areas of common interest that may add value to their respective research activities.  However, this interaction must be incidental to achieving the goals of the research under a grant.  If the involvement should become substantial, i.e., essential to achieving these goals, then the award would become a cooperative agreement.  Interaction that is "incidental" is not reflected in a research proposal and involves no resource commitments.

Potential applicants who are uncertain of their eligibility should contact Jack Puzak in NCER, phone (202) 564-6825, email: puzak.jack@epa.gov

STANDARD INSTRUCTIONS FOR SUBMITTING AN APPLICATION

A set of special instructions on how applicants should apply for an NCER grant is found on the NCER web site: http://www.epa.gov/ncer/rfa/forms/. Standard Instructions for Submitting a STAR Application and the necessary application forms may be found on this web site.

SORTING CODES

The need for a sorting code to be used in the application and for mailing is described in the Standard Instructions for Submitting a STAR Application. The sorting code for applications submitted in response to this solicitation is 2001-STAR-S1. The deadline for receipt of the application by NCER is no later than 4:00 p.m. ET, August 15, 2001.

ADDITIONAL REQUIREMENTS: DATA DEVELOPMENT

The application must include a plan to make available all data (including primary and secondary data) from observations, analyses, or model development under a grant awarded in this program in a format and with documentation such that they can be utilized by others in the scientific community.  The data must be made available to the project officer without restriction and be accompanied by comprehensive metadata documentation adequate for specialists and non-specialist alike to be able to understand how and where the data were obtained and to evaluate the quality of the data.  The data products and their metadata must be provided to the project officer in standard exchange format no later than the due date of the grant’s final report or the publication of the data product’s associated results, whichever comes first.  Applicants who plan to develop databases containing proprietary or restricted information should provide a strategy, not to exceed two pages, to make the data widely available while protecting privacy or property rights. These additional pages are in addition to the 15 pages permitted for the project description.

CONTACTS

Further information, if needed, may be obtained from the EPA officials indicated below. Email inquiries are preferred.

Susan Carrillo
EPA National Center for Environmental Research
carrillo.susan@epa.gov
Fax (202) 565-2447, Voice (202) 564-4664

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