LAO 2005-06 Budget Analysis: General Government

Analysis of the 2005-06 Budget Bill

Legislative Analyst's Office
February 2005

Environmental Protection Indicators Update

In the sections that follow, we provide an update on the Environmental Protection Indicators for California (EPIC) Project. We conclude that legislative involvement is crucial to ensuring the ongoing usefulness and effectiveness of this effort.

Status Report on the Environmental Protection Indicators for California Project

The Environmental Protection Indicators for California (EPIC) Project was established in statute in 2003. Progress reports on EPIC pilot projects reveal that the consideration of indicators in the development and implementation of environmental protection programs has been important in evaluating program effectiveness. However, little application has been made of environmental indicators in the budget development process. We recommend that departments continue to refine existing indicators so as to permit more specificity in the evaluation of the environmental outcome as a result of a particular program investment.

Background. The administration created the EPIC Project in 2000-01 to establish and implement a process for developing environmental indicators. Chapter 664, Statutes of 2003 (AB 1360, Steinberg), established this program in law. Broadly speaking, an environmental indicator is a scientifically based tool to track changes that are taking place in the environment. For example, the "percent of produce with illegal pesticide residues" indicator characterizes the safety of produce in California by providing a direct measure of the level of pesticide residue in produce. (Please see Figure 1 for more examples of indicators.)

Figure 1

EPIC Project
Selected Environmental Protection Indicators

Air Quality

·  Number of days over the state ozone standard.a

·  Total emissions of toxic air contaminants.b

·  Visibility on an average summer and winter day in California national parks and wilderness areas.b

Water (Quality, Supply, and Use)

·  Number of leaking underground fuel tank sites.a

·  Number of coastal beach postings and closings.a

·  Statewide per capita water consumption.a

Land, Waste, and Materials Management

·  Number of waste tires diverted from landfills.a

·  Amount of hazardous waste generation.b


·  Percent of produce with illegal pesticide residues.a

·  Percent reduction in use of high-risk pesticides.b

Ecosystem Health

·  Clarity of Lake Tahoe.a

·  Distribution of exotic plants.c

a  Type I—adequate data for presenting status or trend.

b  Type II—further data collection or analysis is needed.

c  Type III—systematic data collection is not in place.

The EPIC Project has been a joint effort of the Secretaries for Environmental Protection and Resources, with most of the staff work being conducted by the Office of Environmental Health Hazard Assessment (OEHHA). The driving force behind the EPIC Project was a desire to be able to answer two questions: (1) what is the state trying to accomplish in terms of environmental protection and (2) how does it know whether it is accomplishing it or not? In other words, the focus is placed on goals and results. This contrasts with the traditional reliance of the state's environmental programs on measures of workload as opposed to outcomes. (Please see our Analysis of the 2003-04 Budget Bill, page B-30,for more information on EPIC.) Funding for EPIC has not been included in the budget since 2002-03 and the budget does not propose funding for EPIC in 2005-06.

Current Status of EPIC. Even though no funds are specifically budgeted for EPIC in the current year, OEHHA has invested a relatively small level of effort (0.1 personnel-year) in updating a select number of indicators. At the beginning of February 2005, OEHHA released an updated version of 43 of the 50 "Type I" indicators. (Type I indicators are indicators in which adequate data are available for presenting a status or trend.) These 43 indicators were chosen because they are supported by already existing ongoing and systematic data collection.

According to OEHHA, a fully operational EPIC Project would require 3 personnel-years and $750,000 in contract funding. This includes staff time to ensure that the indicator system is robust and scientifically well founded and the development of an approach to collect the necessary data to measure indicator trends.

EPIC Pilot Projects. The Supplemental Report of the 2003 Budget Act required the Air Resources Board (ARB) and the State Water Resources Control Board (SWRCB) to each submit a progress report on their use of indicators in two specified pilot projects. The ARB's pilot project was the Carl Moyer Program, which provides incentives to reduce smog-forming emissions. The SWRCB's pilot project was the Clean Beaches Program, which provides grant funding for water quality improvement projects. The purpose of these pilots was to quantify the environmental impacts (such as emission reductions or reductions in beach closures) resulting from the program's investments using environmental indicators to measure the outcomes.

Carl Moyer Program Pilot. The ARB's progress report notes that indicators are essential to evaluating the success of the Carl Moyer Program. For this reason, ARB used the pilot as an opportunity to refine the EPIC indicators so that more specific relationships between a Carl Moyer Program grant and changes in air quality could be achieved. For example, the ARB can specify that a total of 907 tons of NOx was reduced each year because of Carl Moyer grants for marine vessels—a level of detail much more refined than what is measured by current EPIC indicators.

We find merit in the board's approach to more specifically refine its use of indicators to be able to characterize the effectiveness of this program. Furthermore, we note that ARB's ability to quantify the Carl Moyer Program's effectiveness contributed significantly to legislative debate this past session regarding the establishment of a permanent, stable funding source for the program.

Clean Beaches Program Pilot. Since this pilot was intended for projects funded with bond funds and these projects have generally not been completed, the SWRCB is not yet able to demonstrate the cost-effectiveness of these grants. However, the pilot analysis indicates that the inclusion of an EPIC indicator—Beach Mile-Days (a measure of beach unavailability for swimming recreation)—in the grant making process prompted staff and the program's advisory panel to focus on prospective projects' ability to reduce bacterial contamination and therefore reduce beach closures. Additionally, SWRCB staff are working towards refining the Beach Mile-Days indicator, so that projects which improve water quality, but not enough to avert a beach closure, will not be overlooked when evaluating project effectiveness.

Limited Use of Indicators in Budget Development Process. Chapter 664 requires all budget change proposals (for 2005-06 and beyond) submitted by a board, department, or office within the California Environmental Protection Agency or the Resources Agency to describe how the proposal would affect specified environmental indicators. Our review of this year's budget change proposals found that most proposals at least referred to the impacted environmental indicators; however, we find the level of detail explaining how the proposal impacted an indicator to be varied and generally very limited.

One of the few examples where the indicators were used quite well is ARB, which has extensive experience with the use of indicators. The ARB estimated that one of its budget proposals would reduce hydrocarbon emissions, a contributor to the formation of ozone, by 32 tons per day by 2020. On the other hand, other departments typically either very generally stated how a budget change proposal affects an indicator or simply stated which indicators could be affected by the proposal.

Recommend Departments Continue to Refine Indicators. To facilitate more widespread use of environmental indicators in the budget development process, we recommend that departments and OEHHA continue to refine existing indicators so as to permit more specificity in the evaluation of the environmental outcome as a result of a particular program investment.

Legislature's Involvement in EPIC

We recommend the Legislature hold hearings to specify high priority indicators for the Environmental Protection Indicators for California (EPIC) Project. We also recommend that the Legislature consider EPIC indicators in the development of new programs and initiatives.

Recommend Hearings to Specify High Priority Indicators. As discussed above, EPIC indicators are a meaningful tool to evaluate program effectiveness and efficiency. In light of the funding constraints facing the EPIC Project, we think that it is particularly important that the project focus its efforts on tracking and updating the environmental indicators that are of most relevance to the Legislature.

Therefore, we recommend that the Legislature's budget subcommittees and environmental quality, natural resources, and water committees hold hearings to specify which of the roughly 85 currently developed indicators they consider to be a high priority. Furthermore, since not all of the current indicators have sufficient data collection mechanisms in place to measure a trend over time, the identification of high priority indicators would also provide notice to affected departments of legislative priorities for improving data collection capabilities.

Consider Indicators When Creating New Programs. As exemplified by the Carl Moyer Program, it is important for a program to be able to quantify the outcome from an investment of public funds. Therefore, we recommend the Legislature consider specifying indicators to be tracked when creating new environmental programs. Not only will this assist the departments in ensuring that data collection requirements are addressed adequately during program development and implementation, but it will also provide specific accountability criteria that can be used to continually assess the effectiveness of the new program.

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