Green Tier frequently asked questions
The Green Tier law, s. 299.83, Wis. Stats., unleashes the potential of Wisconsin businesses, communities and citizens to protect the environment and grow the economy. It provides several incentives such as regulatory flexibility and permit streamlining to environmentally responsible businesses and other entities. The law also creates a program in which qualified businesses and associations make legal commitments to superior environmental performance through contracts negotiated with the Department of Natural Resources. In exchange, these businesses get flexibility in how they achieve their environmental goals.
Green Tier's history
Green Tier was the first program of its kind in the country and serves as a model for others. It is based on recommendations from an advisory committee representing a wide array of business sectors, industry councils, municipalities and environmental organizations. It also builds on the successes of the Environmental Cooperation Pilot Program, which the DNR launched in 1998 to offer participating companies the opportunity to pursue environmental initiatives that would not have been possible under traditional regulations.
Components of "superior environmental performance" encouraged through Green Tier are based largely on the principles of the Coalition for Environmentally Responsible Economies (CERES), a nonprofit organization that leads a national coalition of investors, environmental organizations and other public interest groups working with companies to address sustainability challenges and promote continual progress toward pollution reduction, energy conservation and other environmental goals.
Governor Jim Doyle signed the original Green Tier legislation on April 16, 2004. It was set-up as a five-year pilot program with a sunset date of July 2009. In order to preserve the program and build upon successes, re-authorization legislation was proposed to accomplish the following three goals.
- Repeal sunset dates to make Green Tier a permanent program.
- Update elements of the statute to make administering the law more efficient and clear.
- Improve and expand the law's ability to improve both environmental and business results.
Due in part to great bi-partisan support, Gov. Jim Doyle signed re-authorization legislation on July 8, 2009.
In June 2012, Governor Scott Walker signed Executive Order 69 directing DNR to undertake actions to increase Green Tier program participation.
- What is the vision?
Green Tier is a voluntary program that recognizes and rewards environmental performance "that voluntarily exceeds legal requirements related to health, safety and the environment resulting in continuous improvement in this state's environment, economy, and quality of life." (s. 299.83(1m)(b), Wis. Stats.)
Many provisions of Green Tier were tested in an Environmental Cooperation Pilot Program. Among the pilot program participant accomplishments were:
- As part of its pilot program agreement, We Energies committed to reduce its annual coal use by at least 10,000 tons and generate more than 10,000 megawatts of electricity per year by burning coal ash recovered from company-owned landfills. This is enough electricity to meet the average annual needs of more than 1,000 Wisconsin homes! We Energies activities normally would have required multiple case-by-case approvals for each landfill site and ash reuse plan. The cooperative agreement allowed DNR to grant We Energies a blanket approval to save both parties time and labor. Wisconsin's environment benefited more quickly, and at a lower cost.
- Northern Engraving Corporation manufactures nameplates and similar items at five facilities in Wisconsin and Iowa. A cooperative agreement allowed NEC to close a costly but relatively ineffective waste incinerator at their Sparta, Wis., facility and focus their resources on cleanups and other meaningful methods of environmental improvement. The agreement also allowed NEC to operate new equipment prior to obtaining a permit in certain cases provided that ambient air quality standards were protected and NEC first received written approval from DNR. NEC realized tremendous emissions reductions over the 10 years they were in the pilot program and this agreement gave them the flexibility they needed to do so. NEC is currently transitioning to Tier 2 of Green Tier.
- What is the problem?
Current law does not allow state environmental officials to differentiate between exceptional environmental performers and those performing at or near the regulatory minimum. The use of staff resources to oversee these exceptional environmental performers does not yield environmental results proportional to the investment. Failure to tap the capacity and capability of good companies to produce substantive environmental results is inefficient for DNR and inhibits environmental improvement.
- How will the department support a company's efforts to achieve superior environmental performance?
Environmental policy programs in the past have centered on a "command and control" approach to regulation. Regulatory programs have no mechanism for recognizing regulated entities that go beyond compliance with minimum environmental requirements. Entities achieving a high level of environmental performance receive no more benefits or recognition than those that merely comply with minimum standards. In some instances, in the short term, it may be costly for entities to go beyond compliance when they are in competition with others that are expending only those resources necessary to meet minimum regulations. Green Tier is designed to help entities offset these costs. While the department doesn't directly provide funding to achieve superior environmental performance, it can indirectly increase the competitive position of companies that are exceptional environmental performers.
- How does the program work?
While entry into the program is voluntary, participation in Tier 1 is governed by a letter from the DNR to the company which lays out both responsibilities and benefits. Participation in Tier 2 is governed by a legal contract. Companies, communities and governments seeking a different level of involvement may negotiate contracts and charters that are flexible, innovative, efficient and enforceable. Self-auditing, third-party auditing, public involvement and reporting make the processes transparent and the results verifiable. For more information, read the Green Tier: An Overview of Performance-Based Environmental Management fact sheet.
- Is an Environmental Management System required for Green Tier?
Wisconsin's Green Tier program places great value on Environmental Management Systems. Tier 1 participants must have an ISO-14001 certified or a functionally equivalent Environmental Management System in place by the end of their first year of participation. Tier 2 participants must have a well-developed EMS (ISO certified or functionally equivalent) at the time of application with a documented history of results. (See Environmental Management Systems web page for more information.)
- How stringent are the requirements for adequate demonstration of superior environmental performance?
The Green Tier program requires "performance that results in measurable or discernible improvement in the quality of the air, water, land, or natural resources, or in the protection of the environment, beyond that which is achieved under environmental requirements…" The precise criteria for meeting this requirement will vary according to the creative strategy submitted by the entity for recognition in Green Tier.
- Are the requirements for participation in Green Tier the same for each applicant? If not, how does the department manage the diverse approaches participants have to moving beyond compliance?
While the requirements for eligibility are the same for all applicants, the specific activities to achieve superior environmental performance are established by the participant. This allows participants to move beyond compliance by committing to an environmental strategy that is sensitive to their unique strengths and opportunities.
Each participant is paired with one regulator at the DNR who gets to know the participant's particular strengths and opportunities. This departmental contact will often specialize in an area that is of particular interest or concern to the participant. They can then offer their guidance to help enhance the participant's performance in their area of expertise and other areas that impact the participant.
- Could DNR limit participation in the Green Tier program? Is this something to be cautious of when applying? Are there some inevitable limitations participants may face?
The DNR staff in charge of Green Tier will only limit the extent of participation by an applicant if it necessary to protect the integrity of the program. This may be necessary due to the substandard quality of an application or lack of department staff and/or resources available to process applications. The department may also delay admission to the program and wait for an applicant to demonstrate environmental performance that is judged to be superior. While DNR has delayed admission of applicants, it has not limited participation because of resource constraints.
- What are the costs of applying to the program? How can the proposed incentives offset the costs of participation? Are there other benefits that may offset the costs besides the proposed incentives?
There are no fees for applying to or participating in Green Tier, however there will be indirect costs that are associated with the development and implementation of an Environmental Management System. These costs would be borne by any company choosing to implement an EMS. Environmental management systems are integral requirement component of participation in Green Tier, and there is cost in designing, implementing and auditing an EMS. Other costs include time and resources spent on the initial application and ongoing audits. Successful participants will often offset these costs with the increased efficiency that comes from both the direct incentives proposed by the program and the increased organization and effective investment that can occur as the result of participation.
- How informed is the public about Green Tier? How much of an impact will participation have on public perceptions?
Green Tier is still gaining significant public recognition. Those who visit the department's website have access to information about the program and each applicant submits a list of stakeholders who might be interested in knowing more about Green Tier. These stakeholders are contacted directly by the DNR. As more entities participate in Green Tier, more of these notices will be sent to newspapers around the state, so the potential for positive public perception increases as more participants enter the program. These news releases along with the program logo will stimulate public interest and discussion and create business value for Green Tier participants.
- What are the advantages of the Green Tier logo? It seems as if this could really enhance brand image.
The logo is meant to stimulate interest in the program and create an easily recognizable symbol that ties the participant's name to the goals and values of an innovative and credible environmental excellence program. As Green Tier achieves greater recognition among members of the public, this logo will prompt recognition of superior environmental performance and enhance the quality of participants' images.
- How might participants benefit from sharing information with those who have an interest in their actions, performance, and involvement in Green Tier? What kinds of negative consequences might this have for participants?
Participants in Green Tier are required to inform stakeholders about their progress toward superior environmental performance. This information sharing recognizes participants for their Green Tier actions while building trust with stakeholders and can earn them recognition and distinction among their competitors. Providing public notice of participants' involvement and performance in Green Tier might entice competitors to follow similar paths. This may increase the number of entities that demonstrate superior environmental performance, but some participants may not want to share this information with their competitors. Moreover, Green Tier's requirement for public involvement may expose negative aspects about participants to community stakeholders, regulators, and environmental groups. While some may view the transparency of Green Tier as a potential threat to businesses, there are ways for participants to fulfill the requirement and involve the public without surrendering their competitive edge.
Although Green Tier participants must share relevant information with stakeholders, they are not required to share all information that may be relevant to competitors. The department does require an annual report from participants including a summary of their accomplishments, information on generic indicators, audit findings and reports on the success of the environmental management system. Participants are not required to submit a copy of the actual EMS. Aside from the contents of the annual report, they may submit any other information with a request that the information be held confidential because of trade secrets.
- How will participants be recognized on the department website? Is this recognition obvious to visitors? Who will be looking at this?
Green Tier participants will be listed on the DNR website's Green Tier page along with links to public notices, press releases, and photos. The web page provides these entities with a showcase for their superior environmental performance and innovative thinking. Potential viewers of this information include regular visitors to the DNR website, those seeking more information about Green Tier, and those looking for information about the participants.
- What's in it for businesses?
While most companies have achieved consistent compliance with regulatory requirements, the current business environment provides the opportunity for companies to engage in behaviors that would constitute superior environmental performance. Green Tier would save time, reduce costs, encourage innovation, contain liability and adapt to market demands. For more information, read The Business Case for Green Tier fact sheet.
- What's in it for the environment?
Each company in the program commits to specific and measurable environmental improvements and reports regularly on their progress. Actions may result in reduced pollution, energy conservation, and the implementation of sustainability strategies. For more information, read the The Environmental Case for Green Tier: Moving from Compliance to Performance fact sheet.
- What's in it for the community?
A cleaner environment, more communication between public and private entities, and increased community involvement.
- What's in it for taxpayers?
Green Tier reduces bureaucracy and allows regulators to focus on the most pressing environmental concerns, like businesses with sub-standard environmental records.
- What is the department's relationship with the public? How does their input affect Green Tier?
One of Green Tier's most important goals is transparency. Community stakeholders' access to all pertinent information regarding Green Tier participation is crucial to the success of the program. This transparency is necessary both to encourage trust between the DNR and participants and to allay public suspicions about the interests behind Green Tier negotiations.
Public support is vital to the successful Green Tier applicant. Each application is subject to public scrutiny before it is accepted. Public comment periods are held to allow the community to respond to these applications. The department also communicates with the public on its website and through annual notices to newspapers regarding entities' participation in the program.
- How does participation in the program affect relationships with the Department?
Once a formal environmental management system is implemented, Tier 1 participants will experience the lowest allowable level of inspection frequency from the DNR. Participation in the Green Tier Program will also subject entities to deferred civil enforcement. The single point of contact will also help increase communication and trust between the entity and the department. This individual will help remove obstacles to smooth, timely processing of participants' paperwork and provide them with valuable information about how to work effectively with regulators. In addition to these benefits, Tier 2 participants are eligible for regulatory incentives. These benefits are negotiated by the participant and the department, which ensures that the incentives granted are proportional to the environmental benefits provided by the participant.
- What is Tier 1?
Tier 1 is the entry level into the Green Tier program. It is designed to allow participants committed to enhanced environmental protection to distinguish themselves from others. Tier 1 participants are generally environmental innovators with proactive management teams. The DNR is committed to supporting these participants with incentives, including use of the Green Tier logo, that are not available to other companies.
- What are the participation criteria for Tier 1?
- A strong environmental compliance record, with no recent civil or criminal judgments or DNR citations. (See the application instructions for more information.)
- Commitment to a formal Environmental Management System by the end of the first full year in the program. Annual audits of the Environmental Management System must be done, with every third year performed by an external, certified auditor. (See the Approved Green Tier/EMS auditors webpage.)
- Annual report to the DNR that includes performance reviews and audit results. (See the Green Tier Annual Reports for more information.) Continual improvement of environmental performance.
- What is Tier 2?
Tier 2 is designed for companies with an effective Environmental Management System and a history of superior environmental performance. Tier 2 participants represent the truly exceptional companies that are not only committed to going above and beyond, but are also committed to bringing about change in their industry, region, or within their supply chain.
Tier 2 participants negotiate customized environmental contracts with the DNR. Interested stakeholders, including the public, are invited to help negotiate the contacts. These flexible agreements generally identify areas of current environmental regulations that the company wishes to modify and contains new requirements that require the company to commit to superior environmental performance. Tier 2 contracts may be the most innovative and valuable part of Green Tier, as they support both government efficiency and business competitiveness.
- What are the participation criteria for Tier 2?
- A strong environmental compliance record, with no recent civil or criminal judgments or DNR citations. Participation in Tier 2 requires a stronger environmental compliance record than Tier 1. (See the application instructions for more information.)
- A formal Environmental Management System that has been in place and has documented results.
- Annual compliance audit are performed by the participant or an external auditor.
- Annual audits of the Environmental Management System for Tier 2 are performed every year by an external, certified auditor.
- Prompt follow-up action to any findings of non-compliance or non-conformance discovered during the annual audits.
- Annual report to the DNR that includes performance reviews and audit results. (See the Green Tier Annual Reports for more information.)
- Continual improvement of environmental performance
- What are the benefits to participants of Tier 2 over Tier 1? Is the public aware of the differences?
Tier 2 participants negotiate contracts with DNR staff stating their specific strategy for achieving superior environmental performance, their commitment to implement that strategy, and the incentives they expect to receive from the department. These incentives may be more valuable than those offered only in Tier 1 because they can directly reduce costs associated with regulation and improve participants' positions relative to their competitors. These contracts also foster greater efficiency in the department by reducing the time and resources spent on regulation.
Participants in Tier 2 are also recognized for satisfying more rigorous eligibility requirements than those in Tier 1 with a stronger environmental compliance record and an environmental management system already in place at the time of application. The DNR promotes awareness of the distinctions between Tiers 1 and 2 through public hearings, news releases, and information recorded on the department website regarding program participants.
- What is a participation contract?
A participation contract is a legal agreement entered into by the DNR and a Tier 2 participant that specifies:
- the participant's legal commitment to superior environmental performance; and
- incentives to be provided to the participant (may include regulatory flexibility, public recognition, branding, etc.).
- How will DNR ensure that the incentives to participants are proportional to their benefits to the environment? How is this proportionality determined?
The applicant, DNR staff and interested stake holders will negotiate the incentives. DNR Green Tier administrators will also weigh the value of the proposed benefits to the environment against the magnitude of the incentives requested. There will also be a 30-day comment period for the public to provide feedback on the proposed contract. A Tier 2 contract that describes substantial environmental benefits will be approved unless the department determines that:
- the environmental benefits proposed are not sufficient to justify granting the incentives.
- the incentives granted would result in adverse environmental change way before the environmental benefits would be realized.
- the speculative nature of the environmental benefits provides insufficient justification for issuing immediate and tangible incentives.
- the declaration of proportionality is not in the best interest of the program. This reaction will occur if public reactions to the proposal indicate that determining proportionality would erode public confidence in the program.
- Why is the participant responsible for explaining how its proposed measures for improvement are proportional to the incentives it expects to receive?
Green Tier is not a program that tells entities what to do. Part of participating in Tier 2 of the program is developing contracts that indicate a commitment to improving environmental performance while diminishing the need for regulation. While the DNR determines eligibility and negotiates the terms of these contracts, the commitments necessary to receive the incentives are actually specified by the participant. In this way, the program encourages creative thinking about ways to increase business value while achieving better environmental results.
Tier 2 participants submit a letter of intent to the DNR stating how they propose to achieve superior environmental performance and the incentives they expect in return. If the department determines that the applicant is eligible for Tier 2, then, following an initial public comment period, they will begin negotiating the terms of the contract with the participant. This could take up to a year or longer depending on the department's assessment of how proportional the participant's proposed environmental benefits are to its requested incentives.
- What is an environmental results charter? What necessitates these charters? What are the potential benefits? Potential costs?
A charter is a contract entered into by the DNR and an association committed to helping some group of entities participate in Green Tier. An association may consist of private entities, public entities, or a combination. In a charter, the association must describe its goals, the responsibilities of its members, and the methods its members will use to accomplish their goals. The term of a charter can be between three and 10 years, with the opportunity for renewal. Charters help business sectors or regions establish environmental goals and develop systems that support the accomplishment of those goals.
Environmental results charters are typically composed of entities in similar locations, business sectors, or regulatory situations that are committed to achieving common superior environmental performance goals. These charters provide an excellent opportunity for more environmentally proficient entities to demonstrate leadership by collaborating with and assisting those that may be less capable, but want to get involved. These less capable members are given the assistance they need to meet environmental performance goals and are provided with a framework for future participation in Tier 1 or 2.
Members of charters that participate in Tier 1 or Tier 2 receive both statutory incentives and any additional incentives that are negotiated in the charter. They are also expected to provide the same transparency and potential for public participation. In addition to the incentives provided by the department, Green Tier charter members may experience lower transaction costs than individual participants in Tiers 1 and 2. Since a charter may include several entities, the costs of application, negotiation, and audits may be spread out to decrease the expenses of each member.
The complexity of environmental challenges facing Wisconsin demands that we move beyond the current compliance model.