Encouraging Local Environmental Innovation

In nearly every city and region there are threats to environmental quality and opportunities to improve environmental conditions. However, business as usual is often insufficient to effectively respond to these opportunities and threats. Greater imagination, and innovation, is needed.

One type of environmental threat is residential, commercial, or industrial development of prime farmland or other open space on the rural-urban fringe. In its current state, that land may have aesthetic value, ecological value, or productive value for agriculture, or it may provide ecosystem services such as protection of water or air quality. Land use regulation or public purchase of the land to protect these values could be pursued. However, these methods can be expensive and typically create powerful opposition. If you stop there, a frequent outcome is doing nothing. But thinking about the problem differently changes the focus to solutions that are acceptable to landowners, that produce results, and that are less costly. Voluntary conservation easements are one innovative solution that began to be widely used starting in the 1960s. These easements protect the environmental value of the land while allowing the landowner to continue using the land in a manner consistent with its environmental value. Easements may be donated or sold by the land owner to a land trust or similar organization.

Another example of local environmental innovation is responding to the threat of urban stream flooding by recasting the threat as an opportunity to create an asset for the community. A standard practice, at least in the past, was to put urban streams into concrete channels to control floods. A more imaginative solution is to design a park or greenbelt to control the floods and provide new recreational, ecological, and aesthetic resources for the community. Going from a concrete channel to a greenbelt in Scottsdale, Arizona took many years of working with the US Army Corps of Engineers, owners of land in the flood zone, and citizens, as well as lining up funding. There was, apparently, no one moment when the greenbelt idea occurred. Rather, the greenbelt option gradually emerged via public support and from planning and engineering reports as an alternative to the Corps of Engineers’ initial preference for a conventional solution to flooding.

A third example of innovative thinking is to empower local citizens to develop watershed protection projects in an urban region. The innovation is to actively involve citizens in designing and implementing small scale projects to protect local watersheds by awarding them grants to carry out their projects. The resulting community gardens, green roofs, raingardens, and other projects build on local knowledge, citizen buy-in, and participant commitment of their own time and energy.

Business opportunities are also part of innovation. For example, rooftop solar energy projects are expensive, and most homeowners cannot write a check for US$20,000 to $40,000. Seeing solar energy as an opportunity to install equipment seriously limited the market. Instead, several businesses saw rooftop solar as a financing opportunity, primarily through leases of solar energy equipment. The financing strategy was highly successful and deployments of rooftop solar energy accelerated rapidly in some regions.

More detail on these and other environmental innovations can be found in Table 1. Common themes among the examples are the application of imaginative solutions to threats and opportunities, a local perspective, a wide range of environmental problems, and a diverse collection of innovative organizations including non-profit, community-based organizations, businesses, informal citizen groups, and local governments.¹ A local focus recognizes that local buy-in, local knowledge, and local talent are all important and that a lot of environmental progress occurs outside national regulatory and incentive programs.

The cumulative effect of numerous innovators, ideas, approaches, and projects may be substantial in the aggregate and the long term, especially as innovations are spread over a large area. A good example is the rapid diffusion of financing for on-site solar energy that sped up deployment of this technology in many localities. Another is the transformation, in many cities, of streams from a hazard, nuisance, or transportation obstacle into a valuable recreational, aesthetic, and ecological asset.

How do you encourage local environmental innovation? Many things can go wrong, such as formidable stakeholder opposition, public indifference, impractical plans, insufficient expertise, unhelpful managers, and various surprises. Based on the experience of businesses, community-based organizations, environmental managers, policy entrepreneurs, and local governments, there are certain factors tend to encourage local environmental innovation

To start, we need to be clear about what local environmental innovations are. They are new or novel products, services, processes, designs, financial tools, legal formulations, etc. that facilitate improvement of environmental conditions in a city or region.² They break from current practice, at least within a specific locality, and are therefore different than just improving the performance or efficiency of current practices.³ Treating an urban stream as a potential recreational resource instead of as a hazard is a change in practice. In general, environmental innovations may lower the costs of meeting environmental goals, expand green choices, improve environmental quality, protect habitats, create economic and social benefits, strengthen public support for environmental protection, and lead to additional investment in environmental assets, relative to what would have happened if there were no break from current practice.

For local environmental innovation to have an impact, several fundamental problems must be solved: a) creating effective ideas that stakeholders and consumers will accept; b) managing uncertainties that arise from introducing new practices; c) developing adequate organizational capacity to design and implement an innovation; and, d) overcoming obstacles that can thwart innovation. The experience of government agencies, businesses, community organizations, and others shows the importance of these problems and illustrates how they can be solved. Lessons from this experience are presented in the following sections.

A common feature of successful environmental innovations is a business model. A business model is a plan for creating and implementing a local environmental innovation. It can be developed by a business, a community-based non-profit, a local government, and possibly an informal citizen group. Generally, a business model lays out objectives, indicates the good or service to be produced and how it is to be delivered, communicates the value of the good or service, identifies customers and suppliers, describes how the good or service will be produced, estimates costs, specifies revenue sources, identifies similar efforts, and states why the proposed approach is superior.⁴ The development of a business model causes innovators to think through and clarify what they are trying to do. The audience for the business model is the organization itself and the purpose of the business model is to productively channel the organization’s activities toward fostering an innovation.

Key Practice 1: Interpreting Opportunities and Threats

Interpreting opportunities and threats is an exploratory process for generating and refining new ideas that involves interactions with stakeholders, scientists, consumers, and others. The term “interpretation” comes from Lester and Piore’s research on business innovation.⁵ Interpretation starts before a business model is finalized. At the outset, goals are vague and ideas on implementation are fuzzy. If an interpretive process is successful, the outcome is a clearer goal and a more concrete business model.

With regard to local environmental issues, interpretation applies to identifying opportunities or threats, determining how those opportunities or threats might be addressed, and clarifying the intended outcome of an innovative project. Interpretation proceeds via conversations with employees or members of the organization, entrepreneurs, environmental advocates, scientists, citizens, consumers, and other stakeholders, depending on the specific issue.⁵ These conversations may be conducted in public meetings or may be informal. They are not marketing or financing pitches. Rather, they should be used to tell you how to improve an idea, a proposed goal, or a business model.

Conversations can stimulate imaginative thinking by bringing together outwardly disparate ideas that, when combined, create innovative solutions. Indeed, this type of exploration and synthesis is central to innovation in general.⁶ For example, an entrepreneur may operate in a network in the solar energy industry and in another network of architects or industrial contractors. By conducting conversations within and across these two networks, the entrepreneur may develop novel designs for buildings or other structures that provide on-site solar energy as well as serve the conventional purposes of the building or structure.

Conversations can also reveal and seek to proactively resolve potential conflicts or overcome barriers by addressing stakeholders’ concerns or identifying major problems. If stakeholders do not understand the nature of a proposed project or believe that their concerns are not being addressed, an innovative idea may be delayed, weakened, ignored, or rejected.

Addressing stakeholder concerns often involves social capital such as building or drawing upon trust within a community, empowering stakeholders, and using social networks to obtain or spread information or attract participants.^7-9 In a study of energy efficiency and distributed solar energy programs in Arizona, community-based organizations indicated that their success was due to the trust they had established with the communities where the programs were offered, empowerment of citizens so that program participants took ownership of the programs, and use of social networks to recruit volunteers to help implement the programs and to recruit participants.¹⁰ Trust and social networks are also major themes in engaging communities within the City of Chicago in climate action planning – for example, using trusted sources of information and working through a network of local churches to develop public support for and participation in the planning effort.¹¹ Additional examples of empowerment can be found in Table 1.

When trust and empowerment are relatively weak, the chances of a successful innovation diminish. During the 1960s, a team of experts prepared a plan to protect a watershed near Philadelphia, relying on what were innovations at the time, including restrictions on construction on sensitive lands, regulation of drainage and grading of new development, and buying conservation easements.¹² Some local landowners perceived that the plan was being imposed on them by outsiders despite numerous discussions between team members and residents. They also did not trust the motives behind the proposed plan and feared that the plan would impinge on their property rights. These perceptions helped to undermine adoption of the plan. Following the failure of the plan, several of the experts concluded that, in the future, the chances of success might be improved by seeking to have some landowners originate and take ownership of a watershed protection plan and by creating trust in the planning process through voluntary demonstration projects that show how the innovations would actually work, simplification of the plan, and clarification of the net benefits of the plan.¹²

Key Practice 2: Managing Uncertainty

Adopting new practices opens the door to various uncertainties. If these uncertainties are not managed well, the resulting surprises could doom an innovative effort because of unexpected opposition, high costs, or ineffective solutions. To a large extent, uncertainties are managed through the interpretation process, as the concerns of stakeholders, customers, and others are explored before developing and launching a proposed innovation. In addition, uncertainties may be managed through the features of a business model and through experimentation.

In preparing a plan or business model, it is helpful to monitor emerging technological, financial, legal, regulatory, or other developments that could affect the plan.¹³ Further, a business model may be structured to lay out the sequence of events that has to occur in order to reach the desired outcome. Because it is uncertain how those events will actually unfold, McGrath recommends designing a sequence of events with checkpoints so that assumptions and costs can be tested at each checkpoint and modifications can be made as more information is obtained.¹⁴ Are stakeholders’ or customers’ responses as expected? Are costs close to the levels assumed? Can the good or service be produced as planned? And so forth.

Additionally, it is desirable to monitor environmental and other conditions to establish a baseline and allow for tracking changes from the baseline.^15,16 Reliable measurement and tracking mechanisms should be developed before a program starts operating as unmeasured progress may undermine long term program credibility and measuring progress may be impractical after the program has concluded.¹⁶

In some cases, experimentation can be used to acquire information on whether an innovation is likely to work, whether modifications are needed, or whether to abandon the idea.¹⁴ Schrage proposes that businesses employ small teams of people with diverse perspectives to spend a few days developing cheap, short term pilot programs to test the viability of an innovation and to identify what changes might improve the innovation.¹⁷ The same idea can be applied to local environmental innovation. If a pilot demonstrates the feasibility and practicality of an innovation and reveals and addresses stakeholders’ concerns, a basis for extending the idea will have been established. According to the post-program review described above, the unsuccessful watershed protection project near Philadelphia would have benefited from a demonstration project to show landowners how it would have worked and dispel some of the fears that undercut the program.¹²

Pilots are used in designing and refining local residential energy efficiency programs.¹⁸ Efficiency programs are often complex, involving education, incentives, multiple efficiency measures, multifaceted barriers to efficiency, and a great deal of variety in structural and behavioral characteristics. Thus, participation rates and energy savings are not clear at the beginning. A pilot can identify problem areas and more effective strategies before a large effort is launched.

Key Practice 3: Developing Organizational Capacity

An environmental business model should be supported by organizational capacity, or the ability to recognize environmental opportunities or threats and to effectively mobilize economic and social capital to innovatively address those opportunities or threats. Capacity is usually expressed in terms of specific functions that need to be performed, such as coordination activities, communication with stakeholders and others, and scaling up activities as interest in the programs grows. It is also expressed in terms of specific inputs such as staff expertise, staff turnover, funding, and so forth. Where capacity is constrained by a lack of time, expertise, leadership, funding, or other resources, attempts at developing innovative new practices may be severely limited.¹⁹ Three components of organizational capacity are especially important for promoting innovation: creativity, leadership, and partnerships.

At the organizational level, managers can promote creativity by assigning challenging tasks to their staff, giving staff the freedom, resources, and support to be innovative, and following through on good ideas.²⁰ Creativity often occurs within the interpretive conversations described above. For example, a conversation may lead to creative design of a project that combines an environmental objective with a job training program or with green jobs in the community, thus expanding support for the environmental innovation.¹¹ Nemeth argues that, to promote innovation, conversations should encompass a diversity of perspectives, including dissenting views, and should avoid social pressure to go along with the group or with management.²¹

Leaders may be mayors, business executives, entrepreneurs, or managers of community-based organizations, university institutes, or religious organizations. They can bring vision, gravitas, legitimacy, clout, facilitation, access to critical resources, energy, and the ability to coordinate various agencies and organizations. Steady, committed leadership is essential for environmental innovation, especially when large investments must be made and there is considerable uncertainty about costs, benefits, and long term public support.¹³ In addition, effective leadership is needed to maintain the effort to design and implement new business models that support innovation.⁴ However, if leaders continually change goals or are vague about commitment, the staff or stakeholders working on an innovation may give up or the effort might fade away.²⁰

Partnerships and collaboration with other organizations having complementary skills may augment an organization’s capacity for innovation.^6,13 For instance, community organizations engaged in energy efficiency programs often rely on partnerships to expand program participation, exchange information, get funding, obtain help in designing and implementing programs, and enhance their credibility within a community.^10,22

An important form of collaboration occurs through community environmental organizations that act as a bridge between and across government and other community groups.²³ Bridge organizations administer other groups’ programs, train staff of other organizations, provide linkages to government agencies, and generally provide information and resources. Through a web of relationships and collaboration, bridge organizations expand the collective capacity of community organizations and government agencies to manage responses to local environmental threats and opportunities.

Partnerships may be difficult to form or may be unproductive, however. The costs of undertaking and managing partnerships and the potential for incompatible motivations among partners can be barriers to successful partnership arrangements.^11,24

Key Practice 4: Overcoming Obstacles that Hinder Innovation

Several circumstances may obstruct development and adoption of a local environmental innovation, and two common obstacles can often hinder implementation.

The first obstacle is an incompatibility in objectives, values, or beliefs among stakeholders that leads to a stalemate.²⁵ Several responses may be applicable. It may possible to break the logjam by coming to a compromise. For instance, in protecting a watershed, some scientific objectives and procedures might have to be modified in order to secure landowner participation.⁹ Another approach is to focus on desired outcomes, such as quality of life in the community, rather than trying to reach agreement on conflicting philosophies.²⁶ Additionally, differences may be overcome if there is a major crisis that compels stakeholders with conflicting objectives, values, or beliefs to jointly respond to a mutual threat.^27,28 A crisis could arise from flooding or drought or contaminated drinking water supplies, for example.

A second obstacle can occur when an organization is too cautious about breaking from past practice. An organization’s decision-makers may conclude that a proposed innovation lies outside the organization’s competencies and experience or outside its regulatory or legislative authority.³ Even if a careful job could be done regarding interpretation, managing uncertainty, and developing organizational capacity, decision-makers may view an environmental innovation in terms of how poorly it fits into current practice, despite the existence of significant threats and opportunities, instead of in terms of how it changes prevailing practice to better respond to threats and opportunities.³ A cautious organization may thus forego a proposed environmental innovation.

If an individual business rejects a potentially effective innovation, its competitors may adopt the innovation.³ Thus, there may be an alternative route to innovation through competition. In non-market circumstances, a possible response is venue shopping, such as pursuing the innovation before a different government agency, pursuing the innovation in court instead of before a government agency, or pursuing the innovation through a (different) community-based organization.^27-29 Changing venues may alter the stakeholders and decision-makers participating in the process, the framing of issues, interpretation processes, organizational capabilities, management of uncertainty, implementation strategies, and the business model employed, all possibly leading to an outcome more favorable to innovation.

Final Thoughts

Local governments, businesses, and community organizations have established a track record of innovation that fosters environmental quality. While their efforts have responded to a wide range of opportunities and threats, there are several practices common to success:

• Extensive interpretive conversations that generate new ideas and that reveal and address stakeholder concerns;
• Robust processes for managing uncertainty such as pilot projects, creation of business models that include a testable sequence of events for progressing to a successful outcome, and monitoring;
• Development of more effective organizational capacity, including strong leadership, encouragement of creativity, and use of partnerships and collaboration; and,
• Overcoming obstacles due to differences among stakeholders or to cautious organizations by turning to market competition or by focusing on quality of life in the community, compromising, taking advantage of crises, and venue shopping.

Taken together, the key practices discussed here can help innovators gain public support, increase the chances that innovations will result in demonstrable environmental improvements, and advance the state of the art. These key practices should be regarded as suggestions for consideration by individuals and organizations contemplating innovative approaches to local environmental threats and opportunities, taking into account their specific circumstances. There can be no guarantee of success due to the wide range of factors potentially in play in a particular situation, but these key practices can be employed across contexts.

Acknowledgements

The author wishes to acknowledge the helpful comments of Jack Fairweather, Stephen Wheeler, and Sara Hughes.

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