Table of Contents

The Great Lakes Region: Growth and Renewal

• The Council of Great Lakes Governors: Supporting a High Performance Region

The Council Agenda: Meeting the High Performance Challenge

• Stopping Pollution Before It Starts: The Pollution Prevention Challenge
• Advancing Competitive, Clean Industries: The Great Printers Project
• Reducing Pollution In One Sector: The Auto Project
• A High Performance Regulatory Vision: The Great Lakes Initiative
• Preventing Hard to Trace Pollution: The Great Lakes Watershed Initiative
• Supporting New High Performance Industries: Great Lakes Recycle
• High Performance Redevelopment: Brownfield Clean-up and Re-use
• Building a Competitive Workforce: The Great Lakes Workforce Quality Initiative
• A High Performance Technology Base: The Science and Technology Partnership
• Linking Students to Technology and the Future: Pioneering Partners
• The Electronic Erie Canal: Telecommunications
• Bringing the World to the Great Lakes: Great Lakes of North America Tourism

A Vision for the Future

The Great Lakes region has undergone a vast number of changes that have altered both its industrial and environmental landscape. The Great Lakes region, once the center of the North American mass production economy, is now a world leader in building a region based on high performance principles and practices.

From the late 1960s through the mid 1980s, the Great Lakes economy and environment were in severe distress. Many "experts" predicted that the lakes and the regional economy would never recover; that the economy was permanently de-industrialized and the lakes permanently polluted.

The "experts" were wrong.

By the late 1980s, the Great Lakes economy was well on the road to recovery and, once again, the region was a world economic leader. This recovery was not driven by the mass production strategies that built the regional economy, but led by regional companies using 21st century high performance principles. These principles emphasize flexible production, low cost, high quality and waste reduction in manufacturing. They also stress advanced technology, greater participation from workers, and environmental protection as primary goals in changing production methods.

Many "experts" thought that this renewed growth in manufacturing would exact a serious toll on the environment, but the high performance revolution occurred in a time of unprecedented renewal of the regional environment. High performance strategies are very compatible with environmental protection. Companies now integrate environmental goals into organizational designs and production processes as they work to increase their economic competitiveness.

"The world has shrunk so dramatically over the past ten years that we can't look at what's happening in northwest Ohio. We have to look at what happens around the globe. .... As I walk through my factories, I know that it is my responsibility to keep my people employed, and to keep them competitive. We can't outwork other countries: our backs, legs and arms aren't any stronger. So we have to out think them."

-Rick Norton, President and CEO, Norton Manufacturing, Fostoria, Ohio.

The Council of Great Lakes Governors was formed in 1983. In 1991, the Great Lakes Governors transformed how the Council of Great Lakes Governors worked because they wanted to ensure that the region kept pace with high performance changes. It was a transformation based upon changing needs of people, technology and environmental protection and linking the three more closely. The Governors are leading the way in building cooperative efforts that concentrate on developing and implementing projects on issues that have an impact on improving the region's economy and environment.

The projects selected were those that support the developing high performance economy. The Governors led the development of private/public partnerships that enhance workforce development, capitalize on the promise of telecommunications, encourage pollution prevention, and support the development of a recycled product industry.

As these projects develop, they spin off new related projects. The telecommunications initiative led directly to two projects. In 1992, the Governors added Pioneering Partners, a partnership with GTE that supported teams of educators in advancing the use of educational technology. In 1994, the Governors initiated the Great Lakes Science and Technology Partnership, to organize and coordinate public/private efforts to increase the use of advanced technology by regional companies.

As new regional needs are identified, the Council develops new projects to meet them. The Governors began a project in 1995 to address pollution whose source cannot be easily identified, and are now beginning to identify ways to encourage the reuse of contaminated industrial sites, or brownfields. This process will continue as new challenges arise for the region so that the Great Lakes region continues its leadership in environmental protection and economic growth.

Preventing the generation of pollutants is often cheaper than controlling or disposing of them after they are produced.

Pollution prevention is part of total quality management: process changes that prevent pollution also increase quality. Successful pollution prevention spawns high performance, quality-oriented work organizations.

Pollution Prevention leads to cleaner production, that can create a competitive advantage in an increasingly environmentally-conscious world.

- From the Great Lakes Pollution Prevention Challenge, April 29, 1991

In April 1991, the Governors, with the then-U.S. EPA Administrator, issued a challenge to industry to prevent pollution in their manufacturing processes. Pollution prevention is a major component of high performance. In a mass production economy, pollution control means "catching" pollution at the end of the process. In high performance, pollution prevention becomes an integral practice throughout the production process.

The Challenge committed the states to identify and remove barriers to prevention, create a framework for specific public/private initiatives, and promote prevention within government. The Challenge is not only for industry. It is also for government to work with industry to identify more effective means of achieving environmental protection. The current environmental regulatory structure was created for a mass production economy. The challenge facing government is modifying how it does business so that it does not subsidize older, inefficient and dirty producers by not eliminating barriers for companies that want to reduce emissions though pollution prevention or by investing in new process technology.

The Challenge is moving forward through two projects: the Great Printers Project and the Auto Project.

The Great Printers Project, a partnership between the Governors, the Printing Industries of America (PIA), and the Environmental Defense Fund (EDF), provides a model for the integration of competitiveness and environmental protection. The goal is to make pollution prevention the primary choice of the Great Lakes states' printing industry in meeting and exceeding its environmental and human health responsibilities.

Representatives from government, industry, labor, environmental groups and the general public developed recommendations on how printers can reduce pollution and become more competitive. Since 1994, the state affiliates of PIA in Illinois, Michigan, Minnesota and Wisconsin and governmental and environmental partners are working to put those recommendations into action.

To build a truly competitive and environmentally sound region, smaller companies, like those that make up the printing industry (80 percent of printers employ fewer than 20 people) need to adopt pollution prevention practices. However, they do not always have the resources or the technical expertise to do this. Printing facilities tend to produce significant pollution relative to their size.

he Great Printers Project encourages government and private programs to provide technical assistance to help printers change to state of the art technology and use more environmentally friendly raw materials. Just as important are the training programs and occupational credentials that provide the underlying support for new printing practices. If government assistance programs and regulations do not keep pace with changes in the industry, printers may be discouraged from making the change to more efficient, cost-effective and environmentally sound technologies.

The Great Printers Project

• The Printer's Role: Continuous effort in Great Printing
- Seek out information on the print shop's environmental performance, and the environmental impacts to buyers;
- Perform environmental compliance and pollution prevention assessments, and correct any compliance problems;
- Measure pollution prevention progress.

• The Buyer's Role: Building Markets for Great Printing
- Work with printers to specify their requirements in ways that produce quality jobs that do not compromise the environment;
- Ask questions about the environmental impacts of a job: Are the inks safe? Is the paper recycled? Is the paper bleached using chlorine?

• The Government's Role: Creating a Pollution Prevention Friendly Regulatory Framework
- Avoid redundancy and confusion with reporting and permitting;
- Make sure requirements are conducive to pollution prevention;
- Give incentives to companies to go beyond simply complying with regulations.

Eliminating or reducing pollution at a single facility is a start to protecting the environment, but it is only a beginning. A truly effective pollution prevention strategy reaches throughout a sector and into their suppliers so that a finished item has produced as little pollution as possible. The Great Lakes Automotive Pollution Prevention Project (Auto Project) strives to do this.

Established in 1991 under the Pollution Prevention Challenge, the Auto Project is the Council's first voluntary public/private partnership. Led by the state of Michigan, the Big Three auto companies, Chrysler Corporation, Ford Motor Company and General Motors Corporation, and their trade association, the American Automobile Manufacturers Association (AAMA), the Auto Project seeks to advance pollution prevention throughout the auto industry, and addresses regulatory barriers that inhibit pollution prevention actions.

The Auto Project originally focused on reducing pollution from a targeted list of sixty-five Great Lakes persistent toxins that occur in the manufacturing process of cars and light trucks. This focus was addressed, in part, through working with suppliers to ensure that they understand and are encouraged to achieve industry-wide pollution prevention objectives. Two progress reports, detailing accomplishments and future direction, have been released.

The project will continue to have a broader impact on the nation as a whole as it has been expanded from a Great Lakes-specific project to a national project: the U.S. Auto Project.

"Too often in public policy-making, the question, "Can we afford..." to undertake some laudable goal is the most important question posed. ...this can easily obscure the fact that, while we might indeed be able to afford a particular remedy, it may be much less effective than many other alternatives. ...a consistent policy of adopting environmental remedies -- each of which "we can afford" -- that are not the most effective will eventually leave us short on our overall goal of a cleaner environment and out of resources to tackle the next societal challenge. In other words, if we fail to emphasize the question of cost-effectiveness, ultimately, we will "NOT be able to afford" the goal of a cleaner Great Lakes region."

DRI/McGraw-Hill Report: The Great Lakes Water Quality Initiative: Cost Effective Measures to Enhance Environmental Quality and Regional Competitiveness, September 1993.

Voluntary partnerships and government support assist the development of new industries that link economy and environment in production processes, but current regulatory structures can be barriers to companies achieving peak economic and environmental performance. The Great Lakes Governors are working to redefine government's role as regulator within the context of high performance.

It was the Great Lakes Governors who initiated the effort to create a consistent level of environmental protection for the Great Lakes Basin because of their commitment to an ecosystem approach and to prevent competition among the states based on environmental standards. The Governors' goal in implementing the basin-wide water quality regulatory system, the Great Lakes Initiative (GLI) remains geared toward constructing a comprehensive, high performance, basinwide framework for environmental regulation that allows flexibility and innovation in achieving cost effective reduction of toxics.

To ensure that the GLI is an effective instrument, the Governors contracted twice with DRI/McGraw-Hill to assess the proposed water quality guidance issued by the U.S. Environmental Protection Agency: first, in 1993, to identify potential cost drivers in the draft guidance that did not effectively promote environmental protection; and second, in 1995, to determine if the Governors' concerns on the draft were addressed in the final guidance.

The Governors released a Statement of Principles in early 1996 that outlines their vision for creating a consistent level of environmental protection that achieves maximum environmental benefit, while leveraging investment in improved economic competitiveness. With limited resources for both government and business, it is important to target investments where they are most effective, both environmentally and economically. Money that is spent for virtually no environmental benefit shifts investment away from pollution prevention and other more effective environmental undertakings. The statement also affirmed their intent to be the primary implementors of GLI and co-regulators with U.S. EPA. As they move forward with this important effort, the Governors will try to maximize environmental protection and support the economy, just as they do with their voluntary partnerships.

"We need to encourage state and local partnerships to implement new solutions (to nonpoint source pollution). We need to supplement regulatory approaches with educational programs, voluntary initiatives, and economic incentives. The framework for our actions needs to be watersheds rather than political jurisdictions."

John Engler, Governor of Michigan, Chairman, Council of Great Lakes Governors, 1994-1996

The Great Lakes Water Quality Initiative and pollution prevention efforts generally address point source pollution. Preventing nonpoint source pollution, which is not as easily traced as is pollution from point sources such as factories and other polluting facilities, requires creativity. Nonpoint source pollution needs to be addressed directly for the Great Lakes to become cleaner and better protected.

The Governors, in partnership with The Conservation Fund and the National Geographic Society, are creating a network of urban nonpoint pollution prevention projects under the Great Lakes Watershed Initiative. At each site, the Governors and the Premiers of Ontario and Quebec will implement recommendations of the National Forum on Nonpoint Source Pollution, chaired by Michigan Governor John Engler in 1993-1995. The goals of the project are to identify and implement innovative, high performance, non-regulatory solutions to nonpoint pollution based on economic incentives, voluntary initiatives, and education.

The states are taking a broader look at pollution prevention, not on an industry- or sector-wide basis, but at the watershed level. The project reflects the reality of nonpoint pollution because there is no single solution to the problems it poses. Each project is different, highlighting the multiple types of nonpoint pollution that exist and offering viable solutions that can be applied to other areas around the basin and nationwide.

Under the high performance revolution, new industries developed that did not exist just a few years ago, such as the recycling industry. The Great Lakes Recycle project was created in 1992 because the Governors identified the recycling industry as one of these new industries that would benefit from market-based assistance from the states. The industry showed great promise for the future, but was having difficulty taking off.

The Governors signed the Great Lakes Recycle Agreement, pledging to cooperate in purchasing recycled products that meet common specifications. It was hoped that this would send a strong market signal to producers. They also established a Great Lakes Recycle Board that would identify other mechanisms that the states could use to spur the development of recycled product markets.

The first product chosen for joint purchase was one that governments use in large quantity--copy paper. The state purchasing directors put out a single call for bid on each state's individual paper contracts that listed the same product specifications. Wisconsin, under a grant from U.S. EPA, tested potential suppliers' paper to ensure quality standards.

This quality testing had the intended impact. First, states received paper that met their specifications. The states were vigilant in monitoring quality standards, and, in fact, Michigan canceled its contract with its paper distributor because the quality did not remain constant. Second, several companies whose paper did not pre-qualify for bid during the first year, came back the next year with paper that was of higher quality. In addition, several paper mills began capital investment plans to produce more copy paper with more post-consumer content shortly after the first Council initiated state purchase.

The states have increased the number of products that they work together to purchase: envelopes, soft paper products, motor oil, retread tires, traffic cones, and computer forms.

In 1996, the Governors appointed an eight member Great Lakes Recycle Board to provide a broader strategic framework for multi-state purchases and in the development of a healthy, high performance recycling industry. The Board has two primary goals, first to expand and stabilize markets for recycled products by continuing to use state purchasing power to send signals to the marketplace, and second, to expand the region's recycling infrastructure and integrate the recycling industry more closely into the regional economic fabric. Developing that infrastructure gives the region a competitive advantage over other regions that do not intelligently develop an extensive, closed-loop recycling infrastructure that "exports" products to other regions of the country.

According to the Center for the Biology of Natural Systems which analyzed the impact of the paper purchase on the recycling industry, "The Council's joint purchase was one of the major signals that demand for recycled copy paper was serious and would be a long-term trend."

"With a regional strategy devoted to industrial sites reuse, the legacy of thousands of vacant and under-used industrial sites throughout the Great Lakes region can be our advantage, not our curse."

Tom Ridge, Governor of Pennsylvania, Chairman, Council of Great Lakes Governors, 1996-1998

Abandoned industrial properties, or brownfields, are one of the legacies of the environmental pollution generated during the era of mass production when environmental effects were not considered in production processes. While brownfields present a special problem, they also offer enormous potential as sites for industrial redevelopment. Rather than being viewed as wastelands, many people see them as places with tremendous capacity for creating jobs while cleaning the environment.

The Great Lakes states share similar problems with brownfield redevelopment. Because of the density of mass production facilities in the region, there are more sites in this region. But, like the lakes themselves, brownfield sites can be cleaned and revitalized so that they are a positive element of the regional economic and environmental makeup. This is particularly important in some urban areas where high performance has not taken root. The states need to work with community groups and local and federal governments to identify common policy threads. These policies must be implemented with flexibility by states and local communities based upon local needs.

As they begin work in leading regional brownfield redevelopment projects, the Governors recognize that there are several barriers to redevelopment, just as there are barriers in other policy areas. First, businesses tend to have a greater interest in sites that are ready immediately, as opposed to some

brownfield sites where cleanup may take two years. Second, there needs to be an assessment of current environmental and liability policies that impact the transfer of mildly contaminated properties. Additionally, there is a need for greater coordination between all levels of government to ensure that the array of regulations that affect brownfield sites is less confusing and policy implementation is more coordinated.

However, government policy can only go so far. Governments cannot provide financing to redevelop sites. There needs to be closer coordination with the private sector, site owners, potential site users as well as financial institutions to build a firm and clean foundation for new brownfield policies.

"Returning brownfields to productive use retains and creates jobs--jobs that are especially valuable to the distressed communities where brownfields are commonly located."

Final Report and Action Plan: Chicago Brownfields Forum, October 1995.

High performance companies need people with up-to-date skills: skills that will make both the person and the company more competitive in the marketplace. Industry-designed skill standards are needed to build productivity in a constantly changing workplace, ensure that education and training programsare accountable and tied to measurable outcomes, and help increase people's motivation and achievement.

Under the Great Lakes Workforce Quality Initiative, the National Tooling and Machining Association developed new sets of skills standards for the metalworking industry, and the Printing Industries of America developed skills standards for the printing industry to help companies within each industry identify the types of skills that workers need to possess. The Great Lakes states, in turn, work with the associations to guarantee that the standards are used in training programs around the state, whether state-, local- or company-sponsored.

A key component of this project is that it will provide a guarantee that a worker certified as having attained the skill level in one state will have that skill recognized in all Great Lakes states. It guarantees people that their skills are up-to-date and gives them the flexibility to move to another state where

there may be new opportunities for advancement, while giving employers a guarantee that the workers they hire who are certified have the skills required by a globally competitive company.

Skill standards will be used to:

• evaluate job applicants fairly
• identify training needs
• prepare, train and retrain workers
• assess skills and proficiency
• recognize and reward employee ability and achievement
• encourage career development and advancement

Skill standards are needed to:

• build productivity through increased skills in a changing workplace
• make sure that education and training programs are accountable and tied to measurable, observable outcomes
• drive student and worker motivation and achievement

"Making sure that Great Lakes industries stay ahead of world competition demands the most efficient use of our region's rich technology base. The partnership will create a variety of resources from which we can further develop our already strong base."

George V. Voinovich, Governor of Ohio, Chairman, Council of Great Lakes Governors, 1992-1994

The Council's 1994 report, North America's High Performance Heartland, describes an emerging, closely interconnected, advanced manufacturing economy that requires rapid technology development and adoption. Inspired by the report, the Governors established the Great Lakes Science and

Technology Partnership that is creating technology links between the Great Lakes states, and between the public and private sectors. The Governors' goal is to create a regional technology agenda to advance the Great Lakes high performance economy.

There is a wealth of science and technology resources within the individual states, but there are few mechanisms through which the states coordinate science and technology resources in the region. The Council of Great Lakes Governors and the Partnership, working with the states and their industries, perform an important role in organizing and coordinating these activities within the region.

Historically, states and their industries have sought assistance from federal departments, agencies and laboratories. The states, because of their sensitivity to local industry needs and the problems of modernization, have had some success in linking federal research and development to private sector needs. However, this relationship is very likely to change as the shape and size of federal science and technology programs and resources decrease.

To prepare for this eventuality, the Council has engaged in partnerships with the automotive and plastics industries (Great Lakes Alliance and Great Lakes Composites, respectively), as well as projects intended to improve the Great Lakes information infrastructure serving manufacturers

(Great Lakes Manufacturing Network). The Council also is a partner in developing a curriculum for advanced manufacturing education. There is tremendous potential for additional projects in other industries that improve technology transfer and facilitate the conversion of defense dependent firms that will improve the region's overall competitiveness and productivity.

"The process of dissemination itself is broad and far-reaching. Not only is there more technology, but more time is being spent with technology. Not only are there more teachers employing educational technologies in the classroom as a result of this project, but the sophistication of these technologies is at a higher level than it has ever been."

North Central Regional Educational Laboratory report on Pioneering Partners.

School reform and educational change are major challenges facing every Governor in the 1990s. In 1991, GTE and the Great Lakes Governors began a partnership to enhance the use of educational

technology in Great Lakes classrooms, Pioneering Partners for Educational Technology. This partnership provides support to teams of educators, encouraging the most effective use of technology in classrooms and helping these educators spread their knowledge to their colleagues.

GTE invested over $3 million in developing Pioneering Partners. Nearly 100 teams of teachers, administrators, and community officials, who demonstrated the ability to use technology to improve educational attainment, participated in the project. The project focuses on recognizing best practices in educational technology, professional development at a summer partnership summit, coalition building across local areas and regions, and disseminating skills through workshops and the internet. The driving force for Pioneering Partners is dissemination. Funded teams must demonstrate that they will make their knowledge accessible to other teachers, students, schools, businesses and governments.

The success experienced on a regional level will be tested at the national level. Pioneering Partners is now an independent organization: the Pioneering Partners Foundation. It will continue the efforts begun by GTE and the Governors on the national stage so that more students will have the opportunity to learn from teachers who know how to use technology as a powerful tool for learning while, at the same time, becoming more familiar with the technology that they will face in the years to come.

"The Great Lakes has a proud tradition of leading the way in new technology and infrastructure development beginning with the opening of the Erie Canal in 1825; a feat that linked us to the rest of the world. The Great Lakes states have stayed ahead of the game, building roads, railroads and highways. We became leaders in transportation and education. Each new development moved us along the road to greater trade within the region, throughout the nation, and now in our global economy."

Governor Tommy G. Thompson, Chairman, Council of Great Lakes Governors, 1989-1992

Pioneering Partners and the Science and Technology Partnership arose out of the Great Lakes Telecommunications Initiative which was intended to outline the region's opportunities in harnessing the power of telecommunications.

In 1991, the Governors convened a major conference of regional and national telecommunications experts and practitioners with the knowledge that telecommunications infrastructure can interconnect different sectors of the region's economy, allowing all segments to move forward at similar paces.

This is part of a long tradition of regional infrastructure development: whether canals, national roads, railroads, highways or interstates, which began with the opening of the Erie Canal in 1825. The conference led to the development of a series of recommendations that the public and private sectors need to implement for the region to compete globally. Many of these recommendations moved forward, led by the private sector, but the Council helped play a role in raising the level of awareness of the need for a regional perspective on telecommunications.

• International tourism supports 6.3 million direct jobs and another 8 million indirect jobs in the United States These are expected to double in the next decade.

• Travel and tourism generates $58 million per year in federal, state and local taxes, creating a $22 billion trade surplus each year.

• Over one-third of the international visitors to the United States are European, who also represent the fastest growing overseas source of visitors.

• The Great Lakes regions boast over 600 state parks, over 4500 golf courses, and attract over 4 million anglers per year.

A central tenet of the Governors' agenda has not only been creating linkages within the region, but linking the region to the rest of the world. To do this, the Governors have worked to create a unifying identity for the region.

To most Americans and the world, the Great Lakes region is seen as the "rustbelt." However, that image no longer fits. The Governors created the Great Lakes of North America (GLNA) project, which is geared toward projecting a new high performance image of the Great Lakes region to prospective tourists in Germany and the United Kingdom.

The five lakes and the urban and rural recreational resources represent a common marketable product for international visitors. GLNA partners with industries that led the high performance movement to promote an international image of a region that reflects the high performance reality: vibrant cities, unspoiled wilderness, and thousands of miles of spectacular Great Lakes coastline.

GLNA's purpose is to attract an increased number of international tourists to the Great Lakes region. Tourism is the second largest industry in the region. Revenues from international visitors are a growing part of the region's exports. In 1994, the Great Lakes states saw international tourism grow at almost double the rate of the rest of the U.S.

The Governors recognize that a regional tourism campaign could pay additional dividends in foreign investment and trade. It would also help strengthen the region's environment by building recognition of the lakes as an economic asset and fostering investment in clean-up and preservation.

A Vision for the Future

As the Great Lakes economy and environment have changed, so too must our views of how government interacts with them. The transformation of both the regional economy and environment necessitates this change.

The Great Lakes Governors recognize the importance of joint action in meeting the new high performance challenge that faces each state individually. The refocusing of the Council of Great Lakes Governors' efforts since 1991 is a reflection of these increased interconnections, not only of economy and environment, but of the states within the Great Lakes ecosystem.

A major lesson of the transformation of the regional economy and environment is that change is constant, but ever-quickening in pace. Increased global competition and the need for faster planning and response requires increased flexibility to address the problems that we face now and that will face us in the future. The Governors will move to meet the new high performance changes and challenges as they occur. The projects that they choose to work on together will continue to be geared toward this reality. Over time, the projects will change, but the focus on cooperation and linkages will remain.