I am pleased to be here today to share with you what US-AEP � and our partners in Taiwan -- are trying to do to facilitate environmentally sound, sustainable development throughout the region.

Let me first begin with an overview of our organization. The United States-Asia Environmental Partnership was launched in 1992 as a presidential initiative. In creating US-AEP, the White House recognized Asia�s growing commitment to sustainable development and America�s increasing eagerness to share its experience, technology, and management practices.

US-AEP embodies a new model of cooperative development, one that encourages American-Asian partnerships. With the participation of a wide spectrum of partners�including industry, governments, NGOs, and academia�

US-AEP has become a flexible, responsive vehicle for delivering timely answers to environmental questions.

One of our major partners is the Industrial Development Bureau (IDB) of Taiwan�s Ministry of Economic Affairs. The IDB and US-AEP share a zealous commitment to promoting cleaner production and environmental management practices. In recent years, the two organizations have co-sponsored clean production training workshops, designed to increase industries� knowledge of the latest technologies and management systems. These events target key industry sectors, such as the printed circuit board and petrochemical industries, which are now facing stringent emissions standards.

Taiwan�s broad, international outlook is helping it to become a regional leader in the field of cleaner production. There are few other economies that have both taken important strides to improve the ecological efficiency of their industrial production, and then share that knowledge and experience with neighboring countries.

There is much at stake. Continued rapid growth is essential to lift much of Asia out of poverty, but is nevertheless dependent on significant improvement in how the environment is managed. The future of our children and grandchildren depend on what we all do now.

Although much has been made of a perceived conflict between economic growth and environmental protection, in fact, the two goals are mutually interdependent�you cannot have one without the other.

The New York Times reported in mid-1998 that firms rated as strong environmental performers had earnings greater than the average of their competitors as measured by the 500 firms included in the S&P 500 index. Strong environmental performance is essential to continuing strong economic growth, which in turn is essential to progress in Asia.

As evidenced by this conference, Asia is now moving along what can be called the "clean production continuum." This continuum starts with public awareness, moves to education and training, then to implementation, and finally, to the stage of continuous improvement.

Much of Asia is now past the awareness stage, which began in the early 1990s, and is in the throes of the second step, that is, educating and training its practitioners. From the mid-90s, a growing Asian cadre of trainers has been bringing the tools and techniques of cleaner production to the shop floor. These have resulted in improved process efficiencies, waste reduction, recycling of non-product output, and pollution prevention.

The third step in the continuum, implementation, is beginning in many companies around the region. One proxy for measuring the progress of implementation is the movement toward adoption of ISO 14000, which, as most of you know, is a comprehensive voluntary business standard for environmental performance. Since 1995, US-AEP has been facilitating the establishment of internationally recognized local accreditation systems in our 11 Asian partner countries. Within these 11 countries, more than 1,600 companies have been ISO 14001 certified. Taiwan is leading the charge with more than 500 certified companies.

The forth and final step, and it is a challenging one, is to move all companies�even small- and medium-scale enterprises�into the stage of continuous improvement.

Although much progress has been achieved, what I want to stress today is the challenge of sustaining the momentum.

Further policy development to support continued progress is the real challenge we face. Frankly, the necessary policies�at both national and industry sector levels�are lagging behind the technical solutions to reducing pollution and increasing efficiency. And not enough small and medium scale industries are benefiting from the advances in knowledge.

Our host, Taiwan, has been a leader in defining excellent industry sector policies:

• For example, scarcity of water, and serious air and water pollution problems associated with Taiwan�s semi-conductor industry have been addressed through a combination of new standards, industry outreach and participation, and innovative technical solutions.

• Taiwan�s record of constant learning and innovation, spearheaded by IDB and the Industrial Technology Research Institute (ITRI), is a model for all of us. We urge Taiwan to continue to expand its outreach to the international marketplace, sharing its insights, practices and experience.

Governments around the world continue to face the problem of how to frame policies that balance the relationship between regulatory command and control, which is an absolutely necessary base on which to build, and market-based incentives, which provide flexibility and lowest-cost options. Both are needed. Increasingly, we can see that the balance and mutual reinforcement of these policy thrusts is the key to finding the path forward. Both government and industry must respond to the pressures of resource scarcity and the need for energy efficiency as they affect specific industry sectors.

As we look ahead, forward-looking trans-national companies will help set the standards because they are responding not only to consumer and non-governmental organization pressures, but also to financial markets. There is a growing awareness by the markets that sustainable production is a valid criterion for judging the future profit potential of a firm. The new Dow-Jones �sustainability index� suggests a view by one of the world�s leading research firms that responsible corporate behavior pays returns to investors, and must be tracked. The index focusses on a company�s pursuit of sustainability opportunities � for example, meeting market demand for sustainable products and services � and the reduction, ideally avoidance, of sustainability risks and costs. As a result, I believe we can assert today that corporate sustainability is an �investable� concept. This recognition in the market will be crucial in driving interest and investments in sustainability to the mutual benefit of companies and investors. As this benefit circle strengthens, it cannot help but have a positive effect on the societies and economies of both the developed and developing world.

We can already discern some of the likely shape of what continuous improvement will mean for competitive industries. I will suggest five, although there are others and you may believe that the ones I will mention would not be in your personal �top five� list:

1. The business philosophies of "design for the environment" and "strategic environmental management," with their emphasis on efficiency and sustainability, will become ever more widespread;
2. The acceptance of "social responsibility" by business, where environmental impact, health and safety, and stakeholder participation become an integral part of the strategic decision-making process;
3. Policies requiring large-scale consumer-products manufacturers, such as carpeting and tires, to "take back" their products once they have reached the end of their life span. This will raise the bar on environmental design standards and create powerful incentives for development of recycling and waste utilizing technologies;
4. The power of the Internet, which is being harnessed through such databases as the U.S. government�s "clean production cooperative," will dramatically reduce the transaction and information costs of acquiring clean technology best practices.
5. The growing importance of eco-efficiency metrics--getting reductions

in energy, water, materials, waste and pollution per unit of output-- and establishing industrial goals and environmental indicators that correspond with such metrics.

We seek to help policy-makers relate their work to the growing field of environmental performance benchmarking. We have been in close touch with the work on environmental performance metrics that the Industrial Development Bureau of Taiwan has been doing and are delighted to be partners in their conference on eco-efficiency metrics scheduled for late February next year here in Taipei. Drawing upon Taiwan�s expertise in the field of cleaner production, this meeting has been designed to encourage industry to adopt eco-efficiency goals and environmental indicators. US-AEP plans to bring key decision-makers from a number of other countries here to Taiwan to participate. They, in turn, will organize meetings within their countries to further spread understanding of how important this work is.

The United States-Asia Environmental Partnership is supporting the development of an Asian node for the Greening of Industry Network. The worldwide network includes public and private policy-makers and academicians, who are deeply engaged in the search for answers to the issues that we are discussing in this conference. Just this August, we co-sponsored a workshop with the Asian Development Bank and the Network on the Outlook for Environmentally Sustainable Policies in Manila. It is something you all should be engaged with. And by the way, the Greening of Industry Network has asked me to extend to you an invitation to their Bangkok conference in January 2001.

As our name suggests, our vision of cleaner production means a growing network of engaged and committed professionals, linked among Asian nations and to the United States and other OECD nations. Our expectation is for a growing volume of dialogue and documentation covering best practices, technology transfer and industry benchmarks flowing around and through this network, across Asia, and from industrializing Asia to the OECD as well as the other way.

We look forward to remaining engaged with you, over the next several years, in the continuing effort to find and implement more cost-effective ways of helping our business partners become more sustainable, and our governmental partners define better policies. Both are essential to finding the way ahead to a sustainable future for all.

We hope to work with all of you to build a movement that will lead to a cleaner, more productive, more profitable and more livable world. The alternative is disaster.