I am pleased to transmit to the Congress the Twelfth Annual Report of the Council on Environmental Quality.

The American people insist on a quality environment. We also strive for economic progress and the promise of a better life. A clean healthy environment is a fundamental part of that promise.

Our air must be fit to breathe and our water fit to drink. We require standards of environmental quality that will protect the most vulnerable -- the very young and the very old, the infirm and the yet to be born. We care about our parks, our wilderness, our wetlands and our endangered species.

We have already made great progress toward ensuring a healthy environment. Our general course has been charted with the passage of numerous Federal and state environmental laws. Our state governments and many localities have strengthened their capabilities for dealing with environmental issues. Many of our industries are coming to view the generation of wastes as lost profit potential. It is now time to make sure that the paths we have chosen are the best ones. It is time to review the environmental regulations and to make certain we are doing the most efficient job possible. Certainly we can afford a clean environment, but we must work for it in the most creative and effective way.

To operate more efficiently, I believe we must take two major initiatives. First, we must create a more innovative and flexible regulatory and economic framework in which our environmental programs operate. Regulations should complement, not stifle market forces in determining the most cost-effective methods of proper environmental management.

Second, I believe that environmental decisions should be brought closer to the people most affected by them. Particularly in the past decade, the various state and local governments have substantially improved their capability for dealing with environmental issues. Therefore, we should increase our reliance upon that expertise. The Federal government should continue to establish environmental quality standards, assure the enforcement of such standards, help to resolve environmental issues of a regional and interstate character, and continue to develop the scientific and technical information necessary to carry out environmental protection programs at all levels of government.

Working together, we can make the necessary changes to reach our environmental goals, and at the same time use our resources wisely with the help of the free market. As we do, we will create a healthful environment in a healthy economy.

Ronald Reagan

The White House,

July 21, 1982.

Note: The 291-page report is entitled ``Environmental Quality 1981 -- 12th Annual Report of the Council on Environmental Quality.''