Environmental change is certainly possible. For example, the amount of lead the average person gets from the environment has been slowly falling for several decades now. Better pre-natal care, and better education about the effects of consuming even small amounts of alcohol during pregnancy, might also be factors.

I think that cultural change is probably the biggest single cause of the Flynn effect, though. Computer use, increased practice taking standardized tests in childhood, ect. Which doesn't necessarily mean that they're smarter, just that they'd better at taking IQ tests.