S US T A I N AB L E D E V E LO P ME N T
Institutional Challenges in
Environmental Governance: Moving
Beyond General Principles to Achieve
Concrete Results
Ruth Greenspan Bell
A U G US T 2 0 0 2
· I S S U E B R I EF N O . 0 2 -1 2
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Issue Briefs are shor t repor ts designed to provide topical, timely
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W
hile the stated theme of the Johannesburg summit is sustainable development, conference planners have said that this meeting will be the place wh ere policyma kers
move beyond general di scussion of the principles and agenda established in Rio in
1992 and toward effective implementation. They characterize the summit as “an exciting oppor-
tunity to adopt concrete steps and identify quantifiable targets.”
This is an admirable goal, but it’s important to be clear about the level of ef for t it requires.
Implementation requires doing much more than simply repeating the broad pronouncements typica lly made at world meetings.
The overall challenges to sustainable development continue to be poor air quality and undrinkable water, losses of natural resources and biodiversity, the impacts of a variety of human
activities (mining, agriculture, human set tlement) on the land, and the global consequences of domestic practices on climate change. Preparation for the Johannesburg summit has surfaced a lot
of justifiable worries about continued environ me ntal deterioration in much of the developing
world, as well as philosophical differences about how to approach these problems and who is to
blame. For countries in economic and political transition, the story is also tragic but for a different reason: in most cases, the environ me nt has benefited indirectly from economic decline, but
poverty is clearly not an acc eptable or socially effective way of achieving environmental control.
The pressing issue becomes how to achieve implementation? Responsibility must devolve to
countries and sub-national governmental bodies to take up the concrete challenge of effective environmental protection. Talk is cheap. Implementation in volves hard work, difficult choices, commitment, and resources.
There are at least two parts to implementation that must be faced squarely. First, effective national and sub-national env ironmental regulator y regimes must be established by adopting, implementing, and enforcing workable environmental policy instruments, whether those are for controlling pollution, or for conserving and protecting natural resources.
The second part is the question of who will do the heavy lifting. We know that governments
alone can’t do the job; nor should the entire responsibility fall on industry, although control of industrial emissions is an important component of success. Improved environmental enforcement
is needed, but it is not easily achieved. By itself, enforcement it is not the sole answer bec ause
there s imply is not enough capacity to monitor every pollution-generating activity and to compel modifications of behavior and pr actice as needed. The goal should be for each country to develop a culture of c ompliance in which most people follow the environmental rules because th ey
agree with the principles the laws embody. Enforce me nt is a last resor t tool that is used against
the hard-core holdouts.
The essential role of the public in all dimensions of environmental protection is captured in
the concept of public participation, because effective environmental protection is both wide and
deep, and requires a high level of public engagement and mutual responsibility.
The developing world and the countries in transition have not been well se rv ed by much of
the advice they have received about how to go about tackling their well-documented environmental problems. Too often, the advice is impractical and reflects fads, ideology, or even wishful thinking on the part of the advisors, rather than a close examination of the institutions and capability of the specific country. Moreover, the same countries have been on the receiving end of
considerable advice that they should do a better job of environmental public participation, but little support for helping them develop real understanding of what public participation contributes
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or how it might be made to happen. Here, I review the “whys” of public participation, with a goal
of making those more concrete and hopefully more capable of realization.
A critical assumption underlying this discussion is that in developing and transition c ountries,
demand exists for instituting environmental protection that goes beyond mere lip service to hig hminded principles. There must be domestic will at all levels to institute these complex policies.
Choosing Effective Policies
Instrument c hoice is shorthand for what tools are available and appropriate for environ me ntal
control and cleanup. In mature environmental protection regimes, instrument choice is thoroughly
pragmatic; i t’s a matter of what works and which approaches can develop the necessary political
and bureaucratic suppor t. Many U.S. environmental programs mix tools, including command-andcontrol (traditio nal regulation) and market-based instruments. Classic examples of this include
the acid rain program and lead phase out in gasoline.
The United States has achieved significant reductions in sulfur dioxide (SO2) from electric
generating plants using a combination of traditional and market-based approaches. The federal
government sets a permanent emission ceiling that ensures that environmental benefits will be
achieved and mainta ined. Utilities are allocated allowances to emit 1 ton of SO2 during or after a
specified year based on their historic fuel consumption and a specific emissions rate. For each
ton of SO 2 emitted in a given year, one allowance is retired, that is, it can no longer be used.
The market kicks in bec ause allowances may be bought, sold, or banked. Sources that can control SO 2 more cheaply may accumulate cre dits that they can then sell to others whose cost of cutting emissions is more onerous. However, regardless of the number of allowances a source ho lds,
it may not emit at levels that would violate federal or state limits set under Title I of the Clean Air
Act to protect public health. And the government maintains tight controls over the trading program and r igorously en forces violations.
A tax might have been the most efficient way to phase out lead in gasoline, but the U.S. Environmental Protection Agency (EPA) lacked authority to impose ta xes—that power is constitutionally vested in Congress—and in any case, Americans react badly to gasoline ta xes. As a result, EPA mandated a gr adual reduction of lead in fuel, but toward the end, the agency moderated
the pr ogram by adding an inter-refinery averaging program that created “lead rights” to trade or
sell. The trading program reduced c ompliance costs and gave refiners additional flexibility in the
timing of their complian ce .
The lesson from both of these experiences is that a mature, market eco nomy uses whatever
tools are available to reach its environmental protection goals and takes its cues from the legal
system, the prevailing c ulture (including the power and limits of markets), and political expediency. The decisions are rarely ideological or pure. Sometimes they are inefficient; some say that
is the cost of democratically deri ved rules.
In fact, all decisions about environmental protection in the United States are a product of an
active stakeholder process. Public participation is not an add-on, it is an integral part of the
process of designing and selecting policies. U.S. laws are the result of considerable lo bbying on
all sides of the issue (including from the NGO community), and regulations must undergo a public notice-and-comment process, in w hich EPA must consider and respond to suggestions, ideas,
and even opposition, from any source. This very practical approach is at the same time the strength
Institutional Challenges in Environmental Governance
3
(solutions are found that most stakeholders can live with) and weakness (the solutions often reflect considerable compromises and may be very inefficient) of U.S. environ me ntal decisionmaking.
In contrast to the active (but different) stakeholder pr ocesses in the United States and most
of West ern Europe, the debate over which policies to adopt in the developing world and in many
of the countries in transition has been dominated by outside advisors. In particular, the Organisation for Economic Co-operation and Development, the European Union, and the multilateral
development banks have played a large role. The banks control lending resources and have implicit suppor t from large shareholders such as the United States. In recent years, the inte rn ational
assistance and lending organizations have strongly pressed for market-based approaches.
My concern with the unmodulated advice in favor of market-based instruments is that it is often rendered without considering whether necessary institutions exist, or are strong enough, to
allow economic instruments to work. It is offered independently of whether there is demonstrated
public support for the adoption of the policies. Tools are first rec ommended, followed by public
information campaigns or an instruction to make them work in the available institutions. For example, much of the advice rendered in the first years following the fall of the Soviet regime was
based on the apparent assumption that the transition created a tabula rasa would allow c ountries
to avoid the mistakes committed in the name of environmental protection in the West.
Some of the advice has been unnecessarily ideological and negative, implicating a very large
set of instruments that actually work, if imper fectly. This “guilt-by-association” approach is captured neatly in some advisors’ insistence on contrasting command-and-control with market instrum ents, knowing full well that the two expressions are highly freighted in many parts of the
world, and thereby o bscuring a more nuanced di scussion of the complex issues buried beneath
each term. It is misleading to suggest that any environmental policy instruments can ac hieve their
purposes without supporting institutions, particularly adequate monitoring and en forcement.
Market-based instruments rest on the following essential elements, many of which are missing in much of the world:
■ Motivations for compliance. Why try to save money on regulation if you are not expending
any to begin with and don’t expect to in the future? In much of the world, there has been no clear
expectation of consist ent and reliable env ironmental en forcement. Strict environmental requirements are informally waived in favor of development objectives. In the West, the economic pain
from investing in compliance has helped industry develop a good grasp of the real costs to them
of regulation, and of what it takes, at a practical level, to achieve compliance, making firms enthusiastic supporters of mar ket-based instruments such as emissions trading.
■
Adequate monitoring. All environmental regulations, whether market-based or traditio nal,
need fairly clear knowledge— not rough guesse s—of what pollution each plant is discharging to
the environment. This can be achieved with believable end-of-pipe monitoring, which is often expensive or, in some cases, by making estimates. But estimates can be misleading if they are based
on assumptions that don’t always hold in the developing world. Has the plant’s control equipment
been turned on? Is someone c leaning the bag house, so that the equipment works to remove pollutants? Effective environment regulation, like arms control, rests on the principle of “trust but
verify.”
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■
System honesty. No regulator y program, including emissions trading, can work if there is
cheating. Cheating is infectious; when one plant or industry gets away with it, others are encouraged to do the same. Transparency is one way to assure that noncompliance is visible, and
this pr i n ci ple is rigorously applied in the United States to make sure that trading is honest, resulting in real—not me re ly paper—reductions. The United States makes pe rm it r equirements,
emissions data, and the tran sa ctions themselves available for inspection by the public, including
the fi rm ’s competitors. T his has helped to create a level of trust, a necessary predicate if gove rn me nt regulators, economic competitors, nongovernmental organizations, and the public interest c ommunity are going to go along with unconventional compliance programs.
■ Keeping officials who administer the program honest. Trading is a tran sa ction that allows
one party to be held to stricter environmental standards than another s imilarly situated. But the
second party assumes a different sort of re sponsibility (paying for this privilege) and the public
is better off as a result of the open tran sa ction. When arrangements are made in the sunshine, there
are f ewer reasons to be con ce rned that these differentials will quickly become c orrupted. Citizens and competitors need as surance that these dispensations are made on the merits, and not on
the basis of personal connections or illegal payments. Specific safeguards must be built in to reduce the likelihood of fraud.
■
Protections when cheating has been discovered. Emissions r ights—“allowances”—are com-
plex intangible proper ty rights that sometimes involve future rights. Buying and selling them is
quite diffe re nt from simple tran sa ctions in which a purchaser hands over money and is handed
back a tangible object. The authenticity of a right to pollute can not be physically probed or examined. Participants in these tran sa ctions in the West know that they can rely on a viable, reliable legal system or some analogous set of institutions to ensure the integrity of trades and to act
in a timely manner to protect wronged parties. Some countries in the developing world don’t have
reliable rule of law traditions. In others, the court systems move too slowly, giving life to the
adage, “justice deferred is justice denied.” In still others, the judiciary is not independent, and
sometimes judges get their paychecks and social benefits from the same body that owns polluting industry.
■
When participants lack experience with market institutions. Industrial managers in some
countries, particularly countries in transition, tend to lack working experience with mar ket-based
economies. If industry’s actual exp erience was honed under, for example, the rules of state socia lism, they will not have developed the kinds of skills normally applied in complex emissions
trading systems, and may encounter a steep learning curve. The managers’ instincts may r un
counter to if not actually subvert the market mecha nism.
Donor advice has been self-defeating in two other ways. One is the tendency to try for superior, overarching solutions to environmental problems. Manifestations include drafting state-ofthe -art environmental laws or highly sop histicated trading schemes for countries with little environmental protection experience or regulator y confidence. Most mature regimes, like the United
States, started small, with a handful of laws and requirements and added requirements and laws
as sophistication and experience grew, and as the success of previous effor ts built constit uencies
for additional ones.
Institutional Challenges in Environmental Governance
5
A widely held hope is that the developing world might leapfrog over or at least learn from the
experiences of the developed world. The flaw in this argument comes back to the fact that the activities that constit ute env ironmental protection are not centra lized in one government body or
institution, but require widespread societal ef forts. The leapfrogging argument assumes the possibility of a w idespread, rapid learning experience across s ociety, and an a nalogous level of commitment. One of the problems in learning from the experience of others is that fr equently the bottom line is easy to access
X or Y policy worked or didn’t work
but the experience that led to
the con cl usion is more difficult to impart. Often it is the experience, not the final result, that is
the most valuable part of the lesson.
A related lesson for donors and for participants in the Johannesburg Summit would be to spend
more time and ef for t developing tools to encourage c ompliance, and a wider variety of enforcement tools that go well beyond punishment to encourage improved environmental behavior. Many
countries rely on relati vely crude methods to obtain compliance. The widespread practice of fees
and f ines suffer from collection and inflation problems, or are often not set at levels that might
create motivate be ha vior change through economic pain. Closing down a factor y is sure to increase unemployment in already unsteady economies. And putting a plant manager in jail might
produce a scapegoat, but it doesn’t necessarily compel the installation of control technology or
improved plant practices.
The Western democr acies have developed a number of tools that combine enforcement pr inciples with ef forts to bring plants into compliance. For example, compliance schedules r ely on
the common law system, where courts have the power to shape remedies and issue injunctive relief. But they can be made to work in other settings, with considerable thought and ef for t, a nd
their availability gi ves enforcers a larger “tool chest” to work with.
In general, the env ironment in the developing world might begin to see some improvements if
the process started more modestly, with lowered expectations, and specifically with a careful examination of local laws, culture and traditions, to get some ideas about what can work. It would
be wise to emphasize incremental impr ovements that could be attained with existing institutions.
Not only is the tabula rar ely rasa, but each c ountry has histor y to overcome and institutions to
build.
The Johannesburg Summit could refocus ef for ts on impl e me ntation by setting into motion
p ro cesses that will work with environmental professionals and their governments to construct
suppor ting institutions that will allow the cause of environmental protection to flourish. The summit should also send a s ignal to the donor community in favor of less formulistic advice and a renewed ef fort to understand local conditions and their importance in the f ight against pollution.
What does public participation have to do with all of this?
Instrument choice and env ironmental public participation are closely related subjects. At the
start, specific policy tools that are adopted represent choices about how to go about the process
of environmental protection. Tools must be specific to the particular population that might use
them and, as discussed above, functional within the available institutions.
The experience in the United States suggests that environmental policies are more likely to
succeed if they reflect some sor t of internal domestic consensus. If government acts in a vacuum,
it does so to its detriment. After these decisions are made, responsibility devol ves to factories and
their management and workers, farmers, automobile own ers, loggers, home gardeners, and the
myriad other people and institutions that produce pollution or despoil natural resources. After spe-
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cific tools are adopted in the form of environmental laws and requirements, many people must
pick them up and use them. A regulator y limit means that factories must install technology (and
turn it on, and clean it from time to t ime), or make in-plant process changes. An information requirement places the burden on citizens to use the information to make informed choices. In other
words, every tool requires a high level of public engagement and mutual re sponsibility to be effective.
In the Western democracies, public participation is an important part of the process of examining whether policy tools are appropriate, whether they will work, and whether society can
afford them. Feedback from the public helps develop the necessary political and bureaucratic suppor t for the legal requirements. And in the end, whether the policy tools are picked up and used
is also a function of public willingness to act.
There is a fair amount of evidence demonstrating that environ me ntal requirements are more
likely to succeed when the people who must implement them have respect and confidence in the
decision system. As Terry Davies has said, “[P]ublic involvement in the po licymaking process is
fundamental to the health and vitality of American Democracy. Public in volvement inf luences
not only the success of a given program but a lso the public’s perception of its success.”
Open, inc lusive processes for deriving the requirements are important because they encourage information flow to and from gover nment. This two-way communication can, in turn, enhance
the quality of environmental rules. When lawmakers and environmental protection officials obtain data, experience and opinions from industry and the affected public, they can write more realistic and achievable requirements. But to engage in this dialogue, the government must be wi lling to c ommunicate its decision process, what data it is relying on and what it wants to achieve,
and to listen to what people say in return.
Because environmental decisions involve a great deal more than good science, it is not enough
simply to seek out the opinions of exper ts. Fam il ies con ce rned about their drinking water and
mothers with asthmatic children who breathe polluted air contribute important intuitions about
the human contex t and tolerance for risk. Public opinion has much to do with priority setting in
the western democr acies. Even technical tools of env ironmental decisionmaking such as risk assessment and cost-benefit analysis include significant subjective judgments that are most appropriat ely made with explicit attention to public values in consultation with the public. Sometimes
this is helpful; when the public cares about an issue and expresses strong opinions, government
knows that th ere is suppor t for environmental programs and responds positively. Sometimes public concern elevates the priority of environmental risks that would not other wise survive strict
analysis, and as a result, res ources can be dissipated. When syringes washed up on the beaches of
New Jersey, Congress wrote an expensive medical equipment di sposal law. It would be nice to
think that these detours are avoidable, but are they in a democracy?
Success in the ongoing process of environmental protection requires active public engagement. Poor water quality, for example, is the responsibility of numerous factory owners and employees, farmers, gardeners and urban res idents—not only a small number of big dischargers. Attacking more diffuse and widely distributed no npoint sources requires widespread knowledge,
commitment and mobilization.
Public involvement and open processes also build public trust and belief in the legitimacy of
the decisionmaking process. After disputes on po licy and science have been resolved, there will
inevita bly be compromises, if not outright winners and losers. But even t hose who disagree with
Institutional Challenges in Environmental Governance
7
the final result must be persuaded to work together on implementation, and not to ignore or even
sabotage the decision.
Academic studies in the United States suggest that people who disagree with the final decision may agree to go along with it if they feel that the process itself has been fair and their views
have been heard. But when legitimacy diminishes, so does the ability of legal and political authorities to influence public be ha vior and function effectively. This is a lesson that should be
heeded, in view of the unsatisfying histor y of environmental laws in much of the world, where
often, laws simply rest on the books without significant genuine practic e.
Conclusion
If implementation is the goal of the Johannesburg Summit, much can be done to encourage better
results in each country, but there are limits to what can be achieved at a global level. Countries
must assume the responsibility of making incremental improvements in pursuit of pragmatic goals.
They would be greatly assisted in this if the donor community would also put greater emphasis
on ef for ts that help build a transitio nal system that takes account of existing capabilities and institutions. The goal should be real, if small, initial environmental gains, as long as donors a nd
countries don’t lose sight of the ultimate goal of developing the most efficient ways to manage
the environment. More realistic instrument choice and renewed co mm it me nt to and suppor t of
genuine public participation could help advance toward t his tar get.
Although the emphasis should be on action at a national or sub-national level, it would be helpful for the int ernational community to provide suppor t and assistance. One obvious vehicle would
be to reconstit ute the U.N. Commission on Sustainable Development to monitor progress toward
implementation goals and provide suppor t for their achievement. This would be fully consistent
with the commission’s stated mandate to elaborate policy guida nce and options and promote dialogue and build par tnerships for sustainable development with governments, the internatio nal
community, and numerous stakeholders.
Further Readings
Bell, Ruth Greenspan and Susan E. Bromm. 197 7. Lessons Learned in the Transfer of U.S.-Generated Environmental Compliance Tools: Compliance Sched ules for Poland, XXVII Environmental Law Reporter, News &
Analysis. June.
Bell, R uth Greenspan and Clif ford Russell. 2002. Environmental Po licy for D eveloping Countries, Issues in Sci ence and Technology. Spring. Re p ri nted in electronic jour nal Failsafe, ht tp://w ww.felsef.org/summe r 02 .
htm#4b (accessed June 17, 2002)
Davies, J. Clarence and Jan Mazurek. 1998. Pollution Control in the United States Evaluating the System. Washington, DC: Resources for the Future
Fio ri n o, Daniel J..1989. Technical and Democratic Values in Risk Analysis, Vol. 9 Risk Analysis, No. 3
Tyler, Tom R..1990. Why People Obey The Law. New Haven: Yale University Press
Ruth Greenspan Bell is a visiting fellow at Resources for the Future.
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