Can rethinking the role of governance and regulation push society towards more effective environmental outcomes?
In a rapidly globalizing world, persuading reluctant governments and mobile corporations to mitigate their negative impact on the environment takes more than setting and enforcing standards. It requires wholesale normative shifts in thinking about our environment and the way in which governments can best influence behavior. While that is easier said than done, Professor Neil Craik, Faculty of Environment professor and current director of University of Waterloo’s School of Environment, Enterprise and Development (SEED) sees a way forward thanks to his research on innovative forms of environmental governance and regulation.
A crucial step to making polluters more accountable is to expand the range of legal instruments to restrain them beyond simply “command and control” mandates. In a global economy where profit margins can be razor thin, the most innovative methods to curb pollution remove potentially clumsy government control and rely on market incentives and information based tools, such as public reporting requirements.
“As the environmental problems we face become more complex, it is much more difficult to identify standards and apply those standards in unambiguous ways,” says Craik. “Take GHG emissions. It is a monumental challenge for governments to determine, on their own, the emission reduction standards across every sector of the economy. But market mechanisms provide economic signals that enable individuals to determine the appropriate levels of emissions for their operation.”
Market-based regulation is not totally laissez-faire, because governments can still impose costs on emitters through taxes or emission trading schemes. Plus, using price incentives gives governments much more information about the relative preferences of emitters. This allows governments to not only regulate more efficiently, but also more effectively.
While such innovative market-based governance tools can result in lower levels of pollution, “in a sense my own research would push that a little further”, says Craik. “I would say that what these processes do is internalize some of these environmental values.” When governments and corporations see that environmental impacts can affect their bottom line, they will internalize better practices into their own environmental practices. Recently, much of Dr. Craik’s research has been on the role that information-based processes play in international and domestic governance arrangements.
“Often information based approaches do not dictate particular environmental outcomes. Instead they require project proponents to investigate the consequences of their activities, to disclose those consequences to the public and to justify their actions in light of shared environmental values,” explains Craik. “My observation is that the process of reasoned justification pushes proponents to make better decisions and to reframe their interests in light of environmental values. In these instances ‘sunlight is the best disinfectant’, to quote U.S. Supreme Court Justice Louis Brandeis.”
Craik notes that in the future regulatory challenges are going to revolve around carefully matching regulatory approaches to particular environmental challenges. The role of government will increasingly be to orchestrate, not dictate, behavior.
“The key is not to throw the baby out with the bathwater, says Craik. “Governments, firms and NGOs must learn to harness other important social forces, such as markets and reputations, but without abandoning the government’s central responsibility to protect present and future generations from environmental degradation.”