WORLD BANK TECHNICAL PAPER NO. 391 1~~~~~~~~~~~~~~~~~~~ h)y// i ,iu.lt iii''t//// S,v'u/t. Work in progress \/ P 1391 for public discussion i r Environmental Management and Institutions in OECD Countries l-jK.,-,S tIl '-P''/''i''"''' .. ... . .. .; - :::0 000 f~~~~~~~~~~~~~~~~~~~~~~~~~~~~ RECENT WORLD BANK TECHNICAL PAPERS No. 335 Kirmani and Le Moigne, Fostering Riparian Cooperation in International River Basins: The World Bank at Its Best in Development Diplomacy No. 336 Francis, with Akinwumi, Ngwu, Nkom, Odihi, Olomajeye, Okunmadewa, and Shehu, State, Community, and Local Development in Nigeria No. 337 Kerf and Smnith, Privatizing Africa's Infrastructure: Promise and Change No. 338 Young, Measuring Economic Benefits for Water Investments and Policies No. 339 Andrews and Rashid, The Financing of Pension Systems in Central and Eastern Europe: An Overview of Major Trends and Their Determinants, 1990-1993 No. 340 Rutkowski, Changes in the Wage Structure during Economic Transition in Central and Eastern Europe No. 341 Goldstein, Preker, Adeyi, and Chellaraj, Trends in Health Status, Services, and Finance: The Transition in Central and Eastern Europe, Volume I No. 342 Webster and Fidler, editors, Le secteur informel et les institutions de microfinancement en Afrique de l'Ouest No. 343 Kottelat and Whitten, Freshwater Biodiversity in Asia, with Special Reference to Fish No. 344 Klugman and Schieber with Heleniak and Hon, A Survey of Health Reform in Central Asia No. 345 Industry and Mining Division, Industry and Energy Departrnent, A Mining Strategy for Latin America and the Caribbean No. 346 Psacharopoulos and Nguyen, The Role of Government and the Private Sector in Fighting Poverty No. 347 Stock and de Veen, Expanding Labor-based Methods for Road Works in Africa No. 348 Goldstein, Preker, Adeyi, and Chellaraj, Trends in Health Status, Services, and Finance: The Transition in Central and Eastern Europe, Volume II, Statistical Annex No. 349 Cummings, Dinar, and Olson, New Evaluation Procedures for a New Generation of Water-Related Projects No. 350 Buscaglia and Dakolias, Judicial Reform in Latin American Courts: The Experience in Argentina and Ecuador No. 351 Psacharopoulos, Morley, Fiszbein, Lee, and Wood, Poverty and Income Distribution in Latin America: The Story of the 1980s No. 352 Allison and Ringold, Labor Markets in Transition in Central and Eastern Europe, 1989-1995 No. 353 Ingco, Mitchell, and McCalla, Global Food Supply Prospects, A Background Paper Prepared for the World Food Summit, Rome, November 1996 No. 354 Subramanian, Jagannathan, and Meinzen-Dick, User Organizations for Sustainable Water Services No. 355 Lambert, Srivastava, and Vietmeyer, Medicinal Plants: Rescuing a Global Heritage No. 356 Aryeetey, Hettige, Nissanke, and Steel, Financial Market Fragmentation and Reforms in Sub-Saharan Africa No. 357 Adamolekun, de Lusignan, and Atomate, editors, Civil Service Reform in Francophone Africa: Proceedings of a Workshop Abidjan, January 23-26, 1996 No. 358 Ayres, Busia, Dinar, Hirji, Lintner, McCalla, and Robelus, Integrated Lake and Reservoir Management: World Bank Approach and Experience No. 360 Salman, The Legal Frameworkfor Water Users'Associations: A Comparative Study No. 361 Laporte and Ringold, Trends in Education Access and Financing during the Transition in Central and Eastern Europe. No. 362 Foley, Floor, Madon, Lawali, Montagne, and Tounao, The Niger Household Energy Project: Promoting Rural Fuelwood Markets and Village Management of Natural Woodlands No. 364 Josling, Agricultural Trade Policies in the Andean Group: Issues and Options No. 365 Pratt, Le Gall, and de Haan, Investing in Pastoralism: Sustainable Natural Resource Use in Arid Africa and the Middle East No. 366 Carvalho and White, Combining the Quantitative and Qualitative Approaches to Poverty Measurement and Analysis: The Practice and the Potential No. 367 Colletta and Reinhold, Review of Early Childhood Policy and Programs in Sub-Saharan Africa No. 368 Pohl, Anderson, Claessens, and Djankov, Privatization and Restructuring in Central and Eastern Europe: Evi- dence and Policy Options (List continues on the inside back cover) WORLD BANK TECHNICAL PAPER NO. 391 Pollution Management Series Environmental Management and Institutions in OECD Countries Lessons from Experience Magda Lovei Charles Weiss, Jr The World Bank Washington, D.C. Copyright © 1998 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing May 1998 Technical Papers are published to communicate the results of the Bank's work to the development community with the least possible delay. The typescript of this paper therefore has not been prepared in accordance with the procedures appropriate to formal printed texts, and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. 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Cover photo "Montreal Skyline from Mount Royal, Montreal, Quebec," from COREL CD Photos. ISSN: 0253-7494 Magda Lovei is an environmental economist in the World Bank's Environment Department. Charles Weiss, Jr., is director of the Program on Science, Technology, and International Affairs at the Georgetown School of Foreign Service in Washington, D.C. Library of Congress Cataloging-in-Publication Data Lovei, Magda Environmental management and institutions in OECD countries: lessons from experience / Magda Lovei, Charles Weiss, Jr. p. cm. - (World Bank technical paper; no. 391) (Pollution management series) Includes bibliographical references. ISBN 0-8213-4204-5 1. Environmental management-OECD countries. 2. Environmental policy-OECD countries. I. Weiss, Charles. II. Title. III. Series. IV. Series: Environment Department papers. Pollution management series. GE320.043L68 1998 363.7'056-dc2l 98-14304 CIP Contents Foreword v Abstract vii Acknowledgments ix Abbreviations xi Executive Summary xiii Environmental Policymaking xiii Legal and Regulatory Framework xiv Admninistrative and Institutional Framework xv Conclusions and Recommendations xvi Introduction 1 The Elements of Environmental Management 1 Environmental Management and Performance in OECD Countries 1 Purpose of this Study 2 1 Environmental Policymaking 5 Priority Setting 6 Cross-sectoral and Cross-media Integration of Environmental Policy 8 Consensus Building 9 Public Access to Information and Participation in Decisions 10 The Role of Nongovernment Organizations 13 Policy Implementation Approaches and Instruments 15 2 Legal and Regulatory Framework 21 Environmental Legislation 21 Distribution of Political and Administrative Authority 22 The Role of Courts 26 Ombudsman 27 Supra-national Integration of Environmental Policies and Legislation in the European Union 28 3 Administrative and Institutional Framework 31 Evolution of National Environmental Protection Agencies 31 iii iv Environmental Management and Institutions in OECD Countries: Lessons from Experience Administrative Control of Environmental Protection Agencies 35 Organizational Structure of Environmental Authorities 38 Human Capacity of Environmental Management 41 Technical Background 42 4 Conclusions and Recommendations: Effectiveness of Environmental Management 47 The Gap between Policy Objectives and Performance 47 Main Lessons Learned and Implications for Developing Countries 48 Bibliography 51 Boxes 1 Threats to the environmental protection agenda, and the role of the public in the United States and Japan 6 2 The emergence of risk assessment in environmental priority setting in the United States 7 3 Integrated environmental policy in the Netherlands 9 4 Public pressure and policy response to forest dieback in Germany 11 5 The use of referendum in environmental decisionmaking 13 6 Government-NGO relationships in the Netherlands 14 7 Illustration of technology requirements in United States environmental legislation 16 8 BATNEEC definitions in the United Kingdom 16 9 Increasing role of fiscal instruments in environmental policy in OECD countries 18 10 "Landmark" environmental court decisions in Japan 27 11 National interests and consensus building in the EU: The case of the Large Combustion Plant Directive 29 12 Bottom-up development of environmental management in Japan 33 13 The evolution of environmental protection authority in France 34 14 Distribution of environmental protection responsibilities among government agencies in Sweden 35 15 "Gyoseishido" or administrative guidance, and pollution control agreements in Japan 36 16 Experimenting with voluntary environmental regulation in the United States 37 17 ISO 14000-Voluntary compliance program, new corporate management approach, and inventive marketing tool 39 18 Administrative changes support integrated pollution management in the United Kingdom 40 19 Integrated permitting in France 41 20 Development of air pollution monitoring system in the United States 44 21 Changing approach to environmental research in the United States 45 Tables 1 Examples of environmental legislation in the United Kingdom 22 2 Transfer of regulatory power during the creation of national environmental protection agencies 32 Foreword E nvironmental management policies, regula- The lessons from OECD countries summarized tions, and institutions have gone through in this report should help developing and transitional major changes during the last decades in country governments find effective ways and mecha- response to increasing public awareness of environ- nisms to protect their populations and natural mental issues. OECD colLntries were in the forefront resources from the effects of environmental pollution of this evolutionary process and they have achieved and degradation. The report points out that the first significant improvements in environmental quality and most important underpinning of effective envi- through the modification of consumer preferences, ronmental management is the commitment of policy production processes, and technologies. makers to address environmental problems, and an However, the road towards better environmen- effective mechanism of consensus building to set real- tal management and sustainable development has not istic and achievable targets. It also warns, however, been smooth. Political commitment to address envi- that institutional development is a gradual process that ronmental issues has been uneven, policymaking has should rely on national characteristics, traditions, and been influenced by conflicting interests, and regula- culture, rather than emulating complex foreign models. tory and institutional frameworks that support the implementation of policies have gone through numer- ous changes. Gradually, the traditional view of environmental issues as "add-ons" has been replaced Robert T. Watson by a proactive approach to environmental manage- Director ment that recognizes the need to influence human and Environment Department institutional behavior and management practices Environmentally and Socially beyond technological requirements. Sustainable Development v Abstract P ublic concern about the impacts of economic Environmental management practices and the activity on the environment and human health underlying regulatory and institutional frameworks in has gradually drawn policymakers' attention OECD countries have gradually evolved from an ad to the need to establish an environmental management hoc, sectoral approach that reacted to emerging framework that can properly address these issues. problems by mitigating the consequences of Actual environmental management practices are environmental damages after the damages occurred determined by a complex set of interactions between towards a proactive and integrated approach that policymaking, regulations, and institutions. The recognizes the need to introduce environmental priority-setting process of policymaking is supported considerations into economic decisions while analyzing by science and economics which help to understand potential environmental impacts across all media. The the relationship between economic activities and their decades-long experience of OECD countries has also environmental impacts, and help to assess the resulted in increasing recognition of the need to comparative risks posed by various environmental influence the actions of microlevel enterprise managers outcomes. In practice, however, imprecise scientific and consumers through incentive policies rather than information leaves ample room for political bargaining mandatory and uniform technological measures. involving value judgments, business interests, and Application of the lessons leamed required changes in equity considerations. A consensus-building process regulatory and institutional systems, a better that incorporates these considerations, therefore, is key understanding of microlevel decisions, and more to setting realistic and achievable environmental flexibility in the enforcement of environmental objectives. regulations. vii Acknowledgments T his report was prepared by Magda Lovei Development (OECD). The authors would like to thank (World Bank) and Charles Weiss, Jr. Amy Brooks for editorial, Sriyani Cumine for admin- (Georgetown School of Foreign Service, Wash- istrative support, and Jim Cantrell for desktop pub- ington, D.C.) under the guidance of Richard lishing.TheworkwassupportedbytheMediterranean Ackermann. The authors are thankful for their contri- Environmental Technical Assistance Program butions to Sarah E. Brayman,Just Heldring, Sue Klein, (METAP), which is financed by the Commission of the Andrew Lean, and Andras Sajo; and for valuable com- European Communities, the European Investment ments to Gordon Hughes, Yasuhide Koga, Michelle Bank (EIB), the United Nations Development Keene, Dan Beardsley, Ruth Bell, Edith Brown-Weiss, Programme (UNDP), and the World Bank. Views and Rebecca Hammer, Frances Irwin, and Sheila Jasanoff, conclusions expressed in this paper are those of the as well as staff of the World Bank's Legal Department authors and should not be attributed to METAP and the Organisation for Economic Co-operation and donors. ix Abbreviations BAT Best Available Technology BATNEEC Best Available Techniques Not Entailing Excessive Cost BCT Best C'onventional Technology BOD Biological Oxygen Demand BPEO Best Practical Environmental Option CAC Command-and-Control CEC Commission for the European Cornmunities CEGB Central Electricity Generating Board CFC Chlorofluorocarbon CO Carbon Monoxide DIN German Industry Standards DOE Department of Enviromnent DRIRE Direction Regionale de l'Industrie, de la Recherche et de Y'Environnement EIA Environmental Impact Assessment EIB European Investment Bank EIS Environmental Impact Statement EMAS Eco-Management and Audit Scheme EU European Union CK Hydrocarbon HMIP Her Majesty's Inspectorate of Pollution IPC Integrated Pollution Control ISO Intemnational Organization for Standardization LCPD Large Combustion Plant Directive MAFF Ministry of Agriculture, Fisheries and Food METAP Mediterranean Environmental Technical Assistance Program MITI Ministry of International Trade and Industry MOE Ministry of Environment NAMS National Air Monitoring Stations NEPP National Environmental Policy Plan NGO Nongovernment Organization NO. Nitrogen Oxides NRA National Rivers Authority xi xii Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience NRC National Research Council OECD Organisation for Economic Co-Operation and Development PM10 Particulate Matter smaller than 10 microns PCA Pollution Control Agreement PSI Pollutant Standards Index RIVM State Institute for Public Health and Environmental Protection of the Netherlands SOx Sulfur Oxides S°2 Sulfur Dioxide SRETIE Service for the Research, Study and Treatment of Environmental Information in France TRI Tixuc Reseases Inventory U.K. United Kingdom UNDP United Nations Development Programme UNEP United Nations Environmental Programme U.S. EPA United States Environmental Protection Agency VDI Association of German Engineers VOC Volatile Organic Compound Executive Summary EF nvironmental management is a complex sys- environmental problems. Historically, the emergence tem of concepts, values, processes, rules, and of public awareness of environmental problems and formal and informal organizations and political commitment to deal with environmental behaviors that translate public preferences and goals protection was often prompted by tragic accidents and into actions in order to influence environmental publications in the mass media. Today, environmental quality. Over the past decades, significant environ- awareness is strong; well-organized, popular "green" mental improvements have taken place in OECD movements exist with influential lobbies in several countries. However, some problems have remained OECD countries; and the programs of traditional unsolved, new ones have emerged, and there has been political parties have been influenced by environ- a constant gap between some national environmental mental concerns. objectives and actual achievements on the ground. In order to increase social welfare, policymakers As environmental protection is attracting are expected to prioritize environmental measures increasing political attention and public support, many relying on tools and mechanisms that rank environ- developing countries are designing and putting into mental problems according to the risks they pose to practice environmental institutions. To assist them in human health and the environment. In practice, carrying out this task, this study analyzes the however, decisions on environmental issues are not experience of several OECD countries to identify simply technical and economic, but also depend on (i) factors that influencie the role and success of value judgments and political and equity considera- environmental management; (ii) possible causes of tions. AdditionaDLy, imprecise scientific information the discrepancy between national environmental and technical knowledge leave significant room for objectives and actual performance; and (iii) impli- political bargaining. Mechanisms for interaction and cations of lessons learnedL and recommendations for consensus building among all affected parties, therefore, countries that are in the process of establishing or become important elements ofenvironmental policymaking. redesigning their environmental management systems. The availability of systematic public information on the environment is a powerful tool to facilitate the Environmental Policymaking interaction of poLicymaking with the general public. However, misinterpreted or misrepresented infor- The experience of OECD countries shows that the key mation may lead to inappropriate policies. The to sound environmental management is the degree of availability of public information, the extent and form importance that the public and its representatives of public participation in policy decisions, and other assign to environmental matters. PubLic pressure plays consensus-building mechanisms depend on traditional a key role in drawing the attention of policymakers to political decision making styles and regulatory xiii xiv Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience approaches. In the United States, where political search for cost-effective solutions to achieving envi- traditions are distrustful of the government, ronmental goals, market-based instruments are gain- environmental policymaking has been open, and has ing increasing acceptance and political support, involved broad public participation. In several supplementing the largely command-and-control- countries in Europe (for example in Germany, France, based regulatory framework. Political preferences, and the United Kingdom), on the other hand, traditional styles of decision making, and country- governments traditionally were given wide latitude in specific factors have influenced the choice of these policymaking which was carried out by a relatively instruments. On the one hand, fiscal instruments have small group without strong formal participation of been widely applied in several European countries, but the public. However, traditional policymaking they were largely resisted in the United States, where mechanisms have been changing, and now there is a strong aversion exists towards new taxes. On the relatively little difference in this respect among OECD other hand, the traditional American support of free countries. markets may have contributed to a larger appeal of Environmental policies of OECD countries have tradable permit schemes to American policymakers. developed in a piecemeal fashion, frequently expressing absolutist goals. In the past, environmental Legal and Regulatory Framework protection zwas viewed and designed as an add-on to existing technological, economic, and administrative systems: Environmental legislation cannot be enforced unless environmental policies focused on "end-of-pipe" it is compatible with existing administrative, technical, solutions to pollution problems; environmental and economic capabilities for implementation and protection was "attached" to the management of enforcement. Hstorically, environmental legislation various environmental sectors and media; and has evolved from sporadic laws and regulations of new institutions were established to deal with economic sectors and environmental media. The environmental issues. Such environmental manage- piecemeal pattern of early environmental legislation ment did not reflect, however, the complex interactions often resulted in overlaps and potential contradictions, among different environmental media and economic reinfoTcing the fragmented policy approach and sectors, and did not express a need to introduce considerations of environmental protection at earlier institutional responsibilities. The emergence of phases of economic and technological planning. Since comprehensive legislation has been interrelated with such an approach resulted in the transfer of problems the development of integrated environmental policy from one sector and environmental medium to another, d regulatory approaches and the establishment of and required increased costs and duplications in separate environmental protection agencies. regulation and implementation, integrated environ- National, regional, and local systems of envi- mental policy approaches rvere gradually introduced in most ronmental administration follow existing patterns OECD countries. of administrative organization and allocation of Despite the theoretical advantages of market- jurisdiction among the different levels of goverrunent. based instruments, command-and-control environ- Though federal states are decentralized by nature, mental policy implementation approaches have different degrees of allocation of power exist. In strong dominated, relying on various versions of strictly federations like Germany, states have only the powers technology-based and largely uniform standards. expressly delegated to them. In looser federations like Command-and-control regulation was suitable to the the United States, the division of jurisdiction between add-on policy approach, and it was attractive to vari- state and federal authorities is not always well defined. ous political interests. Once a command-and-control- The degree of the decentralization of political and based regulatory framework became entrenched, it administrative authorities similarly varies in unitary became extremely resistant to change due to well- states. In centralized systems, administrative functions established constituencies and vested interests. may be concentrated in the national capital as, for Although command-and-control based policy regimes example, in the United Kingdom, or "deconcentrated" have produced significant results, they also often re- in offices which report to the national government but sulted in wasteful use of resources. As policymakers which are located at the regional or county level, as in Executive Summary xv France. In more decentralized systems (for example, Administrative and Institutional Framework the Dutch and Swedish), local and regional authorities carry more functions and responsibilities. Additionally, The admninistrative and institutional framework is an the need to address environmental issues that cut inherent part of the environmental management across political and administrative boundaries has system. It facilitates and supports the environmental led to voluntary coope:ration among political and policymaking process, and ensures the imple- administrative units and the establishment of river mentation and enforcement of policies. Government basin management agencies to coordinate environ- agencies appointed and authorized by elected officials mental regulations and the management of water to carry out these tasks are the main pillars of resources and quality. environmental administration. Separate environmental The role of the judiciary system in environmental protection agencies were established when historically management depends on traditional styles of policymaking developed regulation of enviromnental protection by and enforcement. Courts have not played a major role the ministries and agencies responsible for the in environmental policy implementation and economic activity in that sector became insufficient enforcement in European countries or Japan. By The new environmental protection agencies, however, contrast, in the United States, certain stages of often remained powerless within a well-established institutional framework with entrenched interests and environmental policymaking and implementation are frequently subject to court review, with the result that administrative linkages. Frequent changes in the acts of the legislator, policymaker, regulator, or administrative status of environmental protection agencies interested private parties are carried out with an eye in the OECD countries support the viev that institutions on the likely reaction should a court review later take develop only gradually. place. However, extensive reliance on the judiciary Today, national environmental agencies exist in splae. Hor extensv reice on the OECD countries in the form of a ministry, part of a system for enforcement, which is typical of the adversarial pluralist regulatory style, has often led to ministry, or an independent (or semi-independent) delays and increased costs of implementation. This has agency. The critical factor is the priority given to the environment by the government through the cabinet resulted in the introduclion and increasing use of less or other major cross-sectoral coordinating body, rather confrontational approac:hes in policymaking such as thnhecbetsaufoteevinmtlpre- regulatoy negotition ('rg~neg").than the cabinet status for the environmental protec- regulatory negotiation ("reg-neg"). tion agency which is, therefore, often symbolic. Aes the economies and political systems of Additionally, some environmental protection respon- Western European countries gradually become sibilities often remain in the hands of institutions that integrated in the framework of the European Union were traditionally involved in the management of (EU), a supra-national harmonization and integration certain economic sectors or environmental media. of national environmental policies and legislation is Under a well-functioning coordinating mechanism and taking place. The formulation of EU environmental oversight of environmental policies, such division of policies involves a lengtly political consensus-building responsibilities does not normally create a problem. process influenced by national and sectoral interests. Conflicts of interest may arise, however, if operating EU directives, therefore, often deviate significantly functions are combined with the responsibilities of from the original proposals, reflecting large environmental protection. compromises. Additionally, significant national The relationship between government bureau- variations exist in the effectiveness of implementation. cracies and elected officials is an agent-principal rela- EU environmental policies influence national tionship in which elected officials are trying to ensure environmental policies,, legislation, and management that the bureaucracy follows their policy intentions. practices in many ways; for example, environmental Elected officials, therefore, may restrict the discretion quality standards have been coordinated, the of agencies in setting rules, granting permits, enforc- application of environmental impact assessments has ing and providing exceptions to compliance, and become standard practiice, and the provision of public influencing regulatory style and the relationship environmental information has been widely required. between regulator and regulated entities. In Japan and xvi Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience many European countries, environmental protection * The importance attached to environmental protec- authorities have significant discretion in privately tion in political decision making, and the commit- negotiating with industries and allocating licenses on ment of the government to address environmental a case-by-case basis. In the United States, the discre- problems. These are influenced, in turn, by (i) the tion of the EPA is more limited by Congress and the public's concern aboutenviron-mental problems and adversarial regulatory culture, however, new its access to meaningful information on environmen- approaches such as "reg-neg" and voluntary programs tal issues; and (ii) the existence of mechanisms for have been introduced to allow for increased flexibility public pressure on environmental decisions. and a larger focus on changing behavior at the micro * The capacity to identifyfeasible environmental objec- level. tives through (i) appropriate techniques and mecha- Environmental authorities usually owe their nisms of setting priorities; (ii) cross-sectoral and origin to an amalgamation of pre-existing organi- cross-media coordination of policies; and (iii) con- zations and personnel responsible for the environ- sensus building between regulators, businesses, mental issues of the various environmental media. As and the general public. a result, environmental authorities have typically * The ability of the administrative, legal, and insti- allocated responsibilities and staff along media-specific tutional system to translate environmental objectives lines, and their professional skill mix has not reflected into actions, as determined by the (i) institutional, the optimal ratio of technical and managerial staff. This technical, and human capacity of the administra- organizational and human resource structure has reinforced tive system; (ii) ease and mechanisms of coopera- a piecemeal environmental policy approach, and limited tion among authorities at all administrative levels; cross-sectoral integration. This pattern is changing, (iii) degree to which legislation and regulations however, as increasing efforts are made to integrate consider administrative capacities and facilitate cross-media and cross-sectoral considerations into the policy implementation; (iv) flexibility allowing cost- formulation and implementation of environmental effective responses to environmental regulations; policy through administrative reorganization and and (v) gradual adjustment and development of training, as well as administrative procedures such as institutions to reflect a growing importance environmental impact assessment and integrated assigned to environmental issues. permitting. Based on the experience of OECD countries, Effective environmental management requires environmental management systems in developing scientific and technical knowledge and a capacity to countries could benefit from the following policies: make informed, feasible, and acceptable decisions. Strengthening mechanisms and vehicles of build- OECD countries, therefore, have relied on extensive ing political commitment and public pressure through national and local monitoring networks and research systematic provision and interpretation of public capacity either within the environmental protection information on the environment; and support of agency (as, for example, in the United States) or in environmental organizations and local environ- independent institutions (as, for example, in Germany). mental initiatives Several countries have increased their reliance on Introducing mechanisms and tools that help bal- computer modeling in order to reduce the costs of ance the benefits and costs of environmental monitoring (for example, the Netherlands and measures in order to support policymakers in set- Germany), and refocused their environmental research ting feasible environmental priorities, and avoiding efforts on better enviromnental priority setting (for absolutist, unachievable goals example, the United States). * Creating a framework and mechanism for consensus building among the major stakeholders of environ- Conclusions and Recommendations mental policy issues to ensure the political accept- ability and support of policy objectives The conclusions of this study are that the following * Introducing mechanisms and procedures that facili- key factors influence the performance of enviromnental tate the consideration of complex environmental impacts management: of decisions and actions starting with priority areas Contents xvii * Introducing a balanced mix of direct regulations * Adopting a gradual approach to the development of and incentive-based policy implementation instruments environmental institutions, rather than introducing in order to ensure flexibiity and cost-effectiveness complex foreign institutional and regulatory models. Introduction EF nvironmental management is a process that en, to influence environmental quality. While basic op- tails the (i) recognition of environmental prob- erative norms of environmental management systems lems; (ii) emergence of public awareness and are provided by legislation, formal rules are always political commitment to address these problems; supplemented by informal ones influenced by atti- (iii) formulation of environmental policies; (iv) expres- tudes, customs, and moral traditions. sion of policies in regulations and legislation; and Environmental management may be evaluated (v) implementation and enforcement of policies. from various aspects: (i) the efficacy of the system that reflects both the extent to which environmental issues The Elements of Environmental are addressed in a society depending on the values Management assigned to environmental matters by the public, and the extent to which these values are translated into Bressers and Honigh (1986) describe the framework of political decisions; (ii) the effectiveness that shows how analyzing environmental management by a simple successfully environmental protection goals are three-phase model: in order to achieve something, first achieved; and (iii) the efficiency of environmental man- one should want to achieve it (commitment and goals); agement that indicates how well environmental ob- second, one shouldknov hoin to achieve it (instruments, jectives are achieved using a given amount of human, rules); and third, one should have the power (adminis- technical, institutional, and other resources. trative and institutional framework) to achieve it. Simi- larly, Branes (1991) described the key components of Environmental Management and environmental management the following way: Performance in OECD Countries * Policy that expresses the environmental objectives of a society based on scientific information and Highly polluted urban air, deteriorating water qual- value judgments about conflicting political and eco- ity, and the human health threat of highly toxic sub- nomic interests stances used in industrial and agricultural processes * Law as one of the key tools of policy formulation were the first signs of environmental problems that led and implementation to increasing concern and a need for government in- * Administration that provides a framework for de- tervention in highly industrialized OECD countries. veloping and translating policy objectives into Complex environmental management systems were action. developed over the last decades, resulting in signifi- Environmental management is also a complex sys- cant environmental improvements. Due to the com- tem of concepts, values, processes, rules, and formal plexity of factors influencing the economic, political, and informal organizations and behaviors that trans- and social systems and the quality of environment, late public preferences and goals into actions in order exact cross-country comparison of the success of envi- 1 2 Environmental Management and Institutions in OECD Countries: Lessons from Experience ronmental management systems is difficult. However, cubic meter (,ug/m3) in the early 1970s to 40 gg/m3 in it appears that most countries have made comparable the mid-1980s, ambient particulate standards were still progress in improving several aspects of their environ- only met at about 50 percent of all monitoring stations mental performance during the last decades. by the early 1990s (OECD, 1991). In some prefectures A dramatic decline of atmospheric particulate (Tokyo, Osaka, and Kanagawa), only 19 percent of concentrations took place in most large urban cities, roadside nitrogen oxides (NOr) measurements did not especially in the 1970s. Annual average sulfur diox- exceed standards in the early 1990s, and full compli- ide concentrations also dropped by 45 percent (United ance with NOx air quality standards has never been States) to 60 percent Gapan), and atmospheric lead con- achieved in metropolitan areas (OECD, 1994b). centrations were reduced substantially. The percent- Groundwater quality has been deteriorating in many age of populations served by domestic wastewater areas of Germany (OECD, 1993). In Dutch rivers, typi- treatment increased significantly (for example, 87 per- cal concentrations of phosphorus and nitrogen were cent in the United Kingdom, 86 percent in Germany, two times higher than the national target, and the num- 71 percent in the United States) (OECD, 1996), and pre- ber of violations under the Pollution of Surface Wa- viously polluted waters became available for fishing ters Act was increasing (OECD, 1995b). Pollution and bathing. The elimination of such highly toxic sub- incidents from industry, sewerage, and agriculture are stances as lead, DDT, and asbestos from commercial still common in England, many of these causing se- use has significantly reduced human health risks. vere damage (OECD, 1994c). However, the experience of OECD countries has not been all positive. Despite significant successes, Purpose of this Study several environmental problems have not been solved, while new ones have emerged. The control of diffuse Environmental protection is attracting increasing po- sources that contribute to surface and groundwater litical attention and public support in many develop- pollution generally has not been very successful. In ing countries as well as transition economies. New the United States, for example, phosphorus and sus- environmental legislation is being introduced and pended solid concentrations declined in rivers, but ni- administrative structures are being fundamentally re- trates and salinity often increased as a result of structured to respond to an increasing need for im- agricultural activity and atmospheric depositions. The proved environmental management. In this process, accumulation of toxic substances in the sediments of these countries can reasonably expect to draw from surface water bodies also remained a constant prob- the lessons learned by industrialized countries in the lem. Volatile organic compounds (VOC) and nitrogen design of environmental management systems. oxides (NOx) concentrations have increased in urban Several developing and transition economies are areas in most countries, frequently exceeding national seeking to harmonize their economic and environmen- ambient standards. Traffic-related air pollution and tal regulations with those of the larger intemational the proper disposal of household and industrial waste community. Many also have an obligation - and may pose increasing concerns in many OECD countries. be under international pressure -to harmonize their Additionally, there has been a frequent gap be- regulations with international treaties on biodiversity, tween national environmental quality objectives and climate change, protection of the ozone layer, and the actual performance. This is especially obvious if we transboundary movement of hazardous waste. Trends look beyond aggregate averages. In the United States, towards regional and global harmonization of trade for example, despite the fact that air quality signifi- and markets (for example in the framework of the Eu- cantly improved in the cities, still about 62 million ropean Union and the North American Free Trade people lived in designated non-attainment areas for Agreement), and initiatives to set international stan- one or more criteria pollutants in 1994, and 40 percent dards for environmental management at the company of rivers, 45 percent of lakes, and 33 percent of estuar- level emphasize the need to study and learn from the ies could not support designated uses (OECD, 1996). experience of others. In Japan, where annual average concentrations of air- This paper looks at the practices and experience borne particulates decreased from 60 micrograms per of a number of OECD countries (France, Germany, Ja- Introduction 3 pan, the Netherlands, Sweden, the United Kingdom, management. Rather than analyzing every element and United States) in developing their environmental of a complex set of environmental issues, it focuses on management systems. All these countries are economi- the issue of pollution management. In order to facili- cally well-developed, advanced industrial democra- tate the learning and selection process, the paper seeks cies, affected by a set of common environmental to answer the following questions: problems. Not all of the elements of their environmen- * What factors influence the role and success of envi- tal management systems may be suited, therefore, to ronmental management? the circumstances in developing countries. * W7nat are the reasons for the discrepancy between Studying the evolution of environmental manage- national environmental objectives and actual per- ment in OECD countries may prove to be more useful formance? for developing countries than the analysis of the cur- * I/at are the main lessons learned and what do these rent state of affairs. The paper, therefore, draws heavily imply for countries that intend to establish or improve upon past experience and trends in environmental their own pollution management systems? Chapter 1 Environmental Policymaking P olitical commitment to address environmen- amounted to 15-19 percent (for example, in Alsace, tal issues has evolved gradually in OECD Rhone-Alpes, and Ile de France) in the 1992 regional countries. Historically, tragic accidents such as elections, but they failed to gain representation in the the Minamata and Itai poisoning cases in Japan, the 1993 legislature election (Harrison, 1995). In some lethal London smog and the Torrey Canyon oil tanker cases, "greens" may become coalition partners for non- accident in the United Kingdom, the Love Canal inci- majority parliamentary parties. In Sweden, for ex- dent in the United States, as well as reports and publi- ample, "greens" occasionally hold the balance of cations about environmental problems (for example, political power at national and county levels. European Rachel Carson's Silent Spring in 1964 in the United "greens" also occupy seats in the European Parliament. States, and the Limits to CGrow7th report for the Club of Although "green" parties are often general protest Rome by Meadows et al. in 1972) contributed to the parties with a broader agenda, their role is important public's growing concern about the environment. By in introducing environmental concerns to the political the end of the 1980s, the majority of people surveyed decision-making process. in OECD countries was willing to give priority to the The worldwide rise of popular interest in the en- protection of the enviromnent, even at the risk of curb- vironment has also influenced the agenda of other par- ing economic growth (OECD, 1991). ties across the entire political spectrum. In Japan, for Environmental movements, organizations and example, environmental and antipollution movements parties have introduced envirounental concerns, al- have had a strong impact on local politics. A substan- terative ways of life, and other "green" ideas into the tial "greening" of both major parties took place in the .tenat ays oflieeanmohe,geee United Kingdom during the 1980s. In 1986, for ex- political agenda. In some countries (for example, the United States and United Kingdom), well-organized ample, the Labor Party published its environmental popular "~green" movements exist with active and in proposals that were well received by environmental popuentalar loiesin" mothems (forexample, wit mact and i groups. In 1988, the Conservatives also embraced the fluential lobbies, in others (for example, Germany and concept of sustainable development. Other parties soon Sweden), "green" political parties compete with tradi- followed suit making their own political statements tional parties for seats in the parliament. One of the about environmental protection (Garner, 1996). In the most successful "green" parties in Western Europe, Die United States, environmental issues are part of the pro- Grunen in Germany, captured 7 percent of the votes in grams of both the Democratic and Republican Parties. the 1994 general elections, and more than 10 percent During the history of building their environmental in sub-national elections in several states (Harrison, management, however, several OECD countries have 1995). "Green" parties appear to receive stronger sup- gone through periods when the political leadership port in sub- national than national elections. In France, gave low priority to environmental matters, and in for example, the support of "green" candidates some cases has sought to reverse previous progress in 6 Environmental Management and Institutions in OECD Countries: Lessons from Experience Box I Threats to the environmental protection agenda, and the role of the public in the United States and Japan During the mid- to late- 1970s, when the slowdown in ral resources), came under conservative leadership. economic growth began to overshadow envirormen- Public opposition to cutbacks in environmental ser- tal spending as a political priority, the U.S. Environ- vices and enforcement, again, forced a return to an mental Protection Agency (EPA) faced the possibility approach more supportive of environmental protec- of being merged with the Department of the Interior tion. and hence losing some of its funding and political In Japan in the early 1980s, the minister respon- weight. The Administrator of U.S. EPA realized the sible for environment declared his formal opposition need for favorable and supportive public and political to antipollution measures, which had been adopted in opinion, and "positioned" environmental protection response to public outrage over public health emer- issues in terms that appealed to this support most. U.S. gencies caused by industrial pollution. The Ministry EPA's central mission was revised from the mainte- abandoned previous measures designed to facilitate nance of ecological balances to the protection of hu- public access to compensation for pollution-induced man health. This shift in strategy allowed the U.S. EPA damage. However, pressure from municipal and local to acquire new resources at a time of general budget governments and the public, as well as international austerity. A challenge was also posed to advantes of partners forced the government to reconfirm its com- strong environmental policy in the United States dur- mitment to environmental protection. It also recog- ing the early 1980s, when the U.S. EPA, as well as the nized the potential in the export of environmentally Department of Interior (which is responsible for natu- friendly products and technologies. this area (box 1). In each case, such efforts were the gains from intervention exceed the costs. Focusing thwarted by public pressure. on those measures that satisfy this criterion results in The OECD experience has clearly demonstrated socially desirable outcomes. Policymakers are ex- that the importance ascribed to environmental prob- pected, therefore, to determine acceptable risks by bal- lems in a country and in its government is the most ancing the costs and social benefits of environmental important underpinning of the entire system of envi- protection based on the best available scientific infor- ronmental management. The "bottom line" is whether mation. Risk assessment- the process that estimates the public and business community base their behav- the form, dimension, and characteristics of harm ior on the tacit assumption that the government and caused to human health, the ecology, and quality of the society are serious about environmental protection. life based on scientific evidence, cost-benefit, and sen- Itis not specific organizational or institutional arrange- sitivity analyses -offers useful tools to support ments that determine the success of environmental policymakers in setting priorities by facilitating the management. More important factors are the public comparability of various policy options relying on sci- preference to pursue environmental protection goals, entific evidence and expert judgment (box 2). the reflection of that preference in political commit- In practice, however, imprecise scientific infor- ment, and the predictability and reliability of the mation about the causes, impacts, and costs of envi- government to act according to this commnitment. ronmental damage, uncertainties about the alternatives and costs of corrective actions, and the variance in val- Priority Setting ues that may be assigned to present and future envi- ronmental quality introduce large uncertainties into Policymakers should have a mechanism of prioritiz- cost-benefit analysis. Additionally, the choice of pri- ing environmental problems in order to tackle them in orities inherently blends a set of technical, political, and the most effective way. The remediation of environ- ethical considerations. Hourcade et al. (1992) pointed mental problems generates social and individual ben- out that scientific uncertainty provides "space for ma- efits by avoiding damage to humans, materials, and neuver" in a negotiation process in which vested in- nature. However, remediation is not without public terests may influence decisions based on unproved and/or private costs. Environmental management is scientific hypotheses. Additionally, priority setting has desirable if it increases social welfare, requiring that become increasingly complex, with emerging regional Environmental Policymaking 7 Box 2 The emergence of risk assessment in environmental priority setting in the United States Beginning in the mid-1980s, dissatisfaction with the ad Unfinished Business was sent to the Scientific Ad- hoc development of U.S. environmental policy began to visory Board (SAB) to be evaluated and updated in be heard from the highest levels of the U.S. EPA. Scien- light of more recent scientific data.' Specifically, the tific and public doubt arose over the severity of the risks SAB was asked to examine strategies for reducing posed by the environmental "time bombs" which at- major risks and to recommend improved methodolo- tracted attention earlier, and there was growing concern gies for assessing and comparing risks and risk reduc- about new environmental threats (such as the depletion tion options. (The U.S. EPA had not focused on this of ozone layer, global warming, and the extinction of spe- area of research in the past.) The SAB committee work- cies). "Many people no longer believed that all environ- ing on this assignment was divided into three subcom- mentalproblems were urgently pressing" (Davies, 1995). mittees: Ecology and Welfare, Human Health, and In response to the growing concern of the public Strategic Options. and Congress about the increasing costs of environ- The Board's response was published in the docu- mental protection, the IJ.S. EPA administrator brought ment, Reducing Risk: Setting Priorities and Strategies for together 75 career managers and experts from all parts Environmental Protection (1990). Reducing Risk recom- of the agency in 1986 and 1987 to evaluate the relative mended that the most advanced techniques for assess- risks posed by a number of major environmental prob- ing and comparing risk be utilized to facilitate the choice lems which the agency was assigned to address. By of enviromnental projects and objectives in the U.S. EPA. focusing on environmental risk, U.S. EPA was attempt- The committee suggested that the distinctions among ing to set up a common basis for the discussion of dis- environmental problems at U.S. EPA were not condu- parate issues and for the evaluation of alternative cive to good evaluation of relative risk, nor to choosing environmental policies and tools. the most effective actions to reduce environmental risks. Thirty-one problems were selected to correspond It also found that many of the methods used to mea- to the legislative and programmatic organization of sure the benefits of reducing risk were inappropriate the U.S. EPA. They were grouped into four categories: and inadequate. Finally, it recommended that risk as- human cancer risk, human non-cancer health risk, eco- sessment be used at many levels of decision making and, logical risk, and welfare risk. Comparison focused on in particular, that local governments, which are gener- "residual risks," or those risks that remain after cur- ally responsible for implementing national environmen- rently required controls have been applied. The project tal policies, also incorporate relative risk assessment into was unique in that personnel from all parts of the their strategic planning. agency worked directly on the risk calculations rather Implementation of the recommendations of Reduc- than delegating them to the U.S. EPA Office of Policy ing Risk is moving ahead, although slowly. In 1992, Analysis. Also, the staff was required to assess the the U.S. EPA released a report, Strategies and Frame- problems in a context that went beyond their tradi- workfor the Future, laying out strategies to set priori- tional bureaucratic turf that was defined by program- ties and make policy decisions. These strategies include matic structures and legislated activities. integrating risk analysis into the strategic implemen- The outcome of this work, Unfinished Business: A tation of the agency's statutory mandates, improving ComparativeAssessmentof EnvironmentalProblems,found its science and information base, using economic in- that the agency's priorities corresponded more to pub- centives and encouraging technological innovation, en- lic and congressional perceptions of environmental risk couraging international cooperation, and improving than to the scientific basis on various issues. public outreach programs. and global environmental issues affecting a range of havior the "Tunnel Vision," pointing out the difficul- regions, countries, and country groups with different ties in determining "how clean is clean enough" and economic development, social systems, and prefer- "how safe is safe enough." "Tunnel Vision" leads to ences. requirements to clean up the last 10 percent of pollu- Instead of making difficult trade-offs, tion even if the social benefits would only justify a 90 policymakers are often tempted to choose absolutist percent cleanup. However, the costs of pursuing ab- goals, such as the total protection of human health from solutist goals usually outweigh the benefits. Since so- environmental damage, in expectation of strong pub- cieties can rarely afford such costs, overly ambitious lic support. Breyer (1982) called such bureaucratic be- environmental goals typically remain unfulfilled. 8 Environmental Management and Institutions in OECD Countries: Lessons from Experience In response to public concerns, the intention of the increased use of incineration, resulting in the dete- governments to demonstrate their commitment to solv- rioration of air quality. In yet other cases, environmen- ing emerging environmental problems often resulted tal problems were transferred across geographical in ad hoc approaches and an exclusive focus on the regions. Higher smokestacks to disperse sulfur diox- benefits ignoring compliance costs. In the United States, ide emissions, for example, improved the air quality for example, the Federal Water Pollution Control Act in the immediate area of the pollution source, but trans- of 1972 aimed at banning all discharges of wastes into ferred harmful environmental effects to distant loca- public waters without regard to the receiving water tions. In the United States water quality deterioration capacity, a goal that has proved to be overly ambitious due to agricultural runoff, and soil erosion due to govern- and costly. In certain cases (for example, the Safe Drink- ment-supported agricultural exports have been attrib- ing Water Act), legislation has specifically prohibited uted to the lack of coordination among sector policies the consideration of costs and benefits of alternative (Howe, 1993). regulatory approaches (Luken and Fraas, 1993). The The piecemeal, media-oriented approach to regu- Clean Air Act also mandated ambient air quality stan- lation also turned out to add significantly to produc- dards to protect human health with a considerable tion costs. When regulators imposed stricter standards margin of safety, expressly outruling cost consider- on one medium without giving sufficient attention to ations. their effects on other media, firms responded by add- Pollution control requirements were often set ing multiple, uncoordinated, antipollution devices with faith that technologies existed or would soon be (scrubbers, cooling towers), unnecessarily increasing developed to reduce pollution to zero. Strict emission capital and operating costs. limitations on vehicular emnissions in the United States The experience in OECD countries has clearly (for example, the requirement of 90 percent reduction demonstrated that environmental issues cannot be in VOC, CO and NO, emissions between 1970 and compartmentalized by medium or by sector, encour- 1975-76) could not be met by new car technology, and aging administrators to seek some form of integration. actual reduction was closer to 50 than 90 percent In the Netherlands, for example, the strategic docu- (Breyer, 1982). Although the concept of risk assessment ment entitled To Choose or to Lose, based on a major has been accepted by many policymakers, risk analy- research project by the State Institute for Public Health sis has rarely guided priority setting. After an exten- and Environmental Protection of the Netherlands sive review of regulatory impact analyses, Luken and (RIVM), found in 1989 that significant revisions would Fraas (1993) concluded that "in no case does it appear be needed in the Dutch environmental policy if the that U.S. EPA chose the regulatory alternative that country was to achieve its goal of sustainable devel- maximized net benefits." opment. The RIVM study resulted in the setting of national long-term targets that took into account all Cross-sectoral and Cross-media Integration sectors and cross-media impacts of environmental of Environmental Policy policy, and became in effect the first Dutch national environmental plan (box 3). In the United Kingdom, Historically, environmental policies in OECD countries the Environmental Protection Act of 1990 introduced have developed in a largely piecemeal way, and did Integrated Pollution Control (IPC), requiring the se- not reflect the complex interactions among the vari- lection of Best Practical Environmental Option (BPEO), ous environmental media until the 1970-80s, when it a principle expressing multimedia approach and inte- was discovered that highly acclaimed successes of an- grated pollution management. tipollution measures directed to a single medium, such Integration of environmental policy was formal- as air or water, resulted in the deterioration of another ized in many countries by changing legislation, medium. For example, successful cleanup of water administrative organizations, or administrative proce- through strict controls of end-of-pipe emissions often dures. Environmental legislation has been used to facili- resulted in groundwater contamination from the tate integration by laying out basic definitions and highly toxic wastes resulting from such control. In the procedures applicable to all media. This approach has same way, problems with landfills sometimes led to been most effective when a single law existed for all Environmental Policymaking 9 Box 3 Integrated environmental policy in the Netherlands Several different approaches to cross-media and cross- priorities may be required where the NEP has not sectoral integration of pollution abatement policies proved effective. have been pursued by the Dutch government since the This environmental planning process creates a early 1980s. First, policies were developed for envi- framework of recommended actions thathave emerged ronmental "themes," such as acidification and from structured planning process vetted by experts. eutrophication, in order to analyze the cross-media All parts of the government which are involved in en- routing of various pollutants. Several years later, poli- vironmental issues use this framework as the basis for cies, oriented towards "target groups" of major pol- setting their priorities, but must ultimately respond to luters, such as refineries, were introduced. The current the political concerns and interests of their constituen- planning approach is the culmination of these earlier cies and their overall mandates. attempts for the establishment of integrated environ- The Dutch government is relatively well prepared mental management. to undertake these new environmental planning ac- Currently, priorities for environmental policy in tivities since it has a long history of planning, and has the Netherlands are set through the national environ- been a strong participant in the economy through its mental planning process. The Ministry of Housing, quasi-governmental companies. Physical Planning arLd the Environment releases a Although many of the goals of the Plans are quite National Plan every four years. The first of these, the strict, it has not been too difficult to gain political sup- National Environmental Policy Plan (NEPP), was port for them. A goal of planning is to involve outside adopted in 1989. To complement the National Plans, participants in the process: national funds are allocated Environmental Programs are issued each year to record to encourage environmental planning within the pro- the progress the central government has made in at- vincial and municipal governments, and the business taining environmental objectives of the plans. The ba- community is invited to help develop the plans with sic targets set under the NEPP will be maintained under the intention that individual companies will increase the updated versions of the plan, though new opera- their participation by implementing environmentally tional goals and additional priorities or criteria for friendly practices early on. media. In other cases, administrative (re)organization has industries, and other regulated entities perceive such been used to make officials consider all media when goals and objectives of environmental policies as fea- contemplating an action. Various administrative pro- sible and fair. The consensus among a large range of cedures, such as enviroinmental impact assessment and stakeholders, therefore, affects the ultimate success of integrated permitting, have also facilitated the integra- environmental policies. tion of environmental management by requiring that Consensus-building mechanisms are dependent all impacts of a policy or project be considered in an on the traditional political decision making-style of a integrated manner, regardless of medium or sector (see country.2 In a country whose political traditions are Organizational Structure of Environmental Authorities in distrustful of the government, society may require a chapter 3). relatively open system of decision making in which the public is permitted and encouraged to participate. Consensus Building In the United States, the archetype of such traditions, adversarial procedures are built into the formal policy Environmental policymaking is a highly political pro- formulation. Consultations between government offi- cess. It represents a comprehensive approach to cer- cials and parties are carefully regulated and most dis- tain environmental problems, balancing the goals of cussions are expected to take place in public forums. economic development and environmental protection, Public forums assure that no interested party has spe- and considering distributional and macro-economic cial access to information, and encourage posturing by effects. Most importantly, envirornmental policies must both environmentalists and industry. NGOs and sci- be implemented at the micro level. The acceptance of entists outside the regulatory bureaucracies are inte- and compliance with environmental policies depend gral parts of the system, and regard themselves as on the extent to whic]h lower levels of governments, acting in the public interest as independent checks and 10 Environmental Management and Institutions in OECD Countries: Lessons from Experience counter-weights to the more parochial or politically The two different styles of political decision mak- constrained interests of the regulatory bureaucracies, ing and interest representation are often referred to as and the parties directly affected by a particular deci- corporatist and pluralist. Corporatism is defined as in- sion. However, effective environmental regulation re- stitutionalized consensual policymaking by a small quires both technical information and analysis, much number of strategic actors representing larger parts of of which requires skills and information that are found the population. The interaction between the strategic mainly among people with a vested interest in the actors is consensual, cooperative, and goal oriented. policy outcome. The openness that facilitates public In contrast, pluralism is process oriented and pressure may inhibit the free exchange of such confi- adversarial, characterized by a large number of vol- dential information. Additionally, the fact that every- untary groups of a wide range of interests competing one reserves the right to litigate eliminates any pressure for access to government decision makers and the leg- to forge a consensus. islative process to influence public policy (latch, 1995 In contrast, in a country where a ruling elite is, and Crepaz, 1995). Although it is difficult to define by tradition, given wide latitude and discretion in exact measurements to compare the effectiveness of policymaking, a closed style of decision making may these policy-making styles across countries, such at- be accepted with a relatively small group of interested tempts have been made. Crepaz (1995), for example, parties hammering out a consensus among themselves used statistical analysis to demonstrate thatcorporatist and presenting it to the public as afait accompli. In sev- policymaking (for example, in Germany) results in eral countries in Europe (for example, the United King- lower emissions of traditional air pollutants than plu- dom, France, and Germany) and in Japan, negotiations ralist interest representation (for example, in the United between the environmental agency and regulated en- States). tities before government decision making have re- The Swedish system appears to have achieved a mained largely private. It is considered as part of the middle ground between the above two patterns. Draw- function of an intelligent civil servant to learn the point ing on the long Swedish tradition of "open policy con- of view of those who will be affected by government sensus, openly arrived at," the Swedish government policies, and to represent this viewpoint in the course develops new major policies through a system of royal of internal government discussions. Since these con- commissions, broadly based advisory bodies which sultations are private, participants can be frank, direct, ensure that the basic facts bearing on a policy decision and open, and can, in principle, work out a solution are widely known and that major alternatives are that both works toward government objectives to pro- widely discussed in all parts of the country. Indeed, tect the environment and allows industry to make the the major problem with the commissions has been that necessary adjustments without undue cost or incon- there are too many of them, prompting efforts to re- venience. Mutually agreed policies, then, are handed duce their numbers in order to reduce the burden on over to a politically neutral bureaucracy for straightfor- the citizenry. Special characteristics of the Swedish ward implementation and enforcement, with little or society -its relatively small size and homogeneous na- no judicial review. Consultations also provide industry ture, as well as the strong proactive involvement of with ample notice of the new requirements, so that by technical people in environmental measures -have the time a regulation is published, the great majority of supported the Swedish "model." those affected are frequently already in compliance. This greatly simplifies the problems of enforcement against Public Access to Information and the remaining violators, who are relatively few in num- Participation in Decisions ber. The dosed style of decision making has worked reasonably well, mainly because civil servants are The public has a right to expect that environmental trusted by the public to be skilled and responsible, and policymakers will act according to publicly expressed to behave in a professional manner. Environmental ac- environmental objectives, and government officials tivists, however, have often criticized the lack of trans- will be competent and well trained to implement poli- parency in closed decision making. cies. However, there is a need for a public counter- Environmental Policymaking 11 weight to the many economic and political interests homes was done in the absence of any scientific evi- influencing environmentail decision making through dence for the risk of serious health damage. In fact, some form of pro-environmental pressure based on when such a study was later done, the results were citizen access to the system. negative. One of the means of allowing the public to influ- Among OECD countries, the level of public ac- ence environmental policy is the regular release of sys- cess to environmental information has been tradition- tematic information concerning the environment Hovever, ally uneven. The United States has an open system of such information is only valuable to the general public if it public access to environmental information required is analyzed, interpreted, and presented in a 7vay understand- by the Freedom of Information Act of 1966, which gives able for non-professionals. According to Viscusi (1996), citizens the right to any information in the hands of the public has a tendency to overestimate risks that the federal government, subject only to exceptions for have received substantial media attention even if such commercial secrets and national security. Additionally, risks have low probabilities. Complex and scientifically through individual statutory provisions of sector leg- .islation, industry is also required to disclose certain not fully researched issuies may be misinterpreted or specific types of information, such as the amounts of presented in a simplified and misleading way by the pollution emitted, hazardous substances in use or be- media, causing "environimental crisis" situations that ing stored, and emergency evacuation plans. Under politicians are expected and pressured to solve the Emergency Planning and Community Right to Know promptly. Such situations, as Hourcade et al. (1992) Act of 1986,3 for example, industries must report ma- pointed out, may lead to premature, exaggerated, or jor toxic releases to air, water, and land,4 and provide misdirected policy responses that could irreversibly information on chemicals stored at local industrial fa- determine the future path of certain economic sectors cilities, emergency response procedures, pollution pre- (box 4). The media played a role in heightening public vention and control measures, and land use planning, anxiety and exaggerating the danger of chemical con- insurance, and property transfer issues. Although tamination in the Love Canal incident in New York rough data of the toxic substance releases do not indi- that resulted in the evacuation of nearly 1,000 families cate the relative risks the reported substances impose from the neighborhood of the former chemical plant on human health and ecosystems, the obligation to site. As Wildavsky (1995) showed, moving those that make such information public made polluters more did not have high levels of chemicals measured in their aware and concerned about pollution and put pres- Box 4 Public pressure and policy response to forest dieback in Germany Even though concerns about transboundary pollution catalytic converters. started to emerge worldwide in the 1970s, direct links Hourcade et al (1992) pointed out that the scien- between acid rain and forest deaths were not made tific foundation of the exact causes and mechanism of until the early 1980s when two German scientists sug- forest dieback was not available at the time of govern- gested that such links existed. A crisis evolved during ment decisions. In fact, several alternative scientific 1982-83 in Germany when this information was widely hypotheses existed, each implying different pollution publicized in the media. Public concern increased sud- abatement strategies. If, for example, soil acidity was denly as reflected in the agenda of the "green party" the main cause of forest damage but only above a cer- in the political arena. tain threshold, the abatement of sulfur emissions from To prevent the further exasperation of the crisis, stationary sources would have been sufficient If, how- the government was quick to adopt strict emission ever, a synergy between ozone and the level of soil standards for thermal power plants in 1993, and ve- acidity was responsible without a threshold, the abate- hicles in 1994. The new standards for thermal power ment of ozone precursors from transportation should plants resulted in an emission desulfurization program have been the main policy focus. The government chose with a cost of 12 billion dollars over five years. The a maximalist approach which determined long-term regulation of vehicle emissions was largely aimed at investment decisions in industry and also influenced combating the emissions of nitrogen oxides and the environmental policies of other European coun- volatile organic compounds by requiring the use of tries in the framework of the European Union. 12 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience sure on company management to more systematically to enact comprehensive legal obligations, and some improve enviromnental performance. simply assumed that their existing legislation was suf- Information was closely held in the past, how- ficient to comply with the directives. He also pointed ever, by government officials in many OECD coun- out that in many countries, the provision of informa- tries in Europe, and the public had no right to access tion remained passive, and public participation is still it. An extreme example was the British Official Secrets hampered. Act of 1911 which stated that a public official may not, Several formal procedures may be available for under penalty of prison, divulge information to the the public to influence or participate in environmental public without specific permission to do so. As decision making. However, the role and application Priestman (1996) showed, Britain's statute books have of these procedures vary significantly among countries: accumulated at least 200 separate prohibitions, effec- * Public hearing. The basic device for formal public tive in 1990, on the public's right to information on involvement in environmental decision making is aspects of the environment. As a result, prior to the the public hearing on proposed changes in legisla- Environmental Protection Act of 1990 and the Environ- tion and policy, and on proposed projects that will mental Information Regulations Act of 1992, most infor- affect the environment. In the latter case, the envi- mation held by regulatory agencies about pollution ronmental impact statement plays an important and the state of the enviiromnment was kept secret in role, since it is a comprehensive statement by the Britain (Davis, 1996). In Germany, access to official files promoter of the project of its anticipated environ- mental effects. Public hearings form an important was only allowed if someone's rights or personal free- dom or ppy rapart of environmental decision making and are built into most procedures for policymaking and (Davis, 1996). Even in countries such as France, which project review in the United States. In Germany, started to establish mechanisms for public access to public hearings are frequently held as part of the information relatively early (the principle of confiden- consideration of new policies and projects. Hear- tiality and refusal to provide information was abol- ished in 1978), serious obstacles and limitations have also by the Ministry of the Environment, other parts remained. Environmental organizations, for example, of the government, or individual political parties. can participate in public decisions only if, after at least In the Netherlands, public hearings are not a usual three years of operation, they receive a license from part of the policy-making process, but may be called the Ministry of Environment, and environmental im- under special circumstances by the Parliament, es- pact statements have to be published only after a deci- pecially to review an environmental impact state- sion is taken (Davis, 1996). On the other hand, in ment or a voluntary agreement between a polluter Scandinavian countries (for example, Sweden and Nor- and a government inspector. In the United King- way), participation of various interest groups has been dom, many decisions go through a process known institutionalized in environmental policymaking as "planning appeals," which involve public hear- through advisory boards and committees. ings. Traditionally closed decision-making patterns are * Independent technical advisory committee. Another gradually changing in Europe, largely influenced by device for seeking input from the public - albeit a European Union directives, specifically the directive specialized segment of the public -is the indepen- dent technical advisory committee. The purpose of on Assessment of the Effects of Certain Public and Private suchna committeei T dsreements Projects on the Environment of 1985, and the directive such a committee is to thrash out disagreements Pojets FeonmtheEnvironmen of Acceo I natond the Envirece on the technical aspects of controversial issues, and on The Freedom of Access to Information on the Environ- at the same time to allow time to pass, and give ment of 1990. Many European countries have been tem sand tica temertu aschanc tcol tempers and polltical temperatuires a chance to cool. slow, however, in developing a legislative framework If properly constituted, such a technical advisory and embracing the idea of broad public participation committee should include technical experts repre- in environmental decision making. As Davis (1996) senting all points of view. Its members should be notes, with some exceptions (such as the Netherlands free of undisclosed conflicts of interest. Such com- and Denmark), EU member states have been reluctant mittees are frequently convened in the United Environmental Policymaking 13 States, and to a much lesser extent in Germany, the Friends of the Earth, Greenpeace, and Worldwide Fundfor United Kingdom, and other countries, by such bod- Nature. Within countries, NGOs may form coalitions ies as the National Academy of Sciences. The United such as the Dutch umbrella organization Foundation Kingdom also has a standing Royal Commission for Nature and the Environment and the Green Alliance on Environmental Pollution which considers envi- in the United Kingdom Increasingly, trade organiza- ronmental issues. tions, academnic institutions, unions, and church groups Referendum. The referendum, or popular vote on a are also active on enviromnental issues and want to question or proposed law or policy, has been an be seen as members of the family of environmental important tool in a Sfew countries for securing the NGOs. passage of environmental measures opposed by The role of NGOs varies widely from country to elected officials, and conversely, for enabling country. The NGO community in the United States con- elected officials to "pass the buck" to the voters sists of numerous broadly differentiated, overlapping concerning issues on which they do not wish to take organizations, many with highly professional staff. The a stand. Referenda vary greatly in the extent to tradition of citizen participation in these organizations which they can subslitute for control over law mak- is strong, and large memberships give clout to NGOs ing by the legislators. Referenda are likely to gain who can claim to represent the concerns of a large num- a stronger role in environmental policy formula- ber of people. Most funding for U.S. environmental or- tion in countries that have traditions of such direct ganizations comes from private donations, either democratic mechanisms (box 5). directly through membership contributions or indi- rectly through grants and other monies provided by The Role of Nongovernment Organizations foundations which are, in turn, financed privately. In Japan, where interest groups are generally not By objective and style, four broad types of nongovern- clearly differentiated from political parties, antipollu- ment organizations (NGOs) play a role in the environ- tion groups have managed to become more autono- mental policy formulation in OECD countries: (i) mous, and they have been successful in halting the traditional organizations oriented towards the protec- construction of new power plants and other contro- tion of nature and landscape; (ii) activist organizations versial investments (Enloe, 1975). NGOs, however, do involved in lobbying and community organization; (iii) not have significantly large membership, financial re- technical groups which carry out policy analysis and sources, or legal standing in courts in Japan (OECD, develop environmentally friendly technologies; and 1994b). (iv) radical groups which aim to change lifestyles. En- In Europe, consultations often occur at the initia- vironmental NGOs may be locally or nationally based, tive of the government. Therefore, the first objective or may be branches of multinational NGOs, such as of an outsider who wants to influence governmental Box 5 The use of referendum in environmental decisionmaking The early environmental movements scored some spec- The United States does not utilize national referenda tacular victories through referenda in the 1970s. In as a legislation tool, but some states have institution- Sweden, for example, a referendum rejected the fur- alized popular initiatives and in some westem states ther development of nuclear power. Local referenda it has become a standard policy-making process. There on environmental matters (such as conservation and are cases in which an initiative was ultimately found the siting of incinerators) are specifically authorized unconstitutional, but in retrospect had a decisive im- by Swedish law. In Switzerland, the "Greens" who had pact on legislation, for example, the legislation on seats in the Federal Parliament easily collected the coastal protection and nuclear waste disposal in Cali- 100,000 signatures for the federal referenda on the fomia. In other cases, referenda have set the tone for phaseout of nuclear power. The proposition was nar- later national environmental legislation, for example, rowly defeated (by 53 percent) but a 10-year building the legislation on energy conservation and on nonre- moratorium on nuclear plants received 54 percent of turnable bottles and cans in Michigan and Maine, and the vote. clean air in California. 14 Environmental Management and Institutions in OECD Countries: Lessons from Experience actions, including NGOs concerned with the environ- difficult for NGOs to bring suits against polluters, since ment, is to get inside and become one of those regu- individual plaintiffs face immense pressure to back larly consulted. In England, for example, heritage trusts down, and the legal fees often exceed the capabilities and other local voluntary organizations established to of NGOs. In the United Kingdom, for example, the loser protect landscape, recreational values, and heritage of litigation is required to pay the legal costs of both (often protesting against the government's land use parties. and development plans) have become "converted to NGOs are an important channel for grassroots insiders" who are formally consulted by local plan- public pressure on government. NGOs, with their abil- ning authorities (Davis, 1996). ity to raise public support, can be valuable allies of the The tradition of voluntary philanthropy is much environmental agencies, counterbalancing the influ- weaker in Europe than in the United States, and NGOs ence of sectoral ministries with powerful constituen- are often dependent on the financial support of gov- cies and large budgets. Indeed, environmental policies ernments. In the Netherlands, for example, where and agencies in many countries were established pre- NGOs ae ccisely in response to such popular pressure. NGOs can NGOsare onsltatve prtnrs, heirrol as ofitcal also assist environmental authorities to identify issues counterweight is valued to such an extent that the gov- als asi envionental authoritesto itifu isue eminent~~~ prvdssg.iatspott oeso early and analyze them independently without com- mitment to any particular economic or political inter- NGOs (box 6). In other countries, it is common for the ' ~~~~~est (although the latter is not always true). Their government to provide support to NGOs for work on technical expertse may be equal to or even exceed that a particular project, such as conferences, research of the government. In some cases, grassroots environ- projects, or public education campaigns. In the United mental pressure is augmented by the influence of Kingdom, there has been close collaboration between neighboring countries, important trading partners, or government and specific NGOs on issues such as multilateral negotiations. In this, too, domestic NGOs stratospheric ozone depletion and waste recycling. can be an important link with these sources of exter- Under some statutes, U.S. NGOs can obtain stand- nal pressure, opening lines of communication that ing to bring class action suits in U.S. courts. As a re- channel the external influences into constructive paths. sult, some U.S. NGOs spend more time on litigation This is true despite the fact that their independence, than their European counterparts, which commonly their chosen roles as gadflies, and the tactics they use do not have such rights. In order to use the court sys- in order to mobilize public opinion make them some- tem for environmental causes, NGOs must find indi- what inconvenient associates. viduals who suffered direct harm and are willing to There is often good reason, however, for an arm's- go to court in order to bring legal action. It is generally length relation between the government and NGOs. Box 6 Government-NGO relationships in the Netherlands The Dutch government and public have come to rec- fessionals, creating respect and trust in the relation- ognize the value of the role played by independent, ship. The Foundation for Nature and the Environment, critical NGOs at the vanguard of the environmental for example, an umbrella group with highly profes- movement in (i) identifying environmental problems sional staff, is an important source of policy documents. that government and society have yet to acknowledge; The Dutch goverment subsidizes the core (non- (ii) spurring action on issues that the government may project) budget of some 30-40 environmental NGOs. ignore; and (iii) being a "consultation partner" on en- As a result, only less than half of their budget is de- vironmental issues to balance the influence of economi- cally oriented constituencies represented by the r ministries of industry, agriculture, and energy. provincial and municipal governments subsidize The government regularly consults with the NGO locally based NGOs. community. Industries also seek comments from NGOs Both the government and NGOs insist that gov- regarding their environmental policy and, in turn, seek ernmental support has not infringed on the freedom to gain their support through public relations programs of the NGOs to take positions strongly critical of the and visits. Each side views the other as competent pro- government on specific environmental issues. Environmental Policymaking 15 NGOs are often burdened by their needs for fund-rais- system wasteful; (ii) the need for excessive regulation ing and membership, and the career ambitions of their and overinvolvement of bureaucracy makes it cum- officials that may distort their priorities and tactics, bersome; (iii) it ignores costs; (iv) it encourages rent making them difficult partners for governments. NGOs seeking; and (v) it discourages innovation. These crit- frequently focus only on a limited set of issues for ics have advocated a variety of economic incentive which they are trying to gain political support. As a schemes which are supported by a large body of theo- result, there are often legitimate differences of views retical literature. between the government and NGOs over the priority Economic instruments rely on the market to in- to be given to certain environmental problems. Some duce the attainment of satisfactory environmental qual- NGOs deliberately maintain an adversarial relation- ity. Under economic incentive systems, polluters have ship with the government, dramatizing their opposi- significant control over decisions about how much to tion by civil disobedience, or pressing exaggerated pollute versus how much to abate, based on their claims and showing hysterical reactions to certain en- knowledge of output prices and production costs vironmental problerns, which are altered by policy intervention to reflect the social costs of pollution and other economic activities. Policy Implementation Approaches Firms with relatively low marginal costs of pollution and Instruments abatement will, in principle, reduce emissions beyond the level that would have been required under CAC Environmental policymaking involves two strongly approaches. Polluters facing high control costs, on the interrelated processes: the determination of objectives other hand, will choose to abate less and pay taxes or and the selection of policy implementation instru- prhs olto emt.Tecmeiiemre ments. As Hahn and Stavins (1991) pointed out, how- purchase pollution permits. The competitive market ever, these two processes do not necessarily follow each encourages innovation in pollution abatement tech- other in a distinct order. The choice of instruments fre- nologies and techniques, so that industry, rather than quently influences the distribution of costs, risks, and governent, takes on the task of searching out effec- ' a~~~ive, low-cost methods to attain reduction levels. Pol- benefits, and therefore, the support of various interest ter also encoug to ctin reducing groups and constituencies. The choice of policy instru- ments is as much influenced by a variety of political pollution, as long as it is cost-effective to do so. In and economic interests as the determination of envi- theory, economic incentives promise to deliver the ronmental objectives, same or better level of environmental quality as CAC Aaneninstruments is systems, but with significant savings in cost, gains in Av range of policy implementahon trolCACnto efficiency, and reductions in government involvement available from strictly command-and-control (CAC) to Critics of the market-based policy approach point purely market based (for details, see: Eskeland and out, however, that while economic incenhves have Jimenez, 1991). The basic philosophy of the CAC ap- great theoretical promise, this has not yet been borne proach holds that governments should determine the rules to be followed by individual polluters. These rules and goals will necessarily move the actual policy per- are expressed as explicit orders that control which tech- formance of an economic incentive scheme away from nologies or processes are to be used to attain compli- theoretical ideals. They also point out the need for cer- ance (technology standards), the permissible content ta. policing activities and administrative control. and concentration of emissions discharge (emissions In practice, command-and-control approaches standards), or when and where activities can take place have dominated in OECD countries, relying primarily (permitting and zoning). The requirements of CAC on various versions of strictly technology-based, and schemes are relatively clear-cut, and their results are largely uniform standards. U.S. legislators, for ex- consistent and predictable. ample, have endorsed and supported the notion that Many economists have criticized the command- Best Available Technology (BAT) should be applied by and-control approach, however, as conceptually polluters to curb environmentally harmful emissions. unsound and difficult to administer because (i) gov- BAT requirements have been explicit in some cases and ernment involvement in micro management makes the implicit in others (box 7). Specific abatement technolo- 16 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience Box 7 Illustration of technology requirements in U.S. environmental legislation *"Best system of continuous emission reduction... .ad- source Conservation and Recovery Act) equately demonstrated" (Clean Air Act, section 111) * "Best practicable control technology currently * "Lowest achievable emission rate" (Clean Air Act, available" (Clean Water Act, section 301) section 173) * "Secondary [wastewater] treatment as defined by * "Greatest degree of emission reduction achievable the Administrator" (Clean Water Act, section 301) through application of technology which the Ad- * "Best available technology... .[that is] feasible" ministrator determines will be available. . ." (Clean (Noise Control Act, section 6) Air Act, section 202) * "Best technology ...available" (Safe Drinking Wa- * "Best demonstrated available technology" (Re- ter Act, section 1412). gies were mandated, for example, for all new electric media. The cost element in these policy approaches, generators, while nationally uniform effluent standards however, remained only implicit, leaving significant were set based on BAT requirements for all major wa- room for case-by-case analyses and the discretion of ter pollution sources. In Germany, the Technical Instruc- the regulator. tions on Air Quality Control set BAT requirements and Heavy reliance on direct regulations and technol- emission limits to specific industries for a great num- ogy-based policy approaches has been reasonably ef- ber of pollutants grouped into three categories by tox- fective in achieving environmental improvements, but icity, persistence, bio-accumulation potential, and often resulted in wasteful use of resources. Uniform carcinogencity (OECD, 1993). Dutch policymakers dis- water effluent standards in the United States, for ex- tinguish pollutants by their toxicity and require the ample, have imposed significant financial burden on application of "best technical means" in case of highly toxic substances, and "best practicable means" for other the satesand mncal ities,e ithe conc toxic pollutants, while ambient quality objectives de- into astete treatment faclte ithoutta termine the requirements for controlling other pollut- inoacutheos-fcivesofuhivsmns antsBrinetshe pouicymakers forconsidered nother ponlyt to improve water quality; ignoring regional differences; ants.~ Brts poiyaescnsdrdntol and overemphasizing investments as opposed to main- technical feasibility, but also the cost-effectiveness of compliance when adopting, in the Environmental Pro- tenance. Some analysts (cited by Howe, 1993) estimated tection Act of 1990, the concept of Best Available Tech- the difference between actual and theoretically mini- nology not Entailing Excess Cost (BATNEEC) (box 8) mum air quality control costs four to 14-fold in certain recommended in the Conservative Government's cases in the United States. White Paper on the Environment; and the principle of Regulations have focused excessively on end-of- Best Practical Environmental Option (BPEO), which em- pipe control measures, thus discouraging process phasizes the cost-effectiveness of measures in achiev- changes, the reduction of waste and other preventive ing environmental objectives across all environmental measures, and the invention of altemative pollution Box 8 BATNEEC definitions in the United Kingdom According to theEnvironmentProtectionActof 1990, HMIP sible techniques to the operator of facility. is required to ensure the application of the Best Avail- * Techniques include measures and technologies, and able Techniques Not Entailing Excessive Costs imply that technologies have to be not only in- (BATNEEC) principle. Since the law itself leaves room stalled but also effectively operated. for interpretation, the Department of Environment (DOE) * Not Entailing Excessive Costs principle allows for provided guidance in the definition of BATNEEC: modification of the BAT requirement if its costs are * Best means the most effective (set of) techniques to excessive in relation to their effectiveness in achiev- prevent, minimize, or render hazardous emissions. ing environmental objectives or to the capabilities * Available requires procurable and generally acces- of the industry. Source: Adapted from Slater, 1996. Environmental Policymaking 17 abatement technologies. Additionally, new sources of noticeable change in attitudes towards the use of eco- pollution and more profitable industries have gener- nomic policy instruments has recently taken place in ally been treated differently, distorting economic most OECD countries, recognizing the merits of mar- competition. ket-based instruments as viable policy options. Addi- Frequently, CAC approaches were favored by tionally, current trends towards deregulation in some politicians because they offered predictable results, countries, budgetary shortages, and the demonstration while market-based instruments were rejected due to effects of existing market-based regulatory programs the uncertainties connected to their implementation. are expected to encourage the application of economic Once the command-based policy approach became en- instruments. trenched, it became extremely resistant to change. In the There are differences in the choice of market- United States, for example, water pollution fees have based policy instruments among OECD countries. been rejected because fees were (i) viewed as additional Emission charges and other environmental taxes have taxes; (ii) perceived to provide the "right to pollute;" gained larger acceptance in European countries than (iii) contradictory to the perception that only legisla- in the United States, where a strong resistance exists tive means could answer social needs; and (iv) opposed against new taxes. A comparison of the share of envi- by industries that view fees as an additional financial ronmental tax revenues among total tax revenues in burden (Lovei, 1995). Although states have the legal OECD countries (Morgenstern, 1996) revealed, for ex- power to introduce effluent charges, their reluctance ample, that it was lowest in the United States (3.24 to do so may have also been influenced by their con- percent compared to 4.92 percent in France, 5.49 per- cerns about violating the Constitution's commerce cent in Japan, 6.12 percent in Germany and the Neth- clause that restricts the creation of obstacles to inter- erlands, 6.34 percent in Sweden, and 8.23 percent in state commerce. the United Kingdom). Some industries also resisted change due to con- Emission charges on water effluents have been cerns about the impacts of such change on their profit, applied in several countries, including France, Ger- since it would inevitably result in financial transfers many, and the Netherlands. Experience in the Nether- among industries, creating winners and losers. Hahn lands showed that water pollution fees contributed not and Stavins (1991) showed that private sector lobby- only to the accumulation of revenues, but also created andistswholeavins (1) reshow that private sectord lb- incentives for polluters to reduce emissions (Bressers ists who learned the rules of the game and gained Sig- adShdeom 93.I emn,wtrefun nificant experience in fine-tuning the regulatory and Schuddeboom, 1993). In Germany, water effluent nifcatem,d bexenrienucint ftunichangesthereguat woryd charges contributed to reduced industrial waste dis- system, had been reluctant to allow changes that would chre,vntouhheeelfcagswsstto have elirminated the need for their expertise. charges, even though the level of charges was set too low to achieve desired water objectives through the Environmental groups and NGOs frequently op- incentive effects alone (Brown and Johnson, 1984). The posed economic instruments because they were un- u o d certain that these instruments could achieve the same agement en rare, and ic arroly fcsd envirrunetal mprovment as AC intrumnts. agement has been rare, and typicallv narrowly focused. Thenvrnehntlogy-bal edimppovem has CaCs instruents faIn France, for example, a charge has been levied on The technology-based approach has also been facili- lrepluigisaltosi rprint h tated by the professional profile of enviromnental staff, amountidifingtemissions. amount of acidifying emissions. which was typically dominated by technical expertise. Environental charges have been frequently ap- Existing administrations strongly resisted change due plied in areas of waste disposal and noise abatement. to (i) conceptual disagreements about regulatory ap- Existing environmental charges, however, typically proaches; and (ii) the perceived threat to certain jobs tend to sacrifice charge accuracy for administrative that might become obsolete as the mix of necessary feasibility (Hahn, 1989). The use of indirect environ- skills changes. As a result, the application of market- mental taxes, especially product taxes levied on a nar- based instruments to encourage polluters to weigh row range of commodities, such as fertilizers, economic costs in decisions to abate remained limited. pesticides, and rubber tires, has been more acceptable With increased recognition of both the complex politically in many countries than direct enission taxes. nature of pollution problems and the need for solving Tax differentiation policies have also been successfully environmental problems cost-effectively, however, applied by several countries to promote the use of more 18 Environmental Management and Institutions in OECD Countries: Lessons from Experience Box 9 Increasing role of fiscal instruments in environmental policy in OECD countries A recent OECD survey (OECD, 1995a) found that the * Fuel tax differentiation to promote the use of un- role of environmental taxes has been growing in OECD leaded gasoline, for example, in France, Germany, countries both politically and economically. Another Netherlands, and the United Kingdom trend has been the growing emphasis on the incentive * Vehicle tax differentiation to promote the use of effects of environmental taxes. catalytic converters, for example, in Germany, Aus- The use of product charges and the taxation of trans- tria, Norway, and Finland. port and energy according to environmental impacts are Furthermore, in Denmark, the Netherlands, Nor- increasing in most reviewed countries. Examples are: way, and Sweden, a major restructuring of the tax sys- * Carbon tax that has been recently introduced in tem took place as part of a tax reform aiming to replace Denmark, Finland, the Netherlands, Norway, and traditional taxes with "environmental taxes." During Sweden the Swedish tax reform in 1991, for example, the level * Fertilizer taxes that are levied, for example, in Aus- of general fuel taxes was reduced by 50 percent paral- tria, Finland, Norway, and Sweden lel with the introduction of the CO2 and sulfur taxes in * Taxes on packaging materials and disposable goods order to achieve a substitution effect towards low car- levied, for example, in Belgium, Denmark, Norway, bon and sulfur content fuels, while compensating en- and Sweden ergy users for the new taxes (OECD, 1994a). fuel-efficient and less polluting vehicles, and environ- impact on the timing of pollution abatement invest- mentally less harmful fuels. The increasing role of en- ments. Besides environmental considerations, incen- vironmental taxes requires the adjustment of existing tive policies have often been combined with the tax systems in a revenue-neutral way. Several Euro- promotion of industrial competitiveness, employment, pean countries have reformed their whole tax system and technological progress. Subsidy programs have to introduce environmental considerations (box 9). taken the form of grants, soft loans, or various types of The traditional American support of free markets tax incentives, such as accelerated depreciation, tax may have contributed to a larger appeal of tradable per- reduction, or the allowance of tax deductible funds mit schemes to American policymakers and their con- (Lovei, 1995). Of these forms, tax incentives applied stituencies than to their European counterparts. In the primarily for the purchase of pollution control equip- 1970s, for example, the Clean Air Act allowed firms to ment have been the favored form of subsidies in most trade emission permits internally (with sources at the OECD countries. The bias of such programs towards same plant site) or externally (with other sites). The trading program has proved more cost-effective than endfipe ontrol however, mayuae pn ted ternative pollution abatement measures, and distorted CAC regulations, primarily due to internal trading price signals. Only Germany and Japan have set up activity. The 1990 Amendments to the U.S. Clean Air Act xpaned he ue ofmaretabe pemit to eal special national credit mechanisms directed to envi- Act expanded the use of marketable permits to deal rnetlfnnig(oe,19) ronmental financing (Lovei, 1995). with regional problems of acid rain (SO2 trading pro- Besides economic rationale and political accep- gram). The successful application of this trading pro- gram demonstrated the potential in reducing the costs otance administrative costs and feasibility of certain of~~~~~~~~~~~~ emsinaaeetwe.sc eiin eelf policy implementation instruments are also important. Of emission abatement when such decisions were left to the polluters: the market set the marginal abatement Although direct emission charges create the closest link cost of SO2 at levels several times lower than the ex between the damage caused to human health and the ante estimates of polluting industries, power plants, penalty imposed on polluters, administrative consid- or the U.S. EPA.5 erations often favor indirect taxes on inputs and mate- A number of countries have used various types rials as well as on final products. Input taxes may be of temporary subsidies in an effort to induce polluters to effective if the pollution potential of production inputs make investments needed to bring them into compli- and materials can be easily and uniformly estimated. ance with environmental regulations. The temporary Taxes on final products may influence consumer de- nature of subsidies was believed to have a positive mand when substitutes are available. Environmental Policymaking 19 Although it is likely that environmental policies Notes can be implemented most effectively by a combina- 1. The Scientific Advisory Board (SAB) is a group of tion of various environmental policy instruments un- 60 full-time scientists, engineers, and other experts der an overall policy regime that allows each approach and approximately 250 outside consultants charged to achieve its goals most efficiently, finding the opti- with providing executive advice to the U.S. EPA mal mix of instruments is a task yet to be solved by on scientific issues. policymakers and legislators. Some environmental 2. The traditional political decision making style in a problems are more suitable to be regulated by eco- country influences not only the way environmen- nomic instruments than others. On the one hand, tal policies are made, but also regulatory and en- transboundary and global pollution problems may be forcement mechanisms (see under The Administrative well suited to be tackled by emission trading. On the Control of Environmental Protection Agencies in other hand, some types of pollution, such as the emis- chapter 3). sion of heavy metals and other highly toxic elements 3. AlsoknownasTitle III of theSuperfundAmendments. which are very hard to monitor and measure, are not 4. The list of more than 300 chemicals and chemical very likely candidates for market-based regulation. categories included in the Toxic Releases Inventory Similarly, there are limits to the use of economic in- (TRI) is continuously reviewed by the U.S. EPA. struments for the regulation of non-uniformly mixed 5. Before the passage of Clean Air Act amendments pollutants with known thresholds of health impacts in 1990, estimates of marginal emission costs were or not well understood impacts. As Hahn and Stavins as high as $1,500 per ton. By the end of 1995, the (1991) pointed out, emerging environmental issues are price of allowances traded privately fell to $100. also better candidates for new approaches than already The price of 1995 allowances in the U.S. EPA auc- regulated ones with entrenched interests and constitu- tion administered by the Chicago Board of Trade encies that resist change. ranged from $122 to $144 per ton (Burtraw, 1996). Chapter 2 Legal and Regulatory Framework T he legal and regulatory framework provides legislation of environmental protection develops is. means to implement environmental policies. usually laid down by the constitution.' The constitution The legal framework of environmental man- determines the distribution of political authority and agement, however, includes not only environmental power, and proyides environmental protection legislation but also the broader system of governance principles that may form the basis for the development that determines the distribution of political and of environmental legislation. On the one hand, administrative authorities, as well as regulatory and constitutional rights combined with the right to petition enforcement instruments. Additionally, social norms, the courts on environmental matters can provide a influenced by the country's historical and cultural past means for citizens to gain redress for damages suffered and traditions, are embodied in the way individuals, from particularly serious environmental harm. On the groups, and organizations behave in a society. other hand, it is not clear that a constitutionally Traditional attitudes towards law and law enforce- recognized environmental right would constitute a ment, for example, influence the effectiveness of directly enforceable individual right against the environmental legislation in the implementation of government on enviromnental matters, as courts are environmental policy. Some societies are more rule frequently reluctant to take on policymaking conscious than others, and rules are not always legal responsibilities. Additionally, such an approach is rules; frequently, they are based on customs and moral likely to be less effective and feasible in providing tradition. As a result, several systems of law rightstocitizenstoprotecttheenvironmentthanother (customary, common, or statutory) may exist at the measures, for example, putting public participation same time and the effectiveness of each is influenced mechanisms into administrative processes. by the other. Tradlitionally developed political and Efforts to extend human rights laws to include social norms also endogenously change and adapt in the notion of environmental rights have not been response to social and cultural changes and economic especially fruitful. Attempts in the United States in the development. early 1970s to recognize a federal constitutional right to environmental quality based on a due process were Environmental ILegislation rejected by the courts on the grounds that they did not wish to "be saddled with ultimate responsibility for Environmental legislation should facilitate the deciding what portion of society's resources would be integration of environment and development policies, devoted to environmental quality" (Stewart, 1977). and provide a framework and means for the Efforts to include the right to enviromnent into the implementation and enforcement of environmental European Convention on Human Rights did not succeed, policies. The legal framework within which the either. 21 22 Environmental Management and Institutions in OECD Countries: Lessons from Experience The legal framework of environmental regulation Table I Examples of environmental legislation in evolved from sporadic laws and regulations addressing the United Kingdom environmental issues connected to economic sectors or to various environrmental media (table 1). In each of 1853 Smoke Nuisance Abatement (Metropolis) Act the reviewed countries, legislation dealing with various 1876 Rivers Pollution Prevention Act environmental matters including water, air, and noise 1906 Alkali and Works Regulation Act pollution has been decades or even centuries old. The 1947 Town and Country Planning Act earliest pollution-related laws were nuisance laws that 1955 Rural Water Supplies and Sewage Act protected people and property from unreasonable 1956 Clean Air Act interference from the activities of others. The primary 1958 Litter Act objective of such laws was to regulate the management 1960 Radioactive Substances Act of a given sector rather than consider them as part of 1961 Rivers (Prevention of Pollution) Act an overall framework of environmental protection. 1968 Countryside Act 1969 Creation of the Royal Commission on The dispersion of environmental functions among Environmental Pollution various sectors and media agencies reinforced the 1970 Creation of the Department of Environment piecemeal approach, reassigning environment-related 1973 Water Act authorities and functions to the regulated sector or 1974 Control of Pollution Act media. As a result, the regulation of environmental 1986 Food and Environment Protection Act protection through sectoral legislation was often 1987 Creation of Her Majesty's Inspectorate of incomplete, and the dispersion of environmental 1989 WaterAct regulation among sectors and media at this early stage 1990 Environmental Protection Act may have resulted in overlaps and potential 1991 Water Industry Act contradictions in administrative responsibilities. Such 1993 Radioactive Substances Act a piecemeal approach was also incapable of integrating regulation across sectors and media. Source: OECD, i994b; Gamer, 1996. The success of environmental legislation depends on: Legislators in the United States have frequently * How well environmental legislation reflects envi- imposed burdensome requirements on federal agencies ronmental priorities and their regulated organs that they were incapable of * How compatible environmental legislation is with fulfilling. Portney (1993) showed, for example, that the existing legislation and the general legal system requirement established by the Toxic Substances Control * How compatible it is with the existing administra- Act for separate testing rules to be applicable for each tive and institutional framework chemical was unrealistic and, as a result, the U.S. EPA * How feasible its implementation and enforcement could only issue testing rules for a fraction of chemicals are. in commerce. A discrepancy between the requirements The gap between environmental policy objectives of the law and the capabilities of the administrative and results on the ground often can be traced back to system may stem from the lack of knowledge on the weaknesses in environmental legislation: a piecemeal legislative side of the feasibility of implementation. Such regulatory approach based on ad hoc problems and discrepancies are more likely to occur in the adversarial influenced by short-term political interests leading to regulatory framework of the United States than in the the failure to set clear priorities; the disregard of the European and Japanese practice, where negotiations and capabilities of the executive agencies by the legislators consensus building ensures the implementability of resulting in overly burdensome implementation policies before legislation takes place. requirements; and the failure of legislation to provide the implementing agencies with adequate incentives Distribution of Political and and clearly defined and measurable objectives of Administrative Authority performance leading to power-maximizing behavior and reluctance and resistance to implementation The appropriate level of government to deal with an (Helm, 1993). environmental problem is the one which is most able Legal and Regulatory Framew'ork 23 to define environmental priority problems and find regulations to protect the environment. In the United cost-effective solu tions. Since the effects of many States, states are allowed to enact air quality standards environmental problems are primarily local, the stricter than the federal ones, in Germany they are not. decentralization of certain environmental policy However, the division of regulatory powers among decisions would be justified. Such decentralization government levels may vary by environmental media. would lead to differences in environmental quality In Germany, for example, air quality objectives are across regions due to differences in population determined at the federal level, while water quality densities, the composition of industries, and, objectives at the state level. Additionally, the detailed consequently, marginal abatement costs. Non-uniform distribution of responsibilities among the various environmental regulation across regions may not be government levels may undergo changes even within politically acceptable, however, if it is perceived to the same country. In the United States, for example, hinder commercial and business relationships, or water quality regulation, previously the responsibility contradicts national policies and principles of social of states, was gradually centralized to the federal level equity and fairness., during the 1970s. Additionally, the optimal size of administrative In unitary systems, regional and local jurisdiction over a particular environmental issue also governments are subject to the sovereignty of the depends on the nature of the environmental problem. central government. The division of responsibility for Although most pollution problems are primarily local, formulating, implementing, and enforcing environ- some have larger impacts. In practice, admninistrative mental policy is strongly influenced by general jurisdictions do not always correspond to the attitudes and traditions regarding the centralization environmentally optimal ones. For example, or decentralization of political authority. In a highly watersheds or airsheds may occupy the territories of centralized system like that of France, local activities several political-administrative jurisdictions, are closely controlled by the national government, presenting problems to decentralization. Some although they may be geographically "deconcen- environmental problems may also expand beyond trated" into regions and counties. In a traditionally national borders, solutions to which require decentralized system like the Dutch one, provincial international cooperation. The central government, authorities are allowed substantial leeway to adapt therefore, typically retains an important role in national guidelines to local conditions. In Japan, air environmental policymaking. quality standards (for five typical air pollutants) and The extent of decentralization is also determined maximum tolerable emission amounts for given areas by the political system. Federal countries are are set nationally, however, prefectural and local decentralized by definition, with many functions governments can issue ordinances with more stringent delegated to state level. The constitution determines limits. the distribution of power, delegation of authority, and While environmental policies are typically set the policy responsibilities among various levels of nationally, the implementation and enforcement of governments. In strong federations, states may have policies are usually delegated to lower levels of only those powers expressly delegated to them as, for administrations, or decentralized or deconcentrated example, in Germany. In the United States, the division through representatives of offices of the national of jurisdiction between state and federal authorities is agency. In the federal system of Germany, the states not always well defined and has been at times a source implement federal regulations and handle the of considerable debate and litigation. Once the division permitting, monitoring, and enforcement of federal air of jurisdiction between the federal and state levels has protection policies. The federal government determines been determined, governments on each level function the framework for water management, leaving detailed independently; that is, state governments are legally water quality regulations and responsibility for sovereign regarding the functions assigned to them. implementation and enforcement to the states. In the In general, broad environmental policy is a federal United States, states prepare state implementation matter, although states are sometimes authorized to plans for U.S. EPA review. Once such a plan is impose stricter standards than federal laws and/or approved, the state is responsible for enforcing it, and 24 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience has the authority to grant delays (called "variances") the federal Ministry of the Environment drafts both to polluters within its jurisdiction. Permits for water general and detailed regulations for the disposal of pollution discharge are granted by the states or by the hazardous wastes. State governments, then, assign sites local U.S. EPA offices based on nationally established for dumps and treatment facilities. In the Netherlands, effluent standards for each industry over and above the Ministry of Housing, Spatial Planing and the standards of ambient water quality. In a Environment (VROM) is responsible for the decentralized system like the Swedish one, munici- implementation of legislation. palities have an important role and responsibility in Urban waste management is normally delegated implementing environmental policies based on the to local governments acting under the supervision of historically developed concept of municipal self-rule. the counties or the states in a federal system. In the In the Netherlands, the provinces are responsible for United Kingdom, for example, each county makes up permitting. The provinces are responsible for its own waste disposal plan, while the district (the unit enforcement at large installations, the municipalities of municipal government) handles the actual collection. at smaller ones. In the United Kingdom, where there In Germany, each county prepares a 10-year plan for was a historically strong resistance to set nationwide waste collection, which is submitted to the state for environmental quality objectives (although references approval. Actual collection is carried out by the county to WHO guidelines were used), requirements to or municipality under the supervision of the state comply with EU regulations led to changes in government. In the Netherlands, regulations for the environmental legislation to accommodate statutory collection of urban wastes are drawn up by waste air and water quality objectives. collection boards, on which municipalities, incinerator Hazardous waste management policies are plants, and the National Inspectorate are all typically centralized at the national levels, while represented. The siting of large facilities for the disposal implementation responsibilities vary among countries. of urban wastes is typically subject to public review In France, for example, the national Ministry of the through an environmental impact statement or a Environment has the right to grant monopolies to waste permitting process. This process is generally carried disposal companies, and approve installations for the out by a lower layer of government: the county in the treatment and disposal of hazardous wastes. In the United Kingdom, the district government in Germany, United States, the regulation of hazardous wastes is and the province in the Netherlands. In France, the based on a series of measures aimed to ensure that prefectural authorities must authorize waste companies responsible for waste disposal (or of sites installations, a public inquiry must be held and an EIA of previous waste disposal, even those inherited from prepared before permission is granted. previous owners) pay the very considerable costs of Since national governments delegate various cleanup. Hazardous waste management is overseen responsibilities to lower levels of governments in both by the federal government, however, its authority may federal and unitary states, coordination and be delegated to the state level. For example, the consultation between the various government levels Superfund legislation and the Toxic Substances Control are essential to ensure the commitment and Act retain virtually all program management cooperation of lower government levels. In Germany, responsibilities at the federal level, while the Federal for example, consultation between federal and state Insecticide, Fungicide and Rodenticide Act grants primary authorities over the feasibility of enforcement of enforcement and certification authorities to the states proposed new environmental policies and laws is (but still reserves registration and other program institutionalized in both the civil service and in the functions for the U.S. EPA). A federal Environment Parliament. Federal officials consult with their state Impact Assessment (EIA) is required for the installation counterparts during the formulation of new laws and of large facilities such as incinerators. The EIA is policies, both informally and formally through special prepared, usually through outside consultants, under councils. Both federal and state governments maintain the responsibility of the federal agency that is the laboratories and technical services to assist source of financial support. Most states require a state municipalities with the technical, legal, and scientific EIA if no federal EIA is to be prepared. In Germany, aspects of their responsibilities. In the Netherlands, Legal and Regulatory Framework 25 which has a strong commitment to administrative standards for all sources of pollution, an objective that decentralization, a variety of measures are used to required the transfer of large federal grants to the states ensure that local governments are staffed and trained and local governments to ensure implementation. Such to carry outtheir enforcement responsibilities. National an approach was proven to be very costly and subsidies are offered to local governments to increase inefficient, however, and federal grants were replaced their capabilities for planning and enforcement, and a by State Revolving Funds that required matching funds government fund supports the majority of the costs of from the states and higher cost recovery. The U.S. training programs submitted by municipal and local example demonstrated that local responsibility to governments. Both municipal and provincial recover costs increased the efficiency of public governments are organized into associations which environmental services (Lovei, 1995). Local and represent them int dealings with the national regional governments, therefore, are typically in the best position to provide public environmental services according to local demand, and to set charges for those matters are not unnecessarily diminished. The services based on the local population's willingness to Association of Municipal Governments also maintains pay. In the United Kingdom, private water companies a professional staff which assists municipalities in are given revenue-raising powers for water supply and discharging their environmental and other responsi- sewage treatment services. bilities. In addition, the Netherlands uses the system Environmental boundaries do not always match of environmental covenants to form contracts between administrative boundaries, a fact which may hinder the public and private sectors. environmental management. The most obvious The decentralization of political authority is also mismatch may occur in the management of water influenced by the fiscal system that determines the basins or coastal waters that typically extend over the revenue-generating capacity of local authorities. In territories of several local administrations. There are principle, the decentralization of policymaking should two basic approaches to this problem: voluntary go hand in hand with the decentralization of funding cooperation among existing administrations; or the responsibilities, since the costs of policy imnplemen- establishment of independent river basin authorities. tation are best borne where the benefits are expected. Both of these schemes exist in OECD countries. In the Some central revenue allocation is typically necessary, United States, for example, interstate water comnuis- however, to support regional/local environmental sions have been formed by voluntary agreements policy implementation. Central intervention may be mong states with the approval of the federal necessary, for example, to compensate for the uneven government to manage major river basins, such as that burden imposed across regions by uniform of the Delaware River. In Germany, inter-state corruissions coordinate regulations on major river environmental regulation. The role of central revenue comissions coorite relations on majo rie basins, and control the relations between Germany and allocation varies across reviewed countries. In the multilateral regulatory commissions. Examples of United Kingdom, for example, only a small proportion independent river basin authorities in the countries of local authority income is generated locally, the bulk reviewed are the River Basin Agencies in France, and coming through central government allocations. In authorities like the Tennessee Valley Authority in the Sweden, on the other hand, the majority of United States. In France, the six river basin agencies, environmental investments and recurrent costs are one for each major river basin, have both financial and financed by locally generated revenues (OECD, 1990). techlnical authority and expertise to levy pollution fees While waste management is most typically and water user charges; and use the money to finance financed from local sources, the role of central investment programs to improve water quality and governments is often significant in financing water develop regional water resources. The agencies are run quality management. This may be the consequence of by executive boards and managed by committees uniform water quality and pollution control which consist of representatives of local officials, water requirements that do not meet the objectives and/or users, and water polluters. Despite the otherwise financial capabilities of local governments. In the highly centralized system, the degree of effective local United States, for example, the Federal Water Pollution control in river basin management agencies is Act of 1972 established technology-based national considerable. 26 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience The Role of Courts ambiguities, and review the clarity and propriety of the delegation of administrative authority. They also Under constitutional systems, courts usually have the review the procedures and rationale used by the power to review legislative and administrative authorities in drafting environmental regulations. determinations, whereas in the absence of a Additionally, they and the relevant agencies are active constitution, the role of the courts may be limited. The in enforcement and trying and punishing violators. role of courts differs significantly in the European, One of the attractive features of the U.S. system is its Japanese, and American styles of environmental openness to citizen intervention. Due to the easy access management. to the court system enjoyed by "public interest" groups In Europe and Japan, courts do not play a bringing class action and other suits, the American significant role in environmental enforcement. In most courts exert a critical influence on the system of countries, courts do not have the authority to review environmental management by influencing the propriety or constitutionality of legislation. Even policymaking and enforcement. Virtually every act of when they do have this power, it is rarely used. In legislator, policy maker, regulator, or interested Sweden, for example, the National Franchise Board, private party is carried out with an eye to the likely which makes decisions about environmental permits, reaction should a court review take place, since each has the form and function of an administrative court. stage of environmental policymaking and However, Swedish courts do not review policy or implementation in the United States is in principle legislation. In the Netherlands and the United subject to such actions. The result is a system in which Kingdom, the role of courts is mainly in enforcement the issuance of a regulation is oniy an intermediate step against persistent violators, although judicial review in a prolonged, multi-sided battle to determine the of unreasonable decisions is an increasing trend in the practical effect of the proposed policy or regulation. United Kingdom In France and Germany, citizens may Such a system places a great emphasis on adherence go to court to force the abatement of pollution from to administrative process, precisely drawn criteria, and certain sources. In Germany, citizens can also stop a elaborate methods of analysis, to ensure that policy proposed project if they are or will be directly affected. and administrative decisions will stand up to the As Ormond (1991) points out, the easiest way for . . . envirnmentl grops inGermny toobtai staning udicial review that IS likely to take place. environmental groups in Germany to obtain standing ' Critics of the open, cumbersome, lengthy, court- before administrative courts is to obtain a piece of land dominated system in the United States point to the close to the site of a project and demonstrate damage. waste of time money, and human talent that results In Japan, where a cultural abhorrence for direct conflict f exists, and society is viewed as a series of hierarchical fromenprlongedeltigTion tpalcof ' ~~~~~~~~~~environmental management. These drawbacks of relationships with strong personal allegiances, and respect for authority and general trust in public taitionalepolicymating h n rc in te servants, the public has been typically reluctant to take Unitdntates, aresultinginaserc foriless ' ~~~~~~~~~~~confrontational approaches. Regulatory negotiations direct action against polluting industries, and courts , have been very arely involved n environmenta ("reg-neg' ), for example, have emerged as an have been very rarely involved in environmental alternative to traditional procedures to draft proposed matters. Polite phrases, mild requests and appeals have alterativest traditional roceduresto draft ropse been more typical than demands or political threats o U r n (Enloe, 1975). However, courts have played a a consensus among representatives of the regulator significant role in a number of "landmark" cases in agency and various interest groups. Such consensus- the past that raised public awareness of environmental based rulemaking is expected to result in more hazards, and contributed to the government's implementable policies and reduce litigation. "Reg- commitment to take environmental protection neg" is viewed as a supplement to traditional seriously (box 10). rulemaking regulated by the Administrative Procedures In the United States, courts are deeply involved Act (Pritzker and Dalton, 1990), and it has been in various aspects of environmental regulation. They increasingly used for environmental regulation both review the constitutionality of legislation, interpret its at federal and state levels. Legal and Regulatory Framework 27 Box 10 "Landmark:" environmental court decisions in Japan Four major court decisions have contributed to an by dumping cadmium into water used for the increased awareness of pollution problems, and irrigation of rice fields. influenced national environmental policy in the early * The Chisso Corporation was ordered in 1973, af- 1970s in Japan: ter several years of legal struggle, by the district * The Showa Denko Company was found liable for court of Kyushu island to pay 930 million yen in methyl-mercury poisoning called the "Minamata legal fees and compensation to the victims suffer- disease," and was ordered to pay 270.2 million yen ing from "Minamata" mercury poisoning. in damages to 77 of the victims and their families in Of all the legal cases, the last one had the most 1971. significant impact on the politics of environmental * Six petrochemical companies in Yokkaichi were protection in Japan. The traditional friendly and ordered in 1972 to jointly pay 88.2 million yen to trusting relationship between local citizens and the victims of air pollution causing the so-called businesses was somewhat weakened, and the role of "Yokkaichi asthma."' local public groups and governments grew stronger. * The Mitsui Mining and Smelting Company in the The court rulings in these landmark cases also started Tokyo region was ordered in 1971 to pay 2.3 billion to change the way national government approached yen in compensation for 489 victims of cadmium the relationship of economic development and poisoning, the so-called "Itai-itai disease," caused environmental issues. Source: MEIP, 1994. While solutions are sought to change the The position of Ombudsman was first created in fundamentally adversarial nature of the U.S. civil law countries, in which the rights of concerned environmental regulatory system, changes may be citizens to petition for relief are typically limited, and taking place on the other side of the ocean, as well. As the public has neither sufficient resources nor environmental regulations become more stringent, and information to protect the environment on a regular relations between regulators and regulated become basis. In other countries, such as the United States, more open to public view and thus less frank and members of the legislative branch may act as the congenial, the role of courts in environmental citizen's advocate against governmental abuse. In the management is likely to increase in many countries 1960s, the Ombudsman also appeared in common law where their role has not been strong in the past. In jurisdictions. Europe, court-based remedies for environmental In Sweden, where the office has existed since 1809, damages appear to be on the rise. The French the Ombudsman is required to investigate all Administrative Court, fo:r example, which has long had complaints against officials, including those that come power to review how reasonable the actions of to his attention through the press. Under this system, government officials are, is beginning to get involved even judges are subject to the scrutiny of the in environmental cases. [n the United Kingdom, there Ombudsman and have extended criminal and civil law has been a recent trend for enforcement bodies, for liability for their actions. The Swedish Ombudsman example, the National Rlivers Authority, to seek and may intervene not only in cases of mistakes and obtain large exemplary penalties against polluters. negligence by the administration, but may also be involved in compensation for individuals and may Ombudsman recommend changes in the law. Somewhat similar institutions have also been established in other An Ombudsman is an independent government official Scandinavian countries and in Germany. Ministers are whose function is to ensure that the rights of citizens subject to inspection by the Ombudsman in Norway are not abused by their government. This institution may and Denmark. The Danish Ombudsman may order play an important role in environment protection by competent administrative authorities to start addressing government officials failing to carry out their disciplinary proceedings against civil servants. statutory functions properly. Thus far, however, this There is a very high degree of voluntary potential has been realized only to a very limited extent. observance of the Ombudsman's suggestions, even 28 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience though he lacks administrative authority to annul become increasingly proactive by adopting a stronger regulations or to enforce his authority otherwise. This integration of environmental considerations and is likely to be connected with the fact that the objectives into economic decision making; new correspondencetoandfromtheOmbudsmanissubject principles of greater public involvement and to daily press scrutiny. A free press is thus essential to stakeholder participation; a wider application of the effectiveness of the work of the Ombudsman. economic instruments; and voluntary approaches in environmental policy implementation. Additionally, Supra-national Integration of a shift has taken place towards a larger focus on global Environmental Policies and Legislation in environmental issues. the European Union Interaction between national and EU policymaking and legislation has become more The European Union (EU, formerly referred to as complicated and interdependent. On the one hand, European Community), a regional economic national policies and legislation may serve as a model integration of sovereign states, introduced an for the EU. Environmentally proactive countries often additional layer to national policy-making structures. expect and pressure the Commission to accept their In some respects, policymaking in the EU resembles model or adopt strict regulations to 'level the playing policy formulation in federal states, the Council of field." The United Kingdom, for example, strongly Ministers representing the federal dimension. The main supported the voluntary Eco-Management and Audit objective of the EU is to facilitate a unified market and Scheme (EMAS) that was closer to its own eliminate barriers of economic cooperation and intra- management-oriented auditing scheme than to a union trade. Due to differences in existing national stricter mandatory and technical-oriented version policies, institutional and legal structures, traditions, advocated by Germany. On the other hand, EU policies and economic interests, such supra-national and legislation affect national policies. In some integration, however, presents considerable difficulties northern European countries where extensive regimes n building a consensus and establishing legislation of environmental regulation preceded EU involvement accepted by all members. in regulation, harmonization with the policies and The EU did not have an explicit environmental procedures of the EU has required substantial policy until 1973, when the Directorate General for modifications in otherwise satisfactory policies or Environment was created and the first in a series of procedures. In a few cases (for example, in case of Action Programs for the Environment was established. polcies concerning the transport of hazardous wastes Explicitly, however, enviro-nental protection was not across boundaries), EU rules have threatened to disrupt established as one of the EU's objectives until the carefully elaborated domestic regulatory regimes, and adoption of the Single European Act in 1986. Early have led to extensive negotiations between the EU and environmental policies of the EU were in many ways the affected countries regarding implementation. The similar to those of the early national environmental influence of the Community has also affected the policies: the emphasis was on the production of balance between the government and the Parliament, technical standards (for example, product standards); and between the central and local governments of the adoption of new environmental legislation rather individual countries, since it is the national government than the integration of environmental considerations that must deal directly with the Union participating in into other policies (Haagsma, 1988); and command- the negotiations with the Council of Ministers. and-control instruments dominated. Key players in EU policymaking are the This approach started to change at the end of the Commission, the governments of the member states 1980s when the priority of prevention and the through the Council of Ministers, and the Parliament. integration of environmental protection requirements The Commission itself, with its numerous directorates, to all other EU policies were adopted as guiding may represent varying viewpoints. The Council of principles. TheAct ofPolitical Union (Maastricht Treaty) Ministers makes final decisions based on qualified of 1992 represents a milestone in environmental policy majority vote on most environmental issues.2 Although formulation. Environmental policies of the EU have the role of Parliament was increased by the Maastricht Legal and Regulatory Framework 29 Treaty, it is yet to gain a stronger role in environmental occurs, and temporary alliances are formed to lobby decisionmaking. for or against certain proposals. Large industrial firms The key legal instruments of environmental or groups of firms dominate in this political game, policy of the EU are: while the interests of small enterprises and industries * Directives: The main legal instrument of EU policy. may remain under-represented due to the high costs Once they are approved by the Council of Minis- involved in lobbying. Ikwue and Skea (1996) pointed ters upon proposals from the Commission, their re- out that the competitive position of industries may quirements are binding for member states through influence their resistance to environmental regulations. their transfer to nat*onal legislation. The selection They also noted, for example, that monopolies in power of mneans and instruments used to achieve the re- quiremeans ofd dintrumeties however arhevlefto the r generation can more easily recover the costs of their muirembertes of directives, however, areleftforthe environmental investments through bargaining with member states. * Regulatory Acts: Legal documents which must be authorities, while industries exposed to competitive directly implemented by all Member States. markets have more limited chances to do so. * Recommendations: Non-binding regulations issued As a result of extensive negotiations and by the Commission of the Council. bargaining, initial regulatory proposals often change The EU's enviroinmental policy formulation drastically before they become adopted and, as some affects national economic inteTests and, therefore, analysts point out, often differ significantly from involves extensive bargaining among the member textbook solutions (Leveque, 1996a). It has been also states (box 11). Additionally, several industrial interest noted (Davis, 1996) that the political rhetoric of groups have established mechanisms of direct environmental declarations may not always be networking and lobbying. Inter-industry cooperation reflected in concrete action and EU legislation. A Box I I National interests and consensus building in the EU: The case of the Large Combustion Plant Directive One of the longest andi most controversial regulatory opposition. Acid rain controls were also perceived as processes in the EU has been associated with measures anti-coal measures and, therefore, resisted by the coal designed to address emissions from fossil fuel-fired industry. power stations. The Large Combustion Plant Directive After new members (Spain and Portugal) joined (LCPD) was proposed in 1983, following increasing the EU, significant compromises were introduced to concems about the potential damage caused by acid the original proposal accepting non-uniform emission rain on the decline of forests (box 4). It affected power reduction requirements and multiple implementation stations, petroleum refineries, and larger industrial stages. installations. Germa:n national interests -concern Although Britain's Central Electricity Generating about the German industry's competitiveness due to Board (CEGB) made a significant voluntary gesture in increasing energy production costs following national 1986 committing to the retrofit of several power legislation to restrict emissions- played a key role in stations, the goverment concluded the final phases of EU negotiations without consultations with the the initiative. As Ikwue and Skea (1996) point out, the EG aegotoeiion reductions imy a German industry that failed to prevent the introduction of strictnational regulations, saw the EU envirornental larger commitment than the power industry was polstricynasionalmeansationslesetheEplayingvfiedmn willing to take. However, this commitment was still policy as a means to 'level the playing field." much smaller than the initial proposal. Extensive bargaining followed the initiative within The LCPD was accepted at the Environment the Council of Ministers influenced by strong national Council in 1988. Several years of negotiations resulted interests. The initiative was supported by Germany, in a directive significantly different from the original the Netherlands, and Denmark, and opposed by the proposal; instead of 60 percent reduction of SO2 United Kingdom, Irelamd, Italy, and later, Spain and emission by 1995, average reduction requirements Portugal. The United Kingdom, the largest sulfur amounted to 23 percent by 1993, 42 percent by 1998, dioxide emitter, which was also reluctant to put a and 57 percent by 2003 (Ikwue and Skea, 1996). In significant burden on the power sector before summary, the efforts to export national regulations to the planned privatization, showed the strongest other member states were strongly resisted. 30 Environmental Management and Institutions in OECD Countries: Lessons from Experience discrepancy exists, for example, between objectives and of conflicting interests and a reluctance at the national concrete action in strengthening the participation of levels to more forcefully intervene. The reluctance and public in environmental policy and decision making lack of commitment to seriously increase public where the EU has been following a minimalist approach participation in environmental policy and decision After issuing directives, the Commission follows making are expressed by the fact that only a few up with a formal communication to governments member states implemented national laws and inquiring about the state of policy implementation. regulations to fulfill the requirements of the Freedom of This often leads to an exchange of polite notes that is, Access to Environmental Information Directive (Davis, in effect, a process of negotiation. The negotiations may 1996). Gamer (1996) also found that the performance be quite prolonged, depending on the environmental in implementing and enforcing EU measures by policies of the government in power in the country's member states was influenced by such factors as overall relations with the EU. The ultimate remedy for (i) difficulties in incorporating EU legislation with lack of compliance is a formal complaint, before the existing laws; (ii) complexity of administrative systems; European Court of Justice, against the country. This and (iii) level of consultation with stakeholders. measure, however, is taken only as a last resort. As Gamer (1996) pointed out, one of the biggest Notes obstacles of effective EU environmental policy is the difficulty of enforcement. Individual member states 1. While most modem states have a constitution, Brit- may ignore or delay the implementation of EU ain is an exception. It relies on a mutual acceptance directives, causing uneven performance among of precedent, a set of existing laws, and the distri- - ~~~~~~~~~bution of political power among the Parliament, countries. Italy, for example, is considered as a country gonment,can t ow n the ovrhtme. where~~ enocmn rean cosdrbywa goverunment, and the Crown that evolved over time. where eforcemnt remins cosideraly wea 2. Measures falling in the following areas require (Leveque, 1996b). Implementation is influenced by the unanimos ag in the Counc of M in e extnt o wichthereglaton orrspods o ntioal unanimous agreement in the Counafl of Ministers: extent to which the regulation corresponds to national (i) fiscal provisions; (ii) measures affecting town and interests and enjoys national support. The relatively country planning, land use, and the management lax enforcement of waste management policies in many of water resources; and (iii) measures significantly member countries, for example, reflects the existence affecting a country's energy sector. Chapter 3 Administrative and Institutional Framework he administrative and institutional framework authority of the sector agency to regulate and intervene is an inherent part of the environmental if necessary. Environmental protection was, however, management system. It facilitates and supports subordinated to the primary objectives of sector the environmental policy-making process, and ensures agencies. With increasing govermnent commitment to the implementation and ienforcement of policies. The tackle enviromnental problems more seriously, the self- main pillars of environmental administration are regulating approach became insufficient. government agencies appointed and authorized by In response to the surge of public concern and elected officials to carry out these tasks. The increased media coverage of envirorunental topics, administrative framework also entails a web of formal augmented by the attention enviromnental issues had and informal organizations with established rules, gained in international relations, the appointment of communicational and command patterns, and environmental protection agencies embodied the institutional linkages, such as decision-making commitment of the government to deal with processes, distribution of authority, interactions, and environmental problems. In most countries reviewed patterns of communication with other organizations, for this report, national enviromnental agencies were individuals, and groups (Glase, 1973). established at the end of the 1960s and the early 1970s. In Germany, however, even though the Environmental Evolution of National Environmental Agency was established in 1974 to conduct scientific Protection Agencies research on environmental issues, it was not until 1986 that the Federal Ministry for Environment, Nature Historically, sectoral ministries and government Protection and Nuclear Safety was set up. Environ- agencies were responsible for the regulation and mental agencies were typically established by supervision of economic activities and the impacts of transferring responsibilities from existing govern- such activities on people and the environment. In this mental agencies and combining these responsibilities capacity, sectoral regulatory agencies focused on the with new duties (table 2). mritigation of negative impacts caused by the economic The history of the development of institutions activity they promoted in order to prevent disruptions suggests that most institutions are path dependent, and in the regulated activity. In the United States, for their development is evolutionary rather than example, the dumping of waste into rivers was revolutionary (De Capatini and North, 1994). The regulated from the end of the 19th century to facilitate experience of OECD countries with environmental navigation. Such sectoral self-regulation relied on the management institutions appears to confirm this view. availability of information about the damage; the Setting up a national environmental agency, for knowledge of costs and rneans of mitigation; and the example, has not been sufficient to ensure that 31 32 Environmental Management and Institutions in OECD Countries: Lessons from Experience Table 2 Transfer of regulatory power during the creation of national environmental protection agencies Year environmental Country agency established Agencies from which regulatory power was transferred Germany 1986 Federal Ministry of the Interior; Federal Ministry for Food, Agriculture and Forestry; Other Agencies; Japan 1971 Ministry of Health and Welfare; Ministry of Agriculture, Forestry and Fisheries; Economic Planning Agency; Ministry of International Trade and Industry; Ministry of Transport; Ministry of Construction; Science and Technology Agency; United 1970 Ministry of Housing and Local Government; Kingdom Ministry of Transport; Ministry of Public Buildings and Works; Central Unit on Environmental Pollution (formerly part of the Cabinet Office); United 1970 Department of Interior, Federal Water Quality Administration and the States Office of Research on Effects of Pesticides on Wildlife and Fish; Department of Health, Education and Welfare: Bureau of Water Hygiene, Bureau of Solid Waste Management, National Air Pollution Control Administration, Bureau of Radiological Health and the Office of Pesticides Research; Department of Agriculture: Pesticides Regulation Division; Atomic Energy Commission: Division of Radiation Standards, Interagency Federal Radiation Council. environmental concerns are taken seriously within the of the national agency was also curtailed. For example, government. The newly established environmental only prefectural governors had the right to directly protection agencies have frequently lacked real power enforce certain laws, while in other cases as in the case to oversee the implementation of environmental of aircraft noise regulation, the Environmental Agency policies. There were two main reasons for this: the lack had no authority to interfere. Pollution control efforts of real political comnuitment to implement changes; at this stage, therefore, were developed primarily by and the resistance of existing institutional, legal, and large cities in Japan, with the national government administrative relationships. being neutral or, in some cases, adversarial (box 12). In Japan, for instance, the national government Eventually, public pressure led to a strengthened undertook many of the responsibilities of national environmental management regime. environmental policy with reluctance, while New environmental protection agencies often did continuing to place economic development, especially not fit into the existing pattern of government decision the promotion of industry, ahead of environmental making, and remained powerless in a well entrenched concerns. Political pressure, in the form of disciplining organizational and institutional web. This may explain by the prime minister, often curtailed the agency's the frequent changes in the administrative status of operation (Enloe, 1975). In fact, the Agency's first many environmental protection authorities (box 13). director, who called for a strong stance against Today,theadministrativestatusofthecentralen- pollution and a shift to stronger pollution management, vironmental agency varies in the reviewed countries. was dismnissed by the prime minister and replaced by The cabinet status of a full-blown ministry, for example an administrator who was less confrontational to in Germany and France, gives environmental issues business allies. The legal and administrative authority extra prominence. In the United Kingdom and the Administrative and Institutional Framework 33 Box 12 Bottom-up development of environmental management in Japan Due to its rapid economic growth and industrialization Although these early ordinances were not very during the 1950s and 1960s, Japan suffered from effective in achieving real pollution abatement, mainly serious local environmental problems. A number of due to the lack of emission standards and appropriate citizens' movements were born as popular opinion means of enforcement, they developed into more galvanized around incidents such as mercury and powerful instruments over time. Additionally, local cadmium poisoning of lakes and the sea, and the governments acted -albeit in a piecemeal fashion - occurrence of asthma due to air pollution. Most against the most extreme polluters in drawing up complaints were direcbed at the local government level "Pollution Control Agreements" (PCAs), which had since the majority of the problems were local in nature stricter standards than the national law. and the national government did not have a clearly National legislation followed the evolution of local defined role in reducing pollution. Citizens' initiatives only in the late 1960s and early 1970s. The movements had a large impact on local politics, and first attempt of the national government to address the opposition parties won a number of mayoral and issues raised by local authorities, however, would have gubematorial elections with pollution as an important weakened overall regulation, and was rejected by local platform. Local officials had played an important role governments. It was not until 1970, during the in bringing industry tc their areas and, therefore, felt "Environmental Pollution Diet," that national pollution a certain level of responsibility for regulating pollution. policy caught up with and even surpassed leading local However, local governments were not sure of their policies. National laws were passed, and gave local legal authority to do so imd called for a central response governments the authority to impose stricter to environmental problems. The national govenmment regulations than those stipulated at the national level. reacted by issuing reports that argued that local Local governments continued to take the initiative in governments did not ]have the authority to regulate some areas of pollution management. The government, polluting industries. This response was unsatisfactory for example, responding to pressure from the Ministry to local authorities and the public. of International Trade and Industry, the Ministry of Local governments played a pioneering role in Construction, business groups, and parts of the Liberal environmental regulation. They were the first to enact Democratic Party, dragged its feet on a bill proposed pollution prevention ordinances. Such ordinance was in 1976 requiring EIAs for large-scale projects. introduced, for example, by the Metropolitan Kawasaki City enacted its own program in 1977; Government of Tokyo in 1949, the Osaka Prefecturate Hokkaido Prefecture implemented one in 1978; and, in 1950, and the Kanagawa Prefecturate in 1951. Special by 1980, two more prefectures and one city also pollution control departments were also established, required EIAs through extra-legal guidelines. Netherlands, environment represents part of the re- environmental policies, while a separate environmen- sponsibility of an operating ministry with budgetary tal protection agency carries out their technical imple- and operating responsibilities in housing and physi- mentation. cal planning. In the United States, the main environ- If the environment is a major and uncontested mental authority is the U.S. EPA, an independent concern of the government and the nation, the minister agency reporting directly to the president. The U.S. responsible for environmental matters will have a EPA has many of the characteristics of a cabinet de- strong pro-environmental influence, regardless of partment, and granting cabinet status has been con- whether environment is the whole or only part of his sidered. The significance of such status may be chiefly or her portfolio. In the Netherlands, for example, the symbolic, although it would increase the weight ac- prominence given to environmental protection by corded the agency's views in inter-departmental dis- successive governments ensured that all ministers have cussions. The symbolism of a ministry devoted entirely considered it a major preoccupation. Such interest to the environment is probably most important when developed gradually in the United Kingdom, where the government that previously did not take a strong subsequent secretaries of state have focused on urban pro-environment stance wishes to make a dramatic and policy, local government, and environmental pro- visible change in its policy. This was the case in Ger- tection, respectively. Once, however, the importance many in 1987. In several countries (for example, Swe- of environment was well accepted, ministers have used den and Germany), the MOE is responsible for their regulatory and budgetary power and their 34 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience Box 13 The evolution of environmental protection authority in France Popular pressure for environmental improvements from 1974 until 1977, it was attached to Quality of Life; was modest in the early 1970s in France compared to in 1978, a Ministry of the Environment was established other OECD countries and, as a result, environment along the lines of the Ministry of the Environment in was not given a high political priority. Nevertheless, the United Kingdom; in 1981, the Ministry of the the president of the Republic set up a Ministry of the Environment recovered the environmental depart- Protection of Nature and the Environment in 1971 on ments it had lost earlier and regained its autonomy; in his own personal initiative. This action was a great 1983, a Secretary of State for Environment in the office surprise to many within the government. of the prime minister was created with responsibility A full cadre of staff was not available to the for the environment and quality of life; in 1986, its environmental authority in the early days of the new responsibilities were delegated to the Ministries of ministry, and numerous changes followed its Infrastructure, Housing, Land Management, and establishment, reflecting the govermnent's efforts to Transportation. Later, a secretary of state charged with come to terms with the cross-disciplinary and cross- the environment was re-established in 1988 in the sectoral nature of environmental management. The prime minister's office, and upgraded to the status of government also sought to deal with the fact that a deputy minister in 1990. In 1989, responsibility for coherent system to manage environmental issues technological risk and natural disasters was transferred involved taking authority away from parts of the to this secretary from an ephemeral secretary of state government that are well established and organized that has also been at the level of the prime minister. An along sectoral lines. Even in cases where EnvironmentalMinistrywasfinallysetupagaininl991. responsibilities were not transferred to the environ- Throughout the 1970s and 1980s, the environ- mental agency, the agency was expected to coordinate mental administration gradually took on the functions with and influence parts of the government that had needed to properly manage environmental policy. It greater expertise, political weight, and financial also became more rationally organized and connected resources than those available to environ-mental to the rest of the government. Over the years, the protection. increasing political importance of environmental issues Over the next decade and a half, the French has been reflected in the increased personal influence environmental ministry was reorganized on numerous of the minister or other chief official responsible for occasions: in 1974, it was attached to Cultural Affairs; envirornment within the government. influence at the cabinet table to induce compliance with Fisheries and Food, National Rivers Authority, and environmental policies by polluters affected by these others) until recently. In Germany, the Ministry for broader areas of jurisdiction. Agriculture retained control over pesticides and Typically, the national agency responsible for landscape issues, together with the Ministry of Health, environmental policy has primary responsibility for the which has a role regulating hazardous chemicals. In regulation of air and water pollution, public and the Netherlands, the protection of nature belongs to hazardous waste disposal, noise, and, in many cases, the Ministry of Agriculture, and water quality nuclear safety and the protection of nature. However, management is assigned to the Ministry of Traffic and many environmental issues cut across the man- Transport, traditionally responsible for water dates of several ministries and agencies (box 14). management. Water quality regulation is a typical area Additionally, the nature of the most serious where historically developed and strong water environmental problems and the type of institutions management authorities dominate, often preventing traditionally involved in the regulation of certain new environmental protection agencies from gaining economic sectors (frequently those that are the main full control. Conflicts of interest may arise, however, contributors to environmental problems) influence the when regulatory and operating functions in the same distribution of primary environmental protection sector are combined. This used to be the case, for functions. In the United Kingdom, for example, example, in the British Water Authorities until 1989, environmental protection authority remained when the National Rivers Authority (NRA) was dispersed among a number of regulatory bodies established, separating water quality management (Department of Environment, Ministry of Agriculture, from the regulation of water use; and it is still an issue Administrative and Institutional Framework 35 Box 14 Distribution of environmental protection responsibilities among government agencies in Sweden * Ministry of Agriculture: Agriculture, fisheries, food * Ministry of Health and Social Affairs: Environmental control, game preservation, bio-fuels health issues * Ministry of Defense: Environmental protection at * Ministry of Industry and Cmmerce: Energy prices; envi- military sites, measurements of atmospheric radio- ronrental support to business, forestry, and mining activity * Ministry of Labor. Occupational safety including in- * Ministry of Environmnent: General environmental door environment policies * Ministry of Public Administration: Green labeling, * Ministry of Finance: Environmental taxation and en- environmental consumer issues vironmental accounting * Ministry of Transport and Communication: Environ- * Ministry of Foreign Affairs: International environ- mental impacts of transport, traffic planning, me- mental negotiations, environmental aspects of for- teorological, hydrological, geotechnical, and eign politics and development assistance oceanographical surveys. Source: Kahn, 1996. in the Netherlands affecting the protection of nature between the extent of agency compliance and the cost in agricultural reclamation efforts. of assuring it. As a result, compliance of the agencies with the intention of elected officials is rarely perfect. Administrative Conh-ol of Even with all the relevant environmental Environmental Protection Agencies objectives and an adequate legal framework in place, the realization of policy objectives may be vulnerable The relationship of elected officials and the toimplementationdisruptionsandpoororganizational administration is a principal-agent relationship in design. Government agencies designated to implement which the principals (elected officials) have to ensure environmental policies may lack economic incentives that the agents (appointed administrative bureaucracy) to operate effectively. Bureaucratic behavior may also carry out their policy intentions. Elected officials, lead to budget maximization rather than efficient therefore, determine administrative procedures that regulation. In the United States, for example, restrict the discretion of agencies in their decision organizational failures of the executive agencies have making and actions, and establish a mechanism of frequently contributed to their relatively weak monitoring, rewarding, and punishing the agencies performance, lagging behind the legislative effort. depending on their compliance. As McCubbins et al. Between U.S. EPA headquarters, its regional offices, (1987) pointed out, elected officials are trying to create and state agencies, for example, the distribution of a decision-making environment in the appointed responsibilities has been blurred, causing friction, agencies that reflects the political circumstances and ineffectiveness, and lengthy procedures (Beal, 1978). consensus of various interests. As a result of The U.S. EPA also deviated sometimes from the fragmented policymaking and the existence of intended policies of Congress. Under the Superfund conflicting interests and constituencies, agencies regulation, for example, the agency's ad hoc analysis practically must be responsible to not one but several of individual sites disregarded the safety standards principals, which may influence the agency in different developed under other regulations, and allowed for directinc s. Additionatich influenceetherag e sts a dlend the consideration of factors that were not intended by directions. Additionally, political interests and thleiaivbrn.ConadRun(18)fr constituencies change over time, altering political exle,sreferatoha surey a subittee of choices and decisions. If such changes are not reflected House Committee on Energy and Commerce that in the decision making of the agencies, mismatches will found the U.S. EPA's monitoring of hazardous waste occur between the intention of elected officials and the dump sites "inaccurate, incomplete, and unreliable." operation of agencies. Monitoring and intervention in As a result, as Florio (1986) pointed out, the U.S. the operation of agencies require significant resources. Congress had lost its confidence that the U.S. EPA Elected officials, therefore, have to make a trade-off would exercise its authority in the way intended, and 36 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience assumed the role of regulator by making detailed BATNEEC and BPEO principles (see Policy technical rules and regulations on several occasions,' Implementation Approaches and Instruments in chapter 1). curtailing the U.S. EPA's playing field. Inspectors are requested to assess not only the physical The discretion of implementing agencies in setting conditions of the plant, but also the quality of operation rules and regulations, granting permits, enforcing, and and management including such areas as training, providing exceptions and extensions of the deadlines procedures and instructions, and auditable for compliance depends on the administrative style of environmental management systems (Slater, 1996). regulation (see under Consensus Building in chapter 1). Guidance notes, issued by the Department of In Japan, "voluntary agreements" are the results of a Environment, however, provide only limited help with very slow negotiation process between environmental the interpretation of BATNEEC and BPEO principles inspectors and polluters that relies on persuasion, trust to introduce consistency in licensing. Suggestions have and traditional administrative guidance (box 15). The been made, therefore, to introduce cost-benefit agreements are made public, and it is up to the considerations in a more consistent manner (Helm, inspectors to ensure that they are carried out. 1993). Even in countries with a long tradition of The public may become part of or witness of detailed laws, regulations, and enforcement such as negotiations, however, the majority of cases are Germany, administrative bargaining has been unavailable to citizens and citizen groups (OECD, accepted, recognizing that coercive power and legal 1994b). Public pressure, as well as traditional respect requirements were insufficient and ineffective to for agreements play an important role in ensuring ensure the achievement of required environmental compliance which, therefore, is very strong. In the quality (Hucke, 1978). United Kingdom, Her Majesty's Inspectorate of By contrast, the discretion of the U.S. EPA has Pollution (HMIP) enjoys significant discretion in been traditionally curtailed by Congress to ensure that licensing on a case-by-case basis, applying the the regulators are not co-opted by those they are to Box I "Gyoseishido" or administrtive guidance, and pollution control agreements in Japan Formal laws and regulations are not always the most PCAs were used, for example, in Osaka City to important means of achieving policy goals in Japan. reduce severe atmospheric sulfur dioxide (SO2) Administrative guidance-negotiations between the pollution by the use of lower-sulfur fuels in local regulator and regulated entities prior to establishing factories. Similar agreements were implemented in regulations-and pollution control agreements often Yokohama city in the 1970s to address pollution from play a significant role. small and medium-size factories, and in Kitakyushu Yokohama was the first area to require new city to implement pollution prevention measures. In industry moving into the city to sign Pollution Control Agreements (PCAs) as part of their land sale persuadingbusinesses to cooperate, local governments often use incentives such as low-interest loans and tax agreements. At the time, the city had no legal authority reductions in exchange for timely complance with over pollution matters and, thus, these agreements government requirements and guidelines. One of the were outside the law. Yokohama was able to do this without fear of competition from other cities because mainadas of thismadintrative tool of urban land had become scarce and local governments persuasion has been the immediate action following were able to make demands on the industries that the agreement as opposed to lengthy legislation and wanted to move into their jurisdictions. Kanagawa implementation. In fact, it has been often used as Prefecture took the process a step further by adding a precedent before the introduction of regulation. permit system for new polluting factories to its Even though members of the national government ordinance in the 1960s. Tokyo soon followed suit, argued that PCAs were not legally binding, the expanding PCAs to existing industries, as did many national government had no jurisdiction over them other urban areas throughout the country. However, since the agreements were essentially "extra-legal' and the number of agreements that a local government "private" (that is, between the community as repre- could negotiate was limited, and they thus covered sented by the local government and the individual only a small number of large firms. industry). Source: Mori, 1993. Administrative and Institutional Framework 37 regulate. Private negotiations have been also Discussions between polluters and environ- constrained by the adversarial culture and mistrust of mental authorities are never perfectly harmonious. On government authorities. The U.S. practice is often the contrary, the affected parties come to the referred to as the enforced compliance model as opposed negotiating table not solely out of devotion to the to the negotiated compliance model. The enforced environment, but also out of fear that failure to negotiate compliance model relies on enforcement mechanisms will result in measures that may impose stricter such as fines, penalties, and cease and desist orders. requirements than those concluded by negotiations. In Hunter and Waterman (1992) point out that the fact, the threat of using the typical mechanisms and tools wide range of enforcement mechanisms from strict of the enforced compliance model should be employed in administrative orders to comments and warning the negotiated compliance model as a bargaining chip. letters, in fact, allows flexibility even in the enforced However, the more open a regulatory system is to compliance model.2 The adversarial regulatory style, discretion, the less firm is the long-term commitment however, resulted in a large administrative burden and regulators make, and the less predictable and credible serious backlogs in compliance, leading to a search for their decisions may become. The lack of predictability new approaches, such as "reg-neg" (see under The Role in environmental regulation increases the cost of of Courts in chapter 2) and voluntary programs (box 16): compliance, the risk of moral hazard, and reduces Negotiations, however, are carried out in incentives for long-term environmental investments. structured and formal way, and their ultimate outcome Furthermore, frequently changing requirements (Consent Decrees or Compliance Agreements) often still increase the risk of unnecessary investments. Some has the character of an out-of-court settlement, which analysts (Vogel, 1986) point out, however, that systems can be enforced by courts in response to citizens' with limited agency discretion may also undermine the complaints even without further intervention by predictability of management if regulations are inspectors. In some states, special programs (as, for excessively strict and enforcement becomes arbitrary. example, the Sonoma Green Business program in The main objective of environmental manage- California) have been designed to change the ment and regulation is to improve environmental fundamentally adversarial relationship among quality by altering the behavior of various private and regulatory agencies and businesses (Stiles, 1996). public bodies. Inevitably, there is pressure on the Box 16 Experimenting with voluntary environmental regulation in the United States In 1991, the U.S. EPA initiated the 33/50 program tory surveillance by demonstrating commitment which introduced a new concept to the agency's to be environmentally conscious; regulatory approach that traditionally focused on end- * They target market segments that are willing to of-pipe control, and created an adversarial relationship pay for environmentally friendly images and prod- with the regulated industries. The 33/50 program is ucts; and built on the voluntary prevention of toxic chemical * They support tighter standards to make entry to releases by industries participating in the program, and the market more difficult. on the availability of public information in the Toxics Public awareness through the availability of data Releases Inventory (TRI) under the Emergency Planning about toxic releases, and information about the and Community Right to Know Act of 1986. Unlike other participants and their pledges in the 33/50 program regulatory approaches that involved costly and timely are key to the success of "voluntary regulation". As litigation, the 33/50 program facilitates cooperation Arora and Cason showed, large emitters that probably between the regulatory agency and industries. As a have the highest potential for reduction are most likely result, industries gained more flexibility in reducing to participate in the program; and firms in emissions than under command-based regulations. unconcentrated industries are more motivated to What makes industries and firms voluntarily participate than firms who dominate the market. reduce their emissions beyond the required minimum? Voluntary programs are viable options to supplement Arora and Cason (1995) have pointed out several traditional environmental regulations by reducing possible explanations: enforcement cost and increasing flexibility for industries They try to minimize public scrutiny and regula- to reduce their emissions the most effective way. 38 Environmental Management and Institutions in OECD Countries: Lessons from Experience implementing agency for looser regulation which may and Japan, for example, adopted the Responsible Care come from the regulated entities or from govermnent codes for health, safety, and environment management agencies operating in the regulated sector. Such pres- practices to ensure an ongoing improvement in sure, however, can be greatly reduced if a consensus company performance. In Germany, several voluntary is reached early in the policy-making process (see un- agreements have been put into place between der Consensus Building in chapter 1). Additionally, the industries and the administration. Additionally, in the separation of enforcement functions and an arm's- framework of the Duales System Deutschland GmbH, a length relationship between elected authorities and the group of 40 firms, largely packaging companies, agency that carries out enforcement may be desirable pledged to ensure the return of primary packaging to ensure that once regulations are set, political con- material for recycling (OECD, 1993). The British siderations do not interfere with enforcement. The Standard 7750, designed to improve the enviro=nental policy-making body, however, should have the author- performance of companies, followed quality ity and responsibility to ensure that the quality objec- management standards BS 5750 and BS 7750. A tives are maintained during the enforcement process. standardization of corporate environmental In the Netherlands, for example, the enforcement func- management approaches is taking place by tion fulfilled by environmental inspectorates is sepa- establishing ISO 14000, a voluntary program prepared rated from the licensing function. Additionally, an by the International Organization for Standardization environmental police force with special courts and (box 17). Such new voluntary approaches that target prosecutorsoverseestheenforcementofenvironmental changes at the micro level are likely to gain an laws. In the United Kingdom, a semi-independent envi- increasing role in supplementing traditional regulation, ronmental authority was established to ensure that the largely due to the cost saving they offer. implementation and enforcement of policy are kept free Several countries have introduced eco-labeling of political interference. In the literature, private enforce- systems, for example the German Blue Environment ment has also been suggested as a viable alternative to Angel label, using life-cycle assessment to evaluate the public agencies (Cohen and Rubin, 1985). So far, such a full environmental impacts of a product, process, or mechanism has not been introduced in practice. activity. Eco-labeling systems, set by governments or At the micro level, compliance with environmen- firms, attempt to solve the information asymmetry and tal regulations and the identification and implemen- uncertainty that prevents consumers from assessing tation of effective solutions to pollution problems the environmental friendliness of products. Eco- require a change in corporate management philoso- labeling systems can be effective if consumers are phy and practices affecting not only production pro- environmentally conscious and willing to pay higher cesses and product design, but also such areas as prices for "environmentally friendly" products. Such financial and cost accounting, and capital budgeting. systems, however, require a significant infrastructure A concerted effort of operational, financial, and mar- of consulting services with analytical capabilities, and keting management, therefore, is necessary to improve widely accepted standard methodologies. environmental performance and compliance with regulations, and allow commercial competitiveness at Organizational Structure of Environmental the same time. Only recently have countries turned to Authorities incentives and regulatory measures that focus on changing behavior at the micro level (see also Policy National al potection agnes Implementation Approaches and Instruments in chapter 1). trdita allocate ronsibii ang lineso Several countries introduced systems to provide medium specificity. The strong medium and subject guidelines and a framework for environmentally orientation was the consequence of the way responsible management practices. These systems environmental agencies were set up, but it was also incorporate environmental management in a broader reinforced by the piecemeal fashion of environmental initiative to ensure high quality in all management regulation that tended to reassign responsibilities along areas, or build on previously developed quality these lines. In the United States, for example, some management standards. Chemical manufacturers' environmental legislation was passed in the 1970s, associations in the United States, the United Kingdom, mainly in response to the problems that seemed most Administrative and Institutional Framework 39 Box 17 ISO 14000-Voluntary compliance program, new corporate management approach, and inventive marketing tool The ISO 14000 series of standards under development certification as a marketing expense, while posing by the International Organization for Standardization relatively high compliance costs to small and medium (ISO) is a structured approach to corporate enterprises. There are also doubts about the environmental management designed to improve applicability and impacts of ISO 14000 on developing compliance with national environmental regulations countries where environmental regulations are and legislation. ISO 14000 includes, inter alia, sporadic, enforcementis weak, industrialmanagement standards for carrying out environmental audits; performance is often poor, domestic markets do not setting policies and performance targets; preparing and require good enviromnental performance, and local implementing environmental action plans; carrying capabilities are inadequate to administer the system. out environmental labeling; and monitoring and In general, there are several conditions for an reporting performance. environmental management tool such as ISO 14000 to ISO 14000 may become a useful tool for drawing be feasible and effective in a country: company managers' attention to the environmental * Environmental regulations should be in place to aspects of business; incorporating environmental provide guidelines for performance; considerations into planning, operations, and * The enforcement of environmental regulations marketing; and identifying and evaluating alternative should be perceived as a real threat of punishment solutions to solving environmental problems. It does for violators; not, however, replace the need for environmental * Environmental regulations should allow flexibil- regulations and enforcement. Instead, it provides a tool ity in compliance; for better compliance through improved management, * Corporate management should be responsive to and could be used to introduce a certain degree of the requirements of environmental regulations and flexibility in the environmental regulatory system, capable of translating them into an effective cor- allowing for various measures to reach compliance. porate management responses; Although the program is voluntary, the ISO 14000 * Customers should be concemed about environ- is expected to become an international standard for mental problems, and be willing to reward envi- environmental management. Certain concerns exist, ronmentally responsible corporate behavior; and therefore, that it may become a bureaucratic approach * A well-developed administrative system should be to environmental management standards favoring in place to address auditing, registration, labeling, large international corporations, which can easily certification, registration, and supervision of the absorb the administrative costs of ISO 14000 program. pressing, creating a separate regulatory regime for each as a pragmatic solution to the problems, it led to medium or subject within the agency. Seventy to 80 difficulties later on as it was discovered that pollution percent of the U.S. EPA's budget has comprised non- was simply being transferred from one medium to discretionary funds allocated to programs under another, rather than being reduced in the aggregate. specific pieces of legislation, and each program has The need for environmental authorities to show been responsible primarily for implementing specific quick victories to maintain public and political support laws. The administrative structure of the U.S. EPA also thwarted reorganization. The early attempts in the directly reflected this ad hoc pattemn of development United States, for example, to (re)organize the U.S. EPA Each program was responsible primarily for along functional lines were seen as requiring a large implementing a specific law that had been passed in effort and long time horizon. The requirement to response to public and political pressure over a assimilate various units brought in from other agencies particular environmental problem. Some of the seemed too burdensome in addition to difficulties in regulatory practices of these programs were not organizing and retraining staff to focus on consistent, even when pollutants were controlled in environmental issues, even within their more familiar the same way in different programs. As a result, the subject of expertise. Inherited divisions continued to agency was able to adjust programs and create new seek support from their traditional allies outside the initiatives only incrementally. Although this was seen agency, and new functional units simply added to the 40 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience many conflicting objectives that the agency was expected to meet, further delaying attempts to establish Box i1 Administrative changes support integrated management. ~integrated pollution management in the integrated management. Uie igo The gradual development of integrated United Kingdom environmental policymaking has required changes in Traditionally, British pollution management and the administrative structure and procedures to support institutions have developed in a fragmented manner mechanisms of stronger cross-sectoral and cross- focusing on specific substances and/or environ- medium integration. In the United Kingdom, for mental media. As a result, a range of inspectorates example, caeithawere established to deal with emissions from exml, chnev nteamnsrtv tutr industry. The Alkali Inspectorate was originally helped in overcoming the drawbacks of traditionally fndedtin 186 to ctrol hdoloriciacid founded In 1863 to control hydrochloric acid fragmented environ-mental policymaking (box 18). In emissions from alkali manufacturers. In a network the U.S. EPA, teams were formed of technical and of inspectorates including Inspectorates of Waste, managerial staff from different parts of the agency Radioactive Substances, Water Quality and a range (called "clusters") to focus on problems related to of organizations operated by local authorities, the specific sources (for example, petroleum refining), Alkali Inspectorate (re-named in 1982 to Industrial pollutants (for example, lead), environmental resources Pollution Inspectorate) became the most general air (for example, groundwater), or other logical grouping pollution inspectorate. Due to the fragmented and ofactivties(foexampl, specialneesomedia- and substance-specific nature of permitting of activities (for example, special needs of small anvnpcig nutisotnhdt pl o comuites. heclstr ae ssgnd hetakso and inspecting, industries often had to apply for communities). The clusters are assigned the tasks of multiple permits. integrating the implementation of existing regulations The institutional structure of British pollution and activities. In some cases, the clusters have the management has changed gradually to reflect a authority to review and sign off on new regulations. growing acceptance of the need for integration. In This is part of an overall attempt to coordinate the 1987, Her Majesty's Inspectorate for Pollution agency's regulations and other activities in a manner (HMIP) was established with the amalgamation of that addresses the cross-medium impacts of various separate pollution inspectorates to facilitate multi- types of pollution. In the Netherlands, the Ministry of medium approach and integrated pollution the Environment has created two sets of teams: one management. The Environmental Protection Act of 1990 strengthened the HMIP by increasing its organized around clusters of issues (acidification, powers. chemical hazards) and the other around target groups Additionally, the National Rivers Authority (refineries, farmers, builders). Each staff member must (NRA) was established in 1989, separating the participate in a team in addition to his or her medium- regulatory functions responsible for water use and based responsibility. The cross-channels of water quality. This measure was expected to communication and responsibility fostered by these eliminate potential conflicts of interests and to teams give the ministry the character of a matrix improve water quality management. Further organization, enhancing integration at the policy level. integration took place in 1996 with the establishment of a new Environmental Protection Agency The Seihniomtlahrtcombining the HMIP, NRA, and waste regulation organized by sector rather than by medium since very authorities. early in its history, an approach supported by extensive cross-medium training of technical staff. After a few years of experience working closely with colleagues * Environmental Impact Assessments (EIAs) provide an trained in other environmental media, staff were analytic framework to be followed by policymakers generally capable of taking responsibility for all the and project promoters during the planning of a environmental impacts of a proposed installation, and policy or project, thus facilitating integration both of approaching new issues from a broad, cross-medium across different environmental media and various perspective, consulting with experts on especially economic sectors. EIA procedures have been a cen- difficult technical problems. terpiece of environmental policy in the United Additionally, administrative procedures have States, France, and Germany for more than a de- been introduced that can facilitate an integration of cade, and have recently been required by a Euro- environmental policy implementation: pean Union directive. Many point out that a proper Administrative and Institutional Frameuwork 41 EIA can save project developers both time and * Geographical or regional approach defines the sources money. British Gas, for example, has saved over 30 and effects of a problem and determines what needs million pounds over 10 years by preparing full as- to be done about them. It may be used on a nation- sessments before seeking authorization for projects, wide scale through national planning, or may deal thus enabling applications to be considered more specifically with particular ecological resources or quickly. EIAs can also contribute to the improve- with areas that are major sources or recipients of ment of the overall plianning of a project, so that pollution, such as the Great Lakes of the United direct economic benefits can be increased. States and Canada, and the North Sea of Europe. Integrated permitting ensures the consideration of River basin management (for example, in France) all releases from a manufacturing process or facil- also belongs to this category (see also under Distri- ity. Polluters can obtain either a single permit for bution of Political and Administrative Authority in all emissions or submit applications for all permits chapter 2). at the same location. In the United Kingdom, for example, Her Majesty's Inspectorate of Pollution Human Capacity of Environmental (HMIP) was recently reorganized to implement Management "one-stop" permitting by granting all pollution permits at a single location. Even though the In- In general, environmental policymaking is a complex spectorate still consists of medium-oriented inspec- task that requires a mix of political, economic, and legal tors, interaction between the inspectors has opened skills on the one hand, and scientific and engineering up possibilities for integration and cross-consider- skills on the other. Policy implementation also requires ation of pollution problems in various media. In political skills to facilitate consultations between those Sweden, a system of integrated permitting has been responsible for drafting regulations and those in effect since 1969. In thlis system, larger plants re- responsible for enforcing them. The type of required ceive their multi-media permits from the National scientific and engineering skills depends on the nature Licensing Board, smaller ones from the State of the environmental problems. In the Netherlands, for County Administration (Kahn, 1996). As Stiles the wherenter proble Nethe, the (1996) pointed out, integrated permitting inFrance example, where water problems dominate, the government requires large numbers of hydrologists (box 19) dates back to the Napoleonic era. In the United States, integrated permitting has only been introduced by some innovative states. In Minne- Box 19 Integrated permitting in France sota, for example, the Environmental Coordination Environmental permitting is handled by DRIRE Procedures Act allows industries to submit one mas- (Direction Regionale de l'Industrie, de la Recherche ter application for permnits, and multi-media inspec- et de l'Environnement) at the regional level in tions have been introduced. Stiles (1996) pointed France. Typical environmental permits may be out that such inspections increased management's lengthy documents with four main parts: understanding of environmental problems and * Description of permitted facility and opera- multi-media environmental issues. tions; * Substance- or pollutant-oriented approach for the regu- * General environmental requirements; lation of hazardous chermicals and toxic substances is * Specific requirements; and another alternative to medium-based regulation. It is * Sanctions for non-compliance. frequently used for substances that are of concern Each facility receives one comprehensive multi- because of their effect on workers' health or on spe- media environmental permit that addresses cross- cific receptors (e.g., humans, soil). Toxic substances medium effects and covers such areas as (i) air cifc rcepor (eg.,hum-n, sil) Toicsubtanes pollution; (ii) water pollution; (iii) waste are controlled or banned. regardless of the media in pollution; (ii) wate pollution; (v) wse t management; (iv) noise and vibration; (v) security; which they occur. This approach, however, is com- (vi) building design; (vii) emergency measures; and plicated by the vast number of harmful substances (viii) training requirements. Such permits reduce that need to be controlled. A solution to this problem potential duplication in administrative efforts in the may be to divide the range of substances into more facilities, as well as the environmental authorities. general categories, and to develop regulations by cat- Source: Stiles, 1996. egory rather than for individual substances. 42 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience and civil engineers. Germany, where land use creates members were not experienced with the adversarial significant problems, employs large numbers of postures necessary to win lawsuits over contested architects and construction engineers. regulations or to hunt down lawbreakers aggressively. Historically, the professional and skill mix of At the time, it was important to gain public and political environmental protection authorities did not typically support by quick victories in the litigation of particular reflect an optimal ratio of technical and managerial issues that were typically specific to a particular staff. The majority of personnel was trained in a single After several years of operation economics still medium, such as water, air, or wastes as a consequence r afte sely a m o operato teconmic si of the historical development of agencies which were remaionm l agmino pat Eofeth skill rixso set p aongthe ine ofenvionmnta meda. any environmental agencies in most European countries. set up along the lines of environmental media. Many This could be one of the reasons behind the strong of the technical personnel were more familiar with and relance on technology-based command-and-control committed to sector- or medium-related issues in approaches to policy implementation. A shift in skifl general than environmental issues. In Japan, for mix may be expected as the aggregate cost of meeting example, the agency was created by filling key environmental standards rises and the interest in using positions with staff transferred from ministries whose economic incentives increases. The role of generalists interests often contradicted environmental objectives: may similarly increase as integrated pollution staff was transferred, for example, from the Ministry management gains larger prominence. The staffing of International Trade and Industry (MITI) to handle patterns of the environmental agencies of the countries airandwaterpollution;fromtheMinistryofTransport in this study vary also according to the major to deal with motor vehicle pollution; and from the environmental problems confronting the country; the Ministry of Agriculture to manage soil pollution and degree to which the agencies are responsible for agricultural chemicals. As the Japanese government operating and enforcement functions; and the extent became aware of the seriousness of environmental to which they rely on in-house technical skills as problems and their economic impacts, the patterns of opposed to skills contracted from the outside. selecting staff members changed. Key positions were The division of labor among different levels of filled, for example, with staff from ministries such as government is influenced by the geographic the Ministry of Health and Welfare. concentration or dispersion of the major environmental Staffing patterns and habits have often led to problems facing the country. Local administrative persistent difficulties in re-orienting environmental capabilities for environmental work changed policies along lines. The staff of British significantly over the past 20 to 25 years. As policiesalongintegrated lines.ThestaffofBenvironmental conditions deteriorated and problems regulatory bodies, for example, did not change after became more urgent in the 1970s, the number of local the Department of the Environment was established government staff devoted to environmental work in 1970, and environmental regulations continued to increased. New units were set up to deal with pollution, be written by largely technically and scientifically especially in project planning and development. Over trained personnel. During the first years of its time, the larger units were broken down into operation, most of the U.S. EPA's staff also consisted specialized units and departments. Many local of scientists and engineers drawn from other federal governments set up their own environmental research bureaucracies. They were often accustomed to working and testing departments. Even today, as new concerns in large departments, far from public scrutiny, and come to the forefront, local governments continue to brought with them the concepts, attitudes, and skills set up special units to deal with them. Local research organizations, for example, are studying localized that had been useful in their former agencies. The environmental issues and nature conservation. Some group that was transferred from the Department of local governments are in the process of setting up units Agriculture to deal with pesticides, for example, had to address global environmental issues. formerly focused on promoting agricultural productivity, without much consideration of human Technical Background health and environmental impacts. Early environmental laws had focused on planning, grant Environmental management cannot be carried out administration, and technical assistance, and staff effectively unless it is underpinned by a reliable and Administrative and Institutional Framework 43 effective technical and research base. Additionally, set up to maintain the monitoring network established environmental management organizations have to be in collaboration between the MOE and local seen as reasonable and well informed by public and authorities. In "Danger Zones" (highly polluted industry alike. As Helm (1993) points out, however, industrial areas), a network of stations are installed by despite the considerable monitoring capabilities of the government that has the power to order polluters environmental protection agencies, regulators are often to switch to less polluting fuels (Bennett, 1991). In forced to rely on information provided by the regulated Germany, two ambient monitoring networks exist, a entities that may lead to "regulatory capture": the more comprehensive network operated by the states, strategic use of informration by the regulated to and a second, smaller one operated by the Federal influence regulatory outcome. The most basic Environment Agency.3 The main responsibility for environmental service, environmental monitoring, as monitoring lies with the states. In the United States, well as research including such fields as toxicology, the monitoring network of states is also supplemented epidemiology, biology, analytical chemistry, and by a national network (box 20). hydrology, should yield information that supports Monitoring, however, is often dispersed among policymaking, implementation, and enforcement. They government agencies reflecting the distribution of should not be used, however, as a substitutes for action, policy and implementation responsibilities. In France, or as a cover for inaction. for example, water quality is monitored by the Ministry The command-and-control type environmental of Navigation for big rivers, the Ministry of Agriculture management systems of the reviewed OECD countries and Infrastructure depending on the use of water, the rely heavily on permitting and licensing based on French Institute for Ocean Research for saltwater, and zoning regulations and emission standards, and an the Ministry of Environment for groundwater. extensive network of monitoring stations. Government Cooperation among government agencies to reduce monitoring is usually supplemented by a system by overlaps or utilize existing technical facilities takes which individual polluters monitor their own activities place; for example, the MOE in France subcontracts its and are, in turn, monitored from time to time by official groundwater monitoring tasks to the Bureau for inspectors. Additionally, health monitoring is carried Research on Minerals. out by environmental and public health authorities. Several of the MOEs maintain their own This entire system is sapported by a network of monitoring and research personnel and technical basis, laboratories and technical services, and basic and or affiliated research institutes. In the Netherlands, for applied research. The sLubjects of research and the example, the major technical resource on environment scientific and engineering disciplines involved usually is a government laboratory, the National Institute for include hydrological studies of the movement of Public Health and Environmental Protection (RIVM). groundwater and of oceanographic currents, RIVM is responsible for monitoring, as well as limnological studies of the chemical structure of lakes, environmental research. It operates the air quality meteorological studies of wind and rainfall patterns, monitoring network both for the direct monitoring of ecological studies of forests, taxonomic studies of ambient quality and the surveillance of the self- biological species which serve as indicators of the monitoring systems of individual polluters. RIVM health of ecosystems and of the levels of pollution they scientists built the model which served as the basis for bear, to name just a few. the strategic decisions underlying a major re-casting Environmental monitoring is often delegated to of Dutch environmental policy. Other branches of the sub-national level in OECD countries. In Japan, for RIVM do research, inter alia, on methodologies for example, the nationwide network of monitoring environmental monitoring and systems for minimizing stations, largely responsible for monitoring back- waste and environmental disruption, including "clean" ground conditions and gathering basic information, is technologies. The U.S. EPA carries out a major supplemented by local monitoring of air pollution, environmental research program with an annual conducted under the responsibility of mayors and budget of several hundred million dollars, covering managers at the prefectural and local levels (OECD, all aspects of the environment: pollution detection; the 1994b). In France, a number of associations have been fate and transport of pollutants; remedial technology; 44 Environmental Management and Institutions in OECD Countries: Lessons from Experience Box 20 Development of air pollution monitoring system in the United States The development of the National Air Sampling states hindered the comparability of monitoring data Network started in the United States in the 1950s. The and the need for a reliable monitoring network was master plan adopted in 1956 provided for monitoring recognized. This led to the establishment of National of all the major population centers. Equipment and Air Monitoring Stations (NAMS). supplies were provided by the Public Health Service, The Pollutant Standards Index (PSI) provides U.S. while sampling was carried out by the local health EPA with a uniform system of measuring pollution departments. Samples were analyzed for PM, organics, levels for the major air pollutants regulated under the nitrates, sulfates, lead, beryllium, nickel, chromium, Clean Air Act. Index figures for five major pollutants vanadium, and other metals and substances. enable the public to assess the quality of air in a Development of the monitoring system took place particular location. PSI converts the measured by the introduction in 1961 of the continuous pollutant concentration in a community's air to a monitoring program designed to automatically number on a scale of 0 to 500, the standards measure ambient concentrations of CO, SO2' NOX and corresponding to 100 on the scale. The intervals on the total oxidants, and total HCs. Gradually, the need to PSI scale relate to the potential health effects of the daily process, analyze, and disseminate large amounts of concentration of each of the pollutants measured. The data led to the development of SAROAD, an automated PSI places emphasis on acute health impacts occurring data storage and retrieval system. over short periods of time rather than chronic impacts Additionally, local and state agencies have occurring over longer periods. The limitations of PSI established their own monitoring programs directed assessment are connected with the existence of other to support enforcement primarily by sampling factorsthatthesystemdoesnotconsider.Theseinclude pollutants for which U.S. EPA has issued criteria the size of population exposed; the effects and nature documents (PM, SO2, NO,, CO, oxidants, HCs). of dispersion; the representativeness of the sample; However, differences in equipment and the lack of other than human health damages; and the interaction standardized quality assurance and control in various of various pollutants. development and demonstration of innovative air and water pollution, climatic change, and technology; pollution prevention; and economics and hazardous and nuclear wastes. These laboratories health. In France, the Service for the Research, Study operate as independent agencies and their clients can and Treatment of Environmental Information include a number of departments or other public or (SRETIE), an agency under the MOE, coordinates and private bodies. administers consulting and research. In Germany, the Integrated research, for example, research that major in-house technicalresourcsarethefocuses on so-called clean technologies, can facilitate major in-house technical resources are the Federal teitgaino niomna oiy la Environmental Agency and its equivalents at the state technolgies edchrmful pacts oneth technologies reduce harmful impacts on the level, which provide technical advice to government environment through reduced pollution and waste policymakers and legislators. minimization and are carried out in all reviewed Many of the government agencies rely on private countries. The ministries of environment of several or semi-public independent research institutes to carry countries, including France, the United Kingdom, and out specific tasks. In Germany, the technical inputs to the Netherlands, include staff units responsible for standard setting are provided by private entities: the promoting the development and adoption of such Technical Inspection Associations, the Association of approaches. A comprehensive research program was German Engineers (VDI), and the German Institute of introduced in Germany to assess the complex impacts Standardization (DIN). The VDI produces guidelines and costs of environmental management, and similar change in research orientation has been initiated in the for emission limits which are frequently incorporated Unie Statese (oxt21). by reference into legislation, a practice which in effect delegates value judgments regarding acceptable levels Notes of risk to a committee composed entirely of engineers. In the United Kingdom, the major technical resources 1. For example, under the re-authorization of Resource are based at government laboratories specializing in Conservation and Recovery Act. Administrative and Institutional Framework 45 Box 21 Changing approach to environmental research in the United States Research at U.S. EPA has traditionally focused on the agency reevaluate its environmental and health fulfilling the agency's immediate regulatory needs, research programs. This led to a major new "core namely to protect air and water quality; control research" approach instituted in 1989 for building the pesticides and toxic substances; ensure the safe agency's information base in four key areas: ecological disposal of solid and hazardous wastes; and clean up risk assessment; health risk assessment; risk reduction; abandoned hazardous waste sites. The Scientific and exploratory grants and research centers. Advisory Board (SAB) has played an important role In 1995, the Congress directed the U.S. EPA to in a number of U.S. EPA initiatives, encouraging the commission an independent National Research agency to take a broad and prescriptive approach to Council (NRC) for assessment of its research and peer doing environmental research in order to meet its review. The NRC was supportive of the agency's effort overall mandates. According to the board, the U.S. EPA to revamp its research operations to increase the role should be more than just a regulatory agency, and of long-term fundamental and anticipatory research should take on more of the role of a science agency. If programs (increasing budget allocation from 30 to 50 the U.S. EPA were to expand its research capabilities, percent). Some concern was expressed, however, the board has observed, it would be better able to stating that the scientific and regulatory needs of identify the United States' environmental problems regional offices should not be compromised by the new and possible solutions rather than simply reacting to direction of research, and suggestions were made to priorities set by the Congress. improve scientific interactions between regulatory In the late 1980s, the board also recommended that offices and the research staff. 2. According to Hunter and Waterman (1992), over 3. Although states are responsible for monitoring, basic 60 different enforcement techniques have been ap- requirements concerning the size and density of moni- plied by the U.S. EPA during 1980-88 to implement toring networks, pollutants to be measured, moni- the Clean Water Act. toring equipment, and the types of analysis required are established at the federal level (Bennett, 1991). Chapter 4 Conclusions and Recommendations: Effectiveness of Environmental Management B ased on the experience of the OECD countries The Gap between Policy Objectives and reviewed, the key factors influencing the Performance performance of environmental management in a country are: Environmental management is a process that includes * The importance of environmental protection in the recognition of environmenrtal problems, formu- political decision making and commitment of gov- lation of policies, selection of policy implementation emnment to address environmental problems, as in- instruments, transformation of policies into laws and fluenced by (i) the public's concern about the regulations, and implementation and enforcement of environmentandaccess;toreliableinformationand these laws and regulations. Weaknesses in the environmental management process and in the (ii) the existence of vehicles for public pressure on administrative and institutional structure have environmental decisions such as "green" parties, traditional political parties, NGOs, and community frequently led to discrepancies between goals and reality when: groups; a The lack of consensus among major stakeholders a Capacity to identify and set feasible environmental during the policymaking-process led to resistance objectives through (i) appropriate techniques of de- and reluctance in implementation. fining priorities; (ii) cross-sectoral and cross- e Unrealistic policy objectives resulted in mnisallocation medium coordination of policies; and (iii) consen- of resources and failures in implementation. sus building between regulators, businesses, and * The failure to coordinate environmental policies the general public; across economic sectors and environmental media * Ability of the administrative, legal, and institutional resulted in duplications in regulation and resource system to translate environmental objectives into allocation, often transferring environmental prob- actions: (i) institutional., technical, and human ca- lems from one medium to another. pacity of the administrative structure; (ii) ease and * The excessive reliance on command-and-control ap- mechanisms of cooperation among authorities at proaches and uniform standards in policy imple- s U ~~~~~~~mentation restricted the flexibility in finding all administrative levels; (iii) degree to which leg- cost-tivesalterntie slutito ie envi- islaton an reglatiots cnside admnistrtive cost-effective alternative solutions to achieve envi- islation and regulations idemintative ronmental objectives, making compliance prohibi- capacities and facilitate policy irnplementation; (iv) tvl xesv o oeplues ff hYtiely expensive for some polluters. flexibility to allow cost-effective responses to envi- * The legislativefailure to consider the capabilities of ronmental regulations; and (v) gradual adjustment administrative agencies and the feasibility of imple- and development of institutions to reflect the grow- mentation led to unfulfilled and unenforced re- ing importance assigned to environmental issues. quirements. 47 48 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience * Newly established environmental protection agen- public pressure should be key considerations in build- cies remained powerless due to the lack of political ing environmental management systems in developing conmnitment to allocate real authority to the agen- countries. cies, and the failure of the new institutions to adapt While public pressure plays an important role in to existing ones. raising political awareness of envirorunental issues, * The organization of environmental protection agen- environmental policymaking should rely on tools cies along environmental media prevented or lim- and mechanisms in order to set priorities and ob- ited effective cross-sectoral and cross-medium jectives according to their impacts on the welfare coordination. of the society. Cost-benefit criteria, based on sys- * The traditional, predominantly technical skill mix of tematic assessment of risks associated with certain environmental management personnel resisted a environmental problems and the feasibility and wider application of cost-effective, market-based costs of solutions, have not been widely used by instruments. OECD countries in environmental policymaking. This has often led to wasteful allocation of re- Main Lessons Learned and Implications for sources, ad hoc decisions, and unrealistic objectives. Developing Countries Priorities and environmental objectives should be set according to the extent of threat to human health and OECD countries faced similar environmental problems ecosystems With consideration of the costs andfeasibil- during the last decades: public health problems in ity of implementation. Well-established international urban areas caused by air pollution from industries, scientific know7ledge and methodology such as risk households, and growing traffic volumes; the assessment can assist decision makers in this process. deterioration of water quality due to untreated * Environmental management is a complex system household sewerage and industrial effluents; the that embodies conflicting political, economic, and inproper disposal of municipal and industrial wastes; geographical interests. Like all political problems, the d e d rthe management of environmental policy suffers theodamagersi and deterowioghreati of floresimpacts afrom inherent constraints on its effectiveness bipodutiverond a envirowinntra ofnaglobal sypacts through a string of difficult compromnises and trade- of pollution. The environmental management systems offs. Some of these constraints arise from the fact put in place to address these problems have made that solutions to environmental problems require significant progress in influencing environmental trading off economic resources for results that are quality in the countries reviewed. Cross-country difficult to predict or calculate due to imperfectly comparisons reveal both similarities in the factors that understood science, uncertain technology, and con- shaped the fundamental approaches of OECD countries troversial value judgments. An additional trade- to managing their environment, and differences in the off typically exists between the conflicting administrative structures and regulatory styles. requirements of national and local authorities. The The experience of OECD countries yields some goals and standards set by national officials do not important lessons that developing countries can draw necessarily reflect the interests of the local officials on when designing environmental management who must enforce them in the face of local economic systems: and political realities on the ground. Officials in * Public awareness of environmental problems and charge of environmental policy must, therefore, pressure on political decisions played a strong role regularly negotiate not only with their colleagues in the emergence of environmental protection in in the sector ministries, but also with officials at all reviewed OECD countries. However, significant various levels of government and groups outside variation could be observed among countries in the the government who are essential to the accom- mechanisms available for the public to access and plishment of the government's envirorunental ob- influence environmental policymaking and, in jectives. A framework and mechanism for consensus some cases, public pressure may have also led to building among the major stakeholders of environmen- premature or misdirected policy responses. The tal policy issues should be created. Consultations be- provision and interpretation of environmental informa- t7veen government agencies at different levels, preferably tionfor the public, and promotion of suitable vehicles of with a high-ranking government official in charge of Conclusions and Recommendations 49 mediation andfinal decisions, should be given clear pri- validity of its results. Experience shows that many ority over autocratic decisions. successful institutional changes were slow and in- The traditional piecemeal approach to environmen- cremental. Radical change -such as the establish- tal problems proved to be inadequate to effectively ment of a new government agency - caused address environmental issues that cut across sec- difficulties by disturbing well-established institu- tors and environmental media. That approach re- tional linkages, constituencies, and decision- stricted efficient priority setting, and resulted in making patterns. Environmental protection agen- inefficiencies by transsferring environmental prob- cies gained power as the political commritment of lems from one mediuim to another, duplicating the the government to pursue environmental protec- efforts and costs of regulation and control. As a re- tion increased, elected officials transferred more au- sult, many reviewed OECD countries started to thority to the agencies, and institutional and develop legal, administrative, and institutional administrative linkages became established. A mechanisms to facilitate integrated environmental gradual approach should be taken during the develop- planning, policymaking, and implementation. ment of environmental institutions, building on and Decision-making mechanisms and procedures that fa- strengthening the capacities of existing institutionsfirst. cilitate the consideration of complex environmental im- Changes in the organizational structure should reflect pacts of a given decision or action should be introduced the evolution ofpolitical commitment and technical ca- at the early stages of developing environmental man- pacity. New government agencies should be appointed agement, starting 7vith priority areas of special concern only if they can be provided With authority, political and trying to build teamus of diverse specialists dealing 7veight, and sufficient technical capacity to pursue their wvith the complex problems of each area. One-stop per- mandate. mitting and environmental impact assessments may be An environmental agency should not and cannot also useful toolsfor this purpose. administer all aspects of a country's environmen- The primarily technology-based command-and- tal policy. Rather, it should orchestrate a system control policy implementation instruments that that ensures that environmental considerations are OECD countries traditionally relied on resulted in properly handled in myriad actions, only some of inflexibilities in policy implementation, overly which fall within its direct responsibility. Gover- costly solutions to enitvironmental problems, and ment technocrats who are normally accustomed to mak- over-emphasis on technical solutions as opposed ing and implementing policy on their own in to prevernemphasivemeasuresandinnovativesolution hierarchical bureaucratic structure need to acquire ne- to preventive measures and innovative solutions. gotiation skills, andfind wvays to share information. As a result, large gaps developed between policy * There are inherent trade-offs in assigning environ- requirements and actual performance. It proved menal mnaement tasks to govern entbrea- to b vey dffiult o cang esablihedregla- mental management tasks to goverrnment bureau- to be very difficult to change established regula- cracies. Different political preferences and patterns tory regimes and instruments. Despite these diffi- of public administration in OECD countries re- culties, a larger political acceptance started to sulted in varying degrees of administrative discre- develop for incentive instruments in order to in- tion assigned to the environmental protection crease the cost-effectiveness of environmental agencies. There is a need to strike a balance between policy implementation. A balanced mixture of direct the extensive and costly monitoring and guidance by regulations and incentive policy instruments should be administrative agencies; and the openness of political introduced in developing countries as early as possible decision making and smoothness of procedure. in order to ensure flexibility and cost-effectiveness in * OECD countries have been increasingly focusing on policy implementation. 'Relying on ambient quality ob- mechanisms thatfacilitatechangesinbehaviorsatthe jectives and leaving details of compliance to polluters, micro level and reduce administrative costs. Coun- for example, could offer suchflexibility. tries with limited resources of human and technical capa- * Environmental management and institutions con- bilities should take advantage of methods, such as tinuously evolve as the various players - govern- consultations between the regulatingagencyand regulated ment officials, polluters, other affected parties, entities, andvoluntaryprograms, in ordertoenhance com- environmental activists, and the general public- pliance with regulations and reduce costs of enforcement. gradually learn their roles, and gain confidence in Such approaches, however, only supplement and do not the legitimacy and fairness of the process and the replace regulations and traditional enforcement. 50 Environmental Management and Institutions in OECD Countries: Lessonsfrom Experience There is a trend in several OECD countries to re- * No universally acceptable environmental manage- duce extensive monitoring and replace it with mod- ment and institutional model exists. Despite the eling. Environmental research is becoming more relative similarities of environmental problems, proactive to support environmental priority setting achievements, and fundamental environmental and policymaking, rather than being reactive management approaches and choices in the coun- following political decisions. Excessive monitoring tries reviewed, there are striking differences in their and research should be avoided in favor of relying on institutional patterns and regulatory styles. Politi- rapid assessment methods, modeling, and the existing cal traditions, cultural and national characteristics, the inventory of technologies. The monitoring network existing legal system, and the structure of public ad- should develop gradually to serve rather than substi- ministration should all be taken into account when de- tute actions. Only those data should be collected that signing an environmental management system. 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World Bank Group Assistancefor Minerals Sector Development and Reform in Member Countries No. 406 Milazzo, Subsidies in World Fisheries: A Reexamination No. 407 Wiens and Guadagni, Designing Rulesfor Demand-Driven Rural Investment Funds: The Latin American Experience No. 409 Heggie and Vickers, Commercial Management and Financing of Roads 41, THE WORLD BANK I" I "- SIi IL. \.\\. \\ bingllt, 1).( :. 211433 t S I1Icli imic: 2012-4771-1234 II :'i,,ilL: 21112-47 7-039)1 VIcc\: \1( :1 0414S \\( )l .I).I \\ k \1(. 1 2 4S42.. \\ OI {I. )I)I k\1 Wl LI \\i.l.V \\ II: II,t t I): \\ \\ \\. \\ IIIIII,,I II, 9 780821 342046 ISBN 0-8213-4204-5