Environmental policy

1. Environmental policy

2. Key questions • Impact of green policy and initiatives on business: • cost and bureaucratic burden • stimulus to innovation and greater competitiveness? • EU role? • Current trends and issues

3. Business and the Environment • Question of corporate social responsibility • Question of reputation • Need to comply with regulations • Specific – e.g. Chemicals, end-of-life vehicles • General – environmental liability, etc • Need to secure flexible regulations • Impact on competitiveness – see below

4. Early attitudes to the environment • 1950s - little environmental awareness • Early 70s changing but ‘Limits to Growth’ • i.e. - growth and environmental protection incompatible • Environmental policy seen as cost burden to business

5. Emergence of ecological modernisation • Early 1980s: ideas from Netherlands and Germany • Environmental policy not a cost burden but → commercial gains • Reconciles environment and growth encourages innovation (Porter hypothesis) & boosts competitiveness • shift to policies that use market mechanism • growth of eco-industries/ 2mn jobs in EU • ‘first mover’ advantages

6. E.M. ideas permeate EU policy ‘Environmental action can generate benefits in the form of economic growth, employment and competitiveness’ European Commission, Global assessment: Europe’s environment, 1999 ‘High environmental standards are an engine for innovation and business opportunity’ 6th Environmental Action Programme, Exec. Summary

7. Why EU environmental role? • Pollution knows no boundaries • Trade reasons - • different regulations as protectionism? • Environmental dumping and ‘race to the bottom’

8. Environment – a ‘core’ EU objective • 300 + directives/regulations • Understanding of national policy needs reference to EU • Policy tension - leaders and laggards • leaders pull others along • laggards - environmental policy unlikely or much less developed without EU rules • new member states

9. Evolution of EU policy • No direct environmental reference in Rome Treaty • 1972 Paris Summit decision to establish EC environmental policy → First Environmental Action Programme • Subsequent action programmes build on each other – now on 6th (2001-10)

10. 1987 Single European Act • 1st explicit environmental legal base • Establishes key principles: • preventive • damage rectified at source • polluter pays • policy integration • Member states allowed to take stronger measures provided compatible with Treaty

11. Maastricht Treaty • High level of protection • Precautionary principle • Amsterdam Treaty • Sustainable development - a core EU objective • Extension of co-decision procedure → greater role for European Parliament but • NO extension of qualified majority voting • No significant change – Nice or constitution

12. Environmental policy problems • Early EU policy inflexible • command and control • Impact of national measures • Inadequate information • Implementation, interpretation, enforcement - legal, technical complexity, lack of inspectors

13. Number of open infringements, 4.11.03 – over one third of cases before ECJ

14. Current themes and approaches • Legislation - to be implemented - use of ECJ, monitoring, ‘name and shame’ • Integration – environment at the heart of policy making - a continuing theme • Some successes (shift from producer to income subsidies in CAP) but little change in some trends that damage environment – e.g. transport and energy growth

15. Working with the market -e.g. • continuing market based instruments • green purchasing by public sector • Work with financial sector to develop criteria for ‘green’ lending and investment • Business incentives for ‘green’ behaviour • Help with environmental management • Help consumers re environmentally sustainable choices • Better land use

16. The 6th EAP (2001-10): Priority Areas • Climate change - meet 8% Kyoto emissions reduction target for 2008-12 (and more) • Energy savings/efficiency, renewables, technology, etc • Policy integration • Cross-sectoral approaches – emissions trading • R&D • information • nature/biodiversity • environment and health • sustainable use of natural resources - waste reduction, recyclability, waste prevention - Integrated Product Policy

17. Policy examples: voluntary • Own initiative – e.g. ‘Responsible Care’ chemical industry • Co-operation and shared responsibility – e.g. AutoOil • Eco-labelling – national and EU (‘The Flower’) schemes • Environmental management schemes – EMAS – review, audit, statement and verification

18. Policy examples: compulsory • Command-and-control to market-based • i.. Use market forces/price mechanism to change behaviour – • Environmental liability (Polluter pays principle) – from 2007 • operators responsible for damage pay for it rather than society • Incentive for precaution and prevention

19. Taxation – more common in member states • Emissions trading (from January 2005) • To help meet Kyoto Protocol • Applies to power stations, oil refineries, coke ovens, iron and steel, pulp and paper, building materials, ceramics (aluminium and chemicals excluded) • Effective scheme ensures cheapest emission reductions made first

20. Continuing enlargement and international challenges • Environmental compliance • €50-80 bn for 2004 ‘10’ • need to spend 2-3% of GDP incoming years • International dimension - push forward • International response to international problems • Pollution havens/race to the bottom