Explaining Environmental Policy Failure

A proposed new approach to environmental policy fails to convince.

Why Environmental Policies Fail by Jan Laitos is a curious book (1). Its subject is certainly important, and it’s hard to disagree strongly with the bleak picture it presents of risks to the environmental conditions needed for humans to live safely  (pp 59-76).  It contains interesting discussions of particular situations and policy failures.  What makes it curious is the abstract framework within which its proposals are presented, based on what it describes as “fundamental laws of nature” (p 171).

The author is a professor of environmental and natural resources law, and it’s interesting  to see how he pigeonholes what economists regard as two key policies to address environmental issues: Pigovian taxes and marketable permits.  Grouped within the heading of economic policies, these form just one of ten items on his list of current environmental policy strategies (pp 139-140 & 145).  Among the others are some which are commonly discussed by economists as alternatives to market-based instruments, eg regulations (command and control), and adjustments to property rights.  Some others are new to me: legal rights for nature (pp 153-9) and human-nature linkages (pp 160-3).

Laitos’ comments on all these policy strategies are generally critical.  In the case of economic policies, his main criticism is that they are based on assumptions that human behaviour is deliberate, rational and utility-optimising. He refers to evidence that people often behave quite differently (pp 32-3, 145-8). But a crucial question, which he does not consider, is how much difference this makes.  Consider a case where emissions of pollutant are initially at a rate of 100 units per day.  Suppose that, applied to relevant data, conventional economic analysis predicts that a proposed tax would reduce the rate to 50 per day.  Given a more realistic view of behaviour, we would not expect the outcome of the tax to be exactly 50 per day.  But will it be, for example, 55 per day or 90 per day?  The former would suggest that the theory works fairly well in this situation (perhaps because departures from rationality largely offset each other in aggregate); the latter that it does not.

Environmental Policy Failure – an Orthodox Account

Laitos’ overall assessment, as the book’s title suggests, is that environmental policies to date have been unsuccessful.  His argument is essentially that severe environmental degradation has occurred despite the presence of many environmental policies (p 61).  I will not dwell on the objection that some policies, for example the Montreal Protocol on Substances that Deplete the Ozone Layer, have been fairly successful (2).  Of more importance here is that he shows little interest in distinguishing types of failure.  The following is I suggest a useful classification:

Type 1 Failure: Environmental policies which fail to achieve their objectives.

Type 2 Failure: Environmental policies which produce undesirable environmental side-effects.

Type 3 Failure: Environmental policies for which the objectives might be considered insufficiently ambitious.

All three types occur (some policies may exhibit failure of more than one type).  As examples I offer the following:

Example of Type 1 Failure:  The US Lead and Copper Rule, intended to minimise lead and copper levels in drinking water (3), which did not prevent lead contamination in Flint, Michigan (4).

Example of Type 2 Failure:  Germany closed eight of its seventeen nuclear reactors in 2011 following the Fukushima disaster in Japan (5).  This significantly reduced its exposure to the environmental and safety risks of nuclear power.  But to ensure adequate electricity supply, Germany has since increased production of brown coal which is an even worse source of air pollution and greenhouse gas emissions than ordinary coal (6).

Example of Type 3 Failure: Australia’s greenhouse gas emissions target for the Kyoto Protocol’s first commitment period was an increase of no more than 8% on its baseline level (7).

The reasons for these different types of failure are likely to be quite different.  Type 1 failures are often due to poor technical advice to policy-makers and/or ineffective administration and enforcement (including regulatory capture by rent-seeking groups).  Type 3 failures tend to result from political compromises between differing interest groups, or between short and long term interests.  Type 2 failures may occur for either of these reasons, or because a particular environmental problem happens to be especially salient when a policy is adopted.  We have, therefore, the outline of an orthodox answer to the question implicit in the book’s title.

Environmental Policy Failure – Laitos’ Account

Laitos, however, largely neglects these sorts of explanation. Instead, he presents a framework of thought, the key elements of which can be summarised as follows (8):

Nature as a Complex Adaptive System, not necessarily in equilibrium, characterised by co-evolution of living organisms and their abiotic surroundings, and often achieving resilience between stability and instability in the state sometimes termed ‘the edge of chaos’ (pp 95-100).  This leads to the idea that environmental policy should not aim to conserve or restore a state of nature, because there never was such a stable baseline state (p 100).

The Requirement of Symmetry as fundamental to the laws of nature, in physics and in biology (p 174).  The following three consequences of symmetry are of particular relevance to environmental policy.

The Law of Conservation according to which certain quantities cannot be created or destroyed, an example being the First Law of Thermodynamics  (p 177).  This leads to the conclusion that, because the natural environment is a complex adaptive system, environmental policy should be simple, and complex policies are likely to fail (p 179).

The Equivalence Principle according to which seemingly different concepts are actually the same, an example being the equivalence of gravity and acceleration in Einstein’s general theory of relativity (p 180).  This leads to a rejection of the ideas that humans are morally superior to their environment, and have the ability to manage and master it.  Instead, environmental policy should treat humans and their environment as equivalent parts of a social-ecological system (p 181).

The Unification Principle according to which apparently opposite concepts are actually the same (pp 181-2.  Again, there are examples from physics.  The conclusion drawn is that environmental policy should address not simply the environment but the whole social-ecological system (p 183).

According to Laitos, therefore, environmental policies do not work well for four main reasons: they are based on an inaccurate model of nature; they often presuppose human superiority; they are inconsistent with the law of symmetry; and sometimes they are based on a false model of how humans behave (p 184).

The most persuasive part of this is the view of nature as a complex adaptive system.  We know for example that there are complex interdepencies between the biotic and abiotic elements of the environment, via processes such as photosynthesis and carbon sequestration.  We also know that such natural processes have not always been in equilibrium.  The oxygen content of the atmosphere, 21% at present, has during the last billion years been as low as 3% and as high as 35% (9).  Even within the much more recent past, there have been dramatic changes such as the retreat of glaciers at the end of the last ice age about 12,000 years ago (10), and a period about 10,000 years ago when much of what is now the Sahara desert received sufficient rainfall to support a savanna-like environment (11).  Certainly, therefore, environmental policies should be developed with awareness of the complexity of natural processes and the possibility that the past may not be a good guide to the future.

On the other hand I am not persuaded by the ‘no natural baseline’ argument. Consider how it might apply to the issue of waste plastic polluting the oceans with adverse consequences for wildlife and indirectly (via food chains) for humans.  The argument would presumably be that the former plastic-free ocean was just one state which had persisted over a certain period and which, given the complexity of nature, might have come to an end without human intervention.  Hence to regard plastic-free oceans as a baseline to be restored if possible would be misguided.  Now that argument seems to me mistaken: it ignores both the implausibility of plastic being produced by natural processes, and the fact that, for thousands of years, fish caught from plastic-free oceans have been an important component of human diets.  What’s more, it illustrates a general shortcoming of Laitos’ approach.  His criticism of actual environmental policies contains many examples of particular policies in particular situations.  But in his presentation of his own policy ideas, I can find little indication that he has tested his abstract principles by considering what they would imply for specific situations.

So far as the requirement of symmetry is concerned, I will not comment on its application to theoretical physics, which is not my specialism.  But I have to say that I find the drawing out of consequences for environmental policy not just unconvincing but in places positively bizarre.  Nevertheless, let us consider the three conclusions on their merits, ignoring their provenance.

Simplicity can indeed be a virtue of environmental policy.  The five pence charge for single-use plastic bags introduced in England in 2015 is an example of a fairly simple policy (12).  It’s easy to think of ways in which the policy might with apparent justification have been made more complex, such as different charges for different bag sizes or exemptions for those on low incomes.  Nevertheless, the policy seems to have been widely accepted.  One likely reason is that the charge is too small to affect anyone’s vital interests.  Another is that it seems obvious that the administrative costs of the sort of complications listed above would greatly outweigh the benefits.

On the other hand, consider the case of international negotiations on reducing greenhouse gas emissions so as to mitigate climate change.  Here vital interests are at stake, along with different understandings of what the scientific evidence shows and different views of fairness in apportioning reductions.  A requirement that any agreement be simple, such as a uniform percentage reduction in emissions, would be fairly certain to ensure failure via a collapse in negotiations. Acceptance that an agreement will need to be complex keeps open the possibility of a partial success – an agreement that if implemented would lead to a reduction in emissions, albeit not as large a reduction as many consider necessary.

Laitos’ rejection of human superiority might suggest that he is an advocate of animal rights.  In fact, the concept of animal rights receives only one brief mention (p 156).  Nor does he ascribe value to nature generally, except in so far as the degradation of nature affects humans (p 38).  The superiority that Laitos rejects is the idea that humans have the ability to manage the environment (pp 29 & 181).  This highlights another weakness of his approach.  Perhaps as a consequence of his high level of abstraction, he tends to make statements that are too absolute and do not allow for matters of degree.  If he had just said that, when trying to manage their environment, humans often fail due to lack of ability, or make mistakes due to lack of knowledge or cognitive errors, then it would have been easy to agree.  But to deny outright  that humans have the ability to manage the environment is too strong.  Human actions do affect the environment, and humans do have the ability to choose among different actions that have different consequences.

If however one really did consider that humans cannot manage their environment, then the natural conclusion would be that any environmental policy is doomed to failure.  It is hard to see how such a belief could be a basis for choosing one policy rather than another.  Yet as we shall see, Laitos does advocate a particular type of environmental policy.

Laitos’ third conclusion – that environmental policy should address the whole social-ecological system – could be taken as just a way of saying that policy formulation should have regard to political feasibility (the social part of the system) as well as to its effect on the environment (the ecological part).  If so it would be entirely acceptable.  But what he actually means by this seems implicit in his rights-based approach to environmental policy, to which I now turn.

Laitos’ Proposed Environmental Policy: A Rights-Based Approach

Laitos proposes that environmental policies consistent with his framework would confer a certain type of right and impose a corresponding duty (p 36).  The right would be:

Positive, that is, a right entitling the holder to the help of others (as opposed to a negative right which merely requires others not to take certain actions) (pp 38-9 & 185-6).

Held by the social-ecological system, that is, by both humans and the environment. Thus it would be quite different from a specifically human right such as a right to clean water (p 185).

To environmental conditions in which humans can live safely (p 185). Thus although the right is held by humans and the environment, its purpose is solely to meet a human requirement, not to save or protect the natural environment (p 187).

Inclusive of the power to alter the right (pp 191).  Thus any legal right granted to the social-ecological system should be capable of being amended (p 192).

Laitos’ account of this right leaves unaddressed the key question of who would grant it.  The answer, at his abstract level, must be humans.  But that leads back to issues of political authority and international negotiation.  For he consistently identifies the right-holder as the social-ecological system. He is not talking about local ecosystems and their human inhabitants, on which one might envisage rights being conferred by local or national governments, but about one system consisting of the global environment and the whole of humanity.

That the right should be capable of being amended seems to amount to saying that there should be flexibility to adjust environmental policies in the light of circumstances (p 192).  As such it seems entirely acceptable.  But again it raises issues of authority which Laitos does not address.  How far should administrators have delegated authority to adjust policies (with risks of uncertainty for those affected and even outright abuse), and how far should changes be a matter reserved for law-makers?

So far as enforcement of the right is concerned, this is best considered after introducing the corresponding duty.  This duty is:

Imposed on humans only, not on the whole social-ecological system (p 185).

Affirmative, that is, a duty to provide something, not merely to refrain from harm (p 197).

To create public environmental goods and positive externalities (p 197).  In this case Laitos does give an example: a person planting a tree which will sequester carbon and so contribute to mitigation of climate change.

Laitos supports the affirmative nature of the duty with the argument that, as a matter of psychology, people respond better to being told what to do than what not do.  This seems problematic.  For one thing, the difference is often just a matter of polite wording, which is important in everyday intercourse (compare “Could you close the door” and “Could you not leave the door open”) but should not be a key consideration in framing laws.  For another, being told what to do can be far more restrictive of individual liberty than being told what not to do (compare requiring a car-owner to travel by public transport, or not to exceed speed limits).  Most fundamentally, the natural wording of some essential environmental policies is negative.  Consider safety policy for nuclear power stations. One might try to formulate a safety policy in terms of ‘preserving a radiation-free environment’, but the more obvious formulation is ‘avoiding radiation leakage’, and any idea that companies would respond better to the former than the latter is rather implausible.

The content of the duty is not specified in any detail. But let’s explore the tree-planting example. Suppose policy required every adult to plant at least one tree a year. That could help in mitigating climate change (though it is pertinent to ask how much else would be required to maintain the habitability of the planet).  But it could waste resources to little effect in places where the climate or soil is unsuitable for tree growth.  It could also do harm where tree-planting conflicts with other important land uses, or where the uptake of water by trees within a river basin would lead to reduced water flows with adverse downstream effects on agriculture or wetlands.  So a sensible policy focused on tree-planting would have to be more complicated, perhaps permitting people in places unsuitable for trees to enter into offsetting arrangements with those in more suitable places.

One way to give content to the duty while addressing such issues would be a policy telling each person in what way they should contribute to public environmental goods and positive externalities, but with the contributions tailored to people’s local circumstances: tree-planting in region A; rainwater harvesting in B; fish restocking in C; and so on.  At the other extreme, another would be to allow people discretion as to the nature of their contributions, but to require each person to submit an annual statement of their contribution for review by the authorities.  Intermediate arrangements would probably be more workable, for example, a list of acceptable contributions from which people could choose any one, or a system of points for contributions with an annual points target for each person.

What emerges from this is that giving practical form to a duty to create public goods and positive externalities would not meet Laitos’ requirement that policy should be simple.  Any apparent simplicity is entirely due to Laitos’ abstract presentation of his ideas.  Putting it into practice would raise the same sorts of issues as existing environmental policies, such as whether policy-makers have adequate technical advice, conflicts between different environmental objectives, and political feasibility.

Then there is the issue of enforcement.  Laitos states that environmental policy needs a “stick” instead of “carrots”, contrasting the “carrots” of subsidies with the “stick” of his positive duty (p 200).  This is an odd comparison for two reasons.  Firstly, subsidies are only one of many instruments used by existing environmental policies, and as a means of incentivising firms to reduce pollution are generally considered by economists to be inferior to taxes (because subsidies can also encourage new firms to enter polluting industries).  Secondly, a duty is not itself a “stick”. A “stick” would be a penalty that an authority could impose for failing to fulfil a duty.  One might have expected here a discussion of the process for imposition: how evidence might be gathered; whether the process would be administrative or judicial; types of penalty; and so on.  As throughout the positive parts of his book, however, Laitos seems uninterested in such details.

In summary, therefore, although Laitos is right to highlight the failure of many existing environmental policies, the alternative he offers owes whatever plausibility it may have almost entirely to its abstract formulation.  As soon as one attempts to flesh it out with practical detail, it becomes apparent that it would encounter much the same complexities and difficulties as existing policies.

Notes and References

  1. Laitos J, with Okulski J (2017) Why Environmental Policies Fail  Cambridge University Press.  All page references above are to this book.
  2. Wikipedia: Montreal Protocol – Effect https://en.wikipedia.org/wiki/Montreal_Protocol#Effect
  3. US Environmental Protection Agency: Lead and Copper Rule – A Quick Reference Guide https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=60001N8P.txt
  4. Wikipedia: Flint Water Crisis https://en.wikipedia.org/wiki/Flint_water_crisis
  5. Wikipedia: Nuclear Power in Germany – Closures and Phase-Out https://en.wikipedia.org/wiki/Nuclear_power_in_Germany#Closures_and_phase-out
  6. Der Spiegel (22/11/2017) Can Germany Break its Lignite Habit? http://www.spiegel.de/international/business/energy-transition-blocked-by-brown-coal-a-1179537.html
  7. UN Framework Convention on Climate Change – Kyoto Protocol – Targets for the first Commitment Period http://unfccc.int/kyoto_protocol/items/3145.php
  8. My policy in this blog when setting out the views of others is normally to paraphrase and rarely to quote. This is partly because a paraphrase highlighting key points can be more concise than a quotation, and partly for copyright reasons. I hope that my paraphrases are fair and, as ever, would appreciate advice of any misrepresentation.
  9. Wikipedia: Atmosphere of Earth – Evolution of Earth’s Atmosphere https://en.wikipedia.org/wiki/Atmosphere_of_Earth#Evolution_of_Earth.27s_atmosphere
  10. Wikipedia: Last Glacial Period https://en.wikipedia.org/wiki/Last_glacial_period
  11. Carey B, Live Science (20/7/2006) Sahara Desert was Once Lush and Populated https://www.livescience.com/4180-sahara-desert-lush-populated.html
  12. The government regulations on the 5p charge are at http://www.legislation.gov.uk/uksi/2015/776/contents/made
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