Problems of transnational policymaking: Environmental policy in the European Community

European Journal of Political Research 19: 281-305, 1991. 0 1991 Kluwer Academic Publishers. Printed in the Netherlands.

Problems of transnational policymaking: Environmental policy in the European Community

ANGELA LIBERATORE European University Institute, Florence, Italy

Abstract. Environmental protection is inherently a cross-border issue, which might be thought to create opportunities for transnational regulation. This has significant potential consequences for European integration. However, two contrasting trends can be identified. On the one hand, the increasing magnitude of environmental problems, along with growing public and elite awareness of these issues, are generating responses which put the European Community at the centre of a process of ‘reregulation’. It is intended that this role should grow in the twin contexts of the Single Market and of increasing interaction with Eastern Europe with itsvast pollution problems. O n the other hand, however, the kind of ‘political’ policy intervention which environmental protection requires has not really developed. EC environmental policies have thus far been rather weak in both formulation and, especially, implementation, and even existing gains are likely to come under increasing pressure from the trend towards economic deregulation characteristic of the Single European Market project. Probably the most significant impact of Community efforts in the environmental field has been to encourage the convergence and strengthening of national regulation among member states, more than to create distinct European policy processes and institutions.

The academic debate about the political development of the European Com- munity has been dominated by the neo-functionalists and their critics. This debate centres around two questions. Firstly, to what extent are contemporary political issues, especially economic issues, so inherently and profoundly cross- national and/or transnational that they can only be confronted or resolved transnationally? And secondly, will attempts to confront such issues lead necessarily to the development, perhaps the eventual supremacy, of quasi- sovereign transnational - ‘supra-national’ - institutions? This debate is not dissimilar to longstanding debates about international systems, ‘regimes’ and transnational structures. However, it also concerns the more particularistic question of whether common socio-political elements in Europe (especially Western Europe) - welfare capitalism and consumerism, relatively stable liberal democracy, the desire to avoid future European wars, geographical contiguity, etc. - will permit more rapid convergence and institutionalisation.

This article will argue that the issue of environmental policy provides only mixed support for the neofunctionalist hypothesis, with two contrasting levels. On the one hand, the increasing magnitude of environmental problems, along

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with growing public and elite awareness of these issues, are generating responses, still problematic at this stage, which put the European Community at the centre of a process of ‘reregulation’. As national governments tried various forms of economic ‘deregulation’ in the 1980s, and as attempts at wider transnational regulation proved insufficient, the E.E.C. started to define a role for itself through a mix of direct regulation and economic instruments. It is intended that this role should grow in the twin contexts of the Single Market (‘1992’) and of increasing interaction with Eastern Europe with its vast pollution problems. Not only are environmental problems inherently ‘transboundary’ problems, but they also have a regional aspect which is likely to be particularly significant in the European context in the future.

On the other hand, however, the kind of ‘political’ policy intervention which environmental protection requires has not really developed. E.C. environmental policies have thus far been rather weak in both formulation and, especially, implementation, and even existing gains are likely to come under increasing pressure from the trend towards economic deregulation characteristic of the 1992 project. Environmental protection was not mentioned in the Treaty of Rome of 1957 establishing the European Economic Community. Until 1972, when the Heads of State and Government of the member states officially recognised the importance of a Community environmental policy, environmental protection was seen to be outside the sphere of competence and interest of an economic community. And more recent attempts to develop environmental policy at the E.C. level have had significant structural ’defi- ciencies, as will be seen below.

Among the various reasons given to support the need for a Community environmental policy, two, in addition to pure environmental protection, seem to be particularly important for its development at the Community level. From the economic standpoint, both national governments and Community- level actors cite the need to harmonise environmental regulation in order to avoid distortions of competition within the E.E.C., and to preserve and increase the competitiveness of E.C. products and industries in the world market economy. On the political level, once again, both national and E.C. actors recognise the increased public concern for environmental issues, concern that involves the risk - for member-state governments as well as Commu- nity institutions - of losing legitimacy in case they do not take action.

Four Environmental Action Programmes and an impressive number of directives concerning various aspects of environmental protection constitute the superstructure of E.C. regulation in this field. But conflicts and difficulties often arise in formulating and implementing such programmes and directives, undermining their effectiveness. This problem may prove to be particularly serious with respect to the 1992 project on the completion of the Internal Market, a project that is likely to involve negative environmental impact if

preventative measures are not taken. However, the global dimension of many environmental problems increasingly challenges the willingness and the capa- bility of E.E.C. member states and institutions to reinforce cooperation at the international level in search of really sustainable development.

I. The beginning: Economic growth and environmental concern

After the Second World War, Western European societies experienced rapid economic growth, thanks to financial help from the United States (the famous Marshall Plan) and to very favourable conditions common to all industrialised countries - particularly the low cost of raw materials and rapid increases in productivity in both agriculture and industry made possible by technological innovations and by increased urbanisation and education (O.E.C.D., 1980: 26). But this rapid growth, based on quantitative criteria and on the uncontrolled exploitation of natural resources, caused widespread environmental degradation. This in turn gave rise, starting from the early 196Os, to increasing concern about the negative impact of economic development on the natuial environment and on human health and safety. After having treated air, water and soil as a sort of inexhaustible cornucopia, many people in the industrialised countries started seeing them as unavoidable constraints. This was the case, for instance, with the authors of the well-known study The Limits to Growth published in 1972 (Meadows, et al., 1972).

This change seems to confirm the common sense assumption that only when people are rich enough not to bother about what to eat, can they worry about environmental degradation. Of course, this is not always true - the indios of the Amazon are very concerned about the destruction of the rain forest, which endangers their survival in several ways - but certainly environmental protection per se does not have as immediate an impact as hunger (or various other forms of material deprivation) on individual awareness and public priorities. However, people in industrialised countries have come to recognise that the negative environmental impact of economic growth does produce adverse consequences for future economic development - for example, problems of resource availability. Many political and social problems are connected at not only local or national but also the interrnational level because of the transboundary dimension of many environmental threats.

Attempts to develop comprehensive environmental policies started in the early 1970s. In 1969, the Secretary General of the United Nations, U Thant, mentioned the protection of the environment among the major problems to be dealt with urgently and at the global level (Meadows, et al., 1972: Introduc- tion), and in 1970 the first meeting of the Preparatory Committee established to organise a U.N. Conference on the Environment was held. This Conference

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took place in Stockholm in June 1972 and was attended by the representatives of 113 states. For the first time environmental degradation, its causes and some possible remedies were discussed in an international and authoritative forum. The conference adopted the notion of a general right to ‘. . . an environment of a quality that permits a life of dignity and well-being’, together with the duty to ‘. . . protect and improve the environment for present and future generations’ (Declaration of the U.N. Conference on the Human Environment, Principle 1). Particular emphasis was laid on the relationship between environment and development, that is on the need to take into consideration environmental problems of development projects and not to waste or destroy natural resources both in industrialised and in developing countries (Report of the U.N. Conference on the Human Environment, 1973).

In the meantime, in 1970, an Environmental Committee was established within the Organisation for Economic Cooperation and Development, and a few days before the start on the U.N. Conference on the Human Envi- ronment, the Council of the O.E.C.D. approved a recommendation on ‘guiding principles concerning international economic aspects of environmental policies’ (O.E.C.D., C (72): 128).’ These principles refer mainly to the economic and trade implications of environmental policies and are the following: the ‘Polluter Pays Principle’ (PPP); and the setting of Environmental Standards. The first is used ‘. . . for allocating costs of pollution prevention and control measures to encourage the rational use of scarce environmental resources and to avoid distortions in international trade and investment’.

According to the recommendation, the PPP means that the polluter should bear the expenses of carrying out the above mentioned measures decided by public authorities - which are requested not to give subsidies which would produce distortions in international trade and investment - in order to ensure that the environment is in an acceptable state. (What is meant by ‘acceptable state’ is not specified.) Concerning environmental standards, the recommendation states: ‘Where products are traded internationally and where there could be significant obstacles to trade, Governments should seek common standards for polluting products and agree on timing and general scope of regulations for particular products’. By stating these two principles, the O.E.C.D. explicitly recognises that the depletion of natural (non-infinite) resources and the pollution of the environment are also important issues from an economic point of view. In particular, it acknowledges that the market by itself is not able to cope with the environmental externalities (pollution, resource depletion, accidents in industrial plants, etc.) produced by unregulated economic growth, and that some public intervention is thus necessary.

Obviously the PPP and the setting of standards involve some problems. It is interesting to note that in the definition given by the O.E.C.D., the polluter does not have to pay the costs of the pollution itself - which may not be

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quantifiable in monetary terms (for example, the extinction of species and deterioration of the quality of life) -but only the costs of pollution prevention and control measures. But then who will pay the overall economic, social, political, and environmental costs of pollution? It has been maintained that regarding these costs, it is not the PPP but the ‘Victim Pays Twice’ principle - being a victim and being required to contribute to overall costs- that is applied (Huber, 1989). The point is that the PPP is not sufficient to internalise the cost of externalities, nor to solve distributional problems.

Concerning the setting of standards, it has at least to be mentioned that the scientific basis required to determine if and how much certain substances are dangerous is often uncertain, and that therefore the process of standard setting is not an ‘objective’ one but one based on political and economic negotiations (Breyer, 1982; Majone, 1984). Even if these problems could be solved, another problem remains, i.e., how far to apply the PPP to ‘incentivate’ industries to use environmental resources ‘rationally’? And how strict do the environmental standards have to be? If there is an economic crisis, is it ‘rational’ to waste/pollute natural resources and to relax environmental standards? These questions soon became very relevant, i.e., during and following the so-called ‘oil crisis’ of 1973-74.

At about the same time that these first organisational and legislative steps were taken by the O.E.C.D., and more formally (i.e., officially) after the U.N. Conference on the Human Environment, the E.E.C. too started ‘greening’. This is not really surprising given the fact that the E.C. member states are also members of the O.E.C.D. and that their representatives attended the U.N. conference as well. After some isolated initiatives of the European Parliament - in 1967 the European Parliament examined pollution problems and in 1970 it urged measures to control the pollution of the Rhine - and after approval of the first environmental directive (Directive 67/584/EEC of June 1967 on the classification, packaging and labelling of dangerous substances), the E.C. Commission in 1971 prepared its first communication in the field of environmental protection (SEC (71) 2616 final), followed by a Draft Envi- ronmental Action Programme (SEC (72) 666 final).

Then, during the Summit Meeting held in Pans in October 1972, the Heads of State and Government of the European Economic Community (at that time made up of nine countries) stated that ‘Economic expansion is not an end in itself. . . . It should result in an improvement of the quality of life as well as in standards of living. As befits the genius of Europe, particular attention will be given to intangible values and to protecting the environment’. They also ‘emphasised the importance of a Community environmental policy’ and in- vited ‘the Community Institutions to establish, before 31 July 1973, a programme of action accompanied by a precise timetable’ (see ‘The Paris Summit - Final CornmuniquC’, in Pryce, 1973).

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11. Why an E.C. environmental policy?

Many environmental problems have a transboundary dimension that cannot be dealt with at the national level. This may explain why international cooperation in the environmental field has been sought since the early seventies, when national environmental policies has not yet even been begun in many countries. Obviously not all of the environmental problems have a transboundary or global dimension, and in any case national or local - decentralised - policymaking is necessary to adapt environmental measures to different natural and social contexts. Therefore international agreements and guidelines, or even transnational regulatory efforts, cannot replace environmental policies at the national and local levels. However, it is important to stress that environmental problems do not recognise political borders and that their solution often requires cooperation beyond such borders. But given the fact that in early 1970s the United Nations and the Organisation for Economic Cooperation and Development were taking measures at the international level to protect the environment (and also to protect the market economy), why did the E.C. member states - which are also members of those international organisations - decide to embark on a specifically E.C. environmental policy? The explanation lies on several levels.

Geographical factors Even if many environmental problems are global, some of them have a more limited scale. A joint ‘regional’ effort to protect the environment would seem therefore both necessary and appropriate given the closeness of European countries. Even if Italy and Denmark - the ‘extremities’ of the E.E.C., so to speak - can hardly be considered to share identical climatic and environmental conditions, it is true that there are rivers which cross several European countries, that different European countries face the same seas, that their soil is a ‘continuum’, and that winds and clouds move very rapidly and continuously across borders. But this is true of all European countries, not just E.C. members. Moreover, there are areas sharing peculiar environmental conditions which are not necessarily reflected in political maps. For instance, the pollution of the Baltic Sea is a European environmental problem which concerns not only E.C. but also Eastern European countries; or, to give another example, pollution in the Mediterranean is not only a European (E.E.C. and non-E.E.C.) problem but also involves the Middle East and North Africa. Therefore we suggest that geographical closeness was not a crucial reason to launch and E.C.-level environmental policy.

Technical factors A partly connected reason could be technical. Because of the usual trans-

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boundary dimension of environmental problems, it is technically more effi- cient (in the sense of using in the best way the available technology and personnel) to coordinate the national monitoring networks, to exchange and harmonise data collected in different countries and to apply the same pollution control measures. Technical factors can be seen to have been quite important, for example, in the case of the Chernobyl accident, when the radioactivity monitoring network at the national and international levels had to be enlarged and better coordinated, and when scientific and technical cooperation was needed to cope with the consequences of fallout. However, this and other cases demonstrate that technical improvements are necessary not only at the E.E.C. level, but at the more global one too. And, in any case, scientific and technical cooperation has to be regarded as a tool, rather than an independent variable, for initiating and implementing environmental policy.

Economic factors Directly relevant economic reasons for having an E.C. environmental policy have then to be analysed. First of all, E.C. member states are also members of the O.E.C.D. - but at the same time they are in Competition with the other 0.E:C.D. countries, especially the U.S.A. and Japan. If E.E.C. industries and products have to be competitive, then the Community must establish environmental, product, heath and safety standards which make its products competitive in the U.S., the Japanese and other markets. On the one hand, if the standards applied outside the E.E.C. are stricter than the ones chosen by the Community, then E.C. products cannot enter other markets. On the other hand, if standards within the Community are stricter, then the extra costs of production could make E.C. goods uncompetitive in price. In either case (as was stressed by the O.E.C.D. recommendation mentioned earlier) distortions in international trade and competition may arise.

Obviously economic competition is also crucial within the Community. The importance of avoiding distortion of competition is emphasised in the Envi- ronmental Action Programmes and in other documents produced by the E.C. Commission (cf. E.C., 1984 and 1987). With regard to the instruments adopted to avoid distortion of competition within the E.E.C. and at the wider international level, the PPP and the setting of common standards proposed as ‘Guiding Principles’ by the O.E.C.D. are also regarded as important principles by the Community. Not only are they mentioned in the Environmental Action Programmes and other documents prepared by E.C. institutions, but the PPP is officially recognised as a guiding principle by Article 2 of the Single European Act of 1987 (the act which amended the original E.C. treaties and added a special section o n the environment), together with the principles of preventative action and the integration of environmental protection into other policy issue-areas covered by the Community.

Some problems concerning the PPP and standard-setting have already been mentioned. However, their economic value must not be underestimated. If homogeneously applied in all E.C. countries, the PPP - and the connected requirement for public authorities not to give subsidies - prevent the possibility that the polluting industries of one country are advantaged because of state subsidies, whereas in other countries the industries would have to bear the real costs of anti-pollution measures. Exceptions are admitted in a few cases; for example, in the case where subsidies granted in the context of other policies (e.g., regional, industrial or agricultural policy) may also be used for environmental protection (Johnson and Corcelle, 1987: 320).

The economic importance of setting common standards is also exemplified by the possible protectionist impact that could develop in cases where some countries adopt standards which are stricter than the ones adopted by the others. These countries can in fact refuse to accept into their markets products that are considered unsafe according to nationally agreed standards. On the other hand, this may also have positive implications from the point of view of health and environmental protection. A consequent problem is that in the negotiation process aimed at defining Community standards, those standards may ‘be based on the ‘lowest common denominator’ reflecting the power relations between and within member states rather than being grounded on considerations relevant to the state of environmental and health protection. This problem may become a particularly serious one in the perspective of 1992, when member states will not be allowed to oppose the circulation of E.C. products in their territories (see Observatoire Social EuropCen, 1987).

Political factors There are also political reasons for having an E.C. environmental policy. One possible political factor - which is connected with the economic side of environmental regulation - is that conflicts concerning the negative effects of different standards and of the unequal application of the PPP (distortion of competition, etc.) may bring about conflicts of interest within and between member states, in this way weakening the ideal of a ‘United Europe’. But such conflicts arise normally in the very process of policy negotiation, and they arise in all of the policy fields of the E.E.C.

Another political factor to be mentioned could be the necessity to deal with environmental problems in an international forum which would be regarded as more unitary and effective than the larger U.N. or O.E.C.D. And indeed, in spite of the unavoidable contrasts and differences between E.C. countries, the Community has more binding power than other international organisations. But this binding power has not been used very much in the environmental field -especially in the beginning- and therefore it is unlikely that this factor played a significant role in starting up an E.C. environmental policy. Among further

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possible causes of the initial ‘greening’ of the European Community, one can include the intention of actors within the E.C. institutions, particularly the European Commission, to broaden their power and influence over member states through the creation of a new E.C. policy domain. However, if one looks at the tiny budget allocated for environmental measures (less than 0.001% of the total Commission budget until 1986 [Johnson and Corcelle, 1987: 21]), it does not seem that the Commission as a whole attributed much importance to the development of environmental policy until quite recently. On the other hand, this does not exclude the possibility that some people within the Commission perceived the opportunity to increase the Commis- sion’s power through the institutionalisation of a new policy arena.

One political factor which has certainly influenced the initiation of a Com- munity environmental policy has been increased public concern within the E.C. over environmental degradation and related issues such as nuclear power production and major accidents. An opinion poll carried out in 1973 asked respondents in the then nine E.C. member states to list ten problems of national or global concern according to their relative importance. Pollution was cited as the most important problem, ahead of inflation, poverty and unemployment (E.C. Commission, 1987: 24). Moreover, environmental organisations began to emerge more widely in the member states (even if not equally active in each of them), contributing to the politicisation of generic environmental concern - for example, by asking public authorities to take action and by claiming the right of citizens to information and participation in decisions of environmental and health matters, such as the siting of nuclear plants. In the early 1970s, then, environmental problems began to be perceived as political issues, and politicians within the member states (especially where environmental groups were more active) and in the E.C. institutions had to take them into account in order not to lose legitimacy.

111. What kind of E.C. environmental policy?

Four Environmental Action Programmes and an impressive number of directives (around 200) concerning various aspects of environmental protection constitute the legislative corpus of E.C. environmental policy. This policy is fundamentally a regulatory one -even though recent deregulatory enthusiasm and serious difficulties in implementing regulatory measures have highlighted the limits of direct regulation and led to proposals for economic instruments to complement or even substitute for regulation. Before examining this point, however, it is important to examine what kind of policy actually did develop in the Community context.

It has to be stressed first of all that the ‘greening’ of the E.E.C. had a very

controversial beginning. Despite the solemn words chosen by the Heads of State and Government during the Paris Summit which saw the inauguration of a Community environmental policy, the ‘genius of Europe’ was not yet very sensitive towards the degradation of nature; it was instead more inclined to find subtle legal devices to make the new Community policy not too binding on the member states. The first Environmental Action Programme (hereafter referred to as EAP) was presented as a ‘Declaration of the Council and the representatives of the Governments of the Member States meeting in the Council’. The second and third EAPs were presented as ‘Resolution[s] of the Council and the representatives of the Governments of the Member States meeting in the Council’. Only the fourth EAP has the status of ‘Resolution of the Council’, indicating an increased autonomy of the Council in this field. It must be emphasised that this rather unusual and changing legal form of the EAPs may be regarded as a reflection of existing policy disagreements over the legal basis - and probably over other aspects too - of E.C. competence in the environmental field (Koppen, 1988).

Such disagreements over the legal basis of policy, and the underlying un- willingness of member states to ‘surrender’ part of their sovereignty on environmental matters, is also reflected in the choice of the main legislative instrument adopted as a tool of E.C. environmental policy. According to Article 189 of the E.E.C. Treaty, the Community may use five main forms of action: (1) regulations, which have general application, are binding in their entirety and are directly applicable in all member states; (2) directives, which are binding only as to the result to be achieved, leaving national authorities to choose forms and methods of application; ( 3 ) decisions, which are binding in their entirety upon those to whom they are addressed (member states, legal persons, private institutions and/or individuals); (4) recommendations and options, which have no binding force; and ( 5 ) resolutions and declarations, which may be adopted by the Council and are of a political nature. The main instrument of environmental policy has been the use of directives. This means that E.C. environmental law can be applied in a flexible way by adapting to existing national legislation and administrative practices. But the price is that the directives may be implemented in a quite varied manner at the expense of policy coherence. Even worse, it has been noted that lax implementation and non-compliance grow as the number of directives rises (Koppen, 1988; Kram- er, 1988; Rehbinder and Stewart, 1985; von Weizsacker, 1988).

Environmental directives are mainly ‘regulatory-type’ directives (Rehbind- er and Stewart, 1985: 138) and may take different forms: prohibition of polluting activities; emission, specification and input standards; testing, packaging and labelling obligations; o r the setting of environmental quality standards leaving the member states wide discretion in applying them to individual polluters. Even if environmental directives are usually suggested on the basis

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of ‘national’ priorities expressed by member states’ representatives, the states are also bound to the priorities for action and the general approach set by the Community’s EAPs. It is therefore necessary to see what are the main features of the four EAPs, in order to understand E.C. regulatory strategy in the environmental field and not to get lost in the fascinating vagaries of the approximately 200 directives on air, soil and water pollution, and on wastes, major hazards, dangerous substances, noise, wildlife protection and other subjects.

Four elements seem to be crucial in the formulation of the Environment Action Programmes: the curative andlversus the preventative approach; the short-term versus the long-term perspective; the sectoral andlversus the cross- media and the integrative approaches; and the evaluation of the costs and benefits of environmental regulation. Other important aspects are the use of scientific research and expertise, and the relationship between environment and development at both the E.C. and the global levels.

A. Curative/preventative

After years of uncontrolled pollution, the first important step in the development of E.C. environmental policy was the adoption of measures aiming at repairing the damage. This is why the longest and most detailed plan of action described in the first EAP (OJ C 112/3, 20.12.1973) concerns ‘measures to reduce pollution and nuisances’. These measures followed a strictly ‘curative’ logic: identification and evaluation of the risks to human health and to the environment from pollution (diagnosis); and then the setting of standards based on criteria establishing ‘the relationship between a given exposure and an observable effect’ (chapter 2) and relating to specific pollutants like lead, mercury, cadmium and others (treatment). Moreover, quality objectives (es- pressed as pollutant concentrations or nuisance intensities - chapter 3, section 2, b2) were suggested and specific measures were adopted concerning particular products (directives were formulated on the maximum amount of lead in fuel, on the toxicity of detergents, etc.), certain industrial sectors, energy production, areas of common interest (marine pollution, the Rhine basin, frontier zones), and the disposal of wastes. The principle of prevention was already asserted in the first EAP (‘The best environmental policy consists in preventing the creation of pollution or nuisance at source . . .’, Principle l) , but certainly prevention was not the main focus of this first phase.

In the second EAP (OJ C139/1, 13.6.1977), preventative elements acquire more space under the headings ‘Non-damaging use and rational management of land, the environment and natural resources’ and ‘General action to protect and improve the environment’, in which the Environmental Impact Assess-

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ment (EIA) is mentioned for the first time. On this last point, a directive on EIA was submitted to the Council in 1980, but it was approved only five years later. In 1982, another important directive inspired by preventative criteria was instead approved, i.e., the so-called ‘Seveso Directive’. In the third EAP (OJ C 46/3, 17.2.1983) it is stated that an overall strategy must be formulated where ‘prevention rather than cure should be the rule’ (chapter 2, 9). In this respect, the Environmental Impact Assessment is indicated as the ‘prime instrument for ensuring that environmental data are taken into account in the decision-making process’ (chapter 2, 11). Furthermore, the third part of the third EAP is concerned with ‘Prevention and reduction of pollution and nuisance in the different environments’, and the development of clean technologies is mentioned in the part of the EAP which refers to the rational management of natural resources. Finally, the principle of prevention is included in the Single European Act and proclaimed to be central in the fourth EAP (OJ C 70/3, 18.3.1987).

Obviously prevention does not exclude cure; environmental pollution is so serious and widespread that remedial measures will always be necessary. But preventative measures are increasingly important given the enormous environmental damage already caused by human activities. The problem is that preventative measures are even more difficult to put into practice than curative ones. Prevention in fact needs technological innovation, which modifies existing production processes and products by means of techniques more beneficial to the environment (Janicke, 1985: 14). In this respect it has been noted that (apart from the official declarations) Community environmental law does not normally attempt to force - nor even just to concretely encourage -technological change; for example, in the motor vehicle directives the E.C. rejected the U.S. approach of technology-forcing by statute (Rehbinder and Stewart, 1985: 215).

Moreover, technological innovation is not enough to prevent pollution and depletion of natural resources. In the medium and long term, a coherent preventative approach must increasingly rely on structural changes in the direction of economic forms more suited to ecological conditions (Janicke, 1985: 14). This is today summarised in the slogan ‘ecological modernisation of the economy’, and it fits well with the notion of ‘sustainable economic growth’ which is emphasised in the fourth EAP with regard to cooperation with the developing countries (part 2.3.27) - but which must also be achieved in the industrialised countries. The importance of these issues and the problematic nature of the relationship between environment and development in the perspective of 1992 will be addressed in the last part of this article.

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B. Short-termllong-term

It has been maintained that ‘The great danger from the emergence of ecological scarcity is that we will not respond to its challenge in time . . .’ and that ‘time is probably our scarcest resource’ (Ophuls, 1977). But this does not mean that short-term measures are the best suited to cope with environmental problems. Preventative policies are the ones which try to tackle the causes and not only the effects of such problems, but this takes time -time to implement them (which can be long because of the structural economic, technical and political factors involved), and time to yield the positive effects, i.e., to achieve the conditions of long-term environmental protection.

Short-term and long-term objectives are not necessarily mutually exclusive. To clean a river now may be a first step in the longer-term perspective of preventing the general depletion of water resources. But sometimes there are discrepancies. In the economic field, for example, long-term investments to develop clean technologies can be in conflict with short-term profits. In the political arena, the time which is necessary to see the positive results of certain environmental measures may be longer than the time-scale that politicians have for reelection. And in a policy process where highly technical and scientific matters are at stake, there can be a gap between the normally long time required by scientific research and the necessity for policymakers to take timely decisions.

The use of scientific research and expertise in environmental policymaking is a quite complex issue not only because of the time gap mentioned above. Uncertainty and disagreements between experts are intriguing problems to be faced when scientific advice is asked for in the policymaking process. Stan- dard-setting - a major regulatory device in E.C. environmental policy - is a case in point. It has already been mentioned that, according to the definition given in the first EAP, the standards are set on the basis of criteria establishing the relationship between a given exposure and an observable effect. But there can be disagreements about the possibility that what is ‘observable’ depends upon the kind and scale of the experiments performed, and that ‘non-observable’ effects in the framework of such experiments might be ‘observable’ using other experimental procedures.

In fact, there can be uncertainties regarding important elements like the choice of which animal species best predict human responses, or the choice of the extrapolating function. Moreover, the same data, differently interpreted, can lead to conflicting policy recommendations and can be used to legitimise different decisions. This happens also in standard setting, which is then re- vealed to be a microcosm in which conflicting epistemologies, regulatory philosophies, social values, professional attitudes and national traditions are reflected (Majone, 1984). This point appears to be particularly important in

the E.C. context, where all of the above-mentioned elements interact in a supranational regulatory network and in international research teams and institutions like the E.C. Joint Research Centre.

It has also been pointed out that public policy disputes involving complex scientific issues usually entail conflicts not only over these scientific issues, but also over the distributional effects of the policy at hand - and this is also important in the E.C. context, characterised as it is by regional disparities and conflicts of interest. Mediation techniques aimed at making these distributional issues explicit and (possibly) contributing to the solution of these conflicts have been suggested (Ozawa and Susskind, 1985). Their application in a supranational framework like the E.C. - which involves multiple levels of open and closed, official and informal bargaining processes - seems quite difficult, but needs to be taken into account.

All these considerations indicate that the boundaries between science and policy are not completely clear-cut. This does not mean that they do not exist at all and that science can provide no ground to orientate and implement policy decisions. But in order to provide such ground, environmental research has both to address present environmental policy issues and to suggest which of these are likely to be the most important in future, on the basis of available evidence and theories. On the other hand, research results should be taken seriously into account by policymakers, without using the uncertainties of scientific data as an excuse to postpone and block actions which are regarded as economically or politically unpalatable. With regard to these points, some steps are being taken to better coordinate E.C. environmental policy and research (i.e., the research performed within the Community’s Joint Research Centre or that co-funded by the European Commission and by the member states). But many problems have still to be addressed concerning not only the coordination but also the evaluation and dissemination of E.C. research programmes and results (Liberatore, 1989).

C. Sectorallcross-medialintegrative

All four EAPs include measures concerned with specific sectors, and until the fourth EAP the prevailing tendency was to concentrate on pollution problems as they arise in different media (air, water, soil). The limits of this approach have become apparent, since many problems which have emerged relate not to individual media per se but to the transfer of pollutants or other substances from one part of the environment to another. Stress has therefore been placed upon the need to develop policies dealing not so much with the media themselves, but rather to the flows which link them (E.C. Commission, 1987: 30).

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Consequently, in the fourth EAP, a cross-media, or multi-media, approach is proposed (part 3.2).

While previous Community action has tended to concentrate on discharges of particular pollutant to one medium in isolation from the impact on the other media, the fourth EAP calls for the following measures: integrated substance- oriented controls (where cross-media effects are taken into account); as well as source-oriented controls (which were already included in the first EAP with regard to certain industrial sectors and to energy production, and which should cover all discharges of one source - an industry, a nuclear plant, etc. - into different media). In addition, regulatory measures adopted from the beginning are stressed again, i.e., product standards and emission limits based on the technical characteristics of the industry or product subject to regulation, and quality objectives or standards concerning the receiving environment. With regard to all of these measures, legislative requirements are increasingly set at the level of the ‘best available technology’. Specifications are obviously needed in order to apply this important but rather vague concept, and, what is even more important, forms of inspection would have to be adopted to find out whether the ‘best available technology’ is actually used. These points are not mentioned in the EAP, however.

Not only was there sectoralisation within the environmental issue-area, of course; environmental policy itself was originally ‘just’ a sector of overall Community policymaking. However, in the third and especially in the fourth EAPs the stress shifted towards the necessity (or desirability) to integraie the environmental dimension into other policies because ‘. . . there can be no lasting economic and social progress unless environmental considerations are taken into account and are indeed seen as an essential part of economic and social development’ (Fourth EAP, part 2.3.1). For example, a proper balance should be established between agricultural development and the needs of conserving the natural environment; the siting and design of industrial in- stallations and the management of wastes should be influenced by environmental considerations; and environmental requirements should be integrated into the planning and execution of regional development policies, the setting of energy policy objectives, and so on.

Integration is a very important and coherently ‘holistic’ goal, and it is consistent with the preventative approach and the long-term perspective. But the integration of environmental considerations within various sectoral policies may involve the risk of policy ‘dilution’. If there exist (politically and economically) weak environmental policy andor the lack of institutions able to ensure that environmental protection is actually pursued while economic objectives are being promoted at the same time, environmental considerations may be regarded as marginal in comparison with considerations of the eco-

nomic development of various policy sectors such as agriculture or transport. As a consequence, there may be diluted and piecemeal - ‘cosmetic’ - implementation of measures aimed at protecting the environment.

The effective and undiluted application of the integrative approach would not seem to be easy given the power balance within (and between) the member states and within the E.C. institutions. Within member states, not all public and private interest groups have the same weight and influence on domestic decision-making processes. Even if environmental organisations are very active and Green Parties manage to enter the parliamentary arena in some countries, powerful interest groups like industrial and agricultural organisations are often not very inclined to care about the environmental aspects of their activities. Connected with this point is the fact that environmental policy is still regarded as marginal in many E.C. countries, as is demonstrated by the very small percentage of the G.N.P. allocated for environmental protection (an average of around 1% in the E.C. countries) and by the shortage of financial resources and personnel usually suffered by the Ministries for the Environment, the local authorities and the administrative and technical bodies charged with the implementation of environmental measures.

This situation is partially reflected in the power balance within the E.C. Council, the European Parliament (the most ‘green’ among the Community institutions) and the E.C. Commission. With regard to the last of these - the main institutional actor in the environmental policy process - its annual budget for environmental policy prior to 1986, as has already been pointed’out, represented less than 0.001% of the total budget of the Community, and the Directorate-General for Environment, Nuclear Safety and Civil Protection has been understaffed and underbudgeted in comparison with other depart- ments. Therefore even within the Commisssion it is quite a difficult task to integrate environmental policy with other, economically and politically stron- ger, policy areas. It seems, then, that to strengthen environmental policy at the political, organisational and financial level, it would be necessary to make environmental criteria count for far more within other policy domains.

D. Costslbenefits

At a time when the economic situation of the Community and of the Member States continues to worsen, the question arises as to whether or not the Community environment policy should be modified. The Commission and the Council have already taken into account the new economic conditions . . . especially by developing preventative measures. However, environmental policy is a structural policy which must be carried out without regard to the short-term fluctuations in cyclical conditions, in order to

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prevent natural resources from being despoiled and to ensure that future development potential is not sacrificed. Furthermore, public opinion is still very concerned about environmental matters and, despite current difficulties, continues to support measures to protect the environment. (Third EAP, Introduction, point 5 )

This long quotation attempts to address the key question: Is environmental policy a ‘luxury’ that societies experiencing economic recession cannot afford?

During and following the ‘oil crisis’ of 1973-74 this question (even if expressed differently) was a crucial one. As a consequence, emphasis has been generally placed on cost-benefit and cost-effectiveness analysis (O.E.C.D., 1980), even if their application is not easy. In the second EAP it was in fact recognised that the benefits of environmental policy - mainly a reduction in the social costs of pollution and a improvement in the quality of the environment - are not simple to evaluate in monetary terms (chapter 2, b). The positive economic aspects of E.C. environmental policy also had to be stressed in order to legitimise its continuation during economic crisis. Therefore in the third EAP it is asserted that environmental policy must be concerned with the following problems: creation of new jobs by stimulation of the development of less polluting industries and products; reduction of pollution, nuisance and wastes; economising of certain non-renewable raw materials; promotion of energy saving and the use of less polluting energy resources; and, at the same time, the avoidance of individual national measures which would distort the proper functioning of the internal market.

These points are also underlined in the fourth EAP, which in addition mentions the possible conflict between short-term and long-term effects: ‘. . . economic gains from the pursuit of strict environmental requirements may not be without cost in the short term’ (part 2.4.3)- and even more in the long term. In this respect, a report of the O.E.C.D. concludes that, thanks to new processes and technologies, ‘significant cost savings have been achieved in the past few years which have not only produced improvements in the environment but which may also have enhanced productivity growth in a number of processes and in certain industries’, and that ‘in addition to the output- increasing or cost-reducing benefits of environmental policies, there are welfare benefits from the enjoyment of better health, greater recreational facil- ities and so on’ (O.E.C.D., 1985).

A major issue is, of course, that of the economic costs of environmental measures: costs of research, design and testing of new equipment or technologies; capital costs of producing and installing new equipment; running and maintenance costs involved in using the equipment or in carrying out the provisions of the policy; etc. (E.C. Commission, 1987: 345). Industries are not very enthusiastic about bearing such costs in the perspective of long-term gains

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or ‘merely’ environmental benefits. Therefore both legal regulation and economic instruments (taxes, charges, state aid, discharge permits) seem to be necessary in order to provide incentives or oblige the economic actors not to damage the environment. Some economic instruments are indicated in the fourth EAP: particularly the PPP (also regarded as fundamental in the three earlier EAPs), the adoption of preventative (and cost saving) measures and the use of charges (already provided for in the 1975 recommendation on cost allocation [OJ L 194, 25.7.1975)). But to what extent can economic instruments be seen as a possible alternative to legislative regulation in the environmental field?

IV. Implementation problems, economic instruments and reregulatory trends

The effective implementation of environmental measures is usually the weak link of the regulatory chain. Lack of financial and technical resources, organisational problems within administrative structures and various other elements make the implementation of (sometimes unclearly) written provisions difficult at local and national levels. The problem becomes yet more complex at Community level, where local, national and transnational elements interact. In this respect, the choice of directives as the main regulatory tool of E.C. environmental policy involves both positive and negative aspects.

It has already been pointed out that directives permit flexibility, but at the price of growing non-compliance or difficulties in implementation. This is mainly due to the fact that the policy process in the E.C. has many levels of decision-making: not only the governmental and intergovernmental levels, but also the complex level comprising relations within and between E.C. institutions themselves. All of these levels imply conflicts and bargaining: bargaining within the Council stemming from different national interests; bargaining within the Commission, which enjoys statutory independence from national governments but which is in fact quite dependent upon their ‘good- will’, at least because the Commissioners are appointed by national governments and can be renominated only if they enjoy the confidence of their own governments (see Pryce, 1973); bargaining between the various Directorates- General (DGs) of the Commission bureaucracy; and bargaining within and between the political groups and the working committees of the European Parliament. These multiple forms of bargaining heavily influence the very formulation of E.C. environmental policy and the approval or rejection of the EAPs and the various directives.

But the consequences of the Community’s multi-level policy negotiation processes are particularly evident when the implementation of written regulations and principles is at stake. There are two main potential ‘implementa-

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tion gaps’ between agreement on an environmental directive and its application: first, the directive must be incorporated into the national legal order by legislative measures at the national level; and second, it must be implemented and enforced by the national administration through the establishment of competent authorities, administrative guidelines, infrastructures, etc. (Reh- binder and Stewart, 1985; Capria, 1988; Haigh, et al., 1986). Objective differences in legal and administrative systems, and conflicts within the member states or between them and the E.C. institutions, may imply delays or non- compliance in both these phases. And the Community does not possess many instruments to overcome these problems and enforce its policies.

The Commission can institute formal infringement proceedings, the Eu- ropean Court of Justice can exercise review power and the European Parlia- ment can give its opinion; but at the end of the day each state is solely responsible for the implementation and enforcement of Community directives. Therefore

. . . the normal gap inherent in implementation of all environmental law is aggravated in the Community by the paramount role of the member states, the diversity of national political and administrative systems, and the lack of substantial Community involvement in the process of implementation and enforcement. (Rehbinder and Stewart, 1987: 238)

Because of all of these difficulties, and because of industry complaints regarding the ‘asphyxiating effects’ of an increasingly complicated regulatory system of controls, restrictions, instructions and so on, economic instruments are attracting considerable attention (von Weizsacker, 1988).

The main economic instruments presently under debate are marketable rights, subsidies, pollution fees and taxes. According to the proponents of marketable rights, instead of defining emission standards it would be more effective (and more desirable) to set a definite amount of pollution - fixed in terms of an imaginary ‘bubble’ placed over a plant - and to permit firms and industries to trade this permitted amount amongst themselves (Breyer, 1988). In some countries state subsidies have been introduced to encourage the development of clean technologies. Within the European Community, it has been argued that providing funding to help companies and individuals to make the investments needed to correct for environmental damages is a powerful instrument in achieving a high quality environment (Task Force Report, 1989: 4.17). Moreover, it has been proposed to use part of the Structural Fund (E.C. funds allocated to promote development projects in the most economically disadvantaged areas) to support various measures aimed at protecting the environment (Ruffolo, 1989). Pollution fees and taxes on polluting products or activities have been introduced in many E.C. countries, covering areas such as

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air emissions, water use and pollution, noise, leaded petrol, plastic products, etc. (Gerelli, 1990). More generally, the idea of an ‘ecological tax reform’ has been suggested, in which the bulk of the tax burden is shifted from labour and capital to resources and pollution (von Weizsacker, 1988).

The adoption of each of these economic instruments involves pros and cons. It can be argued that marketable rights involve the not very appealing idea of a right to pollute; but the counter-argument would be that environmental standards also involve a similar notion. The use of public funds to provide incentives for economic actors’ investments in anti-pollution and ‘clean’ technologies can be contrasted with the Polluter Pays Principle; at the same time, when public funds are used to foster some economic activities, it may be useful to use them to promote environmentally friendly activities and products. Fees, taxes and other economic instruments aimed at preventing the free (mis)use of natural resources imply the thorny problem of giving monetary values to the environment or to human health; and even if we are accustomed to the arbitrary values given, for instance, by insurance actuaries to such things as human life, the problem cannot be underestimated. Finally, the idea of ecological tax reform involves complicated and controversial distributive issues. In fact, even if we share a common environment and the responsibility to protect i t , someone who is suffering pollution without causing such pollution could be unwilling to contribute - even through a modest tax - to clean an environment damaged by others. The question of who is the real ‘free rider’ is a highly complex one, and requires political, rather than market, adjudication.

A deeper analysis would be needed to fully assess the pros and cons of the various economic instruments, but two general points can be suggested regarding their use within the context of E.C. environmental policy. First of all, economic instruments cannot substitute for direct regulation, but must complement it. It may seem rational to hope that pollution fees and emission taxes will automatically prevent overly high pollution because of the proportionally very high costs that such pollution would imply. But economic considerations alone cannot determine which level of pollution is ‘too high’ for the environment and for human health. Therefore, in spite of the scientific uncertainties mentioned above, product and emission standards are still needed. Eco- nomic instruments can, of course, provide positive incentives for economic actors to meet these standards and to improve their ‘green’ performance in order to save money. This is particularly true in the E.C. context, where different levels of economic development and the different functioning of economic incentives in the various member countries could lead to different ‘environments’ - and to distortions of competition - if some common standards are not established.

A ‘mix’ between direct regulation and economic instruments is thus developing both within the member countries and at the Community level. It can

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then be argued that a process of ‘reregufufion’, rather than of deregulation, is currently occurring, one in which economic incentives complement regulatory provisions rather than substituting for them.

The second point concerns implementation problems. A major reason for introducing economic instruments is the increasingly difficult implementation of direct regulation, but it must be remembered that the implementation of taxes, charges and so on may not prove to be so easy either. Therefore environmental monitoring, inspections and other activities aimed at control- ling the effective implementation of both legislative and economic measures remain necessary. Given the fact that implementation is the responsibility of the member states, the problem arises of different forms of implementation potentially producing different levels of actual protection within the Commu- nity. This may be a serious problem in the perspective of the completion of the E.C. internal market.

V. 1992: Market against environment?

In October 1988, the environment ministers of the E.C. member states asked the Commission to report on the environmental dimension of the internal market to be completed at the end of 1992. A Task Force formed by independent experts was convened by the Commission and produced a report (Task Force, 1989), in which both the environmental impact of the internal market and the policy responses needed to limit or prevent negative impact are examined. The analysis and the recommendations of the report are based on the issue of ‘sustainable development’. It is admitted, first of all, that ‘the economic growth projections for the Community following the completion of the Internal Market have not hitherto satisfactorily addressed the issue of long-term sustainability of this growth’ (ibid.: 1.2). The Task Force then stresses that ‘Onc central theme of the report is the challenge of ensuring that the Community’s development is sustainable’ (ibid.: 3.31). Finally, it is argued in the conclusions that ‘In the absence of any change in policies or technologies there would be increases in pollution and in threats to the environment . . .’ and that ‘the Community (and member states) must consider the nature of the policy response required to safeguard the environment and to ensure the sustainability of economic growth’ (ibid.: 11).

These and other interesting points made by the Task Force give rise to some further reflections. The first concerns the concept of ‘sustainable development’. According to the definition given in the Brundtland Report (World Commission on Environment and Development, 1987), sustainable development means economic development which can meet the needs of the present generation without compromising the ability of future generations to

meet their own needs. This implies that there are limits - limits which are not the sort of absolute constraints that were at the centre of the debate begun in the 1970s stressed by the report of the Club of Rome (1972), but limits imposed by the present state of technology and society. That is, the focus has shifted away from a necessary contradiction between growth and environmental safeguards, to the potential complementarity of growth and the environment (Pearce, Markandya and Barbier, 1989). The problem is that the boundaries of sustainability are not fixed, and that many interests have much at stake in determining what constitutes the ‘developability’ - and the exploitability - of natural resources (O’Riordan, 1985). It is therefore necessary to see what kind of ‘developability’ underlies the 1992 project, i.e., whether the completion of the internal market reflects serious consideration, or the underestimation, of environmental (and time) constraints.

The most likely answer which can be drawn from the Task Force report on the environment and the internal market is not very encouraging. Until now, no serious attention has been paid to the fact that the removal of physical, technical and tax barriers, while improving trade within the Community, can have undesirable side effects on the protection of the environment. If excep- tionsor alternatives are not established, then there is the risk that the removal of physical barriers will bring about large-scale ‘waste tourism’, that the absence of stringent technical barriers will favour the circulation of products originating in countries without stringent product controls, and that the aboli- tion of tax barriers will severely limit the use of fiscal measures for environmental management. And going beyond these few examples, the general problem of ‘sustainability’ remains: what kind of environmental damage is likely to be caused by the expected increases in production, transport, con- struction and other economic activites? Can anything be done - especially at the Community level - to avoid ‘unsustainable’ economic growth?

Here we must bring in the question of what kind of p o k y responses would be necessary to prevent the E.C. internal market from degrading not only the Community environment but also the wider regional and global one. It is becoming more and more evident that the centrally planned economies of the Eastern European countries have created vast environmental damage. But this fact should not make Western policymakers and citizens forget that unregulated market mechanisms have also proven unable to deal with environmental externalities. This means that deregulatory measures aimed at increasing ‘market efficiency’ may involve even more pollution and inefficient utilisation of natural resources. A better market after 1992 can imply a worse environment and unsustainable development if mere quantitative growth is pursued- as has been the case in the past. It must be remembered that this kind of growth contributes greatly to global environmental threat while its benefits are enjoyed only by a small proportion of the world’s population.

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It seems, then, that public authorities at the national and international levels cannot avoid the responsibility to take action and design regulatory instruments (both direct and indirect) to prevent the ‘hidden hand’ from stealing our common resources. Some interesting proposals in this respect are put forward in the Task Force report. But in many cases those who should listen to the advice, make decisions and enforce measures aimed at protecting the natural environment (and all its inhabitants) are not very powerful in comparison with the representatives of major economic interests. Therefore it seems necessary to strengthen environmental policies and institutions at all levels (local, national, transnational) in order to make environmental considerations really count. The European Community, despite the good intentions in its declarations and attempts to use directives for environmental policy purposes, not only has been caught in various decision-making and implementation traps, but may also be undermining its own capacity to take such measures as the result of 1992. In this respect, citizens’ information on environmental matters and their active participation in decision processes are necessary as a basis for strengthening environmental policies - on the transnational as well as on the national and local levels.

Perspectives

Acid rain, desertification, global warming, ozone layer depletion, pollution of air, water and soil, radioactive contamination of large areas, species extinction - just to mention the most urgent environmental threats - are some of the problems to be dealt with in the present and in the future, problems which are clearly serious, interdependent and characterised in most cases by a transboundary dimension in space and time. Environmental policies are important for facing the ecological challenge. Local, national and international measures must be formulated and implcmentcd, finding the most appropriate level of action necessary to cope with the various environmental threats. In this context, given the economic and political links between the E.C. member countries, and given the problems to be faced in the perspective of 1992, a common environmental policy appears to be crucial.

Such a policy, besides providing a common basis for local and national policies, may also make a contribution to the necessary global strategy first indicated in the U.N. Conference on the Human Environment. With regard to this point cooperation with non-E.C. countries, particularly with the Eastern European and Third World countries, should incorporate environmental considerations in the attempt to achieve a really sustainable - and fairly shared - form of development. In neo-functionalist terms, environmental policies would seem to comprise an obvious potential issue-area for ‘positive’ transna-

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tional integration of policymaking and implementation. However, the new impulse for integration stemming from the Single European Market, so far mainly an exercise in ‘negative integration’ - lowering existing economic barriers rather than developing coherent ‘political’ policies - has not yet borne fruit in terms of institutionalising ‘positive’ policymaking functions. Although existing directives and other forms of ‘reregulation’ have had some significant effects, especially in pushing national governments towards greater awareness and intervention, difficulties in formulating and implementing direct and indirect policy instruments to protect the environment should not be underestimated. It will require a closer and more intense form of political - rather than merely economic - integration for such institutionalisation to develop. It is to be hoped, however, that this fact will not be used as an excuse to delay decisions and to adopt a ‘wait and see’ attitude, for time may be of the essence if we are to prevent irreversible large-scale damage.

Acknowledgements

A previous version of this article was presented to the Workshop on Dereg- ulation, Reregulation and the International Dimension, Joint Meetings of Workshops, European Consortium for Political Research, Paris, 1@15 April 1989. I am grateful to Giandomenico Majone and to Philip Cerny and the other participants in the workshop for their comments.

Notes

1. Certain documents referred to in this paper will be cited by their official catalogue numbers only and not separately listed in the References below. (SEC refers to a series published by the E.C. Commission; OJ refers to the Official Journal of the European Community.)

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Problems of transnational policymaking: Environmental policy in the European Community

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