Effectiveness of Environmental Law: What Does the Evidence Tell Us?

Abstract

A lot of literature has paid attention to ways in which the performance of environmental law could theoretically be improved. Less attention is, however, paid to the question which environmental policy instruments have actually led to a reduction of environmental harm. The problem is not that this material is not available. Since the early use of environmental policy instruments in the 1960s and 1970s various environmental and social scientists have analyzed the effects of particular environmental policy instruments. However, since these results are often published in environmental economics journals, they have to a large extent not led to a large influence in the environmental legal community. Moreover, to the extent the empirical literature is known, it often focuses on one particular aspect, e.g. the effects of an emission trading programme. The enclosed paper tries to fill that gap by looking at the empirical literature with respect to environmental policy instruments in an integrated manner. A large amount of these empirical studies are discussed in a critical manner whereby the various environmental policy instruments (liability rules, regulation, but also market-based instruments such as taxation and emission trading) are discussed in an integrated way. This overview does shed some light on the circumstances under which particular policy instruments (or a combination of instruments) may be effective in reducing environmental pollution. Attention is also specifically paid to the crucial issue of the enforcement of environmental law, thus discussing sanctioning policy and various enforcement strategies. The paper on the one hand brings together a lot of the widely-spread empirical literature with respect to the effectiveness of environmental law; on the other hand it also calls on environmental lawyers to increasingly use this type of empirical literature in environmental policy evaluations. The relevance of the paper is thus both theoretical as well as practical. From a theoretical perspective the paper tests particular assumptions made in environmental policy literature on how environmental law would work, by showing that the results in practice may often be different than what is assumed in theoretical literature. Theoretical literature for example points at the advantage of strict liability in deterring environmental pollution; empirical evidence, however, shows that increasing (strict) liabilities upon polluters also lead to liability avoidance behavior e.g. by organizing hazardous activities within smaller legal entities. This also shows the practical relevance of the paper. By showing under what circumstances particular policy instruments may work, important lessons are provided to the policy maker who e.g. would wish to move to the introduction of an emission trading scheme. The empirical evidence sheds important light on the conditions under which such a scheme can be able to reach the environmental goals desired by the legislator. The empirical evidence which is critically reviewed in this paper moreover relates to the application of environmental law in the US, Europe and developing countries and should therefore be of interest to a broad audience interested in the effectiveness of environmental law.