Abstract
AbstractMulti‐level environmental governance (MLEG) has become commonplace, yet few attempts have been made to explain in economic terms why it should have emerged. This article examines four economic explanations for MLEG. The first considers it as a solution for overcoming collective action challenges when a large number of actors are involved. The second explanation is that multiple levels of environmental governance may be needed to minimize governance costs. Thirdly, path dependence could explain MLEG. Fourthly, complex and multifunctional resource systems may generate ecosystem service flows that have benefit catchments of different size, and multi‐level governance solutions may be needed to link providers and beneficiaries. While they are to a degree complementary, the analysis suggests that the multi‐functionality explanation is the most nuanced one of them and offers the best diagnostic for governance challenges that an environmental resource system poses. © 2015 The Authors. Environmental Policy and Governance published by ERP Environment and John Wiley & Sons Ltd
Highlights
M ULTI-LEVEL ENVIRONMENTAL GOVERNANCE (MLEG) HAS BECOME COMMONPLACE AS RESULT OF THE PROLIFERATION of the European Union’s (EU’s) environmental directives (Jordan, 1999) and multi-lateral environmental agreements (Mitchell, 2003). It has been a common subject of research in political science and international relations (e.g. Jordan, 1999; Vogler, 2003; Biermann and Dingwerth, 2004; Najam et al, 2004) but among economists interest in environmental governance was previously limited to scholars of law & economics, economics & politics, and public finance (Costanza et al, 1999; Esty, 1999; Hanna, 1999; Birner and Wittmer, 2004; Paavola, 2007)
While it is likely that collective action in pursuit of benefits from trade in carbon reductions is behind the establishment of multi-level governance solutions for carbon markets, the multi-functionality explanation helps shed critical light on the existing governance structures
This article has demonstrated that the theories of collective action, governance costs, path dependence and multi-functionality all offer somewhat distinct economic explanations of the emergence of MLEG solutions
Summary
M ULTI-LEVEL ENVIRONMENTAL GOVERNANCE (MLEG) HAS BECOME COMMONPLACE AS RESULT OF THE PROLIFERATION of the European Union’s (EU’s) environmental directives (Jordan, 1999) and multi-lateral environmental agreements (Mitchell, 2003). In Finland the governance of freshwater fisheries was for a long time based on three tiers of self-governing user organizations, the formation of which was mandated by law: the incorporation statutes vested the user organizations with their legal powers and responsibilities (Paavola, 2002a: 23) Another explanation of MLEG starts from the costliness of environmental governance as an undertaking, and from the possibility that different governance solutions can imply different levels of governance costs (Williamson, 1999). Co-management of natural resources such as forests in developing countries is based on the relative advantages of undertaking some governance functions, such as raising funds and making collective decisions, at the national level and others, such as monitoring and provisioning, locally. To summarize, when multi-functional resources generate multiple ecosystem services that have different spatial scales, they may require multiple jurisdictions and governance solutions to link them together to ensure equitable sharing of benefits and burdens. Equity is needed for the legitimacy and effectiveness of governance solutions
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