Environmental Policy Instruments Research Articles

Behavioural instruments in environmental law and policy: Potential and challenges

AbstractThe behavioural revolution in law and economics led to the insight that command‐and‐control and market‐based instruments have limitations in bringing about behavioural change. Environmental behavioural instruments use persuasive strategies or techniques rather than direct incentives to encourage environmentally responsible decision‐making. This article investigates the potential and challenges of behavioural instruments in environmental policy based on a survey of theories and examples concerning environmental behavioural instruments. Behavioural instruments can reduce the information costs of environmental regulation while increasing self‐efficacy for environmental compliance. More importantly, behavioural instruments can be cheap and effective by activating various norms in specific contexts. However, the behavioural approach, because of its focus on individual compliance, may not be well suited to address (transboundary) externalities. Behavioural instruments are especially important in generating positive externalities by appealing to social norms. Such mechanisms are, however, less suited to internalising negative externalities. The effects of behavioural instruments may not be easily guaranteed (in the long run), especially when the environmental goal of the behavioural approach clashes with private interests or fails to consider individual differences and contextual factors. We therefore argue that behavioural instruments should be included alongside standard regulatory tools, thus reaching an optimal mix between both.

Synergies between biodiversity conservation and drinking water protection in an agriculture dominated landscape – Case study of the Lower Savinja Valley in Slovenia

The growing world population and global market competition are putting pressure on high-yield food production, reducing the space available for low-intensity agricultural practices that support high biodiversity. In search of synergies between different environmental policy instruments, the potential of drinking water protection zones (WPZ) for high nature value (HNV) farmland conservation and connectivity in the Lower Savinja Valley in Slovenia was examined. In drinking water protection zones, restrictions of fertilizer and pesticide use are enforced, which have demonstrated beneficial effects on biodiversity. Overall, HNV farmland covered 25.8% of the area, of which 6% was protected in almost equal proportions by Natura 2000 sites and WPZ. Zonation prioritization assigned higher average scores to cells in WPZ compared to Natura sites and unprotected areas indicating high value of WPZ for HNV connectivity. The proportion of WPZ receiving the highest Zonation prioritization scores ranged from 23% to 70% depending on connectivity scale. Simulation of conversion of arable to HNV farmland on WPZ added 58.2 ha, and increased overall HNV farmland cover in the Lower Savinja Valley from 25.8% to 26.3%, further reinforcing the importance of WPZ for connectivity. Drinking water protection zones under different levels of protection cover approximately 20% of the territory of Slovenia. Given their large extent, we suggest that when planning for HNV farmland conservation and ecological networks within intensive agriculture dominated landscapes, WPZ should be evaluated for their potential and integrated into planning. Analysis focused on the spatial configuration of HNV farmland but lacked information on habitat quality, species presence and management practices in WPZ. Further studies of the effect of WPZ management restrictions on biodiversity are needed.

Public acceptability of policy instruments for reducing fossil fuel consumption in East Africa

ABSTRACT In recent decades, there has been increasing research interest in individuals’ support of and resistance to climate and environmental policy instruments. However, there is an empirical bias in the literature, as few studies have been conducted in low-income countries. Based on a survey with 4,766 respondents we identify the level of public acceptability for climate policy instruments and their determinants in East Africa (Ethiopia, Kenya, Rwanda, Tanzania and Uganda). While our sample is not fully representative of the East-African population, we capture highly educated individuals in urban areas, who are likely to have a large influence on policy processes. In line with previous studies in other contexts, we find that higher education and climate change concern are linked to the acceptability of policies aimed at reducing fossil fuel consumption. Specifying how the revenue from a climate tax or subsidy removal would be used, almost doubled the support for these policy instruments. In contrast to earlier studies, we find that investments in social programmes, not environmental programmes, was the revenue specification that increased the acceptability the most. One possible explanation would be that in a context where poverty is more prevalent, social issues are more salient to people. We also find weak associations between trust in government and the acceptability of climate policy instruments in East Africa and large heterogeneity across the five focal East African countries. Besides establishing an empirical foundation for future research on climate policy support in East Africa, the study provides essential policy insights: Investing in education and improved information, contributing to increased awareness and understanding of climate concerns, can potentially increase support for climate policy proposals also in the East African context. Earmarking revenues from climate policy instruments for social programmes may also significantly boost support. However, as our study is not fully representative of the population in the five countries and relies on stated preferences, which may be subject to different biases, the results should be interpreted with caution.

The impact of green finance policy on green innovation performance: Evidence from Chinese heavily polluting enterprises

Green innovation (GI) is increasingly recognised as an effective strategy for tackling climate change, mitigating environmental issues, and promoting sustainable development. Using panel data of the Chinese listed firms from 2007 to 2019, this study adopts the difference-in-differences approach to assess the impact of the green finance policy (GFP) initiated by the Chinese government in 2012 on the green innovation performance of firms. The findings reveal that the GFP significantly boosts the green innovation performance of heavily polluting enterprises (HPEs). Notably, this effect is more pronounced in state-owned enterprises and firms with high dependence on external finance. Compared with penalty-based regulations, incentive-based and voluntary environmental regulations demonstrate more significant moderating effects on the relationship between the GFP and green innovation performance for HPEs. We also identify improved efficiency in the usage of green investments as a potential mechanism through which the GFP enhances the green innovation performance of HPEs. Further comparative analysis shows that green enterprises can achieve simultaneous improvement in both the quality and quantity of green innovation, whereas HPEs predominantly exhibit enhancements in innovation quantity. To maximise the GFP's positive effects, it is recommended to facilitate more targeted bank lending towards HPEs to support their structural transformation. Additionally, the coordinated deployment of diverse environmental policy instruments is advised to exploit their synergistic effects.

Implementing EPR as a Tool for Addressing Environmental Issues in Vietnam

The Extended Producer Responsibility (EPR) scheme has emerged as a critical environmental policy instrument around the world, holding great promise for addressing significant environmental challenges in Vietnam, a country undergoing fast economic expansion and industrialization. This literature review proceeds to describe Vietnam’s EPR program, focusing on its regulations and implementation procedures. By highlighting several obstacles and directions in Vietnam, this review emphasizes the importance of aligning EPR strategies with the country's socio-economic context to achieve sustainable management of waste and a circular economy.

How do gardeners define ‘invasive’? Implications for invasion science and environmental policy instruments on invasive species

Ornamental horticulture is a main introduction pathway for invasive species globally and gardens are a source of potentially invasive species. Gardeners are therefore important actors (i.e. stakeholders) for invasion science and environmental policies on invasive species. Yet, to the authors’ knowledge, no previous study has asked gardeners directly how they define ‘invasive’, and compared this to definitions used within invasion science and environmental policies. For this reason, gardeners were asked to define an ‘invasive’ plant. A deductive approach to thematic analysis of the responses, using key concepts in invasion science and relevant environmental policies, explored the connections between the concepts. This demonstrated the nuanced perceptions and definitions of ‘invasive’ amongst gardeners in Britain, including similarities with how ‘invasive’ is defined especially with the two key concepts of spread and impact. Clear differences were also found; importantly most gardeners only considered the term ‘invasive’ within their gardens (as opposed to the wild). The study also finds that there is better mutual understanding of the term ‘invasive’ between invasion scientists and gardeners than with those involved in environmental policies. Understanding how gardeners define ‘invasive’ has important implications for engaging them with invasion science by exploring the factors determining behaviours in terms of invasive species. This is particularly important in going beyond raising awareness and towards influencing behavioural change more effectively. This study is also relevant to making environmental policies, and especially in their implementation by better knowing how gardeners perceive the issue of invasive species.

The Quality of Biodiversity Inputs to Environmental Impact Assessment (EIA) in the Succulent Karoo Biodiversity Hotspot, South Africa

Environmental impact assessment (EIA) is an important environmental policy instrument to proactively inform development decisions that might impact biodiversity, especially in internationally recognised biodiversity hotspots. One such hotspot region is the Succulent Karoo Biodiversity Hotspot (SKBH), known for its rich endemism of flora and fauna. The aim of this research is to determine the quality of biodiversity inputs to EIA in areas with high biodiversity value, such as the SKBH. This was achieved by reviewing the quality of biodiversity inputs to 16 EIAs against a tailor-made review package. The review produced ‘unsatisfactory’ results related to the integration of biodiversity impacts, public participation, and continual monitoring. ‘Satisfactory’ results were achieved for the consideration of ecological approaches, description of the baseline environment, and the application of the precautionary principle. To address the unsatisfactory results, we recommend the development of context specific guidelines dealing with (i) significance thresholds, (ii) alternatives and mitigation, and (iii) monitoring plans. Standard approaches, guidelines, and general competencies do not suffice for EIA in biodiversity hotspots.

Moderating effect of urban endowment factors on environmental regulations-productivity relationship in Beijing-Tianjin-Hebei region

In this paper, six major cities in the Beijing-Tianjin-Hebei region of China are classified into two groups, namely core city (Beijing) and industrial cities. The objective is to analyze the moderating effect of urban endowments in different urban contexts on the environmental regulation-productivity relationship using an econometric model. The results are: As environmental regulation intensifies, production in Beijing's high-polluting industries rises after falling, showing “innovation compensation” and “inefficient exit” effects. In contrast, the high-polluting industries in the industrial cities exhibit a “compliance cost” effect. In Beijing, four urban endowment factors, including economic development, technological innovation, human capital, and government intervention, can provide supportive conditions for business development under environmental regulatory pressure, primarily by reducing the “compliance cost” effect and enhancing the “innovation compensation” effect. In industrial cities, on the other hand, urban endowment factors have not had a positive moderating effect, and government intervention has even had a negative effect. We argue that government intervention may be the more fundamental urban endowment factor, which may affect the moderating outcomes of other endowment factors. Based on these findings, we propose that governments should make greater use of guiding and incentive-based environmental policy instruments, while reducing administrative interventions. Appropriate policy instruments can activate the positive moderating role of urban endowments and thus provide a better supportive environment for firms' technological innovation.

Environmental Regulation based on the Best Available Technologies: Problems and Trends

The article analyzes the main problems of the transition of the Russian economy to a new environmental and technological regulation based on the best available technologies (BAT). In recent years, the principle of BAT as a promising innovative tool for environmental and economic development has been declared as a key approach that can ensure the activation of structural and technological transformations of the Russian economy. Based on the main conditions, the observance of which largely ensures the success of the practical implementation of the BAT approach in developed countries, the author singled out current trends in changes in environmental regulation instruments in Russia that are taking shape to date and will influence the formation of the environmental situation, at least in the medium term. . Among such tendencies, we analyzed, in particular, the introduction of a moratorium on environmental control (freezing planned inspections of an enterprise for several years in advance); shift or suspension of implementation of a number of federal environmental projects and a number of environmental laws adopted in recent years in the context of BAT; as well as a number of environmental requirements as part of the implementation of the BAT approach, etc. The directions for changing environmental policy instruments in the light of the proposed solutions in connection with sanctions and their possible consequences for the environment are considered. The proposed recommendations can be used in the development of key elements of the environmental management mechanism.

The dynamic influence of energy consumption, fiscal policy and green innovation on environmental degradation in BRICST economies

The global consensus on overcoming climate change and environmental sustainability has increased the urgency towards formulating stringent environmental and fiscal policy instruments in achieve environmental sustainability. The current study extends policy deliberations by studying how energy transition and fiscal policy measures impact the ecological footprint of BRICST economies from 1995 to 2021. Our findings from Driscoll-Kraay standard errors, FMOLS, DOLS, and method of moments quantile regression identify that energy transition, renewable energy, taxation revenues and green innovation improve environmental sustainability, while non-renewable energy consumption and governmental expenditures exacerbate environmental challenges. Our econometric analysis allows us to propose that policymakers must use fiscal policy measures to introduce structural changes and foster the adoption of environmental technologies in the industrial sector. Furthermore, developing economies must broaden tax base to increase environmental spending on upgrading renewable energy infrastructure and lower ecological burden.

Reduce production or increase efficiency? Hazardous air pollutants regulation, energy use, and the synergistic effect on industrial enterprises' carbon emission

Theoretically, the synergistic reduction strategy aimed at curbing both carbon and air pollutants emissions is more cost-effective than a singular emission abatement approach. Using a firm-level panel dataset, we employ the difference-in-differences (DID) method to estimate the impact of hazardous air pollutant regulation on carbon and air pollutants emissions in China. We found that the hazardous air pollutant regulation led to a decrease in firm-level carbon emissions and sulfur dioxide (SO2) emissions of 5% and 10%, respectively. Mechanism analysis shows that source reduction is the key for firms to achieve synergistic emission reductions. Furthermore, firms' source reduction strategies lie in improving energy efficiency, rather than reducing output. Environmental policy instruments should be based on a more synergistic approach.

The effects of environmental taxes, renewable energy consumption and environmental technology on the ecological footprint: Evidence from advanced panel data analysis

The world faces various challenges in terms of environmental sustainability. An increasing world population, the rigidity of traditional production and consumption patterns, the complexity of economic activities, globalization, and harmful emissions intensify environmental pressures. In this context, the evaluation of various environmental policy instruments is important to alleviate environmental pressures and, thus, combat climate change. This study aims to investigate the impact of environmental taxes, renewable energy consumption, and environmental technology on the ecological footprint in OECD countries by using data from 1994 to 2018 and modern panel data techniques. The results of the AMG estimator indicate that environmental taxation and renewable energy consumption play a role in reducing the ecological footprint; however, results imply that environmental technology does not have a statistically significant effect on the ecological footprint. In addition, we applied DCCE and CS-ARDL estimators to obtain robustness results and observed that the findings remained valid. Therefore, the results of the study suggest that regulations to increase the effectiveness of environmental taxes, renewable energy consumption, and environmental technology should be promoted to ensure environmental sustainability.

Reshaping preferences over coastal and marine environment. Evaluating temporal effects on preferences raised by information campaigns

The present study attempts to evaluate an allegedly promising instrument of environmental policy: public information campaigns for raising awareness, as reflected by enhanced environmental preferences. We evaluate an intensive campaign addressing plastic pollution in a coastal and marine environment, an issue of high environmental importance which is increasingly attracting public interest. Using stated preference surveys, we evaluate the effects of the campaign on preferences for ecosystem services and environmental goods. Our focus lies in the temporal effects across seasons, inducing different ecosystem services, approximating the effects of information on use and non-use values.Our findings indicate that systematic provision of information can enhance preferences and, although a time-decay effect exists, awareness remains significantly enhanced after the end of the campaign albeit not uniformly across different (use and non-use) values. As the impacts on preferences are subject to variation of seasonal experience with ecosystems - implying variation in the intensity of use – additional to a time-decay effect, it emerges that although information is a necessary instrument of environmental policy, it cannot be a sufficient one. An effective policy, addressing the needs of future generations, also requires instruments that give economic signals (taxes) and constrain preferences (standards) with information provision enhancing their impacts.

Designing effective environmental policy mixes in the UN Decade on ecosystem restoration

The 2020s are starting under challenging circumstances. The impact of COVID-19 recovery plans and the realignment of geopolitics with energy provisioning will be crucial for meeting global environmental policy targets, such as those exemplified by the recently launched United Nations Decade on Ecosystem Restoration. How to build a more ecologically viable society, however, remains a contested issue. Several scholars are also highlighting the importance of complexifying environmental policy beyond individual instruments centred on the limiting paradigm of economic growth. Drawing on these considerations, we make a case for Environmental Policy Mixes (EPMs), which can better accommodate a diversity of institutional arrangements, contextual power dynamics, and a multiplicity of environmental targets. In this paper, we first present a database of 146 environmental policy instruments (provided in the annexe) that we collected through a survey of the literature. Second, we develop an EPM framework based on a set of 14 criteria that we then test with a selected group of experts in the field, both academics and business practitioners, through structured interviews and card sorting. Following, we present an adjusted final version of the framework and conclude with two illustrative examples of how to apply it. The first one is a case study of the environmental trade-offs in a natural UNESCO World Heritage Site, and the other investigates how to align COVID-19 stimulus packages with the objectives of the UN Decade on Ecosystem Restoration. The decade ahead is going to be critical for reaching global environmental targets. The EPM framework can facilitate policy discussions and guide decision-makers in tackling the environmental policy challenges of the 2020s and beyond.

The Protection of the Capacity for Resilience in the Provision of Drinking Water from Hybrid Environmental Policy Instruments

The use of hybrid environmental policy instruments is an open research topic, particularly in the case of water resources protection. We analyzed the influence of hybrids between command-and-control regulation (CAC) and environmental taxes where the body of water’s capacity for resilience and drinking water supply are critically affected by pollution accumulation over time. We used a general equilibrium model in which it is assumed that a representative company pollutes water bodies with its production and can use pollution abatement technologies to comply with environmental regulations. These water bodies are used by a public utility that provides drinking water to the economy. This paper focuses on the review of the Colombian CAC environmental regulation, which moved from controlling a percentage of pollution to defining specific amounts of pollutants discharged, and its interaction with an environmental tax, which makes it a hybrid policy. Although the new CAC is stricter in principle, we conclude that for different values of the model parameters, a hybrid environmental policy requires periodic revision of pollutant discharge limits as well as a complementary environmental tax that approximates the Pigouvian tax to ensure water bodies’ resilience.

Optimum combination of heterogeneous environmental policy instruments and market for green transformation: Empirical evidence from China's metal sector

Based on the new structural economics view that the combination of effective governments and efficient markets is the fundamental path to high-quality development, this study investigates how heterogeneous environmental policy instruments combine with marketization to improve the total factor energy-environmental efficiency (TFEEE) in China's metal sector. Utilizing the provincial panel data from 2006 to 2019, a super-efficiency slacks-based measure data envelopment analysis (SBM-DEA) integrated with the global Malmquist-Luenberger (GML) index is employed to estimate the energy-environmental efficiency and its dynamic changes. The evaluation results imply a significant increasing trend in the energy-environmental efficiency, but the overall level is rather low with disparities between sub-sectors and different regions. Using a dynamic panel threshold model, the “strong” version of the Porter Hypothesis is validated that command-and-control environmental policy (CEP), market-incentive environmental policy (MEP), and voluntary environmental policy (VEP) have an optimum stringency range to induce TFEEE growth, while the impact modes are drastically diverse. Further study verifies that higher marketization is conducive to triggering the facilitation effect of heterogeneous environmental policy instruments on the TFEEE but with completely different threshold values of marketization, which decrease sequentially corresponding to VEP, CEP, and MEP.

What makes green persuasion effective? Evidence from a community-financed sanitation program in Indonesia

Understanding when and where face-to-face communication affects pro-environmental decisions is important for policymakers. We study a data set collected in a solicitation project intended to increase participation in a community-financed waste collection program in Indonesia. Two types of messages are developed and randomly assigned to 748 households. In addition, solicitors are randomly assigned to a control group or one of two treatment groups, and these groups are shuffled further midway through the project. These two orthogonal randomizations allow us to assess the impact of a combination of messages, solicitors and households. We find that the “help the children” message increases the probability of participation for households with a young child. Solicitor personality is associated with immediate participation but becomes nonsignificant after three months. Furthermore, a household is more likely to participate if a solicitor knows the respondent personally. These results suggest that, at least in the short term, important factors in encouraging behavioral changes include not only the contents of messages but also the type of sender of such messages. This paper highlights the possible impact of targeting and content-sender-receiver matching when persuasive communication is used as an environmental policy instrument.

Carbon Tax and Environmental Quality in South Africa

Carbon taxes are considered an important environmental policy instrument for the improvement of environment quality in developing countries. Despite these premises, the implementation of the carbon tax policy in developing countries has lagged behind. The aim of this study is to analyse how carbon tax influence environmental quality and economic performance in South Africa. Such a country-oriented inquiry is envisaged to have some positive policy implications for the South African economy and other developing nations. The analysis was conducted using a static computable general equilibrium (CGE) model of South Africa, which was expected to capture the observed structure of South Africa’s economy. Furthermore, the parameters of the CGE equations were calibrated to observed data from a social accounting matrix (SAM) for 2015. The results show that environmental tax has negative effects on gross domestic product with the energy sectors which are generally the most polluting sectors suffering higher output losses due to the environmental tax. Household consumption is significant reduced by 2.34% due to the reduction in emissions as a result of carbon tax policy. According to the study findings, policy-makers should consider an initial 5% carbon tax policy which may results in achieving reasonably good environmental quality without losing on investment, fixed capital investment and government revenue.

Making a market in environmental credits I: Streams of value

This pair of papers examines and describes the state action necessary to make markets function as environmental policy instruments and as strategies of governance. They do this through a detailed look at the mechanics of environmental credit compliance markets in the US states of Oregon, Ohio, and North Carolina in which stream credits are privately created and sold to developers who have impacted protected stream systems. In this paper, we examine the tools, techniques, and people involved in the creation of a value-bearing stream credit out of a physical stream or river site. These observations reveal important principles of how science functions within governance, as well as where gaps and resistances appear that create unforeseen outcomes in market-led policy. We examine the construction and use of instruments that define natural processes as objects with value; these techniques and tools include databases and spreadsheets, algorithms, and field scoring tools that have been scavenged from a wide range of scientific and governance practices and are not themselves inherently capitalist or developed for capitalist purposes. In three different state settings, the move from measure to value is made in different ways that depend on the local institutional and social context. However, they all act to render a network of interacting ecological forces as a field of discrete ecosystem objects amenable to governance with markets.

Making a market in environmental credits II: Watershed moments

This pair of papers examines and describes the state action necessary to make markets function as environmental policy instruments and as strategies of governance. We do this through a detailed look at the mechanics of environmental credit compliance markets in the US states of Oregon, Ohio, and North Carolina in which stream credits are privately created and sold to developers who have impacted protected stream systems. In this paper, we observe that the governance of streams as water resources requires the state to create a scalar hierarchy that fixes certain characteristics of streams at certain scales of state action. These fixes attempt to resolve, bracket, or ignore the temporal and spatial variability of streams that can confound governance; however, these variabilities are essential to the scientific study of streams. At each of the four distinct scales, four different operations crucial to market function were observed; at each scale, elements of natural variability were fixed or confined to be expressed only within the given scale. These observations reveal principles of how scale functions within environmental governance, as well as failures where gaps and resistances appear that create unforeseen outcomes in market-led policy. In three different state settings, the establishment of a fixed scale of governance is made in different ways that depend on the local institutional and social context. However, they all act to render an unruly set of temporal and spatial flows as instead occurring within certain fixed scalar boundaries, and thus amenable to governance with markets.