Non-state Market Driven Research Articles

Do eco-labels prevent deforestation? Lessons from non-state market driven governance in the soy, palm oil, and cocoa sectors

Abstract In countries marked by the growing uptake of non-state market driven (NSMD) governance for agricultural commodities (i.e., eco-labels and certification systems), forested areas are steadily decreasing while crop lands are growing. This deforestation continues despite NSMD rules aimed at prohibiting the conversion of forested land to agriculture. In this paper, we ask why the growing presence of NSMD governance has coincided with ongoing deforestation. While the seeming inability of NSMD governance to halt broader patterns of land use change can be partially explained by a lack of market uptake, there are also a range of other variables that may contribute to this relationship. We probe the plausibility of five hypotheses through comparative case studies of sustainable soy certification in Brazil, palm oil in Indonesia, and cocoa in Cote d’Ivoire. Our findings indicate that NSMD governance has neither abetted, nor hindered, the conversion of forested land to agricultural production. We find strong evidence that a lack of broad market uptake limits the effectiveness of NSMD governance. However, we also find evidence that regulatory loopholes in NSMD systems may explain the inability of eco-labels and certification systems to halt broader patterns of land use change in countries with comparatively strong market uptake. Our results highlight critical problems related to expanding the reach and stringency of NSMD governance alongside the ongoing fragmentation of global environmental governance. The study contributes to scholarship on the impacts and effectiveness of transnational environmental governance.

Impacts of nonstate, market-driven governance on Chilean forests

Global markets for agricultural products, timber, and minerals are critically important drivers of deforestation. The supply chains driving land use change may also provide opportunities to halt deforestation. Market campaigns, moratoria, and certification schemes have been promoted as powerful tools to achieve conservation goals. Despite their promise, there have been few opportunities to rigorously quantify the ability of these nonstate, market-driven (NSMD) governance regimes to deliver conservation outcomes. This study analyzes the impacts of three NSMD governance systems that sought to end the conversion of natural forests to plantations in Chile at the start of the 21st century. Using a multilevel, panel dataset of land use changes in Chile, we identify the impact of participation within each of the governance regimes by implementing a series of matched difference-in-differences analyses. Taking advantage of the mosaic of different NSMD regimes adopted in Chile, we explore the relative effectiveness of different policies. NSMD governance regimes reduced deforestation on participating properties by 2-23%. The NSMD governance regimes we studied included collaborative and confrontational strategies between environmental and industry stakeholders. We find that the more collaborative governance systems studied achieved better environmental performance than more confrontational approaches. Whereas many government conservation programs have targeted regions with little likelihood of conversion, we demonstrate that NSMD governance has the potential to alter behavior on high-deforestation properties.

The Transformation of organic regulation: The ambiguous effects of publicization

AbstractThe regulatory regime for organic products is different from other non‐state‐market driven (NSMD) regimes because it is the only one that evolved from a purely private into a regime where the establishment of minimum standards has become the monopoly of public powers. This article is the first to study the effects of the process of publicization, a term coined to characterize the transformation of private into public standards. The central hypothesis studied is that the process of publicization has empowerment and containment effects at the same time. To test the hypothesis the article analyses the effects of publicization on regulatory capabilities of private regulators as well as on the quality of the standards. The effects of publicization are further explored by comparing the legal and institutional architecture that shapes the coexistence of private and public regimes in the EU and the US, showing important differences between the two systems. The article offers a new perspective to look at the dynamic interaction between private and public regulation and its findings are of general relevance for the debate on the desirability of governmental intervention on private regulatory schemes.

Mixed Signals: NGO Campaigns and Non-state Market Driven (NSMD) Governance in an Export-Oriented Country

In the past two decades, non-governmental organizations (NGOs) have targeted international customers of Canadian staples, intent on cajoling and coercing them to favour exporting firms certified as practising responsible fisheries and forestry management. The link between these campaigns and the adoption of these non-state market driven (NSMD) mechanisms is, however, more complex than often portrayed. There is an uneasy tension between demands favouring NSMD as a new form of private governance that will vary its own stewardship standards according to scientific information, multi-stakeholder deliberations, and price signals; and traditional demands that focus on a specific behaviour of a specific firm over a specific, albeit narrow, environmental problem. Indecision on the part of NGOs about the approach to take creates mixed signals, affecting firm decisions (purchasers and producers) in ways that can reduce the institutionalization of private authority. We examine these dynamics by unpacking the campaigns and their implications for the potential and consequences of NSMD governance.

Forest certification with Chinese characteristics: state engagement with non-state market-driven governance

Forest certification is conceptualized as non-state market–driven (NSMD) governance, whereby forces within the market are used to drive sustainable practices at the forest management level and throughout supply chains. Whilst recent scholarship has considered the “cross fertilization” and hybrid nature of the state and non-state in creating sustainable forest governance, these studies have tended to focus on national cases involving democratic countries where the “space” for private standards and auditors is relatively unconstrained. This study seeks to fill this gap though an examination of the entry of transnational forest certification approaches into China. Drawing on extensive fieldwork conducted in China during 2010, it traces the creation of a new forest certification scheme, which aims to be adopted under the Program for Endorsement of Forest Certification Schemes (PEFC). The study examines the legitimacy sought by the Chinese government on three fronts–to appeal to the differing needs of both international and domestic markets simultaneously, whilst ultimately assuming a legitimate form of (institutionalized) domestic governance, which allows the government to maintain their authority over the mechanism and its operations. The study also focuses on the principles of NSMD governance through an analysis of the legitimate authority afforded to the state, third-parties and NGOs within China. It contributes to political geography by examining how isomorphic forms of institutionalized governance are reproduced within local settings, with the aim of adhering to both global norms of legitimate governance and domestic norms of legitimate power.

Market-based governance for sustainability in value chains: conditions for successful standard setting in the palm oil sector

Abstract Current production and consumption patterns remain unsustainable: Global economic growth reaches planetary boundaries and puts increasing pressure on the world's natural resources. Whereas most economic actors just react to environmental pressures, proactive market actors and other non-governmental organisations, e.g. greentec firms or fair trade organisations, turn them into market opportunities or even create standards or certification schemes as promising problem-solving market instruments in global value chains. However, how legitimate are standards and certification schemes developed by collaborating non-state actors for sustainability in global value chains? What are conditions for the success of those market-based governance mechanisms? This paper discusses the legitimacy and effectiveness of standard setting in the case of palm oil and focuses on the Roundtable of Sustainable Palm Oil (RSPO) as the first global standard setting initiative in this respect. Conditions for the success of sustainability standard setting in global value chains are identified based on the concept of non-state market-driven (NSMD) governance, based on literature review and expert interviews on standard setting. Results from the case study on RSPO highlight strengths and weaknesses of its standard setting process in the light of increasing market demand for palm oil.

Not seeing the forest for the trees? The environmental effectiveness of forest certification in Sweden

Forest certification can be conceived as one of many rapidly growing non-state market driven (NSMD) modes of governance. The environmental effectiveness of forest certification is oftentimes evaluated by indicators such as stringency of standards, degree of participation by key stakeholders, certified area, etc. In political science, forest certification as an NSMD governance arrangement is usually evaluated in terms of the quality of the decision-making procedures (input legitimacy) rather than for its problem solving capacity, i.e. its environmental performance or effectiveness. We conceptualize environmental effectiveness as a function of a standard's environmental stringency and the area covered by the standard, the latter dependent on the degree of social acceptance. Accordingly, the environmental effectiveness of different certification schemes ought to be evaluated taking both the standard stringency and the area certified into account. The forest certification process in Sweden illustrates how forestry history and regional differences affect the development, acceptance and adoption of different certification schemes. Industrial and Northern forestry owners favour the NGO led Forest Stewardship Council (FSC) standards whereas Southern small-scale private forest owners preferred to develop an alternative scheme the Programme for Endorsement of Forest Certification (PEFC). We demonstrate that there is a bifurcated geographical coverage of the two certification schemes along a north–south divide coupled with a similarity in standard stringency and a high degree of acceptance in their different areas of dominance. Both forest certification schemes display a similar degree of environmental effectiveness — but in different parts of the country and for different types of ownership.

Revising Theories of Nonstate Market-Driven (NSMD) Governance: Lessons from the Finnish Forest Certification Experience

We assess the ability of Cashore, Auld, and Newsom's theoretical framework on “Nonstate Market-Driven” (NSMD) governance to explain the emergence of and support for forest certification in Finland. In contrast to Sweden's experience, the environmental group-initiated international forest certification program, the Forest Stewardship Council (FSC), failed to gain significant support. Instead, the commercial forest sector created and adopted the Finnish Forest Certification Program, which domestic and international environmental groups ultimately rejected as inadequate. The NSMD framework must better incorporate two key findings. First, the dependence of international markets on the targeted country's forest products can shape domestic certification choices. We found that the largely non-substitutable qualities of Finnish paper products gave the domestic sector greater leeway in responding to international pressures. Second, whether the FSC is being championed primarily to influence a country's domestic forestry debates or indirectly as a lever with which to improve forest practices elsewhere appears to permeate the forest sector's overall receptiveness to the FSC.

The Future of Non-State Authority on Canadian Staples Industries: Assessing the Emergence of Forest Certification

Virtually all of the literature on Canada as a “staples state” has focused on two related topics: the impact of a historically staples-based economy on the development of the Canadian state's structure, function and policy outcomes; and, given these historical influences, the ability and capacity state officials might have to veer Canada off this “hinterland” pathway by facilitating a more diversified Canadian economy less dependent on the US “metropole”. While these foci are important, the dramatic arrival in the 1990s of Non-State Market Driven (NSMD) governance systems that focus largely on regulating staples extracting sectors such as forestry, fisheries, and mining, has raised important new questions for students of the staples state.

Forest certification (eco-labeling) programs and their policy-making authority: explaining divergence among North American and European case studies

In recent years, transnational and domestic non-governmental organizations have created private standard setting bodies whose purpose is to recognize officially companies and landowners practicing ‘sustainable forest management’. Eschewing traditional state processes and state authority, these certification programs have turned to the market to create incentives and force compliance to their rules. This paper compares the emergence of this non-state market driven (NSMD) phenomenon in the forest sector in eight regions in North Am40erica and Europe. We specifically seek to understand the role of forest companies and landowners in granting competing forest certification programs ‘legitimacy’ to create the rules. We identify distinct legitimation dynamics in each of our cases, and then develop seven hypotheses to explain differences in support for forest certification.

Legitimacy and the Privatization of Environmental Governance: How Non–State Market–Driven (NSMD) Governance Systems Gain Rule–Making Authority

In recent years, transnational and domestic nongovernmental organizations have created non–state market–driven (NSMD) governance systems whose purpose is to develop and implement environmentally and socially responsible management practices. Eschewing traditional state authority, these systems and their supporters have turned to the market’s supply chain to create incentives and force companies to comply.This paper develops an analytical framework designed to understand better the emergence of NSMD governance systems and the conditions under which they may gain authority to create policy. Its theoretical roots draw on pragmatic, moral, and cognitive legitimacy granting distinctions made within organizational sociology, while its empirical focus is on the case of sustainable forestry certification, arguably the most advanced case of NSMD governance globally. The paper argues that such a framework is needed to assess whether these new private governance systems might ultimately challenge existing state–centered authority and public policy–making processes, and in so doing reshape power relations within domestic and global environmental governance.