| Front page | | Contents | | Previous
| | Next |
Integration of Environmental Considerations at Different Levels of Decision Making
6. Choosing policy tools for integration
6.1 Introduction
The decision flow analyses described in Section 5 identify a large number of
tools which are or could be used to influence decision making at the micro level and
encourage actors to improve the sustainability of those decisions. For example, Table
6.1 shows the range of tools identified for the industry sector to influence the
decision of which product a business should produce, to reduce the environmental impact of
chemical use.
It is evident from this example and the other sectoral examples in Annexes A-D
that there is considerable overlap between the types of tools which can be used across
sectors in addressing a certain type of decision (eg what product to buy and how to use
it) whether by businesses, individuals or institutional consumers. This section therefore
presents a range of generic tools as a non-exhaustive list of potential tools to address
decision making at the micro level for other sectors.
For each generic tool we have identified the specific conditions which need to be in
place for them to achieve the desired change in decision making. These differ by type of
tool but include the following factors:
 | Effectiveness, implying that the tool must be able to achieve the desired outcome more
effectively than other approaches, such as regulation. |
| Efficiency and practicality, e.g. not requiring new institutions to implement it or
implying higher collection costs than the revenues raised in the case of a market based
instrument. |
| Acceptability to those that the tool is aimed at. Acceptability is generally increased
by participation of stakeholders in the design and implementation process. It is also
increased where the implementing body or information provided is credible. |
| Compatability with the existing policy context. |
In addition there are a range of macro or wider framework conditions which must be in
place for the tool to be effective at a wider level. The relative importance of each of
these factors will vary according to the sector, nature of the decision and the decision
maker. For instance, in the case of farmers deciding what to grow and what inputs to use
in the process, the CAP price support structure for conventionally produced high input
products is likely to be the overriding factor. Likewise, for consumers deciding whether
or not to buy low input or organic produce the price differential will be key, although
price considerations may be overridden where consumers feel that they are getting other
quality, health or life-style benefits from a more sustainable choice (e.g. organic food).
For other products, such as public transport, perceptions of safety, reliability and
convenience may be far more important in encouraging passengers out of their cars than
price, even though in most countries policy makers are focusing on getting the pricing
signals right in order to tackle growing demand for road transport.
These wider framework conditions to a large extent echo the parameters for day to day
decision making by market based actors. These include:
| Sustainability Awareness. Do market based actors understand the issues,
the need for action and what they can do about it? |
| Availability. Are environmentally less damaging products and services
available through the normal channels or is additional research, development, piloting or
effort required relative to conventional processes, products or services? |
| Affordability. Are the preferred alternatives affordable? |
| Competitive Context. Does the wider policy context (EU or WTO etc) support
the use of this tool? |
| Existing Market Structure. Are more sustainable production or consumption
decisions feasible within existing market structures? Is additional support required to
avoid distortions to competition or to prevent some groups bearing unfair burdens? |
| Institutional Capacity. Is there sufficient governmental and non
governmental capacity to support more sustainable decisions? |
| Willingness to take action. For producers, where they have the necessary
knowledge and access to affordable and appropriate technology, goods and services are they
prepared to translate this into action? For consumers, are they willing to act on
knowledge, access to products and the right price signals to actively change their
consumption and purchasing decisions? |
The generic tools are described as follows:
| target audience; |
| type of decision; |
| conditions for success (specific to the tool); |
| wider framework conditions; and |
| interesting examples of how the tools are applied in different sectors. |
Describing the tools in this way provides an overview of the potential use of the tool
and highlights the conditions and constraints for the success and effectiveness of the
tool in influencing market based decisions.
Table 6.1
Industry and chemicals: Business as Providers/Producers
| Parameters |
Tools / Mechanisms: |
| Which product/service is produced? |
|
| Compliance |
Regulation
| Prohibitions/Restrictions eg |
| IPP (Integrated Product Policy) |
| Producer responsibility |
| Product standards |
Monitoring and Enforcement
Facilitation of future compliance via
| Indicators of future legislation eg DK list of ‘undesirable’ chemicals |
| Clear signals re direction of environmental policy |
| Voluntary agreements EC Energy label voluntary agreement |
Advice
Awareness raising and information regarding regulations, partic. for SMEs |
| Liability |
Widening involvement Regulation
| Degree of liability, level of fines |
Monitoring and Enforcement
| Availability of legal aid/resources to bring actions |
Role of investors and banks in driving liability legislation |
| Corporate culture/ethics/ reputation |
Environmental/Sustainability/Ethical corporate policy e.g.
training, reporting, EMAS and ISO 14001 T encourage corporate
citizenship/responsibility e.g. award schemes, media exposure, watchdogs, public debate,
ACCA/CERES Environmental Reporting awards |
| Design process |
Product Design
| EMS applied to design |
| DfE (Design for Environment) |
| LCA (Life Cycle Assessment) |
| H&S assessment |
| Environmental awareness raising/training of employees involved in design procedure |
| Linking of environmental aspects and innovation - tools/training to encourage creative
thinking |
| E-Co Challenge, UK: exploring novel approaches to product development via
university/company collaboration |
|
| Technology |
R&D and associated Economic incentives
| government, investor, NGO support/commissioned R&D into development of clean
technology/products and their acceptability |
|
| Cost investment costs vs expected profits, payback time |
Economic Incentives
| Rebates for clean/sustainable products |
| Favourable start-up schemes for new ‘sustainable’ businesses esp. SMEs |
| Preferential lending criteria, interest rates for ‘sustainable’
products/services e.g. Tridos Bank |
| Ethical/environmental investment funds e.g. Friends Provident |
| Sustainability Index Ratings e.g. Dow Jones/SAM |
|
| Market opportunity Market demand
Competitors activity |
Education
| Public environmental awareness campaigns/education |
Marketing
| ‘Green’ marketing |
| Market analysis and research to combine environmental awareness with innovative business
tools e.g. Porter’s model. |
Regulation
Restrictions on monopolies of producers and retailers |
| NGO/Citizen/Employee pressure Civil Society |
Widening involvement Consumer advice
Product information
| Product Registers e.g. re chemicals |
Education
| Public environmental awareness campaigns/education |
|
| Existing Infrastructure |
Industry collaboration
| Supply chain networks/co-operation |
| e.g. domestic appliance and detergent manufacturers; automobile companies and service
stations regarding fuel provision for LPG vehicles |
|
6.2 Description of generic tools
Product/Service Design
| Target Audience |
| producers, service providers, planners |
|
| Type of decision |
| What to produce/provide? |
| What process and inputs to use? |
| How to minimise environmental impacts (inputs, emissions, waste)? |
| How to make product/service attractive in relation to more environmentally damaging
alternatives. |
|
| Conditions for Success |
| Ensure the product or service is practical, effective, safe and high quality as well as
reducing environmental impact |
| Achievable and practical based on affordable technologies and processes |
| Acceptability to users can be facilitated through early consultation and participation
in the design process |
| Must not lead to displacement |
| Most effective when the design process is based on a life cycle approach |
|
| Wider Framework Conditions |
| Sustainability awareness. Awareness of producers and service providers of the full
range of impacts and to encourage designers to address the source of the problem. |
| Availability of affordable technical solutions and designs that will not lead to a
prohibitively expensive product. |
| Competitive Context. Product design must not breach EU standards or reduce
competitiveness of the sector, especially if regulation is required to ensure adoption of
the design throughout the sector. The uptake of new designs within a sector may be
hindered by restrictions of commercial confidentiality. |
| Market Structure. Research and development costs for new designs may be
prohibitively expensive where a sector is dominated by small and micro producers and may
require a collaborative approach. Where there is a monopoly or unwillingness to adopt new
approaches government intervention may be required. |
| Institutional Capacity. Is there a need for institutions to undertake research and
development or can progress be achieved through the establishment of collaborative
networks? In some sectors it may be necessary to establish a body to oversee and guide the
process. |
| Willingness to act. Producers and service providers may be unwilling to implement
new designs if they are unsure that there is a market for the new or amended product.
Marketing, economic incentives and regulation may all play a part in facilitating uptake. |
|
| Examples |
| Integrated transport systems: The Netherlands Integrated
transport services address various aspects of the transport system to improve connectivity
and co-ordination within and between different modes to reduce the negative impacts of
transport. This includes timetabling and provision of transfer facilities as well as
co-ordinating planning of transport infrastructure. Several good examples have been
implemented in the Dutch transport network and include, but are not limited to:
| carefully planned and designed transfer points including the Amsterdam Transferium which
has capacity for 2,500 vehicles |
| allocation of rush hour only lanes |
| real time information panels on roads |
| shared use of bus lanes with freight traffic and car poolers |
| legally instituted car pool schemes |
|
Widening Involvement
| Target Audience |
| consumers, producers, retailers |
|
| Type of decision |
Can be an effective tool in most decision making, in particular:
| What to produce/provide? |
| What process and inputs to use? |
| How to minimise environmental impacts (inputs, emissions, waste)? |
| How to make product/service favourable in relation to more environmentally damaging
alternatives? |
|
| Conditions for Success |
| It is important to establish trust and transparency in the process to overcome any
preconceptions held by participants entering the process |
| Most effective early on in the decision making process |
| Participants should have realistic expectations for the process and be aware of any
limitations on the outcome eg it is not always possible to reach a consensus and many
unpopular decisions may still be taken |
| Participation and involvement are better than consultation ie it should be a two way
process |
| Needs adequate resourcing - financial, staffing and materials |
| Requires careful selection of the target audience in relation to the decision being
taken and issues such as technical knowledge required etc |
|
| Wider Framework Conditions |
| Sustainability awareness. An understanding of the issues being discussed and their
importance in relation to other issues facilitates constructive and informed dialogue with
other decision makers. Awareness also provides motivation to become involved in the
decision making process. |
| Availability. Inviting other stakeholders to become involved in the decision making
process necessitates the consideration of alternatives and different options, otherwise
the process will be viewed as a token effort and will be of little value to either party. |
| Affordability. Early involvement of consumers can provide a means of determining if
they are willing to pay a premium for less environmentally damaging goods, and if so how
much. However, it is often difficult to establish whether such opinions will translate
into purchasing decisions. |
| Competitive Context. Issues of commercial confidentiality may discourage early
involvement of stakeholders and limit the potential for their views and opinions to be
taken into account. |
| Market Structure. Stakeholder involvement may need to be undertaken by sector level
organisations due to resources required. May be difficult to encourage sectors with a
traditional outlook that are not used to working in an open, transparent market. |
| Institutional Capacity. Is there a need to provide specialist training to facilitate
discussion? Establishing an ongoing framework or forum for discussion may reduce costs and
facilitate the sharing of experience and expertise. It is particularly difficult to
provide the general public with a means of participating. Often those with an interest in
a particular issue are the most vocal and organised and can present an unbalanced view of
general opinion. |
| Willingness to act. Although producers may actively seek the views of stakeholders,
these views may not be given any weight when the decision is actually made. Other issues,
in particular cost, may outweigh the generally preferred option or they make be restricted
by other requirements (including regulations). Again it can be difficult to motivate the
general public into participating in decision making despite general agreement in the
value of public participation. |
|
Advice
| Target Audience |
| consumers (households and businesses), producers |
|
| Type of decision |
| What to buy? |
| How to use a product and dispose of it? |
| What process and inputs to use? |
| How to minimise environmental impacts (inputs, emissions, waste)? |
|
| Conditions for Success |
| Easily accessible - may need promotion |
| Accurate and easy to implement |
| Unbiased/credible source |
| Co-ordinated with or complimentary to other sources of advice |
| No/relatively low cost for users |
| Relevant to target user group |
|
| Wider Framework Conditions |
| Sustainability awareness. Users must be aware of the issues to want to seek out
further information. Do they understand the implications of the advice enough to want to
put the advice into practice? |
| Availability of affordable alternatives to provide the basis of feasible, affordable
advice which users can put into practice. |
| Competitive Context. Advice that favours one product over another may lead to
objections of providing competitive advantage, particularly if a government body is
providing the advice. |
| Market Structure. Advice services often need financial support, in particular where
the information is technical or specialist in nature and the recipient is a small
organisation or company. It may be necessary to involve representative bodies to
facilitate the dissemination of information and to add credibility. |
| Institutional Capacity. Is there a need to monitor/regulate the advice being
provided? It may be necessary to establish a register or accreditation system for
advisors. |
| Willingness to act. Even though the consumer or producer has sought the advice, do
they actually put it into practice? How will the success of the advice service be measured
in terms of implementation? |
|
| Example |
| SME business-environment advice schemes SMEs often have a very
low awareness of environmental issues, legislation and relevant tools, due to resource
constraints concerning time, funds and expertise. To address this gap, advice schemes for
SMEs comprising of information provision, grant and funding opportunities, networks,
workshops, use of environmental consultants and best practice dissemination have been
established in several EU member states. These often involve collaboration with government
bodies, charities or educational institutes in order to provide low-cost advice and reduce
the expenditure incurred by the SME..
The Groundwork Environmental Business Service (EBS) in the UK, part of the Groundwork
Trust which is one of the UK's leading environmental partnership organisations with over
40 local offices. EBS provides practical support, advice, information and training
together with an emphasis on local regeneration.
The following services are offered:
| Groundwork business clubs, associations and networks to bring businesses together to
share best practice and develop common solutions eg waste minimisation programme focusing
on cost savings; |
| Environmental Business Review - offers a baseline review, action plan audit, single
issue reviews, preparation of EMS, verification of public statements etc; |
| Management systems - Environmental, Quality, Health & Safety, Integrated, Waste,
energy and transport management, Supply chain management; |
| Information services - up-to-date information and databases on environmental, health and
safety legislation, phone and fax helplines, newsletters and bulletins, environmental
legislation update; |
| Training - employee training programmes providing specific environmental information and
skills tailored to the needs of each business in terms of level, price and minimum time
away from work. |
|
Education
Green Marketing
| Target Audience |
| Consumers |
| Type of decision |
| Which product to purchase? |
|
| Conditions for Success |
| marketing claim must be credible to the consumer; |
| must have a system of regulation and monitoring, with effective penalties for unfounded
claims; |
| needs to relate to issues of public environmental awareness and concern; |
| greater effectiveness if targeted. |
|
| Wider Framework Conditions |
| Sustainability awareness Unless the consumer is aware of the environmental issues in
relation to the type of product, they are unlikely to be influenced by marketing of more
environmentally benign variations or alternatives. However, awareness raising is a primary
objective of the tool. |
| Availability For many consumers, unless the marketed product is readily available,
purchasing habits will not change: many will be unwilling to make extra efforts to obtain
the alternative product. |
| Affordability Environmental goods can often command a price premium, but in reality
this is limited. The goods must be perceived as affordable. |
| Competitive Context The market for ‘green’ goods has developed rapidly in
recent years but has been largely unregulated until recently. Regulation may be required
to prevent unfounded environmental claims that may provide a competitive advantage.
However, any regulation or restriction on marketing needs to take account of EU and WTO
trade rules. |
| Market Structure A diversity of retailers will tend to encourage the power of
marketing to change purchasing behaviour. Where there is an effective monopoly or the
equivalent of a cartel of retailers, there will be fewer purchasing options for consumers,
and there may be less incentive for retailers to provide a choice of alternatives. |
| Institutional Capacity There must be a system of regulation which has the confidence
of consumers for the marketing to be credible and effective. |
| Willingness to act Despite the provision of information and support for less
environmentally damaging goods, consumers may be unwilling to change their purchasing
decisions due to other factors including habit or perceptions regarding product quality |
|
| Example |
| ECOVER ECOVER was established in 1979 and produces a range of
‘green’ household washing and cleaning products. The development of a brand
identity and market has been facilitated through primarily selling through the health food
shops and other alternative retailers, although more conventional outlets now stock the
product. The green approach has been implemented consistently throughout all aspects of
company operations and supported by an open and transparent environmental policy.
Marketing has also focused on information campaigns and provided a clear self explanatory
message. Uptake has been encouraged by comparable pricing to competing products rather
than charging an environmental premium. The credibility of the company is reflected in its
involvement in the establishment of the European Ecolabel for washing products and the
Environmental Detergent Manufacturers Association (EDMA) which represents the "real
green" producers. |
Industry Collaboration
| Target Audience |
| Producers, processors and retailers of goods and services |
| Producer organisations |
| Public sector eg national or regional/local government, research institutes |
|
| Type of decision |
| Is the product /service needed? |
| Which product (including house or car)or service? |
| How is the product used and disposed of ? |
|
| Conditions for Success |
| Cooperation/trust between parties; |
| Avoidance of highly competitive sectors where confidentiality is imperative; |
| Effective involvement/leading role of trade associations; |
| Transparency (notably for public private sector collaborations). |
|
| Wider Framework Conditions |
| Sustainability awareness. The sector and its actors need to be aware of the
importance of achieving the goal of improved environmental performance or reduced impacts,
otherwise the efforts at collaboration are likely to be undermined by other factors, eg
competition, commercial confidentiality |
| Availability Industry collaboration is primarily aimed at making alternatives
available. |
| Affordability Unless collaboration results in goods or alternatives which are
affordable, they are unlikely to have sufficient success or acceptance to reward the
collaborative effort. |
| Competitive Context. Industry wide R & D initiatives which result in new product
standards being adopted at the European level could be questioned by WTO. |
| Market Structure. If the sector is characterised by SMEs, collaboration will be more
difficult, both in terms of securing agreement to co-operate and financing the venture.
However, there are notable exceptions to this, for example the Danish Agricultural
Advisory Council. Collaboration may also be more difficult to achieve in more traditional
sectors, or where competition is intense, or where the structure of the market does not
encourage change. |
| Institutional Capacity. Industry collaboration may operate outside the sphere of
institutions, however involvement of government or other public sector organisations may
be helpful for effective collaboration, e.g. on updating product standards. |
| Willingness to act. Collaboration requires a forward-looking, possibly innovative
and determined, attitude on the part of those businesses and other organisations involved.
A previous history of collaboration in the sector can make it easier culturally for the
various actors, and may also mean that any administrative or organisational structures and
mechanisms are already in place. The willingness to act is sometimes increased by the
threat of government intervention as an alternative. |
|
| Examples |
| Sweden: Catchment based watershed groups, Federation of Swedish
Farmers (LRF) This collaborative scheme has been developed to promote good practice
in the reduction of nitrate leaching using local, grass-roots knowledge to deliver
information in a form which is more accessible and user friendly than a conventional
published code of practice.
Each group consists of farmers, rural residents and public officials who work jointly
within a specific catchment area to reduce plant nutrient leaching. An environmental plan
for the area is developed with a co-ordinator who serves as an advisor and possesses
knowledge of plant nutrients and other environmental issues. The plan includes goals for
the group, required measures, a chart/flow diagram showing the local nitrogen cycle and
how various practices contribute to plant nutrient leakage etc. Those who take part
may be granted exemption from a number of legal requirements; this in turn provides an
incentive to participate and assists with devising creative solutions. Experience suggests
that nitrate pollution can decrease by 30-50% through this type of co-ordination.
Since the fundamental idea behind these groups is flexibility and local knowledge,
there are no detailed instructions or framework. The material that is distributed consists
of a brochure and a video. A network between the LRF and existing groups is in place to
support new groups when they start. |
R & D
| Target Audience |
| Producers, consumers |
|
| Type of decision |
| Which product/service to produce/provide? |
| How is product/service produced/provided? |
| Is product needed? |
| How to use product? |
| How to dispose of product? |
| Should inputs (e.g. pesticides or chemicals) be monitored/regulated? |
| How should inputs (e.g. chemicals) be monitored? |
| Which house to purchase? |
| How much energy to produce? |
|
| Conditions for Success |
| innovation; |
| resources/funding; |
| leader or fast follower, in order to gain competitive advantage; |
| clear direction from present policy objectives; |
| clear evidence/understanding of the environmental issue being addressed. |
|
| Wider Framework Conditions |
| Sustainability awareness R&D in the context of a tool for integration is often
focused on increasing knowledge and awareness of environmental impacts and issues relating
to the sustainability of products, processes and services. |
| Availability, Affordability The aim is often to make available alternatives
which are also affordable. |
| Competitive Context. Industry wide R & D initiatives which result in new product
standards being adopted at the European level could be questioned by WTO. |
| Market Structure A market characterised by SMEs makes investment in commercial
R&D less likely, as it is often only the larger organisations which have sufficient
resources. Alternatively, trade associations often take on the role on behalf of members. |
| Institutional Capacity Research is often carried out within academic institutions,
and therefore a sufficient academic resource is required to ensure the quality and
excellence of the research. Even where the research is carried out by private sector
companies or institutions, a good base or centre of academic research and facilities is
often a precondition for excellence in commercial research. Clear policy statements from
central government/EU can make R&D investment an easier corporate decision. |
| Willingness to act R&D is often carried out by the more innovative
organisations, which requires a particular corporate culture and willingness to invest. |
|
Corporate policy
Product Information
| Target Audience |
| Consumers; businesses and municipalities in relation to procurement decisions |
|
| Type of decision |
| What and when to buy, how to use it, how to dispose of it |
|
| Conditions for Success |
| Comprehensible information. Provided in a form and language which is understandable
to consumers (eg referring to biodiversity impacts may mean little, while energy
consumption over product life cycle is easily understood). |
| Accessible information - shown on packaging, product itself, point of sale or
through a free helpline according to the nature of the product, where it is bought and how
it is used. |
| Relevant and defensible - information should be relevant to the major environmental,
health and safety issues associated with the products’ use and disposal. Information
should give relevant comparisons with comparable products. |
| Credible. Information should be verifiable with an independent source. |
| Cost effective. Not too costly for producers to provide information or for consumers
to access it. |
|
| Wider Framework Conditions |
| Sustainability awareness. Requires that there is a wider understanding of
sustainable consumption and how this product choice contributes to overall objectives. |
| Affordability Information may have limited impact if the price of environmentally
preferred products is higher than conventional products. |
| Competitive Context Labelling unlikely to contravene trade rules unless
environmental standards are being used as the exclusive criteria for purchasing decisions.
Effective labelling can give competitive advantage to prime movers and stimulate
competition. |
| Market Structure If market is dominated by a few large producers, wholesalers or
retailers effectiveness may be limited unless these key actors take a lead. |
| Institutional Capacity In order to avoid consumer confusion (greenwashing) over
label claims there needs to be a meso level institutional structure (such as ISO bodies
and independent verifiers and NGOs) that can verify claims, prepare ratings reports or
provide additional product information. |
| Willingness to act Time, nature of purchase, life and style choices and peer
pressure may be more important underlying factors in motivating individuals to act than
the actual information on the label. |
|
| Examples |
| Power Content label operated by the California Energy Commission:
USA A ‘nutrition label’ which shows the mix and emissions for each energy
product compared to the average California Power Mix (based on 1995). This information is
sent to each customer with their bill and prior to Green-e was seen as a means for green
companies to highlight greener credentials.
Product declarations, Volvo Environmental Product Profile: Sweden
In 1998 Sweden introduced a regulation to encourage companies to provide externally
verified product declarations based on ISO Type III eco-labels. Product panels comprised
of companies from the energy, furniture, paper and automotive industry sectors were
established to develop standardised environmental indicators for their product categories.
The scheme is overseen by the Swedish Council for Environmental Management which checks
the sector guidelines and product declarations conform with the regulation. Its advantage
over ‘branded’ type I eco-labels such as the Nordic Swan is that it provides the
consumer with easily understandable but detailed information covering manufacture (e.g.
solvent emissions), use and end-of-life environmental impacts, thus being both educative
and enabling comparison between products.
The first example has been produced by Volvo for its S80 passenger vehicle. The company
hopes the declaration will attract the interest of fleet buyers and other car
manufacturers. At present the Swedish Automobile Manufacturers Association has not
finalised sectoral guidelines and therefore Volvo’s version represents a pilot
version and may be changed in future. |
Regulation
| Target Audience |
| Producers, wholesalers and retailers of goods and services |
|
| Type of decision |
| What to produce? |
| What process and inputs to use? |
| How to minimise environmental impacts (inputs, emissions, waste)? |
|
| Conditions for Success |
| Technically effective (and if necessary integrated with other environmental issues
ie not encouraging inter-media transfer of impacts) |
| Achievable and practical based on affordable existing or future technologies and
processes (ie Not Entailing Excessive Costs) |
| Compatible with existing regulatory framework |
| Acceptable to producers and to civil society (generally implying some involvement of
stakeholders in the standard setting process) |
| Equitable - not involving excessive costs on any one group (eg SMEs, or particular
regions) |
|
| Wider Framework Conditions |
| Sustainability awareness. Awareness by industry of what the regulations are trying
to achieve so that if more radical or creative approaches can be found these are explored
rather than relying on prescriptive end-of-pipe solutions |
| Availability of affordable technical solutions. If these are not available then a
framework for public or private financed R&D will be required. |
| Competitive Context. Standards need to fit with EU Directives; if they go further
they must not be set in a way which contravenes WTO competition rules. |
| Market Structure. If the sector is dominated by small and micro producers or old
capital equipment regulation may prove costly for producers and uncertain in effect (with
derogations more likely to be granted to SMEs and those with equipment at the end of its
useful life). |
| Institutional Capacity. Where there are a large number of small players or regulated
emissions or activities are from non-point sources greater institutional capacity will be
required to monitor, enforce and collect fines for non-compliance. |
| Willingness to act. Based on past experience producers will view old style
regulations as very likely to be actively enforced. It may be less clear how more recent
approaches, such as framework regulations, negotiated agreements in lieu of regulations,
service standards and quotas (eg for deregulated energy companies) and liability
legislation will be enforced and indeed whether there are likely to be penalties from not
acting straight away or whether they can afford to wait and see. |
|
Economic Incentives: Green Subsidies or taxes or Conventional Products
Minimum Standards
| Target Audience |
| Producers and Service Providers |
| Public sector eg national or regional/local government |
|
| Type of decision |
| What to produce/provide? |
| Design parameters, conditions, etc that must/should be incorporated into product/service
design and operation? |
| Identifying market requirements/conditions for new products/services? |
|
| Conditions for Success |
| Consumer awareness of voluntary standards. |
| Authority issuing the standard must be credible to consumers/users. |
| Standards must be supported by a system of information dissemination, regulation and
monitoring, with effective penalties for breaching required standards. |
| Cost burden (on producers/providers, which will be passed on to consumers) must be
considered in setting levels for the standards. |
| Effort involved in meeting standards must be considered to ensure producer/provider
acceptance and cost implications/market reception. |
| Must relate to relevant environmental issues. |
| Public awareness of the standards. |
|
| Wider Framework Conditions |
| Sustainability awareness Producers and consumers must be aware of relevant
environmental issues in order to consider the benefits of minimum standards. |
| Affordability Compliance must not entail a significant cost penalty to maximise
uptake rates and market penetration. |
| Competitive Context WTO etc rules may restrict the use of voluntary environmental
standards as the basis for restricting market access. |
| Market Structure A diversity of retailers/suppliers or producers provides better
conditions for using standards to achieve market differentiation. |
| Institutional Capacity Compliance requirements (regulation, enforcement, monitoring
and reporting) must be modest and straight-forward to ensure appropriate support. |
| Willingness to act Voluntary standards assume a certain level of knowledge and
awareness of the advantages of compliance on the part of producers/providers. Regulatory
standards must be underpinned by reliable and credible advice of the environmental
implications of not conforming |
|
Supply Side/Chain Alternatives
| Target Audience |
| Producers, processors and retailers of goods and services |
| Producer organisations |
|
| Type of decision |
| Where to source raw materials and components |
| Who will carry/sell/offer goods and services in the market |
| Production processes used |
| How to package the product |
|
| Conditions for Success |
| A driver company that is offering a considerable amount of business on the basis of
harmonising environmental management practices. |
| A large pool of potential suppliers, some of which will see the advantage in conforming
with supply chain requirements. |
| Co-operation and trust between parties, and a willingness to develop long term business
relationships |
| Recognition of business advantages through partnerships. |
| Acceptance of environmental conditions as one factor considered in procurement
decisions. |
| Effective involvement/leading role of trade associations. |
| Transparency (notably for public/ private sector collaborations). |
|
| Wider Framework Conditions |
| Sustainability awareness. Companies must be willing to work together to meet
sustainability objectives, and must recognise that this requires solutions that extend
beyond their sites of operation, along the supply chain. |
| Availability Industry collaboration is primarily aimed at making alternatives
available. |
| Affordability Compliance costs must be returned through increased reliability or
availability of supply contracts. |
| Competitive context. EU procurement rules may restrict the extent to which public
sector purchasers can use environmental criteria as the basis for supply decisions. |
| Market Structure. There must be market leaders that are willing and able to use
their influence to shape the nature of the supply chain, and a sufficient body of
potential suppliers from which some will see advantages in long term supply chain
relationships |
| Willingness to act. There must be a willingness to enter into partnerships along the
supply chain. This could involve public and private sector actors, who are willing to meet
their supply requirements by considering environmental performance/impacts. |
|
Best Practice - identification, dissemination
| Target Audience |
| Producers/providers |
| Public sector eg national or regional/local government, research institutes |
|
| Type of decision |
| How is product/service produced/provided? |
| Which product/service to produce/provide? |
| How to dispose of product? |
|
| Conditions for Success |
| Information must be effectively disseminated. |
| Information must be practical (eg case studies must be transferable), relevant to
environmental issues that producers/ providers are struggling with, and must demonstrate
advantages of more sustainable decisions. |
| Innovation (links to R & D). |
| Must not entail significant cost penalties to ensure uptake (and demonstrate wider
advantages). |
| Must be provided by a credible source that producers will recognise and respond to. |
| Must minimise disruption to supply chain partnerships. |
|
| Wider Framework Conditions |
| Sustainability awareness Best practice must demonstrate advantages of implementing
best practice - they could be through reduced costs, reduced wastes, etc. Consumers/Users
must recognise the value of environmental performance that goes beyond statutory
requirements. |
| Availability Are technologies available on a competitive basis, and are technical
support services, raw materials, parts etc generally available? |
| Affordability A key issue. There should be economic incentives for adopting best
practice if this reduces environmental costs which would otherwise fall to the public
sector. |
| Market Structure Best practice cannot readily be developed by one actor in isolation
from others in the sector. Meso level actors, such as producer groups and trade
associations, have an important role in developing and disseminating best practice. |
| Institutional Capacity Dissemination of best practice requires the existence of
suitable channels of communication and a relationship between regulators and operators
that goes beyond compliance/enforcement. |
| Willingness to act Producers must be pre-disposed towards accepting practice that
may exceed regulatory requirements. Development and up-take of best practice relies on a
culture of innovation in the private sector. |
|
| Examples |
| LEAF (Linking Environment And Farming): UK LEAF is an
organisation which aims to develop and promote Integrated Crop Management (ICM). It
encourages farmers to take up ICM through the production of practical guidelines on ICM
and through a scheme of self-assessment through environmental audit. LEAF brings together
a broad range of interests and organisations, representing farmers, consumers and
environmentalists and supported by both the private and public sectors.
The audit is designed as a management tool to help farmers assess their farm practices
and performance against the standards of ICM, including identifying practices that if
adopted would benefit the farm business. The system of annual self-assessment provides a
framework to monitor farm systems and help determine priorities in order to adopt a fully
integrated approach. |
Ecolabels
| Target Audience |
| Consumers |
|
| Type of decision |
| Intended to promote environmental awareness, individual responsibility and action in
relation to the decisions what to buy and how to dispose of it. |
|
| Conditions for Success |
Eco-labels are a specific form of product information, providing
consumers with information about the environmental credentials of a product in a format
which is
| Credible because externally verified |
| Comprehensible and easily recognisable because based on standardised criteria and a
logo (enabling both comparability and greater recognition) in a form which is recognisable
to consumers and accessible on packaging and the product itself. Careful promotion is
required to ensure that the label is recognised and understood by retailers and the
general public. |
| Relevant and defensible - information should be relevant to the major environmental,
health and safety issues associated with its use and disposal. For example the EC eco
label requires the label to provide information on the main environmental impacts of the
product based on a LCA approach, product profiling in Swedish industry provides
information on the main impacts of the whole product lifecycle plus other aspects such as
environmental management of the production process. The example of the product profiling
therefore indicates scope for extending the coverage of issues in other sectors. |
| Cost effective. Not too costly for producers to provide information or for consumers
to access it. |
|
| Wider Framework Conditions |
| Sustainability awareness. Requires that there is a wider understanding of
sustainable consumption and how this product choice contributes to overall objectives. |
| Availability. Requires a critical mass of products having received labels to ensure
consumer recognition. Some confusion may arise between the EU and national schemes e.g. EC
‘flower’, Nordic Swan, Fuel efficiency labelling, green certificates for
renewable electricity and EC ecolabel for white goods and organic labelling. |
| Affordability Many ecolabelled products likely to be too expensive for majority of
consumers, eg organic food still only a small niche market. Costs of certification may be
too high for SMEs. |
| Competitive Context Labelling unlikely to contravene trade rules unless
environmental standards are being used as the exclusive criteria for purchasing decisions.
Effective labelling can give competitive advantage to prime movers and stimulate
competition. |
| Market Structure If market is dominated by a few large producers, wholesalers or
retailers effectiveness may be limited unless these key actors take a lead. |
| Institutional Capacity Need to ensure that capacity for assessing, certifying and
verifying a critical mass of products and producers exists. Must be supported by training
of retailers in terms of understanding and encouragement to utilise the label as a sales
point. |
| Willingness to act Time, nature of purchase, life and style choices and peer
pressure may be more important underlying factors in motivating individuals to act than
labelling information. |
|
| Examples |
| Renewable Energy Accreditation Scheme (REAS): Green Electricity
Labelling: UK The aim of REAS is to provide consumers with information on clearly
defined energy products and avoid confusing the consumer with ‘greenwash’. The
scheme offers accreditation for renewable electricity (of which at least 50% comes from
renewable sources and the remainder comes from sources with lower SO2, CO2
and NOx than the average emissions mix) so developing the market for green electricity.
The scheme was approved by the UK government in February 1999 and started operation in
June 1999. So far some 10 suppliers have been accredited.
REAS is run by the Energy Savings Trust, a UK NGO which also runs an Energy Efficiency
brand for products aimed at domestic consumers. REAS provides certification for each
‘green’ tariff (companies typically offer one or two) which identifies the type
of scheme and renewable mix based on a typical year. Pre 1990 schemes and large scale
hydro are exempt. It includes both premium tariffs (typically 5 or 10% above the normal
tariff) and Eco Funds (where the premium paid by consumers is paid into an investment fund
and matched by the utility and invested in renewables development or R&D). The annual
cost of accreditation is £5000 per tariff. When the Climate Change Levy is introduced
REAS certification may be used to identify energy which should be exempted from a
carbon/energy tax. |
| Front page | | Contents | | Previous
| | Next | | Top | |