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Beaufoy, Mark --- "Environmental Justice and Market Mechanisms: Key Challenges for Environmnetal Law and Policy edited by Klaus Bosselmann and Benjamin J Richardson" [2000] AltLawJl 38; (2000) 25(2) Alternative Law Journal 96


Environmental Justice and Market Mechanisms:
Key Challenges for Environmental Law and Policy

by Klaus Bosselmann and Benjamin J. Richardson (eds); Kluwer Law International 1999; 355 pp; hardcover.

This book, as part of an international environmental law and policy series, brings together leading scholars from around the world contributing essays on the relationship between the use of market mechanisms and environmental justice. It is based on papers presented at the conference 'Environmental Justice and Market Mechanisms: Key Challenges for Environmental Law and Policy' held on 5-7 March 1998 at the University of Auckland, New Zealand.

The 1997 Kyoto Protocol to the UN Framework Convention on Climate Change was the first international environmental law agreement to contemplate the widespread use of market instruments- including the possibility of trading emission commitments. Terms such as carbon sinks and emission trading are now clearly part of our local environmental discourse. NSW State Forests recently established a market in carbon credit trading and car manufacturers are rapidly planting fast-growing eucalyptus trees across the country to use as pollution credits against their greenhouse gas emissions.

There has been an obvious shift, identified in this volume, toward focusing on market mechanisms above traditional 'command and control' regulation to address environmental problems. The introductory essay by the editors, Klaus Bosselmann and Benjamin Richardson, traces the history of the development of regulatory responses to environmental problems: from the command and control response which in the 1970s appeared as an extension of public health and safety regulations; to the environmental management and legal responses of the 1970s and 1980s, including the increasingly prolific environmental treaty making emanating from the United Nations. In a context of the growing dominance of free-market ideology, criticisms of 'over-regulation' and 'compliance costs' from the market­ place, and the uncertainty inherent in environmental risk assessment, the concept of sustainable development captured the imagination of policy­ makers. As the editors put it:

in a world of uncertainty societies aim to place themselves between ecological sustainability and economic prosperity. The complexity of the task signals the complexity and importance of modern environmental law.

However, the promise of deregulation in environmental policy was not necessarily achieved by the economic instruments employed (green taxes, environmental charges, environmental compliance reporting and tradable emission rights) and they were seen by industry as further impositions. Conse­quently, only voluntary agreements and associated business self-regulation have received consistent support from industry. It is apparent that both 'command and control' and market-oriented approaches to environmental protection are required and it is the success or otherwise of their synthesis which the essays in this book explore. The editors sum up the challenge as follows:

Regardless of industry's ambiguity towards economic instruments, environmental policy tools have become more diverse and flexible. While the reactive 'stick' of commands, controls, permits, and sanctions may still have its role, it is increasingly complemented by the proactive 'carrot' of tax relief, subsidies, voluntary agreements and other incentive devices. An era of 'smart regulation' and strategies for promoting 'beyond compliance' is attempting to synthesize the command and incentive dimensions of environmental law. The problem seems not whether economic instruments should be used, but how they should be used and how they are to serve the overall aim of environmental justice.

The essays in this volume provide a narrative by which it is possible to imagine this future synthesis of market mechanisms and regulatory instruments which will assist in achieving the goal of environmental justice. The authors explore a variety of definitions of and approaches to 'market mechanisms' and 'environmental justice' including the appropriate balance of priorities for achieving economic and environmental ends. Is the achievement of economic and environmental goals mutually exclusive? Can the language of the market express environ­ mental values or address issues relating to the use of public goods and spaces (water, the oceans, the atmosphere)? Can we move beyond the dichotomy of market or regulation? What is the normative framework envisaged by the concept of 'environmental justice'?

Two very different types of economic instruments are identified: those that rely heavily on detailed regulatory and administrative structures of the state (charges, subsidies, deposit refund systems, market creation- trade­ able emissions - financial enforcement mechanisms – fines, performance bonds); and those that limit state involvement and rely on the restoration of traditional notions of private property rights and reliance on common law remedies (for example, negligence and nuisance) to create a system of private bargaining and incentives for promoting environmental protection. This latter approach, described as 'free market environmentalism', relying on the privatisation of the environmental 'commons', represents a backlash against state regulation of environmental issues and interference with private property rights. In the US, where this movement has been gathering momentum, it has resulted in 'takings' legislation in some jurisdictions, providing for government compensation for excessive regulatory infringement of property rights in achieving environmental ends (Huffman). The essays in this volume also examine the ultimate goal of employing such measures -what is the concept of 'environmental justice' being sought? Is it social, distributive or ecological justice, or merely environmental management - justice viewed from an anthropocentric or ecocentric perspective (Shelton, Bosslemann, and Rowe)?

The debates about the various uses of market mechanisms and concepts of environmental justice are played out in the essays in this book. Part I explores definitions and policy dimensions of environmental justice and their relationship to market mechanisms and state institutional arrangements (Rehbinder, Dovers, Gullet, Macduff, Wolf). Part II outlines the global context and examines the tensions between market mechanisms and environmental justice, focusing on the effects of the inter­ national trade liberalisation, including recent controversies surrounding World Trade Organisation, GATT and the MAl (Kiss, Kelsey, Wynter, Taylor). Part III gives a comparative perspective on the role of states between environmental justice and the market through a series of useful case studies relating to experiences in a wide range of countries and regions including the US, the EU, the UK, Germany, Central and Eastern Europe, South Africa, New Zealand and Australia (Richardson, Bond, Comino, Bothe, Redgwell, Rowan-Robinson, Ross, Huffman, Centner, Kreisel, Costi, Kidd).

This volume of essays contains a wealth of ideas from some of the leading commentators in the field. It will be of great value to policy makers, regulators, environmental lawyers and students in mapping the future of environmental law.


Mark Beaufoy is a Melbourne lawyer.

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