July 4, 2012: Panel 7E - Challenges to Greening the World Economy

Challenges to Greening the World Economy Video

Wed, 04 Jul 2012 13:15:00 PDT

Is The Time Ripe for Binding Norms for Corporate Accountability?

Stephen Stec et al. — Wed, 04 Jul 2012 13:15:00 PDT

International voluntary corporate social responsibility initiatives such as international codes of conduct, non-financial reporting standards and governance principles have displayed an exponential growth trend in recent decades, in response to growing recognition of the need for a policy response to the harmful social and environmental effects of globalization. Corporate accountability was a major topic in 2002 at the World Summit on Sustainable Development in Johannesburg, resulting in the strengthening of voluntary frameworks and the launching of several new voluntary initiatives. The expansion of the realm of corporate social responsibility, sustainability reporting and accountability through voluntary means has not, however, blunted calls by international civil society organizations, IGOs, states and business associations for the adoption of a binding international legal framework on corporate accountability. Discussion of a “global policy framework” for corporate accountability that may lead to binding norms took place during the preparation of this year’s Rio+20 Conference in the development of a vision of “The Future We Want.” Against the backdrop of more than three centuries of operation of the corporate form in international environmental politics, the paper tracks the rise of concern over corporate accountability and the explosion of voluntary initiatives, assesses the limitations of the latter, and examines the implications of a binding legal framework, as well as the possible principles, criteria, norms and structure that such a framework could take on, with regard for legal diversity, collateral legal constraints, and capacity and other issues.

Transnational Voluntary Climate Change Initiatives for Local Governments: Key Variables, Drivers, and Likely Effects

Stepan Wood et al. — Wed, 04 Jul 2012 13:15:00 PDT

Local governments were among the first levels of government to develop and implement policies and measures to combat climate change. They remain in many respects at the forefront of climate policy. Since the early 1990s they have acted collectively to create transnational voluntary climate change initiatives, from the Europe-based Climate Alliance and EU Mayors’ Covenant to the global Cities for Climate Protection campaign and carbonn Cities Climate Registry. After more than two decades of experience with the oldest of these initiatives, it is somewhat surprising that these transnational local government climate initiatives have not received more attention in the scholarly literature. This paper surveys more than a dozen of the most prominent transnational local government climate change initiatives, compares them against key variables likely to affect their performance (namely, process versus performance orientation; self-determined versus pre-determined targets; specificity of commitments; geographic scope; measurement, reporting and verification; and enforcement and sanctions), assesses the economic incentives and other factors driving or constraining their adoption (including externalities, free-rider incentives, cost savings, co-benefits, voter demand, symbolic action, political entrepreneurship, piggy-backing, “green” market opportunities, desire to shape future regulation, desire to put pressure on higher levels of government, principled normative beliefs, and opportunities for policy learning), and predicts their likely effects in terms of GHG emissions reductions, policy learning, and enhanced adaptation capacity. The paper concludes that modest optimism is warranted about the potential of such initiatives to foster climate change adaptation and policy learning in the long run, tempered by considerable skepticism about their potential to reduce global GHG emissions in the short run.

When Do Too Many Good Economic Instruments Become Bad Legal Policy?

Amanda Kennedy et al. — Wed, 04 Jul 2012 13:15:00 PDT

Environmental property interests will inevitably be fundamental components of any ‘environmental economy’, and as such their creation is an important area of policy innovation. A key argument in favour of property approaches to environmental protection and restoration is the expectation that a market/property rights approach can achieve environmental goals efficiently, provide new sources of funds, and allow industry to find cost-effective ways of reducing environmental harms. It is also argued that strongly defined private property rights-based approaches minimise the risk of the potential ‘tragedy of the commons’. Exclusive, secure and transferable property rights (as far as practicable) arguably ensure the resource ends up being put to the highest value use.

However, the proliferation of environmental market instruments and incentive programmes has the potential to create legal complexities for which our existing property governance system may be insufficiently prepared. We are rapidly approaching a time when this propagation may in itself cause significant governance and economic problems. These include the risk of misallocation and over-payment for conservation and restoration of environments through an excess of entrepreneurial zeal meeting an insufficiency of governance capacity, and undermining of the key features of the Torrens system for tracking legal interests in real property.

This paper argues both for the creation of new tradeable fractions of the environment, and the integration of these instruments into a streamlined and simple legal and institutional structure. We believe this is not a matter of trading off between the proliferation of interests and instruments, and complexity. We also believe that there is unfulfilled opportunity for public and philanthropic investment in environmental property resources. The challenge for property law in the twenty first century that we identify is one of facilitating entrepreneurship for the environment by unbundling, whilst at the same time ensuring that this process does not result in excessive transaction costs arising from poor institutional coordination.

Legal Preparedness for the Global Green Economy

Markus Gehring — Wed, 04 Jul 2012 13:15:00 PDT

As argued in the 2011 UN Green Economy Report, the world currently faces an important opportunity to move from current resource depleting, polluting and wasteful forms of economic growth to a new, low-carbon, sustainable green economy. New markets and industries are emerging, for clean renewable energy, environmental goods and services, local organic agriculture, and payment for ecosystem services. International economic law is evolving rapidly, and could foster rather than frustrate this shift. With more than 350 trade treaties, over 2,700 investment accords, new international disputes on resources, environment and development issues, and regimes like the UN Climate Convention Cancun Agreement or the UN Biodiversity Convention Nagoya Protocol adopting new economic instruments, it remains somewhat unclear how international rules can guide governments and markets.

Canada, the EU and many developing country partners have committed to sustainable development globally. They are actively negotiating new Free Trade Agreements (FTAs) & Foreign Investment Protection Agreements (FIPAs). In preparation for the 2012 United Nations Conference on Sustainable Development (UN CSD), where countries will report their progress in developing policies and laws for the green economy, this paper aims to advance our international understanding of opportunities, challenges and also limits of law and policy instruments to support development of a global green economy.

The project builds on my SSHRC research and outreach project for Sustainable Prosperity where I analyzed the international economic legal framework for market-based instruments (MBIs) supplemented by case studies of actual experiences with environmental pricing reform measures for low-carbon development, also forest ecosystems and biodiversity stewardship. I explained how the rules of WTO legal regime (including recent dispute settlement outcomes) have a profound impact on MBIs. I have also been awarded a SSHRC workshop grant and aim to share some of the workshop results with IUCN members in July.

This research builds upon previous studies published in my recent work with Kluwer Law International- Sustainable Development in World Trade Law and in Sustainable Development in World Investment Law.