Traditionally the EU has approached governance through legislation2. Such regulation can take a number of different forms (see Section 2.2) and approaches (see below) but it generally imposes obligations, often in the form of detailed rules (substantive or procedural), on target actors. However, the Commission and the European Council have acknowledged concerns from the general public over the EU’s effectiveness and legitimacy in delivering policies. Therefore, the Commission identified the reform of European governance as one of its strategic objectives in early 2000. The resulting White Paper on Governance proposed a number of measures to revamp and broaden the EU’s approach to policy. It was suggested that ‘legislation is often only part of a broader solution combining formal rules with other non-binding tools’ and that legislation should only be considered in cases with a need for uniform application and legal certainty across the Union. As well as changes to the legislative approach itself, there are a number of different ‘non-binding’ tools that the Commission can chose from in search of a broader solution, especially for environmental policy. These include: the Open Method of Coordination; Market-Based Instruments; Voluntary Agreements; information tools such as eco-labels; and Environmental Management Systems. Both the fifthEAP and the sixth EAP called for the broadening of the range of environmental policy instruments and the sixth EAP placed particular emphasis on the use of market based instruments.

The White Paper suggests that improving the quality, effectiveness and simplicity of regulatory acts is necessary. Highlighting the need for greater flexibility, it is stated that regulation should only be considered when there is a need for uniform application and legal certainty across the Union. However, it suggests the more frequent use of ‘framework directives’ because they are ‘less heavy-handed, offer greater flexibility as to their implementation, and tend to be agreed more quickly by Council and the European Parliament’. In addition, the Commission also urges for more use to be made of ‘primary’ legislationlimited to essential elements (basic rights and obligations, conditions to implement them), leaving the executive to fill in the technical detail via implementing ‘secondary’ rules. This concern with simplifying and improving legislation has since been pursued through the publication in 2001 of a Communication on Simplifying and Improving the Regulatory Environment (COM (2001) 726) as well as a more detailed Action Plan in 2002 (COM (2002) 278) for improving the quality and effectiveness of Community legislation. In addition, in the same year the Commission published a document on the Minimum standards of consultation (COM (2002) 277) with stakeholders as well as a system for integrated impact assessment of all major Commission policy proposals(COM (2002) 276) (see Section 3.1).

Though the Governance White Paper was one of the main drivers behind the EU’s ‘better regulation’ agenda, another important driver was the so-called ‘Lisbon Strategy’. Launched in March 2000 at the European Council in Lisbon, the Lisbon Strategy aims to make the EU the most competitive, knowledge-based economy in the world by 2010, and introduced a number of new mechanisms for policy development aimed at achieving this. The following year, reflecting the Treaty commitment to sustainable development (see Section 2.1), an environmental dimension was added to the Lisbon Strategy via the adoption of the EU Sustainable Development Strategy (see Section 3.1) by EU leaders at their meeting in Gothenburg in June 2001.

 

Moreover, work within the Commission was also proceeding on improving the monitoring, reporting and ex post evaluation of the actual impacts of EU legislation on the ground – one of the issues highlighted by the Mandelkern Group on Better Regulation (a high-level group of Member State experts which reported in 2001). This broad approach to improving the effectiveness, efficiency and transparency of EU measures was largely uncontentious.

Arguably the best example of a new mode of governance is the ‘Open Method of Coordination’ (OMC). The concept originates from the European Employment Strategy as laid down in the Amsterdam Treaty (1997) but it was the Lisbon European Council (March 2000) which coined the expression. The essence of the OMC is not to establish a single common framework, but rather share experience and to encourage the spread of best practice. OMC seeks to initiate an iterative process of mutual learning on the basis of diverse national experiences. Guidelines and timetables for achieving goals at the EU level policies are fixed and sometimes backed up by national action plans. National performance is constantly monitored and evaluated through peer review and benchmarking mechanisms, which act as ‘soft-law’ catalysts for greater convergence towards European ‘best practice’. This clearly contrasts with traditional top-down and command and control type regulation backed by ‘hard-law’ sanctions8. OMC has been applied more in the economic and social fields, areas with lesser Community legislative competence, than in the environmental field, where there is greater Community competence. However, the Lisbon process, an example of OMC par excellence (see section 3.1) has implications for environmental policy in its relationship with the EU’s Sustainable Development Strategy and the subsequent inclusion of an environmental dimension in its Spring Review. Another example of the use of OMC, though not necessarily specifically defined in those terms, is the Environmental Technologies Action Plan (ETAP) which attempts to encourage the development and uptake of clean technologies through ‘technology platforms’9. The experience with OMC is mixed. Some still view OMC as little more than a talking shop with participants lacking the same level of commitment as they would with mandatory measures, while others have seen OMC as a means of learning and addressing issues which could otherwise not be addressed at the EU level for political reasons.

Market Based-Instruments (MBIs) ‘affect estimates of costs of alternative actions open to economic agents’10. They make greater use of the market to internalize the hidden costs of polluting activities and resource depletion in a more cost-effective manner. The EEA in a recent report on MBIs in the EU11 (to which IEEP was the main contributor) distinguished between five types of instruments: 1) Tradable permits designed to achieve reductions in pollution (such as emissions of C02) or the use of resources (such as fish quotas) in the most effective way through the provision of market incentives to trade; 2) Environmental taxes designed to change the prices and thus the behaviour of producers and consumers; 3) Environmental charges that have been designed to cover (in part or in full) the costs of environmental services and abatement measures; 4) Environmental subsidies and incentives that have been designed to stimulate development of new technologies to help create new markets for environmental goods and services, to encourage changes in consumer behaviour through green purchasing schemes; 5) Liability and compensation schemes that aim at ensuring adequate compensation for damage resulting from activities dangerous to the environment and provide for means of prevention and reinstatement.

In an early Communication on Voluntary Agreements (COM (96) 561) the Commission adopted the following generic definition: ‘agreements between industry and public authorities on the achievement of environmental objectives’. Public voluntary schemes are established by public bodies, which define certain performance criteria and other conditions of membership. Individual companies are free to decide whether or not to join, although the membership criteria are normally agreed in advance, often through a business association or standard setting authority. A more recent Commission Communication on Voluntary Agreements (COM (2002) 412), which follows the ‘better regulation’ drive, emphasises that Voluntary Agreements can be initiated and negotiated between industry or private actors themselves without significant input from the Commission. The best known examples of environmental agreements at Community level are the agreements of the European, Japanese and Korean carmaker associations on the reduction of CO² emissions from passenger cars. These were acknowledged through Commission Recommendations and supplemented by a Decision of the European Parliament and of the Council establishing a scheme to monitor the average specific emissions of CO² from new passenger cars (see section 14.8). However, agreements of this kind depend upon the existence of a cohesive industrial sector comprising few companies, and strong industry associations– conditions which apply in only a limited number of cases.

Eco-labels mainly rely on moral suasion by providing consumers with more information about the environmental impact of particular products and services11. The OECD differentiates between 3 subtypes: externally verified multi-issue schemes; unverified self-declaratory schemes; and single issues schemes. Eco-labels simply provide information to consumers in a standardized manner, allowing them to make more informed purchasing decisions12. Widely recognized and supported eco-labels may influence producers in a similar manner to traditional regulatory standards in markets where green consumerism is very strong. However, in markets which are characterized by a low degree of environmental awareness, producers will have much more choice as to whether or not to seek a label. Eco-label schemes have mainly taken off at a national level most notably in Germany and the Nordic Member States, but the EU eco-label scheme established in 1992 has awarded 250 licenses for several hundred products13. At the EU level, ecolabels, although in principle a non-legislative voluntary policy tool, have required a legislative framework to ensure their uniform application (see section 11.7).

Environmental Management Systems (EMSs) such as the EU Environmental Management and Audit Scheme (EMAS) and the international ISO 14001 are designed to encourage industry to behave in a more environmentally responsible manner. Although the precise characteristics of these two systems differ, both require companies to audit the environmental impact of their activities, establish internal management systems to monitor and where possible reduce these impacts, and provide stakeholders with a regular statement of their activities2. In exchange, the business is granted an official confirmation (or logo) by a national competent authority (as in the case of EMAS) or the International Standards Organisation (ISO) (as in the case of ISO 14001), which they are entitled to use in their environmental statements. Although participation in both schemes is voluntary, firms are often driven to participate by pressure from their stakeholders, their competitors or other firms in their supply chain. Again, although EMSs in principle are a voluntary non-legislative policy tool, at the EU level, there is a legislative framework to ensure their uniform application (see section 11.8).