Regulation in an Eco-economy

Transforming economic drivers

The Crisis of Markets

The Swing to Regulation

Principles & Trends

increasing economic complexity demands more conscious involvement and direction.

Planning is more, not less, important, but… The state can’t do it all. Integrated design:

• Social & environmental

• Cross-disciplinary

Trends & Principles -2

political-economic integration moves beyond the state more connected to overall rules of

economic life more connected to all stakeholders

involved [should be] part of a movement toward

direct democracy

Knowledge-based / Quality-based development Greater focus on the ‘human factor’

• From mindless to mindful markets:

• Centrality of end-use & purpose of production

• Integrated design: multi-dimensional goals Greater levels of democracy/participation

• From hierarchical to decentralized regulation

• From external to internal self-regulation

• Greater stakeholder involvement

• Greater integration with everyday exchange & civil society

• Role of The Commons: ecological, physical, electronic; Sharing & saving

Historical Trends in Regulation early industrialism: separation between state and

markets. Focus on production. Fordist & state-socialist industrialism:

• More concern with consumption / demand.

• Need for more planning: political-economic intervention.

Today: even greater involvement of consciousness & planning is necessary; integrated ecosystem-based design.• Post-Fordist globalization: avoidance or disguising of

conscious planning.

• Suppression of new modes of mass collaboration.

Trends in Mainstream Regulation

End of pipe control and cleanup : 70s

Point Source Prevention : 80s

Consumption Patterns and Product & System Design : today

Contending Alternatives toCommand-and-Control

Corporate critique

Regulation: costly and inefficient Trade: a panacea Avoidance of accountability Focus on single bottom line In Practice: tends to starve governments of

regulatory resources—producing a self-fulfilling prophecy

Design Perspectiveon Regulation

Commoner, Hawken, Boyd, Geiser, Stahel, etc. Need for levels of incentives/disincentives

• Regulatory pluralism From prescriptive to performance standards Democracy: inclusion of stakeholders, growth

of accountability Movement toward fundamental solutions:

1. Service economy: redefining output2. Lake economy: organic redesign

Must deal with ‘silo’ structures

The Precautionary Principle

one of the two central principles of eco-regulation (along with the life-cycle approach)

not the basis for 70s regulatory initiatives

encourages benign materials design and use

requires product/substance bans & phaseouts

‘Next Generation’ Regulatory Instruments

…Often a confused combination of corporate and design elements

Variations of ‘Regulatory Pluralism’ self-regulation co-regulation voluntary agreements regulatory flexibility negotiated agreements environmental partnerships informational regulation economic instruments.

Questions about ‘Instruments’

• Do they accept or reinforce chronic underfunding of government?

• Are they based in corporate ideology (i.e. obsolete views of market forces)?

• Do they deal with fundamental problems and solutions?

Elements of Green Economic Self-Regulation the Scale of the economy: community and bioregional

organization, harnessing technological potentials for decentralization via reutilization-industry, distributed energy-generation, eco-infrastructure, local money, co-operative consumption, etc.

Participatory democracy: Green Municipalism, participatory Green City Plans, community indicators & pattern-language development.

a Green regulatory structure: including community design pattern-languages, performance standards, product stewardship systems, product & substance bans, and other rules which encourage bioregionalism, quality and community.

Green market mechanisms: ecological tax systems, account-money & other community currencies, and a green financial infrastructure.

Knowledge as a regulatory force: via resource inventories, eco-accounting, product information & labelling, and community indicators.

‘Surrogate Regulators’

community groups, NGOs buyers / suppliers investors financial institutions insurance companies

Question: are these surrogates, or just vital elements of regulation today?

Possible Instruments in the Integrated Product Policy (IPP) Toolbox

Instrument Including

Voluntary instruments Voluntary agreements

Self-commitments

Industry awards

Voluntary information instruments Eco-labels, Product profiles

Product declarations

Compulsory information instruments Warning labels, Information responsibility, Reporting requirements

Economic instruments Product taxes and charges

Subsidies

Deposit/refund schemes

Financial responsibility

Regulatory instruments Bans/phase-outs

Product requirements

Mandatory take-back

Extended Producer Responsibility (EPR)

designing ownership patterns to achieve stewardship

a positive form of accountability that can “change the DNA” of corporate entities

closes loops and encourages service production

takes different forms in different industries and situations.

Varieties of EPR• liability where responsibility for environmental damages

caused by a product—in production, use, or disposal—is borne by the producer;

• economic responsibility where a producer covers all or part of the costs for managing wastes at the end of a product’s life (e.g. collection, processing, treatment or disposal);

• physical responsibility where the producer is involved in the physical management of the products, used products or the impacts of the products through development of technology or provision of services; one common expression of this would be…

• ownership where the producer retains ownership of the product over it entire service life, and

• informative responsibility where the producer is required to provide information on the product and its effects during various stages of its life cycle.

(Thorpe and Kruszewska,1999; Linquist, 1998)

Expressions OF EPR

Product take back for waste management Life-cycle partnerships for waste management Materials selection Materials management Extended environmental management programs Leasing systems Delivering service and function instead of products Design-for-the-environment programs Environmental purchasing

Frontiers of EPR

Braungart’s Intelligent Product System1. Consumables2. Products of Service3. Unmarketables

Product-Service Systems… typically tries to facilitate:

--sale of the use of product (rather than the product itself); --operational leasing, rather than ownership by consumers--repair rather than throwaway relationships

Strategic Modes of Regulation

Civil Society-based Certification systems Ecological Tax Reform / tax shifting Subsidies / green scissors Green Procurement EPR legislation Guidelines for Green Finance: green

development plans, etc.

Sector-based Action

green belts building codes / zoning renewable portfolio standards &

standard offer contracts product & substance bans, etc.

Other Resources Conroy Powerpoint: Branded: How the Certification Revolution

Facilitates New Ethics in International Affairs

Braungart : Cradle to Cradle design

McDonough on Cradle to California