SUSTAINABLE MARKET SOLUTIONS FOR GLOBAL ENVIRONMENTAL PROBLEMS Vested Interests in the Political Economy SUSTRA Workshop, 22-23 January 2004 Mike Wriglesworth

SUSTAINABLE MARKET SOLUTIONS FOR GLOBAL ENVIRONMENTAL PROBLEMS

Vested Interests in the Political Economy

SUSTRA Workshop, 22-23 January 2004

Mike WriglesworthSenior Advisor European Affairs, International Emissions Trading Association


IETA is dedicated to:

the objectives of the United Nations Framework Convention on Climate Change and ultimately climate protection;

the establishment of effective market-based trading systems for greenhouse gas emissions by businesses that are demonstrably fair, open, efficient, accountable and consistent across national boundaries; and

maintaining societal equity and environmental integrity while establishing these systems.

IETA Vision


Some IETA Members


Main Activities - Build GHG markets

Standardize Components

Capacity building

Highlight issues

Respond to Regulators



Scope of the presentation: Delivering sustainable & equitable solutions:

• Sustainability as the ‘objective’ long-term test• ‘Equity’ recognises likely competing self-interests

Democracy based on competing self-interest Role of advocacy in expressing self-interest Role of markets in harnessing self-interest:

• Regulated markets that drive efficient solutions



In EU process, all institutions & stakeholders bring vested interests to the political debate• Commission protects its power of proposal• Parliament seeks publicity and to increase power• Member State deals to protect national interests• ENGOs seek a heady mix of publicity and funds• Business mixes short term defence with strategy• Consultants have their own more direct interests


Vested Interests Commission Proposals

EU model & process from proposal to directive Commission proposals need to be based on:

• Coherent policy –agreed strategy, realistic aims• Sound data• Impact assessment -‘regulatory’ or ‘extended’

Stakeholder input is key part of the process:• Stakeholders offer relevant data and expertise• Stakeholder impacts must be part of assessment• Advocacy is most effective if soundly based


Vested Interests in the EU Political Process

EU model & process from proposal to directive Commission Extended Impact Assessment

provides the basis for stakeholder advocacy EIA is at a very early stage of development Early examples justify existing aims/strategy EP Env Com vote on EIA test of amendment Data, modelling and analysis lack objectivity Risk: -lack of trust in science and scientists


Creative Markets Harness Vested Interests

Markets can harness creativity & self-interest Regulated market meeting democratic model Market mechanisms combine meeting aims

early & effectively, with economic efficiency But, design of market instruments is crucial:

• Credible balance of aim, cost and effectiveness• Simple mechanism aligned with a clear objective• Simplicity and clarity help gain public support


Vested Interests Drive EU Political Process

Conclusions: Regulated markets can harness self-interest Self-interest underpins the democratic model All stakeholders bring legitimate self interest Well designed market mechanisms can offer

effectiveness with economic efficiency Public support is crucial based on clarity and

transparency of mechanism aligned with aim

Documents

SUSTAINABLE MARKET SOLUTIONS FOR GLOBAL ENVIRONMENTAL PROBLEMS Vested Interests in the Political Economy SUSTRA Workshop, 22-23 January 2004 Mike Wriglesworth