(Innovation) (Jannicke) New Approaches To Ecological Modernisation

Martin Jnicke Klaus Jacob (Eds.
Environmental Governance
in Global Perspective
New Approaches to Ecological
Modernisation
with a preface by Jrgen Trittin
Editors:
Prof. Dr. Martin Jnicke

Dr. Klaus Jacob
Environmental Policy Research Centre
Ihnestr. 22
14195 Berlin
Germany
FFU Report 01-2006

Special edition on the occasion of the 20th anniversary
of the Environmental Policy Research Centre
Published 2006 by
Freie Universitt Berlin
Department of Political and Social Sciences
Cover Design: Cornelia Wolter

Photos Cover: www.photocase.com
Layout: Harald Mnch
Printed and bound by Triggeragent, Berlin
ISBN: 3-929532-64-6
Preface
JRGEN TRITTIN
Ecological Modernisation, focussing on innovations that extend beyond

end-of-pipe solutions, has been an important element of German environ-
mental policy over the last years. This policy has, for example, resulted in a
booming export of renewable energy technologies and in emissions reduc-
tions through the utilisation of modern technologies. Germany has shown
that its innovation-oriented strategies could induce growth in environmen-
tally friendly sectors.
Some key driving forces behind this successful policy can be identified. Inno-
vation in the field of environmental technology needs regulatory support. It
also needs political modernisation. New patterns of multi-level and multi-
sectoral governance had to be developed. New types of instruments such as
obligatory feed-in tariffs for renewable energy or emissions trading have gai-
ned importance. While the role of government and the nation-state has chan-
ged in this process, it has not diminished. I agree with the authors of this
book that governments are significant drivers of both environmental policy
and technology innovation. By providing successful policies policies that are
based on clean(er) technology they create demonstration effects for other
countries. This kind of best practice often leads to policy diffusion and lesson
drawing. To a high degree, global environmental policy is based on national
policy innovations that are subsequently adopted in other countries. For in-
stance, the German feed-in tariff model has now been adopted by some thirty
countries around the world among them several developing countries. Like-
wise, the Dutch Environmental Policy Plan has influenced national strategies
for sustainable development in more than one hundred countries.
This book describes the new role of governments in the global environmental
policy arena. It highlights the high potential of policy innovation and technol-
ogy innovation in the environmental field as well as the interaction between
them. It shows that national governments of highly developed countries not
only have the potential to pioneer solutions to global environmental prob-
lems, but also have the obligation to support lead markets for better technolo-
III
gies. Hence, this book plays a valuable role in informing us about what is pos-
sible and where we need to go from here.
The research on ecological and political modernisation provided by the Envi-
ronmental Policy Research Centre of the Freie Universitt Berlin has often
proved valuable for the German Federal Ministry for the Environment, Nature
Conservation and Nuclear Safety. Indeed, twenty years of its research activities
have contributed to a profound learning process for all political actors. Not
least for this reason I would like to wish the FFU continued success in the
future.
IV
Contents
Preface III
Jrgen Trittin
Contents V
Contributers VIII
Introduction 1
Part I
Ecological Modernisation and the Role of Pioneer Countries
Ecological Modernisation: New Perspectives 9

Martin Jnicke
Lead Markets for Environmental Innovations:

A New Role for the Nation State 30
Martin Jnicke Klaus Jacob
Trend Setters in Environmental Policy:

The Character and Role of Pioneer Countries 51
Martin Jnicke
Modelling Capacities for Environmental Policy-Making

in Global Environmental Politics 67
Klaus Jacob Axel Volkery
V
Part II
Diffusion of Environmental Policy Innovations
The Diffusion of Environmental Policy Innovations:

Cornerstones of an Analytical Framework 97
Kerstin Tews
The Global Diffusion of Regulatory Instruments:

The Making of a New International Environmental Regime 123
Per-Olof Busch Helge Jrgens Kerstin Tews
Sub-national trans-Atlantic lesson-drawing related to governance

for sustainable development 145
Kirsten Jrgensen
Part III
The Rio Model of Environmental Governance
New Approaches to Environmental Governance 167

Martin Jnicke Helge Jrgens
Coordinating sustainable development an evaluation of the

state of play 210
Axel Volkery Darren Swanson Klaus Jacob
Francois Bregha Lszl Pintr
Institutions and Instruments for Government Self-Regulation:

Environmental Policy Integration in a Cross-Country-Perspective 239
VI
Part IV
Greening Energy Policies
Converging Objectives, Diverging Results? National Goal

Formulation and Goal Achievement in Climate Change Policies 265
Kerstin Tews Manfred Binder
Ecological Tax Reform An environmental policy innovation in

an international comparison 303
Lutz Mez
Phasing-Out Nuclear Power Generation in Germany:

Policies, Actors, Issues and Non-Issues 322
Lutz Mez Annette Piening
Part V
International Environmental Governance
Does Bureaucracy Really Matter?

The Authority of Intergovernmental Treaty Secretariats in Global
Environmental Politics 353
Steffen Bauer
The Institutionalization of Private Governance: How business

and non-profit organizations agree on transnational rules 386
Philipp Pattberg
Success and Failure in International River Basin Management

The Case of Southern Africa 411
Stefan Lindemann
VII
Contributers
Steffen Bauer is a research fellow with the international Global Governance
Project (glogov.org) and an associate fellow at the Environmental Policy Re-
search Centre, Freie Universitt Berlin.
Manfred Binder, political scientist, has been working with the Environmental
Policy Research Centre since 1989, mostly about structural change, statistics,
methodology, and the political economy of environmental, energy and indus-
trial policies.
Francois Bregha is director of Stratos Strategies to Sustainability Inc., Ot-
tawa, Canada.
Per-Olof Busch is a research fellow at the Environmental Policy Research Cen-
tre, Freie Universitt Berlin. In his research he is specialising on comparative
politics and international relations. Research projects covered policy diffusion,
policy convergence and the effectiveness of international organisations.
Dr. Klaus Jacob, political scientist and research director at the Environmental
Policy Research Centre, has been analysing and developing instruments and
strategies for environmental policy integration, in particular Impact Assess-
ments. Furthermore, he studied innovation and market effects of environ-
mental policies and analysed and evaluated National Strategies for Sustainable
Development.
Prof. Dr. Martin Jnicke, 1971-2002 professor for comparative politics at the
Freie Universitt Berlin. Director of the Environmental Policy Research Cen-
tre and member of the German Advisory Council on the Environment (SRU).
Member of several advisory boards of research institutes, e.g. the Wuppertal
Institute.
Helge Jrgens is research fellow at the German Advisory Council on the Envi-
ronment (SRU) and research associate at the Environmental Policy Research
Centre. He is member of the steering committee of the European Union fi-
nanced research project "Environmental Governance in Europe. The Impact of
International Institutions and Trade on Policy Convergence".
Dr. Kirsten Jrgensen is assistant professor at the Freie Universitt Berlin,
Department of Political and Social Sciences and member of the executive
committee of the Environmental Policy Research Centre. Her primary field of
VIII
interest includes German and European environmental policy, sustainable
development in the federal systems of Germany and the USA and waste man-
agement policy.
Stefan Lindemann is a research fellow at the Environmental Policy Research
Centre and currently works for the German Advisory Council on the Envi-
ronment (SRU). He has specialised in the fields of environmental and devel-
opment policy, with a particular emphasis on water-related issues.
Dr. Lutz Mez is senior associate professor at the Department of Political and
Social Sciences, Freie Universitt Berlin, and managing director of the Envi-
ronmental Policy Research Centre. In 1993/94 he was visiting professor at the
Department of Environment, Technology and Social Studies, Roskilde Univer-
sity, Denmark. His mayor research area is environmental and energy policy
with particular reference to nuclear and electricity policy.
Philipp Pattberg is a project leader at the Institute for Environmental Studies
(IVM) of the Vrije Universiteit Amsterdam. His current research includes a
project on public policy partnerships as well as a study on the policy options
for a post-2012 climate regime. In addition, he is a senior fellow of the inter-
national Global Governance Project (glogov.org), where he coordinates the
research group MecGlo on new mechanisms of global governance.
Annette Piening, M.A., lives and works as free author and researcher special-
ised in energy and environmental policy in Hamburg. From 1998 - 2004 she
worked as a researcher at the Environmental Policy Research Centre.
Dr. Lszl Pintr is Director of Measurement and Indicators Strategic Objec-
tive at the Canadian based International Institute for Sustainable Develop-
ment (IISD)
Darren Swanson is project officer at the Canadian based International Insti-
tute for Sustainable Development (IISD)
Dr. Kerstin Tews, sociologist, has been working with the Environmental Policy
Research Centre since 2000. Her research concentrates on the analysis of pol-
icy transfer processes in general and in the context of the EU-enlargement in
particular, on policy-diffusion as driving force for global change and on com-
plementary governance activities of non-state actors, state-actors and interna-
tional organisations.
Axel Volkery is project manager for scenario and policy analysis at the Euro-
pean Environment Agency in Copenhagen, Denmark. He has been previously
IX
affiliated with the Environmental Policy Research Centre. The opinions ex-
pressed here do not reflect any official opinion of the European Environment
Agency. They reflect personal opinions of the author and have been developed
when the author was affiliated with the Environmental Policy Research Centre
Berlin.
X
Introduction
Environmental policy making, despite being a rather young branch of state
activities, has evolved in all industrialised countries into a special policy field
with a comprehensive set of actors and institutions at all levels of policy mak-
ing. It has gained importance within the governmental system despite set
backs and defeats in major issues during the past 30 years.
The genesis of environmental policies have been subject of numerous studies
in political science. The field is characterised by a number of special features
which have attracted academic attention, for example, the comprehensive
international framework with hundreds of international agreements, the need
to deal with complexity and uncertainty, the according great importance of
knowledge for decision making, the emergence and growing importance of
non governmental actors, etc. Many political scientists are studying these and
other related phenomena. New conceptual, theoretical and methodological
approaches have been developed to analyse environmental policy.
Research has been performed on questions like: How are governments coping
with the challenges from environmental degradation? Which actors are in-
volved, what strategies are they pursuing? Which institutions have been devel-
oped and what kind of instruments are being applied? How and why are the
patterns of environmental governance changing over time and which ap-
proaches have been successful? What are the effects of environmental policies
in the different domains of society: the economy and the civil society, but also
within government itself? Which approaches have proven to be the most suc-
cessful?
The Environmental Policy Research Centre is an active contributor in this
field. As a research institute primarily based on third party funding it covers a
broad spectrum of methodological approaches and thematic areas. However,
some key areas of research have evolved:
A comparative perspective on pioneer countries: In a world of dynamic
complexity and hundreds of potential intervening factors, policy analysis
relies mainly on case studies and the comparison between countries. Re-
search at FFU has made extensive use of comparative methods and a sys-
tematic profiling of cases against a large N. What began with the analysis of
success conditions for environmental policy in the 1980s, later focused on
1
capacities for environmental policy and on determinants of pioneering be-

haviour. The national government - not least as a collective actor on
higher levels - remains the main unit of analysis: The often proposed the-
sis of a declining importance of the nation state cannot be confirmed by
the rich empirical data collected at the FFU. Without question, there is a
growing importance of the European and the international level for the
further development of environmental policies. However, the emerging
policy arenas at these levels are utilised primarily by actors from the na-
tional level to gain support for their approaches. Environmental policy
making is to a large degree a multilevel game. National governments re-
maining the major innovators and adopters of new policies.
Policy Innovations and their diffusion: The diffusion of environmental
policy innovations and the development of global environmental policy by
horizontal lesson-drawing is a central aspect of modernisation in envi-
ronmental governance. Since the early 1990s, this has been a key field of re-
search at the Environmental Policy Research Center. The role of the nation
state in the global policy arenas well as the role of international regimes
and other global players need research beyond well-established prejudices
(for example those of neoclassic economists). Governments have revealed a
great creativity in developing new policy approaches. Industry, services,
consumers, but also the government itself have been subject of measures to
integrate the environment in their decision making.
The analysis of the relationship between environmental policy and the
economy: The concept of 'ecological modernisation' that has proven to be
both scientifically and politically successful, was developed in Berlin and
has been a sustained source of new projects and publications. Two streams
of research dealing with the link between environmental policy and the
economy. Firstly, the innovation effects of environmental policies were
studied in a number of projects. The ex post and bottom up approach
was added to traditional top-down explanations as a tool for comprehen-
sive analysis. In this approach, an innovation (rather than a policy) is the
unit of analysis and the starting point. From this, the influencing factors
are traced back. This has led to the empirical result that there is no single
policy instrument able to explain innovation; instead, innovations can be
explained only by a comprehensive set of factors including the instrumen-
tation (at every stage of the innovation process), the policy style and the ac-
tor configuration. In a dynamic perspective it can be shown that early
2
Introduction
phases of the policy process - i.e. the definition of problems and the devel-
opment of objectives - already have a considerable influence on the innova-
tion behaviour of firms.
Another stream of research has been the environmental impacts of dirty
industries in cross country comparison: Only few sectors are responsible
for a major share of emissions and resource use. In some countries, the
shrinking of some of these sectors has been a major source of improve-
ments in environmental quality.
Interdependency between political and technological modernisation: The
ecological modernisation of the economy is to a large degree driven by en-
vironmental policies. The pioneers in environmental policy set the pace of
technological development in many different issue areas. They serve as an
example in other countries thereby triggering processes of diffusion of
both technologies and policies. These phenomena have been analysed as
lead markets for environmental innovations.
These issues and the methodological approaches have been at the core of the
research at the Environmental Policy Research Centre since its establishment.
Refinements, further developments and new issue areas have been fuelled by
the rapid development in the real world of environmental policy making.
Since 1986, the German Environmental Ministry was founded, the Brundtland
report was published, many international agreements were agreed on, the Rio
World Summit took place, Green Parties entered national governments, etc.
The institutional landscape for environmental policies changed fundamen-
tally, with new actors entering the scene, the internationalisation and region-
alisation of the policy field, and the broadening variety of policy instruments
including economic, information based cooperative and not least smart
regulatory approaches.
From its foundation, FFU was involved in environmental policy advice, some-
times very near to the decision making process. The combination of basic
academic research and consultancy primarily for political actors proved fruit-
ful for both spheres. A thorough understanding of the informational needs of
political actors and their opportunities for action has shown to be a valuable
source for the framing of new research questions. On the other hand, high
academic standards and reputation are a prerequisite for successful consul-
tancy.
3
This volume aims to take stock of this work and at the same time outline a
future research program. It aims to give both academics and practitioners
insights into the state of the art of environmental policy analysis and of the
performance of the Environmental Policy Research Centre at its 20th anniver-
sary, about its achievements and the way ahead.
This volume comprises a selection of relevant and recently published contri-
butions from the FFU. Nearly all of the chapters have been published else-
where, mostly in peer reviewed academic journals. The 16 chapters are
grouped in five sections:
The first section (Ecological Modernisation and the Role of Pioneer Countries)
gives an overview on recent research on the potentials for and barriers to an
ecological modernisation of the economy and the special role of pioneering
countries. In his overview article Ecological Modernisation: New Perspec-
tives Martin Jnicke analyses recent processes of political modernisation
asking how these innovations work within the logic of ecological modernisa-
tion. In the following chapter by Martin Jnicke and Klaus Jacob, the emer-
gence of lead markets for environmental innovations are examined as an in-
terplay between innovation and diffusion of policies and technologies. Innova-
tions are often stimulated by pioneers of environmental policy. Frequently,
they are setting the trends and the pace for the international processes of
modernisation. In the subsequent chapter, Martin Jnicke analyses such trend
setters, their potentials for action and the impacts of pioneering countries.
The chapter by Jacob and Volkery explores methods of statistical modelling to
represent and analyse the capacities of pioneer countries in a comparative
perspective.
Section 2 is dedicated to the diffusion of environmental policy innovations.
Kerstin Tews takes stock of several major research projects in this field and
develops a new research agenda for fruitful future activities in this area. The
chapter by Per-Olof Busch et al. provides an empirical overview- for a large
number of policy innovations -of the diffusion processes between countries .
Manfred Binder critically assesses the notion of diffusion in a cross-country
comparison. Kirsten Jrgensen focuses on processes of diffusion on the sub-
national level, comparing the Lnder in Germany and the Federal States in the
USA.
Section 3 is dedicated to the Greening of Energy Policies. The comparative
analysis of energy policies and the potentials for Environmental Policy Inte-
4
Introduction
gration in this field have been a longstanding subject of research at the FFU.
The contribution by Tews and Binder, gives overview of CO2 reduction targets
within the ANNEX 1 countries and assess whether these objectives have so far
led to effective activities. Mez describes the concept of ecological tax reforms
from a comparative perspective. Lutz Mez and Annette Piening analysing the
negotiation of the nuclear power phase out in Germany, which can be per-
ceived as a rare example of an organised transition of an economic sector.
Section 4 is devoted to the analysis of innovations in governance. Martin
Jnicke and Helge Jrgens develop an overview and a systematisation of envi-
ronmental policy since the Rio Summit in 1992. Axel Volkery et al. present a
study on strategies for sustainable development in a 19-countries comparison.
The chapter by Klaus Jacob and Axel Volkery provides reviews instruments
and strategies to integrate environmental concerns in the various fields of
policy making and analyses their application in the OECD.
The final section focuses on the international level of environmental policy
making: The chapter by Steffen Bauer explores the bureaucratic authority of
international treaty secretariats in global environmental politics. Philipp
Pattberg analyses the growing importance of NGOs in international environ-
mental policy. Finally, Stefan Lindemann compares a large number of water
regimes in terms of their design, their scope and their effectiveness.
We wish to thank all contributors to this volume. All of the authors have been
immensely patient even on requests on short notice for editing and format-
ting their respective chapters. A large vote of thanks is owed to Julia Werner
who organised the editing, the design and finally the print of this book and to
Harald Mnch who took over the responsibility for formatting the manu-
script. Without Julia and Harald this book wouldnt have been possible.
Berlin, March 2006

Martin Jnicke and Klaus Jacob
5
Part I
Ecological Modernisation
and the Role of
Pioneer Countries
Ecological Modernisation: New Perspectives
MARTIN JNICKE
Abstract
Ecological modernisation understood as systematic eco-innovation and
diffusion has by far the largest potential to achieve environmental improve-
ments. In general, the market logic of modernisation and competition for
innovation combined with the market potential of global environmental needs
serve as important driving forces behind ecological modernisation. In recent
times, however, two additional factors have favoured the rise of ecological
modernisation. First of all, there is growing evidence for the importance of
smart environmental regulation. Secondly, the increasingly complex actor
constellation of global environmental governance leads to mounting business
risks for polluters and thereby exerts pressure for eco-innovation.
Despite these favourable framework conditions, the strategy of ecological
modernisation nonetheless faces a number of inherent limitations. These
include the unavailability of marketable technological solutions for all envi-
ronmental problems, the neutralisation of incremental environmental im-
provements through economic growth (the dilemma of the N-curve) as well
as power-based resistance by modernisation losers. Against this background,
structural solutions seem indispensable. Here, eco-innovations should be
supported by transition management or ecological structural policy. The latter
should be creative and far-reaching but seek to avoid creative destruction.
1 Ecological Modernisation: Linking Ecology and

Economy
For more than 20 years, the concept of ecological modernisation has been
used to describe a technology-based approach to environmental policy. Eco-
logical modernisation is different from the purely end-of-pipe approaches in
that it encompasses all measures taken to foster eco-innovation and to sup-
9
Martin Jnicke
port the diffusion of these innovations. In general, an environmental problem

proves politically less difficult to resolve if a marketable solution exists. In
contrast, if a solution to an environmental problem requires an intervention
in the established patterns of production, consumption, or transport, it is
likely to meet resistance.
The term ecological modernisation was coined in the early 1980s to provide
a formula for the interplay of ecology and economy. The intention was to link
the drive for modernisation in the developed market economies and the long-
term requirement for an ex ante more environmentally friendly development
through innovation in environmental technologies. The concept was first
developed in a study for the Berlin Science Center (Jnicke 1983, 1985) and
adopted by a small community of Berlin social scientists (Simonis 1988,
Zimmermann et al. 1990, Foljanty-Jost 1995, Huber 2000) that are sometimes
referred to as the Berlin School of environmental policy research (Mez and
Weidner 1997, see also Prittwitz 1993). In the aftermath, the concept of eco-
logical modernisation came to exert a strong influence on the environmental
debate in Germany. It was most influential in social-democratic circles, but
eventually also reached the green party (Bndnis 90/Die Grnen). This politi-
cal reception of the concept is mirrored in the red-green coalition agree-
ment of October 1998 where the new German government spelled out a pro-
gram of ecological modernisation. In the environmental science debate, the
concept has been in widespread international use since the early 1990s (Weale
1992, Hajer 1995, Cohen 1998, Young 2000, Mol 2001, Barrett 2005).
Today, the broad reception of the idea of ecological modernization is com-
plemented by the development of a number of alternative concepts that bear
similar meanings. Here, one can cite the comprehensive concept of govern-
ing environmental flows that places the focus of innovation on the quality
and quantity of material flows and thereby seeks to minimise their environ-
mental impacts (Spargaaren et al. 2006, see also Jnicke 2006). Other related
concepts include the idea of eco-innovation for sustainable consumption
and production (SCP) brought forward at the WSSD in Johannesburg (2002) as
well as the notion of eco-efficiency that is part of the EU Lisbon strategy for
growth and employment. With respect to the latter concept, a High Level
Group of the EU Commission stated in 2004 that a promotion of eco-
efficient innovations is needed in major investment decisions, which should
in turn lead to less pollution, less resource-intensive products and more effi-
ciently managed resources (Kok 2004, 36). The Heads of European Environ-
10
ment Protection Agencies, finally, recently advanced the concept of good

environmental regulation that can help to reduce costs, create markets, drive
innovation, reduce business risk and assist competitive advantage (Network of
Heads of European Environment Protection Agencies 2005). In sum, the afore
mentioned concepts all go far beyond the traditional end-of-pipe treatment
and adopt a more comprehensive approach that focuses on environmental
improvements through innovation. Here, the idea of systematically improved
eco-efficiency comes closest to our understanding of ecological modernisa-
tion (Kok 2004).
Modernisation, in economic terms, is the systematic, knowledge-based im-
provement of production processes and products. The urge to modernise is a
compulsion inherent in capitalistic market economies, and the increasing
competition for innovation in industrialised countries has led to the continu-
ous acceleration of technological modernisation. While the problems inherent
in this compulsion for innovation have been discussed at length, it is none-
theless possible to influence the direction of technological progress. In fact,
exercising such influence is what governance for ecological modernisation is
all about. The task is therefore to change the direction of technological pro-
gress and to put the compulsion for innovation at the service of the environ-
ment. The emphasis of this approach lies on the possibility of ecological-
economic win-win solutions that can be achieved, above all, through cost
reduction and competition for innovation.
Ecological modernisation may come in the form of incremental improve-
ment (cleaner technology) or radical innovation (clean technology). Improve-
ment affects such different dimensions as material intensity (efficient use of
materials), energy intensity (efficient use of energy), transport intensity (effi-
cient logistics), surface intensity (efficient use of space), or risk intensity (re-
garding plant, substances, products). Innovation describes the initial market
introduction of a new technology that may improve some or all phases of a
products life cycle. The ecological effectiveness of environmental innovation
depends on its radicalness but also on the degree of its diffusion. Incremental
innovations that remain restricted to niche markets, for instance, will only
have a limited effect. With respect to the degree of diffusion, it is crucial to
understand the mechanisms underlying the diffusion of environmental inno-
vations, especially when it comes to developing a global strategy for ecological
modernisation. Here, the role of lead markets for environmental innovations
has become highly important (Beise and Rennings 2003, Jacob et al. 2005).
11
Martin Jnicke
At present, two driving forces of ecological modernisation seem most re-

markable:
The role of smart government regulation; and
Growing business risks for polluters in the context of multi-level environ-
mental governance.
In the long run, these two influencing factors may reinforce each other,
thereby increasing the already existing dynamics of environmental innovation.
While this may increase the long term potential for creative environmental
governance, there are nonetheless important limits to the strategy of ecologi-
cal modernisation that have to be taken into account.
2 Political Modernisation: Reinventing Government

If we think of ecological modernisation as the innovation and diffusion of
environmental technologies, we have to take account of the political implica-
tions of the concept. Here, environmental innovations, if compared with other
innovations, have three distinct characteristics:
First, due to market failure, they typically need political (or at least organ-
ised societal) support. This is why ecological modernisation is essentially
a political concept.
Second, environmental innovations are an answer to problems that have
(or will have in the future) a global dimension. Therefore, they tend to have
global market potential based on global environmental needs.
Third, the global industrial growth itself creates a demand for environ-
mental innovations since many natural resources are scarce and the sink
capacity of the earth is limited.
The most important implication is that eco-innovations invariably require
political support a fact that has been confirmed by a number of empirical
studies on the determinants of eco-innovations (Jacob et al. 2005, Hemmel-
skamp et al. 2000, Klemmer 1999). Typically, there is interplay between envi-
ronmental policy-making and technological innovators: Politicians in favour
of technology-based (marketable) solutions co-operate with industrial innova-
tors that seek regulatory support for their respective technologies. The Phil-
lips Company, for example, supports the EU Energy-using Products (EUP)
Directive because it gives its technology of power-saving light bulbs a strong
12
market position. In the same vain, Richard Barrington of Sun Microsystems

recently appealed to the European Commission: We want to see standards
being set and market opportunities for companies that meet them (Ends
Daily, 27.1.06). McLauchlin has made similar observations with respect to the
automobile industry: () a complex interplay has begun between regulation
and competition. The regulatory drive () has forced companies to compete
against each other on environmental criteria (McLauchlin 2004, see also Levi-
Faur and Jordana 2005, Murphy 2004).
The particular characteristics of eco-innovations also help to explain why a
regulatory race to the bottom at the expense of the environment has so far
not taken place (Drezner 2001, Vogel 2001, Jnicke 2005, Holzinger, 2006):
Environmental regulation does not necessarily restrict innovation. Instead,
the environmental issue has increasingly become a motor for economic
modernisation and an important dimension of the competition for innova-
tion (Jnicke and Jacob 2004). The view that environmental policy is contrib-
uting to the modernisation of the industry (Ministry of Environment 1996)
making firms fitter and more competitive is not new (Wallace 1995, see also
Porter and van der Linde 1995) but has taken a long time to establish itself in
environmental politics of more advanced OECD countries (Andersen and Lief-
ferink 1997).
While economic globalisation does not restrict environmental innovation,
political globalisation has created an arena for political competition, policy
innovation and benchmarking. Here, individual (mostly small) countries claim
to be pioneers in the area of environmental policy (see table 1). There are sev-
eral reasons why certain governments ascribe to themselves such ambitious
roles in environmental governance. Beyond domestic motives (see chapter 3),
there are also incentives to be visible in the international policy arena an
incentive that seems to be especially high for smaller OECD countries.
13
Martin Jnicke
Tab. 1: Governments Claiming Leadership in Environmental Policy
() Norway shall be () world leading (in) environmental friendly

energy (Minister Enoksen, 2005).
A Finish government program envisages becoming the one of the
most eco-efficient societies (2005).
Sweden perceives itself as a driving force and a model of ecologically
sustainable development (1998).
The Netherlands efforts in the EU context play an important role
alongside its bilateral and multilateral activities to promote SD
(VROM 2003).
The government of South Korea has the objective to become a model
country of environmental preservation (Green Vision 21, 1995).
Prime Minister Tony Blair has recently declared that Britain will take
the lead in climate policy (2004).
Germany claims to play a leading role in climate protection (Coali-
tion Agreement 2005).
The Japanese METI (2002) proclaimed Japan as a recycling oriented
economic system () in which measures for the environment and con-
servation of resources are built into every aspect of industrial and eco-
nomic activity.
Source: Own compilation
3 Smart Regulation
(Smart) regulation plays a very important role in the political competition for
environmental innovation and can be identified as a key driving force behind
ecological modernisation. This important role ascribed to regulation may
come at a surprise since deregulation was the leading economic philosophy
during the Reagan and Thatcher era. Ever since, the argument that regulation
imposes high costs on firms and stifles innovation and competitiveness has
remained popular. From the early 1990s, however, a revisionist, pro-
regulation view has successfully challenged the traditional neo-classical argu-
mentation by highlighting a positive relationship between environmental
regulation and a countrys competitiveness (e.g. Porter 1990, Wallace 1995).
The reasons for the revival of a pro-regulation approach are manifold. To
begin with, neo-classical proposals (that tend to ignore or underestimate the
14
inherent logic of the policy process) have often proved simplistic and had to
be compensated by intensive re-regulation. Also, many of the soft or volun-
tary policy instruments have been rather ineffective, involve high transaction
costs and need the organisational capacity of the state and the final guarantee
of elected governments (Jordan et al. 2003, OECD 2003, Jnicke and Joergens
2004, De Bruijn and Norberg-Bohm 2005). Most importantly, it has become a
strong argument that the role of government in the context of multi-level
governance is a functional necessity and has to be reinvented and strength-
ened, especially if competition for innovation and environmental protection
are at stake.
Environmental regulation generally presents a number of distinct advantages
for companies and industries:
Regulation can create or support markets for domestic industries. Here,
the most interesting cases are the Japanese Top-Runner approach for 18
energy-consuming product groups (see table 3) and the rapidly diffusing
German feed-in tariffs for renewable energy.
Regulation, often initiated by regulatory trendsetters and leading to global
harmonisation, increases the predictability of markets. Anticipation of
regulatory trends is therefore a typical behaviour of innovative companies
under global conditions of growing complexity and insecurity.
Regulation (real or threatened) can make things easier for business: In
contrast to voluntary approaches, affected companies do not have to worry
whether their competitors will enact the same measures.
Regulation also reduces internal impediments in companies to implement
technological change (even energy saving potentials are often being ig-
nored for organisational reasons). Moreover, companies do not have to
look for support within the value chain, as their customers simply have to
accept the change.
The recent comeback of regulation has even led to the emergence of a theory
of Regulatory Capitalism (Levi-Four 2005, Jordana and Levi-Faur 2004): The
notion of regulatory capitalism () rests on a new division of labour between
state and society, on the proliferation of new regulatory agencies, on new
technologies and instruments of regulation, and on the legalization of human
interactions. Regulatory capitalism is a technical as much as a political order
(). These regulations are shaping a new global order that reflects the set of
15
Martin Jnicke
problems and solutions that were socially and politically constructed in some
dominant countries (Levi-Faur 2005, 13, 21-22).
While regulation generally celebrates a comeback, the modes of regulation are
changing as the focus is now on smart or good environmental regulation
(Gunningham and Grabowsky 1998, Network of Heads of European Environ-
ment Protection Agencies 2005). Highly sophisticated regulatory instru-
ments are described as knowledge-embedded instruments (that) are one of
the defining characteristics of the new order (Levi-Faur 2005, 22). This is es-
pecially plausible if we turn to ecological modernisation and innovation. As
a result of several projects on Innovation oriented environmental regulation
(see Weber and Hemmelskamp 2005), we propose the following model of in-
novation-friendly environmental governance (see table 2):
Tab. 2: Elements of a smart" and innovation-friendly framework of envi-

ronmental regulation
Instruments are innovation-friendly if they ...

provide economic incentives,
act in combination,
are based on strategic planning and goal formulation,
support innovation as a process and take account of the
different phases of innovation/diffusion.
A policy style is innovation-friendly if is is

based on dialog and consensus,
calculable, reliable, and has continuity,
decisive, proactive, and demanding,
open and flexible,
management-oriented.
A configuration of actors is innovation-friendly, if

it favours horizontal and vertical policy integration,
the various objectives of regulation are networked,
the network between regulator and regulated is a tight one,
the relevant stakeholders are included in the network.
Source: Jnicke et al. 2000
16
The Japanese Top-Runner approach is a more recent example of an innova-

tion-friendly regulation pattern (see table 3). So far, it seems to be the most
advanced and sophisticated approach to ecological modernisation. Both the
demanding, calculable and dialog-oriented policy style and the broad but in-
tegrated actor configuration match the framework above (see table 2). This is
especially true for the adopted policy mix that combines tight standards with
economic instruments based on the national targets of the Kyoto Protocol
(even though critics say that this connection is not strict enough). Most impor-
tantly, the Top-Runner approach supports innovation as a process by taking
into account the different phases from innovation (supported e. g. by awards)
to diffusion both into the national (lead) market and the international mar-
kets. The success story of the Toyota Prius hybrid car can to a large degree be
directly explained with this kind of innovation-oriented regulation.
Tab. 3: Smart Regulation for Eco-Innovation: the Japanese Top-Runner

approach
METI regulation for 18 energy-using products.

The top-runner regarding energy efficiency becomes the basis of the
product standard (weighted average).
Efficiency standard becomes mandatory for national producers and
importers once the target year is reached.
Name and shame approach is used as an intermediate instrument
Combined regulations:
Green Procurement Law (2001),
Green automobile tax,
Annual awards for energy efficient products.
The fulfilment of the standards is generally very positive:
several products have achieved the standard before the target year (air
conditioners, cars, computers, videotape recorders).
Increased competitiveness of the products confirmed by producers.
The potential for technological innovation and diffusion is taken into
account by METI.
Source: Own compilation based on Naturvardsverket 2005
Similar examples of smart regulation that combine strict standards with

flexible implementation are obligatory feed-in tariffs for renewable energy, the
17
Martin Jnicke
EU emission trading scheme and (possibly) the new EU Eco-design Directive.

Interestingly, all these examples of innovation-oriented governance are flexi-
ble enough to take investment cycles into account. This is a necessary pre-
condition for the economic profitability and the acceptability of this mode of
environmental governance.
4 Ecological Modernisation in a Complex World:

Growing Business Risks for Polluters?
For environmentally intensive industries, the new approach of smart regula-
tion presents both a challenge and an opportunity. The increasingly complex
actor constellation in multi-level governance causes a higher degree of insecu-
rity for dirty industries that face higher pressures to innovate. This seems to
be highly relevant for the global process of ecological modernisation.
In 2004, some 90,500 companies worldwide have certified according to the
ISO 14001 scheme. This represents a remarkable increase of 37% compared
with 2003 (Ends Daily, 27.10.05). At the same time, several large multinationals
(e.g. GE, BP, Allianz) now seem to acknowledge the benefits of environmental
regulation. Here, the statement by Jeffrey Immelt (GE) may be taken as an
example: Stricter environmental standards do not damage the national econ-
omy (). On the contrary, the country could benefit from higher standards if a
core competence for environmental goods is developed (Sddeutsche Zei-
tung, 30.5.05). Even if we should not overestimate the real environmental im-
pact of this change in attitude, it is still worth to be explained.
There are several new driving forces behind the accelerating trend towards
ecological modernisation. Here, we can cite the diffusion of environmental
knowledge in the context of the Rio process or the growing awareness about
climate change, reinforced by recent alarmist studies. Another driving force,
however, has gained particular importance: Companies need a minimum of
investment security for the production and marketing of their products (Net-
work of Heads of European Environment Protection Agencies 2005). Today,
however, they are challenged by two additional business risks: (1) the high
price volatility concerning energy and several mineral resources; and (2) the
uncertainty about environmental pressures and requirements in the context of
increasingly complex multi-level and multi-actor governance. Innovation in
the direction of eco-efficiency can be the answer to such challenges.
18
Insecurity as a driving force behind ecological modernisation requires some

further explanation. There has been an explosion of complexity in the actor
constellation underlying environmental governance since the early 1970s.
Originally, the actor constellation of environmental policy was rather simple
(see figure 1): Government regulated (or at least tried to regulate) the environ-
mental behaviour of polluters through one-sided action of command and
control. While there may have occasionally been some pressure from NGOs or
the media or bilateral forms of co-operation between government and the
target group, the actor constellation remained fairly simple compared with
today. Over the last 30 years, however, the actor constellation has been subject
to radical changes (see figure 2).
Fig. 1: Original Actor Constellation of Environmental Policy
National Government Industry
Fig. 2: Dimensions of Modern Environmental Governance
Global level
European level
National
National level
government
Regional level
Tourism
Local level Construction
Agriculture
Transport
Individual level Energy
Industry
Civil society Government Business
Source: Jnicke 2003
19
Martin Jnicke
Globalisation and the need for multi-level and multi-stakeholder approaches

to governance have led to a constellation where not only governments and
industry but also NGOs act at all levels of the international system. Vertical
and horizontal co-operation and co-ordination has become a great challenge
(Lenschow 2002). Governments increasingly interact not only with other gov-
ernments but also with a broad variety of economic and societal actors. Civil
society actors NGOs, scientific organizations, the media, on the other hand,
do not only interact with government but often establish a direct relationship
with the business community that takes the form of both confrontation and
cooperation.
Why has this increasingly complex actor constellation led to additional inse-
curity and economic risks for polluters? And how can a focus on eco-efficiency
contribute to higher economic security?
Multi-level governance provides numerous opportunities to exert pressure
against resistant polluters. In the past, companies had only one relevant part-
ner - the national government (see figure 1), which could sometimes even be
captured by the polluting industry. From the late 1980s, as NGOs and the
media turned to direct attacks against polluters, companies had to learn that
they cannot hide behind governments. The Brent Spar conflict is a promi-
nent example for this kind of pressure. The increasing complexity of the actor
constellation has made environmental pressures and obligations almost un-
predictable and therefore led to increased economic risk and insecurity for
polluters. In the short run, powerful polluters may be able to successfully act
as veto-players but in the long run this strategy may prove counterproductive.
Today, more than before, polluters have to act under different pressures that
can be defined as pressure for innovation. This is especially true for competi-
tive product markets.
The pressure for innovation regarding eco-efficient technologies is caused by
a large variety of factors that include not only price explosions but also new
competing technologies or new headlines. In the highly complex actor con-
stellation of global environmental governance, this pressure for innovation
can be exercised from below (local NGOs or consumers), or from above (the
EU or international institutions), or from both sides. It can originate from
competitors as well as from pioneer countries that initiate regulatory trends.
Horizontal pressure through political and/or technological competition has
become especially important in this context. This is the mechanism where
even powerful (veto)players like the U.S. government are in a weaker position.
20
Tab. 4: Pressure for Ecological Modernisation:

The Complexity of Business Risks for Polluters
Economic Factors:
Volatile energy prices

Volatile prices of certain raw materials
Green demand from retailers
Green demand within the supply chain
Competing new technologies (pressure for substitution)
Insurances
Benchmarking systems
EMS Certification of competitors (EMAS, ISO 14.001)
Political Factors:
Activities of pioneer countries

Strict regulation of important markets (e. g. EU)
Regulatory trends
International environmental regimes
Public procurement.
Societal Factors:
Attacks from green NGOs (e.g. Brent Spar)

Media campaigns against polluters
Alarming media reports
Internet campaigns against polluters
Alarming scientific studies
Green consumerism of the growing global middle class.
Source: Own compilation
21
Martin Jnicke
5 The Post-Rio Mode of Global Environmental

Governance is essentially Knowledge-based
The rise of smart regulation and growing business risks for polluters in the
context of multi-level environmental governance help to explain the present
dynamics of ecological modernisation. While the strategy of ecological
modernisation has certainly high potential and is in principal without alter-
native, it is nonetheless important to recognise the limits of the approach. In
this chapter, we first discuss the weaknesses of purely knowledge-based envi-
ronmental governance, before we come to address the inherent limits of a
technology-based approach to environmental policy (see chapter 6).
Post Rio global environmental governance is essentially characterised by
processes of policy learning and horizontal lesson-drawing (Rose 1993, Sa-
batier 1999). The creation and diffusion of environmental policy innovations -
with ecological modernisation at the core - is therefore a predominantly
knowledge-based process. While the important role of knowledge in current
global environmental governance has generally led to unexpectedly positive
results, one has to bear in mind that predominantly knowledge-based policies
also encounter inherent limits, in particular with view to policy implementa-
tion.
On the one hand, the knowledge-based Rio process can be regarded an im-
pressive success story. The Rio model of environmental governance en-
compasses the principles of monitored targets, co-operation, participation
and policy integration and is thereby the only steering approach that takes
into account the increasingly complex actor constellation of global environ-
mental politics (Jnicke and Jrgens 2004). At the policy level, the widespread
adoption of Agenda 21 at all levels of government is highly remarkable since
it took place in the absence of legal obligation and/or coercion. While National
Strategies for Sustainable Development (NSSDs) now exist in most countries, a
total of 113 countries had initiated at least 6,400 local Agenda 21 processes as of
2002 (OECD and UNDP 2002). This spread of knowledge-based policies and
the somewhat declining role of power-based strategies is a highly important
development. Today, small innovative pioneer countries such as Sweden, the
Netherlands, or Denmark exert strong influence on the development of global
environmental policy. By offering innovative solutions for global environ-
mental needs, these countries demonstrate that they do not have to be power-
ful to be influential: If their solutions have a demonstration effect and are
22
widely communicated, they can even exert pressure for change within other
countries. Even the US has been forced to adopt a defensive position in the
field of climate policy and cannot easily ignore political and technological
innovations.
This apparent success of the knowledge-based Rio model is however only
one side of the story. On the downside, the enduring power-based resistance
of polluters points to the inherent limits of the knowledge-based approach to
environmental governance: Powerful polluters (often supported by their
ministries or governments) can resist knowledge-induced change, especially
in cases where vested sectoral interests are affected. Power always has the
privilege to ignore and not to learn (Deutsch 1963). Powerful actors can be
highly innovative and ready to learn. But the pressure to do so is lower com-
pared with actors that do not have much power at their disposal.
The limits of the knowledge-based approach become especially visible if we
turn from agenda setting and policy output to policy implementation and
outcome. Here, the remarkable success of the Rio process in the areas of
agenda setting and policy diffusion stands in sharp contrast to persistent defi-
cits in policy implementation and actual policy outcomes. This discrepancy
can be illustrated at the example of National Strategies for Sustainable Devel-
opment (NSSDs): Even though most countries now have a NSSD in place, only
12% have actually moved to the stage of implementation (OECD 2005). This is
hardly surprising since implementation is the phase of the policy cycle where
vested interests - the potential losers of ecological modernisation tend to
mobilise powerful resistance. As innovative knowledge often clashes with the
vested interests of traditional polluters, there is a need to reinvent government
regulation and find ways to ensure improved implementation. In this context,
soft positive modes of sectoral transitions management (Kemp and Loor-
bach 2005) do not seem to be sufficient. In addition, the various forms of
negative pressure for environmental innovation (see table 4) seem to be a
promising option. As demonstrated above, the complex actor constellation of
global environmental governance offers a huge array of opportunities to exert
pressure for environmental innovation - a potential that may be exploited by
improved environmental governance and should therefore be subject of future
research.
23
Martin Jnicke
6 Environmental Governance beyond Technology

While knowledge-based approaches to environmental governance can meet
power-based resistance, the strategy of ecological modernisation faces addi-
tional difficulties. First of all, the concept encounters inherent limits where
(potentially marketable) technological solutions are not available. The persis-
tent problems of environmental policy - namely urban sprawl, soil erosion,
the loss of biodiversity, the final storage of nuclear waste, or global climate
change - all exemplify these limits. Also, the modernisation approach is in
general not a viable option when risk is acute and immediate defensive action
is needed.
Secondly, incremental increases in environmental efficiency can often not be
considered a sustained solution since they tend to be easily wiped out by sub-
sequent growth processes. Reductions in the specific emissions of cars, for
instance, can subsequently be neutralised by increasing road traffic a prob-
lem that was early recognised as the dilemma of the N-curve (Jnicke 1979).
This dilemma affects both end-of-pipe treatment and incremental ecological
modernisation. With respect to the latter case, we can cite the example of
Japanese industries that achieved remarkable savings in the use of energy and
raw materials between 1973 and 1985 achievements that were simply neutral-
ised by the strong industrial growth during this period (Jnicke et al. 1997).
The described dilemma of the N-curve requires more far-reaching solutions.
A first solution lies in the transition from incremental to radical innovations
where environmentally intensive production processes and products are sub-
stituted by environmentally neutral ones. A well-known example in this re-
spect is the transition from efficiency improvements in coal-fired power
plants to variants of solar energy. In between lie the borderline cases - a variety
of incremental improvements that together achieve radical improvements (e.g.
the zero-energy house). Moreover, structural solutions are needed. These re-
quire the development of an ecological structural policy that imposes non-
technical solutions in form of changes in the structure of supply and demand.
This does not only affect the structure of industry but also individual life-
styles (e.g. personal mobility, housing). The problem here is not only that
structural solutions would deeply affect established interests and behavioural
structures. More importantly, structural solutions cannot rely on a strategy of
ecological modernisation since the existing problems cannot be solved
through marketable technological innovations. Against this background, it is
24
hardly surprising that there is so far no empirical evidence for carefully tar-
geted industrial restructuring away from the environmentally intensive indus-
tries. Existing examples such as the shutdown of Dutch coal mines, the clo-
sure of steel mills in Luxembourg or the nuclear power phase-out in Italy were
not environmentally motivated (Binder et al. 2000).
In sum, ecological modernisation is - despite its impressive potential - not
sufficient to ensure a long-term stabilisation of the environment. This is not
only due to its inability to offer solutions for every type of environmental
problem but also to a double hare and hedgehog-dilemma: On the one
hand, ecological modernisation suffers from the aforementioned race be-
tween incremental environmental relief and economic growth. On the other
hand, ecological modernisation meets the resistance of modernisation
losers: If industries and private households save energy, cut their consump-
tion of valuable raw materials, and use environmentally less intensive substi-
tutes, all this will reduce the profits of the respective industrial sectors (min-
ing, raw materials industry, power generation, etc.). Nevertheless, these old
industries - with established structures of power and influence - often succeed
in opening up new sales opportunities. The energy sector, for instance, finds
new uses for electricity, which in turn neutralizes the above-mentioned efforts
to save energy. Similarly, the successful environmental protection campaigns
against the use of chlorine have been overcompensated by the expansion of
chlorine use in other areas. As long as environmentally intensive sectors try to
counteract ecologically desirable decreases in their production, an N-curve
can be expected. Ecological modernisation is thus severely hampered by the
absence of genuine restructuring and by evasive behaviour on the part of the
modernisation losers. As long as no alternative economic perspectives are
available, their counterproductive reaction is all too understandable and policy
changes appear economically and socially unacceptable.
Strategically speaking, this is precisely where ecological industrial policy
becomes relevant. Since industrial restructuring is inextricably connected with
ecological modernisation, ecological industrial policy should make the re-
structuring process socially and economically acceptable. It can promote di-
versification in product types or provide social cushioning, retraining, and
conversion of the work force. Environmental innovations should be creative
but not lead to creative destruction in the sense of Schumpeter. Otherwise
the losers of ecological modernisation will remain an obstacle.
25
Martin Jnicke
7 Conclusion
In the light of the above discussion of the strategy of ecological modernisa-
tion, I come to the following conclusions:
1. The potential of ecological modernisation to radically reduce the envi-
ronmental burden of industrial growth is without any alternative. The
technological potential of green electricity, for instance, is estimated to
be almost equivalent to the present global power supply (WBGU 2003). No
strategy of sufficiency or of changing life-styles could ever have a similar
potential.
2. Driving forces behind ecological modernisation" are:
The capitalist logic of technological modernisation and the competition
for innovation in combination with the market potential of global envi-
ronmental needs: Marketable technological solutions for environmental
problems offer a broad spectrum of win-win-solutions.
Smart environmental regulation by pioneer countries, characterised
by the interplay of high environmental pressure and high innovation
capacity, often motivated by potential competitive advantages. Envi-
ronmental regulation is often an important prerequisite for both inno-
vation and diffusion processes.
Growing economic insecurity and risks for polluting industries in the
context of the increasing complexity of global environmental govern-
ance. This increase in business risks makes ecological modernisation
a more secure strategy for environmentally intensive companies.
3. There are however important limits to the process of ecological moderni-
sation:
Economic growth tends to neutralise environmental improvements if
increases in eco-efficiency remain incremental (below the growth rate),
if environmental innovations are restricted to niche markets and/or if
the solution addresses the symptoms, not the causes.
Ecological modernisation typically meets the resistance of moderni-
sation losers that are often powerful enough to limit the scope and ef-
fects of environmental policy. Modernisation losers may not be
strong enough to prevent environmental innovations and knowledge-
based policies. But when it comes to policy implementation, power-
based resistance remains an important obstacle.
26
4. As a consequence, governance for ecological modernisation has to find

new ways to overcome the resistance of powerful polluters. Fears arising
from creative destruction have to be reduced through transition man-
agement. But the carrot will need a stick. Environmental governance must
also include structural solutions. A more conflict-oriented approach that
increases pressures for environmental innovation under the conditions of
growing complexity and insecurity seems possible and indispensable.
While growing risks for polluters and the rise of smart regulation seem
to hold a large potential for improved environmental governance, the exact
design of improved strategies requires further research.
5. Ecological modernisation as a market-based approach has so far been
remarkably successful. If compared with structural solutions, ecological
modernisation seems to be the easier approach to environmental policy.
Having studied processes of ecological modernisation in theory and
practice for almost 25 years, I do however see the danger that we content
ourselves with the low hanging fruits of marketable win-win solutions.
At the end of the day, governance for sustainable development cannot suc-
ceed if it does not include structural solutions. As the crucial task remains
the prevention of long-term environmental disruptions of all kinds, indus-
trial transformation will inevitably clash with vested interests. Governance
for sustainable development must therefore mobilise the will and capacity
to win this struggle. This is not going to be easy. Sorry about that.
References
Andersen, M. S. / Liefferink, D. (Eds.), 1997: European Environmental Policy - The Pio-
neers, Manchester, New York.
Barrett, B. F. D.(Ed.), 2005: Ecological Modernisation and Japan, London, New York.
Beise, M. / Rennings, K., 2003: Lead Markets for Environmental Innovations, ZEW
Discussion Paper 03-01, Mannheim.
Binder, M. / Petschow, U. / Jnicke, M. (Eds.), 2000: Green Industrial Restructuring
International Case Studies and Theoretical Interpretations, Berlin, Heidelberg,
New York.
Cohen, M. J., 1998: Science and the Environment: Assessing Cultural Capacity for Eco-
logical Modernisation, Public Understanding of Science 7, 149-167.
De Bruijn, Th. / Norberg-Bohm, V. (Eds.), 2005: Industrial Transformation. Environ-
mental Policy Innovation in the United States and Europe, Cambridge, Mass.,
London.
Deutsch, K. W., 1963: The Nerves of Government: Models of Political Communication
and Control, New York.
27
Martin Jnicke
Drezner, D. W., 2001, Globalization and Policy Convergence. The International Studies
Review, 3 (1), 53-78.
Foljanty-Jost, G., 1995: konomie und kologie in Japan. Politik zwischen Wachstum
und Umweltschutz, Opladen.
Gunningham, N. / Grabowsky, P. N. 1998: Smart Regulation. Designing Environmental
Policy. Oxford, UK.
Hajer, M. 1995: The Politics of Environmental Discourse: Ecological Modernisation and
the Policy Process, Oxford.
Hemmelskamp, J. / Rennings, K. / Leone, F. (Eds.), 2000: Innovation-oriented Envi-
ronmental Regulation, Heidelberg.
Holzinger, K. (2005): Races to the Bottom oder Races to the Top? Regulierungs-
wettbewerb im Umweltschutz, Beitrag zum PVS-Sonderheft 2/2006 Politik und
Umwelt.
Huber, J., 2000: Towards Industrial Ecology : Sustainable Development as a Concept of
Ecological Modernisation, in: Andersen, M. / Massa, I. (Eds.): Ecological Moderni-
sation, Journal of Environmental Policy and Planning, Special Issue 2.
Jacob, K. / Beise, M. / Blazejczak, J. / Edler, D. / Haum, R. / Jnicke, M. / Lw, Th. / Pet-
schow, U. / Rennings, K., 2005 : Lead Markets for Environmental Innovations, Hei-
delberg.
Jnicke, M. / Jacob, K., 2004: Lead Markets for Environmental Innovations: A New Role
for the Nation State. Global Environmental Politics, Vol. 4, No. 1, pp. 29-46
Jnicke, M. / Jrgens, H., 2004: Neue Steuerungskonzepte in der Umweltpolitik. Zeit-
schrift fr Umweltpolitik & Umweltrecht. Jg. 27, H.3, S. 297-348.
Jnicke, M. / Binder, M. / Mnch, H. 1997: Dirty Industries: Patterns of Change in
Industrial Countries. In: Environmental and Resource Economics 9, 467-491.
Jnicke, M. / Blazejczak, J. / Edler, D., / Hemmelskamp, J., 2000: Environmental Policy
and Innovation: An International Comparison of Policy Frameworks and Innova-
tion Effects, in: Hemmelskamp, J. / Rennings, K. / Leone, F. (Eds.): Innovation-
oriented Environmental Regulation. Theoretical Approaches and Empirical Analy-
sis. Heidelberg.
Jnicke, M., 1979. Wie das Industriesystem von seinen Mistnden profitiert, Opladen.
Jnicke, M., 1983: Beschftigungspolitik (Zehnjahresprogramm der kologischen Mo-
dernisierung), in: Eine alternative Regierungserklrung, NATUR Heft 4.
Jnicke, M., 1985: Preventive Environmental Policy as Ecological Modernisation and
Structural Policy. Berlin: Wissenschaftszentrum Berlin (IIUG dp 85-2)
Jnicke, M., 2005: Trend-setters in environmental policy: the character and role of
pioneer countries., European Environment, Vol. 15, No. 2, pp. 129-142.
Jnicke, M., 2006: The Environmental State and Environmental Flows: The Need to
Reinvent the Nation State, In: Spaargaren, G. / Mol, A. P. J. / Buttel, F. H. (Eds.):
Governing Environmental Flows: Globale Challenges to Social Theory. Cambridge,
Mass., London.
Jordan, A. / Wurzel, R. K. W. / Zito, A. R. (Eds.), 2003: New Instruments of Environ-
mental Governance? National Experiences and Prospects, London.
Jordana, J. / Levi-Faur, D. (Eds.), 2004: The Politics of Regulation. Institutions and
Regulatory Reforms for the Age of Governance, Cheltenham, Northampton, MA.
Kemp, R. / Loorbach, D. (2005): Dutch Policies to Manage the Transition to Sustainable
Energy, in: Jb, kologische konomik 4: Innovationen und Nachhaltigkeit, Mar-
burg.
Klemmer, P. (ed.), 1999: Innovationen und Umwelt, Berlin.
28
Kok, W. (Ed.), 2004: Facing the Challenge. The Lisbon Strategy for Growth and Em-
ployment. Report from the High Level Group Chaired by Wim Kok, Luxemburg:
Office for Official Publications of the European Communities.
Lenschow, A. (2002)(Ed.): Environmental Policy Integration. Greening Sectoral Policies
in Europe. London: Earthscan.
Levi-Faur, D. and Jordana, J. (Eds.),2005: The Rise of Regulatory Capitalism: The Global
Diffusion of a New Order. The Annals of the American Academy of Political and
Social Science, Vol. 598, March 2005.
McLauchlin, A., 2004: Car Industry Rallies to Meet Demands for Lower Emissions,
European Voice.com, Vol. 10, No. 32.
Mez, L. / Weidner, H. (Hrsg.), 1997: Umweltpolitik und Staatsversagen Perspektiven
und Grenzen der Umweltpolitikanalyse (Festschrift f. M. Jnicke), Berlin.
Ministry of the Environment, 1996: Our Environment, Stockholm.
Mol, A. P. J., 2001: Globalization and Environmental Reform - The Ecological Moderni-
sation of the Global Economy, Cambridge, Mass., London-
Naturvardsverket 2005
Network of Heads of European Environment Protection Agencies, 2005: The Contribu-
tion of Good Environmental Regulation to Competitiveness, EEA Copenhagen.
OECD / UNDP, 2002: Sustainable Development Strategies. A Resource Book. London,
Sterling, VA.
OECD, 2003: Voluntary Approaches for Environmental Policy, Paris.
OECD, 2005: National Strategies for Sustainable Development: Good Practices in
OECD Countries. Paris: OECD SG/SD(2005)6.
Porter, M. E. / van der Linde, C., 1995: Green and Competitive: Ending the Stalemate,
Harvard Business Review, Sept./Oct., 120-134.
Porter, M. E., 1990: The Competitive Advantage of Nations, London.
Prittwitz, V. v. (Hrsg.), 1993: Umweltpolitik als Modernisierungsprozess. Politikwissen-
schaftliche Umweltforschung und -lehre in der Bundesrepublik, Opladen.
Rose, R., 1993: Lesson-Drawing, New Jersey.
Sabatier, P. A. (Ed.),1999: Theories of the Policy Process, Boulder, Oxford.
Simonis, U. E. (Hrsg.), 1988: Prventive Umweltpolitik, Frankfurt/m., New York.
Spaargaren, G. / Mol, A. P. J. / Buttel, F. H. (Eds.): Governing Environmental Flows:
Globale Challenges to Social Theory. Cambridge, Mass., London.
Vogel, D., 2001: Is There a Race to the Bottom? The Impact of Globalization on Na-
tional Regulatory Policies. The Tocqueville Review/La Revue Tocqueville 22 (1).
Wallace, D., 1995: Environmental Policy and Industrial Innovation. Strategies in
Europe, the USA and Japan, London.
WBGU, 2003: Energiewende zur Nachhaltigkeit, Berlin, Heidelberg.
Weale, A., 1992: The New Politics of Pollution, Manchester, New York.
Weber, M. / Hemmelskamp, J. (Eds.), 2005: Towards Environmental Innovation Sys-
tems, Berlin, Heidelberg, New York.
Young, St. C. (Ed.), 2000: The Emergence of Ecological Modernisation -. Integrating the
Environment and the Economy?, London, New York.
Zimmermann, K. / Hartje, V. J. / Ryll. A., 1990: kologische Modernisierung der Pro-
duktion - Strukturen und Trends, Berlin.
29
Lead Markets for Environmental Innovations:
A New Role for the Nation State 1
MARTIN JNICKE
KLAUS JACOB
Abstract 2
The paper discusses the role of the nation state in stimulating lead markets
for green innovations. Often, fears are expressed that the potential for action
for nation states diminishes because of economic and political globalisation.
But empirical research on the development of environmental policy reveals
that it is most often pioneering nation states that push for advances in envi-
ronmental policy. As far as these policy innovations are technology based,
these countries often serve as a regional starting points for new green tech-
nologies. The innovation and diffusion of environmental technologies and
their supporting policy measures do bear the potential of a far reaching eco-
logical modernization.
1
First published in: Global Environmental Politics, Vol. 4, No. 1, 2004, pp. 29-46.
Copyright MIT Press. Reprinted with kind permission..
2
The paper is partially based on the findings of an ongoing research project Policy
framework for the development of international markets for innovations of a sus-
tainable economy from pilot markets to lead markets (LEAD) funded by the Ger-
man Ministry of Education and Research, grant number 07RIW1A. In the project ca.
20 cases of lead markets for environmental technologies are analysed. The tech-
nologies include among others energy technologies such as photovoltaic, wind en-
ergy, fuel cells for stationary energy generation, etc., chemicals such as substitutes
for CFCs, cadmium, phosphate in detergents, technologies that are applied in cars
e.g. energy efficient motors, catalytic converters for exhaust gas, fuel cells for mobile
applications. The studied technologies are both historical cases of innovation and
diffusion as well as ongoing processes
30
Lead Markets for Environmental Innovations: A New Role for the Nation State
Why are some countries early in the introduction of

Environmental Innovations?
There are considerable differences in the rate of adaptation of environmental
innovations among the different countries. Some countries are earlier in in-
novation and the penetration of markets is more encompassing than others. If
these innovations are adopted subsequently without great changes in other
countries, the countries where the first market introduction took place, can be
analysed as lead markets. The concept of lead markets has been developed and
fruitfully applied for normal innovations. Examples for lead markets for non-
environmental innovations are the mobile phones in Finland, the fax in Japan
or the internet in the USA (Beise 2001). These markets have the characteristic
that product or process innovations that are designed to meet local demand
preferences and conditions can be introduced in other geographic markets as
well and successfully commercialised without many modifications. It is the
core of the world market where local users are early adopters of an innovation
on international scale (Beise 1999).
Our studies are dealing with lead markets for environmental innovations. The
history of environmental protection is rich in examples for lead markets: it
encompasses the legally enforced introduction of catalytic converters for
automobiles in the United States, desulphurization technologies in Japan, the
Danish support for wind energy or the CFC free refrigerator in Germany. An-
other impressive example is the global diffusion of chlorine-free paper, from
the political activities by Greenpeace and the EPA in the United States, by way
of the introduction of chlorine-free paper whitener in Scandinavian countries
and various Greenpeace campaigns in Germany and Austria, right through to
effective political market intervention in Southeast Asian countries like Thai-
land (Mol and Sonnenfeld 2000, Beise, Blazejczak et al. 2003). The latter case
shows that political action that stimulates internationally successful innova-
tions is not limited to governmental agencies only, but that this function at
least regarding the process of setting environmental objectives may also be
taken over by environmentalists.
Lead markets can be represented by the rate of market penetration in the dif-
ferent countries. The diffusion starts earlier and the market penetration is
typically more complete than in other countries. An example is the catalytic
converter for cars (see for more detailed discussion: Beise, Blazejczak et al.
2003): California became the pacesetter for air quality and automobile emis-
31
sion standards from the 1960s on. U.S. congress took over these far reaching
standards in 1970, that were not to be met with existing technologies. That was
for the first time a purposeful technology forcing. However, the short period
of time to meet the standards did not allow the development of a new engine
design. Therefore, the catalytic converter became the dominant technical
strategy to reduce emissions. The U.S. regulations had been adopted by several
countries with automobile industry. In particular Japan adopted early the US
regulations, in order to adapt its own car industry to global markets and to
enhance its competitiveness.
Fig. 1: Share of passenger cars equipped with catalytic converter in %
Source: Beise, Blazejczak et al. 2003
While the U.S. standards were postponed and lowered due to successful inter-
vention of the U.S. car industry, the Japanese government hold on the earlier
objectives. In Europe, the regulations favouring a catalytic converter had been
adopted in 1985, and among the European countries Germany took over the
leading role, mainly due to its export oriented automobile industry.
32
What are the determinants that cause the differences in the introduction of
innovations? What are the characteristics of the leading countries? Is there a
room for manoeuvre for a purposeful establishment of lead markets for envi-
ronmental innovations?
From our case studies as well as previous studies we can infer, that technical
environmental innovations have to be largely ascribed to governmental (or
NGO) activities. Environmental innovations are not only stimulated by the
higher environmental standards of consumers in a country as compared with
those in other countries, but also by special promotional measures, or by po-
litical intervention in the market (Klemmer, Lehr et al. 1999; Jnicke,
Blazejczak et al. 2000). If the technologies cause additional costs without im-
proving the benefits for the users, regulatory interventions are even indispen-
sable for innovation and diffusion. But also in cases of integrated technolo-
gies, with additional advantages in efficiency, policy measures are often neces-
sary to stimulate innovations and to support the diffusion. The under invest-
ment in environmental innovation can be explained by the double externality
of R&D efforts spend in environmental technologies: Alongside the spill over
effects that can be observed for any R&D activities, efforts in environmental
technologies do result in improvements of the environment which again is a
public good. Therefore an under investment in environmental innovations
can be expected (Rennings 2000).
Environmental innovations do have another characteristic that is in favour of
their international diffusion: They provide marketable solutions to environ-
mental problems that are usually encountered world-wide, or at least in many
countries. Thus, technological solutions to environmental problems inher-
ently lend themselves to adoption in international or global markets.
The specifics of environmental innovations are not able to explain the re-
gional differences in adoption and diffusion of innovations. For this, the
framework conditions and political strategies in the leading countries have to
be analysed. The dependency of environmental technologies on regulatory
measures leads to the question in how far national environmental policies to
stimulate lead markets remain possible and effective in the context of global-
isation.
It is widely believed by many scholars and also politicians, that unilateral ac-
tion in the context of economic globalisation becomes less likely not only in
case of transboundary problems, but also for all environmental problems if
33
they bear additional costs. By this, there is the danger of a regulatory chill
(Hoberg 2001: 213) independent from the real existence of adverse impacts on
competitiveness of more far reaching unilateral environmental regulations: if
politicians and voters are convinced that regulatory measures affect the com-
petitiveness adversely, this argument can be utilised from the target group of a
policy to make credible threats (Hay and Rosamond 2002; Hoberg 2001; World
Trade Organisation 1999: 5). In this case, innovative environmental policy
measures are not adopted.
From this point of view, promising problem solutions are mainly dependent
on whether the international community of nations is able to agree on bind-
ing law and to create the institutional structure for a new governance structure
on the international level, that is able to enforce this agreements (Young 2002;
Esty 1999; Keohane and Martin 1995). A more optimistic view perceives the
appearance of new actors such as nongovernmental organisations or scientific
networks, the rapid growth of the body of international law and organisations,
and the emergence of new forms of regulation such as public-private partner-
ships, as the rise of a first outline of a governance beyond the nation states
(Park 2002; Knill and Lehmkuhl 2002; Auer 2000; Zrn 1998).
A more sceptical position argues that in general, international bargaining
processes do generate insufficient results because of the disparate structure of
interests and an unclear hierarchy for decision making (Suranovic 2002). Both
lines of argument postulate a declining importance of the role of nation states.
Empirical research, however, reveals that there remains considerable room for
manoeuvre for the nation state and that pioneering policy is still possible.
The Political Economy of Pioneering Environmental

Policy
The greening of international markets strongly depends on national pioneers
in environmental policy. Many students of economics argue that economic
globalization, that is, the liberalized movement of capital and goods across
borders, is a strong impediment for national policymakers in the field of envi-
ronment (for an overview see Bernauer 2000, De Vries 2001, Wheeler 2001).
Since environmental standards do increase ceteris paribus the costs for pro-
duction or products, industry will move to countries with the lowest stan-
dards. The same holds true for every other field of public policy that may pro-
34
vide additional financial burden, such as social policy or taxes. To become the
most attractive location for firms, regulators are expected to compete for the
lowest standards, lowest rates of taxes etc. According to this line of arguing,
economic globalization leads to a race to the bottom or to de-regulation to
attract foreign investments. This phenomenon of deregulation became known
as the Delaware effect of globalization (Vogel 1995). It was in Delaware where
a US-wide competition on deregulation of corporate chartering began. In the
United States, charters are granted by individual states, but all states are re-
quired to recognize each others charter. In the course of this competition, the
race to the bottom was won by Delaware by lowering the level of protection for
employees, shareholders and customers.
But for environmental standards the antagonism between economic integra-
tion and strict standard setting is not that antagonistic as it can be expected.
Often, high standards in important markets force foreign producers to adapt
to these standards that in turn motivates foreign governments to raise their
own standards. Furthermore, due to scale effects in production, but also to
obtain the image of an innovative firm, it is sensible for firms to adapt to the
higher standards for other markets as well on a voluntary basis. The above
mentioned example of exhaust gas standards for cars set by California which
lead to a worldwide adaptation by car manufactures is most prominent and
became known as the California effect. It has been argued that this mecha-
nism may apply to product regulation only (Vogel 1997; Scharpf 1999), but
there is empirical evidence for a spread of industrial pollution control stan-
dards as well (Hettige, Huq et al. 1996).
The expectations of a generally diminishing role of the nation state in setting
demanding environmental standards in the context of globalization has not
been supported by empirical research. Why is this so? Why does the nation
state not wither away in environmental policy?
Apparently, the open (globalized) national economy needs, and is indeed
characterized by, strong governments, both in size and scope. According to
several cross-national studies, public expenditures per capita in open
economies of the OECD are higher than in countries that are less inte-
grated in world markets (Cameron 1978, Garrett 1998, Bernauer 2000). This
contradicts the argument that economic globalisation weakens the nation
state. But both a larger size and a larger scope of government activities in
highly integrated countries can be plausibly explained by three reasons: a
well developed infrastructure is needed for successful international com-
35
petition, including more public spending in fields like higher education,

research and development, or transport; the distributional effects of rapid
structural changes call for compensation; and more regulatory activities are
needed to adapt to international developments.
The nation state remains to be the local hero, not least in the field of
environmental protection. There is no functional equivalent to national
governments as highly visible, legitimized and competent territorial actors
and protectors (Willke 1992). To whom else could citizen address their
complaints? Governments have no exit option. Furthermore, they do not
react to economic pressure alone but also on the preferences and castings
of voters. Therefore, national governments try to find at least compromises
between the requirements of the economy and the environment. Fre-
quently, the answer is technology. As far as technology can provide solu-
tions for environmental problems (in many fields more far-reaching
structural solutions are needed), there is a high potential for national
policies.
The effects of globalisation varies considerable between the different do-
mains of policy. Wages, taxes on mobile sources and social security come
under pressure for a lowering of standards because of economic globaliza-
tion (Scharpf 1998). Other policies, such as environmental policies, but also
health or security standards have a different logic in international regula-
tory competition. Several empirical cross-national studies have rejected the
race-to-the-bottom hypothesis 3. Strict environmental policy does not lead
to the relocation of dirty industries into developing countries with re-
imports of the products into industrialized countries (Jaffe, Peterson et al.
1995, Jnicke, Binder et al. 1997). Many reasons for this are now well-known
(Vogel 2001, Wheeler 2001, Drezner 2001): Countries and companies that
trade with countries with strict regulations tend to have stricter policies
themselves (Eliste and Fredriksson 1998, Foljanty-Jost 1997) the largest
markets are rather strictly regulated. The globalization of environmental
3
We find no race to the bottom ... countries with more open trade regimes have
more stringent regulations (Eliste and Fredriksson 1998). National environmental
pioneer policy can create first-mover advantages (Ashford and others 1979, Porter
and van der Linde 1995, Wallace 1995). Bangladesh, India, Indonesia, and Thailand
are fast adopting industrial pollution control standards similar to those in devel-
oped countries (Hettige, Huq et al. 1996).
36
policy has partly changed the framework conditions of the world market
(Jnicke and Weidner 1997; Weidner and Jnicke 2002, Vogel 2001).
Regulatory competition in environmental policy often creates first-mover
advantages for national economies. Environmental technologies becoming
increasingly part of the global competition (Porter 1990, Wallace 1995,
Faucheux 2000). The so called Porter hypothesis argues that a strict envi-
ronmental policy can improve competitiveness of firms and sectors (Porter
1990; Porter and van der Linde 1995; also Ashford and others 1979). There
are two explanations for this (see Taistra 2001): First, a competitive advan-
tage might be achieved in case of a strict environmental policy which, at a
later stage, diffuses internationally. If there has been a development of
technologies in response to strict environmental standards, industries (not
necessarily the polluting industry itself), might be able to export their tech-
nologies. Their competitive advantage may be based on learning effects or
patent protection for their innovation. Secondly, strict environmental pol-
icy might lead to innovation in the polluting industry itself that compen-
sates or even overcompensate for the costs of adaptation. This part of the
Porter hypotheses has been labeled the free-lunch or even paid lunch
hypothesis. Although the existence of considerable inefficiencies can not
be explained by conventional economic theory, that assumes well informed
economic actors, there is a broad empirical evidence that supports this hy-
potheses (see e.g. Taistra 2001; Taistra 2000 ; Jaffe, Peterson et al. 1995;
Hbner and Nill 2001). The Porter hypothesis has been supported also by
policy science research on pioneer countries showing evidence for eco-
nomic advantages of ambitious environmental policies (Wallace 1995;
Jnicke and Weidner 1997; Weidner and Jnicke 2002; Andersen and Lief-
ferink 1997).
Pioneer countries in environmental policy are highly competitive. The
Global Competitive Report shows a remarkably high correlation (R2 = 0.89)
between ambitious environmental policy and the competitiveness of a
country (Esty and Porter 2000). Other studies have revealed a similar rela-
tionship between eco efficiency and competitiveness (Sturm, Wackernagel
et al. 2000). The causal relation can go in both directions. Also, third fac-
tors (e.g. the GNP per capita) may explain the interrelation. However, the
hypothesis of a contradiction between competitiveness and a demanding
environmental policy can be rejected. The explanatory importance of GNP
for strict environmental policy and high competitiveness may be explained
37
by the high perceived environmental pressure and high capacity to react in

economically advanced countries.
Strict environmental regulations (within limits) remain a possibility to
protect national industries. Multinationals tend to use the same standards
everywhere (Wheeler 2001). Differences in environmental standards tend to
decrease; they are generally less important than differences for example in
labor costs or taxes. The environmental issue has become a dimension of
general technological progress. 40 percent of all innovations in 2010 are
supposed to be relevant to environmental improvement (Faucheux 2000).
To conclude, regarding the expected decline in competitiveness by environ-
mental policy, the race-to-the-bottom hypothesis suffers from several highly
questionable assumptions: It assumes that environmental regulations impose
costs for producers that affect location, regardless of differences in labor pro-
ductivity. It also assumes that governments react exclusively to the preferences
of the international capital, ignoring the preferences of voters or interest
groups (Drezner 2001). Last but not least, the race-to-the-bottom hypothesis
not only overestimates the importance of environmental costs and the differ-
ences in regulatory costs, but also the general role of prices, hence ignoring
the role of innovation in global competition. Recently, it has been argued also
by political actors that environmental issues become more important in the
competition on innovations (e.g. European Commission 2001).
Political Determinants of Pioneering Policy

Beyond economic factors for a leading role in environmental policy there are
also political factors that make pioneering roles of highly advanced countries
possible, or even attractive. The development of an international arena for
environmental policies supports and is frequently framed by pioneering coun-
tries. The nation state is both the subject and object of global environmental
policy learning and lesson-drawing (benchmarking). National governments
are looking for best practice in environmental policymaking (Rose 1993; Ben-
nett 1991; Kern, Jrgens et al. 2001, Tews, Busch et al. 2003). Successful envi-
ronmental policy innovations institutions, instruments, strategies are
thereby often adopted by other governments. This diffusion by imitation is an
important mechanism of global environmental policy development and policy
convergence. International institutions such as OECD, UNEP or special re-
gimes are policy arenas for pioneers and serve as agents of diffusion of envi-
38
ronmental policy innovations. The role of the pioneers seems to be more im-
portant than the creation of policy innovations by the international institu-
tions themselves. Figure 2 shows some examples of the diffusion of environ-
mental policy innovations such as environmental ministries or green plans
from pioneer countries to the rest of the world.
Fig. 2: The Global Diffusion of Environmental Policy Innovations

190
180
170 Environmental framework laws
160 Environmental impact assessments
150 Environmental labels
140 Environmental ministries
130 National environmental strategies
120
Number of countries
110
100
90
80
70
60
50
40
30
20
10
0
1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000
Source: Busch and Jrgens 2005
Innovative environmental policy measures of pioneering countries spread

internationally. The rate of diffusion depends on (1) the type of policy innova-
tion (e.g. distributive measures diffuse more easily than redistributive meas-
ures), (2) the type and difficulties of the underlying problem, (3) the environ-
mental policy capacity of the potential adopters, and (4) the successful influ-
ence of international organization but also of strategic countries in sup-
port of the diffusion. There is a range of international organizations (govern-
mental organizations, but also international NGOs or business associations)
which develop strategies to spread best practice in the field of environmental
policymaking. The OECD is active in this direction, and also the institutional
fabric of the European Union seems comparatively favourable both for innova-
39
tions and their diffusion (Hritier, Mingers et al. 1994). The EU must firstly, at
least in principle, accept a high level of protection in member states; it must
secondly seek to harmonize innovations in environmental policy imple-
mented at national state level. The mechanism of international diffusion of
policy innovations is favourable to the creation of lead markets for environ-
mental innovations. On the one hand, the convergence of standards and regu-
lations implies in case of technology-based policies a widening of the mar-
ket for technologies. On the other hand, the availability of technical solutions
makes the diffusion of the corresponding policy innovation more likely. How-
ever the implementation of European policies remains poor and environ-
mental measures are restricted in so far that Environmental regulations shall
not violate the institutions of the internal market (Knill 2003).
Globalization has created a policy arena for pioneer countries, at least in envi-
ronmental policy. Pioneering environmental policy of highly developed coun-
tries can be observed since the 1970s. The influence of small innovative coun-
tries in global policy has been growing since (Andersen and Liefferink 1997,
Jnicke and Weidner 1997). There is a political competition between countries
that requires an arena. Since the end of the cold war and its dichotomic policy
arena, the situation has improved. International institutions like OECD or the
UNEP and global networks of all kind provide a basis for benchmarking and
competition in global environmental policy. The competition is motivated by
the willingness to support domestic innovative industries or to protect the
national regulatory culture against pressures to adapt to policy innovation
from abroad.
The nation state remains the most competent and best-organized actor
(alongside multinational enterprises) in the global arena. While there has been
a transfer of sovereignty to international institutions, nation states gained
additional opportunities by concerting globally their actions. Examples can be
found in fields like nature conservation, toxic waste control (Basel conven-
tion), or the general environmental strategy (Agenda 21). But also the concerted
consolidation of national budgets is an important example. Therefore, the
decline of national sovereignty should not be confused with a decline of ca-
pacity to solve national problems. The role of pioneer governments is espe-
cially interesting if we turn to the question of greening of the global markets
and the establishment of lead markets for environmental innovations.
40
The Emergence of Lead Markets

Contrary to the race-to-the-bottom-hypothesis, our empirical research on the
development of environmental policy confirms that it is most often pioneer-
ing nation states that push for advances in global environmental policy. As far
as these policy innovations are technology based aimed at improving the
conditions for the development of environmental innovations and/or their
diffusion - these pioneering countries often serve as regional starting points
for new technologies. The lead markets in our case studies are empirically
characterized by high per-capita income, demanding buyers, high and inter-
nationally recognized quality standards, and flexible and innovation-friendly
framework conditions for producers and users of technologies (see also
Meyer-Krahmer 1997).
It is the high-income countries that are able to afford the necessary invest-
ments in research and development for the development of new technologies.
Many of them have also the demand conditions that enable environmental
lead markets. These markets have to deal with the teething troubles of innova-
tions, and they have to provide the pay back of investments in research and
development. They demonstrate the feasibility of technologies on a large-scale
application. Successful lead markets are not only connected with potential
first mover advantages, they also can attract investors for environmental
friendly technologies as it is the case in Germany for renewable energies.
The highly developed countries are characterized by both high environmental
pressure (objective and subjective, induced by high education and income) and
high capacity to react (including the institutional basis, administrative compe-
tence, economic/fiscal resources, knowledge and the strength of NGOs).
There are demand driven lead markets, i.e. nations with higher environmental
standards, leading to a widespread adoption to environmental friendly tech-
nologies. Examples for this case are the Californian exhaust gas standards for
automobiles or the Swedish regulations regarding the use of cadmium. Other
lead markets are driven by the supply of innovative technologies. Frequently,
the producers of technologies seek to extend their markets and therefore
lobby for international support of their technologies.
By setting up demanding environmental standards, pioneer countries in envi-
ronmental policy may send out a twofold signal beyond the boundaries of
their national market. First, a national market for environmentally friendly
41
technology acting as a basis for subsequent expansion to bigger markets. The

pioneer country demonstrates the economic, technical and political feasibility
of its standards and regulations. Subsequently, other countries adopt the in-
novative regulation. The diffusion of policies, e.g. throughout the EU, can
bring appropriate market expansion. Frequently, the national producers sup-
port the international diffusion, if they were able to adapt successfully to the
new standards (examples in Jacob 1999). A diffusion of regulations will be
more likely if a country has attained the image of being a pioneer. It is only a
few countries nowadays, mostly member states of the EU (see Table 1) which
serve as the benchmark for the development of environmental policy.
Second, the pioneer market with its demanding environmental regulations
can, however, also send out signals to the supply side outside the domestic
market. For example, California, with its stricter emission rules compared
with the rest of the United States, was able to exert a general influence on the
car industry worldwide (Vogel 1995). Today, Californian emission standards
exert a considerable influence on car manufactures once again, to develop
zero-emission vehicles. Similarly, Denmark, in 1994, with its targeted promo-
tion of energy-efficient refrigerators, was able to prompt European suppliers
to offer such devices (Jnicke, Mez et al. 1999). In cases like these, competitive
companies can advertise their ability to supply such demanding market areas
as a sign of their technological competence. It can be cost efficient to orient
the production to the highest standards, if there are scale effects.
The emergence of lead markets for an environmental technology takes place
in two stages, of which the first is the most important: The first phase is de-
fined by the struggling for success on the national market. This includes the
establishment of a national market (not only a protected niche market) and
successful incremental improvements of the product and its production. Gov-
ernment instruments may be standards, subsidies, charges, labels, public pro-
curement, network management, or EMAS (demand of firms).
The second phase is defined by government support for technology transfer
by activities within international organizations (e.g. diffusion of the support-
ing policy pattern), bilateral actions with strategic countries, special interna-
tional conferences, reporting by the international media, co-operation with
international NGOs etc. More important may be on the demand situation
the diffusion motor of benchmarking and search for best practices, which in
many countries is an institutionalized mechanism today. In addition, the co-
42
operation with multinational companies may be a relevant transfer mecha-

nism.
If successfully established, such markets may fulfil a range of functions: From
a global perspective, they provide marketable solutions for typical environ-
mental problems. Lead markets in high-income countries are able to raise the
necessary funds for refinancing the costs for development and learning. This
is true for environmental innovations in particular. There is a need to over-
come the teething troubles of new technologies. They are demonstrating both
the technical and the political feasibility and thereby giving a stimulus for
other countries and enterprises to adopt to their pioneering standards. From a
national perspective ambitious standards or support mechanisms might safe-
guard the first mover advantage for the own industries. Furthermore, the crea-
tion of demand by ambitious policy measures can attract foreign investors
which are interested in the development and marketing of environmental
innovations. Finally, a demanding policy that holds economic advantages ad-
ditionally legitimates the national policy makers, sometimes providing them
also with attractive roles in the global arena.
Strategies for the Establishment of Lead Markets

Policies that are likely to promote the emergence of environmental innova-
tions have been described and analyzed by several authors. They encompass
the multi-impulse hypotheses (Blazejczak, Edler et al. 1999) design criteria
for environmental policies (Norberg-Bohm 1999 or strategic niche manage-
ment (Kemp, Schot et al. 1998). The development of lead markets, however,
focuses on the diffusion of green technologies, without neglecting the need
for measures to support their development.
There is a convergence of interests between innovative firms and environ-
mental policy makers. Suppliers of environmental technology seek the sup-
port of politicians in order to extend their markets and political actors are
looking out for technological options, because precisely these are much easier
to implement than any sort of structural intervention. Policies based on tech-
nologies that have demonstrated their feasibility are more likely to diffuse to
other countries.
The interplay between the diffusion of environmental policy measures and
environmental technology can take a wide variety of possible sequences. The
43
following Figure depicts a stage model of policy and technology invention and
policy and technology diffusion. Theoretically, it is possible to distinguish
between the following diffusion scenarios, depending on the factors leading to
the political and technological innovations:
Fig. 3: Diffusion patterns of Environmental Innovation (Jnicke 2000)
A: Policy C: Policy
Innovation Diffusion
B: Technology D: Technology
Innovation Diffusion
Policy induced Diffusion Technology induced Diffusion
Technology Forcing Technological Initiative
(ABCD): e.g. US-Car Emission (BACD): e.g. wind energy
Standards (1970) Technological Dominance
Political Initiative (ABDC): (BADC): e.g. CHP Technologies
e.g. Cadmium substitutes
Autonomous Diffusion (BD): e.g.
Political Dominance Incremental improvements of energy
(ACBD): no example yet? efficiency
Technology forcing (ABCD): A national environmental policy innovation

in one country forces a technological innovation which diffuses if the policy
innovation diffuses (e.g.: catalytic converter technology in cars).
Technological initiative (BACD): An existing environmental technology
induces a political innovation whose diffusion in turn encourages the diffu-
sion of the technology (e.g.: wind energy in Denmark).
Political initiative (ABDC): A national environmental policy leads to
technological innovations whose diffusion in turn encourages diffusion of the
policy innovation (e.g.: cadmium substitute). 4
4
The use of cadmium was regulated in Sweden in the early 1980s with their standards
for substitutes being adopted by European industry. Not until the early 1990s, how-
ever, were these standards made binding by the European Commission (Btcher,
Bhm et al. 1992).
44
Technological dominance (BADC): An innovation in environmental

technology is successfully diffused and as a result receives political support
both nationally and internationally (e.g.: combined heat and power in indus-
try). 5
Political dominance (ACBD): The innovation in environmental policy is
successfully diffused before a corresponding technology is available (this sce-
nario is, symptomatically, very rare in ecological modernization).
Autonomous technological development (BD): An innovation in environ-
mental technology is successfully diffused without political influence; this
case, beyond incrementally increasing energy efficiency in companies, seems
to be rather rare.
Technological innovations do provide additional options for policy makers,
therefore regulations are set up that support the diffusion of environmental
friendly technologies. For other cases, policy factors have been the major driv-
ing forces in the stimulation of environment-friendly technical innovations.
The case of technology forcing, however, has been exceptional for environ-
mental innovation (Conrad 1998; Jacob 1999). So far, environmental policy has
its merits in the promotion of the diffusion of technologies within and be-
tween countries. It can be observed, however, that policies promoting the dif-
fusion do support incremental innovations. Autonomous emergence and dif-
fusion of innovations in environmental technology is the exception and such
developments usually remain limited to incremental increases in efficiency in
companies.
The different variants of innovation and diffusion of technologies and policies
hint to a variation in the degree of political difficultness of the underlying
strategies. Policy makers that may refer to other countries where both the
technical and political feasibility has been proven may legitimize their initia-
tives more easily than those who aim to regulate issues without the possibility
to refer on existing technologies or policies as it is the case the technology
forcing approach. In this case distributive policy instruments, in particular
subsidies for R&D, are easier to be implemented, while for the diffusion of
5
Combined heat and power (CHP) in industry spread largely autonomously, even
though regulatory measures were intended to encourage its use in public power sta-
tions.
45
existing technologies re-distributive instruments and regulative approaches

are more effective and efficient.
Conclusions
The limits of ecological modernization (in the technocratic sense 6) are thus
defined by the limits of technology. However, these limits are dynamic. They
can be extended by research (and by research and development policies). For
example, research into the development of procedures for reducing carbon
dioxide emissions, if successful, could substantially widen our room for ma-
neuver in climate policy. The rapid diffusion of suitable policy innovations
will then be predictable as the difficulty and slowness of a climate policy aim-
ing at structural change of the energy sector which de facto places restrictions
on established energy markets (coal, oil). The variants of this interplay be-
tween policy and technology in any case are a central theme in research on the
diffusion of environmental innovations, especially when it comes to selectively
optimizing such innovations.
Ecological modernization driven by pioneering countries can be conceived
and has its merits as a market compatible strategy of technical environmental
innovations and their corresponding policies supporting their diffusion. It is
the (highly developed) nation state, which plays a crucial role in this context.
In this perspective, the function of international organizations can be seen
more as policy arenas for pioneer countries and as agents of diffusion than as
original policy innovators.
Furthermore, there is no race to the bottom in times of economic globaliza-
tion: The present pioneers in environmental policy are primarily open
economies. There is no general contradiction between competitiveness and
demanding environmental policy, on the contrary, highly developed countries
tend to integrate the environmental issue into the competition on quality. The
highly regulated markets and their environmental standards e.g. of the EU
countries have strong influence on other exporting nations. Global diffusion
of best practice in environmental policy has become an important driving
6
See Jnicke (2000) for a more detailed discussion on the different concepts of eco-
logical modernization.
46
force for the diffusion of marketable, technical solutions for environmental

problems that typically exist on a global scale.
However, so far there are serious shortcomings of an ecological moderniza-
tion. In fields such as climate change or ground water protection a substantial
enhancement of environmental protection is required. Only incremental in-
novations that are limited to niche markets in a few countries are not suffi-
cient. It is radical innovations that are applied on a global scale that may bring
the necessary changes. The conditions for a global strategy of ecological mod-
ernization are, however, not bad.
References
Andersen, M. S. and D. Liefferink (1997). European Environmental Policy. The Pi-
onieers. Manchester, Manchester University Press.
Ashford, N. A. and others (1979). Environment, Health, and Safety Regulation, and
Technological Innovation. In: C. T. Hill and J. M. Utterback (eds.): Technological
Innovation for a Dynamic Economy. Cambridge: 161-221.
Auer, M. (2000). "Who participates in International Environmental Governance? Partial
answers from international relations theory." Policy Sciences 33(2): 155-180.
Btcher, K., E. Bhm, et al. (1992). Untersuchung ber die Auswirkungen geplanter
gesetzlicher Beschrnkungen auf die Verwendung, Verbreitung und Substitution
von Cadmium in Produkten. Karlsruhe, Fraunhofer-Institut fr Systemtechnik
und Innovationsforschung,
Beise, M. (1999). Lead Markets and the International Allocation of R&D. Paper pre-
sented at the 5. ASEAT Conference "Demand, Markets, Users and Innovation: So-
ciological and Economic Approaches", Manchester.
Beise, M. (2001). Lead Markets. Country-Specific Success Factors of the Global Diffu-
sion of Innovations. Heidelberg/ New York, Physica.
Beise, M., J. Blazejczak, et al. (2003). The Emergence of Lead Markets for Environmental
Innovations. Berlin, FFU, FFU rep 03-02.
Bennett, C. J. (1991). "What is Policy Convergence and What Causes it?" British Journal
of Political Science 21: 215-233.
Bernauer, T. (2000). Staaten im Weltmarkt: Zur Handlungsfhigkeit von Staaten trotz
wirtschaftlicher Globalisierung. Opladen, Leske+Budrich.
Blazejczak, J., D. Edler, et al. (1999). "Umweltpolitik und Innovation: Politikmuster und
Innovationswirkungen im internationalen Vergleich." Zeitschrift fr Umweltpoli-
tik und Umweltrecht 22(1): 1-32.
Busch, P.O., Jrgens, H. (2005). Globale Ausbreitungsmuster umweltpolitischer Innova-
tionen. In: K. Tews and M. Jnicke (Hg.): Die Diffusion umweltpolitischer Innova-
tionen im internationalen System. VS - Verlag fr Sozialwissenschaften: Wiesba-
den. S. 55-193.
Cameron, D. R. (1978). "The Expansion of the Public Economy: A Comparative Analy-
sis." American Political Science Review 72(4).
Conrad, J. (1998). Environmental Management in European Companies. Success Stories
and Evaluation. In: J. Conrad (ed): Environmental Management in European Com-
47
panies. Success Stories and Evaluation. Amsterdam, Gordon and Breach Science
Publishers.
De Vries, M. S. (2001). "The attack on the State: a comparison of the arguments." Inter-
national Review of Administrative Sciences 67(3): 389-414.
Drezner, D. W. (2001). "Globalization and Policy Convergence." International Studies
Review 3: 53-78.
Eliste, P. and P. G. Fredriksson (1998). Does Open Trade Result in a Race to the Bot-
tom? Cross Country Evidence. World Bank,
Esty, D. C. (1999). Economic Integration and the Environment. In: N. J. Vig and R. Ax-
elrod (eds.): The Global Environment. Institutions, Law, and Policy. Washington
DC, CQ Press: 190-209.
Esty, D. C. and M. E. Porter (2000). Measuring National Environmental Performance
and Its Determinants. The Global Competitiveness Report 2000. Harvard Univer-
sity and World Economic Forum. New York/Oxford, Oxford University Press: 60-
75.
European Commission (2001). Umwelt 2010: Unsere Zukunft liegt in unserer Hand.
Sechstes EU Umweltaktionsprogramm 2001-2010. Mitteilung der Kommission.
Luxemburg.
Faucheux, S. (2000). Environmental Policy and Technological Change; Towards Delib-
erative Governance. In: J. Hemmelskamp, K. Rennings and F. Leone (eds.): Innova-
tion-Oriented Environmental Regulation. Theoretical Approaches and Empirical
Analysis. Heidelberg, New York, Physica: 153-171.
Foljanty-Jost, G. (1997). Die Bedeutung Japans fr die vergleichende Umweltpolitikfor-
schung-vom Modell zum Auslaufmodell? In: L. Mez and H. Weidner (Hrsg.): Um-
weltpolitik und Staatsversagen. Perspektiven und Grenzen der Umweltpolitikana-
lyse. Berlin, Edition Sigma: 314-322.
Garrett, G. (1998). Partisan Politics in the Global Economy. Cambridge, Cambridge
University Press.
Hay, C. and B. Rosamond (2002). "Globalization, European integration and the discur-
sive construction of economic imperatives." Journal of European Policy 9(2): 147-
167.
Hritier, A., S. Mingers, et al. (1994). Die Vernderung von Staatlichkeit in Europa - Ein
regulativer Wettbewerb: Deutschland, Grobritannien, Frankreich. Opladen, Leske
+ Budrich.
Hettige, M., M. Huq, et al. (1996). "Determinants of Pollution Abatement in Developing
Countries. Evidence from South and South East Asia." World Development 24 (12):
1891-1904.
Hoberg, G. (2001). "Trade, Harmonization, and Domestic Autonomy in Environmental
Policy." Journal of Comparative Policy Analysis: Research and Practice 3: 191-217.
Hbner, K. and J. Nill (2001). Nachhaltigkeit als Innovationsmotor. Berlin, edition
sigma.
Jacob, K. (1999). Innovationsorientierte Chemikalienpolitik. Politische, soziale und
konomische Faktoren des verminderten Gebrauchs gefhrlicher Stoffe. Mnchen,
Herbert Utz Verlag.
Jaffe, A. B., S. R. Peterson, et al. (1995). "Environmental Regulation and Competitiveness
of U.S. Manufacturing: What does Evidence Tell Us?" Journal of Economic Litera-
ture 33 (1): 136-163.
Jnicke, M. (2000). Ecological Modernization. Innovation and Diffusion of Policy and
Technology. Berlin, Forschungsstelle fr Umweltpolitik/Freie Universitt Berlin,
FFU-Report 00-8.
48
Jnicke, M., M. Binder, et al. (1997). "'Dirty Industries': Patterns of Change in Industrial
Countries." Environmental and Resource Economics 9: 467-491.
Jnicke, M., J. Blazejczak, et al. (2000). Environmental Policy and Innovation: an Inter-
national Comparison of Policy Frameworks and Innovation Effects. In: J. Hemmel-
skamp, K. Rennings and F. Leone (eds.): Innovation-oriented Environmental Regu-
lation. Theoretical Approaches and Empirical Analysis. Heidelberg, New York,
Physica: 125-152.
Jnicke, M., L. Mez, et al. (1999). Innovative Effects of Sector Specific Regulation Pat-
terns. The Example of Energy Efficient Refrigerators in Denmark. In: P. Klemmer
(ed): Innovation and the Environment. Case Studies on the Adaptive Behavior in
Society and the Economy. Berlin, Analytica Verlagsgesellschaft: 49-69.
Jnicke, M. and H. Weidner, (Eds.) (1997). National Environmental Policies: A Compara-
tive Study of Capacity-Building. Berlin u.a., Springer.
Kemp, R., J. Schot, et al. (1998). "Regime Shifts to Sustainability through processes of
Niche Formation. The Approach of Strategic Niche Management." Technology
Analysis and Strategic Management 10 (2): 175-195.
Keohane, R. O. and L. L. Martin (1995). "The Promise of Institutionalist Theory." Inter-
national Security 20 (1): 39-51.
Kern, K., H. Jrgens, et al. (2001). The Diffusion of Environmental Policy Innovations: A
Contribution to the Globalisation of Environmental Policy. Berlin, Social Science
Research Center, FS II 01-302.
Klemmer, P., U. Lehr, et al. (1999). Umweltinnovationen. Anreize und Hemmnisse.
Berlin, Analytica.
Knill, C. (2003). Europische Umweltpolitik: Steuerungsprobleme und Regulierungs-
muster im Mehrebenensystem. Opladen, Leske + Budrich.
Knill, C. and D. Lehmkuhl (2002). "Private Actors and the State. Internationalization
and Changing Patterns of Governance." Governance 15 (1): 41-63.
Meyer-Krahmer, F. (1997). Essay. Lead-Mrkte und Innovationsstandort.
Mol, A. P. J. and D. A. Sonnenfeld, Eds. (2000). Ecological Modernization Around the
World. Perspectives and Critical Debates. London/Portland (Or.), Frank Cass.
Norberg-Bohm (1999). "Stimulating 'green' technological innovation: An analysis of
alternative policy mechanisms." Policy Sciences 32: 13-38.
Park, J. (2002). "Unbundling Globalization: Agent of Policy Convergence?" International
Studies Review 4 (1): 230-233.
Porter, M. E. (1990). The Competitive Advantage of Nations. New York, The Free Press.
Porter, M. E. and C. van der Linde (1995). Green and Competitive: Ending the Stale-
mate. Harvard Business Review: 120-134.
Rennings, K. (2000). Redefining Innovation - Eco-Innovation Research and the Contri-
bution from Ecological Economics. Ecological Economics: 319-332.
Rose, R. (1993). Lesson-Drawing in Public Policy. A Guide to Learning across Time and
Space. Chatham/NJ, Chatham House.
Scharpf, F. W. (1998). Die Problemlsungsfhigkeit der Mehrebenenpolitik in Europa.
Regieren in entgrenzten Rumen- Sonderheft 29 der PVS. B. Kohler-Koch. Opla-
den, Westdeutscher Verlag: 121-144.
Scharpf, F. W. (1999). Regieren in Europa. Effektiv und demokratisch? Frankfurt / New
York, Campus.
Sturm, A., M. Wackernagel, et al. (2000). The Winners and Losers in Global Competi-
tion. Why Eco-Efficiency Reinforces Competitiveness: A Study of 44 Nations.
Chur/Zrich, Verlag Regger.
49
Suranovic, S. (2002). "International Labour and Environment Standards Agreements: Is

this Fair Trade?" The World Economy 25(2): 231-245.
Taistra, G. (2000). Die Porter-Hypothese zur Umweltpolitik. Wiesbaden, Dt. Universi-
tts-Verlag.
Taistra, G. (2001). Die Porter Hypothese zur Umweltpolitik. ZfU: 241-262.
Tews, K., P.-O. Busch, et al. (2003). "The diffusion of new policy instruments." European
Journal of Political Research 42 (4): 569-600.
Vogel, D. (1997). Trading up and governing across: transnational governance and envi-
ronmental protection. Journal of European Public Policy. 4: 556-571.
Vogel, D. (2001). "Is There a Race to the Bottom? The Impact of Globalization on Na-
tional Regulatory Policies." The Tocqueville Review/La Revue Tocqueville XXII(1).
Wallace, D. (1995). Environmental Policy and Industrial Innovation. London, Earthscan.
Weidner, H. and M. Jnicke, Eds. (2002). Capacity Building in National Environmental
Policy. A Comparative Study of 17 Countries. Berlin (u.a.), Springer.
Wheeler, D. (2001). "Racing to the Bottom? Foreign Investment and Air Pollution in
Developing Countries." Journal of Environment and Development 10 (3): 225-245.
Willke, H. (1992). Ironie des Staates. Grundlinien einer Staatstheorie polyzentrischer
Gesellschaft. Frankfurt a. M., Suhrkamp.
World Trade Organisation (1999). Trade and Environment. Geneva, WTO, Special
Studies 4.
Young, O. (2002). The Institutional Dimension of Environmental Change: Fit, Interplay
and Scale. Cambridge, MA, MIT Press.
Zrn, M. (1998). Regieren jenseits des Nationalstaats. Globalisierung und Denationali-
sierung als Chance. Frankfurt a.M., Suhrkamp.
50
Trend Setters in Environmental Policy: The
Character and Role of Pioneer Countries1
MARTIN JNICKE
Abstract
Environmental policy convergence resulting from policy diffusion seems to be
influenced not only by functional imperatives of the world market but also by
a collective behaviour of national governments, where pioneer countries func-
tion as (intellectual) leaders under conditions of uncertainty. Their solutions
for general environmental problems are adopted by other countries. As a rule,
it is one single solution that is preferred by a large group or the majority of
countries. This regulatory conformism makes pioneer roles of countries
highly relevant. The article analyses the character and role of such trend set-
ters in environmental policy. A necessary condition for becoming a pioneer
country in environmental policy is a high political capacity. This encompasses
the institutional, economic and informational framework conditions and the
relative strengths of the green advocacy coalition of a country. While these
factors refer to relative stable conditions of policy making, this does not ex-
plain why pioneer countries come and go. In order to explain this, an analyti-
cal framework is proposed that encompasses situative factors, strategic factors
and actor constellations, especially the coalition between organised propo-
nents of environmental objectives and economic modernisers. This coalition
of ecological modernisers may break down e. g. in times of economic crisis.
The political and economic framework conditions of globalisation may some-
times bear impediments for pioneers, but at the same time they also do pro-
vide incentives for highly advanced countries to take over national pioneer
roles - at least in the field of environmental protection, which has become an
important issue in the competition for innovation.
1
First published in: European Environment, Vol. 15, No. 2, 2005, pp. 129-142.
Copyright John Wiley & Sons Limited. Reprinted with kind permission
51
Martin Jnicke
1 Introduction
Since the early days of environmental policy in the 1970s, there have been
pioneer countries setting regulatory trends in the new policy field. National
pioneers have been initiating environmental policy innovations such as new
institutions, instruments or modes of operation. Their solution for a special
environmental problem has been adopted by a relevant group or the majority
of other countries, thereby creating a certain policy convergence. Early on, this
mechanism has been identified as a condition for success in international
environmental policy. And it is no new insight, that horizontal diffusion of
environmental policy innovations is not less important than vertical regula-
tion by international organisations (Jnicke, 1990; Busch and Jrgens 2005;
Tews 2005). The development of global environmental policy and its preferred
policy patterns may have been influenced more than most other policies by
horizontal lesson drawing (Rose, 1993, Jnicke and Weidner, 1997). Environ-
mental policy convergence basically results from a kind of collective - but not
simultaneous - choice of a large group of countries for one special policy in-
novation which is perceived to be the best (or at least the most frequently
adopted) solution for a general environmental problem.
Pioneer countries are more than first movers. To initiate a regulatory trend
(see also Levi-Faur and Jordana, 2005), they need a certain visibility and it is
important whether or not their policy innovation contributes to the interna-
tional policy agenda. Here the international institutions play an important
role. Pioneer countries are actors within the international policy arena. But
policy innovations as well as their early adoption by other countries primarily
depend on domestic factors. They need (1) a certain capacity. The concept of
political capacity is rather complex. The OECD defines environmental policy
capacity very broadly as a societys ability to identify and solve environmental
problems (OECD, 1994: 8). A precise operationalisation may be difficult. But it
can be defined at least negatively by the relative stable limits beyond which
successful action is impossible. These limits depend on (1a) the existing
strength of the green advocacy coalition (Sabatier, 1999) together with (1b)
the existing institutional, economic or informational opportunity structure
which the proponents of a special policy cannot transcend (e. g. lack of institu-
tions, economic/fiscal resources, or knowledge). Capacities can be enlarged by
policies again within given limits (capacity of capacity building). An increas-
ingly relevant option of capacity-building is the institutionalised international
52
Trend Setters in Environmental Policy: The Character and Role of Pioneer Countries
cooperation. Pioneer activities are also (2) issue specific. Countries may be
generally strong in the field of environmental policy, but particular issue-
areas may have their own stories of success or failure. A pioneer country can
be lagging in certain fields (Germany e. g. is a forerunner regarding energy
efficient cars but it has no general speed limit on highways). There are also (3)
situative factors (policy windows) that support or restrict the full use or a
certain enlargement - of a given capacity. These are necessary to explain why
pioneers in environmental policy come and go. There seems to be a large
range of options for highly developed countrys either to be a policy innovator
or to be more hesitant. The sufficient explanation of a given effective pioneer
role is (4) a question of strategic factors: the will and skill (Shonfield) of using
a given capacity and situative context.
Pioneer countries in environmental policy, then, are countries, where a strong
green advocacy coalition is skilful enough to use an advanced opportunity
structure together with situative chances in order to introduce more than
one environmental policy innovation contributing to international regulatory
trends. The factors that determine a countries role as a pioneer in environ-
mental policy can be depicted as in the following graph:
Fig. 1: National Pioneer Roles in Environmental Policy:

The Funnel of Causality
1. Country specific factors

a) General Strength of the green advocacy coalition
b) Opportunity structure
2. Issue specific factors
3. Situative factors
4. Strategic factors
53
Martin Jnicke
The following text will focus on common characteristics of pioneer countries

in environmental policy which have initiated whether actively or not - regu-
latory trends and policy diffusion in other countries. They will be described
on the background of own empirical research and a review of the relevant
literature. The focus is on the necessary basic country-specific elements of the
capacity for environmental policy innovations and the situative factors that
create the sufficient conditions for pioneer roles.
But in the beginning I will have a look at the global context: The first question
to be answered is whether pioneer behaviour at least of highly developed
countries is possible in times of economic and political globalisation and
whether trend setters in environmental regulation are either restricted by or
profit from regulative competition in the international system. The answers
show that the international system provides not only negative but also positive
incentives for being a leading country in environmental policy.
2 Pioneers in National Environmental Policy in

Times of Globalisation
There are two main challenges to the role of nation-states which seem to
contradict the possibility of national pioneer roles in the global context:
political globalisation: the globalisation of policies and especially of
environmental policy reducing the role of the sovereign nation-state and
economic globalisation: the role of international markets and multi-
national corporations putting pressure on the nation-state.
Without any doubt, national sovereignty in the context of global governance
has been reduced. A great variety of international regimes were developed in
the past that restrict national policy making, in particular in the field of trade
policies. Restrictions to national environmental policymaking are imposed by
WTO regulations, EU internal market regulations, or by the present role of
the US in the global environmental policy arena. But does this also lead to a
general withering away of the nation-state in environmental policy? Or has the
loss of sovereignty been compensated by a new potential of collective action of
governments, initiated by policy innovators? Is environmental policy different
from other policies that indeed have come under high pressure in the context
of globalisation?
54
So far, the fear of a general weakening of the nation-state has not been con-
firmed by empirical research. Meanwhile this is no new finding (see also
Jnicke/Jacobs in this volume). Regarding the role of national governments in
global environmental governance the main arguments could be summarised
by following theses which are based on different empirical studies.
Globalisation has created a policy arena for pioneer countries, at least in
environmental policy (Andersen and Liefferink, 1997; Jnicke and
Weidner,1997; Andersson and Mol, 2002).
In the context of multi-level environmental governance (developed) nation
states remain key players, not least in the process of policy innovation and
its diffusion. The national government is both, the subject and object of
global environmental policy learning and lesson-drawing (Rose, 1993; Ben-
nett, 1991; Kern et al., 2001; French, 2002, Tews et al., 2003).
Environmental policy innovation as well as regression are caused primarily
at the national level (Jnicke and Weidner,1997).
Policies are differently affected by globalisation (Scharpf, 1999).
Studies denying a generally restrictive role of the global economy are also
well-known but highly relevant in our context (see also Jnicke, Jnicke and
Jacob in this volume):
There is no general race to the bottom in environmental policy (Porter
and v. d. Linde, 1995; Wallace, 1995, Eliste and Fredricksson, 1998, Vogel,
2001; Wheeler, 2001; Drezner, 2001, Weidner and Jnicke, 2002).
Pioneer countries in environmental policy have open and highly competi-
tive economies (World Economic Forum, 2000, Sturm et al., 2000, Kok,
2004).
The open (globalised) national economy needs and is characterised by
strong government (Cameron, 1978; Garrett, 1998; Bernauer, 2000, Levi-
Faur and Jordana, 2005).
New environmental technologies, as a rule, start from national lead mar-
kets, based on supporting pioneer policies (Meyer-Krahmer, 1999, Beise,
2001, Jacob et a., 2005).
To summarise the presented theses: Both the political and the economic glob-
alisation has not only created restrictions to national pioneer behaviour in
environmental protection. It has at the same time created strong incentives
for national policy innovations in this field. The most important fact seems to
be that the environmental issue more and more has come to play a role in the
55
Martin Jnicke
competition for innovation, which is more relevant for developed countries

than for others. This corresponds with the above mentioned fact that coun-
tries with strict environmental regulations are more competitive than others.
3 Common Characteristics of Pioneers in

Environmental Policy
Table 1 presents the counts for the introduction or early adoption of twenty
one different environmental policy innovations. The ranking of innova-
tion/early adoption may differ with the mix of selected policy innovations.
And it is only a ranking on the level of policy outputs, not of implementation
or outcome. Authors focusing not on policy innovations but on performance
indicators like Andersen and Liefferink (1997) partly deviate from this list of
green pioneers. They would have included Austria (a latecomer which became
a pioneer) or Norway, but not France (see also Scruggs, 2003).
Tab. 1: The Pioneer Countries in Environmental Policy:

Policy Innovation or Early Adoption 1970-2000 2
Country 19701985 19852000
Sweden (11): 7 4
USA (11): 9 2
Japan (10): 8 2
Denmark (9): 5 4
Finland (8): 4 4
France (7): 5 2
Germany (7): 5 2
The Netherlands (7): 3 4
UK (6): 4 2
Canada (6): 2 4
52 30
Source: FFU / Busch and Jrgens, 2005
2
Introduction of 21 new environmental policy institutions, laws or instruments:
innovation or first 3 early adoptions.
56
This at least underlines the argument of the active role of small European
countries in the last ten to 15 years. What I would like to show is the existence
of countries that several times have taken the risk of being environmental
pioneers, but also the change of pioneer roles over time. The US and Japan
which in the 1970s together with Sweden have been so important as trend-
setters of environmental regulation throughout the industrialised world have
taken a quite different position in the 1980s and 1990s.
Therefore, in explaining pioneer roles of countries we must differentiate be-
tween relatively stable and relatively unstable factors (Andersen and Liefferink,
1997; Sabatier, 1999), or between stable structures or capacities and other more
variable situative conditions, that cause changes within a given capacity
(Jnicke and Weidner, 1997).
3.1 The Strength of the Green Advocacy Coalition
Sabatiers concept of advocacy coalition is useful for the explanation of policy

innovation. It focuses on the kind of actor motivation (belief system) and the
combined strength of different actors in relation to the opposing coalition.
This is put in relation to the stable structures and situative factors of action
(Sabatier, 1999). The approach is actually related to issue-specific policy inno-
vations. But it makes sense to describe the general country-specific driving
forces for environmental policy innovations in a similar way. Especially the
coalition aspect can be used for this purpose. The advocacy coalition generally
supporting environmentally friendly policy solutions does at first consist of
actors of environmental administrations or of the ecology movement. The
strength and competence of the environmental government divisions as well
as the organisational strength and professionality of the environmental
movement are important characteristics of pioneer countries. In the Nether-
lands, for example, the degree of organisation of environmentalists is higher
than that of the trade unions (Jnicke and Weidner, 1997).
The most important characteristic, however, seems to be a coalition between
these traditional proponents of environmental policy and modernisers within
industry. Pioneer countries in environmental policy are characterised by a
coalition for ecological modernisation (Jnicke, 1984, 2000). Especially Japan
had a strong eco-modernising coalition in the early 1970s, partly substituting a
weak environmental movement. There was much environmental optimism
within parts of the industry, and in fields like renewable energy and energy
57
Martin Jnicke
efficiency the MITI was a driving force of ecological modernisation. Even

some kind of eco-restructuring resulted from this coalition. It broke down in
the 1980s. The pioneer role of the country was over then (it may have been
revived in the last years). A similarly cautious environmental optimism within
parts of the industry and an eco-modernising coalition with green administra-
tors and NGOs could be observed in most of the countries mentioned in Table
1. In Germany in the early 1970s and in recent years also the majority of trade
unions have been part of this coalition. The strong legal support for renew-
ables in Germany cannot be explained without this kind of coalition. But the
coalition of green modernisers as such also depends on situative factors (only
the actors are stable factors). So far, coalitions for ecological modernisation
have been active only for a certain length of time and have ceased to exist after
a while.
3.2 Structural Framework Conditions
3.2.1 Economic Factors

The most important characteristic of green pioneer countries is their high
degree of economic development (measured by GNP per capita). The level of
national income leads not only to a higher availability of technology or fiscal
resources. It also strongly corresponds with other factors. The level of educa-
tion, which is an important condition for the perception of problems and
adoption of new knowledge, is highest in rich countries. Similar parallels have
been shown e.g. for the strength of institutions (World Bank, 2003).
In our context the dominant role of the level of economic development is
crucial mainly for two reasons: Highly developed countries are characterised
by higher perceived environmental pressures from energy production, traffic,
chemical substances, or urban sprawl being perceived by better educated
people. At the same time they have higher administrative, economic and sci-
entific capacities to solve environmental problems at least those for which
technological means are available. The interplay between perceived high envi-
ronmental pressure and high environmental capacity seems to be the most
important mechanism to explain pioneer roles of highly developed countries.
Therefore highly developed countries by function and capacity are the candi-
dates for being environmental pioneers. But there are differences within this
group of countries. This leads to the other characteristics.
58
3.2.2 Political and Institutional Factors

The structure of the political system: The openness of the political system for
new interests and ideas as well as the capacity for policy integration and coor-
dination seem to be an important institutional framework conditions for en-
vironmental policy innovations of pioneers (Kitschelt, 1983, Jnicke 1990). The
factor strong government has already been mentioned above.
The Policy Style: It is generally agreed that a culture of dialogue and consen-
sus is an important condition for successful environmental policy. This seems
especially important for the creation of a broad coalition for ecological mod-
ernisation. An innovation oriented environmental policy needs networking
and communication of all kind (Jnicke et al. 2000).
The Special Factor EU membership: Why is it that so many EC/EU member
states have successfully initiated environmental policy innovations after 1985?
An answer may be the revision of the treaty at that time, introducing strong
regulations for environmental policy. The new regulation created a double
institutional advantage for environmental innovations (Hritier et al., 1994).
The EU must firstly, at least in principle, accept a high level of protection in
Member States; it must secondly seek to harmonize innovations in environ-
mental policy implemented at nation state level. Pioneer countries, for their
part, often have an interest in anchoring their policy innovations within the
EU framework in order to minimize their subsequent need to adapt to Euro-
pean policy. It is also often a matter of Europeanizing certain national pio-
neer measures favoring the particular countrys domestic industry. This un-
derlines the importance of EU harmonised measures. Policy diffusion within
the EU, however, takes place not only by way of vertical Europeanization but
also horizontally from country to country. The CO2 tax is an example of such
horizontal diffusion.
3.2.3 Cognitive and Informational Factors: the Knowledge Base

Pioneers of environmental policy are characterised by high R&D expenditures
(OECD, 2003). This may be seen as an indicator also for a strong national in-
novation system, which plays an important role for technology-based envi-
ronmental policy approaches. Green pioneer countries tend to define envi-
ronmental policy and sustainable development in terms of innovation policy
and ecological modernisation.
59
Martin Jnicke
But the knowledge base of policy innovation must not only be produced, it has
to be transferred and it has to be adopted by an educated public. All three
conditions are necessary. A highly developed research capacity together with
an effective system of education may be insufficient, if the transfer by the me-
dia is restricted, e.g. by a dominant commercial structure.
The immediate transfer of innovative knowledge to the political elite may be
especially important. The pioneer role of Germany in the field of climate pro-
tection cannot be explained without the role of a parliamentary Enquete-
commission in the late 1980s which created the respective knowledge base for
the Parliament and an educated community (the same could be said for the
German policy of a phase-out of nuclear energy).
3.3 Unstable, Situative Factors: When Pioneers Give Up
We now turn from the relatively stable factors of environmental pioneer coun-
tries to the more unstable (Andersen and Liefferink, 1997: 18; Jnicke and
Weidner, 1997: 7). The role of situative opportunities and of policy windows
has for long been regarded as important for policy innovation (Kingdon, 1995;
Sabatier, 1999). Situative restrictive or supporting factors can be sudden
changes of economic conditions such as recessions, high oil prices, or new
technologies. Political events or changes like government-turnover, or policy
innovations in other countries can play a similar role. The role of new, some-
times shocking informations (from publications like The Limits to Growth to
events like the Chernobyl accident) has often been mentioned in this context.
The situative factors explain not only the full use of a given capacity to play a
pioneer role in environmental policy. Today they are especially important if it
comes to explain a political roll-back, or the under-exploitation of a given
capacity. Examples are the US under Reagan and Bush (jun.), Japan during the
bubble crises after the mid 1980s (Dryzek et al., 2002, Desai, 2002), United
Kingdom under Margret Thatcher, or more recently Denmark and The Neth-
erlands after a government-turnover. Sweden, on the other hand, experienced
a comeback as environmental pioneer in the late 1990s under Gran Persson.
We need more comparative research about such policy changes leading to an
abandonment of pioneer roles. Again the state of the economy is the most
important explanation. But it seems also plausible that pioneer roles of ad-
vanced countries can finally lead to frustration and overextension. Perceived
60
over-regulation or competitive disadvantages especially in times of crisis

are common to all the cases mentioned. Changes in government have been
another factor, but are closely connected with such perceptions. Self-
destroying success may be another, paradoxical reason for giving up a pioneer
role in environmental policy: Clear improvements where problems are most
visible (e. g. water, or air pollution) can weaken the support for further ambi-
tious measures. All this may lead to a break down of the coalition between
proponents of environmental objectives and industrial modernisers. This is
the lesson that can be drawn from several former pioneers: The coalition of
ecological modernisers is no stable factor.
There are, on the other hand, also limits for a roll-back within highly devel-
oped former pioneer countries, and this good news may have to do with both,
the still existing high environmental capacity of such countries and the
mechanisms of competition for innovation which have been described above
The US, for example, are still a strong exporter of environmental technologies.
And there is also the empirical fact of more than one comeback (UK, Sweden,
Japan, Germany), which can be understood as the renewed full use of a given
capacity.
3.4 Issue-specific Factors
Andersen and Liefferink (1997) have differentiated between country-specific

factors (which we described) and issue-specific factors of national pioneer
behaviour. Pioneer roles are typically limited to those issues for which a coun-
try has acquired a competence in the past. A path dependency of environ-
mental policy arises also from the perception from abroad: Countries that
served as an example in the past are likely to be under closer observation from
other countries.
I have not discussed individual issue areas in environmental protection. But it
is clear that issues the kind of problems as well as of solutions make a dif-
ference. The problem may be highly visible or latent (silent deterioration). The
polluter may be strong or weak. The most important factor, however, is the
availability (or lack) of a marketable technical solution. I have stressed the
point that environmental innovations can profit from the fact that the envi-
ronmental issue has become an important dimension of the competition for
innovation. But this advantage in times of economic globalisation is restricted
to technology-based policies.
61
Martin Jnicke
3.5 Strategic factors
Whether and how a given environmental capacity and a situative policy win-
dow are used depends on strategic factors, on will and skill. There are several
options for pioneers: They may be only forerunners, reacting to domestic
problems or certain market opportunities; in this case it is the adoption of the
policy innovation by other countries or the EU that determines the pioneer
role. Or they may act as active pushers (Andersen and Liefferink, 1997, Adre-
sen and Agrawala, 2002), transferring their policy innovation to the higher
level, e.g. the EU. Sweden, the Netherlands, Denmark, Germany and the UK
have combined both strategies several times. Germany e. g. pushed the policy
for renewable energies by a special international conference (2004).
4 Setting the Trend

As mentioned above, pioneers in environmental policy are more than first-
movers. I have characterised them in addition not only by the plurality of en-
vironmental policy innovations, but also by the international visibility of the
country. The reputation of the pioneer country within the international com-
munity is another important factor. Reputation or intellectual leadership is
different from power-based leadership (Andresen and Agrawala, 2002) and the
reputation of being a policy innovator may have a special attractiveness for
smaller countries.
National regulations do influence international markets and the global econ-
omy needs at least some harmonisation. Policy convergence and regulatory
trends therefore have a strong basis. The harmonisation of national regula-
tions often comes from international agreements. But the evolution of regula-
tory trends seems to a large degree to be an independent process. Here also
the design of the policy innovation is important. In order to fit an interna-
tional regulatory trend, the environmental policy innovation must fulfil cer-
tain conditions. In a study on environmental lead markets and their support-
ing policies we found the following factors to be of particular importance
(Jacob et al. 2005): The environmental innovation must be transferable and
useful for other countries. It should relate to global environmental needs.
Another important factor is the close relationship of a national policy innova-
tion to the international policy agenda (e.g. the Kyoto Protocol). It also must
have demonstrated to be (at least with high probability) effective and accept-
62
able. This demonstration effect again depends to a certain degree on the visi-
bility of the country. The regulatory trend also depends on its anticipation by
adopting countries. Not only proactive enterprises anticipate regulations
(Jacob, 1999). Countries too and especially export-oriented economies tend
to orient themselves towards future regulatory developments. If there are
competing policy designs for a certain environmental problem, the adopters
tend to be cautious as long as the prognosis about the finally converging pol-
icy design is insecure (Busch and Jrgens, 2005). Its should also be underlined
that each policy adoption has its own national history of success if there is no
international agreement. The adoption depending not only on policy capaci-
ties and on general environmental conditions of a country but also on
situative factors such as catastrophic events, government changes, technical
developments or sudden changes of energy prices. The main message from
the lead market research is, that the transfer activity of the pioneer country
plays a minor role compared with this internal logic of adoption.
5 Conclusions
Environmental policy convergence resulting from policy diffusion seems to be
influenced not only by functional imperatives of the world market but also by
a certain collective behaviour of national governments, where a limited num-
ber of pioneer countries at some point in time serve as an example for others
in furthering environmental policies. They demonstrate the political and eco-
nomic feasibility of certain solution, thereby legitimating subsequent adop-
tions of the same policy innovation in other countries. Policy convergence
results from the fact, that, as rule, it is one single solution that is preferred by
a large group or the majority of countries. Often by merely existing, pioneers
further the spread or uptake of advanced environmental policy concepts. The
process of adoption - having its own logic (which is beyond this article)
seems to be characterised by a certain regulatory conformism. Seen in this
perspective policy convergence seems to result not least from a group behav-
ior of national governments, where pioneer countries play the (intellectual)
leadership role under conditions of uncertainty.
A necessary condition for becoming a pioneer is a high capacity for environ-
mental policy making. This encompasses the institutional, economic and
informational opportunities and the relative strengths of the green advocacy
coalition of a country. While these factors refer to relatively stable factors of
63
Martin Jnicke
policy making, this explains not why sometimes pioneer roles are given up.
Additional determinants have to be taken into consideration to explain the
ups and downs in environmental policy. To explain this, an analytical frame-
work has been proposed that encompasses also situative factors, strategic fac-
tors and actor constellations, especially the coalition between organised pro-
ponents of environmental objectives and economic modernisers. This coali-
tion of ecological modernisers may break down in times of economic crisis, or
as an effect of overstraining the existing consensus or even as a paradox effect
of visible improvements of the environment. But the existing capacity of a
country together with certain incentives of the international system will
prevent an excessive roll-back and provide chances for a comeback (as in the
cases of Sweden and Britain).
The political and economic framework conditions of globalisation may some-
times bear impediments for pioneers, but at the same time they also provide
incentives for certain advanced countries to take over national pioneer roles
at least in the field of environmental policy. The existing opportunities, how-
ever, seem to be restricted to technology-based solutions. And so far they are
restricted to highly developed OECD countries often EU member states
with a strong position in the competition for innovation. Whether pioneering
strategies become viable for developing countries as well should be, however,
subject of further investigation.
References
Andersen, M.S. / Liefferink, D. (1997): European Environmental Policy. The Pionieers.
Manchester: Manchester University Press.
Andersson, M. / Mol, A. P. J. (2002): The Netherlands in the UNFCCC Process Leader-
ship between Ambition and Reality, International Environmental Agreements:
Politics, Law and Economics, 2, 49-68.
Andresen, S. / Agrawala, S. (2002): Leaders, Pushers and Laggards in the Making of the
Climate Regime. Global Environmental Change 12, 41-51.
Beise, M. (2001): Lead Markets. Country Specific Success Factors of the Global Diffu-
sion of Innovations. Heidelberg und New York: Physica Verlag.
Bennett, C. J. 1991. What is Policy Convergence and What Causes it? British Journal of
Political Science 21 (2): 215-233.
Bernauer, Th.. 2000. Staaten im Weltmarkt: Zur Handlungsfhigkeit von Staaten trotz
wirtschaftlicher Globalisierung. Opladen: Leske and Budrich.
Busch, P.-O., Jrgens, H. (2005): Globale Diffusionsmuster umweltpolitischer Innovati-
onen. In: Tews, Kerstin / Jnicke, Martin (Hrsg.): Die Diffusion umweltpolitischer
Innovationen im internationalen System. Wiesbaden: VS - Verlag fr Sozialwissen-
schaften, S. 55-139
64
Cameron, David R. (1978): The Expansion of the Public Economy: A Comparative Analy-
sis, American Political Science Review, Vol. 72, N0. 4.
Desai, U. (Ed.) (2002): Environmental Politics and Policy in Industrialized Countries.
Cambridge, MA: MIT Press.
Drezner, Daniel W. (2001), Globalization and Policy Convergence. The International
Studies Review, 3 (1), 53-78.
Dryzek, J. S. / Hunold, Ch. / Schlosberg, D. et a. (2002): Environmental Transformation
of the State: the USA, Norway, Germany and the UK. Political Studies 50, 659-682.
Eliste, P./Fredriksson, P.G. (1998): Does Open Trade Result in a Race to the Bottom?
Cross Country Evidence. Unpublished MS (World Bank).
Esty, D. C. , Levy, M. A., Srebotnjak, T., de Sherbinin, A. (2005): Environmental Sustain-
ability Index: Benchmarking National Environmental Stewardship. New Haven,
Conn.: Yale Center for Environmental Law & Policy.
French, D. A. (2002): The Role of the State and International Organizations in Reconcil-
ing Sustainable Development and Globalization. In: International Environmental
Agreements: Politics, Law and Economics 2: 135-150.
Garrett, G. (1998): Partisan Politics in the Global Economy, Cambridge: Cambridge
Univ. Press.
Harvard University and World Economic Forum (ed.): The Global Competitiveness
Report 2000. New York, Oxford: Oxford University Press.
Hemmelskamp, J., K. Rennings, F. Leone, (Eds.) 2000. Innovation-oriented Environ-
mental Regulation. Theoretical Approaches and Empirical Analysis. ZEW Econo-
mic Studies 10, Physica-Verlag, Heidelberg.
Hritier, A./Mingers, S./Knill, C./Becka, M. (1994): Die Vernderung von Staatlichkeit in
Europa Ein regulativer Wettbewerb: Deutschland, Grobritannien, Frankreich.
Opladen: Leske + Budrich.
Jacob, K. (1999). Innovationsorientierte Chemikalienpolitik. Politische, soziale und
konomische Faktoren des verminderten Gebrauchs gefhrlicher Stoffe. - Mn-
chen: Herbert Utz Verlag.
Jacob, K. und Volkery, A. (2002): Environmental Policy Integration (EPI) Potentials
and Limits for Policy Change through Learning. Paper presented at the 2nd Ber-
lin Conference on the Human Dimensions of Global Environmental Change.
Berlin, 6.-7. Dezember 2002.
Jacob, K., Beise, M., Blazecjzak, J. Edler, D., Haum, R., K. Jnicke, M., Lw, Th. Ren-
nings, K., Petschow, U. (2005): Lead Markets for Environmental Innovations. Ber-
lin, Mannheim: ZEW.
Jnicke, M, (1984): Umweltpolitische Prvention als kologische Modernisierung und
Strukturwandel. IIUG discussion papers 84-1: Wissenschaftszentrum Berlin
Jnicke, M. (1990): Conditions for Environmental Policy Success: An International
Comparison. The Environmentalist, 12 (1), 47-58.
Jnicke, M. (2000): Ecological Modernization. Innovation and Diffusion of Policy and
Technology. FFU Report 00 08. Berlin: Forschungsstelle fr Umweltpolitik/Freie
Universitt Berlin.
Jnicke, M. (2002): The Role of the Nation-state in Environmental Policy: The Challen-
ge of Globalisation. FFU-Report 02-07. Berlin: Forschungsstelle fr Umweltpo-
litik / Freie Universitt Berlin.
Jnicke, M. und Jacob, K. (2002): Ecological Modernisation and the Creation of Lead
Markets. FFU Report 02-03, Freie Universitt Berlin. (also in: Global Environ-
mental Politics, Vol. 4 (2004), No. 1).
65
Martin Jnicke
Jnicke, M., Blazecjzak, J. et al. (2000): Environmental Policy and Innovation: an Inter-
national Comparison of Policy Frameworks and Innovation Effects. In: Hemmels-
kamp, J.; Rennings, K.; Leone, F. (Hg.): Innovation-oriented Environmental Regula-
tion. Theoretical Approaches and Empirical Analysis. Heidelberg, New York:
Physica. - 125-152.
Jnicke, M., Weidner, H. (Eds.) (in coll. with Jrgens, Helge) (1997): National Environ-
mental Policies: A Comparative Study of Capacity-Building. Berlin etc.: Springer.
Kern, K.; Jrgens, H. und Jnicke, M. (2001): The Diffusion of Environmental Policy
Innovations: A Contribution to the Globalisation of Environmental Policy. - Dis-
cussion Paper FS II 01302. Berlin: Social Science Research Center.
Kingdon, J. W. (1995): Agendas, Alternatives, and Public Policies. 2. Ed. New York:
HarperCollins.
Kitschelt, H. (1983): Politik und Energie. Frankfurt/M., New York: Campus.
Kok, W. (2004): Facing the Challenge. The Lisbon Strategy for Growth and Employ-
ment. Report from the High Level Group chaired by Wim Kok. Luxembourg: Eu-
ropean Communities.
Levi-Faur, D. and Jordana, J. (Eds.)(2005): The Rise of Regulatory Captalism: The Global
Diffusion of a New Order. The Annals of the American Academy of Political and
Social Science, Vol. 598, March 2005.
OECD Organisation for Economic Cooperation and Development (1994): Capacity
Development in Environment. Paris: OECD.
Porter, M. E. und van der Linde, C. (1995): Green and Competitive: Ending the Stale-
mate, Harvard Business Review, September October: 120-134.
Rose, R. (1993): Lesson-Drawing in Public Policy: A Guide to Learning across Time and
Space. Chatham, NJ: Chatham House.
Sabatier, P. A. (Ed.) (1999): Theories of the Policy Process. Boulder, Co.: Westview Press.
Scharpf, F. W. (1999): Regieren in Europa. Effektiv und demokratisch? - Frankfurt, New
York: Campus.
Schwab et al. (2003) (Eds.): The World Competitiveness Report 2002-2003: World Eco-
nomic Forum. Oxford: Oxford Univ. Press.
Scruggs, L. (2003): Sustaining Abundance. Environmental Performance in Industrial
Democracies. Cambridge: Cambridge University Press.
Sturm, A., Wackernagel, M. und Mller, K. (2000): The Winners and Losers in Global
Competition. Why Eco-Efficiency Reinforces Competitiveness: A Study of 44 Na-
tions. - Chur, Zrich: Regger.
Tews, K., (2005): The Diffusion of Environmental Policy Innovations: Cornerstones of
an Analytical Framework. European Environment, Vol. 15, No. 2, pp. 63-79.
Tews, K., Busch, P.-O. und Jrgens, H. (2003): The Diffusion of New Environmental
Policy Instruments. - European Journal of Political Research, 42(4) .
Vogel, D. (2001): Is There a Race to the Bottom? The Impact of Globalization on Na-
tional Regulatory Policies. The Tocqueville Review/La Revue Tocqueville 22 (1).
Volkery, A. und Jacob, K. (2003): Pioneers in Environmental Policy Making. Konferenz-
bericht. FFU-Report 03-04.
Wallace, D. (1995). Environmental Policy and Industrial Innovation. Strategies in
Europe, the US and Japan. - London: Earthscan.
Weidner, H. und Jnicke, M. (Hrsg.) (2002): Capacity Building in National Environ-
mental Policy. A Comparative Study of 17 Countries. Berlin (u.a.): Springer.
Wheeler, D. (2001): Racing to the Bottom? Foreign Investment and Air Pollution in
Developing Countries. Journal of Environment and Development, 10 (3). 225-245.
World Bank (2003): World Development Report 2003, Washington, D. C.
66
Modelling Capacities for Environmental Policy-
Making in Global Environmental Politics1
KLAUS JACOB
AXEL VOLKERY
Abstract
Since the early days of environmental policy in the 1970s, international policy
development has been driven by pioneer countries that set regulatory trends.
The ongoing diffusion of regulatory innovations indicate that national envi-
ronmental policy-making still is an important driving force of international
policy development.
Despite an array of case studies, comparative environmental policy analysis
still lacks theoretical and empirical scrutiny in understanding the factors that
influence the innovation behaviour of nation-states, although the relevance for
international policy development is often acknowledged. Based on conceptual
models on the capacities of countries to introduce environmental policy inno-
vations, we decompose central parts into quantified variables. This allows for
an empirical verification by using formal methods including statistical model-
ling. We use regulatory innovations in climate change policies in OECD coun-
tries as the dependent variable and aim at seeking to find key variables that
might explain why countries take over or abandon pioneering roles. Unlike
previous large N studies that focus on outcome or impact variables, we find a
great importance of political factors while the economic performance of a
country has only little explanatory power.
1
Paper presented at the 46th Annual International Studies Association Convention,
March 1-5, 2005, Hilton Hawaiian Village
67
1 Introduction
There is a controversial debate on the discretion and influence of national
policy-making in global environmental politics. Some scholars argue that state
autonomy and capacity is constrained by the processes of economic integra-
tion and internationalization of politics. Other scholars point to processes of
diffusion of regulatory instruments and conclude that national policy-making
continues to be a central driving force of policy development (see for an over-
all assessment Pierre and Peters, 2000, Bernauer, 2000). Environmental policy
in particular is characterised by broad processes of diffusion of regulatory
innovations (Busch et al., 2005, Jordan et al., 2003). The observation that inno-
vative regulation spreads around the globe (Levi-Faur and Jordana, 2005)
raises, however, another question: What factors affect the decision to go ahead
with new regulation in an international context?
Despite an array of studies, comparative environmental policy analysis still
lacks theoretical and empirical scrutiny in understanding the factors that in-
fluence the innovation behaviour of nation-states, although the relevance for
international policy development is often acknowledged. Whereas quantitative
studies have become more common in International Environmental Studies
recently (see Sprinz and Wolinsky-Nahmias, 2004), quantitative studies in
comparative environmental policy analysis have focused mainly on environ-
mental outcomes and impacts (Scruggs, 1999, Scruggs, 2003, Jahn, 1999, Jahn,
1998, Crepaz, 1995, Jnicke et al., 1992) or on compliance with international
regimes (Miles et al., 2002, Helm and Sprinz, 2000). Explaining policy outputs
on the national level is up to now largely a matter of case studies or qualitative
small-n studies that seldom focus on a stringent verification of variables (see
for an exception: Ringquist, 1993).
With this contribution, we aim to explore in how far large-N studies are suit-
able for an analysis of the determinants of pioneering environmental policy.
Taking innovative regulation from climate protection policies as an example
and drawing on the concept of environmental capacity (see Jnicke, 1996,
Jnicke and Weidner, 1997, Weidner and Jnicke, 2002) we seek to find key
variables that explain the political innovation behaviour of OECD-countries by
using formal methods inclusive the testing of statistical modelling on the
basis of regression analysis. We define innovation behaviour as the rate of first
introduction or early adaption of environmental innovations in OECD-
countries. What kind of similarities can be found for the countries that are
68
Modelling Capacities for Environmental Policy-Making in Global Environmental Politics
innovative leaders in climate protection? Are there any structural precondi-

tions? Or is such an innovation behaviour first and foremost dependent on
unstable factors related to the specific context and situative factors?
Focusing on policy outputs without considering their effectiveness does not
allow for checking implementation deficits, symbolic policies, or the possibil-
ity that regulations only fix technological or economic standards. Standards
may be cancelled in case no outcomes are achieved rather than putting addi-
tional efforts in their implementation. The abandonment of CO2-objectives in
a number of countries is just an example for this (Binder and Tews, 2004).
However, despite these shortcomings, policy outputs are an often necessary
condition for improvements in environmental quality. To deduce the effec-
tiveness of policies from measuring outcomes is problematic as well, since
policy outcomes and impacts are influenced by many other variables, in par-
ticular technological improvements and economic structural change. This
approach is likely to overestimate policy effects, while a simultaneously con-
sideration of political, economic and technological effects in statistical analy-
sis requires a large number of cases that are often not available in cross na-
tional studies.
This chapter is organised as follows: In the next section, we offer a very brief
background discussion on benefits and strategies of national front-running
in environmental policy and sketch out the concept of environmental capacity.
Following, we introduce the dependent variables, namely an aggregation of the
rank in introduction of CO2-reduction goals, CO2-/Energy taxes, energy effi-
ciency standards, quotas and feed-in tariffs for renewable energies and list the
related pioneers. We proceed by developing a broader set of 27 independent
variables and specific hypotheses to validate their influence. These variables
serve to operationalise the rather abstract conceptual models of environmental
capacity. Afterwards we present first comparative research findings. In a first
step we present results from a bivariate calculation of correlations between the
variables. In a second step, we analyse whether the variables with the highest
correlation analysis can sufficiently explain if a country is rather early or late
in adopting new environmental policy measures. We use a discriminatory
analysis to test the explanatory power of these variables. This contribution has
been written at the start of a comprehensive research project on modelling
capacities for environmental policy-making. It is a first assessment of possible
ways to cope with our research question. We thus conclude with an outlook
for further research.
69
2 Benefits and strategies of national innovation

behaviour in environmental policy
National innovators have always been an important force of international pol-
icy development (OECD, 2002, Desai, 2002, Weidner and Jnicke, 2002). In the
academic literature, several motives are discussed that might explain why uni-
lateral adoption of stringent domestic environmental policies can be rational
under certain circumstances:
Avoiding adjustment costs of international regulation: Countries design
their domestic regulation with a view to the possible impact on the inter-
national processes of policy making and present their regulation as a
model for standard regulation. There is an incentive to be the first: if the
own regulative model becomes accepted as the basis for the international
regulation, costs of subsequent legal adjustments are minimised and com-
petitive disadvantages for domestic industries diminished because all oth-
ers have to take similar measures (Liefferink and Andersen, 1998, Hritier
et al., 1996).
Gaining economic advantages in global competition: The so called Porter
hypothesis argues that a strict environmental policy can improve competi-
tiveness of firms and sectors (Porter, 1990; Porter and van der Linde, 1995;
also Ashford and others, 1979): First, a competitive advantage might be
achieved in case of a strict environmental policy which, at a later stage, dif-
fuses internationally. Secondly, strict environmental policy might lead to
innovation in the polluting industry itself that compensates or even over-
compensate for the costs of adaptation (free-lunch-hypothesis, Taistra,
2001).
Gaining leadership in international policy development: Medium or small
states that do not possess real political strength in the global order or eco-
nomic power can nevertheless aspire to shape the agenda of international
politics by leadership through unilateral action (setting a good example) in
combination with social persuasion and instrumental leadership (Gupta
and Ringius, 2001, Underdal, 1994, Young, 1991).
Skou-Andersen and Liefferink (Liefferink and Andersen, ) have developed a
typology according to which a state can act as a pioneer in four ways, such as
(a) the pusher-by-example that adopts policies with an explicite view to shap-
ing the agenda of international policy-making and (b) the constructive pusher
that achieves policies incrementally and for domestic reasons, but neverthe-
70
less seeks a constructive compromise at the international level. The third type
is (c) the defensive-forerunner that deliberatively adopts its policies but pushes
only indirectly, whereas the fourth type is (d) the opt-outer that maintains or
adopts a stricter regulation if more lax standards are about to be institutional-
ised at the international level.
Coming from another corner of the playing field, Gupta and Grubb (2000)
distinguish structural, directional and instrumental leadership in interna-
tional negotiations as possible forms of engagement strategies. Structural
leaders are states with large material resources and a strong position in the
global order which gives them the possibility to lead bargaining processes and
prompt other actors to accept measures by constructive use of their power.
Directional leaders are states that try to change the perceptions and beliefs of
others through demonstrating by good domestic action that goals are achiev-
able and solutions available. Instrumental leaders are states that use their ne-
gotiation skills to lead international negotiations to mutually beneficial re-
sults, especially by issue-linkage and building of issue-based coalitions.
3 Determinants of environmental policy-making in

OECD-countries
We start our analysis by drawing on the work done by Martin Jnicke and his
collaborators that advanced the concept of environmental capacity-building
(OECD, 1994) into a broad framework for explaining success conditions of
environmental protection in industrialised countries (Jnicke 1996, Jnicke
and Weidner, 1997, Weidner and Jnicke, 2002). The success of environmental
protection is, in the view of Jnicke et al., not dependent on the choice of the
right instruments, but on the complex interaction dynamics between quite
different factors: perceived environmental problems lead actors to develop
and implement strategies, against the opposition of target groups, under sys-
temic framework conditions and varying situative contexts (see figure 2,
Jnicke, 1997: 4).
Jnicke (1997: 8) distinguishes between capacity, as a relative stable condition
of action, and its utilisation which leads to the subjective and situative aspect
of environmental policy. The environmental capacity of a country, in this
perspective, is constituted by the strength, competence and configuration of
the governmental and non-governmental proponents of environmental pro-
71
tection and the specific cognitive-informational, political-institutional and

economic-technological framework conditions. The utilisation of capacities
depends on the strategy, will and skills of the proponents and on the particu-
lar situative opportunities. These factors have to be related to the kind of the
problem, i.e. its urgency as well as the power and resources of the target
groups and the specific economic performance.
Fig. 1: Determinants of Environmental Policy Performance
Structural Context
Informational Context
Situative Context
Institutional Context
Actors
Strategies
Environmental interests
Polluters interests
Economic Context
Structure of
Problems
Economic Performance
Source: Jnicke, 1997
Which factors empower environmental policy? Jnicke (2003, Jnicke, 1997)

mentions first of all the establishment of sufficiently equipped and empow-
ered governmental actors like environmental agencies. Weak and isolated
ministries will not win political battles but strong ministries with the compe-
tency for integrated planning might will. Media coverage is also of decisive
72
importance. Strong environmental NGOs and a large number of green enter-

prises are another main factor. In many cases, new innovative regulation was
brought to life by a strong green advocacy coalition comprising agencies,
NGOs and green enterprises (Jnicke, 2005).
Regarding the systemic framework conditions, the degree of environmental
knowledge and public awareness are considered to be of importance: A coun-
try with national eco-balances and many environment research institutes will
dispose of better possibilities for targeted and innovative environmental pro-
tection than a country with scattered data and no systematic research on pol-
lution problems. Highly influential is also the respective participative and
integrative capacity of a country, i.e. a style of governance that does not restrict
participation to general elections but organises it in a broad and consensual
way but also strong institutions for environmental policy integration. The
degree of corporatism is also described as influential. Economic growth, trade
openness and levels of income are further key variables: Wealthier nations are
characterised by high pollutions loads, but they also have more resources and
a better technological potential to invent new technologies for environmental
protection and are often characterised by higher levels of environmental mo-
bilization.
The concept applies a broad framework of actor-centred and institutional
variables which are related to the underlying problem structure. It is a helpful
systematic compilation of success conditions that helps us avoiding a too nar-
row interpretation of single factors. The concept covers, however, a rather
large set of meta-variables such as integrative capacity or participatory capacity
that are qualitatively described but not explicitly defined. As Scruggs has
rightly noted, the approach misses microfoundation linking causes and ef-
fects (Scruggs, 2003: 130): it is not explained why single factors are conducive
to the solving of environmental problems and it is often not clear, what the
single capacities exist of and what they directly contribute to the solving of
the problem. In other words, despite the claim that single capacities are
important there is no assessment of the specific impacts and no control for
competing explanations (Scruggs, 2003: 130).
Secondly, it is stated that common political system variables such as composi-
tion of government and party system, federalism or bicameralism have low
explanatory power but these findings are not explicitly discussed. Thirdly, it is
mentioned that all kind of national rule-making has to be seen in an interna-
tional context but it is not exposed in greater detail in how far requirements of
73
international regimes, supranational regulation or international organisations

and transnational epistemic communities impact on national policy-making.
This critique serves as a good starting point for the further elaboration of the
concept. We will not address all critical points in the same detail. Instead, we
will concentrate on the decomposition of single components of the conceptual
framework to allow for a more systematic and detailed assessment of capacity-
related factors that affect national innovation behaviour in environmental
policy. We distinguish 27 variables for which we assume a positive influence
on the national innovation behaviour in environmental policy which is then
tested regarding the correlation. Before we continue with explaining the inde-
pendent variables we shall shortly introduce the dependent variable.
3.1 The dependent variable
As a dependent variable we aggregated the ranking of the introduction of four

policy innovations in climate protection policies. The regulatory innovations
used in this analysis comprise:
CO2-reduction targets
CO2/Energy taxes
Quotas for renewable energies
Feed-in tariffs for renewable energies
These innovations cover the spectrum of new regulatory approaches in cli-
mate protection in the 1990s, i.e. target-oriented approaches and incentive-
based approaches. The choice of different policy instruments and the aggrega-
tion of their introduction years levels out different national preferences re-
garding single policy instruments. Data on the first introduction and diffu-
sion of the regulatory innovation are taken from a dataset on the diffusion of
22 environmental policy innovations in 43 countries that was compiled in
projects at the Environmental Policy Research Centre Berlin (Busch et al.,
2005, Tews et al., 2003, Binder and Tews, 2004).
Setting domestic targets for CO2-reduction has always occurred as an interplay
between the international and national level. As early as in 1988, the Toronto
Conference set out the goal of reducing CO2-emsissions by 20 percent until
2005. In 1989, Norway and the Netherlands were the first countries to declare a
similar domestic goal, i.e. to stabilize CO2-emissions until 1995 compared to
the levels of 1989. They were followed by twelve other countries in 1990 that
74
adopted domestic CO2-reduction targets that either Tab 1: Mean rank in

aimed at a stabilization of CO2-emissions or at a introduction of four
reduction of emissions (see Binder and Tews, policy innovations for
2004).2 climate protection
Country Rank
Taxes on petroleum or fuel oil have been a standard
Netherlands 1,50
tool since the early 1970s, but were introduced
Denmark 2,75
mainly for fiscal reasons. Taxes with an explicit
Germany 4,25
ecological motivation and the aim of reducing CO2-
Austria 4,50
emissions through raising costs of energy produc-
Poland 4,75
tion and use were invented, however, only two dec-
Sweden 5,00
ades later. Finland was the first country that intro-
Switzerland 5,00
duced a CO2/Energy-tax in 1990, followed by Nor-
Norway 5,25
way and Sweden in 1991, Denmark and the Nether-
Italy 5,50
lands in 1992 and Belgium in 1993 (Busch and Jr-
gens, 2005). Belgium 5,75
Australia 6,00
Quotas and feed-in tariffs for renewable energies Finland 6,00
share the aim of increasing the proportion of elec- UK 6,25
tricity from renewable energies in the overall elec- France 6,50
tricity mix. They deploy, however, a different regu- Hungary 6,50
latory approach. Quota models determine a specific Japan 6,50
amount of electricity from renewable energies and Canada 7,00
ensure compliance over a system of tradeable cer- Greece 7,00
tificates. Feed-in tariff models, however, determine New Zealand 7,00
a fixed price for electricity from renewable energies Slovak Republic 7,50
that producers obtain when they feed their electric- Ireland 7,75
ity into the grid. Portugal was the first country to Luxembourg 7,75
adopt a feed-in tarif model in 1988, followed by the Spain 7,75
Netherlands (1989), Germany (1990) and Switzerland USA 7,75
(1991). Quota models were introduced in 1998, by Iceland 8,00
the Netherlands, followed by Denmark and Italy in Czech Republic 8,50
1999 and Austria and Australia in 2000 (Busch and Portugal 8,50
Jrgens, 2005). Korea 9,00
Mexico 9,00
Turkey 9,00
2
These countries were Denmark, Germany, France, Japan, Canada, Austria, Switzer-
land, Australia, Luxemburg, New Zealand. Poland and the United Kingdom.
75
Out of the 30 countries that have been analysed, 14 have introduced feed in
tariffs beginning in 1989, 10 deployed an energy tax (from 1990 on), 10 adopted
quota models (from 1998), and 24 countries disposed CO2-related objectives
(firstly introduced in 1989). 3 out of the 30 countries did not use any of these
instruments (see table 1 for the ranking of the countries).
3.2 The independent variables
The rather broad conceptual framework of environmental capacity needs to be

further operationalised for our analysis. Indicators are required that are meas-
urable for several countries and that represent the theoretical concepts, e.g.
the openness of a political system. We hence have to rely on second best indi-
cators that might capture only selected aspects. In order to level out the short-
comings of single indicators we conducted a broad literature search for data.
We selected the variables with a view to operationalising the different capac-
ity-related aspects of the model, i.e. we left out situative and strategic factors
due to the problems of operationalisation and concentrated on actor-related
and economic, political-institutional and informational-cognitive factors.
Variables are split into seven main clusters (see table 2).
We gathered data from different sources. A score for corporatism is taken
from Siaroff (1999). For the other political-institutional variables we used data
from Scruggs (2003) and Lijphart (1999). Structural economic variables are
based on data from the OECD (2004), whereas we used data from the 2005
Environmental Sustainability Index for most of the actor-centred, interna-
tional and governance-related variables (Esty et al., 2005). An overview on data
sources is provided in the annex. Availability and consistency of data is a prob-
lem which we will address throughout the explanation of variables and re-
search findings.
76
Tab. 2: Variables that positively influence national innovation

behaviour of countries
Institutional veto player
1) High degree of corporatism
2) High score on unitarism scale
3) low score on bicameralism scale
4) strong role of government
5) Low score on the Federal/Unitary scale of Lijphart (1999)
6) Governmental Effectiveness
Openness of the political system
7) Low electoral threshold
8) Low degree of disproportionality in the electoral system
9) Large number of parties in the parliament
10) High probability of coalition government
11) High number of green voters
Influence of green NGOs
12) strong environmental group membership (in relation to the total population)
13) high number of IUCN member organisations
14) high share of Local agenda 21
Influence of green business
15) High number of ISO14001 certified business
16) Low share of dirty industries of GDP
17) Low rate of coal consumption
18) High score on Dow Jones Sustainability Group Index
Supportive economic framework conditions
19) High GDP per capita
20) High rates of economic growth
21) Low rates of unemployment
Supportive innovation system
22) High level of spending for renewable energy per capita
23) High score of knowledge creation
24) High score on innovation index
Strength of international engagement of countries
25) They are more often members of IGO
26) provide a higher contribution to international aid and environment projects
27) participate more often in environmental agreements
77
3.3 Bivariate Analysis
Institutional Veto-Structure: We are in particular interested in the number of

institutional veto-players involved since a large number of veto-players in-
creases the difficulty of departing from the status-quo and thus national pio-
neering behaviour in environmental policy. Most of the variables are self-
explanatory. The variable scoring on the Federal/Unitary scale developed by
Lijphart (1999) is an aggregated score that incorporates all variables mentioned
in this section but adds other aspects as well, e.g. the strength of a central
bank. The variable governmental effectiveness is based on an indicator of the
World Bank that comprises the "quality of public service provision, the quality
of the bureaucracy, the competence of civil servants, the independence of the
civil service from political pressures, and the credibility of the governments
commitment to policies." (Kaufmann et al., 2004). We have to treat this indica-
tor with caution since a high degree of governmental effectiveness could also
mean that other departments are in a position to oppose ambitious environ-
mental policy measures. We did not find, however, a satisfying indicator for
measuring environmental administrative capacity yet and have to use this
indicator as a starting point.
Tab. 3: Bivariate Analysis for the factor group

Institutional Veto-Structures
Variable Correlation Significance Observations (N)
Pioneers have a high degree of

1) -,639** ,001 23
corporatism (INTEGRATION)
High score on unitarism scale
2) -,073 ,781 17
(FEDERALISM)
low score on bicameralism scale
3) -,192 ,460 17
(BICAMERALISM)
Strong executive
4) -,040 ,878 17
(EXECUTIVE)
Low score on the Federal/Unitary scale
5) -,198 ,365 23
of Lijphart (1999) (FED_UNITARY)
Governmental Effectiveness
6) -,570** ,002 29
(GOV_EFFECTIVENESS)
78
Corporatism correlates significantly with the score in pioneering behaviour.

We also find a significant correlation between the indicator of governmental
effectiveness and the score of pioneering behaviour. The other variables, i.e.
bicameralism, strength of executive, federalism and federalism/unitarism
score do not reveal a significant correlation to the score of pioneering behav-
iour. This holds also true for the position and strength of the executive within
the political system. The values of these variables are almost evenly distributed
among pioneers and latecomers. It has to be noted, however, that data for
these variables is available for 17 OECD countries only (Federalism/Unitary
Index for 23 countries) and that additional data might reveal a different pic-
ture. Up to now, our data suggest that a large number of constitutional and
societal veto players do not automatically prevent governments from adopting
new and innovative regulations.
Openness of the Political System: From these variables we can draw conclu-
sions on the degree of difficultness for environmental interests to get access to
the parliamentary and executive decision making process. However, the open-
ness to the decision making process is not limited to environmental propo-
nents only, hence a careful analysis is required.
Tab. 4: Bivariate Analysis for Group Factors

Openness of the political system
Pioneers have a low electoral

7) ,634** ,006 17
threshold (ELEC_THRESHOLD)
Low degree of disproportionality in
8) ,424* ,044 23
the electoral system (DISP_ELEC)
Large number of parties in the
9) -,435* ,038 23
parliament (PARL_PARTIES)
High probability of coalition
10) ,433 ,082 17
government (SINGLEPARTY_GOV)
High number of green voters
11) -,487* ,047 17
(GREEN_VOTES)
The empirical analysis reveals highly significant correlations for this group of
variables. Countries that early introduce environmental policy measures are
characterised by a lower electoral threshold, a lower degree of disproportional-
79
ity in the electorate system, a higher number of parties in their parliaments

and a higher number of green votes. The correlation with the number of par-
ties in government is not significant. Our data show that in our sample pio-
neering countries are more often governed by a coalition government rather
than a single party government. Again, data is available only for 17 countries
(electoral threshold, green votes and single party government) resp. 23 coun-
tries (disproportionality and number of parliamentary parties).
Influence of green NGOs: There is no real indicator for measuring the influ-
ence of green NGO across OECD-Countries. We use membership data of envi-
ronmental groups and IUCN member organisations data for a rough estima-
tion of the strength and influence of green NGO. The number of Local Agenda
21 is used complementarily determine the influence of local citizens groups.
This indicator might furthermore give some hints about the strengths of
green governmental actors on the sub-national level that might exert political
pressure on actors on the national level.
Membership rates of environmental groups and the share of local Agenda 21
show a strong correlation with the score of pioneers whereas a significant
correlation with the number of Local Agenda 21 is only computable if outliers
are excluded. This holds also true for the number of IUCN-member organisa-
tions: this variable did not correlate significantly in the first run .Only when
we excluded the outliers from analysis, we observed a significant correlation.
Tab. 5: Bivariate Analysis for the Factor Group

Influence of Green NGO
Pioneers have a high number of

12) members in environmental groups -,760** ,000 18
(ENV_GROUPS)
High number of IUCN member
13) -,535** ,003 26
organisations (outliers excl.) (IUCN)
High share of Local agenda 21
14) -,566** ,003 26
(outliers excluded) (LA21)
Influence of green business: the variable share of dirty industries is composed

of 6 industrial sectors which a much above average energy consumption, i.e.
80
chemicals, pulp and paper, non-ferrous metals (see: Binder, 2001). Coal con-
sumption is described as coal consumption per populated land area and the
carbon emissions per GDP. The Dow Jones Sustainability Group Index en-
compasses a group of companies that have been rated as the top 10% in terms
of sustainability. Firms that are already in the Dow Jones Global Index are
eligible to enter the Sustainability Group Index. Countries in which a higher
percentage of eligible firms meet the requirements have a private sector that is
contributing more strongly to environmental sustainability. (Esty et al., 2005,
p. 317)

Influence of Green Business
Low share of dirty industries of GDP

15) 0,135 0,676 12
(DIRTIES_GDP)
Low rate of coal consumption
16) -0,166 0,39 29
(COAL_CONS)
High score on Dow Jones Sustainabi-
17) -,513* 0,021 20
lity Group Index (DOW_JONES_SD)
Low share of dirty industries of GDP
18) 0,135 0,676 12
(DIRTIES_GDP)
Low rate of coal consumption
19) -0,166 0,39 29
(COAL_CONS)
We also find significant correlations for the Dow Jones Sustainability Index,
for the share of ISO 14001 certified enterprises and for the carbon intensity of
the GDP. The rate of coal consumption shows no significant correlation. Cor-
relations for the green business variables are, however, rather weak.
Supportive economic framework conditions: In the conceptual model of envi-
ronmental capacities, economic variables are treated both as determinants of
pollution and problem-solving resources. We refer to the enabling effects of
economic growth and high GDP per Capita and add a low rate of unemploy-
ment as another structural factor.
81

Supportive Economic Framework Conditions
Pioneers have a high GDP per capita

20) -,285 x) 0,127 30
(GDP_CAPITA)
High rates of economic growth
21) 0,319 0,086 30
(GROWTH_93_03)
Low rates of unemployment UNEM-
22) -0,097 0,618 29
PLOYMENT_93)
x)
significant chi square if transformed to nominal scale
What is astonishing in our analysis is, however, the result that the correlation
is not significant for economic performance. Only if we transform the values
on an ordinal scale (low, medium, high) and thus reduce the effects of outliers
a significant chi square can be calculated (10,608, Sign.: ,031). Our findings
indicate that growth rates and unemployment rates are not significantly corre-
lated with national innovation behaviour in environmental policy. This is
contradictory to former studies on the interrelationship between data on envi-
ronmental quality and economic performance (Scruggs, 2003, Binder, 1997,
Jahn, 1999).
Greening the Innovation System: Whereas the support for renewable energies
is a specific indicator for transitions in the energy sector, the indices for
knowledge creation and innovation capacity are indicators from the 2005 ESI
report that portray broadly capacity developments in environmental science,
technology and policy.
We calculated public spending for renewable energy technologies per capita
and this variables shows a relatively high correlation with our scale of pioneer
behaviour (-,640, Sign: ,001). The other variables do not reveal any significant
correlation.
82
Tab. 8: Bivariate Analysis for the Factors Groups Supportive Economic

Framework Conditions and Supportive Innovation System
Pioneers have a high level of

23) spending for renewable energy per -.640** 0,001 25
capita (REN_ENERGY_CAPITA)
High score of knowledge creation
24) 0,102 0,6 29
(KNOWLEDGE_CREATION)
High score on innovation index
25) -0,32 0,091 29
(INNOVATION_INDEX
International Factors: It can be expected that strong engagement at the inter-

national level is complemented by national innovation behaviour if we assume
structural or directional leadership as a motivation behind the strong en-
gagement. The variables used indicate varying aspects of international en-
gagement.

Strength of international engagement of Countries
Pioneers are more often members of

26) -,429* 0,02 29
IGO (ENV_IGO)
provide a higher contribution to
27) international aid and environment -0,196 0,309 29
projects (CONTR_DEV)
participate more often in environ-
28) -,542** 0,002 29
mental agreements (ENV_AGREE)
The analysis for international factors reveals significant correlations for the
participation in environmental agreements (-,542, sign.: ,002) and for member-
ships in environmental IGO (-,429, sign. ,020) but no significant correlation
regarding contributions for international funding of environmental and de-
velopment projects.
83
3.4 Intermediate conclusions
The bivariate computation of correlations verifies a number of findings from

other studies. For example, all countries that were among the first introducers
or early adopters show a high degree of corporatism. A competent and effi-
cient administration is also a precondition of innovative environmental pol-
icy. It has also been a frequent observation that the conditions of access for
new political access influence the responsiveness of the political system and
that the degree of pluralism in policy networks is beneficial to the representa-
tion of weaker societal interests, such as environmental protection. Neverthe-
less, the bivariate analysis leaves us with a couple of problems and rather un-
satisfying answers to our question. Bivariate analysis reveals a number of rela-
tionships. Whereas we can prove the significance for quite a lot of variables we
cannot proof their relative importance. Using bivariate analysis leaves us with
the notion that nearly all variables are of great importance. Thus, we have to
identify the most important variables, i.e. those variables that explain most of
our cases and thus allow an estimation whether a specific country is likely to
introduce a policy innovation earlier than other countries. This requires, how-
ever, a more elaborate multivariate analysis.
4 Multivariate analysis
The small number of cases and the large number of variables requires a focus
on those factors that revealed a particularly high relationship in the first step
of analysis. Despite the constraints our data allow for a discriminate analysis.
We transformed the dependent variable (pioneer) on a scale of three values
(early adaptor, late adaptor, laggard) with each group encompassing the same
percentile. For the independent variables (integration, elec_threshold, gov_eff,
env_group, dow_jones_sd, ren_energy_cap, env_agree, dirties_gdp, gdp_cap),
the missing variables were replaced by the mean value of each variable. This is
necessary in order to prevent that cases will be excluded from analysis because
the computation of the discriminate function requires values for each variable.
The variables with the added values reveal, of course, strong correlation with
the variables they are derived from. Furthermore, the correlations with the
dependent variable remain significant although they become a little weaker.
The results of the discriminate analysis are presented as follows:
84
Tab. 10: Results of the discriminate analysis for selected independent variables
Standard Valid values (listwise)
Pioneer Mean
Deviation Unweighted Weighted
early adopters
Integration 4,03750 ,565348 10 10,000
Elec_Threshold 5,18941 3,956042 10 10,000
Gov_Effectivness 1,69900 ,524605 10 10,000
Env_Group 9,11556 6,489931 10 10,000
Dow_Jones_SD ,46130 ,271618 10 10,000
Ren_Energy_Capita 1,71253 1,053540 10 10,000
GDP_capita 27590,12306 6303,135163 10 10,000
Dirties_GDP 7,40000 ,916919 10 10,000
Env_agree ,93600 ,072142 10 10,000
late adopters
Integration 2,80000 ,831665 10 10,000
Elec_Threshold 19,37706 11,132674 10 10,000
Env_Group 5,54778 2,119322 10 10,000
Dow_Jones_SD ,39495 ,292611 10 10,000
Ren_Energy_Capita ,69725 ,410558 10 10,000
GDP_capita 24250,93243 6464,507730 10 10,000
Dirties_GDP 7,96667 ,760929 10 10,000
Env_agree ,86100 ,099605 10 10,000
Laggards
Integration 2,91250 ,645632 10 10,000
Elec_Threshold 15,61588 7,009033 10 10,000
Env_Group 5,30333 2,562010 10 10,000
Dow_Jones_SD ,30325 ,210319 10 10,000
Ren_Energy_Capita ,63202 ,425712 10 10,000
GDP_capita 24554,66399 13407,088709 10 10,000
Dirties_GDP 8,13333 2,747389 10 10,000
Env_agree ,80266 ,091748 10 10,000
Total
Integration 3,25000 ,875308 30 30,000
Elec_Threshold 13,39412 9,788997 30 30,000
Env_Group 6,65556 4,432032 30 30,000
Dow_Jones_SD ,38650 ,259884 30 30,000
Ren_Energy_Capita 1,01393 ,840349 30 30,000
GDP_capita 25465,23983 9134,271958 30 30,000
Dirties_GDP 7,83333 1,698546 30 30,000
Env_agree ,86655 ,101922 30 30,000
85
The calculation of the Wilks-Lambda values that the groups can be distin-
guished significantly by the Indicators integration, electoral threshold,
ren_energy_cap and env_agreements.
Tab. 11: Test on Similarity of the Mean values of the groups

Wilks- signifi-
F df1 df2
Lambda cance
Integration ,578 9,837 2 27 ,001
Elec_Threshold ,611 8,588 2 27 ,001
Gov_Effectivness ,841 2,546 2 27 ,097
Env_Group ,840 2,569 2 27 ,095
Dow_Jones_SD ,936 ,928 2 27 ,408
Ren_Energy_Capita ,642 7,544 2 27 ,002
GDP_capita ,972 ,391 2 27 ,680
Dirties_GDP ,965 ,494 2 27 ,615
Env_agree ,703 5,694 2 27 ,009
The Wilks' Lambda of the discriminance function reveals a significant value

only if both functions are applied.
Tab. 12: Wilks Lambda of the discriminance function

Test of the
Wilks-Lambda Chi-square Df Significance
functions
1 to 2 ,222 34,623 18 ,011
2 ,738 6,975 8 ,539
The relative importance of each coefficient in the discriminate function can be

summarized as follows.
86
Tab. 13: Standardised canonical coefficients of the discriminance function

Function
1 2
Integration ,437 ,563
Elec_Threshold -,536 ,772
Gov_Effectiveness -,030 1,632
Env_Group ,390 -,057
Dow_Jones_SD -,315 -,066
Ren_Energy_Capita ,103 -,301
GDP_capita ,154 -1,710
Dirties_GDP -,521 ,459
Env_agree ,764 ,278
Applying the discriminate function on each case, we calculate for each case the
probability of belonging to a specific group. The model is not very stable since
the centres of the groups are closely together. Nevertheless the chosen vari-
ables are able to predict the group belonging of specific countries in 80 % of
the cases.
Tab. 14: Results of classification (a)

Predicted Group membership
Pioneer early late Total
laggards
adopters adopters
Original Number early adopters 9 1 0 10
late adopters 1 6 3 10
Laggards 0 1 9 10
% early adopters 90,0 10,0 ,0 100,0
late adopters 10,0 60,0 30,0 100,0
Laggards ,0 10,0 90,0 100,0
a 80,0% of the cases were classified correctly.
87
5 Conclusions and outlook for further research

One central motivation of this contribution is the operationalisation of the
somehow broad and heuristic concept of environmental capacity to allow for
analysing and estimating the likeliness of national innovation behaviour in
environmental policy. . Having started the analysis with a set of 27 variables,
our discriminate analysis is able to predict the cases in 80 % of cases based on
9 variables that were identified as pariculary highly correlated to pioneering
behaviour.
Our statistical analyses highlight a number of variables. Countries with a high
score on the governmental effectiveness index and the integration index per-
form better than countries with a lower score. This highlights the importance
of a competent administration that needs to have strong competencies for
inter-policy coordination as well. The strength of green NGOs, but also of the
green business sector belong to the group of the most important influencing
factors. The role of the so-called dirty industries is of importance: Countries
that have to struggle with the resistance of sectors such as the pulp and paper
or non-ferrous metals industries are less likely to become innovators. Coun-
tries that are more active in international negotiations tend to be also more
innovative on the national level, either for the reason of shaping the interna-
tional agenda according to the own preferences or for the reason of setting a
good example for others. However, the direction of the relationship has to be
clarified: The international structure might be on the one side enabling for
national policy innovations. On the other side it may serve as an international
arena for pioneering countries.
Several of the findings have been proclaimed in other studies as well. The
added value of this contribution is that we offer a better operationalisation of
these single determinants, make them applicable for quantitative comparative
research and test them with regard to their explanatory power. Thus, they may
allow for a better understanding and even estimation whether a country is
likely to be an innovator and early adopter or whether it is more likely to be a
laggard in environmental policy, at least in the area of climate protection.
However, given the small number of observations for several of the variables
under consideration and the lack of sufficient operationalisation of theoretical
concepts (e.g. the administrative competencies of the environmental admini-
strations, the degree of environmental policy integration, etc.) additional data
might improve the statistical modelling. In the model introduced above, the
88
differences between the groups are rather small. Furthermore, the small num-
ber of cases does not allow a judgement if assumptions on the quality of data
might be violated in particular regarding the normal distribution. For an im-
provement of data, two strategies will be exploited in future research. Firstly,
data will be generated in expert surveys, that captures key concepts of envi-
ronmental policy capacities on simple ordinal scales.
Furthermore, time series of variables in the countries will be generated. By
this, the number of observations can be increased for many variables. But
more important, the change of capacities over time and dependent on the
development of specific variables can be described and analysed. This allows
an estimation in how far e.g. economic crises or a swing in elections opens up
opportunities for becoming a front runner in environmental policy or is hin-
dering the role. We are interested in finding the conditions under which the
role as a pioneer is abandoned and what this means for the development of
other factors explaining environmental capacities. For this, additional re-
quirements are needed regarding the dependent variable. The rank in the
introduction of a policy innovation does not reveal the abandoning of the role
as a pioneer. Other indicators are needed that supplement the measurement
of policy outputs, e.g. data on spending for renewable energies, etc. By this, the
change in the dependent variable can be measured over time as well.
A longitudinal analysis allows furthermore a consideration of situative factors.
Based on time series on growth rates (rather than the average growth for a
decade as it is used in our calculation), data on unemployment, changes in
public opinion and in electoral turnouts should reveal the importance of
situative factors.
We expect the capacities for environmental policy innovations to be issue
specific. This implies that a country may be a front runner in e.g. climate pro-
tection policies, but it is a laggard in e.g. chemical or waste policies. This may
be due to differences in administrative competencies due to trajectories, to a
specific problem structure that is different for a given country, to variances in
the configuration of actors among the different policy arenas. To explore the
importance of such factors, the refined model will be tested for policy in other
issues of environmental protection, e.g. nature protection, chemical policy,
waste policy, etc. To sum up, extensions are planned regarding the data (inclu-
sion of survey data generated in expert interviews), generation of time series,
consideration of situative factors, analysis of abandoning a pioneering role
and application on other areas of environmental policy.
89
Appendix Description of Variables
Variable Description Source

Country Name of Country
Feed_in Feed In Tariffs year of introduction FFU
Energy_tax Energy/CO2 Taxation - year of introduction FFU
Quota Quotas - year of introduction FFU
CO2_Adoption Year of adoption of GHG reduction objective Binder/Tews,

2004
Integration Integration score Siaroff, 1999
Mid 1990s
Federalism Federalism Index Lijphart, 1999
(1970-1995)
unitary (1,0) - federal (5,0)
Bicameralism Bicameralism Index (1970-1995) Lijphart, 1999
unicameralism (1,0) - bicameralism (4,0)
Executive Executive Dominance Lijphart, 1999
(1970-1995)
weak executive (1,0) - strong executive (6,0)
Elec_Threshold Electoral Threshold (1970-1995) Lijphart, 1999
(effective % of the vote a party needs for
representation)
Fed_Unitary Federal Unitary Index (1971-1996) Lijphart, 1999
(Bicameralism, Federalism, Constitutional court,
Constitutional rigidity, independant central bank)
Disp_elec Index of disproportionality of the electoral system Lijphart, 1999
(%) (1971-1996)
Parl_parties Effective number of parliamentary parties Lijphart, 1999
(1971-1996)
Singleparty_Gov % Single Party Government Lijphart, 1999
(1970-1995)
Gov_Effectivness Government Effectiveness (index) World Bank
2005
LA21 Number of local agenda 21 Esty et al., 2005
(per million people)
Env_IGO Number of memberships environmental IGOs Esty et al., 2005
(out of a max. of 100)
Contr_Dev Contributions to aid and environment Esty et al., 2005
low level (0) - high level (100)
Env_agree Participation in international environmental Esty et al., 2005
agreements
90
Variable Description Source

no participation (0) - full participation (1)
Env_Group Environmental Group Membership Scruggs, 2003

World Values Survey 1990
Green_votes 2005 Environmental (Left-Libertarian) Party Vote Lijphart, 1999
Average Vote Share1975-95
IUCN IUCN Member Organisation Esty et al., 2005
Dow_Jones_SD Dow Jones Sustainability Group Index Esty et al., 2005
ISO14001 Number of ISO 14001 certified companies per Esty et al., 2005
billion dollars GDP (PPP)
Ren_Energy_Capita Average Public Spending for R&D in Renewable IEA/OECD
Energy per Capita
Ren_Energy_Share Share of Average Public Spending in R&D for IEA
Renewable Energy of total R&D in Energy Tech-
nologies
GDP Gross Domestic Product, 2003, At current market OECD, 2004
prices Using current PPPs bn US$
GDP_capita GDP per capita OECD, 2004
Growth_93_03 GDP growth OECD, 2004

Average annual volume change % 1993-2003
Unemployment Unemployment rates Both sexes OECD, 2004
_1993 % of civilian labour force 1993
Coal_Cons Coal consumption per populated land area Esty et al., 2005
2001
Dirties_gdp Share of GDP for dirty industries (1997 data) Binder, 2001
Carbon_capita Carbon emissions per capita Esty et al., 2005

(1996-2001)
Carbon_GDP Carbon emissions per million US dollars GDP Esty et al., 2005
(2000)
Knowledge Knowledge creation in environmental science, Esty et al., 2005
_creation technology, and policy 1993, 1998, 2003
Innovation_Index Innovation Index 2003/04 Esty et al., 2005
This index measures the underlying capacity of a
country to engage in technological innovation by
examining factors such as scientific infrastructure
and policy environment.
91
References
Ashford, N. A. and others (1979), Environment, Health, and Safety Regulation, and
Technological Innovation, in: C. T. Hill and J. M. Utterback, Technological Inno-
vation for a Dynamic Economy., Cambridge, 161-221.
Bernauer, T. (2000), Staaten im Weltmarkt: Zur Handlungsfhigkeit von Staaten trotz
wirtschaftlicher Globalisierung, Opladen, Leske+Budrich
Binder, M. (1997), Mgliche Erfolgsbedingungen der Schwefeldioxidminderung im
internationalen Vergleich, in: M. Jnicke, Umweltpolitik der Industrielnder. Ent-
wicklung - Bilanz - Erfolgsbedingungen., Berlin, 153-201.
Binder, M. (2001), Dirty Industries in Decline: An Introduction to the Case Studies, in:
M. Binder, M. Jnicke and U. Petschow, Structural Change and Environmental
Protection in Selected Basic Industries. International Case Studies and Theoretical
Interpretations, Berlin, 13-42.
Binder, M. and K. Tews (2004), Goal Formulation and Goal Achievement in National
Climate Change Policies in Annex-I Countries, FFU-Report 02-2004, Berlin.
Busch, P.-O. and H. Jrgens (2005), The Diffusion of Environmental Policy Innova-
tions, ffu-rep, Berlin.
Busch, P. O., H. Jrgens and K. Tews (2005), The Global Diffusion of Regulatory In-
struments: The Making of a New International Environmental Regime, ANNALS
special issue on "The Rise of Regulatory Capitalism: The Global Diffusion of a New
Order" edited by David Levi-Faur and Jacint Jordana 598 (March 2005)
Crepaz, M. (1995), Explaining National Variations of Air Pollution Levels: Political Insti-
tutions and Their Impact on Environmental Policy-Making., Environmental Poli-
tics 4, 391-414.
Desai, U., Ed. (2002), Environmental Politics and Policy in Industrialized Countries,
Cambridge, MA.
Esty, D. C., M. A. Levy, T. Srebotnjak and A. de Sherbinin (2005), 2005 Environmental
Sustainability Index: Benchmarking National Environmental Stewardship., New
Haven, Yale Center for Environmental Law & Policy
Gupta, J. and M. Grubb, Eds. (2000), Climate Change and European Leadership: A Sus-
tainable Role for Europe, Environment and Policy Series, Dordrecht.
Gupta, J. and L. Ringius (2001), The EUs Climate Leadership: Between Ambition and
Reality, International Environmental Agreements: Politics, Law and Economics 1
(2), 281-299.
Helm, C. and D. F. Sprinz (2000), Measuring the Effectiveness of International Envi-
ronmental Regimes, Journal of Conflict Resolution 45 (5), 630-652.
Hritier, A., C. Knill and S. Mingers (1996), Ringing the Changes in Europe Regula-
tory Competition and the Transformation of the State: Britain, France, Germany,
Berlin and New York, Walter de Gruyter
Jahn, D. (1998), Environmental performance and policy regimes: Explaining variations
in 18 OECD-countries. Policy Sciences. 31: 107-131.
Jahn, D. (1999), The Social Paradigms of Environmental Performance: The Scandina-
vian Countries in an International Perspective, in: M. Joas and A.-S. Hermanson,
The Nordic Environments: Comparing Political, Administrative and Policy As-
pects, Adlershot, 111-131.
Jnicke, M. (1996), Erfolgsbedingungen von Umweltpolitik, in: M. Jnicke, Umweltpoli-
tik der Industrielnder: Entwicklung - Bilanz - Erfolgsbedingungen., Berlin
92
Jnicke, M. (1997), The Political System's Capacity for Environmental Policy., in: M.
Jnicke and H. Weidner, National Environmental Policies. A Comparative Study of
Capacity-Building., Berlin and others, 1-24.
Jnicke, M. (2005), Trend setter in environmental policy: character and role of pioneer
countries., European Environment, special issue "Diffusion and convergence of
environmental policies in Europe"
Jnicke, M., P. Kunig and M. Stitzel (2003), Lern- und Arbeitsbuch Umweltpolitik. Poli-
tik, Recht und Management des Umweltschutzes in Staat und Unternehmen. 2.
Auflage, Bonn, Verlag Dietz
Jnicke, M., H. Mnch and M. Binder (1992), Umweltentlastung durch industriellen
Strukturwandel? Eine explorative Studie ber 32 Industrielnder (1970 bis 1990),
Berlin, Edition sigma
Jnicke, M. and H. Weidner, Eds. (1997), National Environmental Policies: A Compara-
tive Study of Capacity-Building, Berlin.
Jordan, A., R. K. W. Wurzel and A. R. Zito, Eds. (2003), 'New' Instruments of Environ-
mental Governance? National Experiences and Prospects., London and Protland ,
OR.
Kaufmann, D., A. Kraay and M. Mastruzzi (2004), Governance Matters III: Governance
Indicators for 1996-2002, Washington, D.C., MS.
Levi-Faur, D. and J. Jordana (2005), The Rise of Regulatory Capitalism: The Global
Diffusion of a New Order. Special Issue, The ANNALS Vol.598 (March 2005)
Liefferink, D. and M. S. Andersen (1998), Strategies of the green member states in EU
environmental policy-making. Journal of European Public Policy: 254-270.
Lijphart, A. (1999), Patterns of democracy. Government Forms and Performance in
Thirty Six Countries, New Haven, Yale University Press
Miles, E. L., A. Underdahl, S. Andresen, J. Wettestad, J. B. Skjrseth and E. M. Carlin
(2002), Environmental Regime Effectiveness: Confronting Theory with Evidence,
Cambridge, MA, MIT Press
OECD (1994), Capacity Development in Environment, Paris, OECD
OECD (2002), Sustainable Development. Critical Issues, Paris, OECD
OECD (2004), OECD in Figures. 2004 edition. Statistics on the Member Countries.,
Paris, OECD
Pierre, J. and G. B. Peters (2000), Governance, Politics and the State, 2. edition,
Houndmills, Macmillan
Porter, M. E. (1990), The Competitive Advantage of Nations, New York, The Free Press
Porter, M. E. and C. van der Linde (1995), Green and Competitive: Ending the Stale-
mate, Harvard Business Review (September - October), 120-134.
Ringquist, E. J. (1993), Environmental protection at the state level politics and progress
in controlling pollution, Armonk, NY, Sharpe
Scruggs, L. (2003), Sustaining abundance: environmental performance in industrial
democracies, Cambridge, Cambridge University Press
Scruggs, L. A. (1999), Institutions and Environmental Performance in Seventeen West-
ern Democracies, British Journal of Political Science 29, 1-31.
Siaroff, A. (1999), Corporatism in 24 Industrial Democracies. Meaning and Measure-
ment, European Journal of Political Research 36 (2), 175-205.
Sprinz, D. F. and Y. Wolinsky-Nahmias, Eds. (2004), Models, Numbers, and Cases:
Methods for Studying International Relations, Ann Arbor, MI.
Taistra, G. (2001), Die Porter Hypothese zur Umweltpolitik, Zeitschrift fr Umweltpoli-
tik & Umweltrecht 24 (2), 241-262.
93
Tews, K., P.-O. Busch and H. Jrgens (2003), The diffusion of new policy instruments,
European Journal of Political Research 42 (4), 569-600.
Underdal, A. (1994), Leadership theory: rediscovering the arts of management, in: IIASA
and Jossey-Bass, International Multilateral Negotiating: approaches to the man-
agement of complexity, San Francisco, 178-197.
Weidner, H. and M. Jnicke, Eds. (2002), Capacity Building in National Environmental
Policy. A Comparative Study of 17 Countries, Berlin.
Young, O. R. (1991), Political Leadership and Regime Formation: On the Development
of Institutions in International Society, International Organization 45 (1991) (3),
281-308.
94
Part II
Diffusion of Environmental
Policy Innovations
The Diffusion of Environmental Policy Innovations:
Cornerstones of an Analytical Framework 1
KERSTIN TEWS
Abstract
Comparative policy analysis increasingly faces the challenge of incorporating external
forces on national policy developments into its analytical framework. Scholars
of international relations have recognized that the behaviour of states in terms of
policy outputs converges even in the absence of binding international
agreements. These two branches of research can be bridged by the concept of policy
diffusion. Diffusion analysis asks for those conditions that favour or hinder the
spread of policy innovations within the international system. However, the scien-
tific community struggles with different meanings and notions of the term pol-
icy diffusion. Thus, the aim of this paper is to offer a general conceptual frame-
work for the study of diffusion processes within the international system. Under-
standing the process of policy diffusion requires an analysis of the complex interplay
between transnational and international forces, national factors and the character-
istics of policy innovations. By providing a conceptual framework this paper
hopes not only to contribute to the theoretical debate but also to give guidance
for empirical research.
1 Searching for a Definition
1.1 Diffusion as a Source of Policy Convergence
Comparative policy analysis has pointed to the phenomenon that national

environmental policies are increasingly becoming similar. This observation
immediately evokes the question of the nature of these similarities. Are they
1
First published in: European Environment, Vol. 15, No. 2, 2005, pp. 63-79.
Copyright John Wiley & Sons Limited. Reprinted with kind permission.
97
Kerstin Tews
similarities resulting purely from idiosyncratic domestic factors and/or simi-

lar modernisation forces having the same, but separate, effects (Bennett, 1997,
p. 215), or are they more than purely similar but a result of processes interlink-
ing national policy decisions to those beyond national jurisdiction?
For the latter processes the available literature offers a variety of mechanisms
assumed to be responsible for the fact that national policy-making is related
to policy-making elsewhere which leads to the observable phenomenon of
convergence (Bennett, 1991; Holzinger and Knill, 2004; Jrgens, 2004; Lieffer-
ink and Jordan, 2005; Busch and Jrgens, 2005a).
There are processes in which national decision making is consciously directed
towards gaining a convergent pattern of regulatory policy. This mechanism is
sometimes labelled harmonization (Bennett, 1991), obligated policy transfer
(Dolowitz and Marsh, 2000, p. 15) or regulatory cooperation (Holzinger and
Knill, 2004, p. 4). The common notion of all these terms is that national poli-
cies move consciously towards a jointly agreed standard most commonly in
the form of a multinational agreement.
A second mechanism can be singled out in the literature; it forces convergence
and is equally consciously executed but in contrast to the mechanism above it
comes not from the adopting country but from an exporter country or organi-
zation. This mechanism has been labelled hierarchical imposition (Caddy,
1997), coercive policy transfer (Dolowitz and Marsh, 2000) or domination
(Bennett, 1991) The joint notion is that there exists a kind of asymmetric
power relation between the importer and exporter of policies usually in the
form that the weaker one wishes to gain resources from the stronger one,
who conditions access to its resources by making the weaker one import a
policy. This mechanism is relatively easy to identify. It is used regularly by
international organizations, for example the World Bank, to force developing
countries to adopt certain sometimes even environmental policies, but also
by the European Union in order to transfer its whole Acquis Communitaire to
the accession countries (Tews, 1999, 2002c).
Third, competition is a mechanism that is not driven by the intention of the
competing actors to become similar, but by their striving to differ in order to
gain competitive advantages or avoid losing access to scarce resources. Yet, it
is perceived as one of the most important drivers of convergence (Knill and
Lenschow, 2005). The relatively unstable convergence effects of competition
are reflected in the well known terms race to the bottom or race to the top
98
The Diffusion of Environmental Policy Innovations
(Vogel, 1997). Whether convergence is perceived as a sub-stage in competitive

situations or as an equilibrium, which would be the end of the competition
process, depends on the degree of convergence someone wants to predict or
model. In fact, empirically, there is no evidence either for bottom-level equi-
librium in cross-national environmental regulation or for the race to this level
(Hoberg, 2001; Drezner, 2001; Garrett, 1998). An equilibrium at a level higher
than the lowest common denominator can often only be reached via regula-
tory cooperation or harmonization, whereas empirical studies (Vogel, 1997;
Kern et al., 2001; Tews et al., 2003) suggest that races to the top meaning
tendencies that countries converge in their pattern of environment regulation
at the level of frontrunner countries in environmental regulation takes
place due among other things to various competitive mechanisms described
below.
A fourth mechanism assumed to cause convergence is communication (Knill
and Lenschow, 2005). Communication as a mechanism forcing policy conver-
gence is somewhat difficult to tackle. Communication of new knowledge and
best or good political practice via international organizations and trans-
national networks is relevant to understand that certain knowledge is available
almost everywhere and that some knowledge becomes more obvious, more
relevant or more rewarded by recipients than other. However, communication
does not seem to suffice as a mechanism for policy convergence. Knowing
something does not automatically have an impact on the decision-making
process. Communication of policy relevant knowledge via trans-national net-
works of actors or international organizations generates sets of ideas circulat-
ing in the international sphere about how best to design or implement [...]
policies, yet policy convergence can be assumed only if it intersects with na-
tional governments desire to develop such policies (Howlett, 2000, p. 306).
This desire depends on such a variety of factors internal and external to the
country (see below) that communication can hardly be perceived as sufficient
to account for environmental policy convergence which goes beyond the pure
convergence of ideas.
However, what about diffusion? How can it be placed it within this mixture
of mechanisms causing or facilitating policy convergence? The most common
definition used when analysing diffusion processes comes from the science
where it originates communication research: Diffusion is the process by
which an innovation is communicated through certain channels over time
among the members of a social system (Rogers, 1995, p. 5).
99
Kerstin Tews
From this, one might conclude that diffusion is communication. This would
be true if we intended to investigate how knowledge, rumours or news spread
among the members of a social system. However, if we intend to explain how
policy innovations spread, this would be too simple a conclusion. In contrast
to the objectives of communication research, policy innovations have to pass
through a complex innovationdecision process in order to be adopted.
It becomes clear that policy diffusion is not an empirical process easy to iden-
tify. The spreading of policy innovations may be caused by the whole variety of
mechanisms mentioned above, which might overlap or mingle with each
other. Yet, it would not make much sense analytically to conceptualize diffu-
sion as the generic term comprising all these mechanisms. The term policy
diffusion should be used in the notion of a spreading process of policy inno-
vations among countries in the international system which is driven by a vari-
ety of sub-mechanisms comprising all voluntary types of policy adoptions
ranging from policy-learning to copying or mimetic emulation. The borders
between diffusion and other processes leading to convergence are fluent. Dif-
fusion is the spreading of innovations due to communication instead of hier-
archy or collective decision making within international institutions. Thus,
the domestic implementation of binding international law as well as imposi-
tion should be excluded from diffusion research. Although this exclusion is
predominantly an analytical one, it is nevertheless important. A broad concept
of policy diffusion including all possible mechanisms of policy convergence
(voluntary, legally binding and coercive) would have little analytical surplus
value. It would either remain descriptive or risk considerable overlap with
existing concepts such as the analysis of international regimes, which has been
the focus of IR research for many years. Much more important for narrowing
the focus of diffusion research are the following considerations. As all hori-
zontal policy diffusion may result in policy convergence even in the absence of
strong international regimes for a long time assumed to be the only means
of global governance that narrow notion of diffusion may sharpen our re-
search focus and add new questions and perspectives for prospective research
on mechanisms of global governance.
100
1.2 Accounting for Policy Diffusion:

Conceptualizing Sources of Diffusion
In order to understand in what manner policy diffusion might cause policy

convergence we have to understand what causes policy diffusion. Applying and
adapting Rogers definition of diffusion to the objectives of policy science
reveals the factors that are relevant for policy diffusion analysis. From this
perspective, country characteristics and the countrys position within the sys-
tem (adopter characteristics), the characteristics of the international system
itself and characteristics of individual policy innovations have to be consid-
ered to understand how and why innovations spread the way they do. Thus,
the analytical approach, when defining diffusion as the dependent variable,
focuses on detecting factors facilitating or hampering the spread of environ-
mental policy innovations among the countries of the international system.
To avoid misunderstandings it should be stated that each program, idea or
practice that is new to the government adopting it (Walker, 1969, p. 881) is
called a policy innovation, which does not imply either that it has not been
done before elsewhere or that is a good thing to do. The merits of this ap-
proach: first, we can also learn from cases we do not like (e.g. spreading of roll-
back tendencies in environmental policy); second, it opens up the concept, as
it does not make any preliminary fixing regarding the specific mechanisms
through which a policy innovation diffuses. Thus, it may include mechanisms
labelled in literature as isomorphism (Di Maggio and Powell, 1991), legiti-
macy (Bennett, 1997), policy bandwagoning (Ikenberry, 1990) or norm cas-
cades (Finnemore and Sikkink, 1998). The joint notion is that uncertainty may
mean that even the blind [is] leading the blind (Hirshleifer, 1995) owing to
reputation instead of demonstrating good or best practice how to tackle a
problem, which can be learned from.
2 Policy Diffusion: Factors Shaping Diffusion

Patterns
The analysis of diffusion processes has been found to be a challenging en-
deavour as it has to consider a complex interplay of three factors: international
and trans-national factors, which horizontally and vertically interlink jurisdic-
tions and enable the transfer of policy content; national factors, which filter
experiences from abroad and determine national responsiveness to external
101
Kerstin Tews
stimuli, and the characteristics of the policy innovation, which may indicate
its diffusablity (Tews et al., 2003).
2.1 Dynamics of the International System
This group of factors relates to the channels of communication through which

information about policies and programmes diffuses, the actors involved in
this process and the patterns of interaction between national jurisdictions. Its
analysis can provide answers to the question of how and why environmental
policy innovations spread internationally.
In order to identify dynamics in the international system that cause policy
diffusion, we have to focus on both structures that pre-define interaction pat-
terns and actors that create, act within and change these structures.
The most common feature of the current international system is globalization.
Countries and people within are much closer to and more aware of each other
due to an increase of structured interlinkages. These interlinkages between
nation states both in terms of economic and trade relations as well as the in-
stitutional and societal interweavements create channels for the transfer of
policies across countries.
Economic interlinkages are often perceived to create pressure to modify regu-
latory policies in order to sustain or improve national competitiveness in a
global economy (Knill and Lenschow, 2005). Some argue that states may be
tempted to soften their environmental regulation, while others claim that a
tightening of standards is more likely. However, the theoretical prediction of a
downwards convergence forced by regulatory competition often lacks empiri-
cal evidence (Vogel, 1997; Drezner, 2001). Instead, empirical data shows that
the global development in the field of environmental protection has, to an
important extent, been guided by frontrunner countries (Kern et al., 2001;
Tews et al., 2003). Some scholars claim that regulatory competition creates
incentives to adopt innovative measures at an early stage in order to gain first
mover advantages. First, the so-called Porter hypothesis argues that a strict
environmental policy can improve competitiveness of firms and sectors (Por-
ter and van der Linde, 1995). Among other things first moving is explained by
the ambition of first movers to gain prospective comparative advantages for
102
the domestic industry.2 These advantages might be achieved if domestic policy

innovations, at a later stage, diffuse internationally. This, in turn, may lead to
an extension of markets for the technologies that were developed domestically
in response to the stricter regulation.
Second, going ahead may be motivated by the regulatory competition be-
tween member states of the EU that compete for the institutional design of
future common policies. Prospective harmonization within the EU sets incen-
tives for pioneering in order to demonstrate and provide a feasible model for
the EU as a whole. The comparative advantage of first moving is of institu-
tional nature. Providing ones own model first aims to protect the domestic
administration from costly adjustments to European policies that do not fit
with national administrative practices and traditions (Heritier et al., 1996).
Almost all of these comparative advantages drawn from the literature are pro-
spective and depend on certain conditions. Consequently, the argument that
countries go ahead with stricter environmental regulations in order to gain
first mover advantages begs the question of how domestic decision makers
identify such opportunities. This is the most challenging question in order to
understand why regulatory competition may be perceived as a mechanism of
policy diffusion to an upper than the lowest-common-denominator level.
One answer might be that another structural feature of globalization the
dense vertical and horizontal political and institutional interlinkages between
countries facilitates the ex ante assessment of prospective diffusion and the
resulting comparative advantages: environmental protection is internationally
institutionalized in various legally binding or non-binding environmental
regimes. Environmental organizations (IGO and NGO) and trans-national
networks exist that provide information exchange, disseminate best or good
national practices and may reward or blame national policy performance.
The establishment of those international arenas (institutions and/or organiza-
tions) dealing with environmental issues may encourage actors to adopt ex-
tended time horizons and norms (Underdal, 2002a, p. 460) and to make uni-
2
In fact there are two explanations of these comparative advantages of going ahead
(see Taistra, 2001): the first one labelled the free lunch hypothesis states that
strict environmental policy might lead to innovation in the polluting industry itself
that compensates or even over-compensate for the costs of adaptation. However,
this explanation is not as challenging as the second one, described in the text.
103
Kerstin Tews
lateral adjustments in behaviour even in the absence of any legal obligation

to do so (Underdal, 2002b, p. 5). This may result in competitive dynamics at
the horizontal level in order for countries to gain advantages or to avoid
losses.
Consequently, apart from regulatory competition we can observe another
competitive dynamic labelled here ideational competition. The embedded-
ness of states in dense networks of transnational and international social
relations is assumed to shape their perceptions of the world and their role in
that world (Finnemore, 1996a, p. 2). This normative or ideational pressure can
bring about policy convergence as states alter institutions and regulations
because a set of beliefs has developed sufficient normative power that leaders
fear looking like laggards if they do not adopt similar policies (Drezner, 2001,
p. 57).
And in fact we can observe this phenomenon (Figure 1; see also Busch and
Jrgens, 2005a).3 Not only did the previous decades see a remarkable spread of
environmental policy innovations across countries, moreover we observed that
worldwide national innovation activities accumulate at certain points in time.
These points in time correspond with all-time highs in the international
communication of environmental issues immediately before, during and after
the two big UN conferences on the environment in 1972 and 1992.
Yet, we cannot understand these effects without taking into account the actors
involved in these processes. The above described competitive dynamics are
utilized and intensified by international organizations and by transnational
networks and NGOs. These collective actors and their activities are the miss-
ing link between the national and the international level. They differ with
respect to resources and capabilities to influence diffusion processes. Whereas
certain international organizations use the lever of asymmetric power rela-
tions to impose policies (Dolowitz and Marsh, 2000), others, for example the
OECD, engage in the idea game, which is about formulating, transferring,
selling and teaching not formal regulation, but principled or causal beliefs
3
These findings are based on an large-n empirical project on the diffusion of envi-
ronmental policy innovations as an aspect of globalization conducted at the Envi-
ronmental Policy Research Centre at Freie Universitt Berlin and financed by the
Volkswagen Foundation. Research findings of the various researchers of the team
can be downloaded from our website http://www.fu-berlin.de/ffu (see also Binder,
2002; Busch and Jrgens, 2005b).
104
helping to constrain or enable certain types of social behaviour (Marcussen,

2001, p. 13). Networks of state officials are likely to be involved in the hard
transfer of policy practices and instruments (Stone, 1999, p. 55). Non-state
actors in turn, for example think tanks or transnational advocacy networks,
communicate ideas, norms or the intellectual matter that underpins policies
(Stone, 2000, p. 47) and sometimes use international norms as a lever to put
pressure on their domestic governments (Keck and Sikkink, 1999; Stone, 1999,
2000). These differences give reasons to assume different modes of policy
transfer, which and this is broadly agreed in the literature are complemen-
tary (Finnemore and Sikkink, 1998; Chayes et al., 1998; Stone, 2000; Tews,
2002c). Non-state actors may be better at the soft transfer of broader policy
ideas (Stone, 1999, p. 55). They are relevant in the construction of legitimacy
for certain policies, as agenda-setters or as norm entrepreneurs in the early
stage of the so-called norm life cycle (Finnemore and Sikkink, 1998). They
transfer the ideas and ideologies, the rationalizations and legitimations for
adopting a particular course of action, and it is part of their endeavour to draw
attention to developments overseas (Stone, 2000, p. 66).
Fig. 1: Sum of annual environmental policy innovations in Western OECD

countries 19452001 according to the innovation type
seven 'soft' instruments (report, expert council, free access to information, ecolabel,
energy efficiency label, plan/strategy, council on sustainable development)
three economic instruments (environmental energy tax, quota and feed-in tariffs for
renewable energy)
five general institutions for decision-making (ministry, authority, basic law,
20 constitutional clause, environmental impact assessment)
six problem-specific laws (air, water and soil protection, nature conservation, waste
and packaging)
10
0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
Source: Binder, 2002.
105
Kerstin Tews
Bureaucracies often constitute an institutional core of already established

institutions, observing the functioning of negotiated rules, providing respec-
tive information, preparing joint positions and actions such as, for example,
secretariats of international conventions (e.g. UNFCCC). What we know about
bureaucratic action between the principals mandate and its room for ma-
noeuvre4 can be utilized to perceive international bureaucracies as relevant
actors. Intergovernmental organizations, such as the OECD, act equally not
only by member state mandate. Instead, they dispose of a varying but certain
degree of discretion beyond member states control. Therefore, they serve as
platforms for the protagonists of new ideas policy entrepreneurs, ranging
from individuals and non-state collective actors to country representatives.
They are a favourable institutional precondition for political entrepreneur-
ship, pioneer behaviour, vertical bottom-up diffusion and/or horizontal com-
petitive diffusion dynamics.
The activities of organizations engaged in the idea game are quite relevant for
the inducement of competitive diffusion dynamics. They systematically stimu-
late benchmarking processes by comparing national performances in specific
issue areas such as the environment or education. Comparing actual national
performance with a mutually agreed target (aspiration, norm) serves as a key
instrument in the exercise of shaming and peer pressure (Botcheva and
Martin, 2001, p. 15). Those instrumental benchmarking activities in the
shadow of aspirational institutions or quasi-regimes,5 which are pursued not
only by international organizations but increasingly by transnational non-
state actors, facilitate national adoptions of policy innovations practiced in
other countries or modelled on internationally promoted best practices.
Thus, international organizations and transnational networks act as agents of
diffusion. However, national adoption decisions ultimately have to be taken by
formally appointed policy-makers. It therefore depends on the responsiveness
of the national political system whether policy initiatives supported by actors
in the international system become effective or not (see above).
The institutionalization of policy transfer at the international level is assumed
to accelerate the diffusion of policies (Kern, 2000; for an empirical illustration
4
Known as the principal agent problem.
5
J. G. Ruggie describes quasi-regimes as negotiated international agreements on
aspirations rather than commitments with few or weak compliance mechanisms
(quotated by Botcheva and Martin, 2001, p. 15).
106
of this argument, see Busch and Jrgens, 2005a). This assumption is based on
the finding that vertical communication or communication mediated through
third parties accelerates the process of spread (Mahajan and Peterson, 1985;
Kern, 2000). A special catalysing effect is expected when these transfer institu-
tions produce models or meta-standards compatible with heterogeneous na-
tional institutional settings (Tews et al., 2003). Models diminish uncertainty
and provide legitimacy. This, in turn, supports national decisions to adopt
policies already practised in other countries and/or promoted by recognized
international organizations.
In contrast, diffusion may be hampered when competing organizations offer
competing models (Kern, 2001, p. 344). Likewise, policy recommendations of
transfer institutions that ignore ongoing diffusion processes hinder the fur-
ther spread of the policy innovation. The latter is especially relevant for the
EU context, where the European Commission as central transfer institution
not only offers models but also is able to transform them into blueprints for
obliged transfers. There are empirical cases that indicate that this special fea-
ture of the EU setting tends to hamper horizontal diffusion processes as the
regulatory competition between member states induces a wait-and-see behav-
iour by member states and discourages them from unilaterally moving ahead
with their preferred policy solution. This happened, for example, in the cases
of energy-efficiency standards for certain household devices (see Busch and
Jrgens 2005b), feed-in tariffs versus quota regulations for electricity from
renewables (see Busch, 2003) and to a certain degree also during the 11-year
struggle over a European energy/carbon tax (Tews, 2002b; for an overview see
Tews, 2004).
2.2 National Factors
The effects of international dynamics are filtered by a variety of domestic fac-

tors. Here, research focuses on endogenous variables that may account for the
propensity and national capacity to adopt environmental innovations. By in-
vestigating the relevance of national factors, answers should be found to the
question of why some countries adopt policy innovations earlier than others.
Variances in state behaviour with regard to one and the same policy innova-
tion must be ascribed to distinct country characteristics on the one hand and
distinct capacities for environmental policy-making on the other. Whereas the
former comprises country properties such as country size, market volume,
107
Kerstin Tews
power or reputation, the latter refers to the politicalinstitutional, socio-

economic and cognitive informational capacities for environmental policy-
making (Jnicke and Weidner, 1997). These domestic factors are responsible
for the following variances in states behaviour.
Internal Demand for Innovative Solutions

Comparative research has revealed that a certain threshold of socio-economic
development is necessary to perceive problems, address them and spend or
reallocate resources for environmental risk management. However, compara-
ble levels of economic development do not automatically correspond to com-
parable environmental performance as benchmarking results of international
institutions demonstrate: Although in broad terms high income countries
score higher, among countries of similar levels of per capita income no strong
correlation exists between income and overall environmental sustainability
(World Economic Forum, 2001, p. 7). Therefore, the demand for innovative
solutions additionally depends on the level of cognitiveinformational capaci-
ties within a country, which, in turn, is determined predominantly by the
quality of environmental advocacy networks developing, picking up and suc-
cessfully promoting new ideas for problem management.
National Responsiveness to International Stimuli

Scholars of international relations ascribe certain domestic factors a deter-
mining role when accounting for the effects of international aspirational in-
stitutions or soft norms on state behaviour (Martin and Simmons, 1998;
Botcheva and Martin, 2001). It is argued that cross-national variations in the
existence, organization and influence of domestic pressure groups determine
the effects of international soft norms on state behaviour, because these
groups are capable of using the international norm for generating pressure on
their governments for policy change (Botcheva and Martin, 2001, p. 13). This is
closely related to what Keck and Sikkink label the boomerang pattern of a
transnational advocacy networks strategy to seek international allies in order
to bring pressure on their states from outside (Keck and Sikkink, 1999, p. 93).
Furthermore, constructivist approaches in IR theory would predict that coun-
tries at the margin searching for international reputation are much more re-
sponsive to (certain) internationally promoted norms of state behaviour. Insti-
tutional isomorphism, as described by the organizational sociologists Di
Maggio and Powell (1991) and applied to international relations by sociological
institutionalists, is the mechanism that drives especially states at the periph-
108
ery to mimetically copy the behaviour (policies and institutions) of those

countries that they perceive as being successful. Finally, scholars investigating
the behaviour of small industrialized states discovered that the small states
higher degree of transnational interweavements, their greater integration in
the world market and the resulting greater openness to external impacts puts
pressure on them to create adequate adaptation strategies, which, in turn,
often causes a greater propensity to innovate (see, e.g., Katzenstein, 1985; Ge-
ser, 1992).
Objects of Innovativeness
Policy innovations pose distinct adaptation challenges to countries in terms of
their technical and/or political feasibility. Hence, in turn, we can assume that
countries exhibit different propensities to innovate dependent on issues and
instruments. Countries differ with respect to the problems they face. Already
the (oversimplified) assumption of a relationship between problem pressure
and innovativeness reveals that certain features of the economic infrastruc-
ture, the availability of natural resources etc. may predispose the areas where a
political need to act is articulated. Furthermore, path dependencies and ad-
ministrative styles and traditions, equally set the course for whether a country
innovates more or less radically and by which means. Historically grown alli-
ances between (governing) political parties and addressees (e.g. certain
branches of domestic industry and the respective trade unions), for example,
may hamper policy change in areas where the interests of the latter are con-
cerned, unattached by the macro-economic importance of these branches
(Pedersen, 2001; Kasa, 1999).
Temporal Variations in Innovativeness

Political innovativeness cannot be perceived as a stable feature of state behav-
iour. Temporal variances in the propensity to innovate have to be ascribed to
more fluid policy process variables and situative factors. Policy process vari-
ables comprise for example such factors as elite consensus (see, e.g., Middtun
and Rucht, 1994), the role of policy entrepreneurs (Mintrom, 1997) and policy
windows (Kingdon, 1984). As comparative research revealed, situative factors
often have a decisive impact on policy decisions (Kern and Bratzel, 1996).
Changing majorities and governments, the unsteady influence of public opin-
ion reflected in the idea of a political business cycle (Nordhaus, 1975) has an
impact on the openness to new ideas, and these variables may crucially influ-
ence policy outputs. Natural catastrophes and industrial accidents may force
109
Kerstin Tews
radical policy adoption. Furthermore, embarrassing national rankings in in-

ternational benchmark studies may force and legitimate innovative political
measures at the national level. So, whereas structural variables clearly prede-
fine policy processes, they do not determine the process in its entirety
(Middtun and Rucht, 1994, p. 400).
Signal Effects to Other Members of the System (Pushing, Pulling)

There are arguments in the literature that adoptions by critical countries
accelerate the diffusion process (Finnemore and Sikkink, 1998, p. 901). Admit-
tedly, what constitutes a critical state might vary from issue to issue. Critical
are first and foremost those states whose behaviour so far contradicts the
spreading norm and without which the substantive goal is compromised
(Finnemore and Sikkink, 1998, p. 901). Moral stature (Finnemore and Sikkink,
1998, p. 901) or good reputation due to a record of previous success in envi-
ronmental policy or to the spillover of successful policy-making from other
areas can be sufficient to induce the following of others (pulling). Additionally,
country characteristics may influence a countrys impact on the diffusion of
policy innovations.6 Country size is often mentioned in the literature on small
states, which explains why small states have developed certain pusher strate-
gies and an affinity to infiltrate international organizations with national
personnel in order to gain perception or maximize their influence and visibil-
ity (Geser, 1992; Liefferink and Skou Andersen, 1998). National market volume
may be decisive with respect to policies inducing markets for environmental
innovations (technologies). Research on environmental lead markets (Jnicke,
2000; Jnicke and Jacob, 2004) suggests that the political creation of lead mar-
kets for environmental innovations poses distinct challenges on countries
depending on their market volume (see Jnicke, 2005). Whereas pioneering of
countries with a big national market volume sets signals on the supply side
outside the country (the California effect; see Vogel, 1997), pioneers with a
smaller market volume complementarily depend on successfully exporting
regulatory patterns in order to create signals for the demand side outside the
country and to guarantee market extension.
6
Mechanisms of diffusion and/or strategic choices of how to diffuse policies fur-
thermore strongly depend on the characteristics of the policy innovation (see above).
110
Degree of Convergence
Among national factors, attention has been directed especially to administra-
tive traditions, regulatory structures, policy styles and the legacy of past poli-
cies. The perceived administrative implications of adopting new policies or
instruments are often seen as essential factors influencing the decision to
adopt or reject policy innovations from other countries. This emphasis on
administrative fit is based on the general assumption that institutionally
grown structures and routines prevent easy adaptation to exogenous pressure
(Knill and Lenschow, 1998, p. 2). Some argue that these differences cause di-
vergence. This, in fact, depends on the notion of convergence. Others argue
more cautiously that national institutional arrangements serve as filters to the
adoption of innovations (Kern et al., 2001). I would suggest tackling these in-
stitutional arrangements and traditions in the following manner: they might
be responsible for delays or non-adoptions of path-deviant policies, but
mainly they will be responsible for variations in the degree of convergence,
affecting policy similarities with respect to policy ideas and approaches, the
utilization of particular policy instruments or the qualitative level of regula-
tion. Thus, global convergence of policies will never exclude divergent na-
tional adaptations as we would never expect a programme to transfer from
one government to another without history, culture and institutions being
taken into account (Rose, 1991, p. 21).
2.3 Characteristics of the Policy Innovation
Although mentioned in the early diffusion literature (Rogers, 1995), it is often

neglected in contemporary empirical research: the characteristics of the inno-
vation in terms of their administrative implications and/or their political
feasibility determine its diffusability.
Bennett even concludes ...that the major variable to consider when assessing
the diffusion of an innovation is the inherent properties of the issue (Bennett,
1997, p. 229; see also Rogers, 1995, p. 204). However, defining properties of
policy innovations is challenging. A policy innovation has to pass through the
whole policy cycle. At each stage the decision process can break off, due to the
underlying problem structure or problems of compatibility or political feasi-
bility.
111
Kerstin Tews
It is quite clear that the characteristics of policy innovations can hardly be

separated from heterogeneous national contexts as the context significantly
affects the technical and political feasibility of policy innovations. The admin-
istrative implications of policy innovations, for example, pose distinct adapta-
tion challenges to heterogeneous national regulatory structures, styles and
logics (Knill and Lenschow, 1998, p. 4). However, it is intended to define
minimum criteria in order to generalize properties of policy innovations that
may prove relevant for the rate of adoption in the international system.
It is assumed that the problem structure influences the rate of adoption. Em-
pirically, it has been observed that policies related to problems of long term
degeneration, whose effects are not directly visible and which, therefore, can-
not easily be placed on the political agenda, diffuse rather slowly. The same
applies for policies aimed at problems for which standard technical solutions
are not available, such as land use, ground-water pollution or loss of biodiver-
sity (Kern et al., 2001; Jnicke and Jrgens, 2000, pp. 612613).
Regarding the compatibility of policy innovations with existing regulatory
styles and structures, it seems likely that the extent of policy change induced
by a regulatory innovation is decisive for its diffusion. Given the filtering ef-
fect of national institutions, it is assumed that an innovations ability to dif-
fuse will depend on how easily it can pass through these filters (Tews et al.,
2003). The spread of innovations that can easily be added to existing structures
and induce only incremental change can be expected to be faster than the
spread of innovations that conflict with traditional regulative structures and
policy styles (Kern et al., 2001, pp. 1113). Certain empirical findings verify
these assumptions. The comparison of the patterns of expansion of 21 envi-
ronmental policy innovations revealed that the softer policy innovation de-
veloped in recent years, such as environmental plans and strategies for sus-
tainable development, councils for sustainable development and access to
environmental information laws, exhibits the speediest spreading rate (Binder,
2002; Busch and Jrgens, 2005a; Tews, 2004). On the one hand this rapidity
could be ascribed to promotion activities of international and trans-national
actors. Yet, on the other hand, these instruments feature some characteristics
that seem to make it easier to adopt them nationally. As studies of new envi-
ronmental instruments show, these softer open-ended and flexible instru-
ments are characterized by the possibility of escaping policy obligation (Knill
and Lenschow, 2000, p. 18). These instruments assume some necessary pre-
conditions in order to induce change. They assume the presence of motivated
112
and capable actors, who are willing to work with the policy instrument [...]
towards the intended goal (Knill and Lenschow, 2000, p. 26; see also Brzel,
2000; Caddy, 2000; Kimber, 2000). Thus, the potential weakness of these soft
instruments may foster their widespread adoption as national political agen-
das may be strongly influenced by external international drivers. The spread
of free access to environmental information provisions seems to be a suitable
example for such international norm cascades (Finnemore and Sikkink, 1998)
as the global spread of this innovation accelerated immediately after having
captured global policy arenas and the agenda of influential international or-
ganizations. It is interesting to note that access to environmental information
provisions was adopted even by countries7 with little public capacity to gather,
organize or provide these types of information, and where NGOs were very
weak. This leads to the conclusion that policy adoption may not always be
motivated by the expected impact of policy instruments (in this case more
efficient participatory environmental management). Instead, the relative im-
portance of a policy norm on the global environmental agenda and the per-
ceived appropriateness of FAI provisions to respond instrumentally to this
norm has proved sufficient to motivate the adoption of these regulations in
nation states intending to be legitimate members within the international
society (Tews et al., 2003; Finnemore and Sikkink, 1998). However, such adop-
tion cascades are only likely with respect to policy innovations that can be
easily added and require certain preconditions to be fulfilled in order to be
effective.
An innovations political feasibility is assumed to depend on its potential to
provoke conflicts with powerful actor groups (Kern et al., 2001, p. 24). In par-
ticular, an instruments fiscal effects affect the level of conflict potentially in-
duced by the innovation. Re-distributive policies that affect powerful interests,
especially those that are internationally mobile, are less likely to diffuse rap-
idly. Therefore, the policy innovations exposure to regulatory competition
can be characterized as a raw criterion for the prospect of its rate of adoption.
Advancing this assumption even further, Scharpf (1999) suggests that the polit-
ical feasibility of an innovation encountering regulatory competition depends
on whether the underlying economic competition concerns either the quality
of products or costs of production. The former are assumed to spread more
quickly than the latter. These assumptions have been verified in empirical
7
For example Albania in 1998 and Macedonia in 1996.
113
Kerstin Tews
research. Whereas those policy instruments informing about and regulating

the quality of products, such as eco-labels and energy-efficiency labels, show
the second fastest spread among the 21 environmental policy innovations, the
spread of energy/carbon taxes is comparably slow (Busch and Jrgens, 2005b).
Thus, international trade can be both a conduit as well as a brake for the diffu-
sion of market based environmental policy instruments. It can work as a con-
duit for the diffusion of product related environmental regulations such as
eco-labels if consumer behaviour is at least to some extent influenced by envi-
ronmental considerations. These environmental preferences are strongly
shaped through the activities of non-state environmental organizations (Kern
and Kissling-Nf, 2002). As environmental concerns grow among consumers
in the OECD, and increasingly within the Central and Eastern European re-
gion, governments adopt voluntary labelling schemes and suppliers partici-
pate, as this can be seen as a rationale for ensuring sale opportunities and
market shares. Furthermore, such product related measures feature the logic
of a coordination game instead of a prisoners dilemma conflict is about the
type of joint solution but not about the joint solution itself. Thus, at least
within the EU their spread was also caused by positive coordination among
member states. Accordingly, as these national labelling instruments reward
environmentally sound products that are globally traded, international or-
ganizations and networks which were hardly involved in the initial phase of
the spreading process increasingly try to play a part.
International trade works more as a brake when these market based instru-
ments are related to production costs. The comparably slow spread of re-
distributive market based environmental instruments is caused by their expo-
sure to competitiveness concerns, which seriously interfere with their political
feasibility. Consequently, in the case of energy/carbon taxes the innovations
characteristics have even proven to be strong enough to almost overrule the
usually accelerating effects of international promotional activities by many of
the most influential international organizations such as the OECD, the UN
and the EU for many years. Still, they were adopted by a limited group of
countries. Thus, we have to assume that their spread is more determined by
national factors. A respective case study, which compared successful and un-
successful national efforts to introduce an energy/carbon tax, revealed that
policy process factors such as elite consensus, strategy-management and coali-
tion-building have determined their adoption much more than structural
politico-institutional and economic variables (Tews, 2002b).
114
3 Conclusion: Tackling the Complex Interplay of

Factors
The overwhelming majority of diffusion studies approach the central question
for drivers and restrictions of policy diffusion from a macro-level perspective.
This is due to the definition of diffusion, which only becomes manifest
through sequences of individual cases of policy transfer from abroad. Diffu-
sion studies in political science typically intend to detect patterns in these
sequences of national policy adoptions. However, one central shortcoming of
this macro-level approach in diffusion research is that it neglects politics or,
in other words, how experiences from abroad and the way they are communi-
cated by whom affect national policy-making processes. Yet, a policy adoption
alone (output level) does not tell us either whether the imported policy has an
impact, or whether the imported policy is intended to have an impact at the
domestic level at all. To obtain the whole picture, an inclusion of the micro-
and meso-level perspectives would be necessary. Therefore, the translation
process of international stimuli into national decisions to adopt certain inno-
vations has been found to be a research question worth deepening. This ap-
proach is pursued by the majority of the more recent policy-transfer research
(see for example Dolowitz and Marsh, 1996, 2000; Rose, 1991; Evans and Da-
vies, 1999; Stone, 1999, 2000). The framework developed above already tries to
integrate these related but analytically different approaches. The concept of
policy transfer analysis differs from the diffusion concept with respect to the
analytical level8 as it deals at the micro or meso level with a single process in
which knowledge about policies, administrative arrangements, institutions
etc. in one time and/or one place is used in the development of policies, ad-
ministrative arrangements and institutions in another time and/or place
(Dolowitz and Marsh, 1996, p. 344). Thus, it complements traditional structure
based diffusion analysis as it focuses on
the intentionality of policy transfers,
the role of different key transfer actors and their capacities and motivations
and processes of knowledge selection and utilization.
8
Additionally, it differs with respect to its inclusion of obliged and coerced policy
transfers into analysis at least in the framework developed by Dolowitz and Marsh
(1996, 2000). The main questions of the concept e.g. who transfers, what is trans-
ferred and why and with what success can be answered satisfactorily only with re-
spect to single cases.
115
Kerstin Tews
Including these considerations in diffusion analysis seems to be appropriate

as empirical findings suggest that there is no automatism in the spread of
policy innovations, which can simply be derived from certain diffusion
mechanisms (Busch and Jrgens, 2005a; Binder, 2002; Tews, 2004). Even
among countries that are closely linked in terms of dense cultural, economic
and or political relations as well as similar structural determinants of envi-
ronmental capacity, we observe differing propensities to innovate. Hence,
there is no single relationship between diffusion pattern and influencing fac-
tors. We observed that international drivers do matter; however, they do not
suffice to account for specific diffusion patterns. National factors matter, yet
analogous to the international drivers they do not suffice to explain particu-
lar diffusion patterns. International stimuli to adopt nationally a certain inno-
vation meet heterogeneous national capacities and actor configurations, which
function as filters or in other words determine the national responsiveness
to experiences from abroad.
Therefore it would be the most suitable approach both in order to understand
and to influence the interplay between the various factors to look at the char-
acteristics of policy innovations, as they are the most relevant tie between in-
ternational and national factors, structures and agents. Innovation characteris-
tics change
the effects of institutionalized policy transfer,
capacity requirements at the national level and
to what extent the behaviour of other countries constrains domestic action.
Thus, consequently, considering these characteristics is crucial for a prospec-
tive evaluation of diffusion chances as they pose distinct requirements to an
adequate diffusion strategy pursued by an early-mover country or other agents
of diffusion. The following findings from diffusion and policy transfer re-
search might help to develop assumptions for a more focussed analytical ap-
proach to a comprehensive diffusion analysis that goes beyond the macro-
analytical level and takes the probably most decisive intervening variable into
account.
Different innovations diffuse by different mechanisms (Bennett, 1997; Tews
et al., 2003). Conduits can be international trade causing diffusion by regu-
latory competition on the one hand. On the other hand it can be the so-
called international society, stimulating policy learning or causing emula-
tion driven by ideational competition, as state actors intend to behave as
116
legitimate members of the international society (Finnemore, 1996b; Meyer

et al., 1997). Figure 2 exhibits the relationship between one central property
of policy innovations9 and the mechanisms of diffusion and channels for
diffusion.
Fig. 2: Innovation characteristics and diffusion mechanism
Policy innovation exhibits externalities to state behaviour
Yes No
Diffusion- Regulatory Ideational

Legitimacy Policy Learning
mechanism Competition Competition
Reactive Emulation
pioneering pioneering
adjustment Norm cascades
downwards upwards
Global Society (IGO, NGO,

Global trade, increasing
Kind of global media, transnational advocary
regional political and
interlinkage networks and epistemic
economic integration
communities)
Different mechanisms of policy diffusion cause distinct chances of policy

success at the national level. Searching for legitimacy as a driving force to
adopt an innovation does not necessarily induce substantial policy change.
Thus, focussing on policy outputs as is done by the majority of macro-
analytical policy diffusion research does not allow one to distinguish be-
tween superficial and deep policy adoptions, that is between cases where
adoption is largely symbolic and cases where extensive commitment of re-
sources is involved (Berry and Berry, 1999, p. 189). We need to deepen the
analysis by including motivations of the adopters and identify the condi-
9
Adapted and modified from Botcheva and Martin (2001, p. 14) who developed a
model of the effects of international institutions on state behaviour and defined the
mentioned issue property as one of the central variables that have to be considered
in order to account for these effects.
117
Kerstin Tews
tions for policy diffusion success. Among other things, this might require
the identification of those actors who make governments accountable for
their policy adoptions.
Different actors do engage in policy transfers. These actors can be interna-
tional organizations, state actors or non-state actors. They differ with re-
spect to their resources for transferring policies. They differ with respect to
the object they can transfer as a result of their modes of communication.
They differ with respect to their relevance in distinct stages of the policy
cycle or diffusion process (Finnemore and Sikkink, 1998; Stone, 2000;
Tews, 2002c).
Thus, drawing some clues from these observations, one can argue that innova-
tion characteristics predefine to a great extent which diffusion mechanism is
at work, which actors are the most relevant and which actors capacities have
to be complementarily deployed by agents of diffusion in order to develop a
strategic approach to diffuse innovate policy measures and make them work
in distinct national jurisdictions.
References
Bennett CJ. 1991. What is policy convergence and what causes it? British Journal of
Political Science 25(3): 215233.
Bennett CJ. 1997. Understanding ripple effects: the cross-national adoption of policy
instruments for bureaucratic accountability. Governance 10(3): 213233.
Berry FS., Berry WD. 1999. Innovation and diffusion models in policy research. In
Theories of the Policy Process, Sabatier PA (ed.). Westview Press: Boulder, CO; 169
200.
Binder M. 2002. Umweltpolitische Basisinnovationen im Industrielndervergleich. Ein
grafisch-statistischer berblick, FFU Report 06-2002. Environmental Policy Re-
search Centre Berlin. http://www.fu-berlin.de/ffu/ [Accessed 5 January 2005].
Brzel TA. 2000. Improving compliance through domestic mobilisation? New instru-
ments and effectiveness of implementation in Spain. In Implementing EU Envi-
ronmental Policy. New Directions and Old Problems, Knill C, Lenschow A (eds).
Manchester University Press: Manchester; 223250.
Botcheva L., Martin LL. 2001. Institutional effects on state behaviour: convergence and
divergence. International Studies Quarterly 45: 126.
Busch P-O. 2003. Die Diffusion von Einspeisevergtungen und Quotenmodellen: Kon-
kurrenz der Modelle in Europa, FFU Report 03-2003. Environmental Policy Re-
search Centre Berlin. http://www.fu-berlin.de/ffu/ [Accessed 5 January 2005].
Busch P-O., Jrgens H. 2005a. International patterns of environmental policy change
and convergence. European Environment 15(2): 80-101.
118
Busch P-O., Jrgens H. 2005b. Globale Ausbreitungsmuster umweltpolitischer Innova-

tionen, FFU Report. Environmental Policy Research Centre: Berlin. http://www.fu-
berlin.de/ffu/ [Accessed 5 January 2005].
Caddy J. 1997. Harmonization and Asymmetry: Environmental policy coordination
between the European Union and Central Europe. Journal of European Public Pol-
icy 4(3): 318336.
Caddy J. 2000. Implementing of EU environmental policy in central European appli-
cant states: the case EIA. In Implementing EU Environmental Policy. New Direc-
tions and Old Problems, Knill C, Lenschow A (eds). Manchester University Press:
Manchester; 197221.
Chayes A., Handler Chayes A., Mitchell RB. 1998. Managing compliance: a comparative
perspective. In Engaging Countries, Brown Weiss E., Jacobson HK (eds.) MIT
Press: Cambridge; 3965.
Di Maggio P., Powell WW. 1991. The iron cage revisited: institutional isomorphism and
collective rationality in organizational fields. In The New Institutionalism in Or-
ganizational Analysis, Di Maggio P., Powell WW (eds.) University of Chicago Press:
Chicago, IL; 6382.
Dolowitz DP., Marsh D. 1996. Who learns what from whom? A review of the policy
transfer literature. Political Studies 44: 343357.
Dolowitz DP., Marsh D. 2000. Learning from abroad. The role of policy transfer in
contemporary policy making. Governance 13(1): 524.
Drezner DD. 2001. Globalization and policy convergence. International Studies Review
3(2): 5378.
Evans M., Davies J. 1999. Understanding policy transfer: a multi-level, multi-
disciplinary perspective. Public Administration 77(2): 361385.
Finnemore M. 1996a. National Interests and International Society. Ithaca, Cornell
University Press: NY.
Finnemore M. 1996b. Norms, culture, and world politics: Insights from sociologys
institutionalism. International Organization 50: 325347.
Finnemore M., Sikkink K. 1998. International norm dynamics and political change.
International Organization 52(4): 887917.
Garrett G. 1998. Global markets and national politics: collision course or virtuous cir-
cle? International Organization 52(4): 787824.
Geser H. 1992. Kleinstaaten im Internationalen System. Klner Zeitschrift fr Soziolo-
gie und Sozialpsychologie 44(4): 627654.
Gray V. 1973. Innovations in the state. A diffusion study. American Political Science
Review 67: 11741185.
Heritier A., Knill C., Mingers S. 1996. Ringing the Changes in Europe. Regulatory Com-
petition and the Transformation of the State. de Gruyter: Berlin.
Hirshleifer D. 1995. The blind leading the blind: social influence, fads, and informa-
tional cascades. In The New Economics of Human Behaviour, Tommasi M, Ierulli
K (eds). Cambridge University Press: Cambridge; 188215.
Hoberg G. 2001. Trade, harmonization, and domestic autonomy in environmental
policy. Journal of Comparative Policy Analysis: Research and Practice 3(2): 191217.
Holzinger K., Knill C. 2004. Competition and cooperation in environmental policy:
individual and interaction effects. Journal of Public Policy 24(1): 123.
Howlett M. 2000. Beyond legalism? Policy ideas, implementation styles and emulation-
based convergence in Canadian and US. environmental policy. Journal of Public
Policy 20(3): 305329.
119
Kerstin Tews
Ikenberry JG. 1990. The international spread of privatization policies: Inducements,

learning, and policy bandwagoning. In The Political Economy of Public Sector
Reform and Privatization, Suleiman E., Waterbury J. (eds). Westview: Boulder, CO;
88110.
Jnicke M. 2000. Ecological Modernisation: Innovation and Diffusion of Policy and
Technology, FFU Report 00-08. Environmental Policy Research Centre Berlin.
http://www.fu-berlin.de/ffu/ [Accessed 5 January 2005].
Jnicke M. 2005. Trend setters in environmental policy: the character and role of pio-
neer countries. European Environment 15(2): 129-142.
Jnicke M., Jacob K. 2004. Lead markets for environmental innovations: a new role for
the nation state. Global Environmental Politics 4(1): 2946.
Jnicke M., Jrgens H. 2000. Strategic environmental planning and uncertainty: a
cross-national comparison of green plans in industrialised countries. Policy Stud-
ies Journal 28(3): 612632.
Jnicke M., Weidner H. (eds.) 1997. National Environmental Policies: a Comparative
Study of Capacity Building. Springer: Berlin.
Jrgens H. 2004. Governance by diffusion implementing global norms through
cross-national imitation and learning. In Governance for Sustainable Develop-
ment. The Challenge of Adapting Form to Function, Lafferty WM. (ed.) Elgar: Chel-
tenham.
Kasa S. 1999. Social and Political Barriers to Green Tax Reform. The Case of CO2 Tax in
Norway, CICERO Policy Note 5. Center for International Climate and Environ-
mental Research Oslo. http://www.cicero.uio.no [Accessed 5 January 2005].
Katzenstein PJ. 1985. Small States in World Markets: Industrial Policy in Europe. Cor-
nell University Press: Ithaca, NY.
Keck ME., Sikkink K. 1999. Transnational advocacy networks in international and re-
gional politics. International Social Science Journal 159: 89101.
Kern K. 2000. Die Diffusion von Politikinnovationen. Umweltpolitische Innovationen
im Mehrebenensystem der USA. Leske & Budrich: Opladen.
Kern K. 2001. Konvergenz umweltpolitischer Regulierungsmuster durch Globalisie-
rung. Ursachen und Gegentendenzen. In: Die Soziale Marktwirtschaft in der neu-
en Weltwirtschaft, Rller L-H., Wey C. (eds.) WZB Jahrbuch 2001: Berlin; 327350.
Kern K., Bratzel S. 1996. Umweltpolitischer Erfolg im internationalen Vergleich: Zum
Stand der Forschung. In Umweltpolitik in Industrielndern, Jnicke M. (ed.) Editi-
on Sigma: Berlin; 2958.
Kern K., Jrgens H., Jnicke M. 2001. The Diffusion of Environmental Policy Innova-
tions. A Contribution to the Globalisation of Environmental Policy, Discussion
Paper FS II 01-302. Social Science Research Centre: Berlin.
Kern K., Kissling-Nf I. 2002. Politikkonvergenz und Politikdiffusion durch Regierungs-
und Nichtregierungsorganisationen. Ein internationaler Vergleich von Umweltzei-
chen, Discussion Paper FS II 02-302. Social Science Centre: Berlin.
Kimber C. 2000. Implementing European environmental policy and the directive on
access to environmental information. In Implementing EU Environmental Policy.
New Directions and Old Problems, Knill C., Lenschow A. (eds.) Manchester Univer-
sity Press: Manchester; 168196.
Kingdon JW. 1984. Agendas, Alternatives and Public Policies. Little Brown: Boston, MA.
Knill Ch., Lenschow A. 1998. Change as Appropriate Adaptation: Administrative Ad-
justment to European Environmental Policy in Britain and Germany. European In-
tegration online Papers (EioP). http://eiop.or.at [Accessed 5 January 2005].
120
Knill Ch., Lenschow A. 2000. On deficient implementation and deficient theories: the
need for an institutional perspective in implementation research. In Implemen-
ting EU Environmental Policy. New Directions and Old Problems, Knill C., Len-
schow A. (eds). Manchester University Press: Manchester; 935.
Knill Ch., Lenschow A. 2005. Compliance, communication and competition: Patterns of
EU environmental policy making and their impact of policy convergence. Euro-
pean Environment 15(2): 114-128.
Liefferink D., Skou Andersen M. 1998. Strategies of the green member states in the EU
environmental policy-making. Journal of European Public Policy 5(2): 254269.
Liefferink D.,, Jordan A. 2005. An 'ever closer union' of national policy? The conver-
gence of national environmental policy in the European Union. European Envi-
ronment 15(2): 102-113.
Mahajan V., Peterson RH. 1985. Models for Innovation Diffusion. Sage: Beverley Hills,
CA.
Marcussen M. 2001. The OECD in search of a role: playing the idea game. Paper pre-
pared for presentation at the ECPR, 29th Joint Session of Workshops, Grenoble,
2001.
Martin LL., Simmons, BA. 1998. Theories and empirical studies of international insti-
tutions. International Organization 52(4): 729757.
Meyer JW., Frank JD., Hironaka A., Schofer E., Tuma, NB. 1997. The structuring of a
world environmental regime, 18701990. International Organization 51(4): 623651.
Middtun A., Rucht D. 1994. Comparing policy outcomes of conflicts over nuclear
power. Description and explanation. In States and Anti-Nuclear Movements, Flam
H. (ed.) Edinburgh University Press: Edinburgh; 383415.
Mintrom M. 1997. Policy entrepreneurs and the diffusion of innovations. American
Journal of Political Science 41(3): 73870.
Nordhaus WD. 1975. The political business cycle. Review of Economic Studies 42: 169-
190.
Pedersen AB. 2001. CO2 taxes in Scandinavia. Design, achievements, and policy proc-
esses. Paper prepared for the Fifth Nordic Environmental Research Conference
The Ecological Modernisation of Society, Aarhus, 2001.
Porter ME., van der Linde C. 1995. Green and competitive: ending the stalemate. Har-
vard Business Review September/October: 120134.
Rogers EM. 1995. Diffusion of Innovations, 4th edn. Free Press: New York.
Rose R. 1991. What is lesson-drawing? Journal of Public Policy 11: 330.
Scharpf FW. 1999. Regieren in Europa. Effektiv und demokratisch? Campus: Frankfurt.
Stone D. 1999. Learning lessons and transferring policy across time, space and disci-
plines. Politics 19(1): 5159.
Stone D. 2000. Non-governmental policy-transfer: the strategies of independent policy
institutes. Governance 13(1): 45 70.
Taistra G. 2001. Die Porter-Hypothese zur Umweltpolitik. Zeitschrift fr Umweltpoli-
tik and Umweltrecht 24(2): 241262.
Tews K. 1999. EU-Erweiterung und Umweltschutz. Umweltpolitische Koordination
zwischen EU und Polen. Leipziger Universittsverlag: Leipzig.
Tews K. 2002a. Der Diffusionsansatz fr die Vergleichende Policy-Analyse. Wurzeln und
Potenziale eines Konzepts. Eine Literaturstudie, FFU Report 02-2002. Environ-
mental Policy Research Centre: Berlin. http://www.fu-berlin.de/ffu/ [Accessed 5
January 2005].
121
Kerstin Tews
Tews K. 2002b. Die Ausbreitung von Energie/CO2-Steuern. Internationale Stimuli und

nationale Restriktionen, FFU Report 08-2002. Environmental Policy Research Cen-
tre: Berlin. http://www.fu-berlin.de/ffu/ [Accessed 5 January 2005].
Tews K. 2002c. Politiktransfer: Phnomen zwischen Policy-Lernen und Oktroi. berle-
gungen zu unfreiwilligen Umweltpolitikimporten am Beispiel der EU-
Osterweiterung. Zeitschrift fr Umweltpolitik and Umweltrecht 25(2): 173201.
Tews K. 2004. Diffusion als Motor globalen Politikwandels? Potentiale und Grenzen,
FFU Report 01-2004. Environmental Policy Research Centre: Berlin. http://www.fu-
berlin.de/ffu/ [Accessed 5 January 2005].
Tews K., Busch P-O., Jrgens H. 2003. The diffusion of new environmental policy in-
struments. European Journal of Political Research 42(4): 569600.
Underdal A. 2002a. Conclusions: patterns of regime effectiveness. In Environmental
Regime Effectiveness. Confronting Theory with Evidence, Miles EL., Underdal A.,
Andresen S., Wettestad J., Skjrseth JB., Carlin EM. (eds). MIT Press: Cambridge,
MA; 435465.
Underdal A. 2002b. One question, two answers. In Environmental Regime Effective-
ness. Confronting Theory with Evidence, Miles EL., Underdal A., Andresen S., Wet-
testad J., Skjrseth JB., Carlin EM. (eds). MIT Press: Cambridge, MA; 345.
Vogel D. 1997. Trading up and governing across: transnational governance and envi-
ronmental protection. Journal of European Public Policy 4(4): 556571.
Walker JL. 1969. The diffusion of innovations among American states. The American
Political Science Review 63: 880899.
World Economic Forum. 2001. Environmental Sustainability Index 2001. An Initiative
of the Global Leaders of Tomorrow Environmental Task Force.
122
The Global Diffusion of Regulatory Instruments:
The Making of a New International Environmental
Regime 1
PER-OLOF BUSCH
HELGE JRGENS
KERSTIN TEWS
Abstract 2
During the 1990s a new regulatory pattern in domestic environmental policy
making has been emerging. This paper argues that the emergence is to a con-
siderable extent a result of policy diffusion. In the absence of formal obliga-
tions regulatory instruments which have been communicated internationally
and were already being practiced elsewhere were voluntarily emulated and
adopted by policymakers. While the international promotion of regulatory
instruments often facilitated their diffusion, the instrument characteristics
determined the extent and speed to which regulatory instruments actually
spread across countries. The voluntary adoptions of regulatory instruments
cannot be exclusively explained by rational motivations of policymakers to
improve effectiveness. In addition, concerns of legitimacy and the perceived
pressure to have to conform with international norms motivated policymak-
ers.
1
First published in: The ANNALS of the American Academy of Political and Social
Science. Volume 598, 2005, pp. 146-167
Copyright Sage Publications. Reprinted with kind permission.
2
This article is based on findings from an research project on The Diffusion of
environmental policy innovations as an aspect of the globalisation of environmental
policy which has been financed by the German Volkswagen Foundation. We would
like to thank the editors Jacint Jordana and David Levi-Faur as well as Michael
Biggs, Fabrizio Gilardi, Kenneth Hanf, Ulrika Mrth and David Vogel for their help-
ful comments on earlier versions of this paper.
123
1 Introduction
Since the beginning of the 1990s regulatory patterns in environmental poli-
cymaking have changed significantly. We observe a shift from a sectorally
fragmented and largely legally based regulatory approach towards a greater
use of voluntary, collaborative or market-based regulatory instruments (Fig. 1).
This shift is not restricted to a small set of pioneering countries, but has rap-
idly spread from some forerunner countries to almost every industrialized
country.
Fig. 1: International Spread of Regulatory Instruments and Institutions

1945-2001
seven 'soft' instruments (report, expert council, free access to information, ecolabel,
energy efficiency label, plan/strategy, council on sustainable development)
40
three economic instruments (environmental energy tax, quota and feed-in tariffs for
renewable energy)
five general institutions for decision-making (ministry, authority, basic law,

Number of introductions - frequency
constitutional clause, environmental impact assessment)
30 six problem-specific laws (air, water and soil protection, nature conservation, waste
and packaging)
20
10
0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
3
Source: Binder 2002
3
The set of 43 countries in this figure and all subsequent figures comprises industri-
alized countries and countries in transition, namely Albania, Australia, Austria, Bel-
arus, Belgium, Bosnia Herzegovina, Bulgaria, Canada, Croatia, Czech Republic, Den-
mark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Iceland, Italy,
Japan, Latvia, Lithuania, Luxemburg, Macedonia, Moldova, Netherlands, New Zea-
land, Norway, Poland, Portugal, Romania, Russia, Slovak Republic, Slovenia, Sweden,
Switzerland, South Korea, Spain, Turkey, Ukraine, United Kingdom and United
States of America
124
The Global Diffusion of Regulatory Instruments
How can this widespread shift be explained? Structural explanations suggest

that governments throughout the world are reacting independently, but in a
similar way to similar economic, political or environmental problem pres-
sures (see Levi-Faur in this volume). International regime theory suggests the
striking parallels to be a result of institutional effects such as the simultane-
ous domestic implementation of international agreements. Our empirical data
indicates, however, that the international spread of new regulatory instru-
ments has often taken place in the absence of international agreements, and
that it also cannot be satisfactorily explained by similar domestic reactions to
comparable problem pressures. A third explanation, therefore, could be that
governments orient their own policies to what is already being practiced in
other countries (see also Lazer, this volume). The global spread of new envi-
ronmental policy instruments, then, could to an important extent be ex-
plained as a result of the international diffusion of a new regulatory paradigm.
This paper identifies the conditions under which the policy choices of one
country subsequently affect the policy choices of another. Our analysis builds
on data set of more than twenty environmental policy instruments and insti-
tutions in 43 countries over a time period of 50 years (Figure 1; Busch and Jr-
gens 2004). In this paper we analyze the diffusion environmental strategies,
eco-labels, energy taxes, and legal provisions regulating the free access to in-
formation. Together they represent a new generation of collaborative, market-
and information-based instruments that has recently emerged in almost all
industrialized countries (Jordan et al. 2003).
We first discuss the factors we expect to support or hinder the diffusion of
regulatory instruments and consider policymakers motivations to adopt regu-
latory instruments which are already implemented in other countries and
communicated in the international system. We then apply this framework to
the empirical analysis the four selected cases. Finally, we draw preliminary
conclusions about the predominant mechanisms of diffusion processes. In
particular, we seek to answer the question by which motivations policymakers
decisions to emulate regulatory instruments of other countries are driven. Are
they motivated by (perceived) competitive pressures prompting them to adopt
regulatory instruments in order to sustain or improve the competitiveness
and to enhance the efficiency of their policies? Or are they driven by norma-
tive considerations that bring them to emulate regulatory approaches in re-
sponse to an international norm and in order to increase legitimacy either
domestically or internationally? We argue that the adoption of regulatory in-
125
struments from abroad cannot be exclusively explained by attempts to im-

prove the performance of environmental policy making. Additionally, regula-
tory competition between countries and ideational pressures resulting from
other countries' policy choices and their promotion by international actors
affect policymakers decisions.
2 Policy DiffusionMechanisms and Driving Forces

We define policy diffusion as the process by which policy innovations are
communicated throughout the international system and voluntarily adopted
by an increasing number of countries over time (Rogers 2003:5). Diffusion
refers to an international spread of policy innovations driven by information
flows rather than hierarchy or collective decision-making within international
institutions. At the micro-level it is triggered by processes of social learning,
copying or mimetic emulation (Jrgens 2004; Tews forthcoming; Dolowitz and
Marsh 2000, see also Lazer, this volume). The essential feature of policy diffu-
sion is that it occurs in the absence of formal or contractual obligation. More-
over diffusion is basically a horizontal process where individually adopted
regulatory approaches add up to a decentralized regulatory structure (see Levi-
Faur in this volume). Unlike in the case of multilateral legal treaties which are
negotiated centrally between states and subsequently implemented top down,
in the case of diffusion, decision-making procedures are decentralized and
remain at the national level. Diffusion only becomes manifest through the
accumulation of individual cases of imitation or learning regarding one and
the same policy item (Jrgens 2004; Busch and Jrgens 2004). In the absence of
a centralized regulatory regime with highly visible and explicitly stated aims,
international policy diffusion may thus result in a "regulatory revolution by
surprise" (Levi-Faur and Jordana in the introduction to this volume).
The growing body of literature on policy convergence, policy diffusion and
policy transfer indicates that diffusion processes are neither coincidental nor
driven by any one simple mechanism (see Lazer, this volume). Instead, a com-
plex interplay of causal factors has been identified. Drawing on these studies
we distinguish three groups of factors which can be expected to affect interna-
tional diffusion patterns.
Dynamics of the international system: Diffusion presupposes communication.
When analyzing the diffusion of policies and instruments across countries,
one has to identify the international or transnational channels through which
126
policies and instruments are communicated as well as the actors who actually
transport these messages from one political setting to another (see in more
detail Lazer, this volume, who refers to and describes the international system
as informational network).
Domestic factors: While the former is a necessary precondition for policy dif-
fusion, it cannot explain individual cases of policy change. Domestic actors,
interests, institutions, capacities and policy styles, all have an influence on the
actual decision of any one country to adopt a policy or instrument that is be-
ing communicated internationally.
Policy Characteristics: Finally, diffusion studies need to answer the question
why some policies or instruments diffuse more quickly than others. Why, for
example, have approximately 140 countries in the world adopted an environ-
mental strategy since the late 1980s while only eleven countries introduced an
energy tax in the same period of time (Busch and Jrgens 2004)? Taking into
account specific policy characteristics which have so far been neglected in
empirical diffusion studies (Dolowitz and Marsh 2000:3; Bennett 1997:227) can
help to answer this question.
Within this rather general framework lies a wide range of individual motiva-
tions for policymakers to voluntarily emulate other countries' regulatory ap-
proaches (see Lazer, this volume). First of all, policymakers may act in a ra-
tional manner by looking across borders for effective solutions to pressing
domestic problems. Rose (1991) has labelled this lesson-drawing. In situa-
tions where domestic actors face great uncertainties about the likelihood of
present policy alternatives to bring about their preferred future outcomes
rational lesson-drawing becomes less feasible. In these cases, domestic poli-
cymakers may prefer to model their own policy choices on those of countries
which are generally perceived as being successful. In early stages of a diffusion
process, policymakers may also be actively persuaded by other national, inter-
national and transnational actors (Finnemore 1993; Haas 1992; Keck and Sik-
kink 1998, see also Lazer, this volume, who discusses a range of actors). During
the later stages of diffusion processes, when a regulatory approach has already
been adopted by a fair amount of countries4, other motivations, such as inter-
national pressures for conformity, the attempt of political elites to increase
4
Finnemore and Sikkink speak of a critical mass of countries (Finnemore and Sik-
kink 1998; see also Kern 2001:10-11).
127
the legitimacy of their actions, and their desire to enhance their self-esteem
within an international society structured by emerging normative standards of
appropriate behaviour, may become increasingly important (Finnemore and
Sikkink 1998:895, 902-904).
Besides these motivations which are related either to a "rational" and effective
or to a "socially appropriate" and legitimate way of dealing with environmental
problems, other, more complex motivational structures exist which can be
subsumed under the label "regulatory competition". In the literature the term
regulatory competition is used in two different ways. The more common no-
tion of regulatory competition assumes that an increasing international com-
petition for goods and services and an increasing mobility of capital and
highly skilled labour, pressurizes governments to lower regulations in areas
such as social and environmental policy (Scharpf 1997). A second notion that
has become influential in recent Europeanization literature assumes that by
taking up a frontrunner role in environmental protection, individual member
countries of the European Union (EU) attempt to actively shape EU policies in
accordance with their own domestic policy styles and regulatory traditions in
the hope of minimizing the cost of subsequent political and administrative
adjustment (Hritier, Knill, and Mingers 1996). The basic rationale underlying
both concepts of regulatory competition is that policymakers do not necessar-
ily choose those policy-options that promise the highest level of effectiveness
or legitimacy in the light of a given problem, but take into account as well the
expected economic and administrative side costs which result from an in-
creasingly complex political and economic interdependence of countries. In
order to underline the difference between the two concepts, in the following
we will speak of economic and political competition, respectively.
In the context of this article the notion of political competition is of particular
interest as it implicitly takes into account the potential effects of diffusion
processes and applies them to an international multi-level setting. Policymak-
ers are basically aware that policies and instruments may diffuse both hori-
zontally to other countries and vertically to the international level. Once these
regulatory approaches are taken up by a critical mass of countries or are trans-
formed into international law, it becomes increasingly difficult for previously
reluctant countries to ignore them. At worst, latecomers may be obliged to
implement regulatory schemes which were strongly influenced by forerunner
countries and which do not match their own administrative structures and
policy styles. One possible way for countries to actively influence the design
128
and content of upcoming international regulations is by setting an example

domestically and subsequently promoting it at the international level. If sev-
eral countries choose this strategy, an international dynamic may evolve where
countries race to adopt regulations which are directed towards the same policy
problem; but which may differ with regard to administrative and technologi-
cal details or with regard to the scope and ambition of goals. The result is an
often rapid emergence of numerous domestic regulations in a given problem
area. In their sum they form a global regulatory structure which in turn in-
creases the prospect of international legal harmonization or further diffusion.
Due to the generally higher probability of binding international regulations in
institutionally thick environments such as the EU or the OECD-world, politi-
cal competition can be expected to be most frequent here (Jrgens 2004).
By contrast economic competition may be more likely within institutionally
thin international environments or in issue areas where formal political au-
thority rests largely with the nation state and has not been handed over to
supranational or international institutions. Economic competition is often
assumed to result in a race to the bottom, where countries lower their regula-
tory standards in order to avoid capital flight (Drezner 2001:57-58). In practice,
however, this process may be more complex, involving changes in policy in-
struments rather than directly lowering standards of environmental or social
protection. In environmental protection there are hardly any examples where
existing standards have actually been lowered (Vogel 1997:558). What can be
observed instead is an attempt by many governments to complement or even
substitute direct and legally binding regulations by softer instruments such as
voluntary agreements or unilateral self-commitments of polluters (de Clerq
2002). In the wake of this change of instrument it becomes easier to set less
ambitious targets or relax monitoring requirements, and thus de facto lower
the environmental standards domestic industries have to comply with. Often
such indirect weakening of environmental standards occurs through, and is
justified by, the emulation of widely acknowledged foreign models, or of con-
cepts advocated by international organizations. Rather than inventing com-
pletely new approaches to environmental protection, countries thus often tend
to imitate regulatory approaches introduced by their primary competitors in
order to relax their own environmental protection standards.
However, instead of inducing a race to the bottom, the result of economic
competition may also be a race to the top where countries seek to emulate
new and ambitious regulatory approaches at an early stage of their interna-
129
tional diffusion in order to secure first-mover advantages and not lag behind
other countries (Porter and van der Linde 1995). In addition policymakers may
be encouraged by their domestic industries to raise regulatory standards to
the level of the more strictly regulated markets. The reason behind this is that
international firms will in any case have to meet the standards of the most
highly regulated markets if they want to sell their products there (see Lazer,
this volume). Instead of manufacturing products with different environmental
properties for different markets, they may be interested in harmonizing prod-
uct standards at the level of the most highly regulated market in order to be
able to produce similar products for all markets at overall lower costs (Vogel
1997:561-563).
In the following four case studies, we show how new regulatory approaches
spread internationally, identify the causes and mechanisms underlying this
global process of policy change and explore the role of diffusion within this
process.
3 The Global Spread of New Regulatory Instruments

in Environmental PolicyFour Cases
3.1 The Spread of Strategic Environmental Planning: Diffusion,

Imposition and Harmonization
Environmental strategies are comprehensive governmental programmes of

action which are developed with the participation of a wide range of societal
actors and which formulate medium- and long-term goals for an economically
and socially sound environmental policy (Jnicke and Jrgens 1998). Empiri-
cally, two types of strategic approaches can be distinguished: environmental
policy plans which focus predominantly on environmental problems and per-
ceive social and economic aspects merely as important constraints, and sus-
tainable development strategies which attempt to set separate goals for all the
environmental, social and economic dimensions of sustainable development.
Overall, environmental strategies represent an important shift from a strongly
fragmented, primarily medium-oriented and instrumental environmental
policy towards an integrated approach guided by long-term goals. Environ-
mental strategies spread rapidly since the 1980s across industrial countries,
130
but also across newly industrialized, developing and transition countries. By

the year 2003, 140 countries around the world and 28 out of 30 OECD member
countries had formulated an environmental strategy. Although marked differ-
ences remain in these plans as regards both the relevance and specificity of
goals (Jnicke and Jrgens 1998), all use an approach of targeted, cross-media
andat least in intentionparticipatory environmental planning.
Fig. 2: International Spread of Environmental Strategies

45
40 United Nations General Assembly decides to

set the year 2002 as deadline for the
adoption of National Sustainable
35
30 Deadline for the adoption of

Number of introductions
- UN Conference on Environment and National Sustainable Development

Development
- Adoption of WorldBank Operational
25
Directive 4.02 on National Environmental
Action Plans
- Foundation of the International
20 Network of Green Planners
15 Industrialised countries - frequency

Central and Eastern European countries - frequency
Cumulative
10
0
1988 1991 1994 1997 2000 2003
Within the group of industrialized countries, the main driving force behind
the spread of environmental strategies was diffusion. From the first introduc-
tion in 1988 up to the year 1997, when a formal resolution of the United Na-
tions (UN) was adopted, environmental strategies were introduced in 16 indus-
trialized countries. Initially, direct policy transfer from one country to another
played an important role. For example, the Dutch National Environmental
Policy Plan of 1989 was rapidly elevated into a widely recognized model. It was
imitated by several industrialized countries and served as important source of
inspiration to others (Jrgens 2004).
During the 1990s, the diffusion became increasingly institutionalized at the
international level. In 1992 the UN Conference for Environment and Devel-
131
opment (UNCED) recommended in Agenda 21 that [governments should

adopt a national strategy for sustainable development. This recommendation
was neither legally binding nor did it specify any point in time for when com-
pliance was expected. Thus, it involved a relatively low degree of formal obli-
gation and left it to policymakers whether to adopt an environmental strategy
or not. Still, during the period following UNCED the number of adoptions
rose from seven by the end of 1991 to 16 in 1997. Almost all of these strategies
include prominent references to UNCED and Agenda 21. Also in 1992 the EU
adopted its Fifth Environmental Action Programme (EAP) which strongly in-
fluenced the development of environmental strategies in numerous Western
European countries (Jrgens 2004). While many European strategies feature
explicit references to the EUs action programme, some, like the Austrian Na-
tional Environmental Plan, went as far as to copy central elements of the EAP
(Pleschberger 1999:222). In other words, the Dutch model diffused from the
national to the international level and backa process to which Padgett refers
as uploading and subsequent downloading (Padgett 2003:227-228).
Following the UNCED a wide range of domestic or transnational, governmen-
tal or non-governmental actors started using the prescriptions of Agenda 21 as
a point of reference for their demands. In 1993, the OECD included the exis-
tence of an environmental strategy as an evaluation criterion in their Envi-
ronmental Performance Reviews. In 1992, an International Network of Green
Planners was created which provides a forum for policymakers to share in-
formation, learn from experiences and promote the spread of environmental
strategies. At the domestic level, opposition parties as well as non-
governmental environment organizations regularly referred to Agenda 21 to
exert pressure on governments to adopt an environment strategy. Overall,
implementing the international norm of sustainable development through
sustainability strategies had become a major manifestation of appropriate
government behaviour (Jrgens 2004).
Diffusion processes also occurred in Central and Eastern Europe (CEE) and in
the so-called Newly Independent States (NIS). Again, the EUs Fifth EAP was an
important reference point for domestic initiatives. Another driver was the 1993
Environmental Action Programme for CEE. Implementation of this program,
which included the establishment of environmental strategies in CEE as a
main objective, was to be overseen by a newly created task force which
"brought together national environmental officials from all CEE countries and
the NIS". Its main function "was to support a mutual effort in learning by
132
doingexchanging experience, identifying best practices, and stimulating

co-operation and support among network members (OECD 1998:20).
However, the dominant mechanism in CEE was the imposition of environ-
mental strategies by means of financial conditionality. The main actor was the
Worldbank. Its Operational Directive 4.02 from 1992 formally required the
preparation of a National Environmental Action Plan in order to receive
Worldbank loans and effectively made this instrument mandatory for bor-
rower countries. In CEE the adoptions of Albania (1993), Moldova (1995), Mace-
donia (1997) and Bosnia-Herzegovina (2003) were triggered by Worldbank con-
ditionality. In the more developed CEE countries, other organizations took the
place of the Worldbank as environmental strategies were being implemented
(...) primarily at the direct instigation of aid donors who have insisted on such
planning exercises as a necessary prerequisite to cost-effective environmental
investments (Connolly and Gutner 2002).
Ten years after the first introduction of an environmental strategy and its
remarkable mainly imposition and diffusion driven spread across 113 coun-
tries, the UN General Assembly passed a resolution calling all UN members to
complete a sustainable development strategy by 2002 (United Nations 1997).
While UN declarations and resolutions do not constitute binding interna-
tional law in a legal sense, by setting a fixed deadline and establishing supervi-
sory mechanisms the resolution contained two important elements which
characterize international hard law and which augmented significantly the
pressure on governments to comply with the resolution. It can be argued
therefore that since 1997 soft-law harmonization has increasingly become a
dominant mechanism influencing the global spread of environmental strate-
gies.
As a result, between 1997 and 2003 a total of 14 out of 30 OECD member gov-
ernments formally adopted a National Strategy for Sustainable Development.
Even more interesting is that a total of ten countries either formally adopted
their strategy or presented a complete draft in the year 2002 alone. Only four
OECD membersMexico, New Zealand, Turkey and the USAhave not yet
adopted a National Sustainable Development Strategy or announced its publi-
cation for the near future (Jrgens 2004).5
5
The reason why these adoptions are not all reflected in the proliferation curve in
Figure 2 is that many of these countries had already adopted an environmental
133
While the international dynamics of decentralized and largely norm driven

diffusion, external imposition and legal harmonization explain what pushed
countries into adopting environmental strategies, their specific features ex-
plain the impressive speed at which they spread. First of all, environmental
strategies do not require radical changes and can be easily added to the exist-
ing regulatory structure. Only a few countries have introduced thoroughly new
and ambitious environmental policy goals or far-reaching institutional
changes. The majority of plans have been implemented without drastic conse-
quences (Jnicke and Jrgens 1998). This lack of immediate and serious conse-
quences explains why so many countries have actually been able to adopt an
environmental strategy.
3.2 The Spread of Eco-labels:

Vertical Diffusion in Multi-level Systems
Eco-labelling is defined as the practice of labelling products based on a wide

range of environmental considerations in order to make relevant environ-
mental information available to consumers (EPA 1998:5). Eco-labels enable
consumers to orient their purchasing decisions at environmental characteris-
tics of the product which in turn may prompt producers to devote more atten-
tion to environmental attributes in the product design. The following empiri-
cal analysis only considers those eco-labels which rely on third-party-
verification, use a mandatory set of criteria and apply to a broad range of
products and product groups.
The first eco-label was introduced 1978 in Germany. The spread significantly
accelerated in 1989 when four Scandinavian countries adopted a multinational
eco-label, the Nordic Swan, and Japan and the United States introduced eco-
labels (Figure 3). In 1992 the adoption of an EU-wide eco-label, the so called
European Flower, triggered an unprecedented surge in the spread of eco-
labels as ten EU member countries put in place this instrument. Since the EU
eco-label does not oblige member countries to abolish their eco-labels, in
many countries the European Flower and domestic eco-labels exist in parallel.
strategy at an earlier point in time (e.g. Denmark, France, Austria, Portugal and the
Netherlands) and only this first national adoption of a national environmental strat-
egy is shown in the graph.
134
Fig. 3: International Spread of Eco-labels

45
40 Industrialised countries - frequency
Cumulative
35
30
Adoption of the European Union Eco-Label

25
20
15
Adoption of the Nordic Swan

10
0
1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Apparently, adoptions of eco-labels were largely driven by international har-

monization. Nevertheless diffusion was another important mechanism. It
mainly influenced the spread of eco-labels in countries outside the EU which
were not affected by supranational harmonization. In a majority of these cases,
knowledge about schemes implemented elsewhere affected domestic policy
choices. In particular in CEE, the German Blue Angel served as model. It was
promoted by the German Federal Environment Agency through a series of
workshops in the region and, in some cases, through direct assistance in de-
veloping eco-labels (Landmann 1998:101). Moreover, strong similarities of the
eco-labels in New Zealand and Australia indicate that an exchange of ideas
between these two countries had taken place (Landmann 1998:100).
In addition to these cases of horizontal diffusion between individual coun-
tries, a process largely similar to the uploading and subsequent downloading
in the case of environmental strategies could be identified. In a process of
vertical diffusion the European eco-label was strongly inspired and its design
significantly influenced by existing schemes in Germany, France, Austria and
the Scandinavian countries (Landmann 1998:113). With the introduction of the
135
European Flower the dominant mechanism of policy change then switched

from bottom-up diffusion to top-down harmonization. The adoption of the
"Nordic Swan" followed a largely similar pattern. Altogether twelve adoptions
were the result of this type of diffusion-based multi-level governance.
3.3 The Spread of Energy Taxes: Diffusion in Spite of

Unfavorable Instrument Characteristics
Energy taxes are market-based environmental policy instruments, which tax

energy consumption or production. Their overarching goal is to reduce CO2-
emissions from the use of fossil fuel in energy production and thereby miti-
gate climate change. By increasing energy prices they set market incentives for
energy conservation or, if the tax base is calculated on the carbon content of
energy sources, for the use of renewable energy sources.
The international spread of energy taxes is interesting for at least two reasons.
On the one hand, several adoptions were at least partially driven by political
competition. At least three adoptionsSweden (1991), Denmark and the Neth-
erlands (1992)were more or less directly influenced by the European Com-
missions intention to introduce an EU-wide energy tax. Sweden and Den-
mark, tried to actively shape the design and the adoption of the prospective
European energy tax by introducing an operational example at the domestic
level which could be soon followed by others.6 They thus pursued what Lief-
ferink and Andersen (1998) denote as pusher-by-example strategy. In contrast,
the Netherlands utilized the Commission's proposal as a template when it
transformed its fuel charge into a more comprehensive energy tax (Schlegel-
milch 1999:19) and thereby ensured its compatibility with a possible EU wide
regulation.
On the other hand, the international spread of energy taxes is interesting be-
cause it illustrates the impact of the characteristics of a regulatory approach
and concerns about economic competitiveness on diffusion processes. As
figure 4 shows, energy taxes spread relatively slowly although international
policy processes have created rather favourable conditions for their diffusion.
6
Although Sweden was not an EU-member at that time, it would have been affected
by an EU-wide energy tax and thus had an interest in influencing EU policy devel-
opments.
136
The UN Framework Convention on Climate Change, in particular, stimulated

the formulation of national CO2-reduction targets (Binder and Tews 2004)
which subsequently led to the search for regulatory instruments capable of
achieving these goals. Energy taxes figured prominently among the policy
options discussed in industrialized countries (Tews 2002) and were actively
promoted by international organizations such as the OECD (2001) and the
European Environment Agency (2000). Nevertheless, from 1992 until 2000
only five countries decided to adopt an energy tax. Given the importance of
the international climate policy debate this number is rather low. Moreover, in
spite of demands being raised already in the 1970s (Baumol and Oates 1989), it
took almost two decades until ecologically motivated energy taxes which went
beyond charges on mineral oil were first adopted, and it was not until the
international climate protection debate that green taxes became a valid option
for policymakers.
Fig. 4: International Spread of Energy Taxes

45

40
Industrialised countries - frequency
Cumulative
35
30
25
20 - European Commission's Proposal for an

European Energy Tax
- Adoption of the Kyoto Protocol
15 Adoption of the United Nations
Framework Convention on Climate
10
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Source Busch and Jrgens 2004
This time lag between demand and reality as well as the slow spread of energy
taxes is largely attributable to this instruments characteristics and related
137
concerns about economic competitiveness. Due to their redistributive charac-

ter and the fact that winners and losers can easily be identified energy taxes
are regularly opposed by powerful and well-organized domestic interest
groups (Jnicke and Weidner 1997). This is particularly true in the energy and
transport sectors at which energy taxes target. Moreover, taxes imposed on
products or key factors of production, where the goods are traded widely in
the international market (OECD 2001:72) are exposed to the economic dimen-
sion of regulatory competition. The perceived negative impact of energy taxes
on the domestic industries international competitiveness renders govern-
ments receptive to industry's concerns.
Against this background, it is even more astonishing that some governments
succeeded in adopting energy taxes. Therefore, the international spread of
energy taxes shows that although concerns of competitiveness may restrict
domestic environmental policy making and stifle the international diffusion
dynamic, it does not in every case prevent unilateral adoptions of those poli-
cies. These adoptions against the trend can mainly be explained by taking
into consideration domestic constellations of interests. An in-depth analysis
revealed that the activation of political support, the political will of decision
makers and consensus among governing elites is crucial for a successful adop-
tion of energy taxes (Tews 2002).
In sum, the international spread of energy taxes was either driven by unilat-
eral action in forerunner countries which acted in spite of potential competi-
tive disadvantages, or countries emulated tax schemes which were already in
place in forerunner countries and which were promoted by international or-
ganizations like the OECD and the EU. Neither international harmonization
nor bilateral imposition played a role in this process. The fact that the major-
ity of adopters are EU member countries shows that the European debate to
adopt a common energy taxwhich had lasted for many years7had the
strongest impact on diffusion dynamics. The specific characteristics of energy
taxes, however, kept this instrument from spreading across a wider range of
countries.
7
In 2003 a European minimum energy tax was adopted (Directive 2003/96/EC). How-
ever, its level remained far below initial ambitions of the European Commission and
existing tax rates in the more progressive EU member states.
138
3.4 Free Access to (Environmental) InformationThe

Diffusion of a Normative Notion of "Good Governance"
Legal provisions on free access to information (FAI) regulate citizens' access to

information held by public authorities. They increase the transparency and
accountability of administrative action by ensuring the availability, compara-
bility and public accessibility of relevant information. Two types of FAI provi-
sions can be distinguished: general provisions, regulating the access to infor-
mation on all areas of public policy, and issue-specific provisions, exclusively
regulating the access to environmental information. Overall, FAI provisions
are an important element of what has recently become known as "good gov-
ernance".
Fig. 5: International Spread of Provisions on the Free Access to

(Environmental) Information
45
Adoption of the UN/ECE Convention on Access to

Central and Eastern European countries - frequency Information, Public Participation in Decision-making
40
and Access to Justice in Environmental Matters
Industrialised countries - frequency
Cumulative
35 UN Economic Conference for Europe
stresses the importance of citizens'
environmental rights and obligations
30
United Nations Conference on

Environment and Development calls for
25 regulations on free access to
l f
20 - Regime Changes in Central and Eastern Europe

- Adoption of the European Directive on Freedom of
Access to Information on the Environment
15
10
0
1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000
Between 1945 and 2000 about 80 percent of all industrialized and transition
countries adopted FAI-provisions (figure 5). This spread can be divided into
two phases. The first phase is characterized by a relatively slow spread of gen-
139
eral FAI provisions. The adoptions in Scandinavian countries (Sweden, 1949,

Finland, 1951, Norway and Denmark, both in 1970) can at least partially be
attributed to regional policy diffusion between geographically linked coun-
tries. In particular the adoptions in Sweden and Finland can be traced back to
a deep historic and cultural connection between both countries. Such interre-
lations of countries within the same region are often perceived as structural
determinants for diffusion (Lutz 1987). Finally, with the U.S. Freedom of In-
formation Act of 1966 a first model for emulation, recognized by environ-
mental organizations worldwide as well as many policymakers, was estab-
lished during this first phase.
The second phase began in 1991 with a significant and sudden acceleration of
the international spread of FAI-provisions which lasted until 2000. Most pro-
visions in this phase exclusively addressed environmental information. On the
one hand, this remarkable spread was the result of supranational harmoniza-
tion as EU-member countries transposed EC-Directive 90/313/EEC on free
access to environmental information into national law. However, on the other
hand, the directive itself was influenced by processes of vertical diffusion. In
the course of policy formulation, European environmental NGOs, the Euro-
pean Parliament and the European Commission drew upon regulations from
the Scandinavian countries, the Netherlands, France and the USA. Thus, simi-
lar to eco-labels and environmental strategies, the concept of FAI-provisions
diffused from the national to the supranational level where it was then trans-
formed into binding supranational law and subsequently implemented by the
remaining EU-member countries. During this process the instrument of a
general FAI provision regulating all areas of public policy was downsized to a
regulation dealing exclusively with environmental information.
A closer look at the data shows, however, that only eight8 out of 29 adoptions
were actually driven by this supranational harmonization. Additional devel-
opments at the national, international and global levels contributed to the
remarkable spread of this instrument.
In 1992, the Rio-Declaration explicitly called on governments to grant citizens
free access to information. Six years later the UN Economic Commission for
Europe (UNECE) adopted the Aarhus Convention on Access to Information,
8
1992: United Kingdom, Luxembourg; 1993: Ireland, Portugal; 1994: Belgium, Ger-
many; 1995: Spain; 1997: Italy.
140
Public Participation and Justice. By the end of the 20th century, the issue of
free access to environmental information had developed into a widely recog-
nized international norm of good governance and captured the political
agenda of almost all international organizations.
An additional factor contributing to the spread of FAI-provisions was the col-
lapse of the communist regimes in Eastern Europe in 1989/90. As a response,
the new governments started to realign predominantly with the Western
model of democracy and adapted to the norm of transparency and account-
ability of public actions. This was also a response to requests by societal actors.
In several countries, environmental groups even constituted a bearing part of
the regime opposition. In 1992, four out of six adoptions took place in CEE. It
is interesting to note that FAI-provisions were adopted even by countries with
little capacity to provide such information and with weak NGOs (such as Ma-
cedonia in 1996 and Albania in 1998). Thus FAI-adoptions were not only moti-
vated by their expected impact, but also by their symbolic value or norm status
derived from their relative importance on the global environmental agenda.
Free access to information was increasingly seen as an essential prerequisite of
an environmentally responsible international society within which the respec-
tive adopters intended to be a legitimate member.
Finally, some of the CEE countries were motivated to adopt FAI-provisions by
the prospect of EU membership. The adoption of the whole acquis commun-
autaireincluding the EU-directive on free access to environmental informa-
tionwas a necessary prerequisite for integration (Tews 2001).
Summarizing, it can be observed that the spread of FAI-provisions started to
accelerate when the issue entered the agendas of supranational bodies and
international organizations. It was driven by both, harmonization and diffu-
sion. Many of the diffusion driven adoptions can be attributed to the norma-
tive idea of transparency and accountability in public (environmental) policy-
making.
4 Conclusion
Diffusion has become an alternative or supplementary mode of global govern-
ance across a broad range of cases. It has been influential in the international
spread of all four regulatory instruments studied here and its effects, together
with other mechanisms of change, add up to a new regulatory order. Diffusion
141
processes may well be the first step in the emergence of international envi-
ronmental regimes. While horizontal diffusioni.e. the accumulation of indi-
vidual cases of imitation or learning regarding one and the same policy item
may eventually lead to a "de facto" regime where a majority of countries im-
plements similar policies without any formal multilateral agreement, vertical
diffusioni.e. the direct transfer of ideas or programmes from the national to
the supranational levelinspires or leads directly to the adoption of interna-
tional environmental laws. Both types of diffusion have been present in our
case studies. In the case of environmental strategies, horizontal diffusion,
accompanied by information and recommendations from international or-
ganizations, has eventually created a "critical mass" of adopters that made it
difficult for any single government to openly refuse adopting this instrument.
In the case of eco-labels and FAI-provisions, basic regulatory ideas have dif-
fused from the national to the EU-level and led to the adoption of EU-wide
regulations which subsequently had to be transposed by all member countries.
Across all cases, promotion at the international level has proven a decisive
driver of policy diffusion. Often international actors crucially accelerated the
diffusion processes. However, as the example of energy taxes reveals, the spe-
cific instrument characteristics determine the extent to which international
promotion actually leads to domestic policy change. The spread of energy
taxes was relatively slow and did not reach a critical mass. At the same time,
vertical diffusion failed for a long time to set off an EU-wide harmonization of
energy taxes. The case illustrates that policies with a high conflict potential are
less likely to diffuse rapidly. In contrast, environmental strategies or eco-labels
which do not necessarily induce any fundamental policy change, spread sig-
nificantly faster.
Finally, the empirical analysis reveals that normative considerations played an
important role in the decisions of policymakers to adopt regulatory instru-
ments which have been implemented elsewhere or have been communicated
within the international system. In a number of countries, the adoptions, in
particular of environmental strategies and FAI-provisions, were not exclu-
sively driven by rational motivations to improve the effectiveness of environ-
mental policies. Rather, many adoptions could be interpreted as a response to
an international norm whichpromoted by international policy processes
increasingly became recognized and internalized by policymakers.
142
References
Baumol, William J., and Wallace E. Oates. 1989. The theory of environmental policy.
Cambridge, UK: Cambridge University Press.
Bennett, Colin J. 1997. Understanding ripple effects: the cross-national adoption of
policy instruments for bureaucratic accountability. Governance: An International
Journal of Policy and Administration 10 (3):213-233.
Binder, Manfred (mit einem Beitrag von Per-Olof Busch). 2002. Umweltpolitische
Basisinnovationen im Industrielndervergleich. Ein grafisch-statistischer ber-
blick. FFU-Report 02-06. Berlin: Environmental Policy Research Centre.
Binder, Manfred, and Kerstin Tews. 2004. Goal formulation and goal achievement in
national climate change policies in Annex-I countries. FFU-Report 2004-02. Berlin:
Environmental Policy Research Centre.
Busch, Per-Olof, and Helge Jrgens. 2004. Globale Ausbreitungsmuster umweltpoli-
tischer Innovationen [Global patterns of the international spread of environmental
policy innovations]. FFU-Report. Berlin: Forschungsstelle fr Umweltpolitik.
Connolly, Barbara, and Tamar Gutner. 2002. Policy networks and process diffusion:
organizational innovation within the 'Europe for Environment' network. Unpub-
lished manuscript.
de Clerq, Marc, ed. 2002. Negotiating environmental agreements in Europe: Critical
factors for success. Cheltenham: Edward Elgar.
Dolowitz, David, and David Marsh. 2000. Learning from abroad: the role of policy
transfer in contemporary policy making. Governance: An International Journal of
Policy and Administration 13 (1):5-24.
Drezner, Daniel W. 2001. Globalization and policy convergence. International Studies
Review 3 (1):53-78.
EEA (European Environment Agency). 2000. Environmental taxes: recent developments
and tools for integration. Environmental Issue Series No. 18. Copenhagen: EEA.
EPA (Environmental Protection Agency). 1998. Environmental labelling: issues, policies
and practices worldwide. Washington, D.C.: EPA.
Finnemore, Martha. 1993. International organizations as teachers of norms. The United
Nations Educational, Scientific, and Cultural Organization and science policy. In-
ternational Organization 47 (4):565-597.
Finnemore, Martha, and Kathryn Sikkink. 1998. International norm dynamics and
political change. International Organization 52 (4):887-917.
Haas, Peter M. 1992. Introduction: epistemic communities and international policy
coordination. International Organization 46 (1):1-35.
Hritier, Adrienne, Christoph Knill, and Susanne Mingers. 1996. Ringing the changes
in Europe. Regulatory competition and the transformation of the state. Berlin/New
York: Walter de Gruyter.
Jnicke, Martin, and Helge Jrgens. 1998. National environmental policy planning in
OECD countries: preliminary lessons from cross-national comparisons. Environ-
mental Politics 7 (2):27-54.
Jnicke, Martin, and Helmut Weidner, eds. 1997. National environmental policies: a
comparative study of capacity building. Berlin: Springer.
Jordan, Andrew, Rdiger Wurzel, Anthony R. Zito, and Lars Brckner. 2003. European
governance and the transfer of 'new' environmental policy instruments (NEPIs) in
the European Union. Public Administration 81 (3):555-574.
143
Jrgens, Helge. 2004. Governance by diffusion Implementing global norms through

cross-national imitation and learning. In Governance for sustainable development.
The challenge of adapting form to function, edited by W. M. Lafferty. Cheltenham:
Edward Elgar.
Keck, Margaret E., and Kathryn Sikkink. 1998. Activists beyond borders. Ithaca, NY:
Cornell University Press.
Landmann, Ute. 1998. Nationale Umweltzeichen im Zuge der Globalisierung von Wirt-
schafts-, Umwelt- und Sozialpolitik. Analyse und Perspektiven von Umweltzei-
chenprogrammen, Department of Social and Political Sciences, FU Berlin.
Liefferink, Duncan, and Mikael Skou Andersen. 1998. Strategies of the 'green' member
states in EU environmental policy-making. Journal of European Public Policy 5
(2):254-270.
Lutz, J. 1987. Regional leadership: patterns in the diffusion of public policies. American
Politics Quarterly 15 (3):387-398.
OECD (Organisation for Economic Co-operation and Development). 1998. Evaluation
of progress in developing and implementing national environmental action pro-
grammes (NEAPs) in Central and Eastern Europe and the New Independent States.
CCNM/ENV/EAP(98)23/REV1. Paris: OECD.
OECD 2001. Environmentally related taxes in OECD countries. Issues and strategies.
Paris: OECD.
Padgett, Stephen. 2003. Between synthesis and emulation: EU policy transfer in the
power sector. Journal of European Public Policy 10 (2):227-245.
Pleschberger, Werner. 1999. The national environmental plan of Austria - A lesson to
learn in environmental policy? In Formulation and implementation of national
forest programmes: theoretical aspects, edited by P. Glck, G. Oesten, H. Schanz
and K.-R. Volz. Joensu: European Forest Institute.
Porter, Michael E., and Claas van der Linde. 1995. Green and competitive: ending the
stalemate. Harvard Business Review 73 (5):120-134.
Rogers, Everett. 2003. Diffusion of innovations. New York: Free Press.
Rose, Richard. 1991. What is lesson-drawing. Journal of Public Policy 11 (1):3-30.
Scharpf, Fritz W. 1997. Globalisierung als Beschrnkung der Handlungsmglichkeit
nationalstaatlicher Politik. Discussion Paper 97/1. Kln: Max Planck Institute for
the Studies of Societies.
Schlegelmilch, Kai. 1999. Energiesteuern in Europa. In Blick nach Vorn. Anforderun-
gen an die weiteren Stufen der kologischen Steuerreform, edited by B. B. D.
Grnen. Bonn: Bundestagsfraktion Bndnis90/Die Grnen.
Tews, Kerstin. 2001. Politiktransfer. Phnomen zwischen Policy-Lernen und Oktroi.
berlegungen zu unfreiwilligen Politikimporten am Beispiel der EU-
Osterweiterung. Zeitschrift fr Umweltpolitik & Umweltrecht 2:173-201.
Tews, Kerstin. 2002. Die Ausbreitung von Energie/CO2-Steuern. Internationale Stimuli
und nationale Restriktionen. FFU-Report 08-2002. Berlin: Environmental Policy
Research Centre.
Tews, Kerstin. forthcoming. The diffusion of enivronmental innovations. In Multilevel
governance of global enviromental change, edited by G. Winter. Cambridge: Cam-
bridge University Press.
United Nations. 1997. Programme for the further implementation of Agenda 21. Reso-
lution adopted by the General Assembly at its 19th Special Session (13-28 June
1997). New York: UN General Assembly.
Vogel, David. 1997. Trading up and governing across: transnational governance and
environmental protection. Journal of European Public Policy 4 (4):556-571.
144
Sub-national trans-Atlantic lesson-drawing related
to governance for sustainable development
KIRSTEN JRGENSEN
Abstract
Deviant from current trends of divergence in the trans-Atlantic environmental
dialogue, surprisingly a few sub-national U.S.-German interactions head for
mutual lesson-drawing in the environmental field and in related topics. These
forms of lesson-drawing at a policy level below the federal governments are
interesting in different respects. What are the driving forces and possible bar-
riers of mutual cooperation in environmental policies? What differences can
be observed, and what effects are achieved? The article begins with a brief
description of two bilateral partnerships between U.S. states and German
Bundeslnder which have been set-up for the exchange of experiences regard-
ing the greening of policies and economic sectors.
Interestingly U.S.-German sub-national lesson-drawing relates to the broader
context of global governance for sustainable development. It concerns the
international climate protection process and is thus related to the governance
model of the 21st century, the Agenda 21, adopted at the 1992 UN World
Summit on Environment and Development (UNCED) in Rio de Janeiro.
Noteworthy, also, these innovative governance approaches seem to be specific
to the political scope of the sub-national state level in the federal systems of
Germany and the US, which are comparable in terms of their central role in
the implementation, relative power and scope for taking action in the envi-
ronmental field. This de-central innovation potential is a perspective which
until now has largely been neglected. Frequently the focus is on areas where
the sub-national level clearly blocks environmental policy innovations and
compliance (for Germany see e.g. SRU 2004: 546). Competition for the location
of industry and capture of regional interests are the main explanations for this
behaviour as they are explicated in the race-to-the-bottom argument (for
details see for example Engel 1997).
145
Kirsten Jrgensen
Only recently scholars began to focus their attention on sub-national state

level innovation potentials related to ecological sustainability, above the local
and below the federal government levels, taking examples from U.S. states
(Rabe 2004) and German Bundeslnder (Jrgensen 2002a, 2002b). In this per-
spective States and Lnder have the potential to serve as laboratories for ex-
perimentation and in a few areas they even emerge as autonomous political
players in their own right as especially U.S. climate protection at state level
shows. The motivation for such pioneer behaviour is to increase the regional
quality of life in improving the environmental quality. In this context both
intra- and international lesson-drawing emerges. U.S.-German lesson drawing
is targeted at problem solutions which comparable political entities formulate
and implement on the other side of the Atlantic. This is earning attention
since the successful implementation of sustainable development depends on
governance by diffusion, including lesson-drawing and policy transfer as e.g.
the global diffusion of Local Agenda 21-programs underlines. Globally policy-
makers and societies are confronted with similar environmental problems and
comparable challenges regarding innovative problem -solutions and this is,
where mutual lesson-drawing saves time and resources.
1 U.S.-German sub-national lesson-drawing related

to the greening of policies and sectors
Two examples shall illustrate briefly the already ongoing trans-Atlantic lesson
drawing between US states and German Bundeslnder. These examples were
studied in detail in an ongoing research project on environmental protection
in federal systems. As part of the projects, interviews have been conducted
with officials from environmental administrations in both several Bundes-
lnder and US States.
1.1 Greening the construction sector the forerunners

Maryland / Schleswig-Holstein
A good example for German-American collaboration at the sub-national level

is the Environmental Partnership which the German Bundesland of
Schleswig-Holstein and the US state of Maryland established in 2002. In this
collaboration the partners share knowledge about de-central problem-
146
Sub-national trans-Atlantic lesson-drawing
solutions in different issue areas. Marylands experiences with Smart

Growth, an approach to land-use management that became popular in the
USA and Canada, and Schleswig-Holstein's experiences with renewable en-
ergy, as well as its sustainability strategy a comprehensive participatory
green planning approach were identified as the respective areas of interest
(unpublished background paper October 2001; Memorandum of Understand-
ing June 2002). The substantial fields of co-operation were, at the first stage,
identified as best practice from the USA, namely smart growth, and from
Germany renewable energy, green buildings and green planning. How do they
relate to the greening of policies?
Maryland's smart growth policy approach is a strategic approach to the protec-
tion of environmental resources and improved quality of life. 1 Its main focus
is on a more efficient use of land including space-saving ways of construction
and the reduction of car use and commuting distances. Main policy tools are
financial support for the local level, pilot projects and development partner-
ships. The state government regards smart growth as an initiative that pro-
vides for a long-term orientation and policy integration2. While targeted at the
greening of construction activities, it effects through the associated reductions
in greenhouse gas emissions and air pollution, also other environmental pro-
tection issues of high priority such as the climate protection. It is compatible
with sustainable development although the latter is widely unknown whereas
the smart growth slogan is communicated very well to the public.3
The institutional structures are based on the Governors Executive Order of
01.01.19984 and consist of a smart growth and neighbourhood conservation
sub-cabinet and the rule, that projects have to be reviewed in terms of smart
growth by this working group. Since responsibilities to govern land use are on
the local level, vertical integration of smart growth is mainly based on non
1
For a detailed examination of Marylands Smart Growth Initiative enacted in April
1997, see: Haeuber, Richard (1999), Sprawl Tales, Marylands Smart Growth Initiative
and the evolution of growth management, in: Urban Ecosystems, 3, 131147 and:
Daniels, Tom (2001), Smart Growth, a new American Approach to Regional Plan-
ning, in: Planning Practice & Research, Vol. 16, No. 3/4, 271279
2
Interview Jane Nishida, Head of the Department for Environment, 21.12.2001.
3
See: Tregoning, Harriet / Ageyman, Julian / Shenot, Christine (2002), Sprawl, Smart
Growth and Sustainability, in: Local Environment, Vol. 7, No. 4, 341347.
4
Governor Glendenings Executive Order, 01.01.1998: Smart Growth and Neighbour-
hood Conservation Policy
147
Kirsten Jrgensen
regulative instruments such as financial incentives and information. Criteria

for the spending of public money for infrastructure projects are first of all
inward-looking densification and also water sewer and road funding, which
will be applied for smart growth compatible projects only.
The smart growth idea spread in the context of the U.S. National Governors
Association during the time when Maryland's governor was heading the asso-
ciation. More so, this policy approach found the interest of the Organisation
for Economic Co-operation and Development (OECD), where it has been
evaluated. Also in regions of British Columbia, municipalities are committed
to the smart growth approach, they are supported by the Canadian transfer
organisation Smart Growth BC (Alexander and Tomalty, 2002).
Maryland's partner on the other hand, the Bundesland of Schleswig-Holstein,
addresses sectoral greening in the contexts of energy policy and climate pro-
tection as reflected in its sub-national sustainability strategy. A pioneer in the
last 15 years, Schleswig-Holstein has been a fore-runner having implemented
new standards of energy saving in new buildings. These resulted in buildings
which required only one quarter of the average energy consumption of com-
parable conventional older buildings. 5 Schleswig-Holstein is also known for
its active climate protection policy, it adopted a climate protection programme
which supports the framework regulation and approaches at federal level. It
also focuses on issues like energy saving by the modernisation of buildings.
Further ambitions are to increase the share of combined heat and power pro-
duction and the energy efficiency in communities and enterprises.
Schleswig-Holstein is running a pilot project in the context of the European
Emission trading on carbon dioxide emissions, the aim of which is to inform
and advise the involved firms on this complex issue. With a project like this it
is far ahead of the other Bundeslnder in respect to the use of renewable ener-
gies and the development of climate change strategies.
In 2000, Schleswig-Holstein has set up a comprehensive green planning proc-
ess with public participation. The output is a 2004 state sustainability strat-
egy6. The latter is also object to mutual lesson-drawing. The collaboration
5
See: Energie-Bericht Schleswig-Holstein, 1999: http://landesregierung.schleswig-
holstein.de/coremedia/generator/Archiv/48050,property=pdf.pdf
6
For the full text version of the sustainability strategy, see:
http://landesregierung.schleswig-holstein.de/coremedia/generator/-
148
took the form of workshops and policy study visits it can be expected that a
couple of network relationships related with the topics mentioned above will
be continued.
1.2 Greening the business sector (Bavaria / Wisconsin)
A second example of efforts to achieve greater environmental protection is the

Regulatory Reform Working Partnership, which the State of Wisconsin and
the Free State of Bavaria entered in 1998. The substantial field of interest of
this agreement is the sharing of views and testing of practical ideas that en-
hance business efficiency and profitability, produce innovative public policies
and build networks. The involved State governments will coordinate, report
progress and convene cross-activity events.7 The time schedule of the partner-
ship lasts until 2005. The central question is how public policy can promote
the introduction of environmental management systems into the business
sector. A best practice and object of lesson drawing is certainly the Environ-
mental Pact of Bavaria from 1995, a negotiated state-business agreement, used
as a tool for environmental policy integration and the diffusion of environ-
mental management systems in the business sector. Especially its reformu-
lated second version from 2000 (see Jrgensen 2002b) is innovative in terms of
sectoral greening. It contains measurable targets, provides for monitoring and
strives for the creation of a broad platform including business organizations
and regions. Targets concern greenhouse gases, air pollution, energy produc-
tivity, renewable energy, recycling rates and water productivity. The Bavarian
"Environmental Pact" served as a model in Germany where it diffused in a
less ambitious form - since 1995 to almost all Lnder. The majority of the
German Lnder developed comparable negotiated business-state agreements
all of which refer to the European Environmental Management and Auditing
System (EMAS). These agreements, called environmental alliances (Umwelt-
allianzen) or environmental pacts (Umweltpakte), aim at a new business-
state partnership by changing the traditional command-and-control approach
to a more consensus-oriented policy style. The key aims of these initiatives are
to reduce environmental compliance costs for those companies participating
Aktueller_20Bestand/StK/Hintergrund/PDF/-
Nachhaltigkeitsstrategie__Langfassung,property=pdf.pdf
7
http://www.dnr.state.wi.us/org/caer/cea/bavaria/index.htm last accessed 29.11.2004
149
Kirsten Jrgensen
in environmental management systems, to make environmental regulations

more calculable for companies and to promote organizational improvements
on the individual company level.
The U.S.-German agreement also includes an interplay with upper policy-
making levels, such as the federal level and the supra-national level of the
European Union. An "environmental performance gathering" will be held at
the German Embassy in Washington.
In both cases cited the partnership received support from transfer-institutions
as the German Heinrich-Bll-Foundation, the Quandt (BMW) Foundation and
the Council of State Governments.
2 Governance for ecological sustainability and the

greening of policies and sectors
Both trans-Atlantic partnerships are concerned with problems highly relevant
in the context of an ecologically sustainable development. Climate change,
biodiversity loss, ground water pollution, degradation of soil and over-
consumption of space (SRU 2002)8 are persistent environmental problems
causing high problem pressures and challenge public-policy making in a very
specific way. These persistent environmental problems concern long term and
partly irreversible deterioration of the environment. They are, moreover,
problems which current environmental policy so far has neither solved nor at
least improved (EEA 2001, Jnicke/Volkery 2001, OECD 2001, UNEP 1999).
This problem type requires policy measures that go far beyond the classical
fragmented public policy responses to environmental problems as they have
been applied during the last three decades. Concerning this type of matter
sustainable development is to be understood as a long-term oriented, integra-
tive problem-solving approach to cope with global and regional environ-
mental change induced through the economic impacts of industrial growth
and consumption.
8
Persistent environmental problems have been picked up as a central theme in the
end of the 1990s by the Organization for Economic Co-operation and Development
(OECD), the Netherlands Environmental Policy Plan and the European Environ-
mental Agency. In a traffic lights system the OECD identified persistent problems
as red light major problem areas that need to be addressed urgently (OECD 2001).
150
At the United Nations Conference on Environment and Development

(UNCED) in Rio de Janeiro in 1992 the regulative idea of sustainable develop-
ment became politically relevant, 174 states, among them the USA and Ger-
many, agreed upon the concept of sustainable development and adopted the
Rio Declaration and the Agenda 21. The latter contains a very differentiated,
concrete and long-term oriented action program prescribing actions to be
globally taken on different governmental levels and by private sector actors.
Thus a multi-level governance ranging from the global to the local level and a
multi-actor governance approach including economic and societal sectors has
been set up (Jnicke/Jrgens 2004).
In its Chapter 8, the Agenda 21 addresses one of the most urgent tasks today,
namely the environmental policy integration. Environmental policy integra-
tion is required in public policy jurisdiction such as the ministries and de-
partments responsible for transportation, economy, agriculture, energy policy
and urban planning. Moreover and most important the sectors contributing
to persistent problems by pollution, such as power supply, agriculture, trans-
portation and construction, have to integrate environmental goals. As Lafferty
and Hovden point out, successful environmental policy integration is an
essential and indispensable part of the concept of sustainable development (...)
although it does not in itself constitute sustainable development (Lafferty and
Hovden 2003: 2.). The greening of policies and economic sectors depends on
impetus and contributions from a variety of actors and policy levels (Jacob,
Volkery 2004), among them the sub-national state level may play an important
role.
2.1 The Role of different government levels
The United States and Germany both represent high level consuming socie-
ties with a relatively high problem-solving capacity. In the past both developed
environmental pioneering behaviour and effective global environmental coop-
eration and leadership. In an international comparative study, however the
federal governments of Germany and the USA were not found to be pioneers
in terms of leadership in the coordination of the national sustainability proc-
esses. Only a few state governments were categorized as enthusiasts with
respect to governance for sustainable development: The Netherlands, Sweden
and Norway (Lafferty and Meadowcroft 2000: 413 f.). Together with Australia,
Canada, Japan, and the United Kingdom (Lafferty and Meadowcroft 2000: 356
151
Kirsten Jrgensen
ff.), these states developed more or less effective types of horizontal coordina-
tion, they devised national sustainable development strategies or comprehen-
sive national environmental policy plans framing the implementation of sus-
tainable development from a long term perspective.
In contrast Germany, followed the approach of symbolic policy typically lack-
ing concrete measures for sustainable development; it was described as cau-
tiously supportive. (Meadowcroft and Lafferty 2000: 415). Until 1998 in Ger-
many the implementation of sustainable development on the federal level and
the institution building for horizontal coordination lagged behind in com-
parison with other OECD countries (Jnicke et.al. 2001). Federal leadership
improved after 2000 in the context of the red-green coalition and finally, a
sustainability strategy was released in April 2002. The central US government,
qualified disinterested (Meadowcroft and Lafferty 2000), received the worst
assessment, where UNCED treaties continue to face acute problems in the
American context, and Agenda 21 is virtually non-existent at the federal level
(ibid.: 415). Also, in the 2005 global Environmental Sustainability Index, out of
146 nations, the US only ranked 45th.9 Not only did the Bush administration
not sign the Kyoto-Protocol, it also resisted binding targets to increase the use
of renewable energy sources. Dominant US view is with strong emphasis on
the state level: Federal regulators never have been and never will be able to
acquire and assimilate the enormous amount of information necessary to
make optimal regulatory judgements that reflect technical requirements of
particular locations and pollution sources.10 In 2001 sub-national representa-
tives of environmental departments from U.S. states and the German Lnder
judged their central governments contributions to the sustainability process
as being rather weak in general (Jrgensen 2002a).
Besides the slow pace in federal leadership and partly even gridlock in govern-
ance in the USA and temporarily in Germany, interestingly the sub-national
state level in both federal states moved forward and developed a variety of
policy responses connected with the concept of ecological sustainability
(Feldman and Wilt 1994; Carver et al 1998; Brown 2001; Rabe 2002, 2004; Jr-
gensen 2002 a/b).
9
www.yale.edu/esi/ESI2005.pdf
10
Henry N. Butler/ Jonathan R. Macey: Using Federalism to Improve Environmental
Policy, Washington DC: American Enterprise Institute, 1996, p.27
152
2.2 Laboratories for experimentation U.S. states and the

German Bundeslnder
Since the mid 1990s all German Lnder initiated policy measures related to
sustainable development. A few of them started much earlier than the federal
government, among them Lower Saxony, Hesse and Bavaria. Northrhine-
Westfalia, Hesse und Saarland have set up central agencies and financial pro-
grams for Local Agenda 21-processes. As a result between 60 and 70 % of the
cities in these Lnder dispose of Local Agenda 21-resolutions. The majority of
the Lnder initiated green planning processes related to the Agenda 21 (Jr-
gensen 2002a). They take the form of Agenda 21-programs and environmental
plans. Meanwhile Baden-Wrttemberg, Bavaria, Berlin, Hamburg, Lower-
Saxony, Rhineland-Palatine, Saarland und Schleswig-Holstein dispose of a
Lnder-level environmental plan or an Agenda 21 program.
Interestingly also a number of U.S. states are trying to fill the gap created by
the lack of national leadership. A few pioneers have been identified in regard
to overall green planning strategies, such as Oregon, New Jersey and Minne-
sota (RWI 2001). Surprisingly, New Jersey which in comparison to other states
is usually ranked quite low in terms of environmental quality11 has been
ranked very high regarding the institutional framework for sustainability (RRI
2001). Several states such as Minnesota (1993), New Jersey (1997), Maryland
(1998), Oregon (1999) and New York (2001) have most often by executive order
fixed sustainability as a goal of state policy and distributed administrative
responsibilities (Jrgensen 2002b).
Also in both U.S. states and Lnder a variety of innovative policy approaches
relate to the solving of persistent environmental problems and the greening of
policies and sectors. Climate protection planning has diffused on both sides of
the Atlantic. In the absence of a federal obligation 29 states and 13 German
Lnder are providing for climate protection plans and, relevant to this, for
energy plans and programs (Jrgensen 2002b, Rabe 2004). They developed
11
Ranking performed by: Gold and Green 2000, Institute for Southern Studies, Dur-
ham, NC, 2000 (first published in 1994) http://www.southernstudies.org/
gg2000sources.html#Green1, last accessed in March 2002. Environmental indicators
concern environmental quality, emission form industrial and agricultural activities
and transportation including hazardous waste; energy and resource efficiency, aver-
age individual's added cancer risk, total miles travelled by car, truck, or bus per gal-
lon of gas consumed in a year, waste generation and recycling.
153
Kirsten Jrgensen
horizontal forms of coordination where a range of polluting sectors is ad-

dressed, such as greenhouse gas inventories and climate action plans. For
instance New Jersey is striving to reach the levels of CO2 reduction aimed by
the United States in the 1997 Kyoto Protocol and released a New Jersey Sus-
tainability Greenhouse Plan on April 17, 2000 that addresses polluting sectors
and areas such as industry and waste management (Rabe 2004). Nine out of 13
German programs contain quantitative targets - concerning reductions of
greenhouse emissions, improvements in energy efficiency, increases in the
proportion of renewable energy12 and sectoral goals13 New administrative set-
tings for climate protection emerge. In 2004 Minnesota introduced an Inter-
agency Pollution Prevention Advisory Team responsible for integrating air
pollution prevention into state departments.14 A number of states encourages
the development of renewable energy. All these measures induced remarkable
upswings in electricity from renewables (Rabe 2004).
Apart from green planning and climate protection also other smart policies
that can be found in the states and Lnder allude to potentials for mutual
lesson-drawing. They are related to innovative approaches of land-use man-
agement (Maryland, Oregon, Baden-Wrttemberg, Bayern) of transportation
planning (Baden-Wrttemberg, Berlin) and of the greening of the business
sector (Bavaria, Wisconsin) (Jrgensen 2002a/b Rabe 2002).
As the above shows, the USA and Germany are interesting examples that dem-
onstrate that policy innovations must not be organized top-down, but also
emerge at the sub-national level. As for the U.S. states it is not a new message
that they function as laboratories of experimentation and innovation across a
variety of policy areas and that policies diffuse horizontally across states and
vertically to the federal level (e.g. Walker 1969; Dye 1990; Gray 1994; Kern
2000). Empirical research demonstrates that the U.S. states can in certain is-
sues even take the lead in creating more effective environmental policy meas-
ures (Hall and Kerr 1991, Rabe 2000, Kern 2000, Sapat 2004). In regard to envi-
12
BMU 2000: Nationales Klimaschutzprogramm. Beschluss der Bundesregierung vom
18.10.2000 (5. Bericht der Interministeriellen Arbeitsgruppe "CO2-Reduktion"). Ber-
lin. Klimaschutz-Monitor: Bericht des HLUG zum Erlass I 16 101 d. 08.25-14053/00
des HMULF vom 10. April 2000, Stand: Mrz 2001. Own data collection.
13
Ministerium fr Wirtschaft, Verkehr, Landwirtschaft und Weinbau 2001: Vierter
Energiebericht der Landesregierung. http://www.mwvlw.rpl.de/index3.asp?page=/
Inhalt/Service/Infomaterial.asp. Last accessed in September 2001.
14
EXECUTIVE ORDER 04-08 -- August 6, 2004 last accessed 14.09.2004.
154
ronmental performance it should be annotated that the leadership of a state

can but does for sure not inevitably - induce regulative competition for in-
novation and improve environmental performance. Nevertheless it shall not
be concealed that there is also some empirical evidence for race-to the-
bottom developments, as some states were observed to relax their environ-
mental standards in order to attract industrial firms (Engel 1997).
Regarding the potential for mutual trans-Atlantic lesson-drawing the question
arouses if the de-central innovation capacity of the US states and the German
Bundeslnder can be compared. Do their institutional frameworks constrain
lesson drawing, as has been argued for federal policies (Hansjrgens 2000), or
would it make sense?
The USA and Germany represent different types of federal systems, the U.S. a
more dual type of a federal system and Germany a very specific cooperative
federalism. Regional governments in dual federal systems such as the USA,
Switzerland and Canada, are ascribed to enjoy the most extensive powers in a
range of policy areas among OECD-Countries (Braun 2000: 45). The power
distribution of dual federal systems is expected to provide for increasing
autonomy of each level thus allowing also de-central policy innovations and
competitive regulatory policies
In contrast to that type, in the federal system of Germany with a functional
distribution of power, the federal level in practice took over the legislative
function in all important policy areas and is regarded as the main policy actor
(Wachendrfer 2003:52 f.) and agenda setter. The German Bundeslnder are
therefore not expected to possess noteworthy de-central innovation and diffu-
sion capacities. Consequently this did not get much scientific attention. This
underestimation of the Lnder becomes understandable yet, when the formal
powers are looked at carefully, which do in fact not fully mirror the scope for
political action the Bundeslnder enjoy (see also Schmid 2002: 297). Scholars
found that in the stage of economic recession towards the end of the 1970s
German Bundeslnder such as North-Rhine-Westphalia applied policies deal-
ing with socio-economic structural changes; in the 1980s the Bundeslnder
became active also in the fields of innovation and technology policy (Benz
1986: 19); labour marked policies (Schmid 2002) and environmental policy
(Mller-Brandeck-Bouquet 1996, Jrgensen 2002). During the 1980s the inter-
governmental relations became more competitive, the Bundeslnder then
experimented with different modes of implementation (Hesse, Ellwein 1992:
28 9?) and moved ahead in regulatory policies as well.
155
Kirsten Jrgensen
Regarding the environmental policy field it is interesting to see that the U.S.
states and the Bundeslnder have a couple of frame conditions in common.
Environmental regulation, the right to decide has been centralized not only
in Germany but also in the USA, where the central government became power-
ful in many areas of environmental policy (Rabe 2000) during the 1970s. Sur-
prisingly in both systems success and failure in the implementation and
achievement of national environmental policy objectives highly depend on the
sub-national level. In Germany the administrative function, also denoted as
the right to act, is attributed by constitution to the constituent states. They
have full oversight of the implementation of German and European environ-
mental regulations. Contradictory to the jurisdictional distribution of power
and typical of the U.S. system, the U.S. states also possess a remarkable scope
of decision-making in the implementation of environmental policy. During
the 1970s the federal level dominated both, environmental decision making,
and with the Environmental Protection Agency at hand, the control of imple-
mentation (Rabe 2000, Rosenbaum2000, Kelemen 2004). Intergovernmental
relations changed during the 1990s leaving more flexibility to the states and
delegating most implementation and enforcement to the states. The tradi-
tional principal agent relationship between the EPA and the states was
changed, as it did no longer reflect the role of the states in environmental
policy making, their grown implementation capacities and share in financial
spending to the national environmental enforcement (Lffler, Parker 1999;
Rosenbaum 2000).
3 Potentials for U.S.-German lesson -drawing

Regarding their powers and abilities for political action, the de-central innova-
tion capacity of the states and the Bundeslnder can be seen as comparable.
The de-central sub-national innovation capacity of both on the one hand re-
lating to the implementation of federal and in Germany also supra-national
- policies and on the other hand to the creation of de-central policies. The
sub-national level is strongly tied to implementation and practice. In the im-
plementation context e.g. concerning the enforcement and compliance in
the industrial sector or the control of land-use management - experiments
with new public management approaches can take place also, negotiated state
industry agreements and policy mixes that combine command-and-control
regulation with soft instruments for the greening of policies and sectors. It
156
can well stimulate vertical integration down to the local level. Beyond this,
examples from the states and Bundeslnder mentioned above illustrate, that
the sub-national level is a testing ground for new forms of governance related
to sectoral greening, which are not embedded in federal policies but related to
international policy and law. Examples are forms of cooperative green plan-
ning related to the Agenda 21, negotiated state-industry agreements related to
the European Management and Auditing Scheme or private environmental
management norms derived from the International Organization for Stan-
dardization. Other examples are across the board inter-agency arrangements
which have been set up for climate protection and other cross-sectional tasks.
Summing up, the sub-national policy level is clearly able to innovate, as is
evident from the examples given. Yet it should be kept in mind, that innova-
tive policies stand for pioneer behaviour and best practice but not for the
mainstream of sub-national policy-making. Looking at innovative policies, it
cannot be concluded, that the sub-national level is a strong forerunner in
general. In a bigger picture the capacities of the US states to achieve sustain-
ability have even been assessed quite low: Most states are working to improve
their environmental performance on specific frontssmart growth, water
quality, brownfields clean-up, land acquisition, etc. but few have worked to
integrate these efforts as pieces of the larger sustainability puzzle that needs to
be assembled. (RWI 2001: 12). As for the Bundeslnder their institution build-
ing and substantial policy making for ecological sustainability should also be
assessed cautiously (Jrgensen 2002a). In certain areas relevant to ecologically
sustainable development, e.g. the European Nature Protection Law, especially
the Flora-Habitat- and the Bird Protection-Directive, the implementation of
sustainable development is lagging behind.
Stating this, governance by diffusion through lesson-drawing and the transfer
of successful policies to other places might be regarded as an important
mechanism to stimulate the implementation of sustainable development.
Such diffusion mechanisms exist already across different policy levels and
inter- and intranationally. Sub-national policy responses to sustainable devel-
opment have in a variety of cases been observed as referring in one or another
way to a process of lesson-drawing. In the three cases of green planning in the
U.S states cited above basically the Netherlands Environmental Policy Plan-
ning method served as a model, as well as approaches from New Zealand (RWI
2001).
157
Kirsten Jrgensen
In Germany innovative approaches to land-use-management diffused from

Baden-Wuerttemberg to Bavaria. One part of this problem solution, namely
the complementary research on technological aspects of mobilization of sites
and on innovative cleaning up methods, was picked up in the context of an US
EPA-German working group on brownfields redevelopment.15 Smart growth
and climate protection are an area of mutual interest in the partnership be-
tween Maryland and Schleswig-Holstein. New governance approaches to
modernize environmental policy-making in terms of a performance oriented
management integrated pollution prevention, environmental planning,
priority-setting and especially decentralized, place-based decisions have
been adopted. The U.S. National Environmental Performance Partnership
System (NEPPS) (Rosenbaum 2000) 16 which has been practiced in inter-
governmental federal/states context can be traced to the Dutch method of
national environmental policy planning. (Loeffler/Parker 1999).
Beyond these illustrative examples international comparative research dis-
plays that, new governance forms are already relevant in respect to interna-
tional lesson-drawing and diffusion. Especially forms of governance beyond
hierarchy such as negotiated state-industry agreements (De Clerq 2002, Del-
mas 2002), and forms of strategic environmental planning (Tews et al. 2003)
have diffused internationally. And there are hints that the sub-national level
already has some importance in this context. A recent trans-Atlantic compari-
son points to the fact that most experimentation with new governance forms
did not take place on the federal level but as the USA case shows rather on
the state level (Faure, Vig 2004), that is, where policies are being implemented.
4 Diffusion mechanisms
Lesson-drawing and policy diffusion in the cases described above have been
embedded in intra- and international contexts. They involved interactions
15
Greenberg, Michael et al. (2001), Brownfield redevelopment as a smart growth op-
tion in the United States, in: The Environmentalist, 21, 129-143.
16
Different innovative initiatives such as Project XL and the Common Sense Initiative
have been launched by EPA during 1990s. They are partly linked with sustainable
development, since they provided for cooperative problem-solving approaches in-
stead of hierarchical approaches. They were part of the EPA reform Reinventing
Regulation (Rosenbaum 2000) aimed at an organizational modernization of the
EPA and providing for a new environmental policy style as well.
158
between government officials, private sector actors from the cooperating

countries and support from transfer-institutions. The prerequisites for intra-
and international lesson drawing and policy diffusion in the environmental
field seem to be much better in the USA than in Germany so far (Jrgensen
2002a). As for intra-national diffusion the German Lnder dispose of rather
weak mechanisms for the identification of lessons to learn, benchmarking and
policy-transfer. Lesson drawing relies mainly on bi- to multilateral coopera-
tion between pairs or groups of Bundeslnder, for example old and new
Lnder, or regional clusters and working groups that have been formed in the
context of the Environmental Minister Conference including the Lnder and
the federal level17. These institutions have been created for joint-problem-
solving, for the harmonization of the environmental implementation and last
not least for the coordination of the voting behaviour of Lnder representa-
tives in the German second chamber, the Bundesrat. They are not designed to
serve policy-transfer and exchange about best practice. In contrast the US
states have - driven by New Federalism and devolution - created remarkable
capacities like the Environmental Council of the States (ECOS). Also organisa-
tions such as the National Conference for Legislatures support the exchange
of information and policy-transfer. Complementary to this, non-profit organi-
zations contribute to policy evaluation and consultancy regarding the states.
Thus from the German perspective a strengthening of public and private ca-
pacities for policy evaluation and policy transfer could stimulate competition
and diffusion of smart policies in the federal system of Germany. Here is
clearly a lesson to learn for Germany.
The US seems also to be ahead in respect to international lesson-drawing.
Respective US transfer institutions such as ECOS, the Federal Environmental
Protection Agency18 and a variety of private research and consulting institu-
tions provide information about international best-practice and support the
creation of new networks. In Germany foundations such as the Heinrich-Bll
Foundation and the Quandt Foundation have been involved for a couple of
years now.
17
These insights date back to interviews with representatives from German environ-
mental Ministries performed in 2001 and 2002 (Jrgensen 2002a).
18
http://www.epa.gov/international/regions/Europe/westeur.html last accessed
30.11.2004-11-30
159
Kirsten Jrgensen
5 Conclusions
The main intention of the paper is to direct attention to the question, what
the sub-national laboratories for experimentation in federal systems can con-
tribute to governance for sustainable development.19 Surprisingly, till now
very little attention has been paid to public policy making on the sub-national
state level in federal systems, as far as ecological sustainability is concerned.
Up to now the focus of both political debate and scientific research is still
concentrating on national and local governance mainly. During the last two
years a change can be observed. Increasingly the U.S. states emerge as relevant
actors in climate protection, filling the gap of the missing federal government
leadership. It is most likely that there role is getting more and more impor-
tant. Examples taken from the U.S. states and the German Bundeslnder have
well illustrated that even in times of lagging national leadership the sub-
national level moved forward as to institution building and to substantial
policies targeted at relevant policy issues such as climate change, land-use and
industrial pollution.
The central notion of the study presented here is that the sub-national gov-
ernments in the federal systems of the USA and Germany could be innovative
policy makers, also beyond the climate protection task, with regard to the
solving of persistent environmental problems. They may especially function as
laboratories for experimentation in respect to the greening of sectors and
policies, an issue highly relevant for progress in the implementation of sus-
tainable development. Environmental policy integration requires institutional
innovations in political-administrative arrangements bridging fragmented
and specialized policy-making.
It is specific for the sub-national level that it is strongly tied to implementa-
tion and practice and moreover disposes of room for manovering with
autonomous policy initiatives. In both systems the sub-national level enjoys
scope for taking actions the right to decide with respect to several ecol-
ogically relevant issues such as regulating land use or strategic planning.
19
For sub-national laboratories, see: Adler, Jonathan H. (1998), A New Environmental
Federalism, in: Forum of Applied Research and Public Policy, Vol. 13. Karch, Andrew
(2004), Democratic Laboratories. The Politics of Innovation in the American States.
Paper prepared for presentation at the Annual Meeting of the American Political
Science Association, September 2-5, 2004, Chicago, Illinois.
160
Moreover it controls the implementation of federal sub-national regulation

and can thus contribute to innovate management approaches. Especially con-
sidering the character of persistent environmental problems, comparable
processes of modernizing environmental policy may provide a basis to learn
from each other despite differing institutional structures of both political
systems (see also Demke 2004: 151). The implementation can be regarded as a
stage of policy-making, where different forms of hierarchical and horizontal
governance may be fruitfully combined and further developed.
A critical condition for lesson drawing and diffusion can be found in diffusion
mechanisms. As the comparison of the U.S. states and the German Bundes-
lnder shows, mechanisms for the exchange and distribution of information
about best practice are more advanced in the U.S.A. than in the Bundeslnder.
References
Adler, Jonathan H. (1998), A New Environmental Federalism, in: Forum of Applied
Research and Public Policy, Vol. 13. Karch, Andrew (2004), Democratic Laborato-
ries. The Politics of Innovation in the American States. Paper prepared for presen-
tation at the Annual Meeting of the American Political Science.
Alexander, Don and Tomalty, Ray 2002: Smart Growth and Sustainable Development:
challenges, solutions and policy directions. In: Local Environment, Vol. 7, No. 4
397-409. Carfax Publishing.
Benz, Arthur 1987: Anpassungsprozesse in der fderativen Staatsorganisation der Bun-
desrepublik Deutschland : Teilstudie im Rahmen des Projektes "Wohlfahrtsstaatli-
che Entwicklung und fderalstaatliche Reaktion". - Speyer : Forschungsinstitut fr
ffentliche Verwaltung bei der Hochschule fr Verwaltungswissenschaften. - X,
179 S. . - (Speyerer Forschungsberichte ; 63)
Braun, Dietmar (ed.) 2000: The Territorial Division of Power in Comparative Public
Policy Research: An Assessment, in: Braun, Dietmar (ed.): Public Policy and Feder-
alism, Aldershot, Burlington USA, Singapore, Sydney: Ashgate: 1-56, 234-248.
Brown, Matthew. 2001. Innovative State Programs: New Jersey & Oregon Take the
Lead, in Climate Change: Science, Strategies, & Solutions, ed. Eileen Claussen. Ar-
lington: Pew Center on Global Climate Change: 292-307.
Bundesministerium fr Umwelt (BMU) 2000: Nationales Klimaschutzprogramm. Be-
schluss der Bundesregierung vom 18. Oktober 2000 (Fnfter Bericht der Intermi-
nisteriellen Arbeitsgruppe "CO2-Reduktion"). Berlin. Anhang: Charakterisierung
der Klimaschutzprogramme der Lnder.
Butler, Henry N. / Macey, Jonathan R.: Using Federalism to Improve Environmental
Policy, Washington DC: American Enterprise Institute, 1996, p.27.
Carver, Philip H., Sam Sadler, Mark C. Trexler, and Laura H. Kosloff. 1998. The
Changing World of Climate Change: Oregon Leads the States, The Electricity
Journal, vol. 10, no. 4: 53-63.
Daniels, Tom (2001), Smart Growth, a new American Approach to Regional Planning,
in: Planning Practice & Research, Vol. 16, No. 3/4, 271279
161
Kirsten Jrgensen
De Clercq, M. (Hrsg.)(2002): Negotiating Environmental Agreements in Europe: Critical

Factors for success. Cheltenham (UK), Northampton (Ma, USA): Edward Elgar
Publishing, Inc.
Delmas, Magali/ Terlaak, Ann 2002: Regulatory Commitment to Negotiated Agree-
ments: Evidence from the United States, Germany, The Netherlands, an France, in:
Journal of Comparative Policy Analysis: Research and Practice 4: 5-29, Kluwer Aca-
demic Publishers, Printed in The Netherlands.
Demmke, Christoph 2004: Implementation of Environmental Policy and Law in the
United States and the European Union, in: Vig, Norman, J./ Faure, Michael G. (Ed.):
Green Giants? Environmental Policies of the United States and the European Un-
ion. United States: Massachusetts Institute for Technology: 135-158.
Der Rat von Sachverstndigen fr Umweltfragen (SRU) 2002: Umweltgutachten 2002.
Fr eine neue Vorreiterrolle, Berlin.
Der Rat von Sachverstndigen fr Umweltfragen (SRU) 2004: Umweltgutachten 2004.
Umweltpolitische Handlungsfhigkeit sichern, Berlin.
Dye, Thomas R. 1990: American Federalism. Competition among Governments, Lex-
ington (MA) and Toronto; Lexington Books.
EEA (European Environment Agency) 2001: Environmental Signals 2001: European
Environment Agency regular indicator report.-Luxemburg: Amt fr amtliche
Verffentlichungen.-113 S.
Engel, Kirsten H. 1997: State Environmental Standard-Setting: Is There a "Race"
and Is It "To the Bottom"?, 48 Hastings L.J. 271, 274.
Feldman, D. L., and C. A. Wilt 1998. "Motivations and Roles for Sub-National Govern-
mental Participation in Managing Climate Change." International Journal of Envi-
ronment and Pollution 9(2-3):213-226.
Gray, Virginia 1994: Competition, Emulation, and Policy Innovation, in: Dodd, Law-
rence C. and Jillson, Calvin (Ed.) Politics in the American States. A Comparative
Analysis, Washington D.C.: CQ Press, S. 1-34.
Haeuber, Richard (1999), Sprawl Tales, Marylands Smart Growth Initiative and the
evolution of growth management, in: Urban Ecosystems, 3, 131147
Hall, Bob/ Kerr, Mary Lee 1991: 1991-1992 Green Index: A State-by State Guide to the
Nations Environmental Health, Washington D.C.: Island Press.
Hansjrgens, Bernd 2000: Umweltpolitik in den USA und in der Bundesrepublik
Deutschland Ein institutionenkonomischer Vergleich. In: Wentzel, Bettina/
Wentzel Dirk (Hrsg.): Wirtschaftlicher Systemvergleich Deutschland/USA. Stutt-
gart: Lucuis und Lucius. S. 181-222.
Hesse, Joachim Jens/ Thomas Ellwein 1992: Das Regierungssystem der Bundesrepublik
Deutschland. Opladen: VS Verlag fr Sozialwissenschaften.
Jacob, Klaus/ Volkery, Axel (2004): Institutions and Instruments for Government Self-
Regulation: Environmental Policy Integration in a Cross-Country Perspective, in:
Journal of Comparative Policy Analysis, Vol. 6, No. 3, 275-293.
Jnicke, Martin/ Jrgens, Helge/ Jrgensen, Kirsten/ Nordbeck, Ralf 2001: Governance
for Sustainable Development in Germany. Institutions and Policy-Making. Paris:
OECD.
Jnicke, Martin/ Volkery, Axel 2001: Persistente Probleme des Umweltschutzes. In:
Natur und Kultur, Jg. 2/2, S. 45-59, Wien.
Jnicke, Martin/Jrgens, Helge (2004): Neue Steuerungskonzepte in der Umweltpolitik.
in: ZfU 3/2004, S. 297-348.
Jrgensen, Kirsten 2002a: kologisch nachhaltige Entwicklung im fderativen Staat -
Das Beispiel der deutschen Bundeslnder. FFU-report 04-2002, Berlin.
162
Jrgensen, Kirsten 2002b: Policy-making for ecological sustainability in federal states:

The examples of the German Bundeslnder and the U.S. States: American Institute
for Contemporary German Studies. The Johns Hopkins University. AICGS/DAAD
Working Paper Series. Washington D.C.
Kelemen, R. Daniel 2004: Environmental Federalism in the United States and the
European Union, in: Vig, Norman, J./ Faure, Michael G. (Ed.): Green Giants? Envi-
ronmental Policies of the United States and the European Union. United States:
Massachusetts Institute for Technology
Kern, Kristine 2000: Die Diffusion von Politikinnovationen. Umweltpolitische Innova-
tionen im Mehrebenensystem der USA. Opladen: Leske + Budrich.
Lafferty, William M./ Meadowcroft, J.(eds.) 2000: Implementing Sustainable Develop-
ment. Oxford University Press.
Lafferty, William/ Hovden, Eivind 2003: Environmental Policy Integration: Towards an
Analytical Framework, in: Environmental Politics, Vol. 12, No. 3, Autumn 2003, pp.
1-22.
Loeffler, Elke/ Parker, Christina 1999: The National Environmental Partnership System
(NEPPS) Between the States and the US Environmental Protection Agency. OECD,
Public Governance and Management, Working Papers. Paris.
Medearis, Dale, Swett, Brian & Zaw-Min, Merrylin (2003): International Best Practices
and Innovation - Strategically Harvesting Environmental Lessons from Abroad.
ECOStates (Winter 2003): 14-18.
Mller-Brandeck-Boquet, Gisela 1996: Die institutionelle Dimension der Umweltpoli-
tik. Eine vergleichende Untersuchung zu Frankreich, Deutschland und der Euro-
pischen Union. Baden-Baden: Nomos-Verlag
OECD 2001: Environmental Outlook.-Paris: OECD.-327 S.
Rabe, B.G., 2002. "The Subnational Role in Sustainable Development," in The Moral
Austerity of Environmental Decision Making, eds. J Gillray and J Bowersox (Dur-
ham, NC: Duke University Press, 2002): 91-114.
Rabe, Barry, G. 2000: Power to the States: The Promise and Pitfalls of Decentralization.
In: Vig, Norman J./ Kraft, Michael E.(Ed.)(2000): Environmental Policy. Washington
DC. S. 32-54.
Rabe, Barry, G. 2004: Statehouse and Greenhouse: The Emerging Politics of American
Climate Change Policy. Washington, D.C.: Brookings Institution.
Resource Renewal Institute 2001: The State of the States. Assessing the Capacity of
States to achieve Sustainable Development through Green Planning. By Eric Siy,
Leo Koziol, Darcy Rollins. San Francisco.
Rosenbaum, Walter, A. 2000: Escaping the Battered Agency Syndrome. EPAs Gamble
with Regulatory Reinvention. In: Vig, Norman J./ Kraft, Michael E.(Ed.)(2000): Envi-
ronmental Policy. Washington DC. S.165-189.
Sapat, Alka (2004): Devolution and Innovation: The Adoption of State Environmental
Policy Innovations by Administrative Agencies. Public Administration Review, Vo-
lume 64 Issue 2, Page 141
Schmid, Josef 2001: Sozialpolitik und Wohlfahrtsstaat in Bundesstaaten, in: Benz; Ar-
thur/Lehmbruch, Gerhard (Ed.) Fderalismus Analysen in entwicklungsge-
schichtlicher und vergleichender Perspektive. PVS Sonderheft 32/2001, Wiesbaden:
Westdeutscher Verlag, 279-305.
Tews, Kerstin/ Busch, Per-Olof, Jrgens, Helge 2003: The diffusion of new environ-
mental policy instruments, European Journal of Political Research 42, 4, 569-600.
Tregoning, Harriet / Ageyman, Julian / Shenot, Christine (2002), Sprawl, Smart Growth
and Sustainability, in: Local Environment, Vol. 7, No. 4, 341347.
163
Kirsten Jrgensen
UNEP (United Nations Environment Programme) (1999): Global Environmental Out-

look 2000.-London: Earthscan.-432 S.)
Vig, Norman, J./ Faure, Michael G. 2004 (Ed.): Green Giants? Environmental Policies of
the United States and the European Union. United States: Massachusetts Institute
for Technology.
Wachendorfer-Schmidt, Ute 2003: Politikverflechtung im Vereinigten Deutschland.
Wiesbaden: Westdeutscher Verlag.
Walker, Jack L. 1969: The Diffusion and Innovation among the American States,
American Political Science Review 63: 880-899.
164
Part III
The Rio Model of

Environmental Governance
New Approaches to Environmental Governance 1
MARTIN JNICKE
HELGE JRGENS
Abstract 2
Environmental Policymaking has been confronted with a fundamental change
of the structure and nature of the key environmental problems it has to deal
with. Many of todays most pressing environmental problems can be charac-
terized as persistent, meaning that over a longer period of time political at-
tempts to solve them have failed or have not shown the intended effect. At the
same time, the political framework conditions for environmental policymak-
ing are also experiencing a major transformation. This change is characterised
by a broadening of the spectrum of actors involved in political decision-
making, an increasing importance of levels of government other than the na-
tion-state and a broadening of steering modes from a strong focus of direct
regulation towards a greater consideration of economic, informational, coop-
erative or self-regulatory approaches. Against this background, the article ana-
lyses the role that new modes of governance can play in solving new and per-
sistent environmental problems. It argues that while, in principle, the use of
new forms of governance may help overcome some of the prevailing imple-
mentation deficits in environmental protection, their effectiveness and effi-
ciency depends strongly on additional measures being taken. In order to avoid
a decline of the overall level of environmental protection, new modes of gov-
1
First published in: Neue Steuerungskonzepte in der Umweltpolitik. Zeitschrift fr
Umweltpolitik & Umweltrecht. Jg. 27, H.3, 2004, S. 297-348.
2
This paper has arisen out of work on the Environmental Report 2004 published by
the German Advisory Council on the Environment (SRU 2004) and has profited
enormously from wide-ranging discussions within the Council. We would like to
extend our special thanks to Christian Hey, who was involved from the papers con-
ception and has applied the thoughts presented here to the environmental policy of
the European Union (Hey 2003; Hey et al. 2005), and to Stefan Lindemann for his
editorial assistance.
167
ernance need to be complemented and safeguarded by direct and hierarchical

regulation.
1 New Challenges for Environmental Governance

The challenges faced by environmental policy today differ sharply from those
of past decades both as regards the environmental problems calling for at-
tention and the strategies available to tackle them. On the problems side, after
notable successes in some sub-areas of environmental protection, the focus is
now on issues where environmental policy has failed to bring about any sig-
nificant improvement even over a substantial period of time (SRU 2002: 69-74;
Jnicke and Volkery 2001). On the response side, there has been continuous
growth in both the regulatory repertoire and the range of actors involved.
Though they still predominate, traditional forms of hierarchical intervention
are increasingly being supplemented by new forms of cooperative governance.
This can tend to cause a weakening of state authority and democratic legiti-
macy, and reductions in established institutional problem-solving capacity
(Pierre 2000: 2). At the same time, new policy instruments offer an opportunity
to plug deficits in existing environmental policy and help address so-far unre-
solved environmental problems.
This paper explores how persistent environmental problems can be tackled
more effectively against a backdrop of changes in the institutional and policy
framework, and what part can be played here by new approaches to govern-
ance. The focus is therefore on fundamental issues of environmental policy-
making that come under the general heading of governance in both academic
and policy debate.
The first part of the paper describes in detail the changed environmental and
political situation. The second part, written in the light of experience with the
Rio Process begun in 1992 and its ambitious model of multi-level governance,
goes on to evaluate four central governance approaches in recent environ-
mental policy: Target orientation, integration, cooperation and participation.
New forms of environmental governance are shown to promise improvements
in solving persistent environmental problems, but are highly demanding in
their own right and require additional support, particularly in the form of
backup from traditional hierarchical regulation. Without these added precau-
tions, new patterns of governance can be expected to suffer in terms of effi-
168
New Approaches to Environmental Governance
ciency and effectiveness or worse still to deliver lower levels of environmental

protection.
1.1 Persistent Problems
Persistent environmental problems are problems where environmental policy

has failed to bring about any significant improvement over a substantial
length of time (SRU 2002: 69-74). They include globally undiminished green-
house gas emissions, biodiversity loss, urban sprawl, soil and groundwater
contamination, use of hazardous chemicals, and an array of environmental
pressures on human health (EEA 2002, OECD 2001). The intractability of such
persistent problems is due to three main factors.
Firstly, they often represent environmental and health risks whose sources lie
outside the traditional domain of environmental policy and which instead are
a product of the normal functioning of other sectors of the economy and
society. Unlike past environmental policy successes such as improving sur-
face water quality or phasing out the use of ozone-depleting substances
where a technological fix or the ability to exploit a win-win situation secured
rapid progress, solving persistent environmental problems requires lasting
change in the operating logic of the sectors that cause them.
This is compounded by the fact that these sectors are ones whose production
activities necessarily place heavy demands on the environment. This is true of
mining and the raw materials industries, and equally so of energy, transport,
building and agriculture. Environmental policy has to contend here not only
with sectoral pressures on the environment, but with sectoral policies that
exist for each industry: Economic, energy, building and agricultural policies
see their primary aim in securing production conditions for their client sec-
tors and so improving conditions for growth and employment overall. They
show a strong tendency only to consider environmental concerns where these
do not oppose fundamental sector interests as a result of which environ-
mental policy is treated as a bolt-on extra, to be retrofitted like environmental
technology. But even efficiency-boosting ecological modernisation can fall
foul of sectoral barriers if it adversely affects other industries markets. A drive
to save electricity, for example, only stands a chance of success if it has the
power industrys backing (for example because the industry sees alternatives
in new lines of business). Herein lies a special challenge for modern environ-
mental policy.
169
Secondly, the majority of persistent environmental problems are highly com-

plex. Most develop slowly, manifesting themselves as creeping forms of deg-
radation and implicating a plethora of actors, many of them only indirectly.
Substantial distances or delays between cause and effect, diffuse discharges
and problematic additive impacts make reactive environmental policy a non-
starter while simultaneously raising the bar for precautionary strategies tar-
geting environmentally relevant sectors. Such problems can thus further ag-
gravate existing governance challenges critically voiced under headings like
ungovernability, governmental overload and governmental failure challenges
which moved Niklas Luhmann (1989: 85) to the acutely sceptical statement that
environmental problems make it quite clear how much politics would have to
accomplish and how little it can.
Thirdly, the intractability of persistent environmental problems must be
viewed alongside the relatively poor approval ratings for ambitious environ-
mental policy action. The approval gap is partly due to the described need for
incisive changes in other sectors of the economy and society. But it also arises
because many of todays pressing environmental problems, such as urban
sprawl, climate change and species loss, only make themselves felt gradually
rather than immediately and so need to be highlighted by scientists and the
media before the public will sit up and take notice (Jnicke and Jrgens 1998).
This is compounded by the fact that environmental policy successes of recent
decades, mostly involving visible problems like smog and surface water pollu-
tion, can give a false impression that the most urgent environmental problems
are largely under control (BMU and UBA 2002: 34 f.). Finally, environmental
policys failure to master certain persistent problems has led to palpable res-
ignation among those who have fought to bring attention to them for years or
even decades. What was a heated public debate surrounding hazardous chemi-
cals in Germany as recently as the 1980s has thus now petered out. This accep-
tance dilemma, with one groups false sense of security feeding the others
resignation, comes to a head when industry is asked to accept more rigorous
regulation. Its severity is borne out by the fierce counterswell experienced by
former environmental protection pioneers such as the USA and Japan in the
1980s and more recently countries like the Netherlands and Denmark.
Fourthly, persistent environmental problems are often global in nature. Be-
cause they can transcend national borders, effective problem-solving is only
possible on an international scale. But heterogeneous interests and the many
veto opportunities for opponents of radical environmental protection meas-
170
ures often make it harder to properly coordinate the policies of sovereign

nation states than to solve geographically limited environmental problems at
national level. Effectively dealing with persistent environmental problems is
therefore closely linked to the difficulties of policy coordination in the multi-
level international system.
1.2 Changes in the political and institutional framework
The changing nature of environmental problems is paralleled on the response

side by gradual change in the political and institutional framework of envi-
ronmental policy. In a shift away from the conventional debate surrounding
policy instruments, these changes are mostly discussed under the heading of
environmental governance. Governance is an umbrella term for diverse
forms of state and non-state political control exercised today at various policy
levels against a backdrop of growing complexity in actor structures and the
operating environment (Pierre and Peters 2000; Kooiman 2003; Hooghe and
Marks 2003). The term governance therefore takes in a broader range of ac-
tors and policy instruments than government, which is restricted to state
action. Environmental policy in particular has been quick to adopt this broad
concept of governance because in this policy area the legislative means and
agents are diversified to a particularly advanced degree (Holzinger et al. 2003;
Bressers and Kuks 2001). Ultimately, proposals for environmental governance
are about how better to address intractable, predominately global problems
given the large variety of policy levels (global to local), sectors (policy integra-
tion), vested interests (stakeholders) and competing policy instruments.
It is important to distinguish in the governance debate between analytical and
normative uses of the governance concept (Mrle 1998: 6). In its analytical
sense, the concept of governance is used to describe, without any implied
value judgement, the changes in the practice and conditions of policy making
outlined above. Used normatively, it denotes a variety of value-laden, some-
times conflicting visions. These range from notions of the minimal state, that
is, the systematic reduction of state services and intervention (e.g. Osborne
and Gaebler 1992) to the good governance principles propagated by the
World Bank and the International Monetary Fund (see, for example, Leftwich
1993).
The following sets out in greater detail the empirical changes in governance
and the conditions surrounding them changing actor groups, the increasing
171
variety of policy levels and instruments, and changes in the institutional

framework. Each section also briefly addresses key pertinent normative policy
issues from the contemporary governance debate.
1.2.1 Actors and actor groups

The basic environmental policy actor groups have changed significantly over
the last three decades, in Germany as in other industrialised nations and
across the European Union (Jnicke and Weidner 1997: 146 f). The first phase
of environmental policy in the late 1960s and 70s was dominated by the tradi-
tional dipole of the state as the originator of policy and industry on the receiv-
ing end. A second phase saw additional groups join the fray in the form of
environmental organisations and the media. Another new feature of this phase
was the emergence of interaction between actor groups. One reason for this
was that the direct, usually command-and-control forms of regulation that
had predominated until then began to be supplemented by cooperative ap-
proaches such as voluntary commitments by industry (SRU 1998: 130-151). An-
other was that many environmental organisations began to take their de-
mands to polluters themselves from the late 1980s mostly in the form of
protests, but the 1990s increasingly saw instances of cooperation between
environmental NGOs and big business (Weidner 1996; Jacob and Jrgens
2001). Finally, a partial shift of environmental policy responsibility from
within environmental policy institutions and out into other policy areas can
be observed in the state apparatus since the early 1990s (SRU 2002: 153-156;
Lenschow 2002; Lafferty 2001).
The empirically observed expansion in the range of actors is often hastily con-
strued as a sign of waning government and administrative influence or even a
retreat of the state (Schuppert 1995). Some normative policy approaches go a
step further and call for a large-scale transfer of governance tasks to social
actors along with comprehensive deregulation (see, for example, Osborne and
Gaebler 1992). There is a misguided tendency in the context of such argu-
ments to invoke the governance without government formula coined with
reference to international policy coordination (Rosenau and Czempiel 1992;
Young 1999). In fact, this term is used by its authors in an analytical sense and
merely denotes the empirical fact that the international system has no su-
perordinate government with binding decision-making powers and govern-
ance therefore relies by necessity on horizontal policy coordination mecha-
nisms (Rosenau 1992: 9). It does not infer any value judgement in favour of
deregulation and reducing the role of the state.
172
1.2.2 Policy levels

As well as a more varied actor spectrum, the governance concept also denotes
an increase in reciprocal influence between policy levels and their respective
state and non-state actors. This effect is seen at global level with the various
international institutions and environmental regimes, and also at EU level.
These policy levels above the nation state have steadily gained in importance
in line with the amount of policy they originate. Yet this by no means spells
less influence for nation states, including EU member states. Instead, interde-
pendencies that have arisen between the different policy levels make nation
states, though no longer entirely free in their actions, indispensable as the
source of power and legitimacy for international arrangements (Jnicke 2003a).
The environmental policy agenda of EU member states, for example, is now
largely determined by the need to implement prevailing European law and to
anticipate and actively shape European measures and action plans (Hritier et
al. 1994; Demmke and Unfried 2001). An array of international conventions
and multilateral agreements must also be taken into account when shaping
national environmental policy (Jacobsen and Brown-Weiss 2000; Lafferty and
Meadowcroft 2000). Conversely, the enactment of European and international
environmental measures requires input from participating nation states.
Their positions and interests in turn are influenced to a large degree by na-
tional and international lobby groups and transnationally operating networks
of environmental activists (Keck and Sikkink 1998) and environmental scien-
tists (Haas 1992). Environmental governance is therefore increasingly caught
up in a complex web of state and non-state actors operating and interacting at
different policy levels.
Environmental issues also affect policy at the subnational levels of regional
and local government. The role of the world-wide Local Agenda 21 process is
just one example of this among many. Finally, citizens too are party to the
multi-level environmental policy system (for a detailed discussion see SRU
2002: 86-122). Also, greater emphasis is now being laid on citizens role as vot-
ers, consumers and members of nongovernmental organisations. Not only is
environmental policy undergoing a proliferation of policy levels: the individ-
ual levels are gaining in importance.
1.2.3 Policy instruments

As with the widening range of actors and policy levels, a substantial amount of
attention has been paid to the emergence of new instruments specifically in
173
the context of environmental policy (see for example Golub 1998, Knill and
Lenschow 2000, and De Bruijn and Norberg-Bohm 2005). Information-
oriented instruments like ecolabels have long supplemented the regulatory
toolkit (Kern et al. 2002; Jordan et al. 2001; Winter and May 2002). Conversely,
market-oriented governance approaches, which took a central place in the
academic debate from the early 1970s, have been very slow to be adopted in
practice (Holzinger 1987; Opschoor and Vos 1989; Zittel 1996). Since the late
1980s, an increasingly important part has also been played, both in policymak-
ing practice and in political scientists analysis, by cooperative instruments
such as voluntary agreements between environmentally relevant sectors and
the state (Glasbergen 1998; De Clercq 2002; Jordan et al. 2003a). Finally, the
1990s saw at least some degree of environmental policy deregulation. The
term deregulation here is taken on the one hand to mean the trend towards
liberalising sectors close to the state and privatising state-owned industries as
seen in telecommunications, energy, water supply and waste disposal (SRU
2002: 295-304 and 448-461) and on the other to a partial withdrawal from di-
rect, usually command-and-control intervention by the state and increased
reliance on market forces and self-regulation (Collier 1998). Only the latter
variety can properly be termed deregulation, however, as liberalisation and
privatisation of state activities and services are almost invariably accompanied
by a significant degree of new regulation for example in competition law or
the creation of new regulatory agencies (Collier 1998: 4; for a fundamental
discussion, Levi-Faur and Jordana 2005; Majone 1990).
At international level, too, elements of informational guidance or cooperative
governance have gained importance alongside conventional treaties. One ex-
ample of international environmental policy involving relatively little treaty
law comprises United Nations Environment Programme (UNEP) and OECD
activities to promote sustainable patterns of consumption. Both of these or-
ganisations rely first and foremost on informational guidance by gathering
and disseminating best-practice knowledge. Their activities are based on the
fourth chapter of Agenda 21, which outlines general aims and principles for
changing consumption patterns (UNDESA 1992: Ch. 4). Even less formal
governance mechanisms are described and analysed under the heading of
governance by diffusion (Jrgens 2004; Busch et al. 2005; Kern 2000; Kern et
al. 2000). This research centres on the observation that, in developing meas-
ures and programmes, national governments increasingly look to policies
already practised in other countries, and many policy innovations rapidly
propagate through the international system without any need for binding
174
international accords (Busch and Jrgens 2005a; Dolowitz and Marsh 1996 and
2000). Such diffusion processes are borne by a range of different actors in-
ternational organisations or networks. An environmental policy corollary of
the governance-by-diffusion idea might be conscious reliance on the exemplar
effect of policy trailblazers nations that exert political and technological
innovative and competitive pressure on other countries and so become an
important element of international environmental governance (SRU 2002;
Jacob and Volkery 2003; Jnicke et al. 2003).
As with environmental policy actor groups, so with policy instruments: the
empirically observable emergence of cooperative, market-based or informa-
tional governance strategies is often taken to imply a decline in direct state
intervention, mostly of the command-and-control variety. However, there is as
yet no empirical evidence to support such a decline in the importance of tra-
ditional state activity (as regards the European Union see Holzinger et al.
2003). The more likely consequence is a broadening of the governance reper-
toire, aiming to achieve results not so much through specific instruments as
through a judiciously chosen policy mix (SRU 2002: 74-86; Jnicke 1996).
1.2.4 The institutional framework

Finally, the governance debate also pushes the role of institutions into the
policy limelight. As relatively stable collections of formal rules and practices
that structure relations between actors along predictable lines (March and
Olsen 1998: 948; Hall 1986: 19), institutions affect the options available to po-
litical and social actors by precluding certain choices and making others like
giving NGOs access to justice in environmental matters possible in the first
place (Aspinwall and Schneider 2000: 4-5). Additionally, institutions shape the
vested interests, preferences and also expectations of actors in their sphere of
influence (DiMaggio and Powell 1991: 11). Normative policy approaches to
governance like the European Commissions White Paper on European Gov-
ernance often have an institutional dimension in that they develop detailed
visions as to how to reorganise the institutional framework within which gov-
ernance processes operate. They therefore also affect the power relations be-
tween different actor groups.
1.2.5 Interim conclusions

Pulling together what we have seen so far, recent changes in the political and
institutional environmental policy framework do not readily fit under buzz-
175
words like deregulation, retreat of the state, Europeanisation or the end of

the nation state. These changes evidence not a zero-sum shift in political
authority but increasing interconnections and interdependencies among
growing numbers of actors, policy levels and policy instruments.
The complex structure of environmental governance today demands detailed
analysis and appraisal of ongoing developments and tabled reform proposals.
The next section therefore investigates and appraises the strengths and weak-
nesses of four recent approaches to environmental governance: Target orien-
tation, integration, cooperation and participation.
2 Recent approaches to environmental governance

The following sections present, in the light of experience with the Rio Process
and its strategic goals, an overview of key new environmental governance
patterns that are potentially capable or are claimed to be capable of better
meeting the new environmental policy challenges described so far.
2.1 Strategic environmental governance and the Rio framework
2.1.1 The Agenda 21 governance approach

Agenda 21 (UNDESA 1992) is a strategic governance approach to environ-
mental and developmental problems adopted by the UN Summit at Rio de
Janeiro in 1992. It is a strategy for sustainable development with overarching
long-term goals and operational targets, including success monitoring. But it
is also an environmental governance framework integrating key approaches to
governance that have acquired importance on a national and European scale:
Long-term planning, target and results-oriented governance, environmental
integration, cooperative governance, self-regulation and participation (Jnicke
2003b). In the following, we undertake an appraisal of this most ambitious
approach to environmental policy seen so far.
In forty chapters, Agenda 21 not only embodied the then current state of aca-
demic knowledge in matters of environmental policy. It also reflected general
public sector reform trends across the industrialised world. Looking back, it
was a prodigious conceptual achievement with sometimes unexpectedly far-
reaching knock-on effects. It owes its special status not least to the fact that a
176
global multi-level and multi-sectoral governance approach of this kind has so

far been unique to environmental policy and has only existed in this form. In
view of the complex implementation process taking effect at multiple policy
levels, the German Bundestag Committee of Enquiry into Protection of Man-
kind and the Environment for the 1994-1998 election period deliberately
picked out Agenda 21 for special mention as a new model of governance
(Enquete-Kommission 1998: 55 ff.). A model role is sometimes also ascribed to
the main substantive part of Agenda 21 the concept of sustainable develop-
ment. In its three-pillar form, for example, this is recommended by the
OECD as a substantive framework for global governance (GASS 2003; likewise
Enquete-Kommission 2002). The Rio process can be considered the most
comprehensive trial of new environmental governance approaches so far un-
dertaken and as such can furnish key information about approaches and ob-
stacles to solving persistent environmental problems in a changing political
and institutional landscape.
The key features of the integrated model of governance put forward by Agenda
21 are as follows (SRU 2000; Jnicke and Jrgens 2000):
Strategic approach: Consensual, broad-based target and strategy formula-
tion with a long-term horizon (Agenda 21 Chapters 8, 37 and 38).
Integration: Integration of environmental concerns, and in particular envi-
ronment and development, into other policy areas and sectors (Chapter 8).
Participation: Widespread participation by NGOs and citizens (Chapters
23-32).
Cooperation: Cooperation between state and private-sector actors in envi-
ronment-related decisionmaking and enforcement processes (a recurring
theme in all chapters).
Monitoring: Success monitoring with a diverse range of reporting obliga-
tions and indicators (Chapter 40).
Agenda 21 sets targets for key problem areas and individual policy levels. It
assigns specific tasks to selected actor groups such as business and industry,
the scientific and technological community, and local authorities. It aims
overall to replace reactive, additive, case-by-case policy decisionmaking to
protect the environment with broad-based global, national and local efforts to
achieve environmentally more sustainable and globally more equitable devel-
opment.
177
2.1.2 The Rio Process

The Rio Process, structured by and designed to implement Agenda 21 (Rio
Plus 5 or the Johannesburg Summit), met with many obstacles over time (see
section 2.1.3) but nonetheless delivered sometimes remarkable and unantici-
pated results. For example, more countries established environment minis-
tries or central-government environment agencies during the 1990s than ever
before, and today over 130 countries have institutions of this kind (Busch and
Jrgens, 2005b). In addition, some 140 countries followed the non-binding Rio
injunction to develop a national environment plan or national sustainability
strategy. By 2002, the great majority of countries had also submitted struc-
tured reports (country profiles) on implementing Agenda 21. The OECD, too,
heavily promoted national sustainability strategies for its member states
(OECD 2001, 2002). Finally, some 6,400 Local Agenda 21 processes have been
completed or initiated in 113 countries (UNDP and OECD 2002: 64). The ex-
tent to which third parties are or have been at least formally involved in this
process is shown among other things by the over 1,000 NGOs registered with
the UN Commission on Sustainable Development (CSD) set up in 1993.
Key governance elements from Agenda 21 have also been implemented in the
European Union:
Agenda 21s strategic goal-oriented governance approach found clear ex-
pression in the Fifth EC Environmental Action Programme in 1993.
The EU adopted its own sustainability strategy in 2001.
The principle of environmental integration is not only enshrined in the EC
Treaty (Article VI), it has also started being put into practice in what is
known as the Cardiff process, an ambitious attempt to develop environ-
mental integration strategies for different sectors.
There are now numerous instances of cooperative governance being put to
the test in environmental policy. Coregulation and industry voluntary
commitments and agreements play an increasingly important role.
Aside from the Fifth Environmental Action Programme, Agenda 21 partici-
pation principles have been taken up elsewhere, including in connection
with the Aarhus Convention.
Overall, in the course of implementing the Agenda 21 approach to governance,
the Rio process triggered important learning experiences at all policy levels
and for key environmentally relevant sectors. Its influence essentially ex-
tended beyond the UN Johannesburg Summit in 2002. In March 2003, the UN
178
Commission on Sustainable Development adopted a detailed working pro-

gramme to implement the Johannesburg resolutions. A comprehensive ap-
praisal of Agenda 21 and its implementation is planned in 2016/17 (BMU 2003).
A number of EU countries are not only implementing their sustainability
strategies as planned, but continue to develop them further. Barely a year after
the Johannesburg conference, France presented a wide-ranging and in parts
ambitious sustainability strategy. The German government published a pre-
liminary assessment of its sustainability strategy in 2004 and used the oppor-
tunity to set new points of focus. At subnational level, the German states of
North Rhine-Westphalia and Schleswig-Holstein recently pledged to develop
their own sustainability strategies.
The spring 2003 European Council resolved to reinforce the environmental
dimension of sustainable development and called for new impetus in this
regard (Presidency Conclusions, 21 March 2003). It reaffirmed the targets of its
own sustainability strategy and supplemented them with the main targets set
out in the Johannesburg Plan of Implementation. For the ongoing evolution
of the sustainability process, the Council underscored the importance of set-
ting and extending indicative targets. It resolved to strengthen the Cardiff
process for environmental integration and to develop sector-specific objec-
tives for decoupling environmental degradation and resource use from eco-
nomic growth. The EU regards itself as having a leading role in promoting
sustainable development on a global scale (loc. cit.).
In the light of the Rio process, then, the ambitious approach to governance
enshrined in Agenda 21 essentially proved its worth as a guidance system for a
long-term multi-level and multi-sector strategy. Multi-level governance ex-
tending from the global to the local (the latter as Local Agenda 21) proved es-
pecially effective. This is surprising to the extent that the only influence
wielded here from global level consisted of describing problems and recom-
mending strategies whose main instrument was international reporting.
Multi-level governance here was ultimately a voluntary pact among nation
states, including a right to not conform. The Rio model of global environ-
mental governance thus took effect through extremely soft policy instru-
ments.
2.1.3 Obstacles
This effect was mostly restricted, however, to agenda-setting and strategy for-
mulation phases at the various policy levels. A far more mixed picture emerges
179
when we look at the quality of the strategies themselves, and even more so
regarding their implementation. Overall, the strategy model pursued in the
Rio Process came up against visible limitations on the way to implementation.
It cannot yet be regarded as a far superior model of governance when it comes
to persistent environmental problems.
Limitations to the Rio Process manifested themselves in many ways: An ap-
praisal specifically targeting national sustainability strategies was slated for
the UN Johannesburg Summit in 2002 but failed to materialise beyond aca-
demic strategy recommendations submitted at the time (UNDP and OECD
2002; World Bank 2003). This body of experience, which was also documented
in country reports, thus went unexploited in terms of drawing formal conclu-
sions. Success stories were not used as a basis for benchmarking. There was no
enquiry into why many national sustainability strategies resembled routine
publications kept at a general level. The Johannesburg Summit failed to make
available any extra institutional capacity either to the CSD or to UNEP (UNU
and IAS 2002). The Plan of Implementation that the international community
adopted at the summit contained some important and specific targets but is
generally considered vague and non-binding.
This tendency of the Rio Process to become bogged down which we shall not
further investigate here had parallels at European level. Based on Agenda 21
and the Dutch National Environmental Policy Plan (NEPP) of 1989, the explicit
target orientation of the Fifth EC Environmental Action Plan (1993) was not
carried through to the Sixth Environmental Action Plan of 2001. The Com-
mission itself concluded in 1999 that despite the ambitious vision set out in
the Fifth Environmental Action Plan its main response to the 1992 Rio
Earth Summit practical progress towards sustainable development has
been rather limited (European Commission 1999: 2, 6). Likewise, only the
main outlines of a proposal for a sustainability strategy submitted by the
Commission were finally adopted (in a fourteen-point resolution headed A
Strategy for Sustainable Development) by the Gothenburg European Council
of June 2001. Key specific targets lacked consensus. The Cardiff process of
systematically integrating environmental concerns into specific EU sectoral
policies lent important impetus to agricultural and transport policy but in the
majority of policy areas met with considerable resistance. Overall, the EUs
strategic excursions in environmental matters show obvious signs of institu-
tional overload (SRU 2002: 151-152).
180
2.2 General appraisal of key new approaches in environmental

governance
Further appraisal outside of the Rio Process is needed for a subset of govern-
ance approaches that were incorporated into a unifying system under Agenda
21 but separately adopted and evolved thereafter. This relates to key govern-
ance approaches that gained importance during the 1990s, especially in the
EU:
Target and results-oriented governance
Integration of environmental policy into sectoral policy
Cooperative governance in the narrow sense of the term (including coregu-
lation)
Participation of civil actors
These overlap and combine to form hybrid approaches, and it is partly for this
reason that they are discussed here as part of an overall model of environ-
mental governance. Since Agenda 21, this model also includes multi-level gov-
ernance, which will be explored to greater depth in relation to the EU. Gov-
ernance techniques such as success monitoring through reporting are likewise
universal.
A shared feature of recent governance approaches that have become significant
to EU environmental policy in various forms (see SRU 2004) is that they differ
throughout from classical, hierarchical regulation. This means governance
through democratically legitimated action, usually on the part of the legisla-
ture, using taxes and other levies or generally applicable rules and standards,
and typically directed at abstract groups. New governance approaches, on the
other hand, typically represent target-oriented, flexible administrative action
in the conceptual framework of New Public Management (Naschold and
Bogumil 1998; von Bandemer et al. 1998) directed at specific groups and
taking them on board in various ways. Whereas conventional regulation is
legitimated by democratic majority votes, the new cooperative policy instru-
ments have other sources of legitimacy: negotiated consensus, involvement of
affected parties, and documentary proof of effectiveness.
Whether and how far new target-oriented and cooperative policy instruments
can help in better tackling the long-term environmental policy problems de-
scribed cannot be fully evaluated in the present paper. In any case, they cannot
be properly evaluated in isolation from their specific objectives; the abstract
181
debate on policy instruments came to similar conclusions in the 1980s (see

Klemmer et al. 1999: 52 f. and 110-115; Jnicke 1996). It is nonetheless meaning-
ful to attempt an interpretation of the key new forms of governance with re-
gard to their potential problem-solving capacity and, based on experience to
date, to typical difficulties they present.
2.2.1 Target and results-oriented governance

Targets, for example in the form of environmental quality standards, are not
in themselves new to environmental policy. The features distinguishing new
target-oriented approaches as tried in a number of pioneering countries
national environment plans, mostly since 1992 are target setting, deadlines,
and results monitoring (SRU 2000: 57-68). Thus delineated, target and results-
oriented governance approaches are a necessary response to deficits of exclu-
sively reactive and insufficiently effective environmental policy. Without tar-
gets, results monitoring (including efficiency measurement) is impossible.
Persistent, complex long-term environmental problems in particular demand
targets that enable coordinated and continuous action. In the Netherlands,
target-oriented, long-term correction of complex environmental pressures has
been placed for the Fourth National Environment Plan in a conceptual frame-
work of strategic transition management (Rotmans et al. 2001).
Environmental targets are best developed from a problem diagnosis and ini-
tially formulated as quality targets from which action targets can then be de-
rived at increasing levels of detail. Whether binding or merely indicative, they
can serve as guidance for a broad range of actors. Another key purpose of tar-
gets is to overcome inertia in administrations and organisations. Management
by objectives (MBO) is therefore a central topic not only in administrative
reform (Naschold and Bogumil 1998), but also in environmental planning in
advanced OECD nations (Jnicke and Jrgens 2000). Environmental targets
can also have an important instrumental function provided that target setting
involves a learning and consensus-building process that makes action likelier
and breaks down opposition among affected parties. Another advantage of
environmental targets is that they render the policy arena more predictable for
investors, stimulate adaptation processes and offer clear avenues of opportu-
nity for innovators. Early signposting of problems to reveal the states likely
response before any decisionmaking processes are embarked upon can be key
to processes of innovation (Jacob 1999).
182
Target-oriented governance comprises a diverse and if anything still growing

range of approaches, both as regards target setting processes and target hierar-
chies. Target setting can be broad-based and institutionally legitimated to a
large degree something which favours its long-term stability. But it can also
be a transient outcome of ministerial decisions unlikely to survive the next
election. Targets themselves can be binding or merely indicative. They can be
enshrined in law (as in Germanys new Renewable Energy Act). They may con-
sist of a results-oriented target setting process being made binding for a spe-
cific problem area (as recently seen in the EU). They may also take the form of
a precise technological requirement to be attained by a specified date (as with
Japan requiring best available levels of energy efficiency for specific product
groups see Schrder 2003). This diversity can also be seen as part of a process
of learning and experimentation in environment policy.
Effective environmental policy target formulation requires a bargaining proc-
ess that draws upon environmental expertise, and this in turn demands pro-
fessional management and a suitable institutional framework. Moreover, it is
essential that the target setting process be problem-oriented. Creeping, per-
sistent types of environmental problem in particular call for an input of
knowledge to confront those involved with the long-standing trends. Without
this, the necessary debate regarding innovations, win-win solutions and best
practices cannot generate broad consensus.
To be effective, target-oriented approaches to environmental governance
should build upon stakeholder interests. In view of the acceptance dilemma
mentioned earlier, they need primarily to comprise target formulation proc-
esses in which a minimum of problem-related communication is assured and
the arguments of the affected groups are heard. From the standpoint of indus-
try, they need to set stable targets that provide a predictable framework for
R&D processes and investment decisions while allowing flexibility to adapt,
for example in line with investment cycles (SRU 2002). Unlike short-run, reac-
tive and hence unpredictable environmental policy intervention, target-
oriented approaches of this kind generally meet with a better reception from
target groups in industry (see UNICE 2001: 5). In the debate surrounding a
system of tradable emission permits for greenhouse gases, for example, indus-
try circles have stressed the importance of long-term policy targets in allowing
businesses to plan for the future. Priorities from an administrative standpoint
include clear lines of responsibility, high-ranking institutional mandates and
183
sufficient resources. For policymakers and the public, the emphasis is on

evaluation of planned action and success monitoring.
As we have seen, target-oriented approaches to environmental governance are
anything but undemanding. They require a realistic stance on dealing with
foreseeable obstacles. Calls for target and results-oriented policy are by no
means new, and have accompanied public sector reform attempts at least since
the 1960s. The fact that they are repeatedly voiced testifies equally to their
importance and to the difficulties of implementing them. It is no coincidence
that environmental policy actors to date have found it easier to agree on policy
instruments than on targets. Target-oriented, MBO-style environmental pol-
icy not only tends to impinge on vested interests, it also assigns monitoring
powers that strong policy sectors and their economic constituencies soon try
to escape. The resulting evasion tactics range from outright rejection of targets
and dispensing with deadlines to adopting of various types of targets that are
either irrelevant or nonbinding. Then there is always the option of subjecting
unexceptional, routine tasks to a meaningless target with correspondingly
little effect. In this latter scenario, targets paradoxically legitimise a status quo
whose inadequacy was the reason for setting them in the first place.
Developing and implementing an appropriate target hierarchy, then, takes
considerable effort. In addition to deriving operational-level targets, any target
formulation process should therefore be accompanied by a capacity needs
assessment. Especially with reference to persistent environment problems,
target setting is mostly associated with a need to raise capacity (see 2.3.1).
Policymaking processes run on scarce resources. They must therefore be al-
lowed to focus on key targets, especially when addressing more intractable
problems. Where substantial capacity gains are unfeasible, it is better to focus
on a limited number of strategic goals or on problems whose potential impact
or indeed intractability pose special challenges to society. Based on experience
gained in the Rio process, the pressing need in this regard is to set priorities
for environmentally sustainable development.
2.2.2 Environmental policy integration and sectoral strategies

Since environmental resource use is the productive foundation of entire sec-
tors of the economy, the need to integrate environmental concerns into such
sectors and their corresponding policy areas should be considered an axiom of
modern environmental policy. If key sectors of the economy are a major
source of long-term pressures on the environment, environmental policies
184
addressing causes rather than symptoms must aim to bring about change in
those sectors. This includes change in the responsible sectoral policy areas,
which are substantially shaped by the logic of the sectors concerned and usu-
ally serve to safeguard their interests. If environmentally risky sectors do not
internalise environmental accountability, environmental policy tends to be
additive, limited to relieving symptoms and to peripheral intervention; this
insight is by no means new (see Jnicke 1979; Doran et al. 1974). Conversely,
environmental policy integration means leveraging sectoral expertise and
innovating capacity to attain more sustainable development paths.
Environmental policy integration is now pursued with a broad spectrum of
measures. One ambitious approach consists of prompting environmentally
relevant sectors such as transport or energy to adopt environmentally oriented
sectoral strategies themselves; this approach has been taken up in the EU,
most notably under the Cardiff Process initiated in 1998. The apportionment
of sectoral obligations under Germanys Environmental Protection Pro-
gramme in 2000 is another noteworthy example of environmental account-
ability being assigned to specific sectors (see SRU 2002: 219-220). Concepts
relating to sectoral environmental impact assessment are also gaining impor-
tance. The European Environment Agency, for example, is developing a sys-
tem of sectoral indicators along these lines (see EEA 2003). These endeavours
focusing on appraisal of past developments and trends contrast with examples
of pre-emptive policy action such as environment mainstreaming approaches
and assessments targeting planned policies and measures strategic envi-
ronmental impact assessments and the like. In some European countries,
environmental concerns are incorporated into the budgeting process. A fur-
ther approach also pursued by the EU is the greening of government opera-
tions, for example in the form of environment-friendly procurement (OECD
2002).
The aim here, however, is not to further distinguish the possible forms of
environmental policy integration or to explore in greater depth the experience
gleaned so far with individual manifestations of this approach. Instead, an
evaluation of the problems inherent to the approach as a whole is needed,
since it has proved highly demanding in its own right. The notion of envi-
ronmental policy integration itself is by no means new. Its repeated appear-
ance on the agenda hints at implementation problems due to conflicting ob-
jectives. Under the flag of cross-sectoral policy, the approach was accorded
official recognition in German environmental policy as early as the 1970s. It
185
was ultimately a logical follow-on from the polluter pays principle that ac-
companied environmental policy in the industrialised world from the begin-
ning of that decade. Similarly, the concept of environmental policy integration
already featured in the Third EC Environmental Action Programme, i.e. as
early as 1982 (Knill 2003: 49).
There are reasons why little of this early insight fed through to environmental
policy: The integration principle runs, prima facie, contrary to the internal
logic of ultra-specialised policy sectors and their economic constituencies.
The bias towards negative coordination (Scharpf 1991) that impinges as little
as possible on the vested interests of affected sectors can only be overcome
with considerable institutional effort. This is certainly true when it comes to
integrating environmental concerns into policy areas close to the interests of
environmentally relevant industries. There are therefore also reasons why
specific sectors such as mining, transport and farming can exert severe pres-
sure on the environment, reasons that involve considerable lobbying power
and path dependencies.
Sectors such as heavy industry and energy were thus first compelled after
some delay to adopt end-of-pipe technologies. There followed more efficient
technologies which prevented some of the environmental impacts from the
outset. So far, sectoral environmental strategies have been primarily limited to
effecting technological change. As soon as there is a need for structural
change, a need to intervene not only in the technological structure but in the
actual substance of sectors, their markets and even their role in society, there
is a tendency for marked obstacles to emerge. Examples include traffic avoid-
ance and power saving as environmental strategies.
Achieving structural change to reduce the environmental impact of such sec-
tors thus entails more sweeping policy instruments than the technology-
based environmental policies used to date. Environmental policy integration
is therefore not only a potential solution: it is a process with major initial po-
litical and communication challenges that demand significant upgrading in
its management and capacity. The importance of institutional groundwork to
this end can be seen from how Canada found it necessary to back up the (advi-
sory) Canadian Environmental Assessment Agency with a special policy inte-
gration post, the Commissioner of the Environment and Sustainable Devel-
opment, who reports to parliament and appraises on an annual basis the de-
velopment and implementation of sectoral sustainability strategies (for a de-
tailed discussion, see OECD 2002: 49; SRU 2000: 97).
186
Sectoral strategies are backed by the arms of government apparatus responsi-

ble for them and by corresponding sectoral policies. But for such strategies to
bite, sectoral departments must sway their organised stakeholder constituen-
cies in favour of environmental policy integration. One option is dialogue
strategy, where sectoral policymakers and environmental experts hold a meth-
odologically carefully prepared, results-oriented dialogue on the joint eco-
nomic and environmental long-run outlook. The objective is effectively man-
aged discourse for long-term sectoral structural change. Examples in Germany
include the consensus-based initiative to phase out nuclear power (Mez and
Piening 2002) and efforts to confront the coal industry and its customers in
the power generation sector with the long-standing climate trend. In the
course of such endeavours, it is appropriate and necessary for sectors to be
confronted with the long-term problems they cause (see SRU 2000, 2004).
Sectoral strategies need this condition in place to stand a significant chance of
success, although relevant scientific input is also necessary. A sectoral stake-
holder dialogue is conducted, among other things, to identify the economic
risks associated with increased pressure on the environment and what eco-
nomic and environmental crises the sector ultimately faces as a result. A real-
istic appraisal of this kind must take in intervention which is avoidable in the
normal course of affairs but which the state may be forced to adopt if the pub-
lic is mobilised in an acute crisis. Environmental history is rich in crisis reac-
tions of this kind, from Seveso to Chernobyl to instances of catastrophic
flooding. The largely adverse economic and social impacts of crisis interven-
tion may confront the affected sector with problems that a sectoral sustain-
ability strategy based around long-term investment cycles can help avoid.
In formulating such a dialogue strategy, use can be made of the Dutch transi-
tion management concept (Rotmans et al. 2001), of technology impact assess-
ment-based approaches (Renn 1999; Skorupinski and Ott 2000) and the insti-
tution of consensus conferences based around them (Joss and Durant 1995;
Joss 1998), and of research into green structural policy (Binder et al. 2001).
These approaches would, however, require conceptual further development to
be useful for this purpose.
Sectoral strategies usually need a high-ranking institutional mandate (parlia-
mentary or governmental) to take account of issues such as problem specifica-
tion, lines of responsibility and procedural requirements, and also reporting
obligations and monitoring. This high-ranking institutional mandate con-
trasts with earlier integration approaches in which a (generally weak) envi-
187
ronment department was expected to effect horizontal coordination between

(stronger) sectoral departments.
Primarily vertical environmental policy integration presupposes powerful
environment departments with a substantive share in both the top-level man-
dating process and the ensuing horizontal cooperation with sectoral depart-
ments. They must have the human and institutional resources this requires.
This added capacity is also needed with regard to strategies for environmental
policy integration because, in deference to affected industry interests, sectoral
strategies tend to fall short of what is advocated by specialist environmental
administrations.
On past experience, it is important that environmental integration and cross-
sectoral policy does not result in environmental policy being implemented on
an amateur basis by those responsible for other policy areas. Instead, exper-
tise residing in the relevant government departments and industries must be
tapped into through appropriate networking structures. Innovative solutions
in particular require the use of specialist expertise, both in environmental
policy and in the affected sectoral policy departments and targeted parts of
industry. Because of the differing extent to which obligations can be imposed
on the lobbies involved, however, some sectors are more receptive than others
for negotiating agreements with target groups.
The success of a sectoral environmental strategy can be judged among other
things by how far existing environmental sections in sectoral ministries re-
gard themselves as part of the overarching strategy rather than as inspectors
on behalf of the environment ministry and its policy programmes. A large
environment section, as exists for example in Germanys Federal Ministry of
Economics, could be a key factor for environmental integration if its primary
focus were to be on cross-cutting environmental and economic concerns and
not on reporting back to the environment ministry. Capacity building here is
no longer a question of (already present) specialist personnel, but of the
higher-level role handed down by cabinet or parliament (Jnicke et al. 2002:
129).
188
Fig. 1: From Horizontal to Vertical Environmental Policy Integration
Horizontal Policy Integration

Ministry of Ministry of Ministry of Ministry of Other
Environment Transport Industry Construction Departments
Vertical Policy Integration

Cabinet/Parliament
Definition of problems
Determination of reporting
env. objectives monitoring
Ministry of responsibilities sectoral plans
Environment rules of the game strategies / instruments
time table integration of stakeholder
indicators
....
Ministry of Ministry of Ministry of Other

Transport Industry Construction Departments
Source: Jnicke 2000.
2.2.3 Cooperative governance

The limits of hierarchical regulation in addressing intractable problems have
long been a subject of enquiry for social scientists (Schimank and Werle 2000;
Prittwitz 2000; Willke 1997; Mayntz and Scharpf 1995). Depending on the theo-
retical standpoint, the argument centres around the prohibitively high cost of
obtaining information for the desired level of fine control, the inner logic and
limited resonance capacity of social subsystems in response to central gov-
ernment policy impetus (Luhmann 1989), or difficulties faced by interdepend-
ent actors in arriving at a mutually acceptable solution by negotiation.
Where command and control comes up against real or assumed limits, coop-
erative policy instruments that is, ways of exerting influence that state actors
agree upon with private-sector target groups as essentially equal partners are
increasingly discussed as an alternative.
189
2.2.4 Effectiveness of cooperative policy instruments in practice

Cooperative policy instruments are not effective per se. Their skilful applica-
tion has been identified both in environmental policy research and elsewhere
as a key success criterion (Jnicke 1996; Knoepfel 1993; Ricken 1995; Wlti
2003). Their assumed benefits include the following:
Direct consultation between government departments and target groups
often results in better-targeted policy than regulation by legislative decree,
not least because knowledge and experience gained in the process can be
used as a resource.
Government departments have a vested interest in legitimating their rela-
tively autonomous actions with real responses to real problems; with their
built-in forms of legitimisation stakeholder participation, consensus and
results orientation cooperative policy instruments can better contribute
to problem resolution.
Policy made in consensus with industry is less likely to face opposition
when measures come to be implemented.
The long route through parliamentary decisionmaking processes and their
constraints are bypassed and adaptive responses (such as innovations) can
be stimulated at an earlier juncture.
Soft, communicative and hence more readily accepted policy instruments
can be applied provided the option of resorting to harder for example
regulatory or fiscal measures remains available in principle.
These potential benefits must, however, be weighed in each case against the
price exacted by cooperative solutions in terms of policy rigour. The targets
and rigour pursued by voluntary commitments, for example, rarely go far
beyond the business as usual scenario (see SRU 1998: 130-151). Empirical stud-
ies suggest that cooperative and self-regulatory policies tend if anything to
deliver only mediocre results with no clear benefits compared with traditional
command and control (de Bruijn and Norberg-Bohm 2005). Even the OECD
has recently come round to a highly critical appraisal of voluntary commit-
ments: the environmental effectiveness of voluntary approaches is still ques-
tionable. () The economic efficiency () is generally low (OECD 2003: 14).
The OECD even sees a tendency for policy instruments used in combination
with voluntary agreements to be weakened and therefore recommends sup-
porting arrangements to trigger direct, credible sanctions if targets are not
attained. A more recent study, moreover, questions whether voluntary agree-
ments indeed do generally reduce the burden on the state. In one British ex-
190
ample, it took 31 civil servants and a total of 17 man-years to negotiate 42 in-

dustry climate protection agreements (Jordan et al. 2003b). Also, excessively
feeble environmental policy can trigger acceptability problems of its own
especially among affected groups with little opportunity to influence the co-
operative solutions. To ensure that cooperative solutions go far enough or can
be improved upon if they fall short, they must therefore be backed with ulti-
mate state accountability and must potentially be retractable. This precondi-
tion alone shows that cooperative solutions can supplement command and
control-style regulation but cannot replace it. Hierarchical regulation then
assumes the role of guarantor for the soft, dialogue-based processes of coop-
erative governance. Soft policy instruments are only effective if state regula-
tion is held ready as a stick behind the door for the event of failure (De Clercq
2002; OECD 2003; Jordan et al., 2003a).
The ability to realise the potential of cooperative solutions also depends on
their taking a form that suits the situation. For example, cooperative solutions
lend themselves to greater use in some sectors than others. An evaluation of
Dutch environmental planning since 1989 thus showed an important factor to
be the size of industry associations and their ability to take on binding com-
mitments. Generally speaking, negotiated solutions can usually be reached
with industry associations having few major actors as in the energy, chemi-
cals or automotive industry while environmentally relevant sectors with a
broad and diffuse membership for example agriculture, car drivers or con-
sumers can be better influenced by means of traditional regulation.
Requirements of democracy theory regarding cooperative negotiation systems
are only to be mentioned here in passing. They relate to the desirable aim of
linking negotiations back into the parliamentary process. Government de-
partments should be prevented from constraining parliament with the agree-
ments they enter into. The imperatives of transparency, pluralism and pro-
tecting bystander interests must also be observed.
In the light of the potential drawbacks of cooperative policy instruments
briefly outlined above, a general reorientation towards this type of approach
would not be helpful in environmental policy terms. Cooperative approaches
are at best useful as a supplement to direct regulation.
2.2.5 Participation, self-regulation and the enabling state

Under the heading of participation, the Agenda 21 governance model and also
the Aarhus Convention aim to exploit the full potential of civil actors by in-
191
volving them in policy formation and enforcement processes. They thus go

beyond the participation envisaged by cooperative approaches, where the poli-
cymaking process takes industry on board but not environmental lobbies or
interested private individuals. The aim of participatory approaches is to place
policy programmes (and in particular the sustainability process) on a broad
social base and to mobilise hitherto unused supporters and knowledge reposi-
tories. Involving citizens and NGOs thus offers untapped potential for envi-
ronmental policy. Examples of self-regulatory influence being brought to bear
on environmental pressures include activities of nature conservation organisa-
tions in designating protected areas under the Habitats Directive and buying
up land, plus environmental NGOs working directly to influence planning
approval decisions or the product range of retail chains (Conrad 1998: 161-182).
Citizens acting in their capacity as consumers constitute a further form of
participation.
Participation in environmental policy issues, like the other new policy in-
struments presented here, is highly demanding in its own right. It presup-
poses an enabling state (SRU 2002: 86-122). Citizens serving as an added re-
source for environmental policy need a system of incentives and an infrastruc-
ture of rights and information. This includes transparency regarding the envi-
ronmental credentials of products on the market, and rights of information,
participation and access to justice for citizens and environmental groups. The
will to participate also presupposes a minimum of accurate and problem-
focused environmental reporting in the media. There is again a wide-ranging
need for capacity building.
Participation for civil organisations is a management challenge requiring
personnel and skills that can by no means be taken for granted. Another man-
agement challenge is to shape participation processes so that key interests are
included, sufficient expertise is present among those involved and their moti-
vation is not squandered in fruitless debate. Motivation drain in ill-prepared
discourse is among the negative experiences that resulted in waning enthusi-
asm for the Agenda 21 process. Whether participatory approaches strengthen
or (by demotivation) weaken environmental policy generally depends on the
skill applied in their design. Participatory processes are not the inherent suc-
cess guarantee they are often made out to be.
Participation must neither be allowed to block the usually scarce time and
personnel resources needed for effective policy and administration, nor, fi-
nally, must it overextend the capabilities of environmental NGOs by assigning
192
universal responsibility. Formulating selective participation rules that give

due account to the identified governance challenges is therefore essential if
civil actors are to contribute perceptibly to improving the success of long-term
environmental policy.
2.2.6 Multi-level governance

Our survey would be incomplete without discussing multi-level governance.
With its high level of complexity, multi-level governance poses a major chal-
lenge for effective regulation. Its greatest problem is that it carries a risk of
severing lines of accountability, and also offers substantial openings for eva-
sion while leaving policy formulation structures largely opaque. On the other
hand, multi-level governance also opens up new avenues of opportunity spe-
cifically when it comes to persistent environmental problems. The Rio process
is a prime example of this, and one we have already explored in some depth.
The 6,400 Local Agenda 21 processes resulting from a global-level strategy
recommendation and for that matter the global alliances between environ-
ment-related city partnerships underscore the importance of the interplay
between local and global levels in environmental policy.
From a nation-state standpoint, both concerted action on a global, European
or national scale and decentralisation coupled with subsidiarity are equally
effective at boosting capacity and providing flexibility to help achieve a high
level of protection. The actual level attainable, however, will vary significantly
according to the nature of the problem. A discerning answer to this question
is still largely outstanding and represents perhaps the greatest challenge in
finding a workable paradigm for environmental governance.
Decentralisation strategies work particularly well where improvements can
only be decided on the basis of mostly locally available information (see
Scharpf et al. 1976). Many such situations arise in the context of nature conser-
vation, agro-environmental measures, and also transport policy (see SRU
2004). Conversely, decentralisation strategies are of limited use with broader
aims (as with Natura 2000) where local decisions fall short from a national or
European standpoint, in the presence of major externalities, or where too
much coordination is needed between lower levels.
Past experience suggests that strategic targets coupled with reporting obliga-
tions are generally suited to the higher level, whereas lower-level implementa-
tion should leave the greatest possible scope for flexibility and above all com-
petition. For the German context, this implies a strengthened role for federal
193
government while allowing the sixteen German states greater flexibility in

implementation, for example in a more competitive federal framework.
2.3 Success criteria for new policy instruments
The key environmental governance concepts outlined here are potentially able
to deliver improved problem-solving capabilities. As has been seen, however,
they are highly demanding in their own right, to the extent of being counter-
productive unless certain preconditions are in place.
In the following, we shall explore three important success criteria:
Capacity building
Clearer definition of the role of state influence, in particular regarding
guarantee mechanisms for soft forms of governance
Improving the role of the nation state in the global and European multi-
level system
2.3.1 Building and conserving capacity

The Rio process and ambitious governance approaches such as the develop-
ment of sectoral strategies show that every strategy must begin with a capacity
needs assessment from which conclusions can be drawn as to available capa-
bilities (Bouille and McDade 2002: 192-200). More ambitious policy instru-
ments need correspondingly greater capacity on the part of the state. This is
imperative for strategic approaches at the level of importance of a sustainabil-
ity strategy, but it is also a precondition for sectoral strategies. It should be
recalled in this context that capacity building already featured in two chapters
of Agenda 21, which also used the concept of capacity evaluation (UNDESA
1992: Ch. 34 and 37). These recommendations mostly relate to capacity build-
ing in developing countries, but the need is not unique to the developing
world. Environmental policy integration and participation presuppose added
capacity, as has been shown. Neglecting the need to build capacity or to im-
prove management is a major cause of the identified difficulties (Jnicke
2003b). Capacity shortfalls do not relate to the type of measures chosen, but to
what Luhmann terms the conditions of practicability (Luhmann 1989: 89).
Capacity cannot be precisely measured, but it is noticeable by its absence: The
best choice of policy instruments is to no avail if knowledge, material, person-
nel or political resources or institutional preconditions are wanting. In such
instances, capacity building or development is inescapable unless the situation
194
allows targets to be lowered instead (see Bouille and McDade 2002; Weidner
and Jnicke 2002; OECD 1995). Environmental policy capacity and the capacity
to effect sustainable development operate along three dimensions (UNDP and
OECD 2002: 92):
A human dimension, comprising the capabilities of the actors involved
An institutional dimension, for example the ability to coordinate conflict-
ing interests or to perform monitoring
A systemic dimension (associated with the enabling environment), for
example the legal framework, widespread access to information, and net-
working capabilities
Solving intractable long-term problems requires a long-term institutional
focus and sufficient human and material resources. Systemically speaking, it is
also a matter of social awareness. To the extent it relates to public approval for
and readiness to accept demanding solutions, the capacity issue ultimately
also includes the role of the media. Regarding the fickle and scarce resource
known as public environmental awareness, one suitable approach might be a
strategy of dialogue with major media groups, similar to dialogue conducted
in Germany on depictions of violence in the media.
The ability of environmental NGOs to play a capable part in an increasing
range of policy formation and decisionmaking processes also represents a
capacity improvement. This is not least a matter of networking and coalition
building. Strategic alliances can boost capacity. This point was well illustrated
in the run-up to adoption of Germanys Renewable Energy Act in 2000 (Be-
chberger 2000), which involved collaboration not only among parliamentari-
ans with a wide range of party allegiances, but organisations like the mechani-
cal engineering industry association (VDMA), the national metalworkers un-
ion (IG-Metall), the national association of municipal corporations (VKU), and
even support groups from the farming sector. Subject to the preconditions
outlined earlier, environmental policy integration sectoral learning about
environmental concerns can likewise help build capacity. Advocates of green
solutions in environmentally risky sectors know best their industrys capacity
to innovate. Their influence can be bolstered institutionally. However, this
also depends on the role of the environment ministry being strengthened
overall, both institutionally and in terms of human resources.
As in this case, most capacity building is needed in the state sector. But there
is obvious tension here between the need for capacity building and increas-
195
ingly vociferous calls for less state. Modern forms of environmental govern-
ance can result in savings when it comes to detailed regulation and monitor-
ing. The same applies for political rationalisation effects resulting, say, from
the fact that negotiated solutions can bypass the lengthy institutional policy-
making route altogether. However, the state as facilitator or supervisor, part-
ner in negotiation systems and manager of target formulation processes and
sectoral strategies needs extra skills as well as extra personnel. Indiscriminate
layoffs and cutbacks and pruning state activities merely because it is the
done thing can be severely counterproductive in this context.
Last but not least, the capacity to address persistent environmental problems
involves the strategic capacity of actors. Strategic capacity can be understood
as the capacity to enforce long-term general interests over short-term sub-
interests (Jnicke et al. 2003). Its condition is precarious because unlike long-
term general interests, short-term sub-interests are almost always highly or-
ganised (see Olson 1965) and are aligned to the shorter time horizon of market
and electoral cycles. Above all, there is tension between calls for broad interest
group participation and cooperation on the one hand and the preconditions
for strategic capacity on the other. Collective strategic capacity negatively cor-
relates with the number of organisations to be coordinated and the intensity
of competition between them (Jansen 1997: 224). However broad the participa-
tion in decisionmaking (or for that matter in enforcement), limitation of the
number of decisionmakers is inescapable. Broad participatory consultation
and restricted participation in actual decisionmaking process are by no means
mutually exclusive. The latter can also be promoted by clear assignment of
decisionmaking powers something that is particularly important in the in-
tricacies of a federal system like Germanys (Benz and Lehmbruch 2001). Cre-
ating manageable decisionmaking structures along with restricting the
number of veto points in decisionmaking processes (Tsebelis 2002) is a key
capacity-related precondition for solving persistent environmental problems,
but it is also one that can become compromised in a system of cooperative
multi-level and multi-sector governance. The intensity of competition not
only relates to cooperation with industry associations. The adversarial political
style observed in the German party system especially from the 1990s consti-
tutes another obstacle to overcome: Strategic capacity in the parliamentary
system requires a minimum of consensus on basic issues (consensus that is
usually further developed in smaller EU member states), otherwise long-term
targets will not survive changes of government.
196
The tensions between ambitious environmental governance patterns and the

corresponding capacity requirements raise overall questions that need resolv-
ing. In particular, the search should be stepped up for forms of governance
that conserve capacity and so relieve the burden on the state and can be
squared as far as possible with notions of lean government (see box).
Examples of capacity conserving policy instruments

All varieties of negotiating in the shadow of the hierarchy (Scharpf),
which often make it possible to bypass elaborate institutional decision-
making processes
Specifically, early signposting of problems by the state to give environ-
mentally relevant sectors a reliable indication of impending government
action while leaving them the opportunity to adapt (see Section 2.3.2)
Operating with provisional standards that continue to apply until ex-
plicitly revoked
Concentrating on strategic targets
Reprogramming existing environmental sections in sectoral ministries
(economy, transport and agriculture) from monitoring on behalf of the
environment ministry to systematically championing environmental
concerns
Using and promoting decisions at other policymaking levels
Exploiting opportunities for action, from environmental crises (e.g. BSE)
to sudden price rises (e.g. oil prices)
Adopting best practices from other countries (where transferable)
Making use of the Internet, for example as an aid to participatory con-
sultation
Any solution addressing the causes of a problem rather than the symptoms
naturally releases capacity. Above all, the governance approaches focused upon
here not only environmental policy integration, but also target orientation,
cooperation and participation can potentially help release state capacity.
This was one of the reasons why they were introduced in the first place. From
experience gained with them so far, however, it must be stressed that these
approaches have their own capacity needs, neglect of which is a recipe for
failure.
197
2.3.2 The role of the state in the changed governance model

The considerable complexity of multi-level and multi-sector environmental
governance with partial or wholesale participation by private-sector actors
creates substantial need for guidance. This applies both to accountability and
competency structures and to the issue of government involvement and the
role of the nation state.
State actors are involved at all policy levels. Policy formulation in Rio de Ja-
neiro and Johannesburg, for example, was largely the domain of government
representatives. Civil participation and cooperation with nongovernmental
actors is likewise visible at all levels but has not so far reduced the influence
of the state either at national or international level (Raustiala 1997). State actors
also play a part in relation to the various environmentally relevant sectors of
industry and the corresponding policy sectors.
All the same, the political influence of state actors is qualified by governance
approaches based on denationalisation, deregulation and new forms of regula-
tion. Aside from efforts to simplify the law, this mostly involves coregulation
in partnership between state and civil or economic actors, and in some cases
self-regulation and policy ownership.
This all leads to a contradiction: The main rationale for new forms of govern-
ance was that state action fell short in terms of efficiency and effectiveness and
state governance had taken on a real or assumed momentum of its own to
which those on the receiving end could no longer relate. On the other hand,
the new environmental governance tends to create diffuse and tangled lines of
responsibility that end in less effectiveness rather than more: If everyone is
responsible and accountable, then in the final analysis nobody is. At the same
time, there is a so far largely unappraised need to raise state capacity. State
influence must therefore manifest itself in differential institutional account-
ability for securing important common interests, accountability that may be
delegated but as a matter of normative principle cannot be abolished. Follow-
ing on from this premise, state institutions at the various policy levels must
serve as guarantors if activities transferred to private-sector actors fail to de-
liver. Specifically with regard to the persistent environmental problems this
paper is concerned with, state entities must be the first port of call and in
the case of delegated problem-solving the final instance.
The role of the state can even be initially restricted to formally identifying the
problem, which in itself can be a powerful signal to private-sector policy tar-
198
gets especially environmentally relevant sectors of industry as potential

sources of innovation (Jacob 1999). For this to work, the formal identification
of the problem must clearly indicate that competent state authorities can be
relied on to follow through with solutions of their own according to the prob-
lem if private-sector actors fail or are not expected to adapt in response. It is
known from innovation studies that the mere threat of such consequences can
trigger innovation processes (see SRU 2002: 74-86). Hierarchical regulation is
indispensable in this role, including sanction-based regulatory law. In all
events, soft, cooperative forms of governance need this guarantee function to
stand a chance of success and achieve the aim of relieving the burden on the
state. The more credible the guarantee function, the less likely it will be
needed. For this reason it is essential to emphasise the part played by the state,
particularly in the interest of enabling more flexible solutions (see SRU 2002).
Jordan et al. (2003a: 222) conclude along the same lines that environmental
governance is at best supplementing, and most certainly not comprehensively
supplanting, environmental government by regulatory means.
That cooperative policy instruments are by no means a general substitute for
classical command and control is suggested by the fact that even in the light of
new governance patterns after the environment summit at Rio, some 80 per-
cent of all EU environmental policy measures were of the command-and-
control variety (Holzinger et al. 2003: 119).
2.3.3 The role of the nation state

The general function and importance of the state is not the only issue in the
current debate on environmental policy instruments to be in need of basic
clarification. It is also necessary to elucidate the role of statehood at the spe-
cific level of the nation state because whether including nation states in
global or European multi-level governance hinders or even helps in environ-
mental policy problem-solving remains a highly contentious issue. There is
also the parallel controversy regarding nation states scope for action in the
light of economic and social globalisation or Europeanisation.
The German Advisory Council on the Environment explored this aspect in
detail in its Environmental Report 2002, Towards a New Leading Role (SRU
2002), concluding that it provided advanced industrialised nations like Ger-
many in particular not only with major chances to score with environmental
technologies in the international innovation race and so hasten the greening
of international markets, but also with new opportunities and necessities for
199
environmental policy action. In the following, we aim to recall this position

and set it out in a series of propositions in an attempt to take some of the
complexity out of the confusing field of environmental governance.
Both global competition and the internationalisation of policymaking are
unquestionably seen to limit the capacity and sovereignty of nation states.
Taxation of mobile emission and discharge sources, global economic gov-
ernance, wage levels and welfare benefits are all examples of adaptational
pressure at the expense of national policies. Similar examples are known
for environmental policy for example with a view to the WTO or to EU
grant aid. Nation-state environmental policy is nevertheless neither one of
the losers of globalisation nor has it so far been significantly obstructed in
its problem-solving capacity in the framework of the EU. Indeed, the oppo-
site experience has also been recorded. This has to do with regulatory
competition becoming possible in the EU and with (technological) aspects
peculiar to environmental concerns.
Limits to national sovereignty are a logical product of integration into
European or global decisionmaking structures. They should not, however,
be equated with a loss of problem-solving capacity. On the contrary, collec-
tive action by nation states can raise the capacity to solve environmental
problems. Such action is also inescapable where problems are potentially
global in nature rather being limited to a single country. Corresponding
change in the operating environment of international markets is likewise
only attainable through collective action.
Environmental policy pioneering by developed industrialised nations plays
a special part in this process. There have always been pioneer countries
ever since the emergence of environmental policy as a separate policy port-
folio in the early 1970s. If anything, the end of the East-West conflict her-
alded an increase in policy competition and in nation states vying for at-
tention. Never before have even small European countries like Sweden, the
Netherlands or Denmark had such influence on global policy development
than has been the case in environmental policy over the last decade. Inter-
estingly, these pioneers are closely integrated into world markets (Ander-
sen and Liefferink 1997; Jnicke et al. 2003: Ch. 6).
The quality of environmental regulation correlates strongly with competi-
tiveness (World Economic Forum 2000). Even if the direction of the causal
relationship is unclear, this precludes a systematic negative relationship
200
between ambitious environmental policy and the world market integration

of nation states.
Empirical studies have not yet confirmed the existence of a race to the
bottom in environmental policy (SRU 2002: 83-84). This is partly because
environmental issues today are closely coupled with technical progress and
have become increasingly important in quality-based competition among
developed countries. As a result, national innovation systems continue to
be highly important. The promotion of lead markets for innovative envi-
ronmental technologies has also proved a key activity in the environmental
policies of nation states (including in small countries like Denmark).
Within the multi-level global system, nation states possess a number of
important properties that have no functional equivalent at other policy lev-
els. These include fiscal resources, a monopoly on legitimate coercion,
finely differentiated sectoral expertise and highly developed network struc-
tures, including international networking by sectoral government depart-
ments. Also important is the existence of a political public and (particularly
crucial for environmental concerns) pressure for legitimacy encountered
neither at higher nor at subnational levels. Cooperative governance, too,
works best comparatively speaking at state level (Voelzkow 1996; Jordan
2003a: 222). Notwithstanding the broad doctrine of deregulation and dena-
tionalisation, national governments remain the publics first port of call
when it comes to acute catastrophes like the 2002 floods in Germany.
The nation state level of the multi-level environmental policy system is there-
fore crucial, including within the EU. This necessarily extends to its European
and international integration. Multi-level governance, however, itself requires
a guarantor to take on ultimate responsibility if supranational or subnational
solutions fail. In this respect, the nation state will have to retain and extend its
role as the final instance in long-term environmental policy. For all the criti-
cism regarding the weakening of the nation state, the preconditions for as-
suming this role are essentially best fulfilled at this level.
3 Conclusions
New approaches classified under the heading of environmental governance
contrast with the traditional, hierarchical rule-based governance that still ac-
counts for nearly 80 percent of environmental policy in the EU. The motives
201
for seeking new approaches to governance are ambivalent. On the one hand,
there is the objective of raising the effectiveness of environmental policies,
which despite partial successes had failed to stabilise the state of the environ-
ment for the long term. On the other, there are the objectives, both appropri-
ate and problematic, of relieving the state and of deregulation. There are ma-
jor overlaps between these two positions: The search for more effective policy
instruments is essential considering the special nature of persistent, intracta-
ble environmental problems. In principal, it is the right direction to take.
However, it requires more rational management of state capacity a topic
already covered in Agenda 21 (1992) but so far blatantly neglected.
An overall conclusion emerges that it is not only the ambitious targets of a
sustainability strategy or governance approaches based on environmental
policy integration that stand to fail at a shortfall in state and administrative
capacity. Other governance approaches mostly of a cooperative nature
whose primary aim of reducing the burden on the state likewise imposes sub-
stantial requirements in terms of administrative capacity. This raises the ques-
tion of what relief for the state new policy instruments have delivered so far
and how their performance may be improved, particularly as regards persis-
tent environmental problems.
The proliferation of international environmental policy arrangements has not
so far reduced the influence of the nation state. On the contrary, nation states
now play a multiple role: in solving national environmental problems and in
negotiating and implementing international agreements, and in aligning na-
tional policies to increasing quantities of international law. Within the multi-
level global system, nation states possess a number of important properties
that have no functional equivalent at other policy levels.
References
Andersen, M. S. and Liefferink, D. (1997): European Environmental Policy: The Pio-
neers. Manchester: Manchester University Press.
Aspinwall, M. D. and Schneider, G. (2000): Same menu, separate tables: The institu-
tionalist turn in political science and the study of European integration. European
Journal of Political Research, Vol. 38, pp. 1-36.
Bandemer, S., Blanke, B., Nullmeier, F. and Wewer, G. (Eds.) (1998): Handbuch zur
Verwaltungsreform. Opladen: Leske and Budrich.
Bechberger, M. (2000): Das Erneuerbare-Energien-Gesetz (EEG): Eine Analyse des Poli-
tikformulierungsprozesses. FFU Report 00-06. Berlin: Forschungsstelle fr Um-
weltpolitik.
202
Benz, A. and Lehmbruch, G. (Eds.) (2001): Fderalismus Analysen in entwicklungsge-

schichtlicher und vergleichender Perspektive. Sonderheft 32 der Politischen Vier-
teljahresschrift. Opladen: Westdeutscher Verlag.
Binder, M., Jnicke, M. and Petschow, U. (Eds.) (2001): Green Industrial Restructuring:
International Case Studies and Theoretical Interpretation. Berlin, Heidelberg, New
York: Springer.
BMU (German Federal Ministry for the Environment, Nature Conservation and Nu-
clear Safety) (2003): Geschrftes Profil, verbesserte Erfolgskontrolle. UN-
Kommission fr nachhaltige Entwicklung beschliet Arbeitsprogramm 2004 bis
2017. UMWELT 06/2003, p. 326-327.
BMU and UBA (2002): Umweltbewusstsein in Deutschland. Ergebnisse einer reprsen-
tativen Bevlkerungsumfrage. Berlin: BMU.
Bouille, D. and McDade, S. (2002): Capacity Development, in Johannson, T. and
Goldemberg, J. (Eds.), Energy for Sustainable Development: A Policy Agenda. New
York: UNDP, pp. 173-205.
Bressers, H. and Kuks, S. (2003): What does Governance mean? From conception to
elaboration, in Bressers, H. and Rosenbaum, W. (Eds.), Achieving Sustainable De-
velopment: The Challenge of Governance Across Social Scales. Westport, London:
Praeger, pp. 65-88.
Busch, P. O. and Jrgens, H. (2005a): International Patterns of Environmental Policy
Change and Convergence, European Environment, Vol. 15, No. 2, pp. 80-101.
Busch, P. O. and Jrgens, H. (2005b): Globale Ausbreitungsmuster umweltpolitischer
Innovationen, in Tews, K. and Jnicke, M. (Eds.), Die Diffusion umweltpolitischer
Innovationen im internationalen System. Wiesbaden: VS Verlag, pp. 55-193
(forthcoming).
Busch, P. O., Jrgens, H. and Tews, K. (2005): The Global Diffusion of Regulatory In-
struments: The Making of a New International Environmental Regime, Annals of
the American Academy of Political and Social Science, Vol. 598, pp. 146-167.
Collier, U. (1998): The Environmental Dimensions of Deregulation: An Introduction, in
Collier, U. (Ed.): Deregulation in the European Union: Environmental Perspectives.
London: Routledge, pp. 3-22.
Conrad, J. (Ed.) (1998): Environmental Management in European Companies. Amster-
dam: Gordon & Breach.
Czada, R. and Schimank, U (2000): Institutionendynamik und politische Institutionen-
gestaltung: Die zwei Gesichter sozialer Ordnungsbildung, in Schimank, U. and
Werle, R. (Eds.): Gesellschaftliche Komplexitt und kollektive Handlungsfhigkeit.
Frankfurt am Main: Campus, pp. 23-43.
De Bruijn, T. and Norberg-Bohm, V. (Eds.) (2005): Industrial Transformation: Envi-
ronmental Policy Innovation in the United States and Europe. Cambridge: MIT
Press.
De Clercq, M. (Ed.) (2002): Negotiating Environmental Agreements in Europe: Critical
Factors for Success. Cheltenham, Northampton: Edward Elgar.
Demmke, C. and Unfried, M. (2001): European Environmental Policy: The Administra-
tive Challenge for the Member States. Maastricht: European Institute of Public
Administration.
DiMaggio, P. J. and Powell, W. W. (1991): Introduction, in DiMaggio, P.J. and Powell,
W.W. (Eds.): The new institutionalism in organizational analysis. Chicago: Univer-
sity of Chicago Press.
203
Dolowitz, D. P. and Marsh, D. (2000): Learning from Abroad: The Role of Policy Trans-
fer in Contemporary Policy Making, in Governance: An International Journal of
Policy and Administration, Vol. 13, pp. 5-24.
Dolowitz, D.P. and Marsh, D. (1996): Who Learns What From Whom: A Review of the
Policy Transfer Literature. Political Studies, Vol. 44, pp. 343-357.
Doran, C. F., Hinz, M. and Mayer-Tasch, P. C. (1974): Umweltschutz Politik des peri-
pheren Eingriffs. Eine Einfhrung in die Politische kologie. Darmstadt, Neu-
wied: Luchterhand.
EEA (European Environment Agency) (2002): Environmental Signals 2002: Benchmark-
ing the Millenium. European Environment Agency Regular Indicator Report. Lux-
embourg: Office for Official Publications of the European Communities.
Enquete-Kommission (1998): Konzept Nachhaltigkeit. Vom Leitbild zur Umsetzung.
Abschlubericht der Enquete-Kommission Schutz des Menschen und der Um-
welt - Ziele und Rahmenbedingungen einer nachhaltig zukunftsvertrglichen
Entwicklung des 13. Deutschen Bundestages. Zur Sache 98/4. Berlin: Deutscher
Bundestag, Referat ffentlichkeitsarbeit.
Enquete-Kommission (2002): Abschlussbericht der Enquete-Kommission Nachhaltige
Energieversorgung unter den Bedingungen der Globalisierung und der Liberali-
sierung. Berlin: Deutscher Bundestag, Referat ffentlichkeitsarbeit.
European Commission (1999): Communication from the Commission: Europes Envi-
ronment: What directions for the future? The Global Assessment of the European
Community Programme of Policy and Action in relation to the environment and
sustainable development, Towards Sustainability. COM(1999) 543 final. Brussels:
Commission of the European Communities.
Gass, R. (2003): A Battle for World Progress. A Strategic Role for the OECD. OECD-
Observer No. 236, pp. 29-31.
Glasbergen, P. (Ed.) (1998): Co-operative Environmental Governance: Public-Private
Agreements as a Policy Strategy. Dordrecht, Boston, London: Kluwer Academic
Publishers.
Golub, J. (Ed.) (1998): New Instruments for Environmental Policy in the EU. London
und New York: Routledge.
Haas, P. M. (1992): Introduction: Epistemic Communities and International Policy
Coordination, in International Organization 46 (1), pp. 1-35.
Hall, P. (1986): Governing the Economy: The Politics of State Intervention in Britain
and France. Cambridge: Polity Press.
Heinelt, H. (Ed.) (2000): Prozedurale Umweltpolitik der EU. Umweltvertrglichkeits-
prfungen und ko-Audits im Lndervergleich. Opladen: Leske and Budrich.
Hritier, A., Mingers, S., Knill, C. and Becka, M. (1994): Die Vernderung von Staatlich-
keit in Europa. Ein regulativer Wettbewerb. Deutschland, Grobritannien und
Frankreich in der Europischen Union. Opladen: Leske and Budrich.
Hey, C. (2003): Environmental Governance and the Commission White Paper: The
Wider Background of the Debate, in Meuleman, L., Niestroy, I. and Hey, C. (Eds.),
Environmental Governance in Europe. Background Study. RMNO Preliminary
Studies and Background Studies No. V.02. Utrecht: Lemma Publishers, pp. 125-143.
Hey, C., Volkery, A. and Zerle, P. (2005): Neue umweltpolitische Steuerungskonzepte in
der Europischen Union, Zeitschrift fr Umweltpolitik und Umweltrecht, Issue
1/2005, pp. 1-38.
Holzinger, K. (1987): Umweltpolitische Instrumente aus der Sicht der staatlichen Bro-
kratie. Ifo-Studien zur Umweltkonomie 6. Munich: Ifo-Institut fr Wirtschafts-
forschung.
204
Holzinger, K., Knill, C. and Schfer, A. (2003): Steuerungswandel in der europischen

Umweltpolitik? In Holzinger, K., Knill, C. and Lehmkuhl, D. (Eds.) (2003): Politi-
sche Steuerung im Wandel: Der Einfluss von Ideen und Problemstrukturen.
Opladen: Leske and Budrich, pp. 103-129.
Hooghe, L. and Marks, G. (2003): Unraveling The Central State, But How? Types Of
Multi-level Governance. American Political Science Review 97 (2), pp. 233-243.
Jacob, K. (1999): Innovationsorientierte Chemikalienpolitik. Politische, soziale und
konomische Faktoren des verminderten Gebrauchs gefhrlicher Stoffe. Munich:
Herbert Utz Verlag.
Jacob, K. and Jrgens, H. (2001): Gefhrliche Liebschaften? Kommentierte Bibliografie
zu Kooperationen von Umweltverbnden und Unternehmen. Berlin: Wissen-
schaftszentrum Berlin fr Sozialforschung. Discussion Paper FS II 01-304.
Jacob, K. and Volkery, A. (2003): Instruments for Policy Integration: Intermediate Re-
port of the RIW Project POINT. FFU Report 03-06. Berlin: Forschungsstelle fr
Umweltpolitik.
Jacobson, H.K. and Brown Weiss, E. (2000): Engaging Countries: Strengthening Com-
pliance with International Environmental Accords. Cambridge: MIT Press.
Jnicke, M. (1979): Wie das Industriesystem von seinen Missstnden profitiert. Kosten
und Nutzen technokratischer Symptombekmpfung. Opladen: Westdeutscher Ver-
lag.
Jnicke, M. (1996): Was ist falsch an der Umweltpolitikdebatte? Kritik des umweltpoliti-
schen Instrumentalismus, in Altner, G., von Mettler Meibom, B., Simonis, U. E.
and von Weizscker, E. U. (Eds.): Jahrbuch kologie 1997. Munich: C.H. Beck, pp.
35-46.
Jnicke, M. (2000): Environmental plans: role and conditions for success. Presenta-
tion at the seminar of the European Economic and Social Committee, Towards a
Sixth EU Environmental Action Programme: Viewpoints from the Academic
Community. Brussels: European Economic and Social Committee.
Jnicke, M. (2003a): Das Steuerungsmodell des Rio-Prozesses (Agenda 21). Jahrbuch
kologie 2004. Munich: C. H. Beck.
Jnicke, M. (2003b): Die Rolle des Nationalstaats in der globalen Umweltpolitik. Zehn
Thesen, Aus Politik und Zeitgeschichte, Issue B27/2003, pp. 6-11.
Jnicke, M. and Jrgens, H. (1998): National Environmental Policy Planning in OECD
Countries: Preliminary Lessons from Cross-National Comparisons, Environmental
Politics 7 (2), pp. 27-54.
Jnicke, M. and Jrgens, H. (Eds.) (2000): Umweltplanung im internationalen Vergleich:
Strategien der Nachhaltigkeit. Berlin, Heidelberg und New York: Springer.
Jnicke, M. and Volkery, A. (2001): Persistente Probleme des Umweltschutzes. Natur
und Kultur 2 (2), 45-59.
Jnicke, M. and Weidner, H. (1997): Germany, in Jnicke, M. and Weidner, H. (Eds.),
National Environmental Policies: A Comparative Study of Capacity-Building. Ber-
lin, Heidelberg and New York: Springer, pp.133-155.
Jnicke, M., Jrgens, H., Jrgensen, K. and Nordbeck, R. (2002): Germany, in Organisa-
tion for Economic Co-operation and Development (Ed.), Governance for Sustain-
able Development: Five OECD Case Studies. Paris: OECD, pp. 113-153.
Jnicke, M., Kunig, P. and Stitzel, M. (2003): Umweltpolitik. Politik, Recht und Mana-
gement des Umweltschutzes in Staat und Unternehmen (2nd Ed.). Bonn: Dietz, 455
pp.
205
Jansen, D. (1997): Das Problem der Akteursqualitt korporativer Akteure, in Benz, A.

and Seibel, W. (Eds.): Theorieentwicklung in der Politikwissenschaft eine Zwi-
schenbilanz. Baden-Baden: Nomos, pp. 193-235.
Jordan, A., Wurzel, R. K. W. and Zito, A. R. (Eds.) (2003a): New Instruments of Envi-
ronmental Governance? National Experiences and Prospects. Environmental Poli-
tics Vol. 12, No. 1. London: Frank Cass Publishers.
Jordan, A., Wurzel, R. K. W., Zito, A. R. and Brckner, L. (2001): Convergence or Diver-
gence in European Environmental Governance: National Ecolabelling Schemes in
Comparative Perspective. Paper Prepared for the International Seminar on Politi-
cal Consumerism in Stockholm on May 31-June 3 2001. Manuscript.
Jordan, A., Wurzel, R. K. W., Zito, A.R. and Brckner, L. (2003b): Policy Innovation or
Muddling Through? New Environmental Policy Instruments in the United
Kingdom, in Jordan, A., Wurzel, R. K. W. and Zito, A.R. (Eds.), New Instruments of
Environmental Governance? National Experiences and Prospects. Environmental
Politics, Vol. 12, No. 1. London: Frank Cass Publishers, 179-198.
Jrgens, H. (2004): Governance by Diffusion: Implementing Global Norms through
Cross-national Imitation and Learning, in Lafferty, W. M. (Ed.), Governance for
Sustainable Development: The Challenge of Adapting Form to Function. Chelten-
ham: Edward Elgar.
Jrrissen, J. (1997): Produktbezogener Umweltschutz und technische Normen. Zur
rechtlichen und politischen Gestaltbarkeit der europischen Normung. Cologne:
Heymanns.
Joss, S. (1998): Danish Consensus Conferences as a Model of Participatory Technology
Assessment: An Impact Study of Consensus Conferences on Danish Parliament
and Danish Public Debate. Science and Public Policy 25, pp. 2-22.
Joss, S. and Durant, J. (1995): Public Participation in Science: The Role of Consensus
Conferences in Europe. London: National Museum of Science.
Keck, M. and Sikkink, K. (1998): Activists Beyond Borders. Ithaka and London: Cornell
University Press.
Kern, K. (2000): Die Diffusion von Politikinnovationen. Umweltpolitische Innovatio-
nen im Mehrebenensystem der USA. Opladen: Leske and Budrich.
Kern, K. and Kissling-Nf, I. in cooperation with S. Koenen, U. Landmann, T. Lffel-
send and C. Mauch (2002): Politikkonvergenz und Politikdiffusion durch Regie-
rungs- und Nichtregierungsorganisationen. Ein internationaler Vergleich von
Umweltzeichen. WZB Discussion Paper FS II 02-302. Berlin: WZB.
Kern, K., Jrgens, H. and Jnicke, M. (2000): Die Diffusion umweltpolitischer Innovati-
onen. Ein Beitrag zur Globalisierung von Umweltpolitik. Zeitschrift fr Umwelt-
politik und Umweltrecht (ZFU), 23 (4), pp. 507-546.
Klemmer, P., Lehr, U. and Lbbe, K. (Eds.) (1999): Umweltinnovationen Anreize und
Hemmnisse. Berlin: Analytica, 166 pp.
Knill, C. (2003): Europische Umweltpolitik. Steuerungsprobleme und Regulierungs-
muster im Mehrebenensystem. Opladen: Leske and Budrich
Knill, C. and Lenschow, A. (2000): Neue Steuerungskonzepte in der europischen Um-
weltpolitik: Institutionelle Arrangements fr eine bessere Implementation? In von
Prittwitz, V. (Ed.): Institutionelle Arrangements in der Umweltpolitik. Zukunftsf-
higkeit durch innovative Verfahrenskombinationen? Opladen: Leske and Budrich,
pp. 65-84.
Knoepfel, P. (1993): New Institutional Arrangements for the Next Generation of Envi-
ronmental Policy Instruments: Intra- and Interpolicy Cooperation. Cahiers de
206
lIDHEAP no. 112. Lausanne: Institut des Hautes Etudes en Administration Publi-
que.
Kooiman, J. (2003): Governing as Governance. London: Sage.
Lafferty, W. M. (2001): Adapting Government Practice to the Goals of Sustainable De-
velopment: The Issue of Sectoral Policy Integration. Paper prepared for presenta-
tion at the OECD seminar on Improving Governance for Sustainable Develop-
ment. Paris, 22-23 November 2001.
Lafferty, W. M. and Meadowcroft, J. (Eds.) (2000): Implementing Sustainable Develop-
ment: Strategies and Initiatives in High Consumption Societies. Oxford: Oxford
University Press.
Leftwich, A. (1993): Governance, Democracy and Development in the Third World,
Third World Quarterly 14, 605-624.
Lenschow, A. (Ed.) (2002): Environmental Policy Integration: Greening Sectoral Policies
in Europe. London: Earthscan.
Levi-Faur, D. and J. Jordana (Eds.) 2005: The Rise of Regulatory Capitalism: The Global
Diffusion of a New Order, Annals of the American Academy of Political and Social
Science, Vol. 588, March 2005.
Luhmann, N. (1989): Ecological Communication. Chicago: University of Chicago Press.
Majone, G. (1990): Deregulation or Re-Regulation? Regulatory Reform in Europe and
the US. London: Pinter Publishers.
March, J.G. and Olsen, J.P. (1998): The Institutional Dynamics of International Political
Orders. International Organization 52 (4), pp. 943-969.
Mayntz, R. and Scharpf, F. W. (Eds.) (1995): Gesellschaftliche Selbstregelung und politi-
sche Steuerung. Frankfurt am Main: Campus.
Mez, L. and Piening, A. (2002): Phasing-out Nuclear Power Generation in Germany:
Policies, Actors, Issues and Non-issues. Energy and Environment, Vol. 13, No. 2, pp.
161-182.
Mrle, H. (1998): Global Governance. Literaturbericht und Forschungsfragen. INEF
Report Heft 32/1998. Institut fr Entwicklung und Frieden der Gerhard-Mercator-
Universitt -GH- Duisburg
Naschold, F. and Bogumil, J. (1998): Modernisierung des Staates New Public Mana-
gement und Verwaltungsreform. Opladen: Leske and Budrich, 204 pp.
OECD (2001): Sustainable Development: Critical Issues. Paris: OECD.
OECD (2002): Governance for Sustainable Development: Five OECD Case Studies.
Paris: OECD.
OECD (2003): Voluntary Approaches for Environmental Policy. Paris: OECD.
OECD (Organisation for Economic Co-operation and Development) (1995): Capacity
Development in Environment Paris: OECD.
Olson, M. (1965): The Logic of Collective Action. Cambridge, Mass.: Harvard University
Press.
Opschoor, J. B. and Vos, H. B. (1989): The Application of Economic Instruments for
Environmental Protection in OECD Countries: Final Report. Paris: OECD.
Osborne, D. and Gaebler, T. (1992): Reinventing Government. Reading, MA: Addison-
Wesley.
Ott, K. (1997): Ipso Facto. Zur ethischen Begrndung normativer Implikate wissen-
schaftlicher Praxis. Frankfurt am Main: Suhrkamp.
Pierre, J. (2000): Introduction: Understanding Governance, in Pierre, J. (Ed.): Debating
Governance. Authority, Steering, and Democracy. Oxford, New York: Oxford Uni-
versity Press, pp. 1-10.
207
Pierre, J. and Peters, G. B. (2000): Governance, Politics and the State. New York: Pal-
grave, Macmillan.
Prittwitz, V. von (2000): Institutionelle Arrangements in der Umweltpolitik. Opladen:
Leske and Budrich.
Raustiala, K. (1997): States, NGOs and International Environmental Institutions. Inter-
national Studies Quarterly 41, pp. 719-740.
Renn, O. (1999): Ethische Anforderungen an den Diskurs, in Grundwald, A. and Saupe,
S. (Eds.): Ethik in der Technikgestaltung. Berlin, Heidelberg, New York: Springer,
pp. 63-94.
Ricken, C. (1995): Nationaler Politikstil, Netzwerkstrukturen sowie konomischer Ent-
wicklungsstand als Determinanten effektiver Umweltpolitik Ein empirischer In-
dustrielndervergleich. Zeitschrift fr Umweltpolitik und Umweltrecht Vol. 18, pp.
481-501.
Rosenau, J. N. (1992): Governance, Order and Change in World Politics, in Rosenau, J.
N. and Czempiel, E. O. (Eds.), Governance without Government: Order and Change
in World Politics. Cambridge: Cambridge University Press, 1-29.
Rosenau, J. N. and Czempiel, E. O. (Hrsg.) (1992): Governance without Government:
Order and Change in World Politics. Cambridge: Cambridge University Press.
Rotmans, J., Kemp, R. and van Asselt, M. (2001): More Evolution than Revolution
Transition Management in Public Policy, in Foresight, 3 (1).
Scharpf, F. W. (1991): Die Handlungsfhigkeit des Staates am Ende des zwanzigsten
Jahrhunderts, in Politische Vierteljahresschrift, Vol. 32, pp. 621-634.
Scharpf, F. W., Reissert, B. and Schnabel, F. (1976): Politikverflechtung. Theorie und
Empirie des kooperativen Fderalismus in der Bundesrepublik. Kronberg: Scrip-
tor Verlag.
Schimank, U. and Werle, R. (2000): Gesellschaftliche Komplexitt und kollektive Hand-
lungsfhigkeit. Frankfurt am Main: Campus.
Schrder, H. (2003): From Dusk to Dawn: Climate Change Policy in Japan. Dissertation,
Fachbereich Politik- und Sozialwissenschaften, Free University of Berlin.
Schuppert, G. F. (1995). Rckzug des Staates? Zur Rolle des Staates zwischen Legitimati-
onskrise und politischer Neubestimmung. Die ffentliche Verwaltung, Vol. 18, pp.
761-770.
Skorupinski, B. and Ott, K. (2000): Technikfolgenabschtzung und Ethik. Zrich:
Hochschulverlag.
SRU (2000): Umweltgutachten 2000. Schritte ins nchste Jahrtausend. Stuttgart: Metz-
ler-Poeschel.
SRU (2002): Umweltgutachten 2002. Fr eine neue Vorreiterrolle. Stuttgart: Metzler-
Poeschel.
SRU (2004): Umweltgutachten 2004. Baden-Baden: Nomos (forthcoming).
SRU (German Advisory Council on the Environment) (1998): Umweltgutachten 1998.
Umweltschutz: Erreichtes sichern neue Wege gehen. Stuttgart: Metzler-Poeschel.
Tsebelis, G. (2002): Veto Players: How Political Institutions Work. Princeton: Princeton
University Press.
UNDESA (UN Department of Economic and Social Affairs) (1992): United Nations Con-
ference on Environment and Development, 3 to 14 June 1992: Agenda 21. New York,
UNDESA.
UNDP (United Nations Development Program) and OECD (Organisation for Economic
Co-operation and Development (2002), Sustainable Development Strategies: A Re-
source Book. London, Sterling, VA: Earthscan.
208
UNICE (Union of Industrial and Employers Confederation of Europe) (2001), European

Industrys Views on EU Environmental Policy-Making for Sustainable Develop-
ment. Brussels: UNICE.
UNU (United Nations University) and IAS (Institute of Advanced Studies) (2002), Inter-
national Sustainable Development Governance: The Question of Reform. Key Is-
sues and Proposals (Final Report), Tokyo: UNU.
Voelzkow, H. (1996): Private Regierungen in der Techniksteuerung. Eine sozialwissen-
schaftliche Analyse der technischen Normung. Frankfurt am Main: Campus.
Wlti, S. (2003): How Multi-level Structures Affect Environmental Policy in Industrial-
ized Countries. European Journal of Political Research (forthcoming).
Weidner, H. (1996): Umweltkooperation und alternative Konfliktregelungsverfahren in
Deutschland. Zur Entstehung eines neuen Politiknetzwerkes. Berlin: Wissen-
schaftszentrum Berlin fr Sozialforschung. Discussion Paper FS II 96-302.
Weidner, H. and Jnicke, M. (Eds.) (2002): Capacity Building in National Environmental
Policy: A Comparative Study of 17 Countries. Berlin, Heidelberg, New York: Sprin-
ger.
Willke, H. (1997): Supervision des Staates. Frankfurt am Main: Suhrkamp.
Winter, S.C. and May, P.J. (2002): Information, Interests and Environmental Regulation.
Journal of Comparative Policy Analysis: Research and Practice 4, pp. 115-142.
World Bank (2003): World Development Report 2003: Sustainable Development in a
Dynamic World. Washington, D. C.: The World Bank.
World Economic Forum (2000): Global Competitiveness Report 2000. New York: Ox-
ford University Press, 352 pp.
Young, O. R. (1999): Governance in World Affairs. Ithaka und London: Cornell Univer-
sity Press.
Zittel, T. (1996): Marktwirtschaftliche Instrumente in der Umweltpolitik. Zur Auswahl
politischer Lsungsstrategien in der Bundesrepublik. Opladen: Leske and Budrich.
209
Coordinating sustainable development
an evaluation of the state of play 1
AXEL VOLKERY
DARREN SWANSON
KLAUS JACOB
FRANCOIS BREGHA
LSZL PINTR
Abstract
In this article we evaluate the state-of play in sustainability strategies on the
basis of case studies for 19 developing and developed countries. We are inter-
ested in how the institutional fabric of implementing sustainable develop-
ment has developed over the last ten years. What are governments actually
doing to organize the processes required for this? What are the institutional
innovations in this regard and what kind of typologies can be identified? We
offer a simple framework of strategic action that structures our analysis into
leadership, planning, implementation, monitoring, coordination and partici-
pation.
Despite some true progress made, our findings indicate that nations are still
at the early stages of learning toward effective action for sustainable develop-
ment. Interestingly, we dont find many differences for developing and devel-
oped countries. Instead, all countries struggle to turn talk into action. Key
unsolved challenges include a) coordination with the national budget, b) coor-
dination with sub-national level sustainable development strategies and c)
coordination with other national-level strategy processes.
1
Preprint of a manuscript accepted for publication in World Development.
210
Coordinating sustainable development an evaluation of the state of play
1 Introduction
For over a decade now the United Nations has been asking countries to pursue
strategic and coordinated action for sustainable development through the
creation of national sustainable development strategies (NSDS, see for an
overview UN DSD 2004). Whereas the concept of sustainable development has
established itself successfully as a central guiding principle for many different
political institutions at all levels of public and corporate decision making, its
translation into concrete action proves to be a much more difficult challenge
(Lafferty, 2004; Lafferty and Meadowcraft, 2000; OECD, 2002). Five years after
the Earth Summit in 1992 a Special Session of the United Nations came to a
disappointing progress review: single success stories were outweighed by the
overall failure of countries to give appropriate political weight to meaningful
implementation (Brown, 1997).
This review led government to agree on the target of having a NSDS intro-
duced by 2002, the year of the World Summit on Sustainable Development
(WSSD) in Johannesburg. Being pushed by the OECD (OECD-DAC, 2001) and
the UN (UN International Forum on National Strategies for Sustainable De-
velopment, 2001) nearly all countries intensified efforts and subsequently
adopted new or revised NSDS shortly before or after the WSSD (Jrgens, 2004).
A meaningful translation of the rather broad paradigm of sustainable devel-
opment into concrete action encounters many problems. International agen-
cies (OECD 2002; OECD-DAC, 2001; UN 2001) as well as academic scholars
(Dalal-Clayton and Bass, 2002; Jnicke and Jrgens, 2000; Martinuzzi and
Steurer, 2003) have developed a number of criteria of good practice for NSDS.
They have been broadly reflected and repeatedly discussed in recent years. The
list of criteria comprises the development of long-term visions and their link-
age to short term action, institutions for horizontal and vertical coordination,
broad participation by societal stakeholders and a constant monitoring of
action.
It is, however, also a well-known fact that these approaches clash with core
functioning principles of modern government, like the division of sectoral
responsibilities, path-dependencies of policy development or the mode of
negative co-ordination. Governmental discretion for long-term action is fur-
ther constrained by the shortness of election and budget cycles. In response to
these clashes, strategies for sustainable development were often introduced as
211
Axel Volkery Darren Swanson Klaus Jacob Fancois Bregha Lszl Pintr
a tool to initiate change by learning and continuous adaptation rather than by

challenging the existing institutions and power structures. Such an approach
has been characterized as a step-by-step procedure: developing an underlying
vision through consensual, effective and iterative process; and going on to set
objectives, identify the means of achieving them, and then monitor the
achievement as a guide to the next round of this learning process. (Dalal-
Clayton and Bass, 2002).
After more than a decade of strategic and coordinated action for sustainable
development in many countries it is time to draw a balance: what are the
achievements so far? How has the institutional landscape developed, both in
developing and developed countries? In how far are countries re-organising
their institutional structures to comply with the needs of integrated and long-
term decision-making, learning and adaptation? Do remarkable differences
between developing and developed countries continue to exist or do trends
converge?
During the last years, a number of studies have assessed progress at the na-
tional level. Recently, attention has been shifted from content towards proce-
dural and institutional aspects (Dalal-Clayton and Bass, 2002; Steurer und
Martinuzzi, 2004). This article contributes to this growing body of knowledge
by comparing challenges, approaches and innovations in strategic and coordi-
nated action in 19 developing and developed countries. Building on current
thinking we develop a simple model that embraces important aspects of strat-
egy management such as leadership, planning, implementation, monitoring,
coordination and participation. Our findings for 19 countries are featured to
create a pragmatic toolbox to assist governmental managers and policy mak-
ers.2
This article proceeds as follows: In the next section, we will discuss our ana-
lytical framework and applied research methods. In the third section, we pre-
2
This article focuses on process rather than content. To what extent the SDS resulted
in tangible progress toward SD is another question altogether albeit a critical one.
We do not assume that a good process will always lead to good results, but an as-
sessment of process provides a necessary proxy for effectiveness and can provide
practical information (see for a similar conclusion in the analysis of the effectiveness
of global environmental assessment: Eckley et al., 2001; Pintr, 2002). Our research
was not intended to produce a step-by-step how to manual for SD strategy process.
Rather, this article outlines a synthesis of some of the key challenges, approaches
and tools, and innovations at various stages throughout the strategy process.
212
sent empirical findings, organized around the tenets of strategic management

and with a special focus on coordination challenges. For each of the aspects of
strategic management, the challenges and findings will be described briefly at
first, followed by a short highlighting of best-practice examples. The last sec-
tion concludes our research findings, focuses on possible trends and discusses
the question whether the current reforms in institutional structure of gov-
ernments in both developing and developed countries are suited well enough
for the shifts that the implementation of a strategic sustainability approach of
continuous adaptation and learning, implies. 3
2 Analytical Framework and Research Methods

The successful integration of cross cutting issues such as sustainable devel-
opment in governmental practice can be described as a function of (European
Commission, 2004; Steurer and Martinuzzi, 2004; SRU, 2004):
Leadership governmental institutions have to develop an underlying vi-
sion; and concretize this vision further by setting overall objectives; this
process has to be backed by a high-level political commitment;
Planning governmental institutions have to set up a process to identify
the means of achieving objectives (institutional mechanisms, program-
matic structures and specific policy initiatives);
Implementation: governmental institutions have to employ and finance a
mix of policy initiatives regarding to the requirements of planning and
Monitoring, Review and Adaptation governmental institutions have to
develop, monitor and report of indicators to measure: 1. progress in im-
plementing policy initiatives; and 2. the economic, social and environ-
mental state of the nation.
These four stages of strategic management correlate well with the stages of the
continuous improvement approach to managing sustainable development
strategies developed in the 2002 Sustainable Development Resource Book
(Dalal-Clayton and Bass, 2002). Additionally, we focus on two of the cross-
cutting aspects of strategic management as identified in Dalal-Clayton and
3
The article is based mostly on the 19 case studies conducted and the subsequent
synthesis report (Swanson et al., 2004). For the purpose of readability, we abstain
from citing each case study when speaking about single innovations discovered.
213
Bass (2002), namely co-ordination (e.g., with other strategy process, other lev-
els of government, financing mechanisms) and comprehensive multi-
stakeholder participation. Put together with the information gathered in our
case studies we get a roadmap of the challenges ahead (see figure 1). We do not
assume that practical processes follow such a linear model and are also aware
that aspects overlap. But developing such a roadmap is useful as a heuristic
tool for the comparison of 19 countries.
Our case studies are mainly based on interviews with government officials,
governmental reports and evaluation reports by international agencies. The
data is based primarily on self reporting and therefore, we abstain from evalu-
ating the implementation of the strategies. Given the broad spectrum of issues
covered in the national strategies, a comprehensive evaluation would have
required a much broader study with much more data than we were able to
collect.
Fig. 1: Roadmap to the challenges for strategic and coordinated action for
sustainable development, put into relation with the key tenets of
strategic management
1. Leadership
Type of strategy approach
Demonstrating commitment and focus
Incorporating the inter-generational SD principle
Incorporating the interdependency SD principle
4. Monitoring Coordination
With budget processes 2. Planning
Tracking progress With other strategies
toward strategies legal basis
With other levels of government
Understanding SD trends Institutional basis
Learning & Adaptation Participation Policy assessment
Institutionalizing participation
Building Trust
3. Implementation
Accountability
Financing
Mix of policy initiatives
Source: Swanson et al., 2004 (on the basis of Dalal-Clayton and Bass, 2002).
214
Research was conducted on 19 developed and developing countries from

around the world and for efforts both pre- and post-WSSD. Countries studied
were Brazil, Cameroon, Canada, China, Costa Rica, Denmark, Germany, India,
Madagascar, Mexico, Morocco, the Philippines, Poland, South Africa, South
Korea, Sweden, Switzerland, the United Kingdom as well as the European
Union. The criteria for country selection included to have a) good mix of de-
veloped and developing countries, b) broad geographic representation, c) no
extensive coverage in previous research and d) inclusion of at least some po-
tential leaders and a diversity of approaches. Information was obtained from
publicly available sources (government strategy documents, Internet sources,
literature sources) and through interviews with government officials. National
sustainable development focal points had the opportunity to provide feedback
on the case studies, but such contact was not successful in all cases.
3 Challenges, Tools and Innovations
3.1 Leadership
The challenge of sustainable development concerns all departments and levels

of government. A valid commitment of all relevant actors can only be bought
in by active leadership that provides clear directives and track recording.
Commitment has to be underpinned by operationalized and quantified objec-
tives. At its best, it reflects a profound understanding of sustainable develop-
ment covering the interdependency among economic, social and environ-
mental systems as well as the needs of current and future generations (OECD
DAC 2001). In how far are these aspects covered in the strategies of our sam-
ple? Findings can be summarized as follows:
215
Tab. 1: Leadership challenges, tools and innovations
Challenges Approaches and Tools Examples and

Innovations
Choosing approaches Comprehensive strategy U.K., Philippines
for the strategy process (15 countries)
Cross-sectoral strategy (four Cameroon and
countries) Madagascar PRSPs
Sectoral strategies (Canada) Canada
Integration with existing planning Mexico
process (Mexico)
Demonstrating Quantified and time-bound Germany
commitment and focus objectives (7 of 19 countries)
Constitutional provisions Switzerland
Inter-generational Long-term objectives Sweden, Denmark
principle of SD
Addressing the linkages Integrated policy assessment U.K.
between economic, Strategic sustainability assessment Switzerland
social and environ- Cross-cutting strategy objectives Germany
mental sustainability
Note: some of the countries pursue more than one approach
Source: Swanson et al., 2004
The choice of the strategic approach often reflects long-standing institutional

framework-conditions, policy cultures and regulatory stiles. One approach
might fit the specific circumstances for action in one country, but may fail to
address the circumstances for action in another country. Countries have to
adopt an approach that meets their specific needs and fits with their institu-
tional framework conditions there is no single recipe. Sustainability can also
be differently understood and thus strategically operationalised, according to
the circumstances: For example, the eradication of poverty and with the provi-
sion of basic human needs can be the focus of strategic efforts in a developing
country, whereas the change of production and consumption patterns and the
quality of life might be target areas of action in a developed country. We ob-
serve four main approaches that all serve to address the aims of Sustainable
Development: comprehensive and multi-dimensional (e.g., Philippine Na-
tional Agenda 21, German national sustainable development strategy); cross-
sectoral (e.g., the combination of the SD strategy with the Poverty Reduction
Strategy Paper in Cameroon); sectoral (e.g., Canada Departmental SD Strate-
gies, also UK); and integration of SD into existing planning processes (e.g.,
Mexico National Development Plan). All of the different approaches have in
216
common that they aim at a better incorporation of issues of sustainable devel-

opment within the decision making of relevant departments of government.
Leadership can be demonstrated if a commitment is validated to achieve
clearly defined objectives. Quantified objectives and targets are a common
standard to strengthen commitment (see Lafferty and Meadowcraft, 2000).
Seven of 19 countries studied have such systematically developed quantifiable
and measurable targets for sustainable development objectives. Germanys
SDS, for example, provides 21 objectives that at the same times serve as pro-
gress indicators. The Cameroons PRSP frames 14 policy fields and 193 specific
measures (each with a target date for achievement) within seven priority areas.
The UK strategy is centered around four main objectives, supported by a set of
headline indicators and targets as well as a set of ten guiding principles and
approaches. Sweden and Denmark have also a good record on setting concrete
objectives and measures for core areas.
However, it is not the quantity of objectives, but their quality that determines
leadership. All countries are struggling to commit themselves in an encom-
passing, yet explicit manner. The strategies are either a collection of already
existing policy objectives or contain vaguely formulated new objectives.
Whereas the triggering of learning processes has been stressed as an impor-
tant aim, the strategies themselves are often the result of bargaining between
different actors, reflecting interest conflicts and seeking compromise. How-
ever, sometimes strategies contain single objectives that are worth highlight-
ing, since they go beyond the traditional, short-term agenda of policy devel-
opment. This is the case, for example, for the UK strategy and its mid-term
climate protection goal or the objective of a drastic reduction in land-use by
nearly 75 percent until 2020 in the German NSDS.
Constitutional provisions are another approach to demonstrate commitment.
Switzerland proves an interesting example: The new constitution from 1999
elevates Sustainable Development to the status of a national goal. It further
imposes a binding requirement for sustainability action on all levels of gov-
ernment, as well as incorporating sustainability aspects into its foreign policy
goals. A similar approach can be observed for the European Union that has
prominently anchored the principle of Sustainability in the Treaties (former
art. 3 and 6 EU-Treaty) (see Nollkaemper, 2002). These articles have often been
referred to when new policy proposals for promoting action on sustainable
development had to be legitimized.
217
Regarding the inter-generational principle of sustainable development, setting

long-term objectives contributes to a better inter-generational objective. But
only five of the countries considered a strategy outlook that was explicitly
intergenerational, i.e. spanning upwards of 2530 years into the future (Swe-
den, Denmark, Germany, the Philippines and Mexico). However, the underly-
ing scenarios extrapolate current trends, but they do not investigate the possi-
bility of alternative future developments and discuss the implications for ro-
bust policy-making.
All countries studies showed a rather weak performance regarding the link-
ages among economic, social and environmental dimension. In many cases,
NSDS are a simple compilation of economic, social and environmental objec-
tives and initiatives, but did not contain a fundamental notion of how issues,
objectives and initiatives influence each other either positively or negatively.
The tools observed that would help improve understanding of the linkages
among economic, social and environmental systems are Integrated Policy
Appraisal (e.g., as in the UK) or Strategic Sustainability Assessment (e.g., as in
the case of Switzerland; cf. Radaelli, 2004). It should just be highlighted that
the UK was one of the first countries to start with the integrated policy as-
sessment of draft legislation and has continuously extended its application
since then. It is now organised and overseen by a well staffed unit at the Prime
Ministers Office which provides guidelines and assistance to the different
departments and which is also entitled to review the quality of the IAs. Also,
the European Commission has recently installed an ambitious approach of ex-
ante impact assessment (Jacob et al., 2004).
3.2 Planning
Planning is a part of the strategic management cycle that governments have

the most experience with. Key challenges include 1) establishing a clear legal
mandate for the planning process, 2) thinking strategically about institutions
to head the process and implementing them and 3) a reliable assessment of
planned policy plans, programs and initiatives. Findings can be summarized
as follows:
218
Tab. 2: Planning challenges, tools and innovations
Challenges Approaches and Tools Examples and Innovations

Legal Basis Enactment as law Canada, EU, Mexico
Institutional Green Cabinet Germany, U.K.,
Basis Home outside of environment Philippines, China, Sweden
departments
Inter-departmental Commission Switzerland
Policy Strategic Environmental EU
assessment Assessment (eight countries)
Strategic Sustainability Assessment Switzerland
Integrated Policy Assessment U.K.
Source: Swanson et al., 2004: 16
Establishing a clear legal mandate: Only five countries (Canada, EU, Republic
of Korea, Mexico, Switzerland) had a clear legal mandate for the strategy proc-
ess. One example to learn from is Canadas amendment to the Auditor Gen-
eral Act in 1995 that established a clear mandate whereby 25 federal depart-
ments are required to submit sustainable development strategies to Parlia-
ment every three years. This approach has functioned quite well in the past
regarding the delivery of strategies, at least. Also, the already discussed provi-
sions in the treaty on the European Union underpin many activities such as
the development of the European NSDS, the Cardiff-Process for Environ-
mental Policy Integration or the integration of sustainability concerns into the
better-regulation strategy of the Lisbon Process. In Mexico the integration of
sustainability concerns into overall development planning is required by con-
stitution. The integration of sustainability concerns has not been achieved
consistently across all sectors, but it has lead to some success in a couple of
sectors like energy or transport, at least.
Increasing the effectiveness of institutional arrangements: In ten countries
strategy processes had institutional grounding in the environment depart-
ment which limited the extent of influence across government. In nine coun-
tries responsibility laid with the office of the Prime Minister or President or
other central steering institutions (namely Cameroon, China, EU, Germany,
Philippines, Poland, UK, Republic of Korea, Switzerland, with some ramifica-
219
tions also Madagascar) and in a few more countries there is a sharing of com-
petences but no strong central coordination (Canada, Costa Rica, Morocco).4
The shift of responsibility for coordination to the central institutions within
governments has to be regarded as crucial major innovation since sustainabil-
ity issues gain more importance on the political agenda. However, it has to be
acknowledged that insufficient personal capacities in these institutions often
constrain an effective coordination of the strategy process. But it must also be
acknowledged that central coordination by the Prime Ministers office allows
other proponents to take a more active role behind the scenes. Environmental
ministries, for example, are then no longer obliged to moderate between con-
tradictory positions of other departments, but can actively push. This experi-
ence has been reported for at least for Germany, the UK, the EU or Switzer-
land. Another innovation in this line are so called Green Cabinets that are
composed of several ministers or junior ministers and are supported by
committees composed of higher civil servants. In Germany, for example, a
Green Cabinet manages the process. The Cabinet is co-ordinated by the Chan-
cellors Office and seems to be a new venue for argumentation and interest
moderation at a high-level of political decision-making. Similar experiences
can be reported for the UK, Switzerland and the Philippines, although these
countries feature a slightly different institutional design. At the Cabinet level
in the UK, sustainable development policy is co-ordinated by the Cabinet
Committee on the Environment. In addition, each department designates a
Green Minister to sit on the Cabinet Sub-Committee of Green Ministers. Each
Green Minister is responsible for ensuring that environmental and sustain-
able development considerations are integrated into their departmental
strategies and policies. Switzerland has chosen a similar approach, but on a
lower level: here, a directorate-level interdepartmental established by the Fed-
eral Council coordinates the process of NSDS implementation. In the Philip-
pines the responsible Philippine Council for Sustainable Development is
chaired by the vice-chairman of the National Economic Development Author-
ity. In China, responsibilities are divided among Ministries and governmental
4
Counting this way is difficult and not without problems. Grounding the process in
the environmental department does not have to mean that there are automatically
no central steering effects. For example, the organization of the process in Sweden
or Denmark has been quite successful. In the opposite, in countries such as Mo-
rocco or Costa Rica responsibilities are distributed among a number of departments
but there is no coordination so that there is little coordinated action in the end.
220
committees, such as the State Planning Commission and the State Science and
Technology Commission in cooperation with the Administrative Centre for
Chinas Agenda 21. The national Agenda 21 is highly integrated into the Five-
Year Planning process of Chinas economy, less into sectoral plans and within
the overall national environmental planning.
These innovations in planning and implementation illustrate the tendency to
move sustainability issues into the center of governmental decision makings.
Again, it is open to investigation if this remain to be lip service only or if deci-
sion making is influenced effectively.
Assessing specific policy initiatives in an integrated manner. Despite long
discussion and much practical experience, Strategic Environmental Assess-
ment (SEA) has not become a standard instrument of government. Only eight
out of the 19 countries used SEAs, and even fewer countries have developed
the tool further into instruments for strategic Sustainability Assessment (Swit-
zerland, EU) or Integrated Policy Assessment (UK). However, since the Euro-
pean Union has adopted a Directive requiring the Member States to imple-
ment SEA, this tool is likely to become more frequent. It has been made
obligatory also for plans and programmes for which transnational impacts can
be expected by means of the SEA Protocol (2003) within the UNECE Espoo
Convention.
3.3 Implementation
Implementation was a major issue at the WSSD in 2002 and will continue to
draw attention. The UN DESA and OECD-DAC guidelines provide recom-
mendations related to this aspect of the strategic management cycle (UN DESA
2005 and OECD DAC 2002). Key challenges include 1) establishing responsibil-
ity and accountability for implementation of objectives, 2) using an instru-
mental mix to implement strategy objectives and 3) using a mix of financial
arrangements. Findings can be summarized as follows:
221
Tab. 3: Implementation challenges, tools and innovations

Responsibility Shifting of responsibility to Germany, Mexico, South
prime minister/president Korea, Cameroon
Financing Green Budgeting Costa Rica, Poland, Sweden
HIPC debt relief Cameroon, Madagascar
Donor co-ordination Madagascar
Mix of specific SD Action Plans Denmark, Madagascar, EU,
initiatives South Korea
Expenditure policy initiatives U.K., Morocco
Economic policy initiatives Sweden, EU, U.K., Germany
Regulatory policy initiatives South Korea
Institutional policy initiatives Philippines
Source: Swanson et al. 2004
Establishing responsibility and accountability: the implementation of SDS is a

systematic weakness in all countries. Quite often, effective responsibility is
housed in the Ministry of Environment in most cases, either directly or indi-
rectly through a coordinating committee or SD commission or council. Leav-
ing responsibility for implementation with departments that do not have the
authority to exert influence on other departments means a non-strategic allo-
cation of responsibility. The shift of responsibilities to the center of govern-
ment, i.e. Offices of the Prime Minister or Presidential Commissions as it can
be observed in a number of countries, is therefore of importance for a success-
ful implementation, but bears also the risk of loosing ownership and compe-
tencies of specialized ministries.
Using a mix of financing arrangements: financing of specific initiatives often
suffers from a simple lack of revenue. All countries make use of ecological
taxes or levies, but few countries have adopted a formal strategy for their sys-
tematic use and the invention of new financing mechanisms with funds re-
served for sustainable development issues. Sweden has been probably the
country out of our sample with the most profound experiences in environ-
mental taxation. Experiments with environmental tax shifting in Sweden be-
gan in 1991 when it raised taxes on carbon and sulfur emissions and reduced
income taxes. In 2001, the government increased taxes on diesel fuel, heating
oil and electricity while lowering income taxes and social security contribu-
tions. Six per cent of all government revenue has now been shifted. The intro-
222
duction of Emission Trading within the EU will also spur further efforts for
climate protection among its member states. Germany, Sweden and UK are
currently all pursuing an ambitious climate protection policy.
Mixing specific initiatives and instruments: all countries have adopted some
mix of instruments. However, while a mix of policy initiatives has been pur-
sued, economic instruments appear to be under-utilized. Some of the other
studied countries which are active in environmental fiscal reform and eco-
nomic instruments are Germany, UK, Costa Rica, Brazil and Poland. Poland
initiates and promotes private and municipal investments which has attracted
attention as a model for financing important parts of sustainable develop-
ment. In Costa Rica, the Capacity 21-programme provided support for the
creation of a system for payments of environmental services by farmers and
peasants. In Madagascar the Donor Secretariat that managed donor assistance
on the environment was gradually extended to other questions like food secu-
rity or rural development. The secretariat now functions as a Multi-Donor
Secretariat and provides effective donor coordination and integrated program
development.
3.4 Monitoring, learning and adaptation
Monitoring is essential to the NSDS process. Management is possible only if a

measurement of achievements takes place. Challenges include the establishing
and integration of 1) process monitoring and 2) outcome monitoring. Also 3)
institutions have to be created that facilitate processes of learning and adapta-
tion. Findings can be summarized as follows:
223
Tab. 4: Monitoring challenges, tools and innovations

Process Process (output)-type monitoring Canada, U.K.
Monitoring and reporting (nine countries)
Auditing agencies Canada
Spending reviews U.K., Cameroon and
Madagascar PRSP
Ministers reports U.K.
Monitoring National SD indicators and EU, Morocco
outcomes reporting (nine countries)
National accounts statistics Sweden, South Korea
Auditing agencies Canada
Auditing committees U.K.
Independent advisory bodies U.K.
Learning and Independent agencies and Canada, U.K., Philippines
Adaptation committees
Task Force or strategy revision U.K., Philippines
Advisory councils Mexico
Progress reporting Sweden, Germany, EU,
Research networks U.K.
Public consultations India, Cameroon
Source. Swanson et al., 2004
Process-monitoring: In most nations, statistical offices monitor various as-

pects of the economy, society or environment. But only six countries have
developed an integrated set of indicators to allow analysis of inherent trade-
offs and inter-linkages of all dimensions of sustainable development. These
countries included Costa Rica, EU, Germany, Mexico, UK, Sweden, Philip-
pines, Switzerland and Morocco. The UK appeared as a consistent innovator
through such approaches and tools as indicators and reporting; sustainable
development audit committees and spending reviews; a Task Force for na-
tional strategy revision; and the funding of sustainable development research
networks. Information in the UK is also provided in the annual Green Minis-
ters report where performance is searchable by department and by subject
and include as assessment of performance against government-wide standards
and objectives. Canada has institutionalized a Commissioner of the Environ-
ment and Sustainable Development, situated in the Office of the Auditor Gen-
eral that regularly audits governments overall performance on environment
and SD. Findings of reports have led to direct responses by departments.
224
Spending review is also executed for the PRSP process in Cameroon and
Madagascar.
Outcome Monitoring: Even more elusive to detect from the research were
formal and informal approaches to outcome-monitoring. Some countries
operate batteries of indicators, such as the 65 indicators of the National Com-
mittee for SD Indicators in Morocco. Others have transitioned to aggregated
headline-indicators, such as the UK, Canada, Germany and the EU. Aggregated
indicators facilitate understanding and communication of overall progress
and performance, but there is a risk of information loss if aggregated indica-
tors are not supplemented by more detailed lists of component indicators.
Sweden and South Korea are interesting examples insofar as they have estab-
lished first sets of indicator systems to measure the progress towards sustain-
able development with a reduced set of integrated indicators. The UK and
Canada have made the most elaborate use of auditing committees or inde-
pendent advisory bodies. Creating separate bodies that hold an ownership
promises on the one hand, that the process is taken seriously. It bears the risk,
on the other hand, that departments resist relevant recommendation since
they see them as being superimposed.
Learning and adaptation: Most rarely to detect were functioning mechanisms
to learn from integrated monitoring and to make subsequently critical and
necessary adaptations. One tool for learning is strategy progress reports that
can be seen in countries like Sweden or Germany. The SD Spring Review in
the EU gives a broad basis for a long-term learning process: Progress reports
will be submitted by the European Commission to the European Council each
spring and the NSDS shall be assessed at the start of each Commissions term
of office. Heads of Governments take notice and decide further priorities. The
evaluation of the sectoral strategies for sustainable development by the Com-
missioner for SD in Canada is a powerful institution since the Commissioner
is part of the General Auditor and has considerable independence form Gov-
ernment. In the UK, the review by a dedicated parliamentary committee is
worth mentioning. However, independent comprehensive evaluations of the
strategies and their implementation were not found as a systemic process
feature.
225
4 Coordinating the Integration of Governmental

Action
Coordination is a central requirement for making SDS processes work since it
cuts across all aspects of the strategic management cycle that has been used for
our analysis. Deficits in coordination contribute significantly to many of the
serious deficits described above. Our cross-country comparison indicates that
the issue of sustainability is gradually moving into the center of government,
at least on paper, and that this tendency is visible both in developing and de-
veloped countries: Green Cabinets, special divisions within the Prime Minis-
ters or Presidents office, Presidential commissions, inter-departmental
committees, external auditing committees or independent agencies there are
many ways to house responsibilities outside the environmental department
and they experimentally diffuse among developing and developed countries
alike. On the one hand, this reflects the growing importance of the issue. On
the other hand, coordination demands have not been met in most cases due to
capacity overloads of steering institutions and unresolved problems of differ-
ent understandings of the broad concept of sustainability.
The challenges as well as the institutions in response are very similar to the
requirements for Environmental Policy Integration (EPI). Many innovations in
efforts to integrate concerns of sustainability in decision making are rooted in
instruments and strategies for EPI (Jacob and Volkery 2004).
In all countries studied there is a constant gap between the content of the
strategy and its actual impact on governmental policy. Clear information
about responsibilities for strategy implementation is one side of the coin,
information about the actual impact on governmental policy-making the
other side. For tracking progress towards coordinated action for Sustainable
Development on the national level, we have focused in detail on three major
aspects of the coordination challenge, namely:
1. Coordination of strategy objectives and initiatives with the national budget
process
2. Coordination with other strategy processes
3. Coordination with sub-national and local strategy processes.
Beyond the design of more or less comprehensive written strategy documents
it is these three areas of action where talk about sustainable development is
turned into action.
226
Tab. 5: Coordination challenges tools and innovations

With national Incentive structures PRSPs and HIPC debt relief
budgeting processes Spending review U.K.
Environmental taxes Sweden
Links to national planning Mexico, Philippines
process
With other strategy Comprehensive SD strate- U.K.
processes gies that provide framework
for other strategies
Inter-departmental co- Canada
ordinating committees
Institutional home for Philippines
national SD council
Cross-sectoral workshops Morocco
and action areas
Cross-cutting issues Germany, Canada, Cameroon,
Madagascar, South Korea
Green Cabinets Germany, U.K.
With sub-national Municipal SD strategies Denmark
and local strategy Local Agenda 21 process (e.g., South Korea
processes China, Denmark,
Costa Rica and South Korea)
4.1 Co-ordination with the national budgeting process
Budget processes are central to the functioning of government: it is the avail-

ability and spending of resources that reveals whether or not sustainable de-
velopment is taken seriously. Sustainability has to be reflected in expenditure
and revenue generation. Creating incentive structures, implementing spend-
ing reviews, shifting taxes and creating better transparency and responsibility
through Green Budgeting are examples of tools.
In all countries studied, the vision and objectives created through a SDS proc-
ess still has little influence on national budget expenditures and revenue-
generation. National sustainable development strategies still remain at the
periphery of government decision-making. Most countries studied had
mechanisms in place whereby government departments prepare plans that
articulate proposed expenditures. However, these plans seldom align with the
227
NSDS and are not subject to a sustainability impact assessment. More elusive
to find from the research is a country, where the overall budget plan contains
transparent information about the impact of overall spending on sustainabil-
ity and charts a way for improving performance.
A number of interesting approaches and innovations however, were observed
in our research. For example, the requirement for implementation of key pri-
ority areas in poverty reduction strategy papers (PRSPs) to reach the Heavily
Indebted Pour Countries debt relief completion points, results in attention
from the national budgetary process (e.g., Cameroon and Madagascar). The
trade off that has been acknowledged, however, is that the PRSP feels less
country owned (GTZ 2000, p. 12). The irony is that the NSDS, which are typi-
cally more country-owned, have less pressure on them to be implemented
(GTZ, 2000).
The UK emerged as an innovator in their approach of spending reviews. All
departments are required to produce a sustainable development report that
outlines the potential SD impacts related to public spending related to pro-
posed policies, plans and programs. While departments appear to be strug-
gling with this requirement, the Government has been developing tools and
guidance to assist with the process. In Canada, the 25 government depart-
ments are required to prepare a departmental SD strategy every three years.
However, it is still the situation that annual departmental plans submitted to
Parliament remain a document distinct from departmental SD strategies.
While some departments have recognized inherent similarities and have inte-
grated the two documents, most departments have not.
Another notable approach is through the introduction of a tax shift. For in-
stance, in countries where environmental taxes represent a large portion of
government revenues, such countries could be said to have integrated SD bet-
ter into the budgeting process. The most prominent example for this ap-
proach is Sweden (as described above). Integrating SD principles into existing
development planning processes is another approach. This is Mexicos SD
strategy approach. The 2001-2006 National Development Plan is translated
into a set of programs which serve as long-term policy guides and are the basis
for much of the public spending. While this approach does create more direct
linkages with the national budgeting processes, it comes with the disadvantage
that the SD strategy and its included objectives are not developed in as com-
prehensive a manner as occurs with separate SD strategies.
228
Additionally, the Philippines Agenda 21 has provided a conceptual framework

for integrating SD concerns in the countrys medium- and long-term devel-
opment plans. The Philippine Agenda 21 was integrated into the Medium-
Term Philippine Development Plan 19931998 (MTPDP) which is the master
plan for development in the Philippines. At the broadest level, the Philippine
National Development Plan for the 21st Century (Plan 21), or Long-Term Phil-
ippine Development Plan 20002025 (LTPDP), uses Philippine Agenda 21 as its
overall guiding framework. Consequently the later MTPDP 19992004 also
integrates SD concerns.
4.2 Co-ordinating with Other Strategy Processes
Governmental departments execute a variety of strategies that run independ-

ent from the Sustainability process, i.e. action plans or specific targeted pro-
grams. The degree to which these strategies are reformulated due to the re-
quirements of the NSDS or substituted by new strategies indicates the coordi-
nation leverage of the overall NSDS. Co-ordination between the SD strategy
and other strategy processes is a challenge in all countries studied. The com-
prehensive, multi-dimensional SD strategy tends to exhibit more co-
ordination than the sectoral and cross-sectoral strategy approaches due to
their overarching nature. For example, the national SD strategy in Germany is
linked to the strategy of fiscal consolidation, social renewal, and the promo-
tion of renewable energy. But these strategies were developed independent of
the SD strategy. So, while in the German case there was co-ordination among
the SD strategy and other strategies, the SD strategy did not provide an over-
arching framework for action, but rather, it was more of a summary of existing
strategies. This case highlights a challenge that is common to many of the
comprehensive, multi-dimensional SD strategies - that the SD strategy at this
early point in time in their use, is more a post-rationalization of existing ac-
tion, rather than stimulation for new action. The UK national SD strategy
appears to operate more on the other end of the spectrum relative to Germany
in that the UK strategy outlines the underlying goals of sustainable develop-
ment, and commits the government to establishing new decision-making
processes, institutions, instruments, partnerships and communication proc-
esses.
For countries which pursued either cross-sectoral or sectoral SD strategies, the
extent of co-ordination among strategies was minimal. For developing coun-
229
tries such as Cameroon and Madagascar, the PRSP process contained minimal
discussion of the environment or the national environmental management
strategy process that was in place in both countries. In Canada there was little
visible coordination. Canada has recognized the difficulty and has developed a
number of coordinating mechanisms including a Deputy-Minister level Co-
ordinating Committee on SD and the Interdepartmental Network on SD
Strategies. However, it would appear that these coordinating mechanisms have
not yet matched the level of complexity inherent in the inter-dependencies of
economic, social and environmental sustainability.
The Philippines case highlights an innovative approach for coordinating
among different strategy processes. The National Economic and Development
Authority (NEDA) was designated the lead government agency for the Philip-
pine Council for Sustainable Development (PCSD). The fact that PCSD Secre-
tariat is located in the NEDA premises and that national planning in the Phil-
ippines has a high component of multi-sectoral integration has facilitated the
work of the PCSD. In Morocco, through a national integration workshop, key
recommendations from each of the sectoral workshops were brought together
to produce a cohesive, integrated Environmental Action Plan (PANE). In turn,
this plan was then linked through cross-sectoral action areas with Moroccos
three other national development plans: the Economic and Social Develop-
ment Plan (19992003) (PDES); the Plan to Combat Desertification (PAN/LCD);
and the Land Management Plan (SNAT).
As previously mentioned, Germanys national SD strategy established cross-
cutting themes to guide measures. Other examples are PRSPs and national
environmental strategies which help mitigate the silo approach (e.g., Camer-
oon, Madagascar, South Korea). Many countries have articulated cross-cutting
issues and action plans such as climate change action plans, organic farming
action plans or land-use reduction plans. Denmark has a rich tradition in this
regard. Action plans are also a common tool at the European level, especially
under the framework of the 6th Environmental Action Programme, where
thematic strategies are developed.
Finally, Green Cabinets are a tool for helping to co-ordinate with other na-
tional strategy processes (see described above). Germany and the U.K. are ex-
amples of this, where Cabinet Committees have been set up to coordinate the
overall process of strategy development.
230
4.3 Coordination with Other Levels of Government
Activities for strategic and co-ordinated action are underway at all levels of
government ranging from the local/community, to state/provincial, to the
international level. Co-ordination among these different levels will be critical
for leveraging important changes. Such co-ordination is inherently more dif-
ficult in federal states where powers are divided between levels of government,
i.e. Germany or Canada. On the other hand, the division of powers and the
multiple layers of government in federal states might also provide more pos-
sibilities for the invention and diffusion of innovations.
Some countries have co-ordinated national and local level SD action through
local Agenda 21 processes. Our analysis in this regard implies only that SD
action occurred, and did not study the degree to which specific SD objectives
and actions were co-ordinated at the two levels. Among these countries are
Denmark, South Korea, China and Costa Rica.
For example, in Denmark there is a plan that most municipalities in Denmark
will develop a local strategy and a local set of indicators within one yearand
70 per cent of municipalities are succeeding. In South Korea, 213 out of 249
regional government units have adopted a Local Agenda 21. One important
reason for this was the reform of regional government in 1995 that gave local
government greater regulatory power, for example, in the area of air quality
standards. South Koreas National Action Plan of Agenda 21 fostered local
Agenda 21s through financial and capacity support. The government also
helped establish the Korean Council for Local Agenda 21 in June 2000 to bet-
ter co-ordinate the implementation process.
Many of the countries studied also made links between national SD and inter-
national SD priorities. National objectives dealing with climate change mitiga-
tion and adaptation are an example of this. However, the Swedish case study
introduced an innovative way of linking Government operations with the aim
of contributing to fair and sustainable global development. Trade, agriculture,
security, migration, environmental and economic policies are to promote
global development. A poverty and human rights perspective shall permeate
the entire policy. With this bill, the Government has reformulated its policy in
order to contribute more forcefully to the fulfillment of the UN objectives.
231
5 Managing Participation and Consultation

Another possibility to enhance the capacity for coordination is by making use
of participation and consultation of stakeholders. This might not only im-
prove the information basis for governmental action, but it might also help to
break up existing closed networks. Strategy processes that falls shy on obtain-
ing feedback from stakeholders is an indicator that the Government is taking
sustainability not very seriously. Participation needs effective management to
be of value for governmental decision-makers. It also needs building of trust
to allow for dialogue and learning among stakeholders. Challenges thus in-
clude 1) the institutionalization of participation and 2) the building of trust.
Findings of our cross-country comparison can be summarized as follows:
Tab. 6: Participation Challenges, Tools and Innovations
Challenges Approaches and Tools Innovations

Institutionalizing National councils for SD Philippines, Germany
participation Cross-sectoral councils Cameroon
Independent advisory bodies U.K.
Place-based councils Costa Rica
Ad hoc public consultation Canada, Denmark, Morocco,
Poland, Sweden, Switzerland
Building Trust Use of media to obtain members Mexico, Brazil
Negotiation and conflict resolu- Brazil
tion as an explicit and necessary
part of the participation process
Institutionalisation of participation: Regarding the institutionalization of

participation, a wide range of approaches were pursued in the 19 countries.
We distinguish 1) national councils for SD, 2) cross-sectoral councils, and 3)
independent advisory bodies, but also 4) broad consultation via the Internet.
Five of the countries studied have created a permanent multi-stakeholder
council for SD: the Philippines, Mexico, South Korea, Brazil and Germany.
These councils have most notably tried to facilitate social dialogue, support
initiatives and link them with the national level. For example, the Philippine
Council for SD (PCSD) has been supporting local initiatives on the creation of
local councils for SD through technical assistance and trainings. The German
232
Council for Sustainable Development (RNE) has published expert opinions on

the elaboration and evaluation of long-term objectives and indicators for Sus-
tainable Development and has assumed a central role in public debates on SD.
Countries with cross-sectoral SD strategy approaches have in place or have
proposed permanent participatory bodies. This includes Cameroon for the
PRSP process or Madagascar and South Korea for national environmental
strategy processes. Cameroons proposed National Poverty Reduction Network
is an innovative example due to its wide scope of responsibility. The NPRN
shall act as a forum for sharing experiences and exchanging data among
groups and as well as a framework for societal supervision of all activities un-
dertaken to implement the PRS. After a testing phase with the help of UNEP,
the NPRN will be open to all development players and facilitate a partnership
between civil society and Government.
The UK is an interesting example for independent advisory bodies designed
to provide expert advice. The Sustainable Development Commission was es-
tablished as an independent advisory body in 2000. It includes 22 members
from business, NGOs, local and regional government and academia. The
Commissions role is to advocate sustainable development across all sectors
in the U.K., review progress towards it, and build consensus on the actions
needed if further progress is to be achieved (U.K. Government, 2004). Canada,
Denmark, Morocco, Poland, Sweden and Switzerland use a more ad hoc ap-
proach. For example, for Canadas 25 departmental SD strategies, each de-
partment consults its stakeholders in the development of the strategies and
documents the input individually. In Sweden, a series of national seminars
and regional consultative conferences were used in the development of their
SD strategy.
Building of trust: Equal treatment of all major societal groups during the se-
lection of representatives in advisory bodies is a necessary prerequisite for this
task. This can be illustrated with the Philippine Council for SD experience.
The council started out in a general atmosphere of suspicion and even mis-
trust, fostered by years of authoritarian rule, between the government and the
civil society members, especially over the selection of NGO-representatives
(Isberto 1998, NCSD 2001). Since then, a formal process for selection of PCSD
representatives has been developed in the civil society community. Although
dissatisfaction with the process continues to be expressed, the process has
helped in minimizing conflicts and distraction (NCSD 2001). Mexico has ex-
perience with such a formal process of selecting representatives through its
233
National Consultative Council for Sustainable Development and its member-

ship process. The Council was originally created in 1995 and members were
sought through a summons published in newspapers, as well as posters and
promotional pamphlets distributed among various public and private organi-
zations. In September 1998, a new summons was published in order to re-elect
50 per cent of the representatives in the social, business, academic and non-
governmental sectors.
Considering negotiation and conflict management as an integral part of the
development of the national SD strategy is another important approach for
building trust. In Brazil, conflict management was addressed in a forthright
manner throughout the development of the Brazilian Agenda 21. The Brazilian
Agenda 21 recommended that short- and long-term negotiations be con-
ducted, so that there can be a balance between the Agendas objectives and the
environmental, economic and social development strategies. These kinds of
negotiations were a part of the consultation and development process, with
the hope of securing more effective implementation. But the skills involved in
this process must be present in all stakeholder groups, otherwise the process
can readily identify power differences and breed mistrust. The Costa Rica case
illustrates the importance that Local Agenda 21 efforts be accompanied by the
development of community building and negotiation skills at the local level.
Without such capacity, there is the potential for the process to be unnecessar-
ily divisive.
6 Conclusions
Research for the 19 countries illustrated that many innovative approaches and
tools have been developed and applied over the past decade, both pre- and
post-WSSD. The diversity of institutions and tools for the implementation of
sustainable development has been constantly increasing. Compared with the
starting point more than a decade ago, the institutional landscape for sustain-
able development has grown richer in its diversity. There are two interesting
trends: the issue is moving gradually into the centre of government - nearly
half of our countries studied have institutionalized central coordination bod-
ies, mostly located at the Prime Ministers or Presidents Office. And broad
participation and stakeholder consultation have become governmental stan-
dard procedures..
234
The issue of convergence or divergence of institutional development is a key

discussion at the moment. Naturally, it is assumed quite often that there are
striking differences between developing and developed countries with regard
to the strategic approach and capacities to sustainability. While this might be
true for content issues, or for the implementation, our comparison of institu-
tions and procedures in 19 developing and developed countries reveals a great
degree of convergence regarding the basic institutional approaches to leader-
ship, planning, implementation, monitoring, coordination and participation.
In our country sample, many countries are experimenting with the same basic
institutional innovations. Countries that seek institutional or instrumental
responses to certain problems can rely upon a comprehensive sample of other
countries experience. This is an indicator that the information exchange via
international forums and networks, like the annual meetings of the Commis-
sion on Sustainable Development, basically function, despite problems.
A similar point can be made for the implementation issue. The need for ca-
pacity-building refers to developing and developed countries alike. Albeit, of
course, on quite different levels we find that there rarely is sufficient political
commitment in developing and developed countries. Quite often the sustain-
able development strategy does not follow an integrated framework of goals,
objectives and measures. New agencies, bodies or committees are founded but
often do not have appropriate staffing, resources and power. Central budgets
remain largely untouched. Many of the strategies serve partly as a means of
post-rationalizing the mix of policy initiatives that have already been created
from other existing political and institutional processes.
However, this is not to say that major differences do not continue to exist,
both regarding the institutional context and content. A dominant approach
has not appeared yet, also not from a regional perspective. There is obviously
room for mutual learning between countries regarding the institutionalization
of processes for strategic and coordinated action on sustainability.
Additionally, what lessons can be drawn for future policy support by interna-
tional organizations? First, a national strategy is not simply the solution per
se. It needs more than a strategy document and a multi-stakeholder process
organized around it to actually change policies for sustainable development.
Strategic behavior as demanded by the public policy literature finds its restric-
tion in the politics of bureaucratic interest negotiation. Success depends on a
countrys ability to identify leverage points for influencing SD, to identify
emerging issues and to continuously learn and adapt to changes. Getting the
235
process right is critically important over the medium to long term. Prerequi-
sites are, however, stronger political commitment and better coordination.
Strategic action for SD will remain at the periphery of government as long as
it is not connected to visible incentives and sanctions that reward action or
punish non-action. Strategy processes need better ownership, commitment
and a better common understanding among all levels of government.
The core question is where is this supposed to come from? One approach to
catalyze better ownership within government is through strengthening central
coordination, probably best through allocating relevant competencies at the
Prime Ministers or Presidents Office. This has to go hand in hand with a
more systematic use of integrated assessments and indicators. Strategies need,
however, also to be manageable. Efforts should be directed at the most urgent
problems, and public participation processes should be directly tailored to
identify them. Increasing transparency and accountability through reporting
obligations, external auditing and tailored consultation can win new allies.
Strong leverage can be reached through strengthening of coordination with
the budget, i.e. through spending reviews and annual green budgeting reports,
and a strengthening of coordination among all levels of government.
The institutional fabric - despite all individual progress remains rather thin
from an overall perspective. This confirms the premises from the public pol-
icy literature that learning leads in most cases only to changes in minor as-
pects of policies. A comparison with the rich institutional landscape that we
find for economic development and cooperation, i.e. that is much richer in
terms of actors, rules, sanctions, inventories set of activities and political lev-
erage, demonstrates best the magnitude of the challenge that countries
worldwide are still facing in establishing a sound institutional landscape for
Sustainable Development.
References
Brown, K. (1997) The Road from Rio, Journal of International Development 9 (3): 383-
389.
Dalal-Clayton, B. and S. Bass (2002). Sustainable Development Strategies A Resource
Book, International Institute for Environment and Development. London:
Earthscan Publications Ltd.
Eckley, N. et al. (2001) Desgining Effective Assessment: The role of Participation, Sci-
ence and Governance, and Focus, Cambridge, MA: Research and Assessment Sys-
tems for Sustainability, Environment and Natural Resource Program, Harvard
University.
236
European Commission (2004) National Sustainable Development Strategies in the

European Union. A first Analysis by the European Commission, Commission Staff
Working Document, Brussels: European Commission.
GTZ Deutsche Gesellschaft fr Technische Zusammenarbeit (2000) Strategies for
sustainable development in the thicket of national planning processes From
convergent concepts to coherent actions in development cooperation. Eschborn:
GTZ.
Isberto, E. (1998), The Philippine Council for Sustainable Development: Like Cooking
Rice Cakes, World Resources Institute, Global Topics, Governance and Institu-
tions, available at: http://www.wri.org/wri/governance/pdf/ncsdsgfed/-
philippines.pdf (accessed 17.02.2004)
Jacob, Klaus and Axel Volkery (2004): Institutions and Instruments for Government
Self-Regulation: Environmental Policy Integration in a Cross-Country Perspective
In: Journal of Comparative Policy Analysis Volume 6, Issue 3, p. 291-309.
Jacob, Klaus; Julia Hertin, Matteo Bartolomeo, Axel Volkery and David Wilkinson
(2004): Ex-ante sustainability appraisal of national-level policies: A comparative
study of assessment practice in seven countries. Paper presented at the 2004 Berlin
Conference on the Human Dimension of Global Environmental Change in Berlin,
Dec. 3-4, 2004.
Jnicke, M. and H Jrgens (eds) (2000) Umweltplanung im internationalen Vergleich.
Strategien der Nachhaltigkeit, Berlin. Springer [Environmental Planning in Inter-
national Comparison. Strategies of Sustainability].
Jrgens, Helge (2004) Governance by diffusion: implementing global norms through
cross-national imitation and learning. in W. Lafferty (ed) Governance for Sustain-
able Development. The Challenge of Adapting Form to Function, pp. 246-283.
Cheltenham, UK: Edward Elgar.
Lafferty, W. and J. Meadowcraft (eds) (2000) Implementing Sustainable Development:
Strategies and Initiatives in High-Consumption Societies. Oxford: Oxford Univer-
sity Press.
Lafferty, W. (2004) Introduction: Form and Function in Governance for Sustainable
Development in W. Lafferty (ed) Governance for Sustainable Development. The
Challenge of Adapting Form to Function, pp. 1-31, Cheltenham, UK: Edward Elgar.
Martinuzzi, A. and R. Steurer (2003) The Austrian Strategy for Sustainable Develop-
ment: Process Review and Policy Analysis, European Environment 13: 269-287.
NCSD 2001: National Councils for Sustainable Development (NCSD) (August 2001 -
latest update): The NCSD Sustainable Development Report Republic of the Philip-
pines, available at: http://www.ncsdnetwork.org/global/reports/ncsd1999/phi.htm
(Accessed 16 February 2004)
Nollkaemper, A. (2002) Three Conceptions of the Integration Principle in Interna-
tional Environmental Law, in A. Lenschow (ed.) Environmental Policy Integration.
Greening Sectoral Policies in Europe, pp. 22-34, London: Earthscan.
OECD Organisation for Economic Cooperation and Development (2002) Sustainable
Development. Critical Issues, Paris: OECD.
OECD-DAC (2001) The DAC Guidelines: strategies for sustainable development: Guid-
ance for Development Cooperation. Development Cooperation Committee. Avail-
able: http://www.sourceOECD.org (Accessed: 2004, April).
Pintr, L. (2002) Making Global Integrated Environmental Assessment Matter. PhD-
Dissertation. University of Minnesota.
237
Radaelli, C. (2004) The diffusion of Regulatory Impact Analysis in OECD countries:

Best Practices and Lesson-Drawing, European Journal of Political Research 53 (4):
723-747.
SRU German Advisory Council on the Environment. (2004). Umweltgutachten 2004.
Umweltpolitische Handlungsfhigkeit sichern, Baden-Baden: Nomos. [Environ-
mental Report 2004. Ensuring Environmental Protection Capacity]
Steuer, R. and A. Martinuzzi (2004) Toward a new pattern of governance: First experi-
ences with national strategies for sustainable development in Europe. Unpub-
lished forthcoming manuscript, Journal of Environment and Planning C: Gov-
ernment and Policy.
Swanson, D., Pinter, L., Bregha, F., Volkery, A. and K. Jacob (2004) National Strategies
for Sustainable Development. Challenges, Approaches and Innovations in Strategic
and Coordinated Action, Winnipeg: IISD.
Thelen, K. (1999) Historic Institutionalism and Comparative Politics, Annual Review
of Political Science 2, Palo Alto: Annual Reviews, Inc.
U.K. Government (2004) Sustainable Development Commission: About the Commis-
sion. Available: http://www.sd-commission.gov.uk/commission/index.htm (Ac-
cessed 2004, 3 February).
UN DSD (2004) United Nations Division for Sustainable Development, available:
http://www.un.org/esa/sustdev/natinfo/nsds/nsds.htm (accessed 2004, April).
UN DESA 2005: Expert Group Meeting on Reviewing National Sustainable Develop-
ment Strategies New York, 10 11 October 2005.
http://www.un.org/esa/sustdev/natlinfo/nsds/egm/crp_9.pdf (accessed 17.02.2006)
Acknowledgements
The paper has been developed as part of the project National Strategies for Sustainable
Development. Challenges, Approaches and Innovations in Strategic and Coordinated
Action that has been funded by Deutsche Gesellschaft fr Technische Zusammenar-
beit (GTZ), the Canadian International Development Agency (CIDA), Foreign Affairs
Canada, and Environment Canada. The final project report and all country case studies
can be downloaded at: http://www.iisd.org/measure/capacity/sdsip.asp. An earlier ver-
sion of this paper has been presented at the 2004 Berlin Conference on the Human
Dimension of Global Environmental Change, 3-4 December 2004 in Berlin. We would
like to thank all discussants for their comments. We are grateful for valuable com-
ments provided by three anonymous reviewers of World Development. We acknowl-
edge the support and information provided by Jan-Peter Schemmel and Harald Los-
sack of GTZ; from the Government of Canada, Lynn Berthiaume, Lyn Ponniah, John
Eby, Gary Pringle, Nancy Hamzawi, Sandra Scott, Cynthia MacRae, Jennifer Moore and
Catherine Coleman; from IUCN, Andrew Deutz and Tabeth Chiuta; and Kirsten Rohr-
mann from the UN Division for Sustainable Development and by all government offi-
cials who provided input and feedback toward the development of the case studies.
Furthermore, we would like to thank all case study authors: Mary Jane Middelkoop,
Barbara Sweazey, Julie Pezzack from Stratos Inc., Canada and Simone Klawitter, Doris
Tharan, Stefan Lindemann, Mireia Tarradell, Roland Zieschank and Aleksandra Zlo-
binska from the Environmental Policy Research Centre, Freie Universitt of Berlin,
Germany.
238
Institutions and Instruments for Government Self-
Regulation: Environmental Policy Integration in a
Cross-Country-Perspective1
KLAUS JACOB
AXEL VOLKERY
Abstract
The integration of environmental concerns into non-environmental areas of
public policy-making has been a long present challenge in many OECD-
countries. As for the greening of sectoral policies, two approaches can be
distinguished: The approach of horizontal integration delegates the responsi-
bility mainly to the environmental departments. Since this approach has gen-
erated relatively poor performance results so far, a stronger concentration on
the approach of vertical integration with departmental self-responsibility for
the greening of policies has been advocated in the literature. We classify this
approach as governmental self-regulation. It is different in so far, as it tries
to overcome structural rigidities to policy-change by means of policy-learning.
This article provides a preliminary framework for assessing the conditions of
tool usage and develops a tool box. We then present findings from a review of
tool use in 29 OECD-countries by highlighting forerunner countries and dis-
cussing shortcomings of tool usage. Our findings indicate that tools for verti-
cal EPI are not widely applied in OECD-countries so far. Instead, there is still
a strong reliance on tools for horizontal EPI. The most obvious explanation
for these findings is that governmental self-regulation is rarely a strategic
approach that runs by itself, since it contradicts the inherent logic of govern-
mental bureaucratic organisation: specialisation, incrementalism and nega-
tive-co-ordination. Therefore, the speed of diffusion of related tools is quite
1
First published in: Journal of Comparative Policy Analysis. Vol. 6, No.3, 2004, pp.
291-309. Reprinted with kind permission.
239
slow. However, since tools for vertical EPI have been discussed more inten-
sively recently than in the middle 1990s, the process of diffusion might also
speed up due to increasing knowledge and policy-learning. Furthermore,
comparative research is needed for clarifying these first observations.
1 Introduction 2
The establishment of modern environmental policies in OECD-Countries in
the last thirty years can be considered a remarkable success, regarding both
the speed and range of policy developments. However, the environmental
situation is still deteriorating in many areas (EEA, 2003; OECD, 2001). On the
one hand, this record is caused by implementation deficits of existing envi-
ronmental law. On the other hand, it is due to the relatively unchanged conti-
nuity of environmentally harmful energy, transport or agricultural policies
(Lenschow, 2002a).
The need to incorporate environmental concerns into the decision-making
procedures of non-environmental policies has been a long present challenge
for better government. In the 1990s, renewed impetus has been given to the
concept of Environmental Policy Integration (EPI) in many OECD-Countries
(OECD 2002a). Whereas in the beginning a horizontal approach was domi-
nant, with a central institution responsible for interfering in the policy do-
mains of other departments, attention in the 1990s was directed towards more
decentralised approaches which set objectives, but leave discretion for their
deployment.3 We classify this vertical approach as governmental self-
regulation, as it shifts the responsibility for merging objectives and measures
to the single departments. Many scholars have emphasised the potentials for
2
We would like to thank Kai Behrens for setting-up the data base and Dagmar
Heinrich for editing the text as well as two anonymous reviewers for their helpful
comments on a previous version. Previous versions of this paper also have been pre-
sented at the 2nd General Conference of the European Consortium for Political Re-
search in Marburg, July 2003, and at the 2nd Berlin Conference on the Human Di-
mension on Global Change in Berlin, December 2002. We would like to thank all
discussants for their comments. The paper has been developed as part of the re-
search project POINT3D that is funded by the German Ministry for Education and
Research (Grant No. 07RIW15).
3
In order to have a unique wording and avoid misunderstandings, we will use the
term department throughout this article instead of always switching to the correct
term of the respective country descriptions.
240
Institutions and Instruments for Government Self-Regulation
reaching a better implementation of EPI via processes of policy-learning

rather than processes of strict enforcing of norm compliance (SRU, 2004;
OECD, 2002b; Jnicke, 2002; Lafferty, 2001, see the various contributions in
Lenschow, 2002b).
This article explores the adoption of tools for vertical EPI by OECD-Countries
and analyses, which countries have been most active and innovative. It also
examines which tools diffuse easily and which do not. This is helpful insofar,
as the political difficulty of introduction can also be considered a rough indi-
cator for the tools ability to initialise policy change. Coupled with the find-
ings of a review of evaluation literature, this paves the way for a preliminary
assessment of whether governmental self-regulation is a suitable approach for
EPI or not. We proceed as follows: After briefly discussing the concept of EPI
and its implications in terms of needed policy change, we first develop a
framework for assessing tools for policy integration and then develop a tool
box. Following this, we present findings of a review of tool use in OECD-
countries, hereby focusing on the forerunner countries, highlighting best
practice but also shortcomings of tool use, and describing the political diffi-
culty of the tools. After doing so, we finally analyse the findings regarding the
compliance of the measures with the identified success conditions.
2 EPI and the Change of Policies

Why is policy integration needed? Specialisation increases potentially effi-
ciency, and it is for that reason, that a modern government is organised on the
basis of sectoral responsibilities, i.e. the administration of clearly defined
policy domains. But this organisation form does not function very well re-
garding cross-sectoral problems such as environmental problems. Instead, it
is a main cause of the problem itself. Agriculture, energy or transportation
policies counteract with environmental protection efforts by often providing
incentives for environmentally harmful behaviour of their target groups. In
order to be effective on the long run, environmental strategies need to deal
with the interests as well as the competence and innovation potential of pol-
luting sectors (Jnicke 2000). EPI aims at directing single policies towards a
better consideration of environmental needs in order to reach a better coher-
ence of policies (OECD, 2002b; Liberatore, 1997; Lenschow, 1997; Collier, 1994).
Focusing on policy outcomes, Underdahl has pointed out, that a policy is
integrated when the consequences for that policy are recognized as decision
241
premises, aggregated into an overall evaluation and incorporated at all policy

levels and into all government agencies involved in its execution (in: Weale
and Williams 1992, 46; italics by authors). But as Lafferty (2001) has rightfully
noted, this is just an attribute of any good governmental practice. Another
focus is on the integration of different instruments in order to tackle a specific
problem (e.g. Liberatore, 1997), which can be described as coherence of poli-
cies. Following Jordan and Lenschow, policies can be understood as environ-
mentally integrated when policy makers in non-environmental sectors rec-
ognise the environmental repercussions of their decisions and adjust them by
appropriate amounts when they undermine sustainable development (Jordan
and Lenschow, 2000, 111). The European Environmental Agency understands
EPI as a process of changing the policy focus, away from environmental prob-
lems themselves to their causes and from end-of-pipe ministries to driving
force sector ministries (EEA, quoted in Jordan and Lenschow, 2000, 111).
Fig. 1: Mechanisms of Horizontal and Vertical Environmental

Policy Integration
Horizontal Policy Integration

Ministry of Ministry of Ministry of Ministry of Other
Environment Transport Industry Construction Departments
Vertical Policy Integration

Cabinet/Parliament
Definition of problems
Determination of reporting
env. objectives monitoring
Ministry of responsibilities sectoral plans
Environment rules of the game strategies / instruments
time table integration of stakeholder
indicators
....
Ministry of Ministry of Ministry of Other

Transport Industry Construction Departments
Source: Jnicke 2000
242
Lafferty (2001) as well as Jnicke (2000) distinguish two approaches of EPI: a

horizontal approach and a vertical approach. Within the horizontal approach,
a central institution is responsible for developing integration strategies for all
departments and co-ordinating overarching policy issues, be it either the
cabinet itself, a specially designed institutional body or, as it has occurred
frequently, the department of environment (DoE). Within the vertical ap-
proach, it is up to the affected department to choose the strategy for incorpo-
rating environmental objectives in its portfolio of objectives, but it has to re-
port on its activities. There is, however, a need for high-level commitment by
cabinet or parliament, and also a need for clear and realistic objectives, indica-
tors and benchmarks as well as for provisions for monitoring contents and
responsibilities. The role of the DoE changes in this context: Its main task is
to facilitate the development of sectoral strategies, e.g. by providing advice and
indicators (OECD 2002a, b). 4
Comparing both approaches, the horizontal approach comprises a higher
frequency of interdepartmental conflicts, as the departments try to protect
their target groups from greater changes and strains imposed by outside ac-
tors. Therefore, the vertical approach is less conflict-intense, since the de-
partments are able to avoid major changes in the allocation of sectoral winners
and losers (Lafferty and Meadowcraft, 2000). Several countries that have intro-
duced horizontal measures such as constitutional provisions, long-term na-
tional strategies and plans as well as special institutional bodies for overall
policy co-ordination (see OECD, 2002b, 2002c for an overview), are character-
ised by greater implementation deficits, which can be ascribed mainly to three
factors: a) strong resistance by affected departments, b) lacking knowledge of
central bodies regarding the special circumstances and policy aspects in the
relevant sectors and c) lacking capacities for enforcing co-operation and com-
pliance. Much of the integration action thus ended in talk, or was burried after
intergovernmental conflicts (see EEA, 2003, OECD, 2002a; Lenschow, 2002b;
Weidner and Jnicke, 2002). Against this background, vertical approaches for
EPI started their upswing in OECD-countries. One rationale behind this shift
was to move the responsibility for action to the responsible actors. Since the
4
There is no unique understanding of the terms horizontal and vertical integra-
tion. The term horizontal is also used to describe integration efforts between sec-
tors, and the term vertical is in this context used to describe integration across all
levels of government (national, regional, local). We, however, stick to the more nar-
rower focus regarding the modus of steering.
243
responsible departments know their sectors best, they are also best suited to
select the most efficient measures, both in terms of manageability and politi-
cal saleability, if there is a political mandate to do so and this triggers proc-
esses of policy-learning.
In literature on public policy making, several scholars have stressed the im-
portance of learning for the occurrence of policy change over time (see: Dud-
ley and Richardson, 2001; Bennet and Howlett, 1992 for an overview). Most
notably, the Advocacy-Coalition-Framework developed by Sabatier and Jen-
kins-Smith conceives learning to be an important source of policy-change
(Sabatier and Jenkins-Smith, 1999). Learning is understood to be a necessity to
adapt to changing circumstances, as for example in the upswing of new scien-
tific findings, ideas or even paradigms contesting established ideas and para-
digms, or changing socio-economic circumstances. But there are limitations
to policy-learning and change: As policy actors have a set of enduring causal
beliefs in regard to policy objectives and the best way of achieving them, they
consequentially will stick to these framesets and will only change minor as-
pects of the policy. Major policy-change will thus only occur against the back-
ground of an external shock, such as a change of government, or widespread
public concerns due to obvious policy failure (Sabatier and Jenkins-Smith
1999). Coming from another corner of the playing field, scholars of historic
institutionalism present a similar conclusion: The path-dependency of insti-
tutions allows only incremental change, and major change is dependent on
exceptional sources of external influence (Pierson and Skocpol 2002, Thelen
1999, Hall and Taylor 1996).
Although major policy-change might be the exception and incremental
change the rule, the latter can sum up to further-reaching change over a
longer period of time (Hayes 2003). In this regard, two different conceptions of
EPI can be identified: Firstly, it can be understood as an internalisation of the
environmental effects of a sector (e.g. Hey, 1998, 2002). Here, the main focus is
on policy outcomes and impacts. A second perspective however, focuses on
strategies and instruments (policy outputs) which are meant to change gov-
ernmental practices and procedures. We decided on the use of the latter per-
spective in order to reveal a toolbox of strategies and instruments being
used for EPI in OECD-countries.
244
3 A Toolbox for EPI

We screened several studies on efforts to establish and implement EPI in
western industrialised countries (see e.g. OECD, 2002a, 2002b; Lenschow,
2002b; Hertin and Berkhout, 2002; Lafferty and Meadowcraft, 2000) and ex-
tracted a toolbox of strategies and instruments which have been adopted to
improve EPI. These tools can be distinguished regarding their scope (encom-
passing strategies versus instruments) and their domain of application (cen-
tralised versus decentralised). We qualify a tool to be centralised, if several
different governmental departments are involved in its actual application,
whereas a decentralised tool is applied in the domain of responsibility of one
single department. We expect decentralised instruments and strategies to be
more often applied in the case of vertical policy integration and therefore
analyse them in more detail in the following.
In how far are these instruments likely to change governmental practice and
routines? And in how far are they likely to be applied effectively? In the follow-
ing we develop a framework for reaching an understanding of tool characteris-
tics, especially regarding impacts for EPI, first. We expect the impacts for EPI
to vary according to the degree of the tools being able to a) change the relative
strengths of existing actors, b) contribute to the shaping of new actors and c)
lead to an inclusion of environmental actors and open up formerly closed
networks. We further categorise the tools according to the degree of them
being able to d) improve leadership, e) contribute to the dissemination of new
policy visions and f) improve the use of knowledge. Finally, we assess the tools
regarding their potential to f) contribute to a sectoral agenda setting for EPI
and g) increase the consideration of EPI in policy implementation.
The political difficulty of introduction of these tools is critically influenced by
three variables: a) the composition of actor and actors interest constellations,
b) the framework of overall norms and ideas and c) the design of institutions:
a) Actors and Interests: If the tools affect actor constellations in the relevant
policy sub-systems (i.e. by creating new actors) or touch upon actors core
interests, the political difficulty of introduction increases. The degree of
difficulty of introduction is also linked to the requirement of regulatory
capacities and the need for a balance of power with environmental stake-
holders (Hey 2002). Last but not least, the ability to compensate losers or to
enable actors to restructure their activities, is of critical importance.
245
b) Ideas: If the tools fit into the overall philosophy of the department, their
introduction will be simplified. If they do, however, challenge the valid
framework of policy norms, values and core objectives, their introduction
will be contested.
c) Institutions: If the tools fit into the given structures and practices of the
policy field and do not change routines, they will easily be applied. If they,
however, require substantial institutional change, their enforcement will
be very difficult. Usually, an external crisis becomes necessary then, in or-
der to open a window of opportunity for institutional change.
The manifold implications of these dimensions can be operationalised in
terms of the political manageability and political saleability of the tools (see
Peters 2002): Manageability describes the degree of complexity of policy re-
steering, i.e. the number of different interests involved, that need to be negoti-
ated, and the difficulty and complexity of the issue itself. Political saleability
delineates the possibilities to build advocacy-coalitions and to minimize po-
tentially negative impacts as to raise the potentially positive impacts among
target groups. In the following, we focus on tools for vertical policy integration
that have been introduced more recently, considering the above developed
framework for assessment.
3.1 Describing the Tools for Vertical EPI
Decentralised Sectoral Strategies

Sectoral strategies design the overall framework for sectoral policy action for
EPI. Ideally, they contain quantified objectives, timetables and indicators
which serve as a benchmark for the success of policy measures. The strategy
should merge sectoral and environmental objectives and describe measures
for the incorporation of environmental concerns. Departments are obliged to
report on the implementation of the strategy and the need for further action.
Sectoral strategies are expected to improve leadership for EPI and contribute
to the dissemination of new, contesting visions in the respective policy field.
They are also expected to re-shape departmental agenda-settings and to im-
prove the utilization of knowledge if other actors are consulted during the
strategy formulation. The political difficulty varies depending on introduction
and effective implementation. An introduction might be simplified by the fact
that the strategy does not imply a necessary changing of an actors strengths or
246
guiding policy objectives. Instead, the strategy can be formulated with respect
to the premise of not affecting interests of major stakeholders. If, however, a
strict monitoring and evaluation scheme is applied and if the strategy process
is backed by a strong political mandate, the manageability is getting very com-
plex due to the high number of affected interests. Identifying and mobilising
the support from actors which possibly may benefit from the policy, is helpful
for overcoming barriers, for example. Also, the saleability appears to become
very difficult, as the number of sectoral losers rises.
Strategic Environmental Assessment
SEIA is a procedural instrument for the evaluation of all stages of the deci-
sion-making cycle, starting with the formulation of policies (definition of
strategic guidelines and objectives) via planning (assignment of resources) and
ending with the development of programmes (set of projects). The practical
execution ranges from simple checklists to an elaborated modelling of the
impacts. SEIA could be classified as a centralised tool as the results of the as-
sessment may be evaluated by other departments. However, as it implies a
sectoral focus and as its implementation often lies within one department, but
not always the DoE, we can consider it also a decentralised tool. SEIA is ex-
pected to lead to an inclusion of new Environmental Actors in sectoral deci-
sion-making, as the needed knowledge is seldom owned by the sectoral policy
actors. Therefore, it also contributes to the utilization of knowledge. It is a key
tool for the implementation of the EPI-principle, as it focuses on the very
beginning of the decision-making process. The respective policy style and the
network character of the policy field influence the difficulty of introduction: If
the policy field is characterised by a top-down approach with a strong neglect
of procedural stakeholder consultation and rather closed networks, the degree
of difficulty increases. Generally, manageability is difficult given the complex-
ity of ex-ante policy assessments and the relative scarce experiences of gov-
ernmental officials which furthermore seldom have sufficient time to learn to
cope with this tool.
Appraisal of Policy Initiatives
Tools for the appraisal of policy initiatives (also named impact assessment)
aim at the assessment of possible impacts of legislative proposals by the com-
petent authorities themselves. These mechanisms are closely related to Strate-
gic Environmental Assessments, as described above, and there is a continuum
between appraisal methodology and the more formal SEIA procedures. The
247
main difference is that the general public or other departments are not in-
volved in the execution of the tool. Policy Appraisals improve the utilisation of
knowledge in the respective department and lead to a better consideration of
EPI in processes of policy implementation. The political difficulty of the in-
troduction of such tools is not very high concerning the use of simple tools
within the domain of one department. It might increase enormously, if tools
for integrated assessments shall be introduced, which not only impose great
conceptual difficulties regarding the adequate consideration of economic,
social and ecologic impacts, but also offer the possibility of devaluating envi-
ronmental concerns.
Green Budgeting
An in-depth budget evaluation can reveal spending which is contradictory to
environmental objectives. Departments can also be obliged to verify the re-
spective environment impacts as part of the overall spending procedures.
Green Budgeting is expected to re-shape departmental Agenda Setting and to
lead to a better consideration of the EPI principle in policy implementation.
By highlighting environmental harmful spending and offering alternatives as
for example a shifting of resources to more environmental-friendly policies
and programs, it supports the dissemination of new visions. We consider the
degree of political difficulty to be high, as shifting of governmental spending
mobilises intra-governmental and societal protests.
Departmental Units for the Environment / Environmental Correspondents
The establishment of departmental units for the Environment, which are con-
cerned with environmental policy issues (called mirror units, as they are insti-
tutionalised in response to the organisation of the DoE), or of special Envi-
ronmental Correspondents in the departments is a standard procedure of
government. On the basis of an evaluation of EU-policies, Wilkinson (1998)
gives a range of possible functions of these units. They inform about planned
policy initiatives in the DoE (spy) , pass information on environmental legisla-
tion (postman), try to veto policy proposal in intra-governmental negotiations
(police-men), give guidance for e.g. appraisal methods (technician), negotiate
between the departmental units and the DoE (facilitator) and try to modify
DoE policies to fit with own policy preferences (ambassador). Thus, this in-
strument allows a shaping of new actors in the respective policy field, but also
fosters implementation of EPI-principles. It might also enhance the utiliza-
tion of knowledge in the respective departments. We expect the introduction
248
of such units to be of low difficulty regarding functions such as information,

lobbying or vetoing. What might be of greater difficulty is to advocate envi-
ronmental concerns in day-by-day discussions in the department (Kraak et al.
2001, Pehle 1998).
Reporting obligations
Reporting obligations are another standard procedure of modern govern-
ments. Frequently, the departments for finance or economic affairs offer over-
views of environmental-related subsidies, revenues from ecological taxes and
governmental spending on the environment in their annual reports. However,
there are different possibilities to organise reporting: It can occur on a volun-
tary basis, with regard to legal provision and in its highest institutionalised
form on a regular basis under the supervision of an independent evaluation
authority. Reporting might contribute to a dissemination of vision and a bet-
ter utilization of knowledge. The political difficulty of introduction can be
regarded as low, if there are no clear rules for reporting. If departments are,
however, forced to report also on disagreeable indicators and have to report to
an independent institution, reporting can become a powerful tool.
Tab. 1:
Actors / Opening of Networks
Inclusion of Environmental
Expected impacts of
Changes relative strengths
tools for vertical EPI

Shaping of New Actors
Improves utilisation
of existing Actors
mplementation
Agenda Setting
Dissemination
EPI in policy I
Improvement
of Leadership
of knowledge
of Vision
Possi-
Sectoral Strategies 3 3 3
ble
Green Budgeting 3 3 3
Interdepartmental working
3
groups
Strategic Environmental
3 3 3
Assessment
Environmental departments in
Possi-
the different sectors / Environ- 3 3
ble
mental Correspondents
Appraisal of policy initiatives 3 3
249
Table 1 summarizes the expected impacts of the different tools for EPI with
regard to the developed framework for assessment.
4 Tool Use for EPI in OECD-Countries

In the following, we present empirical findings regarding the use of tools for
vertical EPI in 29 OECD-countries. The survey is based mainly on Environ-
mental Performance Reviews done by the OECD during the last three years
and on the country profiles delivered to the World Summit on Sustainable
Development in Johannesburg. Additionally, we used secondary literature that
described and analysed the use of tools for EPI in OECD-Countries.
4.1 The use of tools for vertical EPI
Decentralised Sectoral Strategies

8 out of 29 OECD-countries made use of sectoral strategies at the beginning of
2004 (and one country planning to implement such strategies), with a great
divergence regarding the concrete scope, the institutional settings and proce-
dural aspects of the respective strategies. These countries are: Canada, Den-
mark, Finland, Japan, Mexico, Norway, Sweden and UK. The introduction in
Germany is a declared goal of the government, but still pending. Canada is a
highly innovative country Canada, where a large number of ministries and
agencies were committed to report on their environmental policy, to develop
sectoral strategies and to update these strategies on a three years basis by the
so-called Guide to Green Government which was published in 1995. To re-
view these strategies, the independent Commissioner of the Environment
and Sustainable Development was established as a part of the General Ac-
counting Office (SRU, 2000; Environment Canada 1995, Canadian Environ-
mental Assessment Agency 2004). In Denmark several ministries developed
either by their own initiative or by request of the government, sectoral strate-
gies. This was pioneered by the Ministry of Agriculture and soon followed by
the Energy Ministry and the Transport Ministry. Recently, the country has
also established a multi-dimensional strategy for Sustainable Development
(The Danish Government 2002).
Despite the fact that the European Union is not part of the list of OECD-
countries under investigation, it is a promising excurse to review the efforts to
250
promote sectoral strategies at the European Union level (Jordan, 2002) in more
detail. As a result of the relatively poor performance of integration measures
taken in the middle of the 1990s (see Wilkinson, 1998), a reforming of the in-
tegration project was agreed on at the 1997 Luxemburg summit. The reform
implementation leadership was shifted from the Commission to the European
Council, the highest political decision-making body which consists of the
presidents and prime ministers. At the Cardiff Summit in June 1998, the so-
called Cardiff-Process of Environmental Policy Integration was started. All
relevant Councils were asked not only to develop sectoral strategies containing
objectives, timetables and task assignments, but also to constantly monitor
improvements and address shortcomings. The Councils for Agriculture, En-
ergy and Transport started the process in June 1998. They were joined in a
second round by the Councils for Development, Internal Market and Industry
in December 1998. The setting was completed in a third round by the Coun-
cils for General Affairs, Economical and Fiscal Affairs and Fisheries (Fergusson
et al., 2001, Kraemer et al. 2000). The European Council of Helsinki in June
1999 however, came to a rather disappointing assessment concerning the
overall progress. Most strategies did not contain concrete objectives, timeta-
bles and measures, but were rather superficial and did not assign task respon-
sibilities. Two years later, the European Council in Gothenburg again revealed
similar shortcomings. Up to now, indications of sufficient reform progress
can not be ascertained. Instead, the future course of the Cardiff Process is
nebulous and the political significance of the strategies remains unclear (SRU
2004). Obviously, the ambitious and far-reaching design of governmental self-
regulation produced a capacity overload and strong institutional resistance in
the respective Council formations.
Strategic Environmental Assessment
10 out of 29 OECD-Countries have introduced tools for SEIA so far. This
number will, however, increase considerably in the next two years, as a respec-
tive European Directive has entered into force, obliging all member states to
introduce SEIA. Although the directive was weakened in its scope, the now-to-
be-established SEIA is likely to promote EPI, because of its binding character
(Niestroy, 2003). The Environmental Assessment of legislative proposals has
been a tool of the first hour of environmental policy in the USA. It was intro-
duced in 1970, but according to literature, was seldom applied according to its
intended use. Moreover, the enabling legislation lacks even substantial and
operational goals (Andrews, 1997). Canada introduced a similar Environ-
251
mental Assessment Review Process as well already back in 1973. But this
guideline also has been applied only to a few policies. In 1990 the procedure
was reformed, including a formal provision of EA for the first time. This was
laid down in the so called Blue Book from 1993, which is the official guide to
the assessment process (Marsden, 1998, p. 246). Denmark, the Netherlands,
Finland, Norway and the European Union itself have enacted requirements for
SEIA. The current state of institutionalisation varies considerably: Provisions
for SEA are partially given by legislation (e.g. USA), by administrative orders
(e.g. Canada, Denmark) or advisory guidelines (e.g. UK). Countries differ re-
garding the form and scope of public participation in SEA: involvement of the
public is foreseen in Denmark and the Netherlands, while in the UK and Can-
ada the availability of the assessment results is restricted to the cabinet.
Appraisal of policy initiatives
Only four of 29 OECD-Countries report the regular use of tools for the ap-
praisal of policy initiatives. These are the UK, the Netherlands, France and
South Korea. The UK developed a system for policy appraisal already back in
1991 as a guide for civil servants, called Policy Appraisal and the Environment
(Jordan and Lenschow, 2000). Being rarely conducted in the beginning, it is
frequently used at the present. In the Netherlands, the need for an impact
assessment regarding the environment for new legislation was recognised in
the National Environmental Policy Plan already in 1989. A respective tool was
developed by a ministerial Commission chaired by the prime minister. This
so-called E-test was finally introduced in 1995. 5 At the same time, another tool
for economic evaluation was introduced, the so-called Business Effects Test
(BET). A Joint Support Centre for Draft Regulations was established by the
Environmental and the Economic ministries to give guidance for the execu-
tion of the tools (Marsden, 1999).
5
It is applied to all types of legislative proposals including drafts and amendments.
The E-Test procedure encompasses four phases: 1) Screening/Scoping Phase: An in-
terdepartmental working group selects proposals for which an E-Test should be car-
ried out and lists environmental aspects that should be evaluated. 2) Adoption
Phase: The list of proposal is adopted by the Council of Ministers. 3) Documenta-
tion/Assessment Phase: The selected aspects are addressed by the responsible min-
istry, supported by the helpdesk; results are documented and added to the draft leg-
islation. 4) Reviewing Phase: Joint Support Centre and the Ministry of Justice review
the quality of information and check if the draft can be send to the Council of Min-
isters.
252
Again, the European Commission can be regarded an innovative laboratory. In

1993, the Directorate General Environment of the European Commission de-
veloped an appraisal system (so called green star) to evaluate the effects of
policy proposals with significant effects to the environment. The Manual of
Operational Procedures lists a step-by-step procedure. However, due to a lack
of an appropriate methodology, these appraisals were never conducted (Wil-
kinson, 1998, p.120). Since then, the Commission has been active in different
directions: Currently, a number of sectoral assessments are executed, backed
by a wide range of appraisal tools. Recent developments focus on the dimen-
sions of Sustainability, or aim to integrate different appraisal methods (Tam-
borra, 2003). 6
Green Budgeting
Tools for Green Budgeting are applied in 6 out of 29 countries. These are
Canada, Denmark, Norway, the Netherlands, Japan and UK. Norway pioneered
this policy instrument and introduced it for the first time in 1988. An envi-
ronmental profile requirement was added to the state budget proposal. This
form of Green Budgeting was further elaborated in 1992 and 1996 by the de-
velopment of more detailed categories of spending which has environmental
effects. Other countries that implemented or consider such measures are Can-
ada and the Netherlands (OECD, 2002b).
The budget disputes were the core issue leading to the integration of envi-
ronmental objectives into the European Regional and Cohesion Funds, which
can be considered examples of relatively successful EPI (Lenschow 1997, 2002a;
Wilkinson, 1998). Here, EPI was legitimised and supported by the reformed
constitutional law of the EU which demands the consideration of environ-
ment impacts as part of the spending procedures. It is, however, not linked to
the application of government practices and procedures that support EPI.
Environmental Units and Correspondents
The establishment of mirroring units in other departments is a standard pro-
cedure in all OECD-countries. Recent evaluation studies however, reveal
slightly disappointing results. Generally, environmental units have not been
6
An interesting software that has been developed for an qualitative integrated as-
sessment is IAPlus (see http://www.jrc.es/ projects/iaplus/). Currently, tools are un-
der development, that allow for an integrated qualitative and quantitative assess-
ment of policy initiatives (e.g. I.Q. Tools) (Tamborra 2003).
253
willing or able to influence the overall policy orientation of their respective

departments. One main reason of failure might be the lack of discretion that
bureaucratic routines and rules provide for alternative policy options. There
are strong indications that officials run the danger to jeopardise their own
status or career opportunities, when they tried to lobby environmental pro-
posals that contradicted the policy objectives of their department (Kraack et
al., 2001).
Reporting obligations
Reporting on environmental issues can be regarded another standard gov-
ernmental procedure in OECD-countries. In our survey, we therefore focused
on reporting obligations to special institutions that are ideally independent
such as the Canadian Commissioner on Sustainable Development the DoE or
the Cabinet. 9 out of20 countries report the existence of such provisions.
These are Belgium, Canada, Germany, Japan, Norway, Poland, Portugal, UK
and USA.
Table 2 summarises the findings regarding the use of tools for vertical EPI. It
clearly shows that despite the positive connotation in academic literature,
such tools are not widely used in a standardised way in the OECD-area.
254
Tab. 2: Political Strategies Administrative Instruments

Instruments and
ndependent Institutions
Constitutional Provision
Strategies for
Strategic environmental
Sustainability strategy
Environmental
Reporting obligation
Environmental Plan
Appraisal of policy
nterdepartmental
Policy Integration
Sectoral strategies
Amalgamation of
Green budgeting
(to MoE or Gov)

working groups
in the OECD
Green cabinet
departments
countries
assessment
initiatives
National
for EPI
Australia 3 3
Austria 3 3 3 3 3 3
Belgium 3 3 3 3 3 3 P
Canada 3 3 3 3 3 3 3
Czech Rep 3 3 3 3 P
Denmark 3 3 3 3 3
Finland 3 3 3 3 3 3
France 3 3 3 3 3
Germany 3 3 P 3 3 3 P
Greece 3 3 3 3 P
Hungary 3 3 3 3 3
Iceland 3 3
Ireland 3 3 3 P
Italy 3 3 3 P
Japan 3 3 3 3 3 3
Korea 3 3 3 3 3 3
Luxembourg 3 P
Mexico 3 3 3
Netherlands 3 3 3 3 3 3 3 3
New Zealand 3 3
Norway 3 3 3 3 3 3 3 3 3
Poland 3 3 3 3 3 P
Portugal 3 3 3 3 3 3 P
Slovak Republic 3 3 3 3 3
Spain 3 3 P
Sweden 3 3 3 3 3 P
Switzerland 3 3 3
Turkey 3 3 3
United Kingdom 3 3 3 3 3 3 3 3 3 3 3
United States 3 3 3 3
P: Pending
Sources: various OECD Environmental Performance Reviews and country profiles
that were prepared for the United Nations World Summit on Sustainable Develop-
ment (http://www.un.org/esa/sustdev/natlinfo/cp2002.htm)
255
4.2 The horizontal approach out of date or still predominant?
The table also shows that OECD-countries frequently make more use of tools
for horizontal EPI. This approach seems to still be predominant in the major-
ity of OECD-Countries. For example, 27 out of 29 OECD-countries have intro-
duced Sustainability Strategies.Moreover, 22 of 29 OECD-Countries imple-
ment a National Environmental Policy Plan. This frequency can be ascribed to
the provision of the Agenda 21 to establish national Plans and Strategies for
Sustainable Development. The first plans were introduced in the Netherlands,
Canada, UK, Denmark, Sweden and Norway towards the end of the 1980s. In
the 1990s, a fast diffusion of these instruments could be observed (Tews et al.,
2003). However, they vary considerably regarding scope and content (SRU,
2000; Jnicke and Jrgens, 2000). 7
18 out of 29 OECD-Countries have adopted constitutional provisions, e.g.
South Korean Basic Law, which guarantees the right to live in a clean and
healthy environment. One of the most clearly formulated provisions can be
found in the treaties of the European Union. Article 6 of the Amsterdam
Treaty makes EPI a core principle of the Union, making the integration of
environmental concerns into definition and implementation of other policies
a binding requirement for EU policy-making. No evidence could be found
that the far-reaching tool of a formal right for the DoE to veto legislative pro-
posals by other departments has not been institutionalised in any OECD-
country. The weaker possibility is to give the DoE the right to start initiatives
in other departmental areas of responsibility (Mller, 2002; Jnicke et al.,
2002). We again found no evidence, that such a provision has been introduced
in any OECD-country.
The amalgamation of departments is another way of enhancing the relative
power of the MoE. This has been executed in two OECD-countries, namely
7
Most of the adopted strategies and plans are characterised by some serious short-
comings, for example vaguely formulated objectives, without binding implementa-
tion requirements. Also the institutionalisation of the whole planning process is,
with a few exceptions, weak and objectives are not taken sufficiently into account by
decision-makers in other relevant departments. The relationship between the more
sectoral approach environmental planning approach and the over-arching approach
of the Sustainable Development Strategies is, as for now, far from clear: a comple-
mentary or a competitive relationship is possible. How this dualism affects policy-
making in practice, remains a challenge for further research.
256
Portugal and the UK. Denmark used to have a joint Department for Energy
and Environment, but this merger was revoked by the newly elected conserva-
tive government in 2002. In the UK, the merging of the departments of trans-
port and of environment,, and the selection of the Deputy Prime Minister,
John Prescott, as its head has been interpreted as an improvement in EPI (Jor-
dan, 2002).8
16 OECD-countries have introduced independent institutions for EPI, such as
advisory bodies or bodies responsible for monitoring and evaluation like the
Canadian Commissioner on Sustainable Development. There have also been
many efforts to institutionalise joint committees of environmental depart-
ments and other policy sectors. The institutionalisation of so called green
cabinets that consist of several state-secretaries or ministers is reported for 4
countries (Austria, Germany, Norway and the UK). Norway introduced a State
Secretary Committee for Environmental Issues already in 1989 (Sverdrup,
1998). In the UK, such a committee was introduced in 1990 (Jordan and Len-
schow, 2000). More often, interdepartmental negotiations take place in work-
ing groups of high ranking civil servants. Currently, 17 OECD-countries have
institutionalised such Inter-departmental Working Groups.
As Table 2 shows, the horizontal approach to EPI is not only still in use, but
more that that, is still predominant. Strategic approaches such as National
Sustainability Strategies or National Environmental Plans are by now a com-
mon procedure. The use of single tools differs, however: An extension of for-
mal decision-making powers of the DoE could be detected nowhere in the
OECD-area, whereas many countries have introduced independent institu-
tions such as advisory bodies, interdepartmental working groups or reporting
obligations. Another obvious fact: Countries which employ tools for vertical
EPI, have introduced them in a rather complementary way and not by means
of substituting tools for horizontal EPI.
8
Merging departments could also imply a dilution if the two departments are of
different size or power (Liberatore, 1997). A diffusion of specially designed minis-
tries to other countries is not very likely, as the design of ministries is likely to be
the result of a political bargaining on the national level rather than driven by func-
tionality and cross-country learning.
257
5 Conclusions
The survey of OECD-countries delivers clear but yet surprising results: Tools
for vertical EPI are rarely employed. The frequency rate ranges from 5-10
countries respectively. The exception are standard procedures like environ-
mental mirror units in departments. Despite the fact, that the vertical ap-
proach to EPI has been subject to considerable academic debate, it seems to be
quite difficult to introduce respective tools in OECD-countries. We expected
the political difficulty of introduction to be quite low regarding appraisal tools
and reporting obligations. Nevertheless, they have not become a standard
procedure of governmental practice yet. The fact that these tools might raise
transparency and accountability of decision-making could explain the slow
rate of diffusion. As a contrary, it is of no great surprise that tools for Green
Budgeting are not broadly employed, bearing in mind the political difficulty
of shifting priorities in governmental spending. SEIA has not been broadly
introduced so far. However, the number of countries will increase due to the
need to implement SEIA in all European Countries. This highlights the im-
portance of supranational regulation for the diffusion of policy innovations
(see also Tews et al., 2003).
A comparison of the accords of the scrutinized countries shows, that the
United Kingdom, Norway and the Netherlands have been most active in in-
troducing tools for vertical EPI. Especially the UK can be regarded as a pio-
neer, both concerning the restructuring of governmental practice according to
sectoral integration, and the assessment of policy initiatives. However, the
majority of the OECD-countries still stay with the horizontal approach of EPI.
The survey shows, that nearly all countries have introduced general strategic
approaches such as Sustainability Strategies or Environmental Plans and the
majority has introduced constitutional provisions, Green Cabinets and inde-
pendent bodies for advising and evaluation.
The findings back the hypothesis, that the sectoral organisation of modern
government restricts the execution of integrated approaches to policy-making.
The most obvious explanation for these findings is, that governmental self-
regulation is rarely a strategic approach that runs alone, since it contradicts
the inherent logic of governmental bureaucratic organisation: specialisation,
incrementalism and negative-co-ordination. Therefore, the speed of diffusion
of related tools is quite slow. Cross-cutting issues are still picked up and en-
forced by governmental actors which either represent no special sectoral in-
258
terests, such as central steering bodies, or are interested in the integration due
to their responsibility, such as the DoE. The targeted departments themselves
struggle hard to follow new devices for policy-making that depart from their
traditional path of policy-making. These findings must, however, be consid-
ered with caution. As the literature on policy change and policy learning right-
fully notes, such processes need their time and can be evaluated only after a
longer period of time. Since tools for vertical EPI have been discussed more
broadly as recently as the middle 1990s, the process of diffusion might also
speed up due to increasing knowledge and policy-learning. We can not make a
closing assessment, whether or not the vertical approach to EPI will gain more
attractiveness in the coming years. Further comparative research is needed for
clarifying these first observations.
The focus on instruments of policy integration that is taken in this paper does
not allow conclusions in how far these are actually contributing to a change in
policy making. The potentials of the instruments may be under-utilised, espe-
cially regarding learning effects. However, for an evaluation of outcomes and
impacts of EPI, additional indicators are necessary which reveal the environ-
mental performance of the sectors.
References
Andrews, Richard N.L. (1997). United States. In: Jnicke, Martin and Helmut Weidner
(eds.): National Environmental Policies. A Comparative Study of Capacity Building.
Berlin u.a., Springer. Pp. 25-43.
Bennett, Collin J. and Michael Howlett. (1992). The lessons of learning: Reconciling
theories of policy learning and policy change. Policy Sciences, 25, S. 275-294.
Canadian Environmental Assessment Agency. (2004). Sustainable Development Strategy
2004-2006. Download from:
http://www.ceaa-acee.gc.ca/017/0004/001/SDS2004_e.pdf (February 15, 2004).
Collier, Ute (1994). Energy and Environment in the European Union. The Challenge of
Integration. Aldershot: Avebury.
Danish Government. (2002). A Shared Future Balanced Development. Denmarks
National Strategy for Sustainable Development. Kopenhagen: Danish Government.
Dudley, Geoffrey and Jeremy Richardson (2001): Why does policy change? Lessons from
British Transport Policy 1945-1995. London: Routledge.
Environment Canada. (1995). A Guide to Green Government. Download from:
http://www.sdinfo.gc.ca/reports/en/ggg/Default.cfm (February 15, 2004).
European Environmental Agency (EEA). (2003). Europes Environment: The third as-
sessment. Environmental assessment report No. 10. Copenhagen: EEA.
Fergusson, Malcolm et al. (2001). The Effectiveness of EU Council Integration Strate-
gies and options for carrying forwards the Cardiff Process. London: Institute for
European Environmental Policy.
259
German Advisory Council on the Environment (SRU). (2000). Umweltgutachten 2000.

Schritte ins nchste Jahrtausend. Stuttgart: Metzler-Poeschel.
German Advisory Council on the Environment (SRU). (2004). Environmental Report
2004. Baden-Baden: Nomos (forthcoming).
Hayes, Michael T. (2003). The Limits of Policy Change: Incrementalism, World-View
and the Rule of Law. Georgetown: Georgetown University Press
Hertin, Julia and Frans Berkhout. (2002). Analysing Institutional Strategies for Envi-
ronmental Policy Integration: The Case of EU Enterprise Policy. Journal of Envi-
ronmental Policy and Planning, 5 (1), 39-56.
Hey, Christian. (1998). Nachhaltige Mobilitt in Europa. Akteure, Institutionen und
politische Strategien. Opladen and Wiesbaden: Westdeutscher Verlag.
Hey, Christian. (2002). Why does Environmental Policy Integration Fail? The Case of
Environmental Taxation for Heavy Good Vehicles. In: Lenschow, Andrea. (Ed.).
Environmental Policy Integration. Greening Sectoral Policies in Europe. London:
Earthscan.
Jnicke, Martin and Helge Joergens. (eds) (2000). Umweltplanung im internationalen
Vergleich: Strategien der Nachhaltigkeit. Berlin: Springer.
Jnicke, Martin et al. (2002). Governance for Sustainable Development in Germany:
Institutions and Policy-Making. in: Organisation for Economic Co-operation and
Development. (ed.). Governance for Sustainability. Five Case Studies. Paris: OECD.
Jnicke, Martin. (2000). Environmental plans: role and conditions for success. Pres-
entation at the seminar of the Economic and Social Committee Towards a sixth
EU Environmental Action Programme: Viewpoints from the academic commu-
nity (unpublished).
Jordan, Andrew and Andrea Lenschow. (2000). Greening the European Union: What
can be Learned from the Leaders of EU Environmental Policy?. European Envi-
ronment, 10, 109-120.
Jordan, Andrew. (2002). Efficient Hardware and Light Green Software: Environmental
Policy Integration in the UK. In: Lenschow, Andrea. (Ed.): Environmental Policy
Integration. Greening Sectoral Policies in Europe. London: Earthscan.
Knill, Christoph and Andrea Lenschow. (2000). Implementing EU Environmental Poli-
cies: New Directions and Old Problems. Manchester: Manchester University Press.
Kraack, Michael, Pehle, Heinrich, and Petra Zimmermann-Steinhart. (2001). Umweltin-
tegration in der Europischen Union. Das umweltpolitische Profil der EU im Poli-
tikfeldvergleich. Baden-Baden: Nomos Verlag.
Lafferty, William B. (2001). Adapting Government Practice to the Goals of Sustainable
Development. Paper presented at the OECD/PUMA Seminar on Improving Gov-
ernance for Sustainable Development. Paris (2001-11-22).
Lafferty, William B. and James Meadowcraft. (ed.) (2000). Implementing Sustainable
Development: Strategies and Initiatives in High-Consumption Societies. Oxford:
Oxford University Press.
Lenschow, Andrea. (1997). Variation in EC environmental policy integration: agency
push within complex institutional structures. Journal of European Public Policy,
4 (1), 109-127.
Lenschow, Andrea. (2002a). New Regulatory Approaches in 'Greening' EU Politics.
European Law Journal, 1, 19-37.
Lenschow, Andrea. (Ed.) (2002b). Environmental Policy Integration. Greening Sectoral
Policies in Europe. London: Earthscan.
Liberatore, Angela. (1997). The integration of sustainable development objectives into
EU policy-making. Barriers and prospects. In: Baker, Susan, et al. (eds.). The Poli-
260
tics of Sustainable Development. Theory, policy and practice within the European
Union. London and New York: Routledge.
Marsden, Simon. (1998). Why is Legislative EA in Canada Ineffective, and how can it be
enhanced? Environmental Impact Assessment Review, 18, 241-265.
Marsden, Simon. (1999). Legislative EA in the Netherlands: The E-Test as a Strategic
and Integrative Instrument. European Environment, 9, 90-100.
Mller, Edda. (2002). Environmental Policy Integration as a Political Principle: The
German Case and the Implications of European Policy. In: Lenschow, Andrea.
(ed.). Environmental Policy Integration. Greening Sectoral Policies in Europe.
London: Earthscan.
Niestroy, Ingeborg. (2003). The Role of Impact Assessments for (environmental) Policy
Integration. In: Meulemann, Louis, Niestro, Ingeborg and Christian Hey. (eds).
Environmental Governance in Europe. Utrecht: Lemma Publ.
Organisation for Economic Cooperation and Development (OECD). (2002a): Sustain-
able Development. Critical Issues. Paris: OECD.
Organisation for Economic Cooperation and Development (OECD). (2002b). Policies to
enhance Sustainable Development. Paris: OECD.
Organisation for Economic Cooperation and Development (OECD). (2001). Environ-
mental Outlook. Paris: OECD.
Pehle, Heinrich (1998). Das Bundesministerium fr Umwelt, Naturschutz und Reaktor-
sicherheit: Ausgegrenzt statt integriert. Wiesbaden: Deutscher Universittsverlag.
Hall, Peter and Rosemary Taylor. (1996). "Political Science and the Three New Institu-
tionalisms. Political Studies, 44, 936-957.
Peters, Guy. (2002). The Politics of Tool Choice. in: Salomon, Lester. (ed). The Tools
of Government. A Guide to the New Governance. Oxford: Oxford University Press.
Pierson, Paul and Theda Skocpol. (2002). Historical Institutionalism in Contemporary
Political Sciences. in: Katznelson, Ira and Helen Milner. (eds.). Political Science:
The State of the Discipline. New York: Norton, 693-721
Sabatier, Paul and Hank C. Jenkins-Smith. (1999). The Advocacy-Coalition Framework:
An Assessment in: Sabatier, Paul. A. (ed.). (1999). Theories of the Policy Process.
Boulder, Colorado: Westview Press.
Sverdrup, Liv Astrid. (1998). The Norwegian Experience of the Transition to Sustain-
ability. In: ORiordan, Tim and Heather Voisey. (Eds.). The Transition to Sustain-
ability: The Politics of Agenda 21 in Europe. London: Earthscan.
Tamborra, Marialuisa (2003): Developing Tools for Sustainability Impact Assessment:
the Role of Socio-economic Research in the EU. Paper presented at the EDIAIS
Conference November 24-25, 2003. Download from http://www.enterprise-
impact.org.uk/pdf/Tamborra.pdf (06/10/2004).
Tews, Kerstin, Busch, Per-Olof, and Helge Jrgens. (2003). The Diffusion of Environ-
mental Innovations. European Journal of Political Research, 42 (4), 569-600.
Thelen, Kathleen. (1999). "Historic Institutionalism and Comparative Politics", Annual
Review of Political Science, 2, Palo Alto: Annual Reviews, Inc.
Weale, Albert und Andrea Williams. (1992). Between Economy and Ecology? The Sin-
gle Market and the Integration of Environmental Policy. Environmental Politics, 1
(4), 45-64.
Weidner, Helmut and Martin Jnicke (ed.). (2002). Capacity-Building in Environmental
Policy. A Comparative Study of 17 Countries. Berlin: Springer.
Wilkinson, David. (1998). Steps Towards Integrating the Environment into other EU
Policy Sectors. In: ORiordan, Tim and Heather Voisey. (eds.). The Transition to
Sustainability: The Politics of Agenda 21 in Europe. London: Earthscan.
261
Part IV
Greening Energy Policies

Converging Objectives, Diverging Results?
National Goal Formulation and Goal Achievement
in Climate Change Policies1
KERSTIN TEWS
MANFRED BINDER
Abstract
In the early 1990ies almost all industrialised countries unilaterally adopted
domestic targets to reduce GHG emissions. Interestingly, these countries were
not obliged to do that by any international agreement.
This paper gives a comprehensive overview on the GHG emission targets and
the actual GHG emission developments in industrial countries since 1990. For
selected countries, the decision-making processes leading to the voluntary
targets and the national discussion about them will be outlined. From the
background of these empirical results, we a) try to identify the driving forces
behind the setting of voluntary national GHG emission targets; b) discuss the
effectiveness of national targets which address a global problem against the
background of convergent national ambitions but divergent national results,
and c) draw some lessons for future goal setting processes.
1 Introduction
In the early 1990ies almost all industrialised countries unilaterally adopted
domestic targets to reduce GHG emissions. This phenomenon is interesting
for two reasons: First, these countries were not obliged to do that by any inter-
national agreement. Second, one might question the effectiveness of unilateral
targets approaching a problem which cannot be solved by unilateral action.
1
An earlier and more detailed version was published as FFU rep 02-2004.
265
This paper gives a comprehensive overview on the voluntary national GHG

emission targets and the actual GHG emission developments in industrial
countries since 1990. Unfortunately, hardly any of these targets were or will be
met as intended.
For selected countries, the decision-making processes leading to the voluntary
targets and the national discussion about them will be outlined. From the
background of these empirical results, we try to address the following ques-
tions:
1) Which were the driving forces behind the setting of voluntary national
GHG emission targets? Inasmuch were the national developments influ-
enced by the developments in other countries and international discus-
sions, i.e. inasmuch did these targets diffuse internationally?
2) What can be said about the effectiveness of national targets which address a
global problem against the background of convergent national ambitions
but divergent national results?
3) What lessons should be drawn for future goal-setting processes?
In this paper, we use the terms targets, goals and objectives inter-
changeably. In general, goals and targets do specify the direction of change,
desired end-states and or norms to be attained or maintained. The paper spe-
cifically discusses targets to reduce total national GHG emissions or national
carbon dioxide (CO2) emissions.
The paper proceeds as follows: In a first step we discuss how national targets
address a global problem and define criteria for the effectiveness of such tar-
gets. Characteristic features of the voluntary national targets are described
which had been adopted before any international agreement was made. It will
be shown that the setting of the initial emission goals follows a pattern of
policy diffusion2 which is described first from a macro perspective pointing to
the interplay between international stimuli and the specific national policy
response.
In the next step, more detailed information is given on the motivations of
national policy makers in selected countries. It will be demonstrated that
apart from unilaterally pushing for international cooperation to tackle a seri-
ous environmental problem, the interplay between emerging global norms
2
See Tews and Jnicke (2005)
266
and national responses ranging from jumping on an international band-

wagon to domestic party competition has to be considered when accounting
for the avalanche of national adoptions of quantified emission targets in the
early 1990s. Within this section the level of national ambitions and the respec-
tive changes will be compared with the level of emissions reached at the end of
the 20th century.
The paper concludes with addressing the relationship between the governance
functions of environmental goals and the distinct requirements to their qual-
ity which might depend on the stage of the issue evolution. In contrast to the
early phase of the climate change evolution process, today, the sheer procla-
mation of national ambitions might not suffice anymore in order to stimulate
other governments to set more ambitious national goals and to intensify their
efforts in GHG emission reductions, unless it can be shown that the new goals
will be achieved much more likely than the past ones. Only if the national
goals regain some of their lost credibility by real achievements, they have a
chance of being an environmentally effective policy instrument both domesti-
cally and in the international realm.
2 Greenhouse Gas Emission Targets and

Developments
2.1 National Targets for a Global Problem?
At first sight, it is quite obvious that a national target seems to be rather in-
adequate to solve the global problem of climate change. But on the other
hand, solving the problem is too simple at all to judge such policy targets
because global warming, like many other problems, is too complex to be
solved once and for all (Levy et al. 2001: 88). Therefore, in order to evaluate
whether national targets to reduce greenhouse gas emissions do matter as
policy instruments, the perspective has to be broadened. Levy et al. suggest
that [t]he merits of goals and strategies can () be judged fairly only accord-
ing to how well they promote more efficient management the getting on
with the problem at hand. (ibid.).
Surely, environmental effectiveness seems to be the ultimate criterion to as-
sess environmental targets: Environmental effectiveness of emission reduction
targets is fundamentally a question of the magnitude of global GHG emis-
267
sion reductions. (Philibert & Pershing 2001:2). But as far as we intend to as-
sess national goals, this criterion is too strict and we assess environmental
effectiveness simply as the level of goal achievement, i.e. the difference be-
tween the target announced and the domestic emission level achieved.
Of course, this criterion alone would oversimplify the ways targets may matter
in policy processes. Marc Levy and colleagues developed some broader criteria
for an assessment of the effectiveness of goals in the management of global
risks (Levy et al. 2001: 88-89) which we use in a slightly modified way: Thus,
national GHG emission targets can be perceived as effective, if,
at the international level, they stimulate others to follow i.e. broaden the
range of actors and countries actively involved in risk managements efforts
(policy diffusion and regime formation), eventually resulting in emission
reductions in other countries;
at the domestic level, they prompt and guide the development of policy
responses and instruments (policy evaluation and development of new in-
struments) and stimulate non-state actors to collaborate, eventually result-
ing in domestic emission reductions3.
From this perspective, the German Environmental Advisory Council argued
that even in the case where goals or targets do not result in immediate policy
measures, the process of goal setting itself is an asset, as it may ensure politi-
cal support, induce or sharpen the problem awareness among relevant actors,
and assign environmental policy an own profile among competing policy ar-
eas (SRU 1998: 11). Nevertheless, the effectiveness of a target in these respects is
much more difficult to evaluate than the simple level of goal achievement in
fact, the simplicity of evaluating the level of goal achievement is one of the
major reasons for choosing quantified targets in the first place.
2.2 Voluntary national targets and their features
Before the Kyoto protocol was agreed upon in December 1997, many govern-
ments had already set voluntary goals for the development of national GHG
emissions. A streamlining of national goals is a characteristic feature in this
early period of national target settings. Almost all industrial countries had
declared their intention
3
These criteria are - although slightly modified - adapted from Levy et al. 2001.
268
either to stabilise emission levels until 2000, mostly referring to 1990 as

the base year this goal was also adopted by a EU Council decision at the
end of October 1990, was internationally promoted by the EU since the
second World Climate Conference in Geneva in 1990 (Becker et al. 2001;
Gupta & Ringius 2001), and was suggested in 1992 by the Framework Con-
vention on Climate Change (FCCC), Art. 4, 2 a) and b);
or to reduce emissions by 20% until 2005 in the rest of the paper referred
to as Toronto goal4, because it resembles the most important recom-
mendation which had resulted from the Toronto conference in 1988, i.e. to
reduce world CO2 emissions by this rate until 20055;
or both.
Some other countries had adopted quite similar targets: In 1989, the Nether-
lands declared their intention to stabilize CO2 emissions until 1995 compared
to 1989, followed by more ambitious goals for 2000 in subsequent years (-3-5%
CO2 emissions, set in 1990, and -20-25% GHG emissions, set in 1991); Ger-
manys target, set in 1990, was to reduce CO2 emissions by 25% until 2005
compared to 1987; the Belgian goal, set in 1991, was to reduce CO2 emissions
by 5% compared to 1990 until 2000; the current British one, set in 1997, was to
reduce GHG emissions by 20% until 2010.
Only some fast-growing and poorer European countries adopted emission
targets totally different from stabilisation until 2000 or 20% reduction until
2005 (all for CO2 and 1990-2000): Spain (in 1992, first +25%, then changed to
+15%), Ireland (in 1993, +20%), Greece (in 1995, +15%) and Portugal (1996, +40%).
Among the Annex-II countries of the FCCC, only Italy and Turkey have not set
any national emission targets (Turkey has not even signed the FCCC).
4
A couple of countries explicitly refer their national target to the Toronto goal. Aus-
tria for example even labelled the national target adopted in 1990 by government in
its Energy Report 2000 as our Toronto Target similar to the Slovak Republic in
its Energy Strategy and Policy up to the year 2005 in 1992 that means already be-
fore it became an independent state (January 1993).
5
Other recommendations of Torontos conference final resolution included the
reduction of CO2 and other GHG emissions by 50% until 2050 and an increase in
energy efficiency by 10% until 2005. Nevertheless, it should be noted, that the actual
Toronto goal of 25% decrease in world emissions would have been impossible to
achieve, if the industrial countries would not have reduced a much greater share of
their emissions, because developing countries were not expected to reduce their
emissions that strongly.
269
Thus, it is fair to say, that the voluntary goal setting process before Kyoto fo-
cussed almost entirely on the two options mentioned, with very little national
variations except for poor countries. But contrary to these pretty similar goals,
the development of GHG emissions has differed tremendously among indus-
trial countries, and only very few countries achieved their voluntary goals or
are likely to achieve them in the near future (see chapter 2.4).
2.3 Diffusion of voluntary domestic targets
It is not surprising that the process of developing national climate change

policies is strongly influenced by international policy developments concern-
ing this global risk. Nevertheless, looking at the pattern of subsequent adop-
tions of national reduction goals reveals differences in the countries re-
sponses to these international drivers. We can distinguish three stages in the
development of an international norm and respectively of national GHG
emissions targets (Fig. 1).
Fig. 1: Development of voluntary national targets to reduce greenhouse

gas emissions
PHASE 1: Toronto Conference - PHASE 2: UNFCCC - Kyoto- PHASE 3: from signing the Kyoto-Protocol
30 UNFCCC Protocoll (1993-1997) (1998 - 2003)
(1988-1992) 7 additional countries adopted in 16 countries the unilateral commitment
18 countries adopted unilaterally domestic goals; periods phased out in 2000; 2 countries
domestic goals 4 countries abolished their national abolished their national targets (DK; D);
goals (N; A; AUS; NZ) most of them subsituted national targets by the
25 Kyoto comittments (apart from USA and
Australia)
2 countries adopted new domestic target (S; CZ)
20
15
in 2004 three countries left with explicit domestic

targets more ambitious than the Kyoto-
10 commitments:
Sweden, UK, Czech Republic
Luxembourg did not officially abolish its Toronto
target, but the target isn't ambitious as it was
already achieved in 1995.
5
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
270
First period Toronto (1988) Rio (1992): It is quite interesting to see that a
majority of industrialized countries already in this early stage of the interna-
tional norm building process adopted national targets to reduce greenhouse
gas emissions (example setters and early norm adopters). Most of the early
mover countries explicitly expressed their ambition to be among the front
runners in the process of establishing an international climate change regime.
They demonstratively adopted national targets unilaterally to set standards to
be followed by others. Especially the Netherlands and Norway demonstrated
this type of leadership in international processes which refers to the domestic
policy development. This period is characterized by a shift of the key actors:
Originally, scientific and NGO networks promoted the issue for at least a dec-
ade. But, increasingly, states started to define the rules of the emerging nego-
tiation game. They were influenced by domestic interest groups which awoke
to the issue by the increasing international and domestic attention it had
gained. This phase is framed by a variety of international conferences which
established the climate change challenge on the international political agenda.
The cornerstones were the Toronto conference in June 1988, the Second
World Climate Conference in October/November 1990 in Geneva and the Rio
conference in June 1992 where the UNFCCC was signed by 154 countries. In
1990 alone, an avalanche of 12 national adoptions of unilateral emission tar-
gets increased the number of countries with domestic goals to 14 (plus Norway
and the Netherlands in 1989). By the year 1992, 18 countries had announced
voluntary targets.
Second period Rio (1992) Kyoto (1997): In this phase almost all remaining
industrialized countries adopted national targets, mostly as a response to the
commitment made by signing the albeit in this respect non-binding
UNFCCC (late norm adopters). This period is characterized by international
negotiations to develop an international regime of binding targets and time-
tables for climate protection.
From 1997 up to now: This period is characterised by a process of abolishing
the originally defined national targets and/or their substitution by the negoti-
ated Kyoto commitments. Sporadic unilateral adoption of more ambitious
national targets in selected countries occurred (new pushers and example
setters).
271
Tab. 1: Development of National GHG Reduction Targets

(without Kyoto commitments and EU-burden-sharing)
Country Year of
National Reduction Target Subsequent amendments
(Annex 1) adption
Norway 1989 Stabilization CO2 (1989-2000) 1995 abolishment of target
Netherlands 1989 Stabilization CO2 (1989-2000) 1990 Stabilisation (1989-1995);
minus 3-5% (1989/90-2000)
1991 minus 20-25% GHG
(1989/90-2000)
Denmark 1990 minus 20% CO2 (1988-2005) 2002 abolishment of target
Germany 1990 minus 25-30% CO2 (1987-2005) 2003 abolishment of target
France 1990 Stabilization CO2 (1990-2000)
Japan 1990 Stabilization CO2 (1990-2000)
Canada 1990 Stabilization GHG (1990 2000)
Austria 1990 minus 20% CO2 (1988-2005) 1997 abolishment of target
Switzerland 1990 Stabilization CO2 (1990-2000)
Australia 1990 Stabilization GHG (1988-2000), 1995-97 tacit abolishment of target
minus 20% GHG (1988-2005)
Luxembourg 1990 Stabilization CO2 (1990-2000)
and minus 20% CO2 (1990-2005)
New Zealand 1990 minus 20% CO2 (1990-2005) 1993 Stabilization CO2 (1990-2000);
20% cut ultimate goal, subject
to various conditions
1994-97 Tacit abolishment of the
target
Poland 1990 Stabilization CO2 (1988/89-2000)
United 1990 Stabilization CO2 (1990-2005) 1995 minus 4-8% CO2 (1990-2000)
Kingdom 1997 minus 20% CO2 (1990-2010)
Belgium 1991 minus 5% CO2 (1990-2000)
Spain 1992 25% CO2 (later 15% due to new
projections) (1990-2000)
Hungary 1992 Stabilization CO2 (1985/87-2000)
Slovakia 1992 minus 20% CO2 (1988-2005) 2003 Not mentioned anymore
Ireland 1993 20%CO2 (1990-2000)
Sweden 1993 Stabilization CO2 (1990-2000) 2000 minus 2% GHG (1990-2010)
2001 minus 4 % GHG (1990-2010)
USA 1993 Stabilization GHG (1990-2000)
Finland 1993 Stabilization CO2 (-2000)
Iceland 1994 Stabilization GHG (1990-2000)
Greece 1995 15% CO2 (1990-2000)
Portugal 1996 40% CO2 (1990-2000)
Czech Republic 2004 minus 30% CO2 (1990-2000/2020)
272
2.4 Awareness, competition and bandwagoning the sources of

unilaterally targeting GHG emissions
In this section, we describe the national goal-setting processes in selected

countries and compare the level of ambition announced with the level of
emissions reached at the end of the 20th century6. It will be demonstrated that
apart from unilaterally pushing for international cooperation to tackle a seri-
ous problem, the jumping on the international bandwagon and domestic
party competition were the main sources of unilaterally announcing GHG
reduction targets.
The Netherlands
In 1989, the Netherlands adopted the target to stabilise CO2 emissions by the
year 2000 within its first National Environmental Policy Plan (NEPP). One year
later the government extended its target. It announced to reach the stabilisa-
tion target already in 1995 and to reduce CO2 emission to 3-5% below 1989
levels by the year 2000 (NEPP-Plus). Similar to Norway and Canada, it was
quite active in organising scientific and political meetings to put the issue on
the international political agenda. In 1989 for example, the Dutch Government
(together with the Norwegian and French Governments) organised the already
mentioned The-Hague-Conference and later that year the Noordwijk Ministe-
rial Conference. Both are perceived as crucial in the international agenda-
building of climate change (Andersson & Mol 2002). In documents prepared
for the international audience, the Netherlands were keen on pronouncing
that the Netherlands climate change policy had been already established
before the FCCC was signed in 1992 (Second NC: 2).
According to IEA sources, an even more ambitious additional target to reduce
emissions of all greenhouse gases by 20-25% by the year 2000 on a CO2
equivalent basis from their 1988/89 levels [was] set out in a white paper on
climate policy forwarded to parliament in September 1991 by the Minister of
6
The emission data used in these figures are from the on-line searchable database of
GHG inventory data of the UN-FCCC (http://ghg.unfccc.int/). Since there are no data
available fr years before 1990 and for 1990 only for those countries which have not
chosen another year for base year, the data for the reported base year (mostly 1990)
were used as a proxy for missing data before 1991 in designing the red arrows repre-
senting the voluntary national targets. These arrows start in the year when they were
first declared (i.e. not necessarily in the respective base year).
273
Housing, Physical Planning and Environment (IEA 1994: 117). This target has
not been mentioned anymore.
In contrast, the domestic targets set out in the NEPP-plus were re-announced
several times as for example in the second NEPP from 1993. However, already
in 1995 the Netherlands started to water down its ambitions concerning CO2-
emission reductions. In the so called CO2-letter sent by the VROM (Ministry
of Housing, Spatial Planning and Environment) to the parliament, the CO2-
goal for 2000 was lowered to minus 3%. In a follow-up policy document on
climate change issued in the same year, this goal was formulated slightly dif-
ferently as aiming at a post-2000 stabilisation at minus 3% compared to 1990.
In 1999, the domestic goal was finally substituted by the EU-burden-sharing
commitment to reduce greenhouse gases by 6% in 2008/12 compared to the
1990 level (Minnesma 2003: 47pp). Additionally, it was claimed to realise half of
the reduction domestically and the rest of it abroad by using the Kyoto-
mechanisms.
Fig. 2: GHG emissions/targets in the Netherlands

250000 kt CO2 (equivalent)
111 Netherlands
106 106
Source: UN-FCCC 2002
104 105
103 103 103 102 Goals according to Kerstin Tews (FFU)
100 101 101 101
109
110 94
102 108 112 110 107 96 93
200000 100 108 105 101
91
91 73 68 92
102 97 95 82 74
99 85 78
100
Goal set in 1989:

150000 CO2 1995 = CO2 1989
Goal set in 1990:
CO2 2000 = CO2 1989/90 minus 3-5%
Goal set in 1991:
100000
GHG 2000 = GHG 1989/90 minus 20-25%
113 110 110
104 105 106 108 107 104 106
100 104 104
SF6
50000 PFC
HFC
N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0 base
0 year
0 0
base year 1995 2000 EC commitment * TOTAL
2005 base year
2010
designed by Manfred Binder (FFU) TOTAL
In fact, emissions were not stable in the early 1990s but increased and did also
not decline afterwards when they were supposed to (Fig. 2). GHG emissions
274
have decreased slightly since 1996, yet hardly so because of CO2 but of CH4 and
N2O emission decreases. In 2002, the VROM openly stated that even the wa-
tered-down domestic targets were not met: CO2-emission had risen by 10%
compared to 1990 levels, reportedly due to the highest economic growth com-
pared to its European neighbour countries, but also to climate policy failure
(ibid.).
Norway
Norway, one of the first two countries to adopt a unilateral CO2 stabilisation
target in 1989, obviously did so in order to increase the credibility of the Nor-
wegian international efforts to push multinational agreements. Norway had a
very high reputation at the international environmental scene since the mid
1980s. Gro Harlem Brundtland, Norways Prime Minister and chair of the
World Commission of Environment and Development, not only firmed as the
label of the so-called Brundlandt Report which singled out climate change
as a major environmental problem but also was the only head of government
attending the Toronto conference apart from the Canadian host. She even
called for new international institutions with non-unanimous decision mak-
ing at the Hague Conference as the only way to manage this global risk. Nor-
way (together with the UNECE) convened the Bergen Conference in 1990.
The Norwegian position changed quite rapidly in autumn 1991. The Norwe-
gian government still maintained that domestic actions are necessary, but it
announced its unwillingness to sign any international agreement without the
option of joint implementation a tension which characterized international
negotiations from the very beginning (Andresen & Butenschn 2001; Andresen
et al. 2002). The changes in the Norwegian position are attributed to the fact
that new domestic actors entered the scene (ibid.). During the initial period
when the ambitions were announced, potential economic costs were not dis-
cussed. Instead, the environment was one of the most important issues in the
elections in 1989: parties overcalled each other in proposing national emission
targets. This visionary stage of the early Norwegian climate policy was charac-
terized by defining the global problem as a serious challenge in political terms
both internationally and domestically. Yet, little emphasis was put on domes-
tic implications.
However, shortly after the national goal had been adopted, industry associa-
tions, research institutions and politicians started to question it. A new under-
standing of the Norwegian situation occurred as a country with few potential
275
for emission reductions in energy industries due to hydropower as the main

source of electricity, a large transport sector due to Norways geography and an
already high taxation. It was argued that the cheapest domestic measures had
already been taken. Industry brought the gas argument into the climate
change debate selling gas in order to replace coal in other countries was
perceived to do far more to preserve the environment than domestic
actions (Andresen & Butenschn 2001). The argument was echoed by the
governing Conservatives and their successors, the Labour Party. Key research
institutions also put the finger on the high cost of additional domestic meas-
ures and voted for joint implementation and tradable quotas (ibid.). This
downplaying of the domestic approach became officially visible five years after
the announcement of the goal in the Governments White Paper focussing on
international measures, as it would be much more costly for Norway to reduce
CO2 emissions than in most other OECD countries.
Fig. 3: GHG emissions/targets in Norway

105 106 107 106
109
106
Norway
105
100 99 99
96 96 101
99 103 101 105 101
50000 92 95 94
93 95
109 Source: UN-FCCC 2002
91 108 107 109 107
100 108 109 Goals according to Kerstin Tews (FFU)
97 85
106 107
40000
105
100 103
101
30000
Goal set in 1989 (abolished in 1995):

CO2 2000 = CO2 1989
117 118 119 118 121 118
20000 117
108 108
100 103
97 98
SF6
PFC
10000 HFC
N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0base0 year0 0
base year 1995 2000 EC
2005commitment * TOTAL2010
base year
This gradual dissociation of a national emission target is reflected in the ac-

tual development of emissions (Fig. 3): During the first half of the 1990s, Nor-
way faced a tremendous increase in emissions which came to a halt but not a
reverse in the second half, resulting in 18% CO2 emissions increase during the
276
decade. Relatively early in 1995 the national stabilization target was openly
abolished as it was not possible to plan a policy that will ensure stabilisation
of our total CO2-emissions by 2000 (Government Report to the Storting
Stortingsmelding No. 41, quoted in Andresen & Butenschn 2001: 340).
Denmark
In Denmark, the Brundtland Report and the Toronto Conference stimulated a
parliamentary discussion on sustainable development. Parliament and Gov-
ernment decided that there should be sector strategies for sustainable devel-
opment. In 1990, the Danish Government adopted national action plans on
transport and on energy with specific targets for the energy industries (-28%
CO2) and the transport sector (stabilisation) whose combined effects and time-
frame correspond to the Toronto target of -20% CO2 (1988-2005). The national
target was approved by parliament. This goal was valid until a new govern-
ment took over in November 2001. By then, major climate policy decisions
had been made by a green majority in the parliament (1987-1993) and by
governments led by the Social Democratic Party (1993-2001).
Fig. 4: GHG emissions/targets in Denmark

Denmark Source: UN-FCCC 2002
131 Goals according to Kerstin Tews (FFU)
90000
88 117
116 116 Goal set in 1990 (abolished in 2002):
80000 112
110
111
110 CO2 2005 = CO2 1988 minus 20%
107 87 106
99 91
100 90 101 100
93 85 99
70000
95 109 83 92
102 108
100 109 78 75
105 108 80
60000 103 106
107 104
79
100 106
50000
40000
142
120 121 124

30000 114 116 114
109 109
100 100 103 103
SF6
20000 PFC
HFC
N2O
10000
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0 base
0 year
0 0
2005 base year
2010
277
Denmark is the only industrial country which managed to reverse a trend of

increasing emissions substantially (Fig. 4). Therefore, the Toronto goal even-
tually looked achievable. However, climate change and environmental policy
changed dramatically in Denmark under the new liberal government since
2001, which couldnt be balanced by the parliament there was no longer a
green majority. The new government gave up the CO2 target of minus 20%
by 2005 compared to 1988, cut away most of the support for renewable energy
sources, reduced energy taxation for the commercial sector etc. (Boye Olesen
2003: 160).
Denmark now pursues the Kyoto target negotiated within the EU-burden-
sharing (minus 21% GHG) and is increasingly inclined to use flexible mecha-
nisms to buy emission credits abroad. It combines this new direction in cli-
mate policy with insisting on its previous front-runner policy and early ac-
tions: The latest calculations indicate that only relatively few national policies
and measures with a significant potential that do not exceed DKK 120/tonne
CO2 equivalent7 would be able to compete with the price of flexible mecha-
nisms. This must also be seen in the light of the fact that Denmark has already
done a great deal nationally up through the 1990s, while there is a large, unex-
ploited potential in other countries. (Third NC 2003: 17).
Germany
Germany did already in 1987 establish a parliamentary Enquete Commission
on Preventive Measures to Protect the Earths Atmosphere (Vorsorge zum
Schutz der Erdatmosphre). The Commission took the Toronto goal as a
reasonable starting point in assessing the feasibility and the impacts of a na-
tional target in Germany (Levy et al. 2001: 100). Based on the commissions
recommendations, a national target was adopted by a cabinet resolution under
a Christian democrats government on June 13th 1990. It aimed at a 25-30%
reduction of CO2 emissions until 2005 compared to 19878 levels for the old
Bundeslnder. Immediately afterwards, the government appointed an inter-
ministerial working group CO2-reduction and on November the 7th 1990 the
government adopted its first CO2-reduction program (first report of the inter-
7
Economic benchmark for cost effective national measures set by the Danish Gov-
ernment (3. NC 2003:17).
8
Later, 1990 was defined as base year.
278
ministerial working group CO2 reduction) as the core of the German climate
change strategy.
Thus, Germany adopted the most ambitious national target. On the one hand,
the Kohl government wanted internationally to keep pace with other leader
countries in the climate change process. Domestically, the climate issue and
the German front runner role was perceived as a promising issue in the elec-
tion campaign as the climate change threat gained a lot of public attention.
Behind the doors the 25% goal wasnt unanimously shared. Whereas the min-
istry for the Environment pushed for this political target and the measures to
achieve it, the Ministry of Economics was more reluctant to a binding quota
for emission reductions and stressed the costs and prospective losses in na-
tional competitiveness and growth. These conflicts over goals are perceived to
be responsible for the weakness of the first CO2-reduction program presented
by the inter-ministerial working group in November 1990. It was criticised for
failing with respect to concrete measures compared with e.g. the action pro-
gram recommended by the Enquete Commission (Wille 1990). Consequently,
the Government reduced its level of national ambitions due to these conflicts.
In a Cabinets Resolution from December 1991, the target was confirmed but
now related to the whole area, the older and the new Bundeslnder, i.e. the
former GDR (Loske 1996:285). Herewith, the case of Germany already indicates
that the level of domestic policy ambition not necessarily corresponds to an
equally high level of national implementation due to conflicting goals and
ambitions. Obviously, those who advocate more ambitious policies have ad-
vantages to push them domestically through when internationally the issue
ranks very prominently. Yet, the facilitating function of those international
stimuli seems to be restricted to the formulation of goals, the decision on
concrete policies is framed more by the domestic constellation of interests.
However, the very clear signal to set this ambitious target given by Chancellor
Kohl and its Cabinet in June 1990 has been characterized apart from the
Dutch and Danish front runner ambitions and efforts as one central driver for
the EU council decision at the end of October 1990 to formulate the common
stabilisation target of CO2 by 2000 at the level of 1990 (Loske 1996).
At first glance, the German goal looked feasible given the decline in emissions
by 15% in 2000 compared to 1990, i.e. after two thirds time until 2005 (Fig. 5).
But the reduction rates have slowed down remarkably after the first three
years following re-unification. Germanys CO2 balance benefited enormously
from the decline of the socialist system resulting in economic structural
279
change in the new Bundeslnder, which had not even been analysed by the
Enquete Commission in calculating a reasonable national target.
Fig. 5: GHG emissions/targets in Germany

Germany Source: UN-FCCC 2002
96
1200000 100 92 92
91 90
96 89 88
87
100 97 85
93 92 82 82
89 90 81 81
92 89 79
1000000 73
89 86 75 68 69 69
83 69
78 73 69 60
66 62 59
800000
Goal set in 1990 (abolished in 2003):

600000 CO2 2005 = CO2 1987 minus 25%
100
96
92 91 89 89 91 88 87 85 86 85
84
400000
SF6
PFC
HFC
200000
N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0 base
0 year
0 0
2005commitment * TOTAL base year
2010
In October 2003, the German Government took leave of the national CO2-
reduction goal. The red-green government was forced by opposition parlia-
mentarians by the means of a kleine Anfrage (Drs. 15/1542) to officially an-
nounce the abolishment of the 25% reduction goal. Already in June 2003, par-
liamentarians from CDU/CSU complained that the red-green government had
tacitly taken leave of the national CO2-reduction target and oriented itself at
the much less ambitious obligation under the European burden-sharing. Yet,
the goal defined by the Kohl-government in 1990 had been frequently con-
firmed by the red-green government not only in the coalition agreement of
1998 and 2002 but also in the national climate change programme of 2000.
The abolishment of the target did not gain a lot attention in the public.
Hardly a handful of newspapers most from the more leftist spectrum men-
tioned it with some critical comments (e.g. Frankfurter Rundschau, TAZ,
Neues Deutschland). In contrast, scientists had warned that the measures un-
dertaken so far, will not suffice to meet the goal (Ziesing 2002).
280
United Kingdom
In contrast to most other countries the United Kingdom successively sharp-
ened its national reduction target. Already in Mai 1990, Premier Thatcher
announced the target to stabilise CO2-emissions at the 1990 level by the year
2005 (Michaelowa 2000). Before the Rio-conference in April 1992, the govern-
ment brought forward its previous target and, provided other countries took
similar action, set itself the target of returning CO2 emissions to 1990 levels by
2000 (IEA 1992: 112).
Fig. 6: GHG emissions/targets in Great Britain

kt CO2 (equivalent)
800000 United Kingdom
100 100 Source: UN-FCCC 2002
97
94 95 Goals according to Kerstin Tews (FFU)
94 92 92
92 91
700000 100 97
87 87 87 88
82 87 85
88
84 90 86
100 99 63 87,5
97 66 66
600000 93 82 60
84 84 60
77 73 63
68 57
500000
Goal set in 1990:

400000 CO2 2005 = CO2 1990
Goal set in 1995:
CO2 2000 = CO2 1990 minus 4-8%
300000 100 101 98 96 95 97 95 Goal set in 1997:
94 93 93 92 93 92
CO2 2010 = CO2 1990 minus 20%
200000
SF6
PFC
100000 HFC
N2O
CH4
CO2
0 0 0 0 0 0 0 0 0 0 0
KYOTO-goal * TOTAL base year
base year 1995 2000 2005
EC commitment * TOTAL 2010
base year
In 1995 new emission projections allowed for a more stringent target to reduce
CO2-emissions of about 4-8% by 2000, which was essentially again a stabilisa-
tion target, now for the second half of the decade. In 1997 the new Prime Min-
ister Tony Blair announced a new national target to reduce CO2-emissions by
20% in 2010 compared to 1990 levels, reflecting the decreasing trend which
had started five years before (Fig. 6). Nevertheless, the targets accepted in
Kyoto (92%) and in the following year with the EU burden sharing scheme
(87,5%) were much more cautious than the voluntary goal and were already
met two years later. The government claims, that the unilateral domestic tar-
281
get is far from being only a reflection of the expected reductions by the busi-
ness as usual development, but instead an ambitious target as it corresponds
to a higher than expected reduction, which is estimated at 15.3% in 2010 (UK
Draft National Allocation Plan).9
Yet, the main reason for the decline so far has been the dash for gas, i.e. the
switch from coal to less carbon-intensive natural gas as fuel in the production
of electricity: This was not a result of unexceptionally ambitious climate
change policies, but of the privatisation and de-regulation of the energy in-
dustries, which were done for other reasons, and the easy availability of natu-
ral gas from the North Sea.
Sweden
In its Government Bill on the Swedish Climate Strategy, adopted in 2001, the
government claims Sweden is a pioneer in the field of climate policy. A Cli-
mate Strategy was already formulated in the energy and climate policy resolu-
tion in 1991. Also in that year, Sweden introduced the worlds first really effec-
tive carbon dioxide tax (Summary Gov. Bill 2001/02:55: 16)10. However, it was
not until the Swedish Riksdag ratified the Climate Convention in 1993 that a
Government Bill on Actions to limit Climate Change set a national CO2-
stabilisation target (1990-2000) (First NC 1994). In contrast to most of the other
countries, policy measures as for example the CO2-tax had been adopted be-
fore national emission reduction targets were proclaimed.
The first National Communication to the UNFCCC strongly focussed on in-
ternational measures to cope with goal achievement: In Sweden marginal cost
for further reduction of carbon dioxide emissions is high, compared to most
OECD countries. As part of our national programme we have taken initiatives
in the Baltic countries and Eastern Europe in order to finance measures in the
field of renewable energy, energy management and certain supportive meas-
ures. The possibilities for joint implementation or similar policy measures are
9
The latest provisional projections of UK CO2 emissions suggest that, taking into
account the impact of the measures set out in the UK Climate Change Programme
which have already been implemented or for which firm plans are already in place
(referred to as the with CCP projections), total UK emissions of CO2 in 2010 will be
around 512.4 Mt CO2 (139.75 MtC) (a reduction of 15.3% from 1990 levels). (UK
DRAFT NATIONAL ALLOCATION PLAN FOR 2005-2007, January 2004, page 4).
10
Finland was the first country to introduce a carbon tax in 1989. Norway and Sweden
both adopted energy/carbon taxes in 1991.
282
of great importance for Sweden (1. NC 1994: 11). Within the EU-burden-
sharing to implement the Kyoto-commitment Sweden committed to prevent
greenhouse gas emissions from exceeding 1990 levels by more than 4%. A
parliamentary commission for measures against climate change, appointed by
the government in May 1998, proposed a draft Swedish Climate Strategy in
2000 aiming at a reduction of greenhouse gas emission by the year 2010 by
2%. This target should be realised domestically for example by additional
energy taxation measures. Another parliamentary commission established at
the same time was charged with examining the potential application of the
Kyoto mechanisms in Sweden. This commission came to quite contrary con-
clusions culminating in the recommendation to replace the current carbon
taxation system entirely with an emission trading scheme integrated with
those of other countries. (for more details see: Hodes & Johnson Francis X
2002).
Fig. 7: GHG emissions/targets in Sweden

Sweden Source: UN-FCCC 2002
Goals according to Kerstin Tews (FFU)
80000 107
104 104
102 101 102
100 100 100 100
100 97 96
94 95
70000 101 98
100 98 98 99 100 100
99 95 92
93 93 92
101 100
60000 100 101 98 95
100 102
92 85
89 88
Goal set in 1993:
50000 CO2 2000 = CO2 1990
Goal set in 2001:
GHG 2010/12 = GHG 1990 minus 2%
40000
Goal set in 2002:
GHG 2010/12 = GHG 1990 minus 4%
30000 109
101 100 105 103 101 103
100 100 98 98
94 95
SF6
20000 PFC
HFC
10000 N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0base0 year0 0
base year
Among the rather late adopters of a stabilisation goal, Sweden (Fig. 7) showed
even 6% lower CO2 emission levels in 2000 than in 1990. In November 2001,
the Swedish government presented the Government Bill of The Swedish Cli-
mate Strategy based on recommendations of the Climate Change Commis-
283
sion, and it aimed to reduce GHG emission by 4% in 2010 compared to 1990

levels. Most strikingly and in contrast to the announcements of previous
Swedish governments and the recommendations of the Parliamentary Com-
mission on Flexible Mechanisms, the Bill states: This aim is to be achieved
without any compensation for uptake in carbon sinks or by the use of Flexible
Mechanisms (Summary Gov. Bill 2001/02:55: 2). It legitimates this substantial
unilateral commitment (ibid.) in the following manner: Other countries
have also announced stricter targets than they are legally committed to under
the Kyoto protocol and the agreement within the EU (ibid.). Progress on tar-
gets will be evaluated in 2004 where adjustments will be made as needed, in-
cluding the utilisation of the flexible mechanisms.
Critical voices in Sweden do criticize this approach as legislation which re-
flects a political driven domestic agenda which appears short-sighted and
seems unlikely to be sustainable or desirable as the trends do suggest that
achieving the target would be difficult and costly by domestic measures alone
(Hodes & Johnson Francis X 2002: 62). Others add that the Swedish unilateral-
ism is not only costly but also ineffective for a small country as it sets incen-
tives to other countries to utilize the room created by Swedens voluntary
decision to abstain from a certain amount of carbon emissions granted by the
Kyoto protocol (Hill & Kristrm 2002b: 21)11.
It is interestingly to note that within this early group of industrialized coun-
tries which committed themselves unilaterally to domestic reduction targets
without being forced by any international obligation, there are even countries
which in the subsequent stages of the regime formation process strongly op-
posed the domestic approach pushed by the EU. Already during the interna-
tional negotiations which led to the Kyoto protocol, they rather favoured the
utilisation of JI-measures and other flexible mechanisms to buy emission
credits abroad as well as the inclusion of sinks for example Norway, Austra-
lia, Canada, Japan and New Zealand, all members of the informal JUSCANZ
group led by the USA.
11
This argumentation reflects the classical argument that unilateral action to address
a problem of common goods would reduce marginal benefits of actions of the oth-
ers or in other words induce free rider behaviour (see for example Hoel 1991;
Hill & Kristrm 2002a).
284
Canada
Canada was an early pusher for a multilateral management of the climate
change issue. While Canadian scientific research in atmospheric issues in-
cluding global warming had developed rapidly since the 1950s, their warnings
and recommendations gained only little public and political interest at the
domestic level until the late 1970s. In contrast, Canadian scientists or scientifi-
cally trained officials were active in pushing WMO activities to advance the
climate change agenda internationally e.g. as organizers of the First World
Climate Conference in Geneva 1979 convened by the WMO and as chair of the
subsequent Villach Conference in 1980. Governmental bodies were also in-
volved in these initial efforts as for example the Atmospheric Environment
Service (AES) as a part of the environment ministry headed by an assistant
deputy minister responsible for all research concerning atmospheric issues.
Following a suggestion of the AES, in the mid-1980s the Canadian Environ-
ment Minister announced to host a major conference on global atmospheric
change. The Toronto Conference which took place in June 1988 originally
intended to consider several forms of atmospheric change but became domi-
nated by the climate change issue, mainly due to the situational factor of an
extreme drought and heat wave at the North American continent in this
summer. Though not an official international conference, additionally to sci-
entists and NGOs also representatives of about a dozen governments attended.
The signal effect of the target recommended in the final conference statement
have been already mentioned. In Canada, it marked a starting point of increas-
ing political attention. In late 1988, the energy minister formed a task force to
review the Toronto target and commissioned a study to assess the cost of
meeting it. While a preliminary draft of this study suggested that the Toronto
target would be achievable even with net savings, the revised official study
later found substantial costs (Parson et al. 2001:242). By pointing to the costs
estimated in the revised study, Canada at that time deferred to adopt a na-
tional reduction target. Only a couple of months later the Canadian environ-
ment minister announced at the Bergen conference in May 1990 that Canada
would stabilize CO2 emissions by 2000 at current levels.
According to observers, this announcement was made in order to destroy ru-
mours that Canada would support the US position in opposing the European
fixed target and timetable approach (Parson et al. 2001: 246). The subsequent
environment minister had to develop a more sophisticated position during
intense and conflictual consultations and a draft of the National Action Strat-
285
egy on Global Warming was released by the Canadian Council of Ministers of

the Environment in November 1990 for Geneva Second World Climate Con-
ference. At this conference, the environment minister committed Canada to
stabilize emissions of all GHG at 1988 levels by 2000. In the draft action plan
the stabilization target was added by four principles which should guide fur-
ther greenhouse gas commitments including that Canada would not act uni-
laterally and commitments must be comprehensive across all GHG and sinks.
The official comprehensive environment strategy, the Green Plan released
later in December 1990, restated the stabilisation target of GHG and explicitly
referred emission reductions to net emissions reductions (i.e. including the
effects of sinks), which according to the projections then were estimated to be
nearly zero (Parson et al: 2000 footnote 56). Both of these amendments to the
initial announcement made at the Bergen Conference, which was a much
more environmentally aggressive position than that of the USA, exhibit simi-
larities to the so called comprehensive approach favoured by the US govern-
ment (Fisher-Vanden 1997). Nevertheless, Canada missed its stabilisation tar-
get by a wide margin with no change in trend in sight (Fig. 8).
Fig. 8: GHG emissions/targets in Canada

kt CO2
( i l t) Canada Source: UN-FCCC 2002
800000
119 120
118
115 116
111 111 112
700000 108 100 99
96
117 104
101 102 112
100 99 130 117
128 124 128
126
600000 124
100 105 129
100 99 121
129 122
125 94
100 107 112
500000 104
Goal set in 1990:

400000
GHG 2000 = GHG 1990
300000 122 122

117 120
109 111 114
104 106
100 98 101 101
200000 SF6
PFC
HFC
100000 N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0base0 year0 0
base year
286
Japan
Japan was a latecomer in addressing global environmental risk. This seems to
be quite surprising as Japan was one of the most successful countries imple-
menting air pollution control measures and improving energy efficiency
(Schreurs 2001). It was not until the late 1980s that the global risk of climate
change gained more attention among Japanese scientists, the NGO commu-
nity and politicians. In most of the other countries non-state actors as scien-
tists and NGOs were the main actors in pushing for political responses to the
growing threat of climate change. Not so in Japan. In part this is explained by
the overwhelming improvements in the quality of the environment pressured
by citizen organisations, and local governments which were achieved by the
national government in the 1970s and 1980s. Yet, the globalization of these
transboundary environmental issues reanimated Japanese environment
movement and stimulated politicians to respond not only for environmental
reasons. The greening of politicians was mainly forced by political considera-
tions that global environmental issues might become the suitable area to play
a more active role in international relations (Schreurs 2001: 201).
Consequently, a domestic system was gradually established: in May 1989, the
Council of Ministers for Global Environment Conservation was established. In
July 1989, the Director General of the Environment Agency was appointed by
the Prime Minister as minister in charge of global environmental issues
against strong opposition of the Ministry for International Trade and Industry
and the Ministry of Foreign Affairs.
The Noordwijk ministerial conference in 1989, where Japan still resisted an
international CO2 stabilization target together with the USA, the Soviet Union
and China, introduced the plan for a second World Climate Conference to be
held on October 1990 in Geneva. It was quite clear that Japan had to present a
kind of plan how to deal with climate change. The domestic debate on re-
sponse options was mainly shaped by the Ministry of International Trade and
Industry (MITI) and the Environment Agency. Whereas the latter backed the
idea of a stabilisation target, as it was demanded by the EU, the former re-
jected such a fixed short term target for economic considerations and for con-
cerns related to the divergent positions regarding the stabilisation target be-
tween the EU and the USA. Yet, the compromise between the divergent posi-
tions within Japanese government became possible only because the Envi-
ronment Agency was supported by other important ministries as for example
the Ministry of Foreign Affairs and the governing party. The Liberal Democ-
287
rats were keen on having a CO2 stabilisation target to bring to Geneva

(Schreurs 2001: 203). Hence, one week before the Geneva conference on 23
October 1990 the Japanese Council of Ministers adopted the Action Program
to Arrest Global Warming. This Program bundled the divergent positions on
the fixed-target approach as it stated two goals: first, to stabilize per capita
emissions of CO2 at the 1990 level in 2000 (MITI position) and, second, to
undertake efforts to stabilize total amount of CO2 roughly at the 1990 level in
2000 (Environment Agency position) (IEA 1992: 78; Schreurs 2001: 203).
Although Japan already in the beginning of the 1990s favoured Joint Imple-
mentation measures it still intended to focus on domestic abatement meas-
ures at that time: Japan () does not intend to include emission reductions
from joint implementation in the calculation of total greenhouse gas emis-
sions under current commitments. (IEA 1994: 108).
Fig. 9: GHG emissions/targets in Japan

Japan Source: UN-FCCC 2002
1400000 114 114
112 112 113 112
110 110
106
102 104 105 87 94 88
100 101 101 101 101 92 89 102 85 83 87 79
97 94 87 81
1200000 99 99 99
100 99 99
100 100
94
1000000
800000
Goal set in 1990:

108 110 111 109 110 108 111 CO2 2000 = CO2 1990
600000 102
107 106
100 101 101
400000 SF6
PFC
HFC
200000 N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0 base
0 year
0 0
2005 base year
2010
In following the successful course of action of the 1970 air pollution policies
which made Japan the worlds most energy efficient country and leading pro-
ducer of pollution control technology, the government defined the climate
change challenge mainly as one of technology development. It began to dem-
onstrate internationally the desire to become a leader in technology efforts to
288
address global warming. Yet, it became clear that even with its strong techno-
logical capabilities emissions would rise and it would be difficult to meet the
domestic stabilisation target. Thus, in its first Communication to the
UNFCCC the Environment Agency stated that the second part of the domestic
target the stabilisation of total amount of CO2 would require additional
measures. The in-depth-review of the first communication even stated that
Japan would have problems to even meet the per capita stabilisation target.
Nevertheless, Japan did not officially abolish its target, although the problems
to meet it were repeatedly mentioned and emissions proceeded to grow (Fig. 9).
Australia
Australia adopted a national interim planning target on 11 October in 1990,
just before the second World Climate Conference (29.10.-07.11.1990). This tar-
get committed the government to stabilise Greenhouse gas emission to 1988
levels by 2000 and to reduce these emissions by 20% until 2005. Yet, the target
was added by the caveat that no measures will be adopted which have negative
impacts on national competitiveness (IEA 1992: 37). This policy caveat reflects
contradictory policy goals already obvious at that time. In the early 1980s
shortly before Australian scientists gained more public and political attention
for their warnings concerning climate change and issue related institutions
were set up at state and federal government level large state government
investments in coal power plants contributed e.g. to a more than four-fold
increase in aluminium production (Hoerner & Muller 1996).
Australia with its very energy intensive economy and being the worlds largest
exporter of coal and third largest of aluminium seemed to be a very unlikely
early adopter of ambitious national reduction targets. However, it did due to
the international momentum combined with increased credibility of concerns
expressed by the domestic scientific and NGO-community (Bulkeley 2000: 38).
Nevertheless, government failed to implement measures foreseen in the Na-
tional Greenhouse Response strategy (1992). In 1994 it became clear that Aus-
tralia would not achieve any national or international commitments publicly
made12. Thus, the Federal Government adopted a more hesitant and cautious
attitude in the international negotiation process and aligned itself with the
JUSCAANZ group, opposing further domestic commitments (Taplin & Yu X.
2000). At the domestic level in 1996 a new government took power, which
12
Critical discussion on reasons for failure see Hamilton 2000a; Diesendorf 2000.
289
immediately wound back or abolished several of the already meagre federal

programs aimed at reducing emission. (Hamilton 2000a: 67). Among the few
countries which adopted both goals, Australia (Fig. 10) showed the most disap-
pointing results in achieving the goals. Emissions have grown with an increas-
ing pace, resulting in 19% higher GHG and 26% higher CO2 levels by the end
of the decade. Incidentally, the emission target which Australia accepted in
Kyoto (+8% compared to 1990) was a kind of stabilisation goal, but now with
1997 as base year, the year of the Kyoto protocol, when Australian GHG emis-
sions had already grown by 8% compared to 1990.
Fig. 10: GHG emissions/targets in Australia

Australia
Source: UN-FCCC 2002
120 122 Goals according to Kerstin Tews (FFU)
119
117
114
500000 148
107
109
131
140 144 108
105 124
100 101 101 102 118
100 111
110
101 105 108 102 102
100 102 102
400000 100
100
99
97
98
98 96
100 99 99
300000
Goals set in 1990:
GHG 2000 = GHG 1988
GHG 2005 = GHG 1988 minus 20%
200000
124 126 127 129
120
112 115
101 102 103 105 108 SF6
100
PFC
100000 HFC
N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0 base
0 year
0 0
2005 base year
2010
New Zealand
New Zealands climate policy formation process started in 1988 with the estab-
lishment of New Zealands Climate Change Program a framework compris-
ing four expert working groups (facts on climate change, impacts, policy re-
sponse and Maori matters) coordinated by the visionary and entrepreneurial
Environmental Minister, Geoffrey Palmer. Climate awareness was mainly
pushed by New Zealands scientific community which was strongly cooperat-
ing with Australian scientists (Basher 2000; Hamilton 2000b). On the other
290
hand international norm pressure to respond nationally to a high ranking

global issue gave impetus to express national willingness. Similar to Japan and
Australia, New Zealands target was announced by both the governing Labour
and the opposing National Party shortly before the Second World Climate
Conference in 1990. Prior to the governments election in October 1990, the
National Party was even forced by environmentalists to follow suit the exam-
ple of the governing Labour Party and to adopt a target. They argued that
government officials would be attending the Ministerial level international
meeting[starting two days after election] without a climate policy should the
National party come to power. Accordingly, it too adopted a 20% reduction
target (Hamilton 2000b: 147). Thus, domestic scientific studies and in-
creased public concerns13, international momentum and party competition
brought about the consensual national target to cut CO2 by 20% by 2005.
Since New Zealand is one of the very few OECD countries where energy inten-
sity increased markedly in the 1980s and early 1990s and where conditions for
producing energy from renewables are favourable, many scientist and envi-
ronmentalists hoped that the aim was achievable or even not ambitious
enough, especially due to the feasibility of no regret measures in increasing
energy efficiency. However already in 1991, first doubts about the willingness
of the government to reach the target arose. In the CO2-Reduction Plan
adopted in July 1992 only few concrete actions were included. The disclosure
of interdepartmental correspondence revealed that the Treasury blocked the
funding of further climate change measure (Hamilton 2000b: 153). A power
crisis in 1992 forced New Zealands energy consumers to cut down on energy
consumption what induced the main state-owned Energy Company to com-
plain to the Ministry about the adversely effects on the corporations revenues
(ibid.). The Parliamentary Commissioner for Environment conducted a com-
prehensive study with recommendations for energy restructuring and effi-
ciency improvements the report was ignored by the Energy Minister. A low
Level Carbon Charge was proposed in 1994 within a package of climate
change measures. The proposal failed not only due to resistance from industry
but also to strong opposition from within government. Policy decisions to
build new gas power plants were estimated to increase emissions additional to
13
Not at least influenced by the indigenous Maori having close linkages to the South
Pacific neighbours making New Zealand sensitive against the concerns of the
Small Island States (Basher 2000:136) .
291
the projected increases in a business as usual scenario. These decisions were

legitimated by utilizing the net emission approach meaning the inclusion of
sinks which would allow the achievement of the stabilisation goal.
At Kyoto, New Zealand was strongly opposing any commitment without the
inclusion of sinks and finally was granted a zero reduction target. The domi-
nating governments ideology concerning climate change policy from 1994 at
the latest, proclaimed a minimal inference in the market and if actions are
required only with the total lowest cost to society (Gillespie 2000).
Fig. 11: GHG emissions/targets in New Zealand

New Zealand 120
112
70000 110 109
107
105 128
103 103 104 125
100 101 119
116
112 114
60000 111
112
101 104 108 100
100 100
50000
108
Goal set in 1990:
108
106 CO2 2005 = CO2 1990 minus 20%
102 104
103 103 Goal set in 1993 (tacitly abolished 1994-97):
40000 98 100 101 102
100 100 CO2 2000 = CO2 1990 (maybe minus 20%)
30000
20000
131 134
119 120 122 SF6
109 107 107 107 111 114
100 102
PFC
10000 HFC
N2O
CH4
0 0 0
CO2
0 0 0 0 0 0 0 0
KYOTO-goal * TOTAL base year
base year 1995 2000 2005
EC commitment * TOTAL2010
base year
Among the countries which have tried to meet the Toronto goal of a 20% de-
crease in CO2 emissions by 2005, New Zealand (Fig. 11) fared worst with a 22%
increase by 2000 and no change in trend in sight. A target restricted on CO2
emissions does not make much sense in New Zealand anyhow, because it is
the only country where CO2 is responsible for less than half of total GHG
emissions.
One of the core problem as stated by scientists, that the response options of
increased energy efficiencies and renewable technology remain fundamen-
tally restrained by an overall pricing system which makes nearly all forms of
292
NZs energy comparatively cheap (Gillespie 2000: 185) wasnt approached by

the government due to a lack of political will in market intervention and the
failure of environmentalists to use policy windows during the energy crisis in
1992 to mobilise support among the society. It is unclear, whether New Zea-
lands government has officially abolished the domestic target. However, in
1993 the cabinet adopted the less ambitious stabilisation target and redefined
the 20% cut of CO2 until 2005 as the ultimate objective, subject to various con-
ditions. At the Kyoto negotiation at the latest, the domestic target can be per-
ceived as tacitly abandoned by government.
USA
Despite early efforts and a dominance in climate change research and assess-
ment, the United States have been relatively hesitant in taking political ac-
tions. Efforts to coordinate national climate research programs started already
under the Carter Administration in the 1970s and prompted the adoption of
the National Climate Program Act in 1978, which increased the level of re-
search funding and established the National Climate Program Office which
was in charge with organising all federally-funded climate research (Fisher-
Vanden 1997). Under the Reagan Administration the situation changed, previ-
ous federal decisions on research funding were perceived to be too excessive.
Policy climate changed to an already existing national trend towards more
conservative views including the desire for less government and for industry
deregulation (ibid.). The level of certainty concerning the climate problem was
perceived by key politicians as too vague to move the issue further and to de-
velop policy options. The discovery of the ozone hole, the increasing interna-
tional policy response to these atmospheric global risks combined with a se-
vere drought and heat waves in summer 1988 alarmed not only the American
public but also the U.S. government. Presidential Candidate George Bush
promised the nation in the election campaign to bring a White House effect
to bear in the battle against global warming. As president he even called at
international meetings for common efforts to limit emissions and to create a
framework convention on climate change (Clark & Dickson 2001: 270).
These and further announcements finally awoke industrial and business in-
terests to the issue they had ignored so far. They formed associations to pre-
vent uneconomic climate legislation and criticized the scientific basis of
anthropogenic climate change. They found open ears in the White House: In
an effort to explore other options, the Bush Administration requested the
Department of Justice (DOJ) to propose recommendations on the type of cli-
293
mate policy it should advocate. In 1991 the DOJ presented the Comprehensive
Approach to Addressing Potential Climate Change. Specific features of this
approach were that no specific policy actions were recommended, instead a
bottom-up approach of no regret measures was proposed, what was in conflict
with the approach chosen by most of the other countries (top-down in favour
of targets and timetables); all greenhouse gases and all sources and sinks had
to be considered when deciding policies; and the idea of establishing a trad-
able permit market to achieve lower cost emission reductions was promoted
(Fisher-Vanden 1997). This approach to refuse any commitment to specific
targets and timetables became the official American position at negotiations
for the Climate Convention.
Fig. 12: GHG emissions/targets in the USA

United States of America
115
112 112 113
7000000 110 111
105 106 108
103 109 106 106 Goals according to Kerstin Tews (FFU)
100 101 111 110
99 111
111 109 96 93
6000000 104
104
96 95 94 93
100 101 99 98
100 101
99
100 101
100
5000000
4000000 Goal set in 1993:

GHG 2000 = GHG 1990
3000000 117 115 116

110 112 112 113
103 105 106
100 99 101
2000000 SF6
PFC
HFC
1000000 N2O
CH4
CO2
0 0 0 KYOTO-goal
0 0 0 * TOTAL
0 0 base
0 year
0 0
2005 base year
2010
Although concerned as well about the political and economic cost, the Clinton
administration was more ambitious with reducing emissions domestically.
Yet, it was concerned about the political willingness to commit to actions.
Shortly after taking office, Clinton proposed an energy tax (BTU-tax) to find
synergies between his own policy goal to reduce federal deficit and Vice presi-
dent Gores environment agenda. It was perceived as a kind of testing the pub-
lics willingness to bear climate actions (Fisher-Vanden 1997). According to
294
some observers they failed, mainly due to the concessions they made too early
to the opposing business, which did not soften the political restrictions to
adopt the tax, but instead made business lobbying even more demanding and
aggressive. Political mismanagement to mobilize a supportive actor coalition
both among pro-environmental senators and the environmental NGOs may
have caused the failure of this proposal (Hoerner & Muller 1996). Further-
more, a political climate characterised by the publics animosity against state
intervention and taxes in general has hampered fiscal measures like that
(Fisher-Vanden 1997).
In 1993, the Clinton Administration adopted its Climate Change Action Plan
and submitted it as required under the UNFCCC (article 4) to the secretariat. It
mainly contained the extension of existing programs and voluntary measures
undertaken by US business. The plan aimed at stabilizing GHG emissions at
1990 levels by 2000 and the US claim to achieve its target for the year 2000
with domestic measures alone, but has not excluded the possibility that some
joint implementation projects could be considered in meeting the domestic
commitments if it later appears that the target will not be met. (IEA 2004: 175).
The climate change issue disappeared quite quickly from the political agenda.
It began to peak again as the climate regime approached the negotiations for a
binding protocol. Due to concessions mainly made by the EU concerning
the incorporation of six (instead of three) greenhouse gases, the inclusion of
sinks, the use of multi-year instead of single-year targets, the incorporation of
the flexible mechanisms and the EUs renunciation to cap the use of them
enabled the US previously strongly opposing to binding targets and timeta-
bles to sign the protocol and commit to cut emissions by 7%. The US are
perceived to be the most decisive player in shaping the protocol (Agrawala &
Andresen 2001; Hovi et al. 2003). Yet, in 2001 President Bush Jr., who in the
election campaign in September 2000 still tried to outgun his environmental
opponent Gore with the announcement that he would regulate carbon dioxide
instead of only proposing voluntary measures, rejected a ratification of the
Kyoto Protocol with the statement that he would not accept any plan that will
harm the national economy and workers welfare.14 During all these debates in
the 1990s, emissions have risen continually (Fig. 12), GHG by 13% and CO2 by
16% until 2002. If the USA would ratify the Kyoto protocol now and would try
14
For some comprehensive analyses on US climate policy evolution see Agrawala &
Andresen 2001, Fisher-Vanden 1997, Clark & Dickson 2001.
295
to achieve its goal with domestic measures alone, a reduction in emissions by

some 20% of the current level would be necessary in the remaining few years.
3 Conclusion
The first round of medium-term targets in climate change policy was perfectly
voluntary but still comprehensive: Almost all industrial countries set one or
more targets for national CO2 or GHG emission levels in 2000-2005 during
the first half of the 1990s. But this first round ended with many misses15, often
by a wide margin, and only a few hits, which were probably all by chance:
Hardly a country showed a change in its emission trend which seems to be
due to successful climate change policies. In many countries, trends were
worse than expected in business-as-usual scenarios before, since the decreases
in emission intensities (emissions per unit of GDP) as results of (among oth-
ers) the oil crises and the growth of nuclear power in some countries during
the 1980s slowed down substantially in the 1990s (IEA 2004).
How is this total failure to achieve the self-imposed goals to be understood in
terms of their effectiveness and what lessons can be drawn for the target-
setting process in the future?
The use of goals in public discourses may serve quite distinct purposes. First
and foremost goals set signals. Yet these signals can be instrumental or sym-
bolic. On the one hand, goals are instruments to induce awareness, learning
and guide policy development to manage the problem at hand. On the other
hand, goals are symbols for the adopting actors to gain very distinct resources
soft resources which might be decisive especially in competitive situations.
The announcement of goals often aims at gaining both political legitimacy
within ones own society and reputation within the international community
of states.
Concerning their function as instruments in environmental governance we
defined three effectiveness criteria or functions of goals: Environmental effec-
15
The targets of the second round of medium-term goals were negotiated in Kyoto
and subsequently in the EU. They do not seem to fare better: The USA and Australia
have already officially abandoned their goals and will not ratify the Kyoto protocol, a
lot of other countries plan to fulfil their Kyoto commitments by the so-called flexi-
ble mechanisms, i.e. by helping or recompensing other countries for over-
achievements instead of achieving the national target on their own territory.
296
tiveness in the sense of goal achievement, the stimulation of additional actors

both at the international as well as the domestic level and the inducement of
further policy responses to manage the problem. However, the question arises:
whether there is a varying relevance of the distinct governance functions of
environmental goals subject to distinct stages of the issue development
process and according to that
whether the quality of goals has to be adapted to the distinct challenges the
stages of the issue evolution pose in order be effective?
In short, it can be assumed, as targets do frame the issue evolution process,
that the stage of the issue evolution frames what kind of targets might be
needed.
At the beginning of politically dealing with climate change, countries volun-
tarily committed to reduce greenhouse gases in order to express responsibility
and willingness to set examples to be followed by others and/or to respond to
an emerging international norm. These goal setting processes were extremely
pushed by scientific and NGO actor networks. Dominant political actors were
environment ministers both at the international as well as the national level.
These initial activities aimed at engaging additional and new actors and coun-
tries in risk perception and management. Yet, once on the policy agenda, these
domestic policy ambitions were increasingly challenged by those domestic
actors who were activated by the initial target settings where they hadnt been
involved. Thus, all of the national target-setting processes induced a sort of
learning, e.g. awareness raising among additional actors and a partly new defi-
nition of the problem which was added by conflicts over the political feasibil-
ity of mitigation measures. Yet, setting signals in order to raise awareness and
to engage new actors might be relevant when a problem is new. But is it suffi-
cient when the issue evolves?
The risk management has to proceed and so has the quality of targets if they
are meant as policy instruments which should guide or alter social actions.
Targets in later stages of the issue evolvement process have to have a more
sophisticated quality as they have to be based on a broader societal consensus
about what is required (ecological effectiveness), achievable in the short, me-
dium or long term (political feasibility) to costs that are tolerable for the main
actors (cost effectiveness). As such they may serve as planning instruments.
The national goal-settings of the early adopters were effective in terms of their
signal effect to other countries to keep pace with the emerging trend. Thus,
297
the approach of some nation states to go ahead with unilaterally announcing

targets in order to influence perceptions of other countries about what is pos-
sible and desirable was successful in the early phase of the issue evolution.
They performed a type of leadership which is distinct from other types which
refer directly to the international level (Young 1991)16 insofar as it consists of
demonstrative national front runner policy. In contrast to structural leader-
ship which heavily relies on asymmetric power relations this type does very
much depend on a certain degree of attribution by others. Soft factors as repu-
tation and credibility play an important role. In literature it sometimes is
mentioned as environmental leadership (Andersson & Mol 2002: 50) or di-
rectional leadership (Gupta & Ringius 2001: 282) or national pioneer policy17
(Tews 2004).In the current phase of the climate change issue evolution i.e. a
certain threat of failure of the Kyoto-Protocol coming into force and a neces-
sity to negotiate commitments and/or new policy options for the post-Kyoto-
period new impetus from pioneers is required and indeed it is even
claimed by some countries to be a leader. Yet, it has become much more diffi-
cult to be accepted as a pioneer than in the earlier period. Now, not only the
level of ambition but increasingly the performance is crucial to gain legiti-
macy for such leadership. Diffusion effects of pioneer behaviour as they were
observed in the early 1990s are much more conditioned today. The level of
domestic success restricts the credibility and authority to call upon others
for example transition countries or developing countries to become more
active and committed partners in the international climate change regime.
Thus, the level of domestic ambitions alone will not suffice to encourage other
countries to follow domestic targets have to prove their environmental ef-
fects too.
Yet, in the light of the emission developments measured at the end of the 20th
century these targets were environmentally not effective as hardly a country
16
Young made a distinction between structural, entrepreneurial and intellectual lead-
ership all refer to the international regime formation process but base on distinct
sources: power for structural leadership, diplomatic skills as a broker for entrepre-
neurial leadership and the production and use of innovative ideas for intellectual
leadership.
17
Both of the other terms come quite close to our notion of national pioneer policy.
From a common understanding, a pioneer is someone who paves the way and pre-
pares others to follow. Therefore, we build the pioneer concept on two pillars: a)
The capacity to produce innovative policies how to deal with a problem, and b) the
capability to stimulate others to follow.
298
reached its domestic target. However, this is not the point which raises the
most concerns. Instead, the respectability of targets as policy instruments
might become questionable due to the fact that only very few countries did
actively reflect that their targets set at the beginning of the 1990s were far from
being realistic in later stages of the issue evolution. Issues like cost effective-
ness entered the public debate on climate change policies and dominated the
discussion on feasibility assessments, but the targets stayed untouched and
partly unconsidered in these debates. Most of the countries tacitly substituted
their national target by the sometimes less ambitious Kyoto commitments.
Only few governments openly reflected over prospective or factual non-
achievement of their own ambitions, as for example Japan or the Netherlands.
The stickiness of goals is a well-known empirical phenomenon reflected in
theories of learning (Levy et al. 2001) but, a stickiness of policy goals might
seriously threat the image of these instruments and the image of those adopt-
ing these instruments. When goals are not adjusted in the light of new knowl-
edge which will probably occur when new actors start to shape the problem
definition (one of the effectiveness criteria) they will not contribute any
longer to a better risk management. As Martin Jnicke puts it: The approach
of a target-oriented policy allows for target deviation, yet it requires the disclo-
sure of reasons for deviation. (Jnicke 2003, authors translation into English).
Yet, forgetting about the own ambitions sets new signals which do threat the
overall credibility of environmental targets as policy instruments.
In sum, domestic emission targets did play a role in an issue area with global
dimensions. Their effects in stimulating countries to keep pace are obvious, at
least in stimulating countries to set national emission targets themselves.
However, in the current phase of the evolvement of the climate change issue,
domestic targets might stimulate others both within and beyond national
jurisdiction to follow only when a certain degree of environmental effective-
ness proves the credibility of the ambitions of nation states.
References
Agrawala, Shardul & Andresen, Steinar (2001): US Climate Policy: Evolution and Future
Prospects. Energy & Environment 12 (2-3): 117-38.
Andersson, Magnus & Mol, Arthur P. J. (2002): The Netherlands in the UNFCCC Proc-
ess - Leadership between Ambition and Reality. International Environmental
Agreements: Politics, Law and Economics (2): 49-68.
299
Andresen, Steinar & Butenschn, Siri Hals (2001): Norwegian Climate Policy: From
Pusher to Laggard. International Environmental Agreements: Politics, Law and
Economics (1): 337-56.
Andresen, Steinar, Kolshus, Hans H. & Torvanger, Asbjrn (2002): The feasibility of
ambitious climate agreements. Norway as an early test case. CICERO Working Pa-
per 2002:03, Oslo. Center for International Climate and Environmental Research.
Basher, Reid E. (2000): The Impact of Climate Change on New Zealand. In: Alexander
Gillespie & William C. G. Burns (Hg.), Climate Change in the South Pacific: Im-
pacts and Responses in Australia, New Zealand, and Small Island States. Dordrecht,
Boston, London. Kluwer Academic Publishers, 121 - 142.
Becker, Jens, Hartmann, Dorothea M., Huth, Susanne & Mhle, Marion (2001): Diffusi-
on und Globalisierung. Migration, Klimawandel und Aids - empirische Befunde.
Wiesbaden. Westdeutscher Verlag.
Boye Olesen, Gunnar (2003): Case Study 31: Integration of Environmental and Sustain-
ability Policy in the Danish Energy Sector. In: European ECO Forum & EEB (Hg.),
Environmental Policy Integration: Theory and Practice in the UNECE Region.
Brussels. EEB, 155 - 161.
Bulkeley, Harriet (2000): The Formation of Australian Climate Change Policy: 1985-
1995. In: Alexander Gillespie & William C. G. Burns (Hg.), Climate Change in the
South Pacific: Impacts and Responses in Australia, New Zealand, and Small Island
States. Dordrecht, Boston, London. Kluwer Academic Publishers, 33 - 50.
Clark, William C. & Dickson, Nancy M. (2001): Civic Science: America's Encounter with
Global Environmental Risks. In: The Social Learning Group (Hg.), Learning to
Manage Global Risks.Volume I. A Comparative History Of Social Responses To
Climate Change, Ozone Depletion and Acid Rain. Cambridge. MIT Press, 259-294.
Diesendorf, Mark (2000): A Critique of the Australian Government's Greenhouse Poli-
cies. In: Alexander Gillespie & William C. G. Burns (Hg.), Climate Change in the
South Pacific: Impacts and Responses in Australia, New Zealand, and Small Island
States. Dordrecht, Boston, London. Kluwer Academic Publishers, 79 - 93.
FCCC/IDR.3/AUT (2003): AUSTRIA. Report on the in-depth review of the third na-
tional communication of Austria.
Fisher-Vanden, Karen (1997): International Policy Instrument Prominence in the Cli-
mate Change Debate: A Case Study of the United States. ENPR Discussion Paper E-
97-06, Kennedy School of Government, Harvard University.
Gillespie, Alexander (2000): New Zealand and the Climate Change Debate: 1995-1998.
In: Alexander Gillespie & William C. G. Burns (Hg.), Climate Change in the South
Pacific: Impacts and Responses in Australia, New Zealand, and Small Island States.
Dordrecht, Boston, London. Kluwer Academic Publishers, 165 - 187.
Gupta, Joyeeta & Ringius, Lasse (2001): The EU's Climate Leadership: Reconsiling Am-
bition and Reality. International Environmental Agreements: Politics, Law and
Economics (1): 281-99.
Hamilton, Clive (2000a): Climate Change Policies in Australia. In: Alexander Gillespie
& William C. G. Burns (Hg.), Climate Change in the South Pacific: Impacts and Re-
sponses in Australia, New Zealand, and Small Island States. Dordrecht, Boston,
London. Kluwer Academic Publishers, 51 - 77.
Hamilton, Kirsty (2000b): New Zealand Climate Policy Between 1990 and 1996: A
Greenpeace Perspective. In: Alexander Gillespie & William C. G. Burns (Hg.), Cli-
mate Change in the South Pacific: Impacts and Responses in Australia, New Zea-
land, and Small Island States. Dordrecht, Boston, London. Kluwer Academic Pub-
lishers, 143 - 163.
300
Hill, Martin & Kristrm, Bengt (2002a): Effects on the Swedish Economy of Unilateral
Climate Policy. Mimeo, 11. January, Dept. of Forest Economics, SLU-Ume.
http://www.sekon.slu.se/~bkr/hk1.pdf.
Hill, Martin & Kristrm, Bengt (2002b): Secoral EU-trading and other Climate Policy
Options: Impacts on the Swedish Economy. 7. January, Dept. of Forest Economics,
SLU-Ume. http://www.sekon.slu.se/%7Ebkr/hk2.pdf.
Hodes, Glenn S. & Johnson Francis X (2002): Towards a Next-Generation Swedish
Climate Policy. In: Frank Biermann, Rainer Brohm & Klaus Dingwerth (Hg.), Pro-
ceedings of the 2001 Berlin Conference on the Human Dimension of Global Envi-
ronmental Change "Global Environmental Change and the Nation State". Potsdam.
Potsdam Institute for Colimate Impact Research, 53 - 64.
Hoel, Michael (1991): Global Environmental Problems: The Effects of Unilateral Actions
Taken by One Country. Journal of Environmental Economics and Management
(20): 55-70.
Hoerner, Andrew J. & Muller, Frank (1996): Carbon Taxes for Climate Protection in a
Competitive World. Paper prepared for the Swiss Federal Office for Foreign Eco-
nomic Affairs. Environmental Tax Program of the Center for Global Change, Uni-
versity of Maryland College Park.
Hovi, John, Skodvin, Tora & Andresen, Steinar (2003): The Persistence of the Kyoto
Protocol: Why other Annex I Countries move on without the United States. Global
Environmental Politics 3 (4): 1-23.
IEA (1992): Climate Change Policy Initiatives. Paris. OECD/IEA.
IEA (1994): Climate Change Policy Initiatives. 1994 Update. Volume I. OECD Countries.
Paris. OECD/IEA.
IEA (2003): CO2 Emissions from Fuel Combustion. Paris. OECD/IEA.
IEA (2004): Oil Crisis & Climate Challenges. 30 Years of Energy Use in IEA Countries.
Paris. OECD/IEA.
Jnicke, Martin (2003): Abschied von der Vorreiterrolle. Beim Thema Klimaschutz
breitet sich bei einem Teil der Bundesregierung pltzlich Lustlosigkeit aus. Frank-
furter Rundschau 18.11. 03
Levy, Marc A., Cavender-Bares, Jeannine, Clark, William C., Dinkelmann, Gerda, Nikit-
ina, Elena, Pleune, Ruud & Smith, Heather (2001): Goal and Strategy Formulation
in the Management of Global Environmental Risks. In: The Social Learning Group
(Hg.), Learning to Manage Global Risks.Volume II. A Functional Analysis of Social
Responses to Climate Change, Ozon Depletion, and Acid Rain. Cambridge. MIT
Press, 87 - 113.
Loske, Reinhard (1996): Klimapolitik. Im Spannungsverhltnis von Kurzzeitinteressen
und Langzeiterfordernissen. Marburg.
Michaelowa, Axel (2000): Klimapolitik in Grobritannien - Zufall oder gezieltes Han-
deln? Hamburg. HWWA-Insitut fr Wirtschaftsforschung.
http://www.hwwa.de/Projekte/Forsch_Schwerpunkte/FS/Klimapolitik/PDFDokume
nte/Michaelowa(2000g).pdf.
Minnesma, M. E. (2003): Dutch Climate Policy. A victim of economic growth? Climate
Policy (3): 45 - 56.
Parson, Edward A., with Dobell, Rodney, Fenech, Adam, Munton, Don & Smith,
Heather (2001): Leading while Keeping in Step: Managment of Global Atmospheric
Issues in Canada. In: The Social Learning Group (Hg.), Learning to Manage Global
Risks.Volume I. A Comparative History Of Social Responses To Climate Change,
Ozone Depletion and Acid Rain. Cambridge. MIT Press, 235 - 257.
301
Philibert, Cdric & Pershing, Jonathan (2001): Considering the Options: Climate Tar-
gets for All Countries. Climate Policy (1): 211 - 227.
Schreurs, Miranda A. (2001): Shifting Priorities and Internationalization of Environ-
mental Risk Managment in Japan. In: The Social Learning Group (Hg.), Learning
to Manage Global Risks.Volume I. A Comparative History Of Social Responses To
Climate Change, Ozone Depletion and Acid Rain. Cambridge. MIT Press, 191 - 212.
SRU (1998): Umweltgutachten 1998 des Rates von Sachverstndigen fr Umweltfragen.
Umweltschutz: Erreichtes Sichern - Neue Wege gehen. Kurzfassung. Bonn. BMU.
Taplin, R. & Yu X. (2000): Climate Change Policy Formation in Australia: 1995-1998. In:
Alexander Gillespie & William C. G. Burns (Hg.), Climate Change in the South Pa-
cific: Impacts and Responses in Australia, New Zealand, and Small Island States.
Dordrecht, Boston, London. Kluwer Academic Publishers, 95 - 112.
Tews, Kerstin (2004): Lessons from Diffusion Research or Towards a new Research
Program. Pioneering in Environmental Policy Making. unpublished manuscript/
work in progress.
Tews, Kerstin and Martin Jnicke (eds.) (2005): Die Diffusion umweltpolitischer Inno-
vationen im internationalen System. Wiesbaden. VS Verlag fr Sozialwissenschaf-
ten.
Wille, Joachim (1990): Das Klima will Bonn schtzen, aber das Wachstum nicht brem-
sen. Bundesregierung spielt Vorreiter bei der CO2-Verminderung und schiebt
konkrete Manahmen auf die lange Bank. Frankfurter Rundschau 10.12. 1990
Ziesing, Hans-Joachim (2002): CO2-Emissionen im Jahre 2001: Vom Einsparziel 2005
noch weit entfernt. DIW-Wochenbericht (8/02)
302
Ecological Tax Reform An environmental
policy innovation in an international comparison
LUTZ MEZ
Abstract
The term ecological tax reform (ETR) has been applied to various concepts
which range from individual green taxes or levies to revenue-neutral tax re-
form, where green tax revenues are reducing other taxes. The article analyses
and evaluates the implementation process of the German ETR in a compara-
tive perspective.
After the EU commission's proposal for the introduction of a Union-wide
CO2/energy tax failed at the beginning of the 1990s, Denmark and the Nether-
lands implemented its own national ETR, as Sweden had done before them.
Germany followed in 1999.
This article outlines the progress of the debate on the internalisation of exter-
nal costs by means of ecology taxes and levies. It also traces the emergence of
the first concepts of ETR and describes different forms of ETR, with reference
to the respective concepts and development patterns of the Swedish, Danish
and Dutch ETRs. It concludes with an overview of institutional and instru-
mental innovations that go into, as well as the constitutive elements of ETR.
1 Introduction
Since the late 1970s, the term ecological tax reform (ETR) has been applied to
various concepts of significantly differing content. These range from the in-
troduction of individual green taxes or levies to revenue-neutral tax reform, in
which green tax revenues are used to reduce other taxes.
On 1 April, 1999, the first stage of Germany's ecological tax reform came into
force. This marked the end of a two-decade-long theoretical debate over green
303
Lutz Mez
taxes and the beginning of the practical phase. The further stages of the ETR
have meanwhile taken shape, placing Germany among a group of several
European countries which have undertaken tax reforms of this kind.
After EU member states failed to reach consensus on the EU commission's
proposal for the introduction of a Union-wide CO2/energy tax at the begin-
ning of the 1990s, Denmark and the Netherlands each independently passed
and put into effect its own national ETR, as Sweden had done before them.
Germany's ETR is thus not a novelty, but rather fits within an international
context. This affords the opportunity to analyse and evaluate the implementa-
tion process of the German ETR.
In this comparison there are a number of aspects of ETR that are of interest
from a political science perspective. One is the suitability of ETR as an alterna-
tive for financing public expenditures and easing employment problems in
industrial societies. Another is the potential of ETR to enhance the future
viability of modern industrial societies by markedly reducing environmental
consumption and the use of scarce resources. Further, an international com-
parison sheds light on the constitutive elements of ETR, the extent and role of
institutional and instrumental innovations, and the degree to which regula-
tory complexes and the implementation process themselves can be under-
stood as institutional arrangements.
This paper outlines the progress of the debate, driven primarily by environ-
mental economists, on the internalisation of external costs by means of ecol-
ogy taxes and levies. It also traces the emergence of the first concepts of ETR.
A description follows of different forms of ETR, with reference to the respec-
tive concepts and development patterns of the Swedish, Danish and Dutch
ETRs. Ecological tax reform in Germany was almost twenty years in the mak-
ing. This process and its phases are analysed and assessed here with a view to
the roles of the various parties involved. The paper concludes with an overview
of the institutional and instrumental innovations that go into, as well as the
constitutive elements of ETR.
2 Environmental destruction and internalisation of

external costs
The starting point for the different ETR models is the increasing consump-
tion of scarce resources, as well as damage to and destruction of the environ-
304
Ecological Tax Reform
ment, above all in industrial nations. Up to now, public goods have been used
largely free of charge. Counter to the principle that the party responsible be
liable for the damage, the costs of environmental destruction are generally not
borne by the party causing it. Since Arthur Pigou explored this problem in
"The Economics of Welfare" (1920), various economists have pursued the idea
of the internalisation of external costs that is, accounting for environmental
consumption in prices by means of taxes or levies, so that prices are ecologi-
cally "honest".
The Swiss economists Binswanger, Geissberger and Ginsburg (1979) in the
1970s were the first to develop the concept of ETR, proposing on the one hand
that environmental consumption be made more expensive through levies and
taxes and, on the other, that the increased revenues go to job creation.
Since the 1960s, all of the world's industrial nations have experienced a con-
tinual rise in labour costs, including employment-related taxes, while the cost
of materials and resources has fallen. This has led to companies rationalising
in the area of labour and looking to technical advances to realise savings in the
areas of materials and resources. The new paradigm of protecting the envi-
ronment through energy and green taxes and charting and financing a
course of sustainable development gained momentum internationally in the
mid-1980s. This came about even though oil prices, which began to fall in
1985, and the monopoly-like structures of the energy sector hardly offered
incentive to conserve energy.
The concept of ETR attacks the dilemma at its root. Taxes and levies on re-
source and energy use, as well as on other ecologically damaging patterns of
production and consumption, are introduced in stages. The additional reve-
nue goes first to reducing social security contributions or income taxes. Link-
ing environmental protection and employment incentives in this way, so that
both benefit simultaneously from the change in the tax regime, is referred to
as a double dividend. The pioneering ETR countries have translated this into
practice.
3 ETR in Sweden, Denmark and the Netherlands

Sweden, Denmark and the Netherlands were the first to implement actual
ETRs. In doing so, they altered the tax revenue structure; the proportion of
ecology taxes and levies rose and income taxes fell. At the same time, unem-
305
Lutz Mez
ployment was reduced so dramatically that the labour policies of these coun-
tries have come to be regarded as a "job miracle". For this reason, in the fol-
lowing the most important basic conditions for and experience with the in-
troduction and execution of ETR in these three countries will be outlined.
3.1 Ecological Tax Reform in Sweden
Sweden was the first country to implement an ETR designed to transfer taxes
on labour to energy and environmental consumption. In the general tax re-
form of 1991, new energy taxes were introduced and income taxes simultane-
ously lowered by 30%-50%. Since then all energy sources have been subject to
the normal value added tax rate, a CO2/energy tax and an SO2 tax. Since 1992,
an NOx tax has additionally been levied against large emitters. This first stage
of the tax reform brought about a shift in taxation from labour to ecology
amounting to 4% of the gross domestic product.
Initially, the CO2/energy tax applied equally to households and industry. The
tax rate was set at 250 SEK (28.12 ) per metric ton of CO2 for the first year.
Fuel burned for energy generation as well as biofuels were exempt from the
tax. Combined heat and power (CHP) was given favourable tax conditions and
a kilowatt-hour of electricity was taxed according to the general energy tax
rate. Special regulations were put in effect for a total of 112 energy-intensive
companies.
Prompted by a national economic recession and the failure of the EU to intro-
duce its planned CO2/energy tax, in 1993 Sweden significantly reduced energy
taxes for industry as a whole. The rates for households, however, were raised
to 320 SEK (35.79 ) per metric ton of CO2. In 1995 the rate of the CO2 tax was
tied to the inflation rate. Revenues increased from 8.1 billion SEK in 1991 to 11
billion SEK ( 1.23 billion) in 1995. The government and the Green Tax Com-
mission intend to significantly raise the industry tax rate again, which would
increase tax revenues by 500 million SEK ( 56.24 million) annually. Agree-
ment was reached in 1998 to raise the CO2/energy tax in future faster than the
rate of inflation.
In 1996 revenues from the green tax totalled 52.8 billion SEK ( 5.93 billion).
Energy taxes represent 46 billion SEK ( 5.16 billion), or over 87%, of this
amount.
306
A total of 260 companies in the mineral oil sector are subject to the SO2 tax,
which brings in annual revenues of 200 million SEK ( 22.5 million). Within
just two years, the sulphur content in fuels sank by approx. 40% and emissions
declined by almost 30% from 1989 to 1995.
The operators of fossil fuels-burning power plants pay a nitric oxide tax, the
revenues of which are returned to these companies according to their share of
total electricity generation. This brought about a reduction of specific NOx
emissions from 159 to 103 milligrams per megajoule in the first two years. By
1997 NOx emissions had fallen by 50%.
Sweden has been a pioneer of ETR in regard to other environmental levies as
well. These include a scrapping fee on automobiles, an ecologically friendly
motor vehicle tax, green taxes for domestic flights, a water pollution tax, a tax
on gravel and differentiated waste collection fees, as well as deposits and taxes
on beverage and other product packaging and tires. The implementation of
the ETR met with relatively little resistance, as the new CO2/energy tax was
integrated in a comprehensive tax reform. This "package solution" prevented
opponents of the reform from attacking specific aspects of the CO2/energy tax.
The SO2 tax and NOx tax have had a considerable steering effect. With the new
integrated environmental law passed by the cabinet in 1998 and in force since
1 January, 1999, the regulatory framework for environmental protection in
Sweden has been significantly expanded through over twenty new ordinances.
For example, as a complement to the fiscal instruments, air quality standards
with regard to NOx and SO2 have been established by ordinance.
The package solution of the Swedish ETR can be viewed as an instrumental
innovation. The clear reduction of traditional emissions such as SO2 and NOx
through taxes and levies, as well as the subsequent fixing of this success in
regulation are further noteworthy.
3.2 The ETR in Denmark
Primarily for budgetary reasons, Denmark introduced an energy tax on elec-

tricity and on light and heavy heating oil as early as 1978. Further energy
sources followed: in 1979 a tax on bottled gas and town gas was introduced, in
1982 on coal and in 1996 on natural gas. In 1985 the energy tax was raised dras-
tically in order to stabilise energy policy conditions for investors. The decline
in oil prices on the world market would otherwise have stranded the energy-
307
Lutz Mez
saving investments which were planned or already implemented. Through

this measure, taken by the conservative-centre administration under pressure
from a "green" parliamentary majority, it was also possible to force the eco-
nomically sensible expansion of CHP. Today 50% of Denmark's electrical
power is generated by thermal power plants.
After the introduction of an additional CO2 tax by the conservative-centre
minority government in 1992 to more effectively realise the Danish energy
plan and CO2 reduction obligations, a new phase began. With the introduction
of the CO2 fee energy taxes were modified. Initially only levied against house-
holds, this tax was also applied to industry as of 1993. The tax rate was set in
keeping with the proposal by the EU commission at 100 DKK ( 13.29) per
metric ton of CO2. Industry received a large portion of this tax back in the
form of a rebate.
Following a change of administration from the conservative-centre minority
government to a social-democrat led majority government in 1993, a genuine
ETR was passed. Within five years, the share of green taxes and levies as a part
of total tax revenues was to be increased from 10% to 15% and income taxes
correspondingly reduced. In 1998 revenues from environmental taxes
amounted to 23.5 billion DKK ( 3.12 billion). The energy tax was adjusted in
stages; in the period from 1998 to 2002 it was raised a further 25%. For natural
gas, the increase in the energy tax is set by law as far as 2009, at which point
natural gas is to be taxed at the same rate as heating oil.
As of 1 January, 1996, the CO2 tax was modified for industry. Industrial energy
consumption was divided into three areas:
low-heat processes such as space-heating and hot water,
light processes,
heavy processes.
The rates of taxation in all three areas were set to rise until 2000. In the low-
heat area there were no rate reductions. From 1998 the emission of a metric
ton of CO2 cost, as for private households, 600 DKK ( 79.76). Tax rate reduc-
tions remained in effect for the process energy areas, so long as the companies
and the Danish energy authority reached a reduction agreement. For example,
the tax rate for energy-intensive processes could be reduced to 3 DKK ( 0.40)
per metric ton of CO2 a symbolic level. Revenues from the low-heat area
went to reducing the additional wage costs of industry. Revenues from the
energy process areas were returned to the companies by way of investment
308
subsidies. The subsidy programmes expired in 2000, from which time the CO2
tax revenues have been used exclusively to reduce additional wage costs. Reve-
nues from the CO2 tax grew from 1.5 billion DKK ( 200 million) in 1992 to 4.7
billion DKK ( 620 million) in 2000.
Further subsidy regulations are in place for district heat, decentralised CHP
plants, biofuels and energy conservation. Conservation and information cam-
paigns complement the taxation of energy. In the period from 1994 to 1997, for
example, the market share of energy-saving refrigerators was raised from 42%
to 90% as a result of labelling, continuing training of sales personnel, regional
energy conservation campaigns and a scrapping fee on used appliances
(Jnicke et al. 1998).
Not only is the proactive approach of the political administrative system, but
also the intelligent steering of industrial interests in the direction of energy
management and conservation responsible for the successful execution of the
Danish ETR.
The ecological benefits are visible in the decreased end energy consumption
and even the electricity use in private households, in the development of CHP
and the substitution of coal by natural gas. Additionally, the proportion of
renewable energy sources in primary energy consumption and electricity gen-
eration increased. In industry the CO2 tax has had a significant influence on
decision-making processes and investments in energy conservation (Clasen
1998). The relatively high taxes on energy for space-heating needs have
spurred considerable investment in the reduction of energy use in this area.
Significantly reduced amortisation periods for energy-intensive processes
have played an important role in agreements leading to a tax rate reduction
and financial incentives for investments in conservation. The co-operative
relationship between companies and government authorities has proved an
important condition for success in this regard. State capacities have been ex-
panded considerably through the establishment of corresponding depart-
ments in the national energy ministry and the Danish energy authority.
Denmark serves as an example of how, in addition to the kind of instrumental
innovations carried out in Sweden, institutional innovations in the implemen-
tation process of the ETR play a significant role, and of how negotiations with
industry can spur innovation there, too.
309
Lutz Mez
3.3 ETR in the Netherlands
In the Netherlands, a total of 27 tax and fiscal policy measures in the environ-
mental area were introduced or modified in the period from 1994 to 1998.
Accordingly, green tax revenues increased from 16 billion NLG ( 7.21 billion)
to 24 billion NLG ( 10.84 billion), or 14% of total tax revenues. Energy and
CO2 are taxed in the form of
an ecology tax on fuels and
a regulatory energy tax on electricity, gas and heating oil.
The Dutch ecology tax was introduced in 1988 and replaced various fuel taxes on
emissions, lubricating grease and chemical waste. The new green tax was ap-
plied in equal part to the CO2 and energy content of fuels and was continually
raised. In 1992 the green tax was reformed, rates were raised considerably and
the tax was extended to cover solid waste, ground water and uranium. Revenues
rose from 200 million NLG in 1988 to 2.1 billion NLG ( 0.95 billion) in 1994.
In lieu of the anticipated EU-wide CO2/energy tax, the regulatory energy tax
was introduced in 1996. The tax on gas, electricity and heating oil was in-
creased step by step, whereas small private users and large industrial users
were exempted in the beginning. Annual electricity use of between 800 and
50,000 kWh, as well as annual natural gas consumption between 800 and
170,000 m was taxed. The large consumers were charged a symbolic tax since
1999 and the small consumers are fully included since 2001. In 2000 the rate
per metric ton of CO2 was 66 NLG (approx. 30.68 ). Owners of renewable
power plants are refunded the tax. District heat and gas used in power genera-
tion are also exempt from the energy tax. Due to these special conditions, just
40% of stationary energy use is taxed. Additionally, voluntary agreements on
energy conservation are reached in the industrial sector.
The express aim of the energy tax is a change in consumer behaviour. The
energy tax revenues are returned to households by means of an income tax
reduction and to companies via lower national insurance contributions.
Alongside the energy taxes, the Dutch government levies taxes on uranium,
ground water removal and solid waste. Ecological investments have been eli-
gible for shortened depreciation since 1991. In 1997, for example, over 1 billion
NLG was immediately written off. Further ecology taxes and levies were pro-
posed by the Dutch Green Tax Commission, including a land-use tax (Dutch
Green Tax Commission 1998: 15f).
310
Further steps toward a more ecologically sound tax system are outlined in the
Dutch "3rd National Environmental Policy Plan (NEPP3)", which incorporates
the recommendations of the Green Tax Commission:
As of 1 January, 1999, all ecology taxes are tied to the inflation rate.
The regulatory energy tax is to be raised by 3.4 billion NLG ( 1.53 billion).
Of this amount, 500 million NLG ( 225.48 million) is to go to incentive
programmes for renewable energy sources and energy conservation pro-
grammes, and the remainder to the reduction of other taxes.
The Dutch ETR is noteworthy for the requirements it places on the key play-
ers in climate policy, whereby government regulation relies on mechanisms of
consensus. It is also remarkable for its extensive special conditions, which are
motivated on the one hand by social, and on the other hand by industrial pol-
icy. Nonetheless, considerable ecological benefits are apparent. There is, for
example, in addition to the national environmental plans, a CO2-reduction
plan (presented by the economic minister and parliament in April, 1997), as
well as so-called environmental action plans in industry. The environmental
policy goals of industry are additionally fixed in agreements (covenants)
among business associations. While these require government agreement,
they have led to considerable innovation in, for example, the energy sector.
The competition-neutral form of the tax, its revenue-neutrality and the link-
ing of the ETR to a broader social policy agenda all have contributed to in-
creased public acceptance and decreased industrial resistance in the Nether-
lands. Professional process assistance and a long tradition of agreements with
industry facilitate the implementation of the ETR in this area. Given the coun-
try's size, the amount of support for renewable energy sources and energy
conservation programmes is remarkable.
4 The ETR in Germany

Germany's entry into ETR took place over a very long period. The following,
taking Jungjohann's diploma thesis (1999) as a guide, will briefly describes the
various phases leading up to the ETR and outlines the stances of the various
parties involved.
In the first phase, from 1979 to 1987, the discussion was limited to proposals
for levying individual green taxes. The revenues were to be used to fund envi-
ronmental protection measures and investment in ecological restructuring.
311
Lutz Mez
Along with environmental and other economists, Germany's Social Democ-

ratic and Green parties took part in the debate. The unions and both indus-
trial and environmental associations largely stood on the sidelines. During
this phase, the environmental associations maintained a "command and con-
trol" position, insisting on regulatory instruments of environmental policy. In
contrast, the industrial associations maintained a stance in favour of free-
market instruments and co-operative solutions.
The second phase, 1988 to 1993, can be described as a conceptional phase. In
April 1988, the Heidelberg Umwelt- und Prognoseinstitut published a study
naming 35 individual green taxes with estimated revenues of 210 billion DM
(UPI 1988). This study was Germany's first comprehensive ETR concept, and
the first to include such detailed calculations. Further concepts of this kind
followed, among them proposals from Ernst Ulrich von Weizscker (1988) and
the economists Bergmann and Ewringmann (1989). The Federation of German
Trade Unions (DGB) and other individual unions demanded ten special taxes,
but responded to the idea of an ETR with stances ranging from caution to
rejection. In 1988 the Social-Democratic Party (SPD) declared itself nationally
to be in favour of an overhaul of the finance and tax system in the interest of
environmental and industrial policy. By 1989 all political parties, with the
exception of the Christian Social Union (CSU), had published models for, or
position papers on an ETR. In his inaugural speech in January, 1991, Chancel-
lor Helmut Kohl announced the introduction of a CO2 tax, and a bill was
drafted in the subsequent months by the Ministry of the Environment. How-
ever, the process of German unification brought a temporary halt to the de-
bate on taxes and levies as instruments of environmental protection.
The third phase, 1994 to 1996, was initiated by the German Institute for Eco-
nomic Research (DIW) report, "kosteuer Sackgasse oder Knigsweg?"
(Greenpeace/DIW 1994). It proposed a revenue-neutral primary energy tax on
fossil fuels and electricity. The tax was to rise at an annual rate of 7%, which
would have caused revenues to double in ten years. The revenues were to be
directed back to industry by reducing additional wage costs, and to private
households by means of an "eco-bonus". The DIW report projected a gain of
up to 500,000 jobs as a result. In November 1994, Green Budget Germany pre-
sented its own concept, which echoed the DIW model but for exemptions it
proposed for energy-intensive industries. The two largest environmental asso-
ciations, BUND and NABU, published position papers on ETR in 1995, and the
312
Green Party faction in parliament introduced draft legislation for an energy

tax in May of the same year.
Industry's reaction was swift. In its model, the DIW had calculated the macro-
economic effects of an ETR and determined which industrial sectors would
emerge as winners and losers. Various industrial associations, foremost the
Federation of German Industries, but also the German Chemical Industry
Association, the German Steel Federation and the German Electricity Associa-
tion published position papers against green taxes claiming that unilateral
German ETR would damage the competitiveness of German companies on the
international market.
In April 1995 the majority of industrial associations reached agreement on
specific CO2 reductions. The agreement was amended the following year by
twelve associations to call for absolute reductions in CO2 emissions. The basis
of this arrangement the voluntary commitment of German industry was
propagated by these associations as the royal road of environmental policy. In
return, it was expected of the federal government that the planned heat usage
ordinance feared by industry for its consequences for companies' energy use
would not be put in effect, and that no ETR would be implemented. The
narrow policy view of the industrial associations placed exclusive priority on
future voluntary agreements at the expense of taxes or regulations.
In 1995 the industry representatives Henkel and Strube succeeded in convinc-
ing Chancellor Kohl to step back from federal government plans to introduce
a national CO2/energy tax.
A study published in April 1996 by the Rhine-Westphalian Institute for Eco-
nomic Research (RWI) on the effects of energy taxes on North Rhine-
Westphalia concluded that, on balance, the effect on employment was "not
necessarily positive" (RWI 1996: 23). Since then, the RWI study has been held
up against the DIW model as a countering proposal because the media and
opponents of ETR seized solely on the point that in energy-intensive sectors
up to 400,000 jobs could be lost.
In the lead-up to the 1998 German parliamentary elections, the environmental
associations made a concerted effort to bring ETR into the public debate and
make it an election campaign issue. It was also in this phase that the Green
Party, at their party convention in Magdeburg, agreed on the proposal to raise
the petrol price in steps to 5 DM per litre. The conservative-liberal govern-
ment coalition countered with the proposal to introduce a CO2/energy tax or
313
Lutz Mez
to increase the value added tax on energy. The CDU/CSU faction, however,
agreed on the goal of an internationally co-ordinated, harmonised, competi-
tion- and revenue-neutral energy tax. For the Greens, the main election cam-
paign issue, apart from the phasing-out of nuclear power generation, was the
implementation of an ecologically and socially motivated tax reform. Although
the SPD acknowledged the aims of an ETR in its campaign programme, its
statements on the issue were very reserved.
In their coalition pact of 20 October, 1998, the SPD and the Green Party agreed
on an ecological tax reform that was to be implemented in three steps. The
mineral oil tax on heating oil and natural gas was to be increased in a series of
steps and a tax on electricity introduced. The total revenues were to be used to
reduce additional wage costs. Renewable energy sources were to be exempt
from the tax on electricity and energy-intensive branches of industry were not
to be affected until a Europe-wide harmonisation came into effect.
After the election, the opponents of ETR changed their strategy. Once the
inevitability of an ETR was recognised, their focus shifted to delaying the
process and influencing the form and implementation of the ETR. The first
stage was passed by parliament and the Bundesrat after two hearings of the
parliamentary finance committee and came into force on 1 April, 1999. It
stipulated an increase of 6 Pfennig (3.07 c) per litre in the mineral oil tax on
fuels, 4 Pfennig (2.05 c) per litre on light heating oil and 0.32 Pfennig (0.16 c)
per kilowatt-hour on gas, as well as the introduction of an electricity tax of 2
Pfennig (1.02 c) per kilowatt-hour. The 8.3 billion DM ( 4.24 billion) in ex-
pected revenues for 1999 were almost entirely to go to reducing pension con-
tributions (by 0.8 percent). Due to various special provisions, the first stage
received criticism from all sides. In the draft stage even more extensive special
provisions had been foreseen. Environmental benefit was to be achieved by
means of a market incentive programme to encourage renewable energy
sources. The new programme was launched on 1 September, 1999, with annual
funding of 200 million DM ( 102.26 million). The programme provides for
financing of a total of 1 billion DM ( 510 million) through 2003, for subsidies
and loans to support the development of solar collectors, biomass and biogas
plants, small hydroelectric power stations, heat pumps, energy conservation in
old buildings and other projects.
In summer 1999 the details of the next stages of the ETR were made public.
On 1 January of each year from 2000 to 2003, the petrol tax is to rise by 6
Pfennig (3.07 c) per litre and the tax on electricity by 0.5 Pfennig (0.26 c) per
314
kilowatt-hour. Specifics of the reform include an exemption (later made tem-

porary) from the mineral oil tax for gas and steam power plants and for CHP,
as well as a reduction of the mineral oil tax for diesel fuel for local public
transport. An eco-tax exemption for electricity generated from renewable
sources is slated to come into force at the start of the third stage. Low-sulphur
fuels, required by the EU from 2005, are additionally subsidised. As of Novem-
ber 2001, "low-sulphur" fuels are taxed at a lower rate than conventional fuels.
From January 2003 this will also be the case for "sulphur-free" fuels. Savings of
up to 1.53 cent per litre can be achieved. Advance notice is to be given of this
differentiated tax, so that the new fuel grades can be made available on time in
all regions. With this, the EU standard for 2005 will be met by 2001 and by
2003 significantly exceeded.
5 Evaluation and outlook

The decisive factor in Germany's entry into ETR was not the pressure of eco-
logical problems, but rather the strength of the environmental policy protago-
nists and their line-up in the policy arena, as well as the policy style of the
federal government. Twice the ETR was pushed back just before implementa-
tion. The change in administration altered the conditions for action and the
coalition agreement between the Social Democrats and the Greens opened a
window of opportunity, allowing a decisive step to be made in the direction of
preventive and integrated environmental policy.
Although it did not enter the ETR arena until years after the pioneering policy
changes in Sweden, Denmark and the Netherlands, and later too than Finland
and Norway, Germany can become a motor in the wider EU context, providing
impulses that move the development forward. The other large member states,
Italy, France and Britain, announced tax reform initiatives which were also to
contain ecological components. The pioneering countries are using the Ger-
man ETR in the interest of expanding the reforms in their own countries.
The German ETR is of yet more significance with regard to the leading indus-
trial nations, Japan and the United States, each of which has its own unique
relationship to energy prices and energy taxes. Whereas in resource-poor Ja-
pan, industry and private households for decades have paid significantly
higher prices for electricity and energy than their counterparts in other indus-
trial nations, the Clinton administration was forced to make repeated conces-
sions in its attempt to introduce energy taxes. The resonance and spread of
315
Lutz Mez
such reforms is, however, dependent on whether one of the three internation-
ally leading economic powers is a participant. Thus its introduction of an ETR
regardless of all criticisms of its concrete implementation gives Germany a
role in international and global environmental policy that is not to be under-
estimated.
6 Constitutive elements of ETR and conclusions

A view of the various ecological tax reforms implemented to date reveals the
following constitutive elements:
The aim of ETR is the improvement of the environment and the taxation
of scarce resources.
ETR is revenue-neutral and thus not a source of additional state income.
Green tax revenues go primarily to alleviating problems in the labour factor.
ETR is more than the assessment of an individual tax; e.g., a CO2/energy tax
is part of a total policy package that includes additional taxes on other
emissions, the taxation of resources or waste, as well as a range of further
measures.
The reform is comprehensive and is carried out in stages, whereby rate
increases for the respective taxes are determined over the course of more
than one legislative period.
The social costs of environmental damage are borne by the parties respon-
sible. Differences between various target groups are taken into account.
Consumers and companies feel the effects of their activities and behaviour
on the environment in financial terms. Private households are not treated
as a "cash cow", but pressured to change their behaviour through higher
costs. Private households are accorded a function as multiplier for green
consumption, giving them significant influence in the demand for ecologi-
cally safe products.
The various industrial sectors are given differentiated treatment and inte-
grated in a series of steps by means of a broad policy mix. Especially prob-
lematical sectors are initially exempted or subject to only a symbolic tax.
ETR gives rise to institutional and instrumental innovations that serve the
initiation, steering and controlled acceleration of the process.
In the political science context, the criteria for institutional arrangements are
well-suited to analysing the implementation processes of ETR. An ETR takes
shape out of the basic political conditions of the respective country and is
316
designed to address environmental and employment issues. Especially in

Scandinavia, though also in the Netherlands, the government has played a very
prominent role in introducing and implementing the ETR. Whereas private
households receive differentiated treatment only in the Netherlands, all the
ETRs compared here provide for extensive tax credits and mutual arrange-
ments between government and companies or their associations. The follow-
ing synopsis compares the characteristics of the various ETR models.
The pioneering countries of ecological tax reform make calculated use of di-
verse combinations of measures in their policy mix and "policy packages".
They conduct informational and educational campaigns in concert with the
implementation process. Depending on the given predominant policy style,
the policy mix consists of (voluntary) arrangements, agreements, academic
assistance in the process, financial incentive schemes, and investment grants.
In the cases analysed, even largely symbolic taxes and levies have an impres-
sive guiding effect. It is also of note in this connection that environmental
policy successes achieved with relative speed through fiscal policy instruments
often become standards in the context of comprehensive environmental policy
revisions.
Through innovative combining of methods, the various ETR models analysed
here have contributed to raising environmental awareness in private house-
holds, industry and service. At the same time, the ETR has brought about the
more efficient use of scarce resources and an often considerable improvement
in environmental quality. Environmental and energy management teams cre-
ated to implement and monitor conservation goals have expanded companies'
analytical and logistical capacities. Environmental tax reform has also broad-
ened the governments' capacity to act, as innovative arrangements, new com-
petencies, and departments and institutions are created for the professionali-
sation of the implementation process.
317
Lutz Mez
Sweden Denmark Netherlands Germany

Passage / beginning of implementation
1991 ETR passed 1993, green tax 1988; 1 Apr. 1999
effective 1 Jan. 1994 reform 1992; regulatory
energy tax 1996
Number of stages
multiple multiple multiple 3 or 5
Introduced separately or as policy package
policy package in compre- policy package introduced in steps introduced separately
hensive tax reform
Basis for taxation
t CO2 as energy tax basis; since 1978 electricity and green tax on fuels, mineral oil;
also SO2; since 1992 NOx heating oil; since 1979 energy tax on electricity, light heating oil; gas;
in power plants bottled gas and town gas; gas and heating oil equally; electricity
since 1982 coal; since 1992 uranium
CO2 as part of energy tax;
since 1996 natural gas; SO2
Rates of taxation
CO2 tax in the first stage: highly staggered; 1999: 66 NLG (30.68 ) per 3.07 cent per l fuel; 2.05
250 SEK (28.12 ) per t CO2; since 1998 for heat 600 t CO2 cent per l light heating oil;
since 1993 320 SEK (35.79 ) DKK (79.76 ) per t CO2 0.16 cent per kWh gas; 1.02
cent per kWh electricity
Development of tax rates (planned)
since 1995 tied to inflation drastic increase in 1985 for since 1999 all green taxes annual increase in petrol
rate; since 1998 tax rates investment security; tied to inflation rate; tax by 3.07 cent per l; in
rising faster than inflation 1998-2002 increase in planned increase in energy electricity tax by 0.26 cent
rate energy tax by 25% tax rate per kWh; temporary
exemption for CCGT
power plants and CHP
from mineral oil tax;
reduction in diesel oil tax
for local public transport;
from 2001 exemption for
electricity from renewable
energy sources
Portion of total tax revenues or of GDP
4% of GDP in first stage 1998: 10%, or 4.89% of 1998: 14% 1999 - 2003:111.5 billion
GDP DM ( 57 billion)
Privileging of fuels
no taxes on fuels for concession for CHP, exemption for district coal not taxed; CHP plants
electricity generation, but natural gas and renewable heating and gas for elec- with 70% or higher annual
rather kWh; no taxes on energy tricity generation; tax effectiveness exempted
biofuels; concession for rebate to renewable energy from eco-tax and mineral
CHP producers oil tax; reduced tax rate for
natural gas-powered
vehicles until 2009
318
Sweden Denmark Netherlands Germany

Private households vs. industry
equal treatment until 1993, equal treatment equal treatment, though no equal treatment
then increase in tax rates exemption for small
for households; simulta- private consumers under
neous reduction in tax 800 kWh electricity and
rates for industry, though 800 m natural gas
set to increase again
Exceptions for economic sectors
special provision for tiered for light process exemption for large industry, agriculture and
energy-intensive compa- energy and heavy proc- industrial consumers over forestry have reduced tax
nies esses: significant reduction 10 Mio. kWh electricity rate of 20% for annual use
by agreement with Danish and 1 Mio. m natural gas above 50,000 kWh
energy authority
Supporting measures
further green taxes, 1999 conservation and informa- shortening of the amorti- market incentive pro-
integrated environmental tion campaigns; subsidy sation period for envi- gramme for renewable
law with over 20 new regulations ronmental investments; energy sources
ordinances incentives for renewable
energy sources and energy
conservation programmes
Use of additional revenues
lowering of income tax by lowering of additional lowering of additional lowering of pension
30-50% wage costs for industry; wage costs for households contribution rates by 0.8%,
investment grants; from and companies; lowering reduction of 0.6-1.0% in
2000 only for lowering of of other taxes the following stages
additional wage costs
Expected effect on employment
positive positive positive positive
Institutional innovations
package solution, green tax significant expansion of 1995 green tax commission
commission established state capacity; co-operation established
betw. government authori-
ties and companies
Environmental effects
1989-1995 -30% SO2 emis- reduced end energy expected in the mid- to
sions; NOx emissions consumption & private long-term
halved by 1997 electricity use ; CHP
expansion to 50% of
electricity production;
substitution of coal by
natural gas and renewable
energy sources
319
Lutz Mez
References
Bach, Stefan et al.: kologische Steuerreform. Wie die Steuerpolitik Umwelt und
Marktwirtschaft vershnen kann, Berlin: Erich Schmidt Verlag, 1999
Bach, Stefan et al.: The effects of environmental fiscal reform in Germany: a simulation
study. In: Energy Policy, 30 (9), 2002, pp 803-811
Bergmann, Eckhard/Ewringmann, Dieter: ko-Steuern: Entwicklung, Ansatzpunkte
und Bewertung, in: Nutzinger, Hans/Zahrnt, Angelika (Hrsg.): ko-Steuern: Um-
weltsteuern und abgaben in der Diskussion, Karlsruhe 1989
Binswanger, Hans Ch./Geissberger, Werner/Ginsburg, Theo: Wege aus der Wohl-
standsfalle der NAWU-Report: Strategien gegen Arbeitslosigkeit und Umweltzer-
strung, Frankfurt/M. 1979
Bundesministerium der Finanzen: Die kosteuer Ein Plus fr Arbeit und Umwelt,
Berlin, September 2002
Bundestagsfraktion Bndnis 90/Die Grnen: Eckpunkte fr den Einstieg in eine ko-
logisch-soziale Steuerreform, Bonn, 18.5.1995
Bundestagsfraktion Bndnis 90/Die Grnen (Hrsg.): Eine EnergieSteuerReform fr
Europa. Dokumentation der Konferenz am 26. Mai 1997 in Bonn, Bonn 1997
Clasen, Gesa: A Framework for Innovation: Corporative Responses to Applied En-
ergy/CO2 Taxes in Denmark, Erasmus University Rotterdam, February 1998
Dutch Green Tax Commission, The: A summary of its three reports 1995-1997, March
1998
Economic Commission on Environmental Policy (Ed.): Role of Economic Instrument.
Integrating Environmental Policy with Sectoral Politics, New York and Geneva
1998
Greenpeace / DIW: kosteuer Sackgasse oder Knigsweg, Hamburg 1994
Jnicke, Martin/Mez, Lutz/Bechsgaard, Pernille/Klemmensen, Brge: Innovationswir-
kungen branchenbezogener Regulierungsmuster am Beispiel energiesparender
Khlschrnke in Dnemark, FFU rep 3-98, Berlin 1998
Jungjohann, Arne: Die Debatte um die Einfhrung einer kologischen Steuerreform in
der Bundesrepublik Deutschland vor dem Hintergrund internationaler Erfahrun-
gen, Diplomarbeit am Fachbereich Politik- und Sozialwissenschaften der FU Ber-
lin. Ms. (unverff.) Februar 1999
Larsen, Hans: Energy Taxes The Danish Model, Ministry of Taxation, Denmark 1998
Mez, Lutz: Erfahrungen mit der kologischen Steuerreform in Dnemark. In: Hoh-
meyer, Olav (Hrsg.): kologische Steuerreform, ZEW-Wirtschaftsanalysen, Bd. 1,
Baden-Baden: Nomos, 1995, pp 109-128
ORiordan, Timothy (Ed.): Ecotaxation, London, 1997
RWI: Regionalwirtschaftliche Wirkungen von Steuern und Abgaben auf den Verbrauch
von Energie. Kurzfassung. Das Beispiel Nordrhein-Westfalen. Untersuchung des
RWI im Auftrag des Ministeriums fr Wirtschaft, Mittelstand, Technologie und
Verkehr des Landes Nordrhein-Westfalen, Essen 1996
Pigou, Arthur: The Economics of Welfare, London: MacMillan, 1920
Reiche, Danyel/Krebs, Carsten: Der Einstieg in die kologische Steuerreform. Aufstieg,
Restriktionen und Durchsetzung eines umweltpolitischen Themas, Frankfurt/M.
etc.: Peter Lang, 1999
Schlegelmilch, Kai (Ed.): Green Budget Reform: Countries at the Forefront, Berlin etc.:
Springer, 1999
320
Skou Andersen, Mikael: Governance by Green Taxes. Making Pollution Prevention Pay,
Manchester: Manchester University Press, 1994
Togeby, Mikael/Bjrner, Thomas Bue/Johannsen, Katja: Evaluation of the Danish CO2
Taxes and Agreements, Paper presented at the European Conference on Industrial
Energy Efficiency in Vienna, July 1998
Umweltbundesamt (Hrsg.): Anforderungen an und Anknpfungspunkte fr eine Re-
form des Steuersystems unter kologischen Aspekten. (DIW und Finanzwissen-
schaftliches Forschungsinstitut an der Universitt zu Kln). Forschungsbericht des
Umweltbundesamtes 296 14 175. Berichte des Umweltbundesamtes 99.3, Berlin: E-
rich Schmidt Verlag, 1999
UPI: kosteuern als marktwirtschaftliches Instrument Vorschlge fr eine kologi-
sche Steuerreform, UPI-Bericht Nr. 9, Heidelberg 1988
Weizscker, Ernst Ulrich von: kologische Steuerreform. Steuern fr die Umwelt, in:
Der Spiegel vom 22.8.1988, pp 86f.
321
Phasing-Out Nuclear Power Generation in
Germany: Policies, Actors, Issues and Non-Issues1
LUTZ MEZ
ANNETTE PIENING
Abstract
The phase-out of nuclear power in Germany is one of the priorities of the
Red-Green Government which took office in October 1998. Despite continu-
ous and broad-based public criticism, up until 1998 federal nuclear policies
had sided with the pro-nuclear alliance and supported the industry through a
number of tax and regulatory privileges. Thus, the phase-out decision marks a
fundamental revision of past nuclear policy guidelines. After one-and-a-half
years of negotiations between industry and government, in the course of
which a number of controversies had to be solved, agreement was reached on
the gradual phasing-out of nuclear energy use in Germany on June 14, 2000.
The paper presents the actors policies, analyses issues and non-issues in the
negotiations. It shows that different positions within the Federal Government
and the lack of support from the anti-nuclear movement for the Governments
phase-out strategy strengthened the industrys ability to assert their position.
The industrys motivation for taking such an assertive position is illustrated by
an insight into the economic conditions of operating nuclear plant in Ger-
many. The paper concludes that the phase-out strategy sketched in the coali-
tion treaty could not fully be translated into actual policy measures. Instead
industry succeeded in a number of important issues, the most important of
them being the fact that the agreement guarantees the politically undisturbed
operation of nuclear power plants for the years to come.
1
First published in: Energy & Environment, Vol. 13, No 2, 2002, pp. 161-181.
Copyright Multi-Science Publishing Co. Ltd. Reprinted with kind permission.
322
Phasing-out Nuclear Power Generation in Germany
1 Introduction
Germanys venture into the use of nuclear energy was initiated in the mid-50s
with federal R&D programmes with a total cost of over DM 30 ( 15.3) billion.
More than ten years after the first commercial reactors in the US had come on
line, German producers had caught up with world market standards, and be-
tween 1968 and 1989, more than 24,000 MW of nuclear capacity were put on
line. This, however, is far less than the 50,000 MW capacity projected in official
expansion plans of 1974. Already one year later, in 1975, the last orders for new
nuclear plants were issued in Germany. This corresponds to the global trend.
Nearly stagnating electricity demand, overcapacity and persistent public con-
troversy over the use of nuclear energy have, among other factors, put a halt to
further expansion soon after the industry had been established.
2 Current Status of Nuclear Power in Germany -

Economic and Regulatory Framework Conditions
There are 19 nuclear power plants currently operating at 14 different sites in
Germany (cf. table 1). An additional reactor, the Mlheim-Krlich nuclear
power plant has been shut down by court order since September 9, 1988. In
2000, these 19 plants had a total capacity of 22,203 MW and produced 169.6
TWh (30.1 per cent of total electricity generation) (DIW 2002). Altogether 16
units with a total capacity of 4,000 MW have been shut down for decommis-
sioning. Among these are several small reactors from the early days of nuclear
energy use, but also two commercial sized reactors in western Germany and
six VVER units in eastern Germany. Decommissioning of the Lubmin VVER
site, with six shut-down reactors, continues at an estimated cost of DM 6 (
3.1) billion (Jordan 2000). Decommissioning of the active reactors is estimated
to cost DM 24 ( 12.3) billion, and the construction of a final waste facility (at a
site yet to be found) would cost DM 4 ( 2.1) billion plus annual operating
costs of DM 80 ( 40.9) million (Piening/Mez 2000).
In contrast to the legal situation in most other countries, in Germany operat-
ing licenses were granted without time limit. Nevertheless, the expected tech-
nical operating life is estimated to range between 20 and 40 years, depending
on the service life of particular parts. Taking this into account, nine plants -
namely those operating for 20 years or more - are expected to face major,
323
costly reconstruction requirements or shutdown within the next five years,

and a further seven within 10 to 15 years (cf. table 1). From an economic per-
spective, nuclear power plant investments in Germany are paid back after 18 to
20 years. Taking into account interest yielded on this investment, a nuclear
power plant is profitable after 20, at the most 27 years (Hennicke et al. 2000).
Unlike other electricity supply sources, fuel taxes are not levied on nuclear
power and obligatory insurance for liability had been limited to DM 500 (
255.7) million.
There is no central nuclear regulatory body in Germany. Permitting proce-
dures and safety reviews according to the Atomic Energy Act (Atomgesetz, AtG)
are carried out by the Lnder authorities that are supervised and subject to
directions by the Federal Ministry for the Environment, Nature Conservation
and Nuclear Safety (BMU). The regulatory bodies are assisted by technical
safety bodies such as the Reactor Safety and Radiation Protection Commission
(RSK, SSK), the Federal Office for Radiation Protection (BfS), the Commission
for Nuclear Plant and Reactor Safety (GRS) and other independent experts. The
regulation of nuclear power plants (and other nuclear installations) in Germany
includes all aspects of nuclear energy use, covering matters of construction,
operation, modification of plant and its operation, as well as decommission-
ing (BMU 1999).
While federal policies and the respective directives have until recently been
generally in favour of nuclear power, some Lnder authorities have been more
restrictive in their interpretations of permitting provisions than others, caus-
ing continuous dissent and regulatory uncertainty. In consequence operating
utilities have over the years developed an interest in reaching agreement with
government over nuclear policies, thus reinstating regulatory and related-cost
calculability.
Despite continuous and broad-based public criticism, until 1998 federal nu-
clear policies sided with the pro-nuclear alliance and supported the industry
through a number of tax and regulatory privileges. This official position was
first reversed after the 1998 federal election when the new red-green federal
government announced the phasing-out of nuclear power in Germany. The
coalition treaty between the Social Democrats and the Green Party includes a
special chapter on this issue. After one-and-a-half years of negotiations be-
tween industry and government a number of controversies had been solved
and on June 14, 2000 agreement was reached on the gradual phasing-out of
nuclear power.
324
Tab. 1: Nuclear Power Plants in Germany in the year 2000
Nuclear power Owner / operator MW Start Total genera- Years in

station gross tion until end operation
1999 in TWh
Obrigheim EnBW (100%) 357 Oct 68 76.0 32
Stade E.ON (66.67%), 672 Jan 72 134.0 28
HEW (33.33%)
Biblis A RWE (100%) 1,225 Aug 74 179.5 25
Biblis B RWE (100%) 1,300 Apr 76 177.5 23
Brunsbttel HEW (66.67%), 806 Jun 76 87.6 24
E.ON (33.33%)
Neckarwestheim-1 NWS (70%), DB (18%), 840 Jun 76 137.5 21
EnBW (9%), ZEAG (3%)
Isar-1 E.ON (100%) 907 Dec 77 127.2 21
Unterweser E.ON (100%) 1,350 Oct 78 193.3 21
Philippsburg-1 EnBW (100%) 926 May 79 119.3 20
Grafenrheinfeld E.ON (100%) 1,345 Dec 81 174.4 18
Krmmel HEW (50%), E.ON (50%) 1,316 Sep 83 137.8 13
Gundremmingen B RWE (75%), E.ON (25%) 1,344 Mar 84 142.9 16
Grohnde E.ON (50%), 1,430 Sep 84 168.4 15
Interargem (50%)
Gundremmingen C RWE (75%), E.ON (25%) 1,344 Nov 84 134.1 15
Philippsburg-2 EnBW (100%) 1,424 Dec 84 159.7 15
Mlheim-Krlich RWE (100%) 1,302 Mar 86 11.3 2
Brokdorf E.ON (80%) HEW (20%) 1,440 Oct 86 137.3 14
Isar-2 E.ON (75%), Stadtwerke 1,455 Jan 88 125.7 12
Mnchen (25%)
Emsland RWE (88%), 1,363 Apr 88 128.3 12
Elektromark (12%)
Neckarwestheim-2 NWS (70%), DB (18%), 1,365 Jan 89 118.5 11
EnBW (9%), ZEAG (3%)
Total 23,511 2,670.3
325
3 Policy Targets
The 1998 government decision to initiate the phase out of the use of nuclear
power marks a fundamental revision of past nuclear policy guidelines. The
decision is primarily based on continuing safety concerns as well as the find-
ings of recent scientific research on the long-term effects of nuclear fallout
from Hiroshima and Chernobyl which have led to a fundamental reassess-
ment of the acceptability of risks in Germany. In addition setbacks in the
search for permanent nuclear waste storage facilities have increased sensitivity
to long-term safety risks and the costs public budgets would be confronted
with in the future.
The approach chosen by the coalition is founded on the tradition of achieving
major (energy) policy decisions in a consensual, corporatist manner, that is,
the attempt to agree on the major issues with stakeholders before enacting
important legal changes. Thus, the first year of the legislative period was de-
voted to negotiations - so-called consensus talks - between Chancellor, the
Ministers of Economic Affairs and of the Environment and representatives of
public utilities operating nuclear power plants. It was intended that the results
of these talks would then be confirmed and enacted in amendments to the
Nuclear Power Act. However, should the negotiating parties fail to come to an
agreement, the government would have acted unilaterally without industrys
consent. Most importantly, the law was to allow for the imposition of time
limits to nuclear power plant licenses. The decisive legal precedent for this
provision was set by a recall of the unlimited licenses for fossil-fuel-fired
plants in the 1980s. This was approved by the Federal Constitutional Court
and is generally held to be transferable to licenses for nuclear power stations
as well.
In addition, the bill should comprise the following aspects:
Ending the promotion of nuclear energy
Introduction of obligatory safety reviews
Abandonment of reprocessing and restriction of waste management to
direct final storage
Raising the level of insurance cover for nuclear liability for accidents (cur-
rently at DM 500 ( 255.7) million) to DM 5 ( 2.56) billion.
According to the coalition agreement a number of the above issues were in-
tended to be the subject of legislation as early as January 1999. However, in-
326
tense industry protests and controversy within the government - particularly

over waste management and liability issues - led to the amendments being
postponed until the final phase-out bill. To complement the phase-out, the
initiative was taken to agree a new energy policy. This includes agreement on
future coal policies - up for review by 2003 at the latest - and on the role of
energy efficiency and renewable energy. Early major activities included the
introduction of green taxes (new electricity tax and an increase in mineral oil
duty) and the promotion of renewable energy production through the Renew-
able Energy Sources Act of April 2000.
The federal government also commenced a programme promoting photovol-
taics (100,000 roofs programme), a five-year market transformation pro-
gramme costing DM 200 ( 102.3) million annually funded by part of the green
tax revenue. In April 2000, the electricity feed-in law was reviewed and re-
newed nine years after it came into force as an Act granting priority to renew-
able energy source (Renewable Energy Sources Act). The purpose of the Act is
to double the share of renewable energy sources in total energy consumption
by the year 2010. The key regulatory element of the law is the obligation on
power grid owners to purchase electricity generated from renewable energy
sources, based on the amount of electricity generated during a calendar year,
calculated as a ratio of the total amount of electricity sold.
4 Brief Chronology of the Consensus Talks

The first round of negotiations between government and industry began after
informal exploratory talks on January 26, 1999. The parties to the consensus-
seeking process were officially restricted to the operating companies and rep-
resentatives of government. It is noteworthy that the talks were restricted to
these two groups, while other stakeholders most prominent among them the
trade unions, were left out. The latter had mobilised nuclear power plant em-
ployees in protests in September 1998. Also the industry delegation to most
talks included representatives from only the four largest companies owning
nuclear power plants. The course of the talks and the lines of compromise
becoming apparent so far indicate that industrys position was relatively
strong and unyielding, while many official demands had to be revised. A closer
look at the actors may contribute to an explanation.
One principal difficulty faced during these negotiations derived from the
premise that the regulated phase-out should not give rise to any claims for
327
financial compensation by industry - a boost to industrys negotiating power.

Such claims - just as a unilateral phase-out decision - could have triggered a
series of lawsuits and thwarted chances for a single reactor shutdown within
the current legislative period. As a final consequence, this might have even
threatened the coalitions chance of re-election since the nuclear issue has been
such a core political issue for the green party.
The talks, to the extent that information leaked to the public, were closely ob-
served by the media, environmental organisations, and the affected trade unions.
Proponents as well as opponents of nuclear energy have been able to mobilise
public protest; however, with varying success. The anti-nuclear movement
seemed to be on the wane in terms of public visibility and active membership.
The nuclear industry, however, together with other electricity-sector workers
had mobilised in its support large numbers of demonstrators after industry
had refused to provide employment guarantees.
The first major issue negotiated during early talks revolved around a revision of
waste management policy. Government demands included that spent nuclear fuel
reprocessing, which had been the only legally allowed disposal path until 1994, be
permanently ended.
According to the initial legislative plan of early January, reprocessing contracts
were to be terminated already by January 2000. After serious disputes with in-
dustry during the first consensus talks over the permitted periods of notice,
the legislative plan was dropped and the negotiation of further details delegated
to a working group looking at each individual nuclear reactor. This dispute
drew a lot of public attention, both nationally and internationally, and clearly
demonstrated disagreement within government over the approach to negotia-
tions and attitudes to industry.
Another controversial subject between industry and government was the taxa-
tion of accrued special-purpose reserves. This issue was on the agenda at the
session on March 9, 1999, when the effects of the new tax law were discussed.
The law, enacted in June 1999, changed several conditions and time limits for
nuclear reserves. An expert group of representatives of both sides investigated
the financial burden.
First suggestions for the permitted operation periods - the central issue of the
talks - were made public by the Minister of Economic Affairs on June 17, 1999
in a draft agreement negotiated with the Board Chairmen of the four largest
German electric utilities. This paper consisted of 26 points and proposed a
328
time span of maximum 35 years of operation before shutdown. In contrast, the

Minister of Environment, backed by the Green Party Conference, sought to
achieve a maximum operating time until shutdown of only 25 years, inde-
pendent of the effective operating time. The draft agreement came as a sur-
prise not only to the Environment Minister and provoked wide criticism both
on the part of different stakeholders and also within government. Reactions
indicated a broad range of contradictory legal opinions on central issues and
underlined the uncoordinated approach to these negotiations inside govern-
ment.
Therefore, in July 1999, the government set up a working group, consisting of
deputy secretaries of the Ministries of Environment, Economy, Interior, and
Justice, to investigate special problems of nuclear phase-out with reference of
national and international law. The working group sounded out the legal ca-
pacity of the German government to impose time limits for operating li-
censes, the legal prohibition of reprocessing, a moratorium for the exploration
of the final storage site in Gorleben, and the ending of the licensing procedure
for the Schacht Konrad final storage site. In September 1999, the working group
brought out a report, which provided the basis for the governments future ne-
gotiating position. Talks with industry representatives were resumed in Febru-
ary 2000 after the Green Party Conference had agreed to the compromise of a
maximum of 30 years total allowed operating time. According to the govern-
ments proposal, industry may be given the option of swapping operating years,
calculated in produced kWh, from one reactor to another, which would result
in the shutting down of a few reactors in the short term, while others would
possibly operate up until 2025. In May 2000, the consensus talks had come to an
agreed conclusion that left final and decisive details to final meetings between
government and the leaders of industry to be held on June 14, 2000.
5 The Agreement
On June 14, 2000 the utility companies RWE, EnBW, VEBA and VIAG (now
E.ON) initialled an agreement with the federal government on the future op-
eration of their nuclear power plants.
The purpose of the agreement is to determine the lifetime of nuclear power
plants and to ensure their operation, undisturbed by regulatory activities, as
well as the disposal of nuclear waste. The operating life of power plants is
limited by fixing the quantities of electricity that may still be produced in
329
individual plants. Quantities of electricity are basically transferable. The agreed

electricity production for all German nuclear power plants totals 2,623.3 billion
kWh. This would be equivalent to a total service life of 32 years at high utiliza-
tion. RWE will start the de-commissioning of the Mlheim-Krlich nuclear
power plant and withdraw the claim for damages filed against the state of
Rhineland-Palatinate. In return, RWE will receive a quota of 107.25 bill. kWh to
be transferred to other nuclear plants. The transportation of spent fuel ele-
ments will be resumed, to ensure the disposal of nuclear waste until local
interim storage facilities are available. Reprocessing is allowed until July 1, 2005.
The Gorleben and Konrad final storage projects will be further pursued. Offi-
cial approval of plans for the Konrad final storage facility will be given, while
the application for immediate enforceability is withdrawn. The Federal Gov-
ernment will suspend exploratory work in Gorleben for three to ten years.
The agreement was implemented in January 2002 by an amendment to the
Atomic Energy Act. It was subject of consultations between the negotiating
partners on the basis of several government drafts before the law passed cabi-
net, and, highly unusual for the German parliamentary system, has not been
changed as it passed through the legislative process in Bundestag and Bundes-
rat. In effect, the amendments were legislated by a small circle constituted of
cabinet members, ministerial deputies, and industry advocates, and merely
sanctioned by a self-restrained legislative body.
For the sake of protecting their investments, the utilities did not see any alter-
native to this agreement, which is to serve as a contribution to a comprehen-
sive energy consensus, but has, in the final analysis, not sufficiently contrib-
uted to the restoration of a bipartisan energy consensus in Germany. The
Christian-Democratic Party, as the most ardent proponent of nuclear energy,
has declared its intention to repeal the law upon re-election. The utilities,
despite the fact that they accept the agreement, are still of the opinion that
nuclear energy should remain an integral part of the energy mix for economic
as well as ecological reasons. And the anti-nuclear movement, which has lost a
lot of its public visibility, insists on speeding up the phase out. Against this
schism, so far no common energy strategy has been developed yet.
6 Actors
As mentioned, the actors involved in the consensus process were officially re-
stricted to the operating companies and representatives of government. Even
330
the industry delegation for most talks included the representatives of the four
largest companies owning NPPs. A closer look at the actors may help to explain
the strong position of industry.
6.1 The Industry
The group of operators of nuclear power plants in Germany is comprised of

seven different electricity supply companies with a share of nuclear power
between 20.4 and 80.6 percent of their respective total production (see table 2).
Also the operating times of the different companies reactors vary considerably.
While this has the potential of leaving the companies in a fragmented posi-
tion, it has not influenced their appearance as a unified block in public - ex-
cept for the fact that they had difficulties agreeing on a common spokesper-
son.
Tab. 2: Share of nuclear power of total electricity sales of German nuclear

power operators in 1998
total electricity sales nuclear power nuclear share
(TWh) generation (TWh) (%)
NWS 13.508 11.594 80.6
HEW AG 13.781 8.738 61.0
EnBW Group 51.300 27.000 52.6
Bayernwerk Group 72.643 28.200 38.8
PreussenElektra Group 106.150 33.000 29.7
VEW Energie AG 34.801 8.096 23.2
RWE Energie AG* 135.500 28.522 20.4
Total 427.683 145.150 33.9
* Accounting year 1998/99

Sources: Annual reports, own calculations FFU
In principle, the industrial side accepted the target to phase out nuclear power
for political reasons. Due to the official basis for negotiations to avoid industry
compensation claims and the governments goal to reach presentable results
quickly, industry could enter the talks in a comparatively comfortable starting
position. Their main goals for entering into discussion were to ensure that
331
they will be allowed to run their nuclear reactors as long as possible and with a
minimum of regulatory interference. This will guarantee that additional ac-
cruals can be set aside and that the point at which decommissioning costs fall
due is postponed into the distant future. By some sources, the accrued liabili-
ties were estimated to be DM 72 ( 36.8) billion in 1998 (Hennicke et al. 2000)
(cf. also table 3). Particularly with a view to the changing economic parameters
of liberalisation, cost reductions of this kind and availability of extra funds
pose a clear advantage.
6.2 The Government
The chancellor from the social democratic party (SPD), the Minister of the
Environment from the Green Party, and the Minister of Economic Affairs, an
independent member of government for the SPD, were formally involved in
the negotiations with industry. For members of an administration which came
to power during a period of economic recession in autumn 1998 after 16 years
of conservative leadership, overall political success will obviously only in a small
part be measured by the results of these consensus talks. In contrast, success in
negotiating the phase out is of paramount importance to the Green Partys
political survival. This party grew out of the anti-nuclear protests of the 70s
and 80s and will have to prove to its electorate that participation in govern-
ment does have a positive impact on nuclear decisions.
This difficulty became obvious during the debate over operating periods when
a number of founding members left the party. This difference between the
parties explains to a certain degree the fragmentation inside government, with
the minister of economic affairs and the chancellor on one side and the min-
ister of environmental affairs on the other side. But there were other contrib-
uting reasons: the Minister of Economics and Technology, Werner Mller, was
a former VEBA managing director and a such could be suspected of at least
partly supporting the industrys position, as is indeed suggested in the posi-
tions presented in the draft understanding (Mller, W. 1999). Furthermore, the
SPD as a representative of union interests and former supporter of nuclear
energy had traditionally taken a difficult and at times contradictory position
on energy policy. Highly sensitive to employment impacts of energy policy
decisions and to developments in the coal sector, the corporate decisions and
strategies of large utilities remain a factor the SPD must at least in part defer
to. Only sections of the SPD wholeheartedly support the proclaimed new en-
332
ergy policy moving away from fossil fuels and nuclear to renewable energy,
while a majority of the leadership wants to avoid controversy. This, and the fear
of the unknown financial burdens on tax payers as a result of possible lawsuits
by industry is also mirrored in the governments intent to come to an agree-
ment that avoids the paying of compensation to industry. This also explains
why a number of industry demands have been conceded to.
The opposition parties, CDU/CSU and FDP, were not directly involved in the
talks, but as members of Lnder governments, sought to influence them. As
predecessors of the current federal government they themselves had begun a
slow redefinition of nuclear policies, now however, they adopted the role of
ardent nuclear power proponents. The Hessian and the Bavarian governments
in particular sought a court decisions over the nuclear phase-out law. How-
ever, the Federal Constitutional Court dismissed both actions in February
2002.
Tab. 3: Accruals set aside by operators for nuclear waste disposal and
decommissioning (in mill. DM)
1996 1997 1998

RWE Energie 15,029.0 16,595.0 16,139.5
VEBA/PreussenElektra 10,478.0 10,869.0 11,288.0
Bayernwerk Group 8,827.2 11,372.6 11,879.6
EnBW 7,462.6 8,050.7 8,220.9
VEW 3,145.0 3,656.0 3,867.0
HEW Group 4,756.7 4,742.4 4,750.0
NWS Group 1,730.0 4,085.0 4,209.1
Stadtwerke Mnchen 673.3 690.0 719.6
Total 52,101.8 60,060.7 61,073.7
Sources: Annual reports; FFU
7 The Agenda
The proposed changes in nuclear policy-making have undoubtedly set an
ambitious goal because federal policy during the last 45 years had pushed into
the opposite direction with strong proponent alliances and regulatory struc-
333
tures set up that promoted the use of nuclear energy. Nevertheless, these fac-
tors alone do not provide a satisfactory explanation of the fact, that the scope of
the agenda of the consensus talks left a number of issues untouched, especially
those pertaining to the current and future state of the nuclear industry.
7.1 Nuclear fuel reprocessing
Since the early 1970s completing the fuel cycle was an integral part of German
nuclear policy, with reprocessing a mandatory step in waste management.
However, as became clear in the 1980s, this option was the most expensive way
of dealing with spent fuel. And as public protests against the construction of
reprocessing plants - first in Gorleben and later in Wackersdorf - continued
and the high economic and political costs of this project became undeniable,
the electricity supply industry in 1989 withdrew its plan to build a reprocessing
plant in Germany. Instead, they entered into long-term contracts for reprocess-
ing services with Cogema in La Hague, France, and BNFL in Sellafield, Great
Britain.
Politically, this did not resolve the conflict. Protests against reprocessing now
concentrated on nuclear waste and plutonium CASTOR transports back to
Germany. As a consequence, police authorities were confronted with expenses
of up to DM 150 ( 76.7) million for each transport across the country. In May
1998, any further transports were stopped because the CASTOR containers
proved to be contaminated. Because of the arising political costs, and persis-
tent doubts over the safety and general economic prudence of reprocessing
and long-distance nuclear waste transports, the new government decided to
prohibit further nuclear waste reprocessing.
Initially, this prohibition was intended to be an integral part of amendments to
the Nuclear Energy Act, planned for January 1999. As mentioned, this pro-
voked intense protest on the part of operators in the consensus talks who
pointed out that compensation costs would arise because of the terms of the
long-term contracts they had signed. According to legal experts, however, it
may have been possible to terminate the contracts with Sellafield and Le
Hague without compensation. Other companies (for example, Belgian) had
already reduced their obligations without financial consequences. The Minis-
ter of Economics and Technology in his June 1999 draft agreement compro-
mised by proposing a transition period of five years, which has found its way
into the final agreement.
334
7.2 Nuclear waste storage
Linked to the change in reprocessing policy is the question of temporary stor-

age capacities. Currently, two sites in Gorleben and Ahaus, both in the north-
ern part of Germany, are in service. Both have attracted serious disputes, for
example among Lnder governments when the northern Lnder refused to
accept for the long term all nuclear waste from southern Lnder. Moreover,
the CASTOR affair had raised new security questions and as these could not be
solved speedily, some nuclear reactors were approaching temporary shut-
downs due to waste jam. These concerns, expressed in persistent public
protests, made the development on site of, temporary waste storage facilities
attractive both to industry and government. For the former this promised to at
least diminish a serious public relations problem and gain new flexibility in
waste policy, for the latter more time to resolve the problem of final waste depo-
sition would become available and the need for waste transports with their
high escorting costs would be alleviated. In addition, it proved to be the least
expensive solution in the short run.
Therefore, it became the aim of both parties to the consensus talks to agree on
legal as well as physical requirements for temporary storage. Legally, temporary
storage had to be defined as equivalent to the required proof of safe waste treat-
ment. To counteract the lack of physical capacity, the construction of further
facilities near the power stations was proposed. Following this change in pol-
icy in late 1999, operators therefore applied for permits to construct tempo-
rary storage facilities at 13 nuclear power plant sites. While these permits were
to be granted without undue delay according, the permitting authority, the
Federal Office for Radiation Protection (BfS) refused to accept the proposed
volume of storage capacities. According to first calculations by BfS, these ca-
pacities far exceeded the waste amounts to be expected from a phase out
(Wittmann 2000). The application for a site at the NPP Stade was withdrawn in
the meantime. For the remaining twelve sites, temporary storage permits to
deposit a total of 14,500 tons spent fuel for a period of 40 years have been ap-
plied for. Additionally for five sites interim storage permits allowing storage for
six to eight years, were applied for. The BfS has to check the overall security of
the storage facilities, and in particular, with respect to September 11, the pos-
sible effects of a calculated airplane crash (Knig 2002). The obligatory public
hearings could be completed until the end of 2001.
335
With regard to the deposition of nuclear waste, several major technical prob-
lems remain unresolved. In particular, the geological suitability of the pro-
posed site in Gorleben has been in dispute for decades, and was recently re-
jected in yet another official expert opinion. As in other countries, the earlier
permanent storage concepts are disputed and contrary to expectations 30 years
ago, no acceptable solution is in sight. In 1999, a working group final deposi-
tion (AKEnd) was installed to develop an accepted procedure for the selection
of a suitable site.
It is generally accepted that spent fuel requires a 30-year period of intermedi-
ate deposition. Industry therefore wants to commence with final deposal in
2030 and, according to their plans complete this activity 50 years later.
7.3 Deadline for power plants: operating time vs. calendar years
The most controversial issue, left open until the very last day of the consensus
talks, revolved around the permitted operating period for reactors. Industry
feared a phase-out agreement based on calendar years would enable a more
restrictive policy. They therefore preferred an agreement based on operating
time. However, this would minimise the operators incentive to close down
plants earlier than agreed. A possible compromise, as proposed by the Green
Ministers in government in October and December 1999, suggested agree-
ment on the basis of time-limited permits for each plant that could be trans-
ferred to other plants in the case of early shut down. In principle industry
negotiators agreed to this, but achieved a further amendment which transposed
operating time into a defined amount of electricity allowed to be produced. The
principal details of this approach took much time to negotiate; in particular
the factors of annual capacity that were taken as baseline (for example, 70, 80
or 90 per cent), the range of transferability of operating time (to newer or also
older reactors) and a final shut down deadline.
While the starting point of the Green Party Conference had been an immedi-
ate shutdown of all plants, green members of the coalition government did
agree on 25 years as the maximum total operating time for nuclear reactors.
On this they were in accord with large sections of the SPD (whose Nuremberg
party conference had aimed for a ten-year transition period in 1986). During
the consensus talks, this time limit turned out to be a major obstacle and in
November 1999 the Green Party members voted to raise the deadline to 30
years in order not to threaten the phase-out project and save the coalition. In
336
contrast, industry, with the support of the Minister of Economics and Tech-
nology, had decided on 35 years as the lower limit in the agreed document of
June 1999, though the initial aim had been 40 years total operating time.
The final agreement of June 14, 2000 permits future nuclear power generation
corresponding to 32-year total operating time. This is transposed into kWh for
each reactor, calculated from the average of the five most productive years
between 1990 and 1999. In the end, a total of 2,623 TWh were allowed to be
produced in German nuclear plants until final shut down.
7.4 Taxation of accruals
Another dispute concerned the taxation of reserves that is of funds set aside by
operating companies for the decommissioning of reactors and waste deposi-
tion activities. These funds were currently not taxed or paid into a state fund,
but remain on the operators balance sheets. They were estimated, in 1998, to
amount to as much as DM 72 ( 36.8) billion and to further rise to DM 82 (
41.9) billion in 2018 (Hennicke et al. 2000). While they need to be readily avail-
able when decommissioning and related costs arise, these special-purpose re-
serves were invested in other branches, such as telecommunications, (non nu-
clear) waste processing, or logistics, as well as in the electricity sector.
It is common knowledge that the special-purpose reserves of nuclear power
plants are a lucrative and often the only source of profit from operating such
plants. A detailed study shows that under current market conditions this is the
case for 10 of the 19 nuclear power plants (Hennicke et al. 2000). The longer the
operating life of plants, the greater the reserves that will accumulate; while
decommissioning will result in reserves being run down.
As the overall costs of decommissioning and final waste deposition are esti-
mated to be as much as DM 32 ( 16.36) billion, the Minister of Finance intro-
duced a new tax law that would release about DM 30 ( 15.34) billion of accrued
special-purpose reserves. This will lead to additional state income in the form
of tax revenue amounting to about DM 15 ( 7.67) billion in the next ten years.
7.5 Energy policy
According to the coalition treaty, nuclear energy phase-out is but one element
in a switch to a new energy policy. This policy aims at modernising the German
337
electricity supply system in a way that benefits the environment as well as

socio-economic development and job creation. Other important elements of
this strategy are increased efficiency of energy supply and end-use, as well as the
promotion of renewable energy. As mentioned, the measures to implement
these goals have so far included the first stages of a green tax increase and a
renewable energy programme. Regarding renewables, the target is to increase
their share of electricity supply from the current level of 5 per cent to 10 per
cent in 2010 and in the long-term to 50 per cent in 2050. The long term goal
has to be interpreted as a programmatic goal which in concert with energy effi-
ciency programmes is ambitious but not unrealistic, neither technically nor
economically.
Moreover, the share of combined heat and power electricity generation is to be
substantially increased from 12 per cent in 1999 (by comparison, other Euro-
pean countries have shares of 25-50 per cent). During the first year of the new
government most CHP plants had to withstand massive economic pressures
because of the drastic price reductions on the liberalised German electricity
market.
After long negotiations between government, the SPD, the Green Party, and
industry, the new CHP law will come into force April 1, 2002, protecting CHP
plants for public supply and giving incentives for the modernisation of these
plants. Further support is given to small-scale CHP plants and fuel cells. Until
2010 expenses will total 4.5 billion. As environmental benefit, CO2 emissions
shall be reduced by 11 million tons. Industrial CHP plants are not affected by
the new law. In line with EU policy, activities toward increasing end-use effi-
ciency have been initiated. As one first major measure, the Energy Saving Ordi-
nance came into force on February 1, 2002. The required total energy con-
sumption of new buildings has been fixed at a level laying 30 per cent under
current standards, and for old buildings insulation improvements and ex-
change of the heating system are demanded.
7.6 Non-issues
While the liberalisation of the German electricity regulatory system had been
commenced in April 1998 and resulted in dramatic changes by the end of 1999,
these do not seem to have been addressed in the talks on nuclear phase-out.
This did not happen even in terms of a problem of stranded costs - as might
have been expected from discussions of nuclear power in other liberalised mar-
338
kets, for example in the U.S. According to expert studies, about 40 % of nuclear
power plants in the US are expected to be shut down well before their licenses
expire (that is, after an operating period of 40 years) purely for economic rea-
sons (Higley 1999).
While stranded cost did enter the German liberalisation agenda after some de-
lay in connection with legislation for ailing CHP plants, a discussion of the
extent to which investment in nuclear power plants can be regarded as stranded
costs did not enter the nuclear agenda. A detailed analysis of all German nuclear
power stations and related financial aspects concluded that the operators of
only nine newer nuclear plants can expect to cover costs (Hennicke et al. 2000); in
other words, under conditions of increased competition ten nuclear plants would
have been shut down anyway in the coming years for economic reasons. The
effects of electricity market liberalisation in Germany have led to shrinking pro-
ceeds from electricity sales, and as long as existing surplus capacities are not dis-
posed of, the price for electricity will be pushed down. As mentioned, the only
factor postponing this corporate decision is that profits from accrued reserves
allow losses from operational and capital investment costs to be covered. In es-
sence, therefore, current regulations concerning accrued reserves have to be in-
terpreted as a means of hiding the subsidisation of nuclear power by other sec-
tors of the economy.
While under the current regulatory regime it might have been difficult to
make a case for the non-competitiveness of many of the NPPs, so far the pos-
sibility of re-regulating the financing of decommissioning and limiting the
companies access to reserves has yet to be discussed. All in all, by leaving this
issue off the agenda, government may have unnecessarily relinquished negoti-
ating powers.
Indirectly, however, the agreement did pick up the stranded costs issue. It intro-
duced an instrument which very closely resembles what was proposed for the
CHP market: the additional 2,623 TWh guaranteed electricity production basi-
cally prescribes a quota for nuclear power on the German electricity market. It
will allow the respective companies to keep on profiting from accumulating
accrual reserves and to postpone paying high costs for decommissioning. It also
allows them to exclude other generation technologies and investors from the
market at least for the current decade.
There is a substantial need for technological modernisation of the German
and European electricity sector. This seems important particularly with a view
339
to the dynamics that have developed in the US market and the weakened posi-
tion of German power plant producers in the global market. Crucial for any
progress in this matter is a decrease in surplus capacity which amounts to 92
GW in Middle and Northern Europe, or 21.6 percent of the maximum output
capacity (Schrppel & Urban 2000: 156). In Germany, the difference between
installed capacity and peak load was 30.2 GW in 1998. An early shutdown of
nuclear power plants could help the market regain momentum and open the
way for new technologies - with positive technological, occupational and envi-
ronmental effects - before 2010, as generally expected.
8 Political and Technical Conditions of Operating

Nuclear Power Plants
NPPs in Germany are operated as base load capacities; hence their contribution
to German electricity supply is relatively large compared to installed capacities
(cf. table 4 and figure 1). Within the German power mix, nuclear power ranges
just behind coal, which accounts for roughly one half of supply. Here lignite
and hard coal are of almost equal status, though lignite is primarily employed
as base load while hard coal plants are dispatched in medium load.
Fig. 1: Gross electricity production capacity in Germany 1998 (106.4 GW)
Nuclear
22% Hydro
8%
Others
2%
Gas Coal
16% 26%
Oil
7%
Lignite
19%
Source: BMWi 2000, p. 26
340
Tab. 4: Gross electricity production in Germany, 1997-2000

1997 1998 1999 2000
TWh % TWh % TWh % TWh %
Nuclear 170.3 30.9 161.6 29.1 170.0 30.6 169.7 30.1
Hard coal 143.1 26.0 153.4 27.6 143.1 25.8 143.0 25.4
Lignite 141.7 25.7 139.4 25.1 136.0 24.5 146.0 25.9
Natural gas 48.0 8.7 50.8 9.1 51.7 9.3 48.0 8.5
Hydro power 20.9 3.8 21.2 3.8 23.3 4.2 24.5 4.3
Others 24.2 4.4 25.0 4.5 25.3 4.6 23.6 4.2
Wind power 3.0 0.5 4.5 0.8 5.5 1.0 9.2 1.6
Total 551.2 100.0 555.9 100.0 554.9 100.0 564.0 100.0
Source: BMWi 2000; DIW 2002
Historically, i.e. under monopoly conditions, the nuclear energy sector has
financially been highly lucrative for almost all actors involved. Beneficiaries
were particularly the operators, but also the employees gained from above
average wages. For the power plant producing industry business was some-
what less lucrative, as some producers, e.g. AEG, experienced high losses in the
early years. Today, the few firms that are involved in this business section still
profit from nuclear energy business, even though it is far from the growth
sector it was expected to become (Piening 2001).
Tab. 5: Selected financial indices of nuclear operators 1997-1999

1997 1998 1999
nuclear fuel stock mill. DM 1,246.1 1,368.8 846.3
Accruals mill. DM 50,001.3 62,867.0 50,484.7
Electricity sales bill. DM 32.1 29.9 27.0
No. of employees 48,172 46,264 42,858
Share of electricity sales of total sales % 90.6 86.9 85.5
Share self production of total sales (electricity) % 81.4 81.9 80.5
Specific proceeds (electricity) Pf/kWh 11.9 12.6 11.7
Source: DaViD 2001, own calculations FFU
341
Key to large gains of nuclear power operating companies have been the accruals
set aside for decommissioning and nuclear waste disposal (cf. tables 3 and 5),
which allowed the companies to diversify into different industrial branches,
particularly waste management and telecommunications. Under the current
trend of consolidation and sales of non-energy business, the telecommunica-
tion companies especially were sold at substantial profit, allowing e.g. E.ON to
provide over a scope for acquisitions of between 30-50 billion (Frankfurter
Rundschau 2001).
The political agreement between the German government and the nuclear
power operating companies restricts the operating life time of the NPPs not
by limiting the operating license to a specified year or total number of years,
but by prescribing total allowed amounts of electricity to be produced by each
individual plant. Calculated in years and at current output, German NPPs were
allowed total operating times (Regellaufzeit) of 32 years each (see table 6).
In addition, should one plant close early, its leftover share of allowed electric-
ity production may be shifted to another plant. Thus from the agreement it is
impossible to exactly predict when plants will be shut down and which com-
pany will provide how much nuclear power capacity at which point in time.
However, an approximate calculation shows when the effects of the agreement
will show and how they may affect the individual operators.
The data in table 6 demonstrate that a first effect of the phase out agreement on
the operational nuclear capacity will become noticeable after 2006 and the
number of shut downs will accelerate in 2010. The leading roles of the three
largest operators, RWE, E.ON, and EnBW will be maintained. However, com-
pared to E.ON and EnBW, who will continue to have greater stakes in nuclear
energy, the share of RWEs nuclear production will reduce substantially so
that, based on the current sales numbers, other electricity sources will become
much more important for RWEs supply. Looking at HEW, the share of nu-
clear production will decrease to less than one tenth of the current share by
2014, significantly reducing the current importance of nuclear energy for the
northern company (the nuclear factor has already been reduced in the course of
the new Vattenfall Europe holding of HEW/Bewag/VEAG being formed).
342
Tab. 6: Nuclear power generation and total operating time of the nuclear
power plants according to the phase-out agreement
End of Generation from
Capacity Commercial (age in
Nuclear Power Plant operating 01.01.2000
MW start up years)
time (TWh net)
Obrigheim 357 01.04.1969 (31) 31.12.2002 8.70
Stade 672 19.05.1972 (28) 19.05.2004 23.18
Biblis A 1,225 26.02.1975 (25) 26.02.2007 62.00
Neckarwestheim 1 840 01.12.1976 (24) 01.12.2008 57.35
Biblis B 1,300 31.01.1977 (23) 31.01.2009 81.46
Brunsbttel 806 09.02.1977 (23) 09.02.2009 47.67
Isar 1 907 21.03.1979 (21) 21.03.2011 78.35
Unterweser 1,350 06.09.1979 (21) 06.09.2011 117.98
Philippsburg 1 926 26.03.1980 (20) 26.03.2012 87.14
Grafenrheinfeld 1,345 17.06.1982 (18) 17.06.2014 150.03
Krmmel 1,316 28.03.1984 (16) 28.03.2016 158.22
Gundremmingen B 1,344 19.07.1984 (16) 19.07.2016 160.92
Philippsburg 2 1,424 18.04.1985 (15) 18.04.2017 198.61
Grohnde 1,430 01.02.1985 (15) 01.02.2017 200.90
Gundremmingen C 1,344 18.01.1985 (15) 19.01.2017 168.35
Brokdorf 1,440 22.12.1986 (14) 22.12.2018 217.88
Isar 2 1,455 09.04.1988 (12) 09.04.2020 231.21
Emsland 1,363 20.06.1988 (12) 20.06.2020 230.07
Neckarwestheim 2 1,365 15.04.1989 (11) 15.04.2021 236.04
Mlheim-Krlich * 1,302 107.25
Total 23,511 2 623.31
* Shut down after court decision on 09.09.1988.

Operator applied for final shut down permit.
The relevance of these assured amounts of nuclear production becomes evi-

dent if seen in relation to German total annual electricity demand which has
been stagnating at approximately 450 TWh over the last decade. In terms of
turnover, enormous sums are involved. At current electricity prices - in 1999,
average proceeds ranged at 16.9 Pfg/kWh - the agreement guarantees the op-
343
erators proceeds of roughly DM 443 ( 226.5) billion. Should electricity prices

increase in future years, proceeds might easily rise to DM 500 ( 255.65) billion.
To attain accurate numbers on operation costs and full and marginal costs of
NPP is very difficult, because operators usually do not fully disclose their books.
A detailed analysis by ko-Institut and Wuppertal Institut (Hennicke et al.
2000) provides an estimate. For the past this suggests that the full costs of
producing electricity have varied between an average of 8.4 and 14.4 Pf/kWh
from 1988 to 1998 and differed widely from one NPP to the other (cf. table 7).
Tab. 7: Full costs of selected German NPP 1987-1998 in Pf/kWh

in Pf/kWh 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Stade 8.8 10.1 12.8 10.9 26.1 13.5 9.0 6.7 16.2 10.3 9.3 7.8
Obrigheim 9.4 9.9 15.5 30.8 35.2 18.4 15.5 17.3 16.4 12.7 13.6 8.7
Brunsbttel 9.7 11.9 13.2 11.8 15.0 17.2 22.3 17.1 6.3 10.3
Emsland 11.0 10.8 9.8 9.6 10.2 8.8 9.0 8.7 9.4 11.6 8.4
Krmmel 7.5 8.9 7.8 8.9 8.9 12.1 31.1 8.1 13.1 7.0 12.4
Brokdorf 10.5 10.3 10.1 8.6 7.8 6.9 8.4 6.8 6.9 7.7 6.0 6.5
weighted average 10.0 11.0 10.7 13.1 10.9 10.0 14.4 11.3 11.2 8.4 9.1
Source: Hennicke et al. 2000, p. 5
Production costs are constructed from a number of cost types, the relevance of
each depends on a number of factors. Some of these are specific to NPP, others
are shaped by general market conditions. As some of the respective weight of
these factors is likely to change in the near future, the future costs develop-
ment is estimated to follow a decreasing path.
An important factor is the overall performance of a specific NPP. Some of
the older plants, e.g. Brunsbttel, Krmmel and Unterweser, have proven
highly unreliable due to technical problems, which reduced availability to
values below 60% in some cases. In contrast, particularly the newest NPP
have had high availability of above 90%. Actual utilisation rates, however,
also depend on external factors, such as the network operators request for
reduced delivery due to unexpectedly low electricity demand or the need to
reduce output due to reduced availability of cooling water in hot weather pe-
riods.
344
The costs for regular operation, maintenance, and scheduled revisions,

including the needed personnel, constitute up to one third of costs. Added
to these are refurbishment costs, which may be calculated as a share of
about one tenth of total costs. However, given unforeseen technical prob-
lems and replacement needs, an economically induced decision to close
down individual plants might come unexpectedly and possibly fast (p. 9,
42).
Another important factor is waste disposal costs. Reprocessing of spent
fuel, until 1995 the only legally sanctioned way of treating nuclear wastes, is
more expensive than the direct storage of spent fuel at interim or final dis-
posal sites by a factor of about 2.5 to 3. With the agreed end of reprocessing
by 2005, reduced waste disposal costs may potentially reduce full costs by
about 1.5 Pf/kWh. At the same time the amount of accruals to be set aside
for waste disposal will reduce (see pp. 20-23).
Capital and depreciation costs for the plants construction today affect only
the newest NPP. In 2000 they totalled about DM 800 ( 409) mill. and will
have been paid off by 2007.
Calculations show that the different factors will effect a substantial decrease in
full costs from an average of 9.2 Pf/kWh in 1995 to 6.7 Pf/kWh in 2000 (at a
range between 5.8 and 8.5 Pf/kWh). As the oldest NPP will go off line, average
costs will decrease down to 5.0 Pf/kWh in 2015 and slightly increase thereafter
(see table 8).
Another factor that might put pressure on the economics of NPPs is the future
electricity price trend. Should prices continue to decrease the economics of
the NPP will come under pressure in some cases. However, as the recent price
increase suggests and future power station park replacement needs underline,
market prices very probably will not continue to decrease any further, on the
contrary, they might rise as replacement needs in the German power plant
market arise, at the latest by 2007-10. This could further improve the competi-
tive status of German NPPs.
All things considered, the economic situation of German NPP is not likely to
lead to an accelerated shut down schedule. However, looking at the individual
NPPs, not for all of them the economic prospect is as bright. As the detailed
analyses of ko-Institut and Wuppertal Institut (Hennicke et al. 2000, pp. 72-
79) reveal, considering current market prices, ten NPP are uneconomic due to
their high operational costs and insufficient contribution margins. However,
345
because of their ability to set aside accruals in the balance sheet, the continued
operation of most of these plants turns out to be a clear advantage after all.
Only for two NPP, Stade and Brunsbttel, the prerequisites from accruals
could not balance the operational losses already in the year 2000, proving them
to be highly uneconomic. Thus, if accumulating funds for decommissioning
were regulated in a way that would prevent operating companies from earning
interest from them for their own purposes, nuclear power might cease to play
the significant role it still does in Germany.
Tab. 8: Specific full costs of German NPP (Pf/kWh)
1995 2000 2005 2010 2015 2020

Stade 9.0 7.5
Obrigheim 11.9 8.0
Biblis A 7.8 6.6 5.3
Biblis B 7.8 5.9 5.1
Neckarwestheim 1 8.6 8.1 5.7
Neckarwestheim 2 10.9 6.0 5.8 5.3 4.6 4.9
Isar 1 10.1 8.5 5.6
Isar 2 9.9 6.7 6.0 5.6 4.9 5.3
Unterweser 8.6 7.0 5.0 5.3
Grohnde 8.0 6.2 5.2 4.7 5.0
Emsland 10.4 6.2 6.2 5.7 5.1 5.4
Grafenrheinfeld 8.1 5.8 5.6 4.9 5.3
Philippsburg 1 9.5 8.0 5.5
Philippsburg 2 8.0 6.1 5.0 4.5 4.9
Brokdorf 8.6 6.3 5.8 5.7 5.0 5.3
Brunsbttel 12.5 8.5 6.9
Krmmel 9.8 8.2 6.5 5.6
Gundremmingen B 8.9 5.8 5.7 4.9 5.2
Gundremmingen C 9.4 6.0 5.8 5.0 5.4
weighted average 9.2 6.7 5.7 5.2 5.0 5.2
Source: Hennicke et al. 2000, p. 40
346
9 Conclusion
The most recent German nuclear policy is marked by a fundamental revision
of nuclear policies. The basic decision against the future construction of nu-
clear power plants has been enshrined in nuclear energy law and the licenses
of existing plants have been reviewed and limited. The legislative process lead-
ing up to these amendments was characterised by the governments endeavour
to reach a consensus with nuclear power interests and to avoid legal disputes
before the courts. These negotiations have not been without setbacks for nu-
clear opponents given the powerful position of the vested interests, both eco-
nomically and politically.
Most obviously, the consensus negotiated so far will not lead to a substantial
acceleration of shutdown plans. Instead, the agreement guarantees the politi-
cally undisturbed operation of nuclear power plants. Disputes with regulatory
authorities at Federal or Lnder level about permitting procedures or waste
treatment as had been common over the past decades are not to be expected
for the years to come.
Moreover, nuclear power will remain an important factor in German electric-
ity supply market, despite the phase out agreement and despite economic diffi-
culties of a number of individual plants. At least until 2005 nuclear power will
continue to provide about 30% of German electricity and together with lignite-
fired plants will cover base load needs. By 2010, production is likely to fall by
about one third due to the shut down of older plants, at the same time average
costs should decrease by one third. Very possibly, the needed base load capac-
ity will be covered by additional (inexpensive) lignite-fired sources unless cli-
mate change policies reduce their utilisation. All things considered, it may be
expected that the competitiveness of remaining nuclear power plants may
increase over time and at least over the current decade occupy a substantial part
of the German supply market.
Furthermore, operators will be allowed to continue running plants well be-
yond their economic pay-back periods, and are thus permitted to continue
making substantial profits. These profits stem mainly from interest earned on
accrued special-purpose reserves, which, during the year following electricity
deregulation, allowed operating companies to sell below marginal costs on the
electricity market and thereby strengthen their market power vis--vis inde-
pendent power producers and municipal utilities. Thus, in contrast to the
347
situation in the US, a debate on stranded nuclear investment has been

avoided, and the financial situation of nuclear power plants remains largely
hidden.
10 Addendum
Six years after having agreed on the nuclear phase out consensus, the underly-
ing policy seems to be maintained in political practice. The first three nuclear
power stations (Mlheim-Krlich, Obrigheim and Stade) are finally shut down
for decommissioning. At the end of 2005 the resting agreed nuclear electricity
generation totals 1,659.1 billion kWh. And since July 2005 all transport of spent
nuclear fuel to reprocessing facilities is abandoned.
Attempts at reopening the debate on nuclear power have been made by parts
of the conservative opposition. In the course of the 2005 national election,
some politicians sketched plans to extend nuclear power operating permits
and to feed the industrys extra profits into a fund to lower electricity prices
for German industry. These plans were not echoed by the electricity supply
industry, who has publicly restated their support for the phase out agreement.
Consequently, the coalition treaty of the new CDU/CSU and SPD government
mentions the diverging positions in nuclear power, but clearly confirms to
abide to the phase out law. However, industrial policy makers and electricity
industry did try to influence public opinion by associating the rising electric-
ity prices to be expected in the coming years with the nuclear phase out obli-
gation, thus, tuning in the public for yet another round of price increases to
be blamed on the supposedly mistaken nuclear policy.
The new government also announced that a solution for the final storage of
radioactive waste in Germany will be drawn up during this legislature. After a
final Higher Administrative Court decision in March 2006, the former iron
ore mine Konrad will most likely be the site for low-level radioactive waste
disposal. A site for highly radioactive waste has not been selected yet, but in
the past five years no alternatives for the projected Gorleben site have been
introduced nor has any selection procedure been agreed upon. Thus, since the
nuclear phase-out agreement does not regulate nuclear waste disposal, the
missing consensus for this crucial issue is on the agenda again.
348
References
BMU (1999) Convention on Nuclear Safety - First Review Meeting, April 1999, Bonn
(http://www.bmu.de/english/nuclear/index.htm).
BMWI (2000) Energiedaten 2000, Bonn.
Frankfurter Rundschau (2001) EON will Powergen als Sprungbrett in die USA nutzen
April 10, 2001.
Hartenstein, V. (2001) Der steinige Weg der Bundesregierung zum harmonischen
Ausstieg Deutschlands aus der Atomenergie Jahrbuch kologie 2000, Munich:
Beck, pp. 276-286.
Hennicke, P. et al. (2000) Kernkraftwerksanalyse im Rahmen des Projekts: Bewertung
eines Ausstiegs aus der Kernenergie aus klimapolitischer und volkswirtschaftlicher
Sicht, Zusatzauftrag: Kraftwerks- und unternehmensscharfe Analyse, Wuppertal
Institut fr Klima, Umwelt und Energie, ko-Institut, January 27, 2000.
Higley, C. (1999) Statement on the future of nuclear energy before the Center for Clean
Air Policys conference on promoting clean power in a competitive market. Wash-
ington DC: Public Citizens - Critical Mass Energy Project, December 2.
Jordan, L. (2000) Wie der Ausstieg in Greifswald lngst praktiziert wird, Frankfurter
Rundschau, June 14, 2000.
Kohler, S. (2001) Energiepolitik: ber den Ausstieg und den Einstieg, Jahrbuch ko-
logie 2000, Munich: Beck, pp. 54-61.
Mez, L. (2001) Der deutsche Weg zum Ausstieg aus der Atomenergie - im Konsens zu
einer Quote fr Atomstrom Gourd, A. and Noetzel, T. Zukunft der Demokratie in
Deutschland, Opladen: Leske + Budrich, pp. 416432.
Mller, M. (1999) Der Ausstieg ist mglich. Eine sichere Energieversorgung ohne Atom-
kraft, Bonn: Dietz.
Mller, W. (1999) Entwurf einer Verstndigung ber Eckpunkte zur Beendigung der Nut-
zung der vorhandenen Kernkraftwerke in Deutschland zwischen der Bundesregie-
rung und den Eigentmern/Betreibern der in Deutschland errichteten Kernkraftwerks-
kapazitten vom 17. Juni 1999
Piening, A. (2001) Nuclear Energy in Germany Binder, M., Jnicke, M., Petschow, U.
(eds.) Green Industrial Restructuring. International Case Studies and Theoretical
Interpretations, Berlin etc.: Springer, pp. 403434.
Piening, A. and Mez, L. (2000) Die Ausstiegsdebatte - mehr Schein als Sein? Die Mit-
bestimmung, No. 3, pp. 34-37.
Rdig, W. (2000) Phasing Out Nuclear Energy in Germany German Politics, Vol. 9,
No. 3, pp. 43-80.
Schrppel, W. and Urban, M. (2000) IT-Systeme fr den Stromhandel, Power Engi-
neering Proceedings A, Maribor, pp. 151-158.
VDEW (2000) Pressemitteilung zum Jahresbericht der Strombranche 1999, Rede von
Gnther Marquis, Prsident der Vereinigung Deutscher Elektrizittswerke
(VDEW), Frankfurt/Main, June 5, 2000.
Wittke, F. and Ziesing, H.-J. (DIW 2002), Khle Witterung treibt Primrenergie-
verbrauch in die Hhe. Der Primrenergieverbrauch in Deutschland im Jahre
2001 DIW Wochenbericht 7/2002, pp. 109-118
Wittmann, K. (2000) Sankt Florian lsst gren, Die Zeit, Nr. 11, March 9, 2000.
349
Part V
International Environmental
Governance
Does Bureaucracy Really Matter? The Authority of
Intergovernmental Treaty Secretariats in Global
Environmental Politics1
STEFFEN BAUER
Abstract
Although the relevance of intergovernmental bureaucracies in world politics
has been acknowledged by a number of scholars, International Relations re-
search still lacks theoretical distinction and empirical scrutiny in understand-
ing their influence in the international arena. In this article I explore the role
of intergovernmental treaty secretariats as authoritative bureaucratic actors in
global environmental politics. I employ organizational theories and sociologi-
cal institutionalism for comparative qualitative case study research that traces
variances at the outcome level of two environmental treaty secretariats, the
secretariats to the Vienna Convention and the Montreal Protocol (Ozone
Secretariat) and the UN Convention to Combat Desertification (Desertifica-
tion Secretariat). While the organizational design of both secretariats is simi-
lar, their institutional histories and outcomes differ markedly. Looking for
possible explanations for these differences I focus on the activities of both
secretariats and how they relate to the authority they enjoy vis--vis the parties
they serve.
1 Introduction
Time and again, politicians and practitioners debate organizational reform in
the international arena. Oddly, reliable answers on how international organi-
zations may contribute to or hinder the worlds governing capacity are not
available. This points to a need for a substantive and systematic research effort
1
First published in: Global Environmental Politics, Vol. 6, No. 1, 2006, pp 23-49
Copyright MIT Press. Reprinted with kind permission.
353
Steffen Bauer
that analyses the activities of international organizations and their effects in

world politics. This article focuses on intergovernmental treaty secretariats as
a distinct type of international organization and seeks to explore how these
organizations contribute to shaping global environmental politics. It thus
conceptualizes secretariats as political actors that can and should be analyzed
in International Relations.
I argue that the activities of treaty secretariats are not only noteworthy for
scholars of international organizations but are also essential to gain a more
comprehensive understanding of intergovernmental political processes. As
can be shown in the field of global environmental politics, the activities and
subsequent effects of treaty secretariats differ. Naturally, much of this variance
will need to be attributed to factors outside of these organizations. However,
thorough empirical analysis of global environmental politics should help to
reveal how variation in the attitudes and behaviour of treaty secretariats makes
a difference to the ways an international environmental agreement is fur-
thered or implemented. In this respect, this article will elaborate, first, on
some theoretical assumptions regarding the authority that intergovernmental
treaty secretariats bear as bureaucratic actors in global environmental politics.
Second, it employs empirical findings from two secretariats to assess whether
these assumptions are plausible and ultimately, whether these bureaucratic
actors really matter in global environmental politics.
In the first part of the paper I will offer a brief background discussion on the
treatment of intergovernmental organizations in International Relations theo-
ries and why they can and should be analyzed as actors rather than as static
structures of the world polity. Following this, I will offer a more specific con-
ceptualization of intergovernmental treaty secretariats as bureaucratic actors
in world politics and discuss theoretically how they are bearers of authority.
With regard to the latter I will draw in particular on the conceptualization of
the power and pathologies of international organizations as provided by
Michael Barnett and Martha Finnemore.2 Following a brief discussion of the
concept of authority, the second part of the paper employs two empirical cases
from the arena of global environmental politics. Drawing on the examples of
the secretariat to the Vienna Convention and the Montreal Protocol (the O-
zone Secretariat) and the secretariat to the United Nations Convention to
2
Barnett and Finnemore 1999, 2004.
354
Does Bureaucracy really matter?
Combat Desertification (the Desertification Secretariat) I will investigate the

bureaucratic authority of these secretariats within the wider regimes they are
part of and whether the authority of both organizations differs.3 I will show
that both secretariats do bear bureaucratic authority, but also that there are
differences to the authority (and the use thereof) with respect to either secre-
tariat. The condensed characterization of only two secretariats will of course
not allow for tangible generalizations regarding the bureaucratic authority of
treaty secretariats. Nonetheless, at the end of this paper, I will attempt to hy-
pothesize about potential causal relations of bureaucratic authority and the
activities of intergovernmental secretariats in international relations. Finally, I
will analyze where possible differences emerge and contemplate how they may
relate to the overall effectiveness of intergovernmental treaty secretariats in
environmental governance and how, from this vantage point, plausible hy-
potheses may be generated for further research.4
2 Intergovernmental Organizations in Theoretical

Perspective: A Brief Review
Although scholars of international relations increasingly come to agree that

there is more to world politics than politics among nations, one must not be
oblivious to the fact that it is first and foremost the lack of political willing-
ness among national governments that accounts for many of the present-day
global challenges. This rather trivial statement implies neither caving to the
realist notion of total anarchy in the absence of a world government nor does
it minimize the achievements of international and indeed transnational coop-
eration that can be witnessed as well as analyzed by means of the social sci-
ences. If we agree that multiple actors matter, questions still remain: which
actors are doing what, how and to what effect in world politics? One group of
actors that has remained largely out of the analytical focus of the social sci-
ences is the group of intergovernmental organizationsalbeit with the excep-
3
The full titles of the treaties these secretariats serve read as follows: 1. The Vienna
Convention for the Protection of the Ozone Layer and the Montreal Protocol on
Substances that Deplete the Ozone Layer (www.unep.org/ozone); 2. United Nations
Convention to Combat Desertification in Those Countries Experiencing Serious
Drought and/or Desertification, Particularly in Africa (www.unccd.int).
4
See also Biermann and Bauer 2005b; and Siebenhner 2003 for a broader analytical
framework on effectiveness and learning of intergovernmental organizations.
355
Steffen Bauer
tion of numerous descriptive studies that are generally based on the accounts
of practitioners, diplomatic history and institutional law.
Broadly speaking there are two major groups of scholars in International Rela-
tions, both of which take intergovernmental organizations as a given in world
politics. Accordingly, neither group has taken a closer look at what intergov-
ernmental organizations actually do, how they do it and why they have certain
kinds of effects. One growing group of researchers, liberal institutionalists,
ambitiously reaches beyond the traditional focus of international relations by
means of integrating the role of nonstate actors and public-private as well as
private-private actor networks into their research agenda. Another group of
scholars, neorealists, keeps their eyes on states and their governments as the
paramount actors of international politics. Consequently, this latter group
views international institutions as instruments that may help to facilitate state
interaction and greets the notion of an active role for nonstate phenomena
with a good portion of skepticism. In contrast to these main views, I see the
wide-spread neglect of intergovernmental organizations as a major flaw in the
academic discourse. Indeed, this particular deficit in International Relations
research has been criticized time and again.5 Before elaborating further, I take
a condensed look at the conventional wisdom on intergovernmental organiza-
tions as far as these two schools of thought are concerned.
Quite clearly, neorealists disapprove of the very idea that intergovernmental
organizations may do anything meaningful that is not explicitly asked for,
indeed demanded, by their member state mastersnever mind acting on
their own behalf. To the neorealist mindset, intergovernmental regimes and
organizations are epiphenomena of the interaction amongst sovereign na-
tional governments. If these would not function as instruments in the hands
of their member states they would be dismembered or would not have
emerged in the first place. Intergovernmental institutions are thus perceived
as structures in the political world system and, like other externalities, can be
treated as givens while analyzing the political processes among nations.
Institutionalist research, on the other hand, has tremendously advanced our
understanding of international environmental cooperation and broadened our
empirical knowledge through numerous case studies. This holds in particular
5
See, among others, Rochester 1986; De Senarclens 1993; Malik 1995; Verbeek 1998;
Pease 2000; and Reinalda and Verbeek 2004.
356
for the prolific branch of regime analysis. These achievements notwithstand-

ing, institutionalist research has done little to further our understanding of
the role that international organizationsintergovernmental bureaucracies,
formally controlled by multilateral governmental mechanisms but operated by
self-confident international civil servantsplay in international environ-
mental governance. Indeed, students of international regimes tend to view
organizations such as treaty secretariats as something that happens to come
with regimes as but one feature of the wider institutional setting. They may be
looked at as intervening variables that somehow affect regime outcomes, but
more often than not, they are not really looked at all.6
There are two important reasons to address the neglect of intergovernmental
organizations in the environmental policy debate. First, the limited under-
standing of intergovernmental organizations and their effects on global envi-
ronmental politics is likely to mislead conclusions about the state of interna-
tional environmental governance to the extent that there is an anachronistic
emphasis on sovereign states that encompasses a perception of international
institutions as mere instrumental structures established by these sovereign
states. Second, taking into account the effects international organizations do
or do not have in world politics will contribute to ongoing policy debates
about the very structure of international governance. In fact, the effective-
ness of the UN and its specialized agencies continues to be a subject of in-
tense debate in public policy circlesnot least in the environmental field
albeit with limited academic response.7
As far as the analytical treatment of intergovernmental organizations is con-
cerned neoliberal institutionalism and neorealism share the same fundamen-
tal flaw. Barnett and Finnemore have convincingly pointed out that both ap-
proaches fail to address intergovernmental organizations as actors because
ontologically, they are theories about states.8 Fuelled by the constructivist
6
For a notable exception see Underdals 2002 distinction between organizations as
actors and institutions as arenas. He singles out coherence, autonomy, activity and
resources as criteria that qualify international organizations as actors.
7
For details and further references see Bauer and Biermann 2005. In particular, it can
be assumed that the debate about the pros and cons of upgrading the UNEP to a
specialized agency or a world environment organization could benefit greatly from
a more solid academic grounding. See Biermann and Bauer 2005a.
8
357
Steffen Bauer
turn in International Relations scholarship a number of authors have begun

to challenge this state-centred ontology and developed an institutionalist
branch that draws heavily on sociologist approaches to organizational analysis
and has been branded as sociological institutionalism.9
In order to overcome the ontological flaw of neoliberal institutionalism, scho-
lars of sociological institutionalism aim to look beyond the limits of rational-
ity that have so far constrained utilitarian approaches to institutional analy-
sis.10 To this end they seek to integrate the frames of meaning guiding hu-
man interactionnamely symbol systems, cognitive scripts, and moral tem-
plateswithin an expanded framework of institutional characteristics that is
traditionally confined to norms, rules and procedures.11 Moreover, the emer-
gence of a distinct sociological institutionalist approach greatly benefited
from the cognitivist branch of regime analysis, which enriched the discipline
by considering knowledge and ideas as drivers of international cooperation. As
a result, cognitive variables now compete with the long-standing explanatory
variables of rationalist scholars, namely power and interests.12
Proponents of liberal institutionalist approaches, too, have questioned the
appropriateness of maintaining a state-centric ontology and make a strong
case to accept a multiplicity of actors as one characteristic empirical manifes-
tation of the globalization phenomenon.13 However, in their effort to integrate
actors such as multinational corporations and civil society organizations into
their analytical frameworks they, too, fail to pay closer attention to intergov-
ernmental actors, although this is probably an unintentional side-effect of
their occupation with private actors.
In short, it is in particular the sociologically inspired approach to institution-
alism that helps us to analyze intergovernmental organizations as actors in the
world polity. This however, is not an end in itself. Rather, the sociological
institutionalist approach is applicable as an analytical tool to address ques-
tions that follow from the ontological assumption that intergovernmental
9
See in particular, Powell and DiMaggio 1991; and March and Olsen 1989 for concep-
tual foundations of sociological institutionalism; see also Finnemore 1996.
10
March and Olsen 1996, 251.
11
Hall and Taylor 1996, 947.
12
See Hasenclever, Mayer, and Rittberger 1997.
13
See Dingwerth and Pattberg 2006.
358
organizations are actors. Namely: what do these actors do, how do they do it
and to what effect? And ultimately, does it matter?
Consequently, in the following exploration of how intergovernmental treaty
secretariats may or may not affect the implementation of the multilateral (en-
vironmental) agreements they were set up to serve, I will draw on the theoreti-
cal basis provided by sociological institutionalism and, in doing so, focus in
particular on the authority that is vested in intergovernmental bureaucracies.
2.1 Intergovernmental Treaty Secretariats as Public Nonstate

Actors
Intergovernmental treaty secretariats are one specific type of international

organization. Steinar Andresen and Jon Birger Skjaerseth have usefully de-
fined such secretariats as international organization[s] established by the
relevant parties to assist them in fulfilling the goals of the treaty and empha-
sized that they can be conceived of as actors within broader institutional
structures or networks.14 I further conceptualize intergovernmental treaty
secretariats as issue-specific bureaucratic organizations that are best under-
stood as public nonstate actors. To be precise, bureaucratic organizations that
administer treaties on behalf of the signatory parties to a specific treaty do
represent the collective interest of these parties, which are, of course, states.
This function of representing a collective of governments makes them public
actors. At the same time they are nonstate actorsa label that is commonly
attributed to private actorsin so far as they simply are not states. In short, it
is not mutually exclusive for a political entity to be public and nonstate.
Intergovernmental treaty secretariats have received some attention within the
distinct branch of the institutionalist research that seeks to explain the effec-
tiveness of international environmental regimes. For instance, Jorgen Wet-
testad views treaty secretariats as one of six key factors which help to explain
the effectiveness of such regimes.15 Similarly, Konrad von Moltke and Oran
Young have argued that secretariat effectiveness is a necessary condition for
the effectiveness of the respective regime.16 But beyond this, the International
14
Andresen and Skjaerseth 1999, 2.
15
Wettestad 2001.
16
Von Moltke and Young, cited in Andresen and Skjaerseth 1999.
359
Steffen Bauer
Relations literature does not really tell us a great deal theoretically about the
roles secretariats play in world politics.
This is all the more striking as these secretariats have not only grown in num-
ber, but also in diversity of their functions and features. This holds in particu-
lar in the environmental field, where the immense proliferation of intergov-
ernmental treaties that have been adopted to ameliorate transboundary and
global environmental problems also brought about new secretariats to admin-
ister them. Filling a notable gap in the literature, Rosemary Sandford has
traced a three step evolution of environmental treaty secretariats. Starting with
the organizational embodiments of the early treaties that had been spawned
by the United Nations Conference on the Human Environment in 1972, these
organizations evolved into those secretariats that were typically helped into
being by the United Nations Environment Programme during the 1980s. They
then further evolved into the distinct bureaucracies attached to the so-called
Rio Conventions which were established in the aftermath of the 1992 United
Nations Conference on Environment and Development.17
2.1.1 The Authority of Bureaucratic Personalities

Considering the above, which features qualify intergovernmental bureaucra-
cies as actors in world politics? In a sense, it is the host of international civil
servants employed by a secretariatorganized by a hierarchical structure and
equipped with collective resourcesthat turns it into an actor.18 In political
practice this actor is focused in one or few top executives, like the Secretary-
General who represents the actor that is the United Nations Secretariat. Gen-
erally speaking, these features of a collective actor constitute what I would like
to call an organizations bureaucratic personalityas opposed to the legal
personality which commonly generates from a document of international law,
such as an international environmental treaty. A given collective of interna-
tional civil servants first and foremost serves the objectives of its organization
and not so much the partial interests of the signatories the bureaucrats are
individually affiliated with by nationality.19 This assumption is backed by ob-
servations from within three UN agenciesthe two secretariats discussed in
17
Sandford 1994, 19.
18
On general functions and characteristics of the international civil service see also
Weiss 1982; Mango 1988; and Mouritzen 1990.
19
But see Weiss 1982 for a different perspective in a view of a Cold War context.
360
this paper plus the UNEP secretariatand a broader empirical study which
covers five treaty secretariats and confirms that professional and personal
commitment to the values espoused by the treaty objectives were significant
factors in job satisfaction and staff retention, uncertain employment condi-
tions notwithstanding.20 The notion of bureaucratic personality does not
question the general consensus that an intergovernmental bureaucracies
freedom to act is constrained by the control of its state principals, that is na-
tional governments. However, international civil servants are willing and able
to both detect and exploit the leeway that their principals grant them.
The question remains what makes these bureaucratic personalities meaning-
ful actors in terms of political influence within their respective regime. I argue
that it is bureaucratic authority that makes environmental treaty secretariats
actors of global environmental politics. Intergovernmental secretariats do not
possess sovereignty or power in a traditionalist sense. However, as constructiv-
ism and sociological institutionalism teach us, power and sovereignty are not
the only dispositions by which political processes are constituted and shaped.
But how does one conceptualize the authority of public nonstate actors vis--
vis the material hard powers of states and governments?
2.1.2 Authority and Action: A Delicate Balance for

Intergovernmental Treaty Secretariats
Authority is one of the key concepts of political thought. As with most political
concepts, there are two main ways to approach them: either by scientifically
asking for explanations of the emergence of the phenomenon they conceptu-
alize or by trying to grasp the implications of the existence of the phenome-
non and its conceptualization from a normative angle.21
I understand authority as a function that enables a subject to effectively im-
plement its will without the use of sanctions, because the objects it addresses
voluntarily adhere to it. As such it is clearly distinct from power which does
not require the notion of voluntariness on behalf of the addressees. Power is a
20
Sandford 1994, 25. Note that all these examples draw from the environmental arena.
It is conceivable, but would require of systematic research to ascertain whether this
can be generalized across policy fields.
21
See Raz 1990, 1. Rather than discussing the meaning of authority, I employ it as a
concept that can help us to understand how intergovernmental secretariats interact
with other players in the arena of global governance. .
361
Steffen Bauer
core disposition of statehood. It entails an ability to enforce that is not at the

disposal of intergovernmental secretariats.22 Consequently, in the absence of
power, the potential for an intergovernmental organization to purposively
interfere with international political processes rests solely on its authority.23
Other than for domestic authorities and public institutions, such as local gov-
ernments or universities, it is also not an option for intergovernmental actors
to engage a third-party force, e.g. by calling upon the police or the military, to
break the power of others.24
In an attempt to come to terms with private authority in the realm of global
governance, Claire Cutler and colleagues have brought forth a definition that
highlights similar aspects of authority. According to them authority involves
a surrendering of individual judgment, an acceptance of its dictates based not
on the merits of any particular pronouncement but on a belief in the rightness
of the authority itself.25 This understanding resonates well with the classic
conception of Hannah Arendt on which I have drawn above to approach the
concept of authority.
To grasp what determines the bureaucratic authority of intergovernmental
secretariatswhich is by definition not privateand how it generates, it is
insightful to turn to Max Webers classic analysis of bureaucratization.26 Of
course, one needs to be cautious in so far as classic sociological studies of
bureaucracy result from observations of the domestic level and it is the very
raison dtre for students of International Relations that lessons from national
arenas cannot simply be transferred to the inter-national realm. With regard
to authority it is crucial to note that at the domestic level, in the ideal-typical
22
Arguably some of the bigger intergovernmental organizations possess means to
exert power, too, e.g. the World Bank can pressure governments by withholding lo-
ans. But from the vantage of political philosophy, such power tools are not genuine
power (see Arendt 1977 [1961]; and 1970, 44-58) and the availability of either genuine
power or indirect power tools can most certainly be excluded for the case of envi-
ronmental treaty secretariats.
23
But see Barnett and Finnemore 2005 for a broader understanding of power.
24
Arendt 1970, 47, note 61, has employed the example of the 1969 Berkeley student
rebellion to illustrate this point.
25
Cutler, Haufler, and Porter 1999, 334; see also Pattbergs discussion of the changing
nature of authority in environmental governance (Pattberg 2005).
26
See Barnett and Finnemore 1999, 707-710; see also Weber 1980 [1921]; Kieser 1999;
and Barnett and Finnemore 2004.
362
relation between a government and a people, people are generally willing to

submit to the rational-legal authority of the governmental bureaucracy. At
the intergovernmental level, however, states are generally reluctant if not prin-
cipally unwilling to submit to the authority of an intergovernmental secre-
tariat (the very reason why the latter are powerless and without the means to
exert force). Nonetheless, most features that determine rational-legal authority
at the domestic level also apply to intergovernmental bureaucracies. Environ-
mental treaty secretariats, for instance, embody the institutional memory of
the regime. Specifically, they possess expert knowledge of various categories,
all of which are relevant to regime dynamics. They bear technical and scien-
tific knowledge on the policy problem, administrative and procedural knowl-
edgewhich to a significant degree they will generate themselvesas well as
normative and diplomatic knowledge which is relevant to deal with the com-
plex web of connections that typifies international regimes. Moreover, they
control, at least to some extent, the flow of information between regime com-
ponents, and, not least, they develop their own organizational culture.27 Fur-
thermore, skilful and charismatic leadershipanother concept that goes back
to the sociology of Max Webermay effectively boost a bureaucracys author-
ity, but it is also prone to politicize it and hints to where the concept of bu-
reaucratic authority goes beyond a mere technocratic understanding of a nar-
rowly Weberian rational-legal authority. All these elements contribute to the
generation of bureaucratic authority and some of them will be illustrated in
the empirical section below. In sum, the acquisition of authority invites and
at times requires bureaucracies to shape policy, not just implement it.28 Ul-
timately, then, it turns bureaucratic personalities into public nonstate actors.
Some authors go as far as to consider the control of knowledge and expertise
that is exerted by international organizations as a manifestation of power.29
However, authority not only represents a different concept than power, but its
empirical manifestation is also more delicate. It is important then to keep
both categories distinct, at least analytically. The delicateness of the authority
we find vested in intergovernmental organizations is closely related to their
attitudes and behaviour as nonstate actors. The degree of authority at the dis-
27
For an illustrative example on the relevance of organizational culture see Weaver
and Leiteritz 2005.
28
29
See Haas 1990; and Barnett and Finnemore 1999, 2004.
363
Steffen Bauer
position of a bureaucratic personality depends not only on its activities per se

but also on the ways and manners in which these activities are conducted.
This is where the concept of bureaucratic authority relates to the question of
secretariat activity. The authority of a public nonstate actor is dependent on
how it is perceived by its stakeholders, notablyin the case of treaty secretari-
atsthe parties to a treaty. This perception of course largely depends on the
ways in which the bureaucratic personality acts. Barnett and Finnemore have
pointed to the irony that authoritative international organizations can typi-
cally be characterized by a depoliticized appearance.30 As bureaucratic author-
ity is a delicate good, even minor misdemeanours of a treaty secretariator
what is perceived as such by its partiescan seriously reduce and ultimately
result in a total loss of its authority. Where this is the case the secretariat at the
same time decreases or loses its potential to actively interfere with the political
processes around it. With regard to regime effectiveness, it is conceivable that
the implementation of a treaty can still be reasonably effective if the treaty
secretariat bears little or no authority. From the perspective of the bureau-
cratic personality however, its potential to effectively pursue its own objectives
crucially depends on its authority.
Those who do address the activities of secretariats and look for variation in
secretarial performance commonly rely on an analytical distinction between
passive and active secretariats.31 The general assumption behind this distinc-
tion is that active secretariats significantly influence both treaty making and
implementation whereas minimalist passive secretariats take a back seat on
the processes that determine a regimes dynamics.32 While this distinction is
useful in an ideal-typical sense, I would argue that there is no such thing as a
passive secretariat. Clearly, some secretariats are more active than others, but
even those secretariats who would describe themselves as passive are not that
passive that they would not interfere with the political processes relevant to
the treaty they serve. In fact, as we shall see from the case of the Ozone Secre-
tariat, a secretariat that is eager to characterize itself as a passive instrument to
its parties, may well be quite active behind the scenes. But just because secre-
tariat activity often occurs behind the scenes, indeed in the corridors and ho-
30
31
Sandford 1992, 1994; Andresen and Skjaerseth 1999.
32
Sandford 1992, 27; and Young 1967.
364
tel bars of conference venues, does not mean they are obsolete to regime dy-
namics. Thus, it is preferable to talk of cautious rather than passive secretari-
ats, like Andresen and Skjaerseth have done in their analysis of the Interna-
tional Whaling Commission.33 For secretariats who wish to make a difference
in the ways their treaty is being implemented such cautiousness often is an
appropriate prerequisite to being active as it is directly linked to the authority
they will enjoy vis--vis governments and other actors. Essentially, cautious-
ness and sophisticationstaple skills of successful diplomatsreflect the
delicate balance34 between the activism that is necessary to make a difference
and the risk of being perceived as questioning or even challenging specific
interests of individual parties to the treaty.
As we shall see from the analysis below, both the Ozone Secretariat and the
Desertification Secretariat bear bureaucratic authority and both are active
players in their respective regimes. In tracing their activities and how they
affect the processes of treaty implementation we can see that they differ mark-
edly in keeping the balance between activity and authority. Before I will return
to this aspect in the following paragraphs, I should note in order to reduce
the complexity of the argument in this articlethat I deliberately neglect one
peculiar feature of bureaucratic organizations is bureaucratism, commonly
referred to as red tape. Suffice to say here, that it can be plausibly assumed
that heavy red tape and subsequent inefficiencies in secretariat performance
are not a source of bureaucratic authority and will much rather discredit a
secretariat in the perception of governments. Naturally, the factors that con-
note the maneuverability of an intergovernmental administration will vary
according to its size, i.e. an administration will be clumsier the more employ-
ees it has, the more levels of hierarchy it requires to manage itself, and so on.
However, as far as bureaucratism in small environmental treaty secretariats is
concerned variation is negligible, in particular for those that operate within
the overall administrative system of the United Nations. This is the case with
the vast majority of environmental treaty secretariatsmore than two thirds
according to an estimate of Andresen and Skjaerseth35and includes the two
cases considered in this paper.
33
34
Ibid., 7.
35
365
Steffen Bauer
3 Intergovernmental Treaty Secretariats in Global

Environmental Politics
In the following section I will trace what generates the specific bureaucratic
authority of two intergovernmental environmental treaty secretariats: the O-
zone Secretariat and the Desertification Secretariat. Drawing on these two
empirical case studies I will show that both secretariats do bear authority, but
also that there are differences in the authority (and the use thereof) with re-
spect to either secretariat.36
3.1 Fixing a Hole?The Montreal Protocol and the Role of the

Ozone Secretariat
The international regime for the protection of the stratospheric ozone layer is
built on a multilateral environmental agreement that is typical of interna-
tional environmental politics in the 1980s. As it is generally considered the
success story in international environmental negotiations the literature on the
emergence, implementation and effectiveness of the regime is abundant. Ho-
wever, few scholars have systematically looked at the role of the intergovern-
mental organization that administers the Vienna Convention and the Mont-
real Protocol, i.e. the Ozone Secretariat in Nairobi. Exceptions include a brief
section in a case study on the effectiveness of the Montreal Protocol by Jorgen
Wettestad and a few references in the book by Penelope Canan and Nancy
Reichman who approach the ozone success story from a sociological perspec-
tive. Also, the Ozone Secretariat is one of five cases in Sandfords study.37
In opposition to many other environmental problems, and despite evident
variation in terms of vulnerability, ozone depletion is a genuine global com-
mons problem that leaves everyone worse off. This insight, of course, does not
necessarily equal consensus and swift cooperation in international politics.
Leaving initial uncertainty with regard to the scope and complexity of the
environmental threat aside, two major factors were responsible for the conten-
tiousness of the ozone issue in the arena of international politics: the eco-
nomic importance of CFCs and other ozone depleting substances and, yet
36
For more details see the elaborate case studies in Bauer forthcoming a, b.
37
Wettestad 2002; Canan and Reichman 2002; and Sandford 1994.
366
again, a gross imbalance of cause-and-effect matters along the North-South

divide. While the former has been largely ameliorated during the process of
regime formation, the latter remains to be a bone of contention and infringes
upon the overall success of the regime to protect the ozone layer. Indeed, it
appears as the main obstacle to ensuring smooth sailing with regard to com-
plete problem solving of an otherwise exceptionally effective regime.38 These
flaws notwithstanding, the ozone regime remains a remarkable success both
in terms of constructive international negotiation and meaningful commit-
ment to problem solving with respect to a global environmental problem.
Major explanations for the success story haveto various extentemphasized
the relevance of scientific expertise, strong business interests in combination
with the availability of technical solutions, public attention in industrial coun-
tries, and, not least, the personal authority of committed individuals, most
notably Mostafa K. Tolba, the charismatic Executive Director of the UN Envi-
ronment Programme (UNEP) during the heyday of ozone negotiations.39 The
role of the Ozone Secretariat, which has administered the regimes implemen-
tation since 1987, has received little attention to date.
Both the Vienna Convention and the Montreal Protocol explicitly provide for
a secretariat to administer the regimes implementation, i.e. to organize fu-
ture meetings, prepare and transmit reports, and perform functions assigned
to it by any future protocols.40 Of course, the so-called Ozone Secretariat is
but one component of the overall ozone regime that has developed since the
mid-1970s and also comprises, among other components, the Vienna Conven-
tion, the Montreal Protocol plus its London, Copenhagen, Bangkok and Vi-
enna amendments, an Open Ended Working Group of the Parties, a variety of
expert panels and the Multilateral Fund for the Implementation of the Mont-
real Protocol.
It was established in the Vienna Convention that the secretariat be hosted by
UNEP, but constitutes a distinct entity answerable to the Conference of Par-
ties. The Ozone Secretariat is located within the UNEPs Nairobi headquarters
and it relies upon UNEP for conference services and administrative assis-
38
Wettestad 2002, 167.
39
See Haas 1992; Litfin 1994; Canan and Reichman 2002; and Parson 2003 with an
emphasis on epistemic communities and the role of science; and Benedick 1998;
and Andersen and Sarma 2002 for more general accounts.
40
Downie 1995, 179.
367
Steffen Bauer
tance.41 It formally reports to the UN General Assembly through UNEP and

communication with parties and its publications formally come under the
UNEP label. Indeed, UNEP officials appear keen to emphasize that the Ozone
Secretariat is administered by the programmes Environment Secretariat and
that its own Coordinating Committee on the Ozone Layer, established in 1977
in accordance with the World Plan of Action on the Ozone Layer, effectively
constituted the secretariats institutional predecessor. This idiosyncratic insti-
tutional setting notwithstanding, the Ozone Secretariat emerged as distinct
enough an entity to be represented by its own Executive Secretary and it can
be treated as an intergovernmental treaty secretariat in its own right analyti-
cally.
As of 2004 the small secretariat consists of the Executive Secretarythe posi-
tion being held by Marco Gonzalez since 2002and his deputy, six profes-
sional officers and a total of eight support staff. The budget of the secretariat
amounts to USD 1.3 million (1999) with respect to administering the Vienna
Convention and an additional annual average of USD 3 million to cover for its
activities related to the Montreal Protocol. With these resourceswhich must
not be confused with the multi-million dollar Multilateral Fund that is sepa-
rately administered in Montreal42the Ozone Secretariat administers formal
conferences and meetings of the parties as well as informal consultative meet-
ings, provides drafts for treaties and amendments respectively, convenes re-
view panels and coordinates reporting and compliance issues.
Ever so small, the Ozone Secretariat has contributed to the overall perform-
ance of the regime and, it has been mused, perhaps more so than envisioned
in the regime-creation phase.43 In the following, I will trace where, how and
to what effect the activities of the Ozone Secretariat relate to its bureaucratic
authority within the overall ozone regime. This endeavour is of course com-
plicated by the particularly complex composition of the ozone regimes myr-
iad treaties, institutional arrangements and actors involved.
41
ibid..
42
See UNEP 2003 for figures; and Biermann 1997 for details on the role of the Multi-
lateral Fund.
43
Wettestad 2002, 162; see also Andersen and Sarma 2002.
368
Activities and Authority of the Ozone Secretariat44

A crucial explanatory factor regarding the authority which the Ozone Secre-
tariat has acquired over time is linked to the successful realization of one of its
core functions. The hub of the overall ozone regime, the secretariat takes cre-
dit for smooth cooperation with parties around the globe through a network
of 110 National Ozone Units that have been created following the ratification
of the Montreal Protocol. This network provides for highly efficient commu-
nication flows between national authorities responsible for the on-the-ground
implementation of the Montreal Protocol and the organizational switchboard
that is the Ozone Secretariat.
National bureaucrats responsible for the implementation of the Montreal
Protocol who find themselves faced with the ever more complex requirements
of the Protocol and its various amendments commonly seek advice from the
secretariat and are very appreciative of the respective services provided by the
ozone officers in Nairobi. Naturally, this is particularly important for ad-
ministrators from developing country parties, whose domestic capacities to
handle implementation requirements, including reporting, are rather low. In
its role as the ultimate institutional memory of the regime and as the main
provider of general information and individual advice in technical as well as
in procedural terms, the officers of the Ozone Secretariat have a direct influ-
ence on how compliance issues are handled at the domestic level. While the
officers unanimously emphasized their role as service providers whose advice
always and exclusively serves the letters of the treaty as agreed by the parties,
this does not make their advice less meaningful. Indeed, it constitutes ra-
tional-legal authority in the traditional sense of Weberian bureaucratic theory.
As discussed above, the disposition of rational-legal authority alone does not
justify the assumption of a further-reaching authority that can be acquired by
a bureaucratic personality. In the case of the Ozone Secretariat, one finds the
rational-legal authority to be enhanced by the achievement of the officers to be
credited, even lauded, for their neutrality and professionalism as well as the
44
The following paragraphs are largely based on interviews conducted by the author at
the Ozone Secretariat in Nairobi in September and October 2003 as well as observa-
tion of the First Extraordinary Meeting of the Parties of the Montreal Protocol,
which convened in Montreal in March 2004. Interviewees in the secretariat included
the Executive Secretary, the Deputy Executive Secretary and three programme offi-
cers.
369
Steffen Bauer
level of transparency in the secretariats activities. According to one pro-

gramme officer this is the most precious asset of the secretariat regarding its
standing vis--vis the parties and all officers are doing their utmost to sustain
this level of satisfaction among their clients. There is a sense of pride among
officers of the Ozone Secretariat concerning their harmonic and smooth rela-
tions to parties both in the North and the South. This is underscored by the
difficulties that other international agencies have in this respect. It is even
interpreted as a reward for the continuous neutrality and transparency of the
organization that the Meeting of the Parties approved of two additional pro-
gramme officers for the Ozone Secretariat at a time when there is a general
tendency to cut back on intergovernmental bureaucratic personnel.
A much more sensitive issue with regard to potential effects of the Ozone Se-
cretariat in shaping the ways in which the Montreal Protocol is furthered and
implemented is the drafting of reports and, crucially, decisions to be adopted
by the Meeting of the Parties. Naturally, the Executive Secretary has empha-
sized that drafts are by definition only that and downplayed the secretariats
relevance in this respect as only the letters of eventual formal decisions matter
in international legal terms. Ultimately, these are adopted by the parties. Ho-
wever, although being cautious, programme officers have also expressed that
by means of their expertise, institutional memory and technical knowledge
superior to most party delegates, the relevance of drafting with regard to le-
gally-binding output of the governing bodies must not be underestimated.45
Quite explicitly it has been argued that by means of the legal and scientific
expertise embodied in the secretariat the drafts provided to the parties are
commonly seen as authoritative. In this respect it should also be insightful to
further investigate on the contributions of officers from the Ozone Secretariat
in the expert panels that serve as the consultative basis of the ozone regime,
notably the Technical and Economic Assessment Panel.46
45
See also Churchill and Ulfstein 2000 with anecdotal evidence and explicit reference
to the case of the Ozone Secretariat.
46
Karen Litfin 1994, in her in-depth analysis of ozone discourses, has already shown
how crucial the interface of scientific expertise and intergovernmental cooperation
has been in shaping the ozone regime. It would be an interesting if challenging en-
deavor to trace specifically how knowledge and expertise processed in the Ozone Se-
cretariat relate to this.
370
The most significant manifestation of the Ozone Secretariats authority argua-

bly needs to be attributed to its top executives and their diplomatic skills. In
the ozone case these can be traced back until before the actual emergence of
the permanent Ozone Secretariat and to the time when the secretariat func-
tion was run by the secretariat of the United Nations Environment Pro-
gramme. Although scholars naturally differ with regard to the prominence
they attach to individual leadership amongst other explanatory variables, the
appraisal of Mostafa Tolbas vital contribution in furthering the formation of a
substantive ozone regime is strikingly unanimous.47 Likewise, professional
staff of the Ozone Secretariat and national as well as intergovernmental offi-
cials who have been involved with ozone politics from early on enthusiastically
laud Madhava Sarma for effectively filling Tolbas footsteps as the first Execu-
tive Secretary of the permanent Ozone Secretariat in 1987. Like his predeces-
sor, he has been described as a charismatic and skilful diplomat who was re-
spected as an authoritative mediator by industrialized and developing coun-
tries alike. In particular he has been credited for breaking negotiation dead-
locks through personal interventions at various Meetings of the Parties that
were crucial in bringing about ambitious amendments to the Montreal Proto-
col. With a view to the new Executive Secretary Marco Gonzalez, it is still too
early for a meaningful assessment. This said, an analysis of the role of the
secretariat in dealing with the highly politicized issue of phasing out methyl
bromides promises further insights in this respect.48
Finally, a specific aspect to the role of the Ozone Secretariat is its formal sta-
tus, namely its administrative connection to UNEP. While this organizational
peculiarity should theoretically relate to the authority of the secretariat, it
could work either way empirically. The fact that the Ozone Secretariat may be
perceived as an appendix to UNEP rather than an organization of its own
could be expected to lower its authority in the eyes of parties to the treaty. At
the same time it would be plausible to assume that the authority of the secre-
tariat gains from the backing of a reasonably bigger UN agency and the stand-
ing of the UNEP Executive Director in the numerous fora of international
environmental governancenotably vis--vis the Secretary-General and the
United Nations General Assembly.
47
See, for instance, Haas 1992; Benedick 1998; and Canan and Reichman 2002, in par-
ticular 48-52.
48
See IISD 2004.
371
Steffen Bauer
3.2 Raising Dust?UNCCD and the Role of its Secretariat
The Desertification Secretariat serves the United Nations Convention to Com-

bat Desertification in those Countries Experiencing Drought and/or Desertifi-
cation, Particularly in Africa (UNCCD). From a political-historical perspective
the most apparent difference between the case of the treaty served by the Ozo-
ne Secretariat and the one served by the Desertification Secretariat is that the
latter is attached to one of the so-called Rio Conventions (although it was
agreed on only two years after the Rio Earth Summit and did not enter into
force before December 1996) and haslike the United Nations Framework
Convention on Climate Changebeen attributed with the status of a United
Nations Convention. This implies that formally the Desertification Secretariat
ranks higher in the United Nations system than the Ozone Secretariat which is
formally subordinate to UNEP. As of 2003 the Desertification Secretariat is run
by about seventy employees, roughly half of which are management and pro-
fessional officers. The regular budget of the secretariat amounts to USD 17
million for the 2004-2005 biennium. As we shall see, however, the difference
in formal status and size is of limited relevance with regard to the two secre-
tariats described here and the roles they play vis--vis their respective govern-
ing bodies. A more notable implication which relates to the post-Rio emer-
gence of UNCCD is that it has been framed as a sustainable development
treaty rather than as an environmental treaty in the narrow sense, a point
which is emphasized time and again by officials of the Desertification Secre-
tariat and parties from the developing world.49
These differences notwithstanding the political-historical context of the issues
addressed by the treaty and the mandates of the treaty secretariats allow for
the comparison of both organizations. Most notably, the agenda-setting phase
and subsequent discourse about how to frame the environmental problem to
be regulated took off in the 1970s. Moreover, the assumed causes as well as
prospective solutions to the identified problem are salient issues regarding
the political relations between developing and developed countries. Formally,
both secretariats have been set-up to administer continuous negotiation proc-
esses between the parties to the treaties as well as to help countries in imple-
menting the agreements they have ratified.
49
See Bauer 2006 for details and further references.
372
Turning to the issue of desertification itself, scientific consensus in defining

the phenomenon as a primarily anthropogenic process of severe land degrada-
tion expanding in regions where this should climatically not occur has been
well established for several decades.50 In line with Agenda 21 parties to the
UNCCD defined it as a process of land degradation in arid, semi-arid and dry
sub-humid areas resulting from various factors, including climatic variations
and human activities.51 However, this definition is highly political for its link
to the wider climate change problematique alone. It deviates from earlier as-
sessments in which desertification is first and foremost seen as a direct conse-
quence of haphazard human interference with land development.52 Integrat-
ing climatic variations as one explicit root cause of desertification poten-
tially invokes compensatory claims against countries that are being held re-
sponsible for climate change, effectively turning the desertification problem-
atique into a contentious North versus South issue.53
The trigger event for the desertification issue to finally appear on the interna-
tional agenda was the major drought and subsequent famine that hit the Sahel
region in the late 1960s and early 1970s. This prompted the United Nations to
create the UN Sudano-Sahelian Office to provide assistance in coping with the
consequences of the drought disaster. Again, it was the UNEP which elevated
the issue to a larger intergovernmental arena by calling for the 1977 United
Nations Conference on Desertification. Its major outcome, the Plan of Action
to Combat Desertification, was a spectacular failure.54 With hindsight, how-
ever, it established desertification as an issue of intergovernmental environ-
mental negotiations. It is against this background, that the global convention
against desertification eventually took shape in the wake of the Rio confer-
ence. The complex institutional setting of the desertification regime, which
involves a number of UN agencies as well as regional institutions and a diverse
array of banks and funding agencies, has been described in greater detail else-
where.55 I will now discuss where, how and to what effect the role and activi-
50
See Toulmin 1995; see also Corell 1999.
51
UNCCD 1995, 12.
52
See Corell 1999, 53-62 for an overview of shifting definitions of the desertification
phenomenon.
53
Toulmin 1994.
54
See McCormick 1989, 116-122; see also Corell 1999, 69-72; and Corell 2003.
55
Chasek and Corell 2002.
373
Steffen Bauer
ties of the permanent convention secretariat relate to its bureaucratic author-

ity within the overall UNCCD process.
Activities and Authority of the Desertification Secretariat56

In terms of what can be found in the literature, explicit references to the De-
sertification Secretariat are even scarcer than in the case of the Ozone Secre-
tariat.57 This is hardly surprising considering that the set up of the UNCCD
permanent secretariatthe establishment of which was decided by the first
Conference of Parties in Rome in 1997has only really been completed with
its move from its interim location in Geneva to Bonn in January 1999. More-
over, it must be noted that only now, in the wake of its sixth Conference of
Parties which convened in Havana in September 2003, has the convention
actually entered its implementation phase. While there is an increasingly sub-
stantive literature on the negotiation process that finally led to the anti-
desertification convention, no studies are yet available that evaluate its
achievements in a manner that could possibly match the insights of the case
studies that scrutinize most other major environmental conventions.58
This said, the role of secretariat officials in what should best be called the
desertification discourse is very interesting, not least because many of
themincluding the incumbent Executive Secretary Hama A. Diallohave
been actively involved in the negotiation process that finally led to the conven-
tion. The very framing of desertification rather than land degradation
stands out in the process of institutionalizing the convention and has strong
implications for the implementation of the convention.59 While scientists
agree that desertification is a rather misleading term for the environmental
phenomenon which policy makers actually target, that is dryland degradation,
the Desertification Secretariat purposively maintains the usage of the former.
The explanation offered by its Executive Secretary is as simple as it is straight-
56
The following paragraphs are largely based on interviews conducted by the author at
the Desertification Secretariat in Bonn in November and December 2003 as well as
personal communication with national delegates and academic experts. Interview-
ees at the secretariat included the Executive Secretary, the Deputy Executive Secre-
tary and three senior officers.
57
See also Bauer 2006.
58
But see the edited volume by Johnson, Mayrand, and Paquin 2006.
59
See also Bruyninckx 2004 for an analysis of discourses that are furthered by the
UNCCD and how they relate to policy implementation at the local level.
374
forward: Desertification has a political appeal that land degradation does not
have.60 Indeed, it is striking how most intergovernmental agencies that coop-
erate under the UNCCD umbrella, in particular the Food and Agricultural
Organization, the UN Development Programme or the Global Environment
Facility (GEF), avoid the term desertification in their own parlance by a clear
preference for land degradation instead. Even the UNEP, which is either
blamed or lauded for having introduced the desertification myth to the in-
ternational political agenda and effectively manifested its usagee.g. by pub-
lishing the acclaimed World Atlas of Desertification61is now seen to shift its
vocabulary more consistently to land degradation.62 This notwithstanding, the
Desertification Secretariat is highly effective in preventing its desertification
trademark from sinking into oblivion. The title of the convention vouchsafes
it and the secretariat ensures that its usage is vividly fluctuated, if not diffused,
by means such as the World Day to Combat Desertification which it annually
commemorates on 17 June since the ratification of the convention in 1994.
In a similar vein, the secretariat has greatly promoted the gradual discursive
transformation of desertification from being a regional problem that can be
observed world-wide into a global commons problem. This shift in meaning
is a striking example of the power of discourse as it has far-reaching mate-
rial implications. With desertification as a global problem, projects that relate
to the implementation of the Convention to Combat Desertification have fi-
nally become eligible for funding through the resourceful GEF as of 2003
albeit under the heading of land degradation. This is a concession of the do-
nor community that especially African countries have pushed for ever since
the establishment of the Facility. While it is hard to determine the specific
impact of the Desertification Secretariat in bringing this concession about, it
has played its part to keep the issue on the GEF agenda and continuously
backed developing countries respective efforts. Indeed, the Desertification
Secretariat is happy to accept credit for having contributed to this end. More-
over, officers have also expressed the view that access to the GEF funds is an
overdue step to make up for the lack of a genuine financing mechanism under
the UNCCD. This perception relates to the controversy regarding the Global
60
Hama A. Diallo, cited in Corell 1999, 65.
61
Middleton and Thomas 1992.
62
As underscored by UNEPs recent Strategy on Land Use Management and Soil
Conservation. UNEP 2004.
375
Steffen Bauer
Mechanism, a distinct institutional provision of the convention that acts as a

clearing house utility to help parties to attract funding from those sources that
are most suitable to their needs, but is not a financing mechanism itself.63
Additionally, close links to civil society organizations and close cooperation
with affected regionsinstitutionalized by means of the secretariats respec-
tive Regional Action Facilitators for Africa, Asia and Latin-Americaare also
found to contribute to the authority of the Desertification Secretariat. Both the
emphasis on regional cooperation and the involvement of nongovernmental
stakeholders are explicitly provided for by the secretariats mandate to pro-
mote the development of regional action programs in cooperation with local
populations and nongovernmental organizations. The secretariat makes am-
ple use of this provision with regard to maintaining nongovernmental stake-
holder contacts in affected regions. This is a legacy to the pre-convention ne-
gotiation process, where nongovernmental organizations had been involved to
a considerable and arguably unprecedented extent, on which the secretariat
can now build.64 With regard to enhancing regional cooperation efforts the
Desertification Secretariat has actively sought to strengthen the Regional Co-
ordination Units that cooperate under the convention and has mustered sup-
port for this endeavour among the affected region countries. However, the
main donor countries remain sceptical with regard to institutional duplica-
tion. They have put the secretariats initiative on hold for consideration at
COP-7 in 2005, where the negotiations pertaining to this topic should be in-
sightful to follow.65
Two other initiatives illustrate particularly well the Desertification Secre-
tariats ability to shape the dynamic institutionalization of the convention as
well as the agenda of Conferences of Parties. They also serve to prove the point
that secretariat activity may cut either way in terms of bureaucratic authority.
First, the establishment of the Committee for the Review of the Implementa-
tion of the Convention (CRIC) shows how the secretariat triggered the creation
of an additional institution that was initially perceived to be at odds with the
interests of powerful parties but has by now turned out to be a useful institu-
63
For details pertaining to UNCCD financing see Falloux, Tressler, and Mayrand
2006.
64
See Corell and Betsill 2001.
65
See IISD 2003.
376
tional complement to the desertification regime. Namely, the establishment of

CRIC as a subsidiary body of the Conference of Parties was decided on the
initiative of the Desertification Secretariat at COP-5 in Geneva in 2001, despite
outright scepticism and initial unwillingness of major donor countries and
the European Union. However, after the CRIC had first convened in Rome in
November 2002 it was widely acclaimed as a highly constructive meeting and a
reasonable instrument to further the implementation of the convention.
CRIC-2, held back-to-back with COP-6 at Havana, was perceived as less con-
structive, but even its critics conceded that this was mostly due to the highly
politicized atmosphere of the Havana meeting. This is in fact linked to the
second example, the inclusion of a so-called High Level Segment at COP-6
which illustrates the point that the actions of a treaty secretariat are to be
reckoned with on the stage of intergovernmental diplomacy. In the run up to
COP-6, the idea of a distinct High Level Segment and the inclusion of a
Round Table of Heads of State and Government had effectively been pushed
on the agenda of the meeting by the Desertification Secretariat with the ex-
plicit intention of elevating it to a more authoritative and publicly realized
level. This was aptly justified by the Executive Secretary as an appropriate step
to mark the crucial passage of the convention from institutionalization to
implementation. In the event, however, the twelve Heads of State and Gov-
ernment who attended the conference included a number of controversial
leaders from the Southsuch as Fidel Castro Ruz of host country Cuba, Hugo
Chvez Fras of Venezuela and Robert Mugabe of Zimbabwebut not a single
leader from the donor countries. Ultimately, the High Level Segmentwhich
cumulated in a Havana Declaration of the Heads of State and Govern-
ment66resulted in an open confrontation of developed countries on the
part of Southern leaders. Thus, the well-intended but politically delicate ma-
neuver of the secretariat turned into a farce for which it drew heavy criticism,
not only from developed country parties.
Also adversely affecting the Desertification Secretariats authority is the fact
that it has been repeatedly criticized for lack of transparency in its operations,
which is in stark contrast to the Ozone Secretariat. Specific allegations that
have been raised during the meeting in Havana related to irregularities re-
garding the election of CRIC officials as well as financial support that the se-
cretariat had allegedly granted to hand-picked nongovernmental organiza-
66
UNCCD 2003, 13-16.
377
Steffen Bauer
tions.67 While executive officers of the secretariat have offered explanations for
the controversies arising in Havana and sharply deny allegations of intrans-
parency, some damage is done. The authority of the Desertification Secretariat
took a blow that has its manifest expressions, among other things, in a formal
demarche of the European Union, a statement by Canada, threatening to with-
draw from the UNCCD process, and a decision of the Conference of Parties to
subject the secretariats activities to a comprehensive review by the United
Nations Joint Inspection Unit.68
Authoritative but confrontational leadership that comes to the fore in secre-
tariat initiatives such as insisting on the High Level Segment appear to gener-
ate from a self-understanding of the secretariat as an internationally sanc-
tioned advocacy organization of the global South. Virtually all interviewed
secretariat officers have emphasized, in slightly varying wordings, that the
secretariat serves the majority of parties. This statement can be found to be
correct in so far as the attitude of the secretariat matches the aspirations of
most developing country parties as well as it may be justified on the basis of
the sustainable development prose of the convention text. It fails to acknowl-
edge, however, that the implementation of agreements under the roof of the
United Nations commonly relies on consensual decision making, at least in
political practice. Thus, alienating a few powerful states is not helpful in pur-
suing whatever objective a secretariat may have, just as it would not be helpful
to disrespect the interests of a less powerful share of developing countries. In
terms of furthering the objectives of the convention, this inconsiderateness on
behalf of the secretariat amounts to a perceived breech of neutrality that de-
creases the authority of its bureaucratic personality and leaves parties suspi-
cious of future secretariat activities. Moreover, this loss of authority is not
restricted to the standing vis--vis developed country parties. It also affects
developing country parties who would rather not have an intergovernmental
treaty secretariat alienate donor countries as they may eventually turn their
back on a progressive convention that was so difficult to bring about.
67
IISD 2003, 14.
68
Ibid.
378
4 Conclusion
This article demonstrates that intergovernmental treaty secretariats do bear

bureaucratic authority and illustrates how this bureaucratic authority depends
on the activities of such secretariats. The cases of the Ozone Secretariat and
the Desertification Secretariat also indicate that there are marked differences
in the sources from which bureaucratic authority is generated and even more
so with regard to the effects to which bureaucratic authority is employed.
The Ozone Secretariat effectively utilizes its bureaucratic authority to further
the progressive development of the Montreal Protocol and how it is being
implemented. In particular, the Ozone Secretariat successfully keeps the bal-
ance between being an active player behind the scenes and being perceived as
a neutral and passive tool from the viewpoint of governments. This quality
is an important source of its bureaucratic authority which has been appreci-
ated by governments in the North and the South ever since the Montreal Pro-
tocol was adopted. The diplomatic skill and personal authority of its Executive
Secretaries has been quintessential to this end. The case shows, that for an
intergovernmental treaty secretariat to be an authoritative bureaucratic actor, a
neutral appearance is not an asset but a requirement. At the same time the
example of the ozone officers shows, that this does not confine treaty secre-
tariats and their staff to a life of passive technocraticism, but it requires them
to act cautiously and considerately where they seek to pursue initiatives of
their own making.
Quite to the contrary, the Desertification Secretariat has tipped the balance by
pushing delicate North-South issues. While these issues are related to the
secretariats mandate in so far as they are covered by the UN Convention to
Combat Desertification, they have, by the ways in which the secretariat oper-
ated, been perceived as reaching beyond the mandate. More importantly, they
were seen to offend the interests of powerful parties. This has adversely af-
fected the authority of the secretariat which now finds itself struggling to re-
gain confidence amongst developed country parties. Its latitude to be actively
involved in the overall regime process has decreased as parties have become
more alert to the secretariats activities and have demonstrated reluctance in
following secretariat proposals. As a result, the secretariats potential to shape
the ways in which the convention is implemented has been seriously ham-
pered. However, while the Executive Secretary certainly contributed to politi-
cizing the relations between the secretariat and developed country parties, it
379
Steffen Bauer
would be short sighted to blame this development solely on the moves of this
experienced and highly skilled diplomat. Rather, I would argue, the behaviour
of the secretariat reflects the evolution of the UN Convention to Combat De-
sertification before the actual creation of the secretariat. The distinct history
of the convention, and the parts many of todays UNCCD senior officers have
individually played in it, significantly shape the bureaucratic personality of the
Desertification Secretariat. In particular, there is a peculiar organizational
culture that might be interpreted as a manifestation of the persistent driving
forces that brought about the anti-desertification convention after two decades
of tough North-South bargaining. In this respect, it is only fair to attribute
part of the responsibility for the current situation to the hypocrisy of devel-
oped countries. Rhetorically, they have accepted desertification as a global
problem, but politically they continue to view this as a concession to Southern
interests rather than prioritizing it on their own agenda. If this is indeed the
case, the endeavours of the Desertification Secretariat would appear as a steep
uphill struggle. It remains plausible, however, that the secretariat might be in
a better position to play an authoritative role in the convention process today,
had it acted more discreetly in its recent past.
In sum, it should be noted again, that international treaty secretariats are but
one factor of effective environmental governance. Naturally, the outcomes of
international politics are first and foremost determined by factors other than
treaty secretariats and the intergovernmental civil servants employed by these
secretariats. It is for this reason precisely that the larger part of the institu-
tionalist literature in International Relations does not conceive of intergov-
ernmental secretariats as actors in their own right and only rarely attributes
attention to the roles they play apart from facilitating government interaction
and providing for a for negotiations among nations. Indeed, the potential
effects of secretariats on the overall effectiveness of a given international envi-
ronmental regime are limited as it is subject to a great number of factors that
are beyond its grasp. In particular, states remain the formal masters of a given
regime. Nonetheless, as this article illustrates, states find themselves reacting
to authoritative intergovernmental bureaucracies. The latter can hardly be
blamed for poor regime effectiveness but will occasionally need to be com-
mended for their contributions to improving the specific outcomes of a re-
gime. Often these will be outcomes that were not anticipated by the parties
when crafting a treaty and providing for its administration. Bureaucratic au-
thority thus can make a meaningful difference to the ways in which an inter-
governmental treaty is furthered or implemented.
380
Treaty secretariats will be the more effective in this regard, the more they are
accepted as authoritative players in the overall regime setting. To make a
meaningful difference to global environmental politics they depend on the
bureaucratic authority they muster vis--vis the other actors that operate in
the respective regime. Treaty secretariats can only be expected to affect the
behaviour of other stakeholders if they succeed in generating such bureau-
cratic authority. A secretariat that performs poorly or is perceived as misbe-
having in one way or another will instead undermine its own authority and
limit its means to shape the political processes around it.
In short, the effects even of small treaty secretariats must not be underesti-
mated. The more bureaucratic authority a secretariat acquires the more effec-
tive it will be. Systematically addressing the contributions intergovernmental
treaty secretariats can make to effective environmental governance is thus
essential for a comprehensive analysis of global environmental politics.
References
Andersen, Stephen O., and K. Madhava Sarma. 2002. Protecting the Ozone Layer. The
United Nations History. London: Earthscan.
Andresen, Steinar, and Jon Birger Skjaerseth. 1999. Can International Environmental
Secretariats Promote Effective Co-operation? Paper read at United Nations Univer-
sitys International Conference on Synergies and Co-ordination between Multilat-
eral Environmental Agreements, 14-16 July 1999, at Tokyo, Japan.
Arendt, Hannah. 1970. Macht und Gewalt [On Violence]. Mnchen: Piper.
_______. 1977 [1961]. What is Authority? In Between Past and Future. Eight Exercises in
Political Thought, edited by Hannah Arendt, 91-141. New York, NY: Penguin Books.
Barnett, Michael N., and Martha Finnemore. 1999. The Politics, Power, and Pathologies
of International Organizations. International Organization 53 (4): 699-732.
_______. 2004. Rules for the World: International Organizations in Global Politics.
Ithaca, NY: Cornell University Press.
_______. 2005. The Power of Liberal International Organizations. In Power in Global
Governance, edited by Michael N. Barnett and Raymond Duvall, 161-184. Cam-
bridge, UK: Cambridge University Press.
Bauer, Steffen. 2006. The United Nations and the Fight against Desertification: What
Role for the UNCCD Secretariat? In Governing Global Desertification. Linking En-
vironmental Degradation, Poverty and Participation, edited by Pierre M. Johnson,
Karel Mayrand and Marc Paquin, 73-87. Aldershot, UK: Ashgate.
_______. forthcoming a. The Ozone Secretariat: Administering the Vienna Convention
and the Montreal Protocol on Substances that Deplete the Ozone Layer. In Manag-
ers of Global Change. Effectiveness and Learning of International Environmental
Organizations, edited by Frank Biermann and Bernd Siebenhner
_______. forthcoming b. The Secretariat of the United Nations Convention to Combat
Desertification. In Managers of Global Change. Effectiveness and Learning of In-
381
Steffen Bauer
ternational Environmental Organizations, edited by Frank Biermann and Bernd

Siebenhner-.
Bauer, Steffen, and Frank Biermann. 2005. The Debate on a World Environment Or-
ganization: An Introduction. In A World Environment Organization: Solution or
Threat for Effective International Environmental Governance?, edited by Frank
Biermann and Steffen Bauer, 1-23. Aldershot, UK: Ashgate.
Benedick, Richard E. 1998. Ozone Diplomacy. New Directions in Safeguarding the
Planet (enlarged edition). Cambridge, MA: Harvard University Press.
Biermann, Frank. 1997. Financing Environmental Policies in the South: Experiences
from the Multilateral Ozone Fund. International Environmental Affairs 9 (3): 179-
219.
Biermann, Frank, and Steffen Bauer. 2005a. Conclusion. In A World Environment
Organization: Solution or Threat for Effective International Environmental Gov-
ernance?, edited by Frank Biermann and Steffen Bauer, 257-269. Aldershot, UK:
Ashgate.
_______. 2005b. Managers of Global Governance. Assessing and Explaining the Influ-
ence of International Bureaucracies, Global Governance Working Paper No. 15.
Amsterdam, Berlin, Oldenburg, Potsdam: The Global Governance Project. Avail-
able online at www.glogov.org/front_content.php?idcat=68.
Bruyninckx, Hans. 2004. The Convention to Combat Desertification and the Role of
Innovative Policy-Making Discourses: The Case of Burkina Faso. Global Environ-
mental Politics 4 (3): 107-127.
Canan, Penelope, and Nancy Reichman. 2002. Ozone Connections. Expert Networks in
Global Environmental Governance. Sheffield, UK: Greenleaf.
Chasek, Pamela S., and Elisabeth Corell. 2002. Addressing Desertification at the Inter-
national Level. The Institutional System. In Global Desertification: Do Humans
Cause Deserts?, edited by J.F. Reynolds and D.M.S. Smith, 275-294. Berlin: Dahlem
University Press.
Churchill, Robin R., and Geir Ulfstein. 2000. Autonomous Institutional Arrangements:
A Little-noticed Phenomenon in International Law. American Journal of Interna-
tional Law 94: 623-659.
Corell, Elisabeth. 1999. The Negotiable Desert. Expert Knowledge in the Negotiations
of the Convention to Combat Desertification. Volume 191. Linkping Studies in
Arts and Sciences. Linkping: Linkping University.
_______. 2003. Dryland Degradation Africas Main Environmental Challenge: Interna-
tional activities from the 1970s to the 1990s and the future of the United Nations
Convention to Combat Desertification. In International Environmental Law and
Policy in Africa, edited by Beatrice Chaytor and Kevin R. Gray, 1-29. Dordrecht:
Kluwer.
Corell, Elisabeth, and Michele M. Betsill. 2001. A Comparative Look at NGO Influence
in International Environmental Negotiations: Desertification and Climate Change.
Global Environmental Politics 1 (4): 86-107.
Cutler, Claire A., Virginia Haufler, and Tony Porter. 1999. The Contours and Signifi-
cance of Private Authority in International Affairs. In Private Authority and Inter-
national Affairs, edited by Claire A. Cutler, Virginia Haufler and Tony Porter, 333-
376. Albany, NY: State University of New York Press.
De Senarclens, Pierre. 1993. Regime Theory and the Study of International Organisa-
tions. International Social Science Journal 138: 453-462.
Dingwerth, Klaus, and Philipp Pattberg. 2006. Global Governance as a Perspective on
World Politics. Global Governance 12 (in press).
382
Downie, David Leonard. 1995. UNEP and the Montreal Protocol. In International Or-
ganizations and Environmental Policy, edited by Robert V. Bartlett, Priya. A. Ku-
rian and Madhu Malik, 171-185. Westport, Conn.: Greenwood Press.
Falloux, Francois, Susan Tressler, and Karel Mayrand. 2006. The Global Mechanism
and UNCCD Financing: Constraints and Opportunities. In Governing Global De-
sertification. Linking Environmental Degradation, Poverty and Participation., ed-
ited by Pierre M. Johnson, Karel Mayrand and Marc Paquin, 131-145. Aldershot, UK:
Ashgate.
Finnemore, Martha. 1996. Norms, Culture, and World Politics: Insights From Sociol-
ogys Institutionalism. International Organization 50 (2): 325-347.
Haas, Ernst B. 1990. Where Knowledge is Power: Three Models of Change in Interna-
tional Organizations. Berkeley, CA: University of California Press.
Haas, Peter M. 1992. Banning Chlorofluorcarbons: Epistemic Community Efforts to
Protect Stratospheric Ozone. International Organization 46: 187-224.
Hall, Peter A., and Rosemary C.R. Taylor. 1996. Political Science and the Three New
Institutionalisms. Political Studies XLIV: 936-957.
Hasenclever, Andreas, Peter Mayer, and Volker Rittberger. 1997. Theories of Interna-
tional Regimes. Cambridge, UK: Cambridge University Press.
International Institute for Sustainable Development (IISD). 2003. Summary of the Sixth
Conference of the Parties to the Convention to Combat Desertification: 25 August -
6 September 2003. Earth Negotiations Bulletin, 8 September 2003: 1-16.
_______. 2004. Summary of Extraordinary Meeting of the Parties to the Montreal Pro-
tocol: 24-26 March 2004. Earth Negotiations Bulletin, 29 March 2004: 1-8.
Johnson, Pierre Marc, Karel Mayrand, and Marc Paquin, eds. 2006. Governing Global
Desertification. Linking Environmental Degradation, Poverty and Participation.
Aldershot, UK: Ashgate.
Kieser, Alfred. 1999. Max Webers Analyse der Brokratie. In Organisationstheorien. 3.,
berarbeitete und erweiterte Auflage, edited by Alfred Kieser, 39-64. Stuttgart:
Kohlhammer.
Litfin, Karen T. 1994. Ozone Discourses. Science and Politics in Global Environmental
Cooperation. New York: Columbia University Press.
Malik, Madhu. 1995. Do We Need A New Theory Of International Organizations? In
International Organizations and Environmental Policy, edited by Robert V. Bart-
lett, Priya A. Kurian and Madhu Malik, 223-237. Westport, CN: Greenwood Press.
Mango, Anthony. 1988. The Role of the Secretariat of International Institutions. In
International Institutions at Work, edited by Paul A. Taylor and A.J.R. Groom, 39-
49. London: Pinter.
March, James G., and Johan P. Olsen. 1989. Rediscovering Institutions. The Organiza-
tional Basics of Politics. New York, NY: Free Press.
_______. 1996. Institutional Perspectives on Political Institutions. Governance: An
International Journal of Policy and Administration 9 (3): 247-264.
McCormick, John. 1989. The Global Environmental Movement. Reclaiming Paradise.
Bloomington, IN: Indiana University Press.
Middleton, Nicholas J., and David S.G. Thomas. 1992. World Atlas of Desertification.
London: Edward Arnold Publishers and UNEP.
Mouritzen, Hans. 1990. The International Civil Service: A Study of Bureaucracy. Alder-
shot: Dartmouth.
Parson, Edward A. 2003. Protecting the Ozone Layer: Science and Strategy. New York,
NY: Oxford University Press.
383
Steffen Bauer
Pattberg, Philipp. 2005. The Institutionalization of Private Governance: How Business

and Non-profits Agree on Transnational Rules. Governance: An International
Journal of Policy, Administration and Institutions 18 (4): 589-610.
Pease, Kelly-Kate S. 2000. International Organizations. Perspectives on Governance in
the Twenty-First Century. Englewood-Cliffs, NJ: Prentice Hall.
Powell, Walter W., and Paul J. DiMaggio, eds. 1991. The New Institutionalism in Or-
ganizational Analysis. Chicago, IL: Chicago University Press.
Raz, Joseph. 1990. Introduction. In Authority, edited by J. Raz, 1-19. Oxford: Basil
Blackwell.
Reinalda, Bob, and Bertjaan Verbeek. 2004. The Issue of Decision Making within In-
ternational Organizations. In Decision Making Within International Organiza-
tions, edited by Bob Reinalda and Bertjaan Verbeek, 9-41. London: Routledge.
Rochester, Martin J. 1986. The Rise and Fall of International Organizations as a Field of
Study. International Organization 40 (4): 777-813.
Sandford, Rosemary. 1992. Secretariats and International Environmental Negotiations.
Two New Models. In International Environmental Treaty Making, edited by Law-
rence E. Susskind, Eric J. Dolin and J. William Breslin, 27-51. Cambridge, MA: Har-
vard Law School.
_______. 1994. International Environmental Treaty Secretariats: Stage-Hands or Actors?
In Green Globe Yearbook of International Co-operation on Environment and De-
velopment 1994, edited by Helge Ole Bergesen and Georg Parmann, 17-29. Oxford:
Oxford University Press.
Siebenhner, Bernd. 2003. International Organisations as Learning Agents in the E-
merging System of Global Governance. A Conceptual Framework, Global Govern-
ance Working Paper No. 8. Amsterdam, Berlin, Potsdam, Oldenburg: The Global
Governance Project. Available online at
www.glogov.org/front_content.php?idcat=68
Toulmin, Camilla. 1994. Combating Desertification: Encouraging Local Action Within
a Global Framework. In Green Globe Yearbook of International Co-operation on
Environment and Development 1994, edited by Helge Ole Bergesen and Georg
Parmann, 79-88. Oxford: Oxford University Press.
_______. 1995. Combating Desertification by Conventional Means. Global Environmen-
tal Change 5 (5): 455-457.
UNCCD, Desertification Secretariat. 1995. Down to Earth. A Simplified Guide to the
Convention to Combat Desertification, Why it is Necessary and What is Important
and Different About it. Bonn: UNCCD.
_______. 2003. Report of the Conference of the Parties on its Sixth Session, Held in
Havana 25 August to 5 September 2003. Doc. ICCD/COP(6)/11 of 3 November 2003.
Bonn: United Nations Convention to Combat Desertification. Available online at
www.unccd.int/
Underdal, Arild. 2002. One Question, Two Answers. In Explaining Regime Effective-
ness: Confronting Theory with Evidence, edited by Edward L. Miles,Arild Under-
dal et al., 3-45. Cambridge, MA: MIT Press.
UNEP, Divison of Policy Development and Law. 2004. UNEPs Strategy on Land Use
Management and Soil Conservation. A Strengthened Functional Approach, edited
by UNEP. Volume 4, Policy Series. Nairobi: UNEP.
UNEP, Ozone Secretariat. 2003. The Ozone Story Presentation, last updated July 2003:
UNEP. Powerpoint Slides. Available online at www.unep.org/ozone/oz-story
384
Verbeek, Bertjaan. 1998. International Organizations: The Ugly Duckling of Interna-

tional Relations Theory? In Autonomous Policy Making by International Organi-
zations, edited by Bob Reinalda and Bertjaan Verbeek, 11-26. London: Routledge.
Weaver, Catherine, and Ralf J. Leiteritz. 2005. Our Poverty is a World Full of Dreams:
Reforming the World Bank. Global Governance 11 (3): 369-388.
Weber, Max. 1980 [1921]. Wirtschaft und Gesellschaft. Grundriss der verstehenden
Soziologie, edited by Johannes Winckelmann, 5., revidierte Auflage, Studienausga-
be. Tbingen: Mohr Siebeck.
Weiss, Thomas G. 1982. International Bureaucracy: The Myth and Reality of the Inter-
national Civil Service. International Affairs 58 (2): 287-306.
Wettestad, Jorgen. 2001. Designing Effective Environmental Regimes: The Conditional
Keys. Global Governance 7 (3): 317-341.
_______. 2002. The Vienna Convention and Montreal Protocol on Ozone-Layer Deple-
tion. In Explaining Regime Effectiveness: Confronting Theory with Evidence, ed-
ited by Edward L. Miles, Arild Underdal et al., 149-170. Cambridge, MA: MIT Press.
Young, Oran R. 1967. The Intermediaries: Third Parties in International Crisis. New
York, NY: Princeton University Press.
385
The Institutionalization of Private Governance:
How business and non-profit organizations agree
on transnational rules1
PHILIPP PATTBERG
Abstract
This article assesses the recent trend of cooperation among antagonistic pri-
vate actors that results in the creation and implementation of issue-specific
transnational norms and rules and the subsequent shift from public to private
forms of governance. Many political scientists agree that authority also exists
outside of formal political structures. Private actors increasingly begin to
make their own rules and standards that acquire authority beyond the interna-
tional system. This observation is often referred to as private transnational
governance as opposed to public or international governance. Although the
concept of private governance gains prominence in academic debates, it is
neither clear how private governance on the global scale is constructed and
maintained nor what specific or general conditions are necessary for private
governance to emerge. Based on the review of common theoretical proposi-
tions, this article develops an integrated model along which the necessary con-
ditions for the emergence of private governance can be assessed and under-
stood. As most research has hitherto focused on institutionalized cooperation
between business actors (self-regulation) this article takes a closer look at
those transnational systems of rule that result out of the enhanced co-
operation between profit and non-profit actors (co-regulation).
1
First published in: Governance: An International Journal of Policy, Administration
and Institutions. Vol. 18, Issue 4, 2005, pp. 589-610. Copyright Blackwell Publishing.
Reprinted with kind permission
386
The Institutionalization of Private Governance
1 Introduction
The privatization of world politics is a much-debated issue in contemporary
academic discourse (Brhl; Cashore; Clapp; Savas). But whereas the provision
of services by private actors such as military companies or bond-rating agen-
cies, and the implementation and monitoring of international agreements
have already been at the center of debate for a while, the parallel development
of cooperative rule-making by private actors, both from the profit and non-
profit camp, has not received comparable attention.
As far as rules and norms are concerned, studies in International Relations
(IR) in general and global environmental politics in particular have primarily
focused on international regimes and intergovernmental organizations that
have been designed to address trans-boundary problems. Non-state actors
figure prominently on the research agenda of political scientists for more than
three decades and scholars have studied in detail their role and function in
agenda-setting, lobbying governments, and implementing international
agreements (Arts; Keck and Sikkink; Raustiala; Rowlands; Weiss and Gorden-
ker). However, still little is known about the institutionalization of governance
by private, often antagonistic actors. Research has either focused on inter-firm
cooperation as a source of private authority in the global political system (Cut-
ler, Haufler, and Porter 1999a; Hall and Biersteker) or has addressed partner-
ships between different actors from all segments of society in general, in-
cluding business, civil society, and governments (Austin; Hemmati; Willetts).
As a result, the debate about non-state actors and their new roles in gov-
ernance has been limited to public-private partnerships and global public
policy networks (Brzel and Risse; Witte, Reinicke, and Benner). It has, to a
large extent, neglected far reaching institutionalizations among private actors
without the involvement of governments, government agencies or intergov-
ernmental organizations. The underlying assumption of this article is that the
current process of private institutionalization among a wide variety of busi-
ness and non-profit actors signifies more than a greening of industry based on
rationalistic interest calculations. Instead, we witness the emergence of trans-
national organization, resulting from a variety of norm- and rule-systems on
the global level, from reporting schemes to certification and environmental
management standards, that exist primarily outside the international context.
Consequently, the impact of private actors on world politics has changed as
387
Philipp Pattberg
well. They have developed from being an intervening variable of the interna-
tional system to establishing rules that exist mainly outside of it.
But what explains this recent transformation? I argue that the conditions for
private governance to emerge can be assessed along two interconnected lines
of argumentation, focusing on the macro-level of conditions, including global
economic transformations and contextual factors on the international level,
and the micro-level, including the specific structure of the problem as well as
available organizational resources of actors involved. The two condition-levels
are understood to form an integrated model of private institutional emer-
gence. Therefore, it is possible to highlight the actual linkages between the
conditions in a more process-oriented way than single-factor accounts usually
display. The theoretical and analytical significance of this article derives from
the basic questions it sets out to answer: first, how could we conceptualize the
novel phenomenon of private governance in world politics? Second, how
could we explain its existence? And third, given the rich literature on ques-
tions of institutional formation, which analytical model is most appropriate to
do so?
Consequently, the paper proceeds in three analytical steps. First, it analyses
the shift from public to private governance and the corresponding in-
stitutionalization of cooperation between different private transnational ac-
tors. Second, it seeks to establish a common framework of analysis to un-
derstand the conditions of emergence of private institutions based on com-
mon propositions found in the literature on (private) regimes and private
cooperation. Third, it introduces two empirical cases to further substantiate
the theoretical claims made in the preceding part. The Forest Stewardship
Council (FSC) provides an illustrative example of transnational co-regulation
in the forest sector. In contrast to the Sustainable Forest Initiative or the Pan
European Forest Certification Scheme, which both have been influenced by
industry and public actors and only recently are moving towards more organ-
izational independence, the FSC constitutes a genuine cooperative effort of
profit and non-profit actors from its very beginning. The Coalition for Envi-
ronmentally Responsible Economies (CERES), the second case presented in
this article, displays a different organizational form of private regulation. Here
the rules do not govern a specific issue area but are targeted towards the eve-
ryday operations of companies in general. Achieving a better understanding of
private rule-making as one of the emerging phenomena in world politics will
not only broaden our theoretical understanding of global governance but also
388
contribute to the much-needed institution building for effective sustainable

development.
2 From Public to Private Governance:

The Institutionalization of Private Regulation
The last decade of the 20th century has been called an era of partnership (Mur-
phy). Innovative forms of collaboration can be observed in a range of different
organizational settings and issue areas. Firms may engage in strategic alliances
with suppliers and competitors, develop informal industry norms and prac-
tices or even formal private regimes, regulating the behaviour of a wide range
of business actors in sectors ranging from insurance to minerals and mining
(Cutler, Haufler, and Porter 1999a). International organizations seek the assis-
tance of corporations to implement universal social and environmental norms
(UN Global Compact), or engage in partnership with business actors and
NGOs to introduce a globally applicable scheme for sustainable corporate
reporting (Global Reporting Initiative). Civil society representatives on their
term take part in negotiations involving corporations, governments, and in-
ternational organizations with the view to establish a sustainable framework
for the planning and operation of large-scale dams (World Commission on
Dams).
These examples indicate at least three substantive shifts within world politics.
First, the locus of authoritative problem solving does not rest with govern-
ments and their international organizations alone. Authority is indeed relo-
cated in many different settings, involving public-private as well as purely
private actor-constellations. Second, the predominantly confrontational re-
lation between companies, governments, and civil society has been comple-
mented by partnership as one possible mode of interaction.2 And third, coop-
eration is getting more and more institutionalized, resulting in social prac-
tices that effectively govern specific issue areas. The term private governance
encapsulates these important shifts within one conceptual framework. It em-
2 Judith Richter has pointed to the fact that the term partnership represents a policy
paradigm based on the assumption of trust, shared benefits, and an underlying win-
win situation, concealing the fundamentally different goals and power resources of
the actors involved (2001). This article uses the concept of partnership as a value
neutral term, equivalent with cooperation.
389
Philipp Pattberg
phasizes the role of private actors, both profit and non-profit, in the establish-
ment and maintenance of issue-specific transnational rule systems in contrast
to either private agenda-setting and lobbying or international rule-making.
Therefore, private governance could be understood as a functional equivalent
to public forms of global governance involving states and intergovernmental
institutions.
Global governance is generally believed to encompass different systems of rule
on different levels of human activity as an organizing social principle beyond
hierarchical steering and the sovereign authority of nation-states. As James
Rosenau (1997, 27) notes, global governance is the sum of myriad literally
millions of control mechanisms driven by different histories, goals, struc-
tures, and processes. The phenomenon therefore includes the activities of
governments, but it also includes the many channels through which com-
mands flow in the form of goals framed, directives issued, and policies pur-
sued (Rosenau 1995, 14).
One of these possible channels is the realm of private governance. A closer
look at this phenomenon reveals that private governance is constituted of at
least three analytical dimensions: first, the procedural dimension of govern-
ance, emphasizing the activities of private transnational actors; second, the
structural dimension of governance, highlighting the distinct architecture of
a governance arrangement, including norms and rules, networks and actor-
constellations as well as formal or informal links to other areas of governance;
and third, the functional dimension of governance, focusing on the material
and ideational outcome of a private governance arrangement as a functional
equivalent to forms of national or international public governance. This three-
dimensional perspective on private governance is reflected in Falkners (2003,
72-73) assumption that private governance emerges at the global level where
the interactions among private actors [] give rise to institutional ar-
rangements that structure and direct actors behaviour in an issue-specific
area.
Consequently, the recent trend of private governance goes beyond the phe-
nomenon of privatization of world politics (Brhl, Debiel, Hamm, Hummel,
and Martens 2001), which, to a large extent, has been analyzed as service-
provision and rule-implementation by private actors. In addition, private gov-
ernance includes new actor-constellations and uncommon alliances between a
wide range of actors that go beyond coordination or cooperation. Following
Robert Keohane, cooperation can be defined as adjustments of behaviour to-
390
wards mutual goals that contain some degree of obligation for all participants
and thus extend cooperation into the future (1984). In contrast,
governance .. emerges out of a context of interaction that is in-
stitutionalized and of more permanent nature. In a system of
governance, individual actors do not constantly decide to be
bound by the institutional norms based on a calculation of their
interest, but adjust their behaviour out of recognition of the le-
gitimacy of the governance system (Falkner, 73).
Therefore, cooperation and forms of private governance also differ according
to the authority involved in a specific actor-constellation:
Cooperation that derives primarily from rational calculation of
the direct payoff from adjusting ones behaviour in a particular
strategic situation may not involve authority. Authority requires a
basis in trust rather than calculation of immediate benefit, and
therefore cooperation must involve the development of habits,
norms, rules, and shared expectations cooperation must be in-
stitutionalized (Cutler, Haufler, and Porter 1999b, 334-335).
The emerging private institutions that result out of enhanced cooperation
between antagonistic private actors can be understood as social practices
consisting of easily recognized roles coupled with clusters of rules or conven-
tions governing relations among the occupants of these roles (Young, 32).
From a functional perspective, private institutions govern a distinct issue area
through the development and subsequent implementation of regulations di-
rected at the behaviour of various actors. Therefore, they can be qualified as
private regulative institutions. The resulting regulative rules take different
forms, ranging from management standards to codes of conduct and detailed
global certification schemes.
Next to setting detailed regulative rules, private institutions are generally be-
lieved to fulfil additional functions within the context of private governance
(Pattberg). By providing a forum for deliberation and conflict resolution, by
producing and disseminating valuable knowledge and information, by provid-
ing opportunities for organizational learning, and by securing independent
verification of norm-compliance, private institutions effectively provide an
institutionalized response to intertwined environmental, social, and economic
problems. It is precisely through these distinct functions that private institu-
tions exercise authority within a given issue area and beyond. These observa-
391
Philipp Pattberg
tions are in line with the assumption that private governance is a functional
equivalent of international governance. Similar to regimes established by
states, private institutions might provide collective goods, reduce transaction
costs, and decrease uncertainty (Keohane).
In sum, private regulative institutions play an important role in shaping the
realm of private governance in issue areas ranging from labour rights and fair
trade, to forest politics and biodiversity conservation. Next to private forms of
coordination and rule-implementation, the phenomenon of rule-making by
private actors gains prominence among IR scholars. But research on these pri-
vate regimes (Haufler 1993) has almost exclusively focused on institutionali-
zations among firms and business associations, neglecting far-reaching de-
velopments of institutionalization between former adversaries such as envi-
ronmental and social NGOs, investors, transnational corporations, and a vari-
ety of local or regional business actors. The corresponding question is why,
how, and under what conditions private actors from different segments of
transnational society, following different organizational and functional logics,
engage in close cooperation that produces transnational regulation beyond the
international political system.
3 Explaining the Emergence of Private Institutions

in Global Governance: Reviewing Common
Propositions
This section discusses three theoretical literatures that can all be related to the
problem of private institutionalization, but represent three different theoreti-
cal backgrounds: first, the concept of private inter-firm regimes that is build-
ing on general regime literature; second, the literature on partnership and
collaboration between different actors on the global level in general, and third,
the debate about macro-transformation in the context of globalization.
Regime literature is interested, among other questions, in explaining the for-
mation of normative institutions that are based on a persistent and con-
nected set of rules (Mayer, Rittberger, and Zrn, 393). The object of regime
analysis is voluntarily agreed-upon, issue-area specific normative institutions
created by states and other international actors, which are studied as the
mainstay of establishing intentional social order by self-regulation in in-
ternational relations (Mayer, Rittberger, and Zrn 1993, ibid.). Therefore, as
392
Haufler argues, neither the common definition of regime nor the funda-
mental assumptions made about regimes suggest that there can be no such
thing as a purely private regime (1993, 96). Consequently, the regime litera-
ture is a valuable starting point for theorizing about the possible causes and
conditions of the emergence of private regulatory institutions.
The puzzle of regime formation has been explored basically along three lines
of argumentation (Hasenclever, Mayer, and Rittberger) that are not mutually
exclusive but rather work in tandem. Power-based explanations highlight the
importance of power resources, both in monetary and non-monetary terms, in
bringing about cooperation. The basic premise is that institutions are struc-
tured by and reflect the distribution of power within a given social system, be
it international and public or transnational and private. Interest-based expla-
nations focus on the interactions of self-interested parties coordinating their
behaviour to reap joint gains. The basic premise is that in order to reach co-
operation there must be a zone of agreement or contract, a possible realm of
joint gains for all the participants. The third line of argumentation is labelled
knowledge-based and revolves around the importance of ideas, arguments and
social identities. The basic premise holds that the different interest determin-
ing a specific zone of agreement are not exogenously given, but subject of cog-
nitive processes and developments such as scientific information and conver-
gence or general framing of issues.
Recent case studies on private authority have revealed based on the classic
regime literature three possible explanations for the emergence of private
inter-firm cooperation. Contextual factors and systemic changes are identified
to have a major influence on private institutionalization. Haufler (2000, 122)
for example argues that the globalization of economic activities has resulted in
a mis-match between markets and politics in terms of governance. Conse-
quently, the demand for rules to govern commerce has given rise to a variety
of sources of supply, and one of the most significant [] is the private sector
itself (Haufler 2000, 121). But growing private institutionalization of rule-
making can not only been explained in terms of macro-systemic transforma-
tions, discernible in the recurrent failure of governments worldwide to cope
with trans-boundary problems, but also by applying rationalistic approaches
that focus on utility-maximizing actors as the fundamental heuristic units.
Efficiency gains approaches analyze cooperation and subsequent institution-
alization in terms of a possible reduction of transaction costs (Cutler, Haufler,
and Porter 1999b, 338). In this view, inter-firm regimes may reduce costs asso-
393
Philipp Pattberg
ciated with information and uncertainty, costs related to negotiations and

consensus-seeking, and costs related to the enforcement of regulations. A sec-
ond type of rationalistic explanation centres on the factor of power. From this
perspective, institutions are predominantly established because they enhance
the capacity of some actors to exercise power over others in a given field of
competition. These considerations seem to substantiate the propositions dis-
cussed under the framework of international regimes. But although rational-
istic and contextual explanations seem to have some merits in the case of pri-
vate institutions, even leading scholars of the field suggest that it is difficult to
disentangle them in practice (Cutler, Haufler, and Porter 1999b). Therefore, an
integrated approach to the emergence of private institutions may prove supe-
rior to single-factor accounts of formation (Efinger, Mayer, and Schwarzer,
272-274).
What can be learned from the general regime literature and the more specific
debate about private inter-firm regimes for our puzzle of emerging private
regulative institutions as a form of private governance? From a single-factor
perspective, we can assume distinct empirical observations to substantiate the
individual propositions. For power-based assumptions to be true we would
expect to find strong leaders in each network, influencing the outcome of the
negotiations to their own benefit, or at least a group of actors having con-
siderably more power than others in shaping the outcome of the cooperation,
in most cases the rules governing their own behaviour. For the interest-based
and efficiency gains approach to prove valid one would expect to observe re-
duced transaction costs, better positions in the market, and reputation gains.
These objectives should be identified by the partnering organizations prior to
the establishment of the institution and not just occur as the unintended re-
sult of cooperation. Furthermore, a possible zone of agreement should be
imaginable for all the participants of the arrangement prior to the actual insti-
tutionalization. For contextual factors to be decisive, one would assume to find
evidence for large-scale transformation or eruptive events within a given pol-
icy-field. Observations could include a new influential discourse, absence or
inadequacy of governmental and intergovernmental regulation, the emergence
of new scientific knowledge or an environmental catastrophe. We should keep
in mind that although regime theory provides us with a range of possible
propositions, a simple application of findings from either the international
regimes literature or the inter-firm and business regimes perspective to the
case of private regulatory institutions seems to be at least problematic.
394
A second approach to the question of private institutionalization can be found

in the growing literature on partnership politics (Eisler, 565). Next to studies
on public-private partnerships and inter-organizational collaboration, re-
searchers started to address business-NGO partnerships in the mid-1990s.
This research strategy is action-orientated, but nevertheless provides useful
insights into the specific types and rationales of business-NGO partnerships
(Heap; Long and Arnold; Murphy and Bendell). The existing policy-orientated
studies on partnerships identify four preconditions for business actors and
NGOs to engage in cooperation. First, perceived or actual decline in the effec-
tiveness of state regulation with regards to the enforcement of environmental
and social regulation, both on the national and international level. Second, ac-
knowledgement on part of the NGOs that large transnational corporations are
both cause and possible solution of global problems. Third, impact of new
NGO campaigning strategies that focus on corporate brand reputation and
thus threaten their market position. And fourth, the recognition on part of the
companies that NGOs have acquired power and legitimacy as agents of social
change, thus presenting themselves as potential partners for solving pressing
business problems.
The third broad theoretical approach considered here focuses on the global
political economy as an explanatory factor for large-scale transformations. The
debate about globalization and the changing role of the nation-state in ad-
dressing trans-boundary problems makes three claims regarding the relation
between globalization and the rise of private forms of global governance
(Falkner 2003, 74).
The first claim stresses the relationship between globalization and the perceived
decline of the nation-state system. From this perspective, private governance is
an indicator for a long-term shift in the locus of authority, especially within the
realm of the global economy. Private actors have become the real players in
issue areas ranging from financial stability and foreign investment (e.g. bond-
rating agencies) to industrial standard-setting (e.g. International Organization
for Standardization, ISO). As a result, the powers of most states have declined
still further, so that their authority over the people and their activities inside
their territorial boundaries has weakened (Strange, xi).
The second claim addresses the hypothetical link between the growth of civil
society and the emergence of private governance. In this view, civil society
pressure exerted on corporations, accompanied by far-reaching media-
coverage, is seen as a main cause for the emergence of institutionalized re-
395
Philipp Pattberg
sponses to the growing demand for corporate social and environmental ac-
countability (Wapner).
The third claim is closely related to the work of Antonio Gramsci. In this view,
novel relations between states, business actors, international organizations, and
civil society institutions signify a shift from more traditional forms of politics to
market-oriented, corporate-sponsored regimes that clearly benefit corporate
interests (Falkner, 75). The applicability of this concept to the realm of private
governance stems from the particular importance of business and civil society as
central categories within the framework of private institutionalization. Neo-
Gramscian theory seems capable of explaining the current transformation of the
economic arena, which is driven by a hegemonic bloc of business and society
elites, resulting in a new approach to regulation such as market-driven self-
regulation. Within this institutional setting, a managerial elite from multina-
tional corporations, transnational NGOs, academia, and governmental agencies
comprises a transnational historical bloc, exercising leadership as a conse-
quence of individual and collective human acts (Cox; Germain and Kenny, 6;
Pijl). In this view, NGOs are not natural adversaries of business interests but
play a dual role as arenas of cultural and ideological struggle, and also as key
allies in securing hegemonic stability (Levy and Newell, 90).
The aforementioned three broad theoretical approaches towards the phe-
nomenon of private institutions in global governance - regime theory, part-
nership politics, and studies in global political economy - contain valuable
propositions with regards to the emergence of private institutions. Four recur-
rent aspects seem to be important, although they receive different degrees of
attention in the respective literatures: (1) macro-systemic transformations such
as globalization or hegemonic reconfiguration as well as contextual factors on
the macro-level; (2) problem-structure, characterized by interdependent inter-
ests as well as different levels of information and knowledge; (3) organizational
resources that enable actors to reduce transaction costs or improve their stra-
tegic position; (4) ideas, knowledge, and information. For analytical purposes,
these aspects can be grouped into two broad categories, one containing the
micro-level conditions, the other those observable on the macro-level. Micro-
level conditions contain the problem-structure and organizational resources
because these are dependent on the specific issue area and the actors involved.
Macro-level conditions relate to large-scale transformations in the structure of
the international system as well as to the emergence and dissemination of
ideas and knowledge.
396
4 Private Rules in Private Networks:

Understanding the FSC and CERES
The following section considers two empirical cases from the field of envi-
ronmental politics in the light of the aforementioned theoretical propositions.
After briefly discussing the institutional set-up and rules established, I turn to
the enabling factors for institutionalization of private regulation involving
companies and civil society organizations. I assess the conditions for institu-
tionalization along the four recurrent themes identified in section four. The
two case studies are based on expert interviews with staff members, board
representatives, and a range of additional stakeholders as well as on written
documentation and secondary sources.
4.1 The Environment at Risk: The Coalition for

Environmentally Responsible Economies
The Coalition for Environmentally Responsible Economies (CERES) started

operating in 1989 with publishing the so called Valdez principles, utilizing the
huge public outrage around the Exxon Valdez oil spill, which occurred on
March 24. A group of social responsible investors, mainly organized in the
Social Investment Forum, and fifteen large environmental groups started dis-
cussing the possibility to use the power of investors (shareholder resolutions)
against the power of the boardroom. The idea behind CERES is to engage
companies in dialogue and work towards the subsequent endorsement of
environmental principles that establish a long-term corporate commitment to
a continual progress in environmental performance. The ten-point code of
corporate environmental conduct establishes an environmental ethic with
criteria by which investors and others can assess the environmental per-
formance of companies (CERES 2002b, 31). Principle ten requires an annual
self-evaluation by the endorsing company based on the CERES reporting form
by which the required continual progress towards environmental re-
sponsibility can be measured. As a result, environmental improvements, low-
ered investment risks, and positive corporate performance go hand in hand.
To date, more than 70 companies have endorsed the CERES principles, in-
cluding the annual reporting commitment. Among the CERES endorsers are
large multinational corporations such as American Airlines, Bank of America,
397
Philipp Pattberg
Coca-Cola USA, Ford Motor Company, General Motors, and Sunoco, as well as
small and medium-sized firms, including environmental front-runners such
as The Body Shop International or Aveda Corporation. The second pillar CE-
RES rests on is the CERES coalition, a network of around 90 organizations, in-
cluding environmental advocacy groups, public interest and community
groups as well as an array of investors, analysts, and financial advisors repre-
senting more than $300 billion in invested capital. A board of 21 distinguished
individuals governs CERES. The day-to-day operations are supervised by an
executive director and carried out by a staff of currently 16 people located in
Boston, MA. Although endorsing companies are not directly represented on
the CERES board, corporate representatives participate in various committees
set up by the board to develop and implement programs and project and in
this function regularly attend CERES board meetings. A further avenue of
influence for corporations is the annual CERES conference drawing together
almost all coalition members and endorsers to discuss the issue of corporate
environmental commitment in a long-term perspective. As William Clay Ford,
Chairman of the board of Ford Motor Company, noted, [t]he CERES annual
conference is helping to establish not only the agenda of the next century, but
also the relationships we will need to solve some very daunting issues (CERES
2001, 9).
The regulatory dimension of CERES as an institution contains two related
aspects: first, the principles, establishing a normative framework for compa-
nies to operate in; and second, a standardized format for corporate environ-
mental reporting, prescribing the form and contend of public disclosure (CE-
RES 1999a). Both aspects can be considered a major success. Many companies
have published an environmental mission statement drawing on the original
Valdez principles. To date, more than 2000 companies worldwide regularly
publish environmental reports. The CERES report form gained so much
credibility that it provided the basis for the global sustainability reporting
guidelines operated by the Global Reporting Initiative (GRI), a tripartite net-
work of NGOs, corporations, and the United Nations Environment Program.
CERES not only provided substantial knowledge and information, but also
served as the secretariat and organizational driver until the GRI became an
independent organization in 2000.
When institutional investors and representatives of major environmental or-
ganizations convened at Chapel Hill, North Carolina, in April 1989 to discuss
ways to improve the environmental and social impacts of investments, a whole
398
range of controversial issues waited to be solved. For social investors and their
clients, the lack of information about the environmental performance of com-
panies was a real risk for their business. Either information came from the
companies themselves, displaying advanced public relations skills rather than
substantial information, or from advocacy groups addressing their specific
constituencies. Neither served the need of a growing social investment com-
munity. Little help came from governmental regulation at that time, because
measures focused on specific substances, like in the case of the Toxic Release
Inventory established in 1987, rather than on environmental performance in
its entirety. NGOs on their part began to realize that conventional lobbying
strategies aimed at governments were becoming less efficient, while at the
same time business actors emerged as major threats to the environment. Es-
pecially the catastrophe of Bhopal in 1984 and the Exxon Valdez oil spill of
1989 have brought corporate misbehaviour to the forefront of public concern.
As a result, companies, although reluctant in the beginning, started to look for
credible ways to secure brand reputation and profits in the midst of a hostile
public environment. In sum, interdependent stakeholders having vested in-
terests in the problem, disproportional levels of expertise and information as
well as different perspectives resulting in an adversarial relationship, charac-
terized the problem-structure.
After a couple more meetings among the original coalition members the ne-
gotiations led to the formulation and public announcement of the Valdez
principles on September 7, 1989, resulting in considerable media-coverage and
public attention. Already this early phase of negotiations showed an interest-
ing feature. Debates were not based on positional negotiation and confronta-
tional strategies, but on a common framework of reference from where future
visions could develop.
Two ideas, one practical, the other more visionary, served as influential insti-
tutional models. First, the system of standardized financial accounting that
emerged in collaboration between public and private actors in the United
States and is controlled and monitored by the Financial Accounting Board.
The second idea that had a considerable impact on the coalition members
ability to identify a common platform for action was to use shareholder peti-
tions to challenge corporate behaviour, as in the case of the Sullivan principles
applied to US companies operating in South Africa under the Apartheid re-
gime. The Sullivan principles originated in 1977, when Reverend Leon Sulli-
van, a Baptist minister, issued his code of conduct in an attempt to end dis-
399
Philipp Pattberg
crimination against Black workers in South Africa oppressed by the nations

policy of apartheid. This initiative helped to focus attention on the issue of
racial injustice in South Africa within the international business by promoting
criteria for socially responsible investment practices. The Sullivan principles
are even credited to have contributed to the end of apartheid. Both the idea of
financial accounting and the Sullivan principles have been of considerable
importance in the process of institutionalization because they created a com-
mon framework of reference under which adversarial standpoints could be
integrated into a shared practical vision.
Shortly after the public announcement of the Valdez principles, coalition
members engaged in an intense dialogue with corporations in order to test
their willingness to adopt the principles and commit themselves to periodical
reporting. But although the Aveda Corporation became the first signatory to
the Valdez principles on November 22, 1989 (CERES 1999b), it took another
three years to institutionalize the cooperation with a wide range of corporate
actors. After several rounds of talks with companies the principles were
amended and renamed in 1992. Sunoco became the first Fortune 500 Com-
pany to endorse the new CERES principles in February 1993, General Motors
(GM) followed in 1994. Several contextual factors can be identified that affected
the early process of institutionalization between investors, advocacy groups
and corporations. First, environmental catastrophes, especially the Exxon Val-
dez incident, have triggered widespread public concern about the environ-
mental integrity of major companies. Second, the beginning information
revolution and increasing business activities on the global level radically
changed both the importance and availability of information. As Joan Bavaria
recalls in retrospective,
this need [for principles and reporting] arose just as an informa-
tion revolution was starting to race around the world. We sensed
that this was a real revolution, with implications for our econ-
omy, environment, and culture as sweeping as those that accom-
panied the agricultural revolution or the industrial revolution
(CERES 1998, 2).
As a third contextual factor, the rhetorical as well as practical support that the
Clinton administration gave to cooperative approaches, voluntary initiatives,
and partnership concepts seemed to have played a role.
400
When CERES began to get more institutionalized, neither the investment

community and the environmental organization nor the endorsing companies
knew exactly what would be the outcome out of that process in terms of joint
gains and mutual benefits. This does clearly contradict standard transaction
cost explanations for cooperation. A good example in case is the engagement
with GM, the worlds largest automobile corporation. The CERES perform-
ance review of GM, conducted in 2001 and covering the first five years of insti-
tutional cooperation, notes:
The worlds largest corporation was joining hands with a rela-
tively unfamiliar, yet potentially very influential, coalition of en-
vironmental groups and socially responsible investors. The out-
comes were uncertain, and there were many skeptics on both
sides. [] Together GM and CERES hoped to harvest potential
benefits in admittedly unknown and probably rough terrain
(CERES 2002a, 5).
What has been more important than a clear perception of future gains were
four distinct organizational resources available in the process of institutionali-
zation: the ability to frame the problem in a way that is meaningful to other
stakeholders, the information necessary to solve it, the impact to make an
actual difference in the given issue area, and the credibility to construct a joint
solution acceptable to all the participants. Social investors were able to address
the problem of corporate environmental performance because they did not
only represent social visions, but substantial capital interests as well. Through
filing shareholder petitions they made companies aware of the growing de-
mand for environmental disclosure. But investors needed the support of non-
partisan environmental organizations to offer corporations the reputation
benefit and added value necessary to engage them in cooperation. The com-
panies on their part provided the information requested by investors and the
commitment envisaged by the NGOs to make a real difference on the ground.
In sum, the CERES case confirms the importance of private demand for a
certain regulatory framework in the absence of appropriate governmental or
international responses. A distinct problem-structure creates demand from
different sides of the stakeholder spectrum. What seems important is that one
actor holds the leverage to make the problem a business issue, in this case the
social investors through the intense use of shareholder petitions. Further-
more, ideas seem to matter in allowing dissimilar actors to agree on a mutual
frame of reference as the basis for future action. Although the environmental
401
Philipp Pattberg
community did reject the approach in the very beginning, the idea of envi-
ronmental principles coupled with standardized reporting provided a com-
mon point of reference that was used as a strong long-term vision to bridge
existing differences. The macro-level of conditions plays a twofold role in the
case. First, contextual factors such as the Exxon Valdez catastrophe provided
an additional impulse for successful private regulation; second, macro-shifts
in the economic realm drove corporate actors to the forefront of public atten-
tion. What could not be confirmed was a simple power or interest-based ex-
planation. What rather seem to be influential are available organizational re-
sources that can be exchanged to create a zone of joint gains. Although com-
panies did achieve gains such as positive brand reputation, the initial coopera-
tion process was marked by uncertainty with regard to the possible outcome.
What seems to be of further importance is the existence of an institutional
entrepreneur, a committed individual generating momentum for the respec-
tive idea, similar to the concept of a norm entrepreneur as discussed by Fin-
nemore and Sikkink. These findings indicate that an integrated model, com-
bining micro- and macro-structures, is better equipped to understand the
emergence of private regulatory institutions than a single-factor account.
4.2 Certifying Sustainability: The Forest stewardship Council
The Forest Stewardship Council was founded in 1993 by a general assembly of

interested parties in Toronto, Canada. Among the 126 participants from 26
countries were concerned individuals and representatives from a wide range
of organizations, including environmental NGOs, retailers, trade unions, and
indigenous interest groups. Although consultations among forest producers,
retailers, and environmental and social interest groups had been going on
since 1990, it was not until 1994 that the founding members of FSC agreed
upon the FSC Standards and Principles, the substantive basis of FSCs work
with regards to definition and operationalisation of sustainable forestry (FSC).
The idea behind the FSC is to certify forest management operations according
to a detailed standard. Certification and continual verification of commitment
is carried out by independent certification organizations that are accredited by
the FSC according to specific rules.
In contrast to CERES, being a network of coalition members and endorsing
companies, the FSC is constituted as a membership organization. The General
Assembly (GA), a tripartite body that represents business, social, and envi-
402
ronmental interests within three chambers, governs the FSC. The GA elects a
board of directors that mirrors the principal governance structure. Each
chamber sends three members to the board for a three-year term. The board
decides on all issues of major importance, from approving national represen-
tatives and initiatives of the FSC, to allocating the annual budget, to approving
new standards. The operational work of the FSC is handled by the FSC inter-
national secretariat located in Bonn, Germany, and supervised by an Executive
Director who is appointed by the board. Whereas the day to day operations of
the FSC are in the responsibility of the international secretariat and its execu-
tive director, and questions of major importance are decided by the board of
directors, only the general assembly is authorized to change the fundamental
standards and principles as well as the statutes of the FSC. Currently, the
FSC incorporates about 600 individual and organizational members, 36 na-
tional initiatives, and 13 independent certification organizations within its
network. Member organizations include large economic actors such as IKEA,
The Home Depot, and B&Q, national and international environmental advo-
cacy groups, for example Greenpeace, the World Wide Fund for Nature
(WWF), and Friends of the Earth, and a wide range of social advocacy groups,
including the German trade union IG Bau and indigenous campaigns within
their scope.
As a private regulatory institution, the FSC produces three different basic
types of standards. First, global forest management standards that form the
basis for national and regional standards development; second, chain of cus-
tody standards prescribing detailed rules along the production chain; and
third, standards for accreditation. The standards are developed and drafted by
the standards and policies unit within the international secretariat and later
approved by the board of directors. To date, more than 47 million hectares of
forests worldwide are certified according to FSC standards, amounting to 5%
of trade in forests products. From 1996 until 2004 the FSC has issued 4000
certificates, both for forest management and chain of custody.
In March 1991, a group of timber users, traders, and representatives of social
and environmental organizations convened in California to discuss the need
for a credible system for identifying well-managed forests as an acceptable
resource of forest products (FSC and WWF-Germany, 6). One year later, WWF
had teamed up with major retailers in the UK to form the UK Forest and
Trade Network. In October 1993, the FSC held its first general assembly after a
18 month intense consultation period in ten countries, including the US, Can-
403
Philipp Pattberg
ada, Sweden, and Peru. Several distinct features characterize the problem-
structure that underlay this process of institutionalization. Media-coverage on
tropical deforestation and related social issues such as the Amazonian rubber
tappers protest against illegal logging and the subsequent investment in cattle
quickly turned the word tropical timber into a negative synonym for environ-
mental degradation and human exploitation. Buying mahogany furniture had
become a critical issue among northern consumers by the late 1980s. With
environmental organizations organizing boycotts against tropical timber re-
tailers, and some governments discussing the possibility of banning timber
import, companies were looking for new ways to protect their profits. Major
business players quickly realized that in fact they could not account for the
origin and nature of their raw materials. This created a need for transparent
product labels, which were nonexistent at that time. Some NGOs on their part
were unhappy with the debate focusing only on timber boycott, which espe-
cially WWF saw as contra-productive. Instead, WWF-UK conducted a seminar
on the forest problem, entitled Forests Are Your Business, resulting in the
WWF 95 group. Ten major do-it-yourself and furniture companies agreed to
phase out, by 1995, the purchase and sale of non-sustainable wood and wood-
products (Bendell and Murphy, 70). The competing needs of the major stake-
holders became evident at that point in time. An increasingly competitive
global market for timber products drove large multinational corporations
while at the same time brand reputation became a major topic of concern.
Small forest owners wanted their share of the market but maintain independ-
ence, communities relied on forests to finance community infrastructure,
indigenous people demanded the recognition of fundamental rights while
workers sought to secure employment and fundamental labor standards. Envi-
ronmental organizations on their term focused on protecting and preserving
the integrity of the forest ecosystems.
Around the same time, the ongoing negotiations about an international
agreement on the worlds forest raised expectations among NGOs and corpo-
rations for a credible solution to their problems. Although the first interna-
tional response to the problem of deforestation, the International Tropical
Timber Agreement focusing on trade in tropical timber products, was already
agreed on in 1983, it was not until the late 1980s that the international com-
munity reached a consensus on the necessity to consider a global approach to
the forest problem. In the end, it was the failure of the intergovernmental
process that gave an additional burst to the idea of private forest certification.
For Timothy Synnott, FSCs first Executive Director until January 2001, it is
404
evident that [a] clear impulse for the formation of FSC in 1993 came out of the
failure of the Rio conference in 1992 and its failure to produce a legally bind-
ing forestry element (FSC and WWF-Germany 2002, 8). And Francis Sullivan,
member of WWF-UK and involved in the WWF 95 group and FSC, argued that
one can not sit back and wait for governments to agree. Instead, working with
people and companies who might get things done could be the right thing to
do (Bendell and Murphy, 69).
Although UNCED was unable to deliver a binding agreement on the worlds
forests, it nevertheless provided important guidance for the FSC process. The
Rio conference was the place were the concept of sustainability rose to its
greatest appreciation. Based on the 1987 Brundtland Report, UNCED agreed
on the Agenda 21 as the blueprint for sustainability in the 21st century. The
document calls on governments to identify appropriate national strategies for
the sustainable use of forest resources, acknowledging the crucial contribution
of nongovernmental actors and business interests. For Peter Prokosch, CEO of
WWF-Germany, the FSC constitutes the archetype of the participatory proc-
ess envisioned by Agenda 21 (FSC and WWF-Germany, 3). The idea of partici-
pation and equal representation based on the general assumption of the sus-
tainability discourse that environmental, social, and economic interests are of
the same value has been an important prerequisite for cooperation between
the different stakeholders. Especially the unique tripartite governance struc-
ture, ensuring equal representation of all interests, has served as an early point
of reference and a common ground for future negotiations. Although difficult
to measure, individual commitment seems to have played a decisive role in
the emergence of the FSC. As interviews with current staff members of FSC
indicate, special credit for getting the FSC started is given to individuals at
WWF who approached British companies with a view to partnership and not
conflict.
Similar to the CERES case, available organizational resources played a greater
role in the process of institutionalization than strategic reduction of transac-
tion costs. Although companies were able to minimize cost, for example by
eliminating intermediate traders based on information they obtained through
the cooperation with local NGOs, this has been an unintended consequence
rather than a clear strategic vision on parts of the companies. More decisive
was the fact that NGOs were perceived as legitimate social actors by the public
and thus could deliver the much needed credibility to forest certification sys-
tems. Furthermore, NGOs provided expert knowledge on many complex is-
405
Philipp Pattberg
sues related to the technical aspects of certification as well as to their ecologi-

cal functions. Retailers for their part could exercise pressure on the forest
industry by demanding certified raw materials and products, inducing change
in the actual practices of forestry. Forest managers perceived the chance to
increase their profit margins by positioning themselves on the newly emerg-
ing market for sustainable timber.
In sum, the case of the FSC seems to confirm the importance of a distinct
problem-structure creating demand for regulation that cannot be met by an
international agreement. With NGOs making timber trade a real consumer
issue and governments unable to agree on binding regulations, companies
sought new allies to save their core business interests. NGOs did not only
emerge as corporate critics but also possible solutions to the problem. An
integrative idea, based on the norms embodied in the Brundtland Report and
Agenda 21, served as the common point of reference within the negotiations.
In addition, individual commitment was crucial to realize cooperation when
the opportunity occurred.
5 Conclusion: Understanding Private Governance in

World Politics
This paper argues that the recent phenomenon of private governance in world
politics goes beyond common forms of private cooperation because it involves
not only adjustments of behavior towards mutual goals but also shared norms,
principles, and roles. As a result, private governance is believed to include
private systems of rule that exist mainly outside of the international system of
governance. The article further suggests that the explanatory factors for the
emergence of private systems of rule are best thought of as a set of four condi-
tions, two on a macro- and two on a micro-level of political structures. In this
view, macro-systemic transformations, resulting in perceived or actual decline
of public regulatory power, the emergence of civil society as a legitimate and
credible actor, and increased environmental and social impact of corporate
players, as well as powerful ideas that serve as common points of reference
constitute the macro-level of necessary conditions. On the micro-level, the
structure of the problem and the available organizational resources of the
actors involved constitute the necessary conditions for private regulatory insti-
tutions to emerge.
406
The two condition sets are supposed to be interconnected and form an inte-
grated model of private regulatory institutions emergence because distinct
variables are systematically interacting with each other and thus jointly pro-
duce a certain result (Efinger, Mayer, and Schwarzer 1993, 273). It is further
assumed that the distinct interplay between the macro- and the micro-level of
conditions creates a window of opportunity for the emergence of private regu-
latory institutions. Institutionalization is thus understood to be a dynamic
process.
The advantage of analyzing private governance along a macro-level/micro-
level distinction is twofold: first, the systematic interactions of factors as well
as the specific mechanisms operating therein become evident. Consider for
example the proposition that public pressure can explain the emergence of co-
regulative systems of rule. The empirical cases analyzed in this article have
shown that pressure is a decisive factor but operates through different path-
ways publicly orchestrated boycott or more clandestine shareholder peti-
tions that are dependent on the problem-structure and organizational re-
sources. Second, the proposed model allows for a systematic treatment of ma-
jor factors by offering a structured approach to the analysis of private govern-
ance. A consecutive treatment of the macro- and microstructures in the ana-
lytical process could assure researchers that no major factor has gone unno-
ticed.
Drawing on the two cases, a common narrative can be presented. In this view,
distinct problem-structures, different levels of information and knowledge as
well as adversarial relationships among stakeholders create demand that is not
met by public regulation. The ability to create private demand for regulation
and to find a common solution rests on the organizational resources of dis-
tinct actors. These resources are a result of rather large-scale transformations.
NGOs and other social actors have emerged as an accepted corrective to public
actors while at the same time corporations acquired both greater environ-
mental impact and public visibility. In this situation, ideas can help to inte-
grate these resources (civil society pressure, public acceptance and envi-
ronmental impact) for a joint solution. In short, when private regulatory de-
mand, being a result of strategy and macro-systemic transformations, is not
met by adequate public supply, a broad inclusive idea can help to integrate re-
sources that can be mutually exchanged to solve the multi-party problem.
In sum, an integrated model, combining the macro- and micro-level of politi-
cal structures, has proved helpful in the analysis of private governance. This
407
Philipp Pattberg
approach is helpful because it draws attention to a variety of inter-linkages

between different conditions that would not be observable using a single-
factor account. First, the relation between shifts on the macro-level and new
resources for organizational actors, leading to new strategic choices; second,
the relation between resources and the problem-structure, addressing the
ability of actors to construct a problem in the first place; and third, the rela-
tion between ideas that emerge and diffuse on the macro-level and the subse-
quent integration of competing perspectives in the actual negotiations.
References
Arts, Bas. 1998. The Political Influence of Global NGOs. Case Studies on the Climate
Change and Biodiversity Conventions. Utrecht: International Books.
Austin, James E. 2000. The Collaboration Challenge. How Nonprofit and Business
Succeed Through Strategic Alliances. San Francisco: Jossey-Bass.
Bendell, Jem, and David F. Murphy. 2000. Planting the Seeds of Change. Business-
NGO Relations on Tropical Deforestation. In Jem Bendell, ed., Terms for Endear-
ment. Business, NGOs and Sustainable Development. Sheffield: Greenleaf Publish-
ing.
Brzel, Tanja A., and Thomas Risse. Forthcoming. Public-Private Partnerships: Effec-
tive and Legitimate Tools of International Governance. In Edgar Grande and Louis
W. Pauly, eds., Complex Sovereignty: On the Reconstruction of Political Authority
in the 21st Century.
Brhl, Tanja. 2002. The Privatization of International Environmental Governance. In
Frank Biermann, Rainer Brohm, and Klaus Dingwerth, eds., Proceedings of the
2001 Berlin Conference on the Human Dimensions of Global Environmental
Change: Global Environmental Change and the Nation State. Potsdam: Potsdam
Institute for Climate Impact Research.
Brhl, Tanja, Tobias Debiel, Brigitte Hamm, Hartwig Hummel, and Jens Martens, eds.
2001. Die Privatisierung der Weltpolitik. Entstaatlichung und Kommerzialisierung
im Globalisierungsprozess. Bonn: Dietz.
Cashore, Benjamin. 2002. Legitimacy and the Privatization of Environmental Govern-
ance: How Non-State Market-Driven (NSMD) Governance Systems gain Rule-
Making Authority. Governance: An International Journal of Policy, Administration,
and Institutions 15:503-529.
CERES. 1998. Annual Report 1997. Boston: CERES.
. 1999a. CERES Report Standard Form 1998. Boston: CERES.
. 1999b. Tenth Anniversary Report 1998. Boston: CERES.
. 2001. Drawing on the Wisdom of Us All. Annual Report 2000. Boston: CERES.
. 2002a. CERES Performance Review of General Motors Corporation. Boston:
CERES.
. 2002b. Life in the Edge Environment. Annual Report 2001. Boston: CERES.
Clapp, Jennifer. 1998. The Privatization of Global Environmental Governance: ISO
14000 and the Developing World. Global Governance 4:295-316.
Cox, Robert W. 1987. Production, Power, and World Order. New York: Columbia Uni-
versity Press.
408
Cutler, A. Claire, Virginia Haufler, and Tony Porter, eds. 1999a. Private Authority and
International Affairs. Albany: State University of New York Press.
Cutler, Claire A., Virginia Haufler, and Tony Porter. 1999b. The Contours and Signifi-
cance of Private Authority in International Affairs. In Claire A. Cutler, Virginia
Haufler, and Tony Porter, eds., Private Authority and International Affairs. Albany:
State University of New York Press.
Efinger, Manfred, Peter Mayer, and Gudrun Schwarzer. 1993. Integrating and Contex-
tualizing Hypotheses. Alternative Paths to Better Explanations of Regime Forma-
tion? In Volker Rittberg, ed., Regime Theory and International Relations. Oxford:
Clarendon Press.
Eisler, Riane. 1996. Creating Partnership Futures. Future 28:563-566.
Falkner, Robert. 2003. Private Environmental Governance and International Relations:
Exploring the Links. Global Environmental Politics 3:72-87.
Finnemore, Martha, and Kathryn Sikkink. 1998. International Norm Dynamics and
Political Change. International Organization 52:887-917.
FSC. 2000. FSC Principles and Criteria. Oaxaca: FSC A.C.
FSC, and WWF-Germany. 2002. Forest Stewardship Council. Political Instrument,
Implementation and Concrete Results for Sustainability since 1993. Frankfurt a.
M.: FSC/WWF-Germany.
Germain, Randall D., and Michael Kenny. 1998. Engaging Gramsci: International Rela-
tions Theory and the New Gramscians. Review of International Studies 24:3-21.
Hall, Rodney Bruce, and Thomas J. Biersteker, eds. 2002. The Emergence of Private Au-
thority in Global Governance. Cambridge: Cambridge University Press.
Hasenclever, Andreas, Peter Mayer, and Volker Rittberger. 1997. Theories of Interna-
tional Regimes. Cambridge: Cambridge University Press.
Haufler, Virginia. 1993. Crossing the Boundary between Public and Private: Interna-
tional Regimes and Non-State Actors. In Volker Rittberg, ed., Regime Theory and
International Relations. Oxford: Clarendon Press.
. 2000. Private Sector International Regimes. In Richard A. Higgott, Geoffrey
R.D. Underhill, and Andreas Bieler, eds., Non-State Actors and Authority in the
Global System. London, New York: Routledge.
Heap, Simon. 1998. NGOs and the Private Sector: Potential for Partnerships? Oxford:
INTRAC.
Hemmati, Minnu, ed. 2001. Multi-Stakeholder Processes for Governance and Sustain-
ability: Beyond Deadlock and Conflict. London: Earthscan.
Keck, Margaret E., and Kathryn Sikkink. 1998. Activists beyond Borders. Advocacy Net-
works in International Politics. Ithaca: Cornell University Press.
Keohane, Robert O. 1984. After Hegemony. Cooperation and Discord in the World
Political Economy. Princeton: Princeton University Press.
Levy, David L., and Peter J. Newell. 2002. Business Strategy and International Environ-
mental Governance: Toward a Neo-Gramscian Synthesis. Global Environmental
Politics 2:84-100.
Long, Frederick J., and Mathew B. Arnold. 1995. The Power of Environmental Partner-
ships. Fort Worth: Dryden Press.
Mayer, Peter, Volker Rittberger, and Michael Zrn. 1993. Regime Theory. State of the
Art and Perspectives. In Volker Rittberger, ed., Regime Theory and International
Relations. Oxford: Clarendon Press.
Murphy, David F. 1998. Business and NGOs in the Global Partnership Process. Paper
read at United Nations Conference on Trade and Development, 9-12 November, at
Lyon.
409
Philipp Pattberg
Murphy, David F., and Jem Bendell. 1997. In the Company of Partners: Business, Envi-
ronmental Groups and Sustainable Development Post Rio. Bristol: The Policy
Press.
Pattberg, Philipp. 2004. Private Environmental Governance and the Sustainability
Transition: Functions an Impacts of Business-NGO Partnerships. In Governance
for Industrial Transformation. Proceedings of the 2003 Berlin Conference on the
Human Dimension of Global Environmental Change, edited by K. Jacob, M.
Binder and A. Wieczorek. Berlin: FFU.
Pijl, Kees van der. 1997. Transnational Class Formation and State Forms. In Stephen
Gill and James H. Mittelman, eds., Innovation and Transformation in Interna-
tional Studies. Cambridge: Cambridge University Press.
Raustiala, Kal. 1997. States, NGOs, and International Environmental Institutions. In-
ternational Studies Quarterly 41:719-740.
Richter, Judith. 2001. Holding Corporations Accountable. Corporate Conduct, Interna-
tional Codes, and Citizen Action. London, New York: Zed Books.
Rosenau, James N. 1995. Governance in the Twenty-First Century. Global Governance
1:13-43.
. 1997. Global Environmental Governance: Delicate Balances, Subtle Nuances,
and Multiple Challenges. In Mats Rolen, Helen Sjberg, and Uno Svedin, eds., In-
ternational Governance on Environmental Issues. Dordrecht: Kluwer Academic
Publishing.
Rowlands, Ian H. 2001. Transnational Corporations and Global Environmental Politics.
In Daphn Josselin and William Wallace, eds., Non-State Actors in World Politics.
London: Palgrave.
Savas, E.S. 2000. Privatization and Public-Private Partnerships. New York, London:
Chatham House.
Sell, Susan K., and Aseem Prakash. 2004. Using Ideas Strategically: The Contest Be-
tween Business and NGO Networks in Intellectual Property Rights. International
Studies Quarterly 48:143-176.
Strange, Susan. 1996. The Retreat of the State. The Diffusion of Power in the World
Economy. Cambridge: Cambridge University Press.
Wapner, Paul. 1997. Governance in Global Civil Society. In Oran Young, ed., Global
Governance. Drawing Insights from Environmental Experience. Cambridge, Mass.:
MIT Press.
Weiss, Thomas G., and Leon Gordenker, eds. 1996. NGOs, the UN, and Global Govern-
ance. Boulder: Lynne Rienner.
Willetts, Peter. 2000. From "Consultative Arrangements" to "Partnership": The Chang-
ing Status of NGOs in Diplomacy at the UN. Global Governance 6:191-212.
Witte, Jan Martin, Wolfgang H. Reinicke, and Thorsten Benner. 2000. Beyond Multi-
lateralism: Global Public Policy Networks. Internationale Politik und Gesellschaft
2:176-188.
Young, Oran R. 1989. International Cooperation. Ithaca and London: Cornell Univer-
sity Press.
410
Success and Failure in International River Basin
Management The Case of Southern Africa 1
STEFAN LINDEMANN
Abstract 2
Home to 15 international river basins and affected by growing water scarcity,
the region of Southern Africa is often considered a hydropolitical hot spot
prone to wars over transboundary water resources. Rejecting this widespread
water wars hypothesis, the paper discusses four selected cases of regional
water co-operation and asks if and how these initiatives have provided guid-
ance for the resolution of transboundary problems along Southern African
waterways. To what extent have the existing international river basin man-
agement schemes been successful in resolving the problems that prompted
their creation? And what are the pathways to success and failure in the manag-
ing of international rivers?
Drawing on regime theory, the author develops an analytical framework that
explains the success of international water regimes with the complex interplay
of (1) Problem factors - the incentive structure of the respective problem and
the underlying problem pressure; (2) process factors - the political tools to
balance incentive structure and reduce transaction costs; (3) institutional fac-
tors - the institutional regime design; (4) country-specific factors - the politi-
cal, socioeconomic and cognitive capacities of the member countries; and (5)
factors of international context - the political context between member coun-
tries and third-actor support. The empirical findings offer some valuable in-
1
This article will be published in: Brauch, H.G. / Grin, J. / Mesjasz, C. / Krummen-
acher, H. / Chadha Behera, N. / Chourou, B. / Oswald Spring, U. / Liotta, P. H. /
Kameri-Mbote, P. (eds.): Facing Global Environmental Change: Environmental,
Human, Energy, Food, Health and Water Security Concepts. Springer: Berlin - Hei-
delberg - New York. Copyright Springer. Preprinted with kind permission.
2
This article builds on and summarises the detailed findings in Lindemann (2005).
411
Stefan Lindemann
sight into the conditions for success of international river basin management.
While the hypothesized role of problem, process and institutional factors is
largely confirmed, it is especially the (often neglected) integration of country-
specific and contextual factors that is of particular interest: The high relevance
of national capacity deficits, political instabilities and strained bilateral rela-
tions illustrates that a thorough discussion of success and failure in interna-
tional river basin management requires a more systematic consideration of
these influencing factors.
1 The Challenge of International River Basin

Management
Almost all of the worlds largest rivers cross national borders. According to
recent estimates, there are 263 international river basins3 that account for 60
per cent of the global freshwater resources, cover 45,3 per cent of the worlds
land area and host 40 per cent of the global population (Klaphake/Scheumann
2001: 7). The use of these international river basins leads to numerous prob-
lems and conflicts among riparian countries that include disputes over water
quantity, pollution, dam schemes, flood protection or navigational issues. The
great majority of these conflicts derive from the upstream-downstream struc-
ture of international rivers. While most water-related conflicts arise upstream
where abstractions or pollution compromise the availability of water down-
stream, activities downstream can also lead to conflict since they may create an
obstacle of upstream actors access to the sea (Bernauer 1997: 162).
One can generally identify two approaches in resolving water-related conflicts
in international river basins. On the one hand, there are general principles of
international water law through which victims of water conflicts might seek
remedy. Unfortunately, this vertical water law remains essentially a soft law
that has provided little guidance in resolving transboundary water conflicts
(Birnie/Boyle 2002).4 Against this background, this chapter focuses on hori-
3
River basins or catchment areas are defined by a common mouth, which is either
the point where the river flows into the sea or into an inland delta.
4
The UN Convention on the Law of the Non-Navigational Uses of International Wa-
tercourses, which took 27 (!) years to develop, establishes a series of principles for in-
ternational water cooperation but has neither entered into force nor does it provide
clear guidance in resolving transboundary water conflicts (Beach/Hammer/ Hewitt/-
412
zontal initiatives for international river management between two or more

riparian states at the river basin level, which seem to hold more potential for
the resolution of transboundary water conflicts. Horizontal cooperation along
international waterways is omnipresent. The FAO has counted 3.600 interna-
tional water treaties for the period between 805 AD and 1984 (Wolf 1997). If one
excludes the numerous treaties on navigational issues, there are still more
than 400 different treaties on international rivers (Wolf/Yoffe/Giordano 2003:
32).
These treaties vary substantially according to both the subject and the extent
of the agreed cooperation (Hartje 2002: 22). The great majority is functional in
scope, which means that the adopted approach focuses on the resolution of
specific problems in the river basin (Marty 2001: 22). Functional forms of co-
operation include (1) agreements on the development of joint projects such as
dam schemes or flood protection a type of cooperation that is still dominant
as it reflects the traditional, infrastructure-oriented development paradigm
(e.g. Rio Grande, Senegal). Furthermore, there are (2) agreements on the alloca-
tion of water, comprising the allocation of specific water quantities between
riparians in mostly semi-arid or arid regions (e.g. Aral Sea, Incomati). Func-
tional forms of cooperation finally also include (3) agreements on water pollu-
tion problems, which have been growing in number since the late 1960s (e.g.
Rhine, Tijuana). Beyond functional cooperation there are also (4) integrated
approaches to international river basin management that focus on the river
basin as a whole and try to resolve the existing hydrologic, ecologic and socio-
economic problems through holistic policies. The integrated approach has
been widely endorsed and promoted by international organisations, NGOs
and scientists (Teclaff 1996: 384) but suffers from a so far very limited practical
application (Hartje 2002: 23).
Kaufman/Kurki/Oppenheimer/Wolf 2000: 9). Among many problems, it institution-

alises the inherent upstream/downstream conflict by calling for both "reasonable
and equitable use" and an "obligation not to cause appreciable harm. These two
principles are in implicit conflict in the setting of an international waterway: up-
stream riparians have advocated that the emphasis between the two principles be on
"reasonable and equitable use" since this gives the needs of the present the same
weight as those of the past. In contrast, down-stream riparians have pushed for em-
phasis on "no significant harm," which effectively protects the pre-existing uses
generally found in the lower reaches of most major streams (Wolf 1998: 1).
413
Stefan Lindemann
Southern Africa is certainly among the worlds most interesting regions in the
field of international water since few regions offer as much contrast. Due to
the regions relative water scarcity5, the 15 international basins in the Southern
African Development Community (SADC) are regularly included among the
worlds hydropolitical hot spots, second only to the arid and hostile Middle
East (Wolf 2003: 1). Water scarcity in Southern Africa is firstly a problem of
inadequate supply since levels of water availability are highly volatile due to
climate and weather extremes.6 But water scarcity is also demand-induced
since ceteris paribus the water available per capita tends to diminish due to
both increasing industrial/agricultural development and average annual popu-
lation growth of more than 3 per cent (Mohamed 2003: 213). Lastly, there is also
a structural aspect to the problem of water scarcity in Southern Africa: Due to
colonial and postcolonial settlement policies, the available water resources are
extremely unequally distributed and mostly located far outside the urban areas
(Swatuk 2002). Altogether, water resources are relatively scarce, extremely vola-
tile and mostly located in international river basins a fact that makes the
international river basins crucial for the development of the entire region
(Granit 2000: 2).
On the other hand, Southern Africa now has more experience in negotiating
water treaties and implementing joint management bodies than any other
region on earth, save the European Union (Wolf 2003: 1). While some of the
management schemes in Southern Africas international river basins date back
5
Recent calculations for Southern Africa reveal that water is already scarce in a num-
ber of local basins, reaching availability levels of 1000 m3 or less per capita per an-
num. By 2025, based on renewable supplies and demographic data, it is expected
that Malawi and South Africa will face absolute water scarcity, and Lesotho, Mauri-
tius, Tanzania and Zimbabwe will be water stressed; while Angola, Botswana, DRC,
Mozambique, Swaziland and Zambia are likely to experience water quality and avail-
ability problems in the dry season (Hirji/Mackay/Maro 2002: 7). Despite undeniable
deficits the designation of entire countries as water scarce is methodologically
problematic since water scarcity is a complex and regionally varying phenomenon
(Schiffer 2001: 4) the indicators give an impression of Southern Africas current
and coming water crisis.
6
The climate in the region is characterised by staggering evaporation rates, extreme
variations in precipitation over the year and recurrent floods and droughts
(Chenje/Johnson 1996). These extremes that are expected to worsen in the context
of global climate change make that the North and the East of the region are rela-
tively wet (Democratic Republic of Congo, Angola and Zambia), while the South and
the West receive very little rainfall (Namibia, Botswana, South Africa, Zimbabwe).
414
to colonial times, most of the 24 international water treaties in the region have
been negotiated since the mid 1980s. In the light of the Southern African
water crisis, the existing efforts for international river management are of
great importance. This is why I ask if and how these initiatives have provided
guidance for the resolution of transboundary problems along international
waterways. To what extent have the existing international river basin man-
agement schemes been successful in resolving the problems that prompted
their creation? And what are the pathways to success and failure in the manag-
ing of international rivers?
2 Theoretical and Methodological Framework

Problems of international river basin management have so far been discussed
in a mostly descriptive and unsystematic way (see Bernauer 2002). Below a
research framework is developed for a more systematic and theoretically
guided comparison (2.1). This is followed by methodological considerations on
how to apply this framework to regional case studies (2.2).
2.1 The Research Framework
In order to explain success and failure in international river basin manage-

ment, I make use of international regime theory7. Treaties on international
rivers are conceptualised as water regimes defined as norm- and rule based
cooperation for the political resolution of problems and conflicts in the field
of international river basin management. Asking for the conditions for success
of these international water regimes involves two interrelated, but analytically
separated questions: (1) Under which conditions are the riparian states pre-
pared to form institutions to address transboundary problems? (2) And what
are the determinants of the effectiveness of those institutions? The focus is
therefore on the determinants of (water) regime formation and (water) regime
effectiveness the two dependent variables.
7
International regimes are sets of implicit or explicit principles, norms, rules and
decision-making procedures around which actors expectations converge in a given
area of international relations (Krasner 1983: 2).
415
Stefan Lindemann
The concept of regime formation is almost self-evident. A water regime is

formed when riparian countries engage upon norm- and rule-based coopera-
tion for the political resolution of problems and conflicts in the field of inter-
national river basin management. The concept of regime effectiveness, on the
other hand, is more problematic. The most intuitively appealing sense of ef-
fectiveness centres on the degree to which a regime eliminates or alleviates the
problem that prompts its creation (Young 1999: 4). However, this problem-
solving approach is misleading since it is usually very difficult to establish a
causal relation between the effects of a regime and the state of a given prob-
lem.8 Against this background, I complement the problem-solving approach
with a political interpretation of regime effectiveness that focuses on behav-
ioural change (e.g. Keohane/Levy 1996; Young 1999): Regime effectiveness be-
comes the extent to which the water regime prompts behavioural change on
the part of the relevant actors leading to an improved management of the
respective problem.
But what are the determinants the independent variables of water regime
formation and effectiveness? Drawing on regime theory especially the work
by Frank Marty (2001) who, from a social sciences perspective, has contributed
one of the very few theoretically guided analyses of international river basin
management five groups of independent variables are distinguished: prob-
lem factors; process factors; institutional factors; country-specific factors; and
factors of international context.
2.1.1 Problem Factors

It is intuitive to assume that problems of international river basin manage-
ment are not equally easy to resolve. In general, one can distinguish between
problems related to transboundary externalities and collective problems
(Marty 2001: 35-36). Most problems are related to transboundary externalities
due to the upstream-downstream structure of international rivers. Negative
externalities arise when the upstream country imposes costs on the down-
stream country without compensating it for the inflicted harm (e.g. in the case
of water abstraction or pollution upstream). Positive externalities, on the other
hand, are less frequent and exist when one riparian country produces a public
8
Environmental problems typically lead to a multitude of initiatives, which have an
impact on the problem but are not necessarily linked to the existence of a related
environmental regime (Young 1999: 5).
416
good without receiving full compensation for its efforts (e.g. the provision for
flood control upstream). Other problems in international river basins are of a
collective nature (e.g. floods or common development projects). These prob-
lems are collective in that they impose (more or less equal) costs on all affected
riparian countries direct costs in the case of transboundary floods, opportu-
nity costs in the case of under-utilised river development potentials. Problems
related to transboundary externalities and collective problems differ funda-
mentally with respect to the underlying incentive structure of the relevant
actors: In the case of collective problems, incentives tend to be symmetrical,
while transboundary externalities are usually characterised by asymmetric
incentive structures. This is why there is reason to believe that problems re-
lated to transboundary externalities are more difficult to resolve than collec-
tive problems (Marty 2001: 37).
Beyond incentive structures, problems in international river basin manage-
ment vary according to the amount of problem pressure involved that is, the
perceived visibility of a given problem (Jnicke 1999: 77). Recurrent floods, for
example, involve more problem pressure than the threat of water scarcity in
the year 2025 and should therefore lead to more political pressure to tackle the
given problem.
Hypothesis 1: Problem factors the underlying incentive struc-
tures and problem pressure influence the prospects of water
regime formation: While collective problems facilitate the forma-
tion of water regimes, the latter are more difficult to achieve in
the case of tranboundary externalities. The higher the problem
pressure involved, the better the prospects for the creation of ef-
fective water regimes.
2.1.2 Process Factors
Moving beyond the purely functional logic of the early 1980s (e.g. Keohane
1984), regime analysis has come to realise that incentive structures do not en-
tirely determine the prospects of regime formation a turn to process in
regime analysis (Schramm Stokke 1997: 58). This is why there is reason to
focus on political tools that help to transform the given constellation of inter-
ests and thereby promote international water cooperation. These process
factors can be divided into mechanisms to balance incentive structures and
instruments to reduce the transaction costs of regime formation (Marty 2001:
38ff.).
417
Stefan Lindemann
Mechanisms to balance incentive structures facilitate the resolution of prob-

lems related to transboundary externalities. Balancing incentive structures
involves the provision of new or additional incentives: A party which has an
incentive to externalise cost, for example, must be given the expectation that it
would not be rewarding for her to continue that behaviour. The provision of
new incentives usually happens in form of direct or indirect costs. While di-
rect cost incentives comprise the benefits a party expects to gain from a pro-
posed arrangement in the specific issue area (e.g. side-payments), indirect cost
incentives refer to all forms of issue linkages, that is the promise of costs or
benefits in an issue-area other than the one at stake (e.g. sanctions). Secondly,
the formation of water regimes generally requires the development of instru-
ments to reduce the perceived transaction costs of regime formation. Here,
one can distinguish between information costs and negotiation costs. Infor-
mation costs are related to uncertainty about (a) the nature of the respective
problem; and (2) the behaviour of the other parties and/or third actors. Nego-
tiation costs, on the other hand, derive from communication problems, frag-
mented decision-making procedures or a high number of involved actors.
Political tools to minimise both information and negotiation costs are mani-
fold and can include confidence-building meetings at the technical level, the
exchange of data or the implication of independent experts.
Hypothesis 2: Asymmetric incentives and transaction costs are
important obstacles to regime formation. The creation of inter-
national water regimes therefore requires the development of po-
litical tools that (1) balance asymmetric interests through direct
or indirect cost incentives; and (2) minimise the underlying in-
formation and negotiation costs.
2.1.3 Institutional Factors
Problem and process factors determine the prospects of regime formation.
But what determines the effectiveness of international water regimes? Most
authors assume a causal relationship between the institutional design of a
regime and its effectiveness (Brown-Weiss/Jacobson 1998; Victor/Raustiala/-
Skolnikoff 1998; Mitchell 2001) institutional design matters. Again drawing
on Marty (2001: 45ff.), I assume that successful water regimes need to be spe-
cific, feasible, flexible, open and equipped with a centralised organisation
structure.
418
Specific regimes are problem oriented and incorporate precise rules and pro-
cedures that structure the relevant actors behaviour with a view to a better
management of the problem at hand. If these precise rules and procedures are
missing, there is scope for interpretation and rule avoidance and the effective-
ness of the regime is bound to suffer. Feasible regimes choose their goals ac-
cording to the available financial and personal resources: If the respective
goals do not take account of the resources at hand, the regime effectiveness
can be expected to decrease. Given the fact that resources to solve problems
related to international river basin management are usually limited, there is
reason to assume that water regimes tend to be more effective if their goals are
of limited scope (Marty 2001: 47). Flexible regimes include institutional
mechanisms that allow adapting to changes in the problem structure. A lack of
flexibility is likely to lead to reduced regime effectiveness since the existing
problem solving strategy may prove inadequate to cope with changing circum-
stances. Furthermore, effective water regimes need a centralised organisation
structure. In such a case, one central actor exercises the regime functions -
usually an international organisation. This should facilitate coordination,
communication and monitoring and lead to more regime effectiveness. Open
regimes allow for a high degree of public participation. If non-state actors are
involved in the decision-making process, this should increase the available
knowledge as well as the legitimacy of the respective regime and foster its
effectiveness.
Hypothesis 3: The effectiveness of a water regime varies with its
institutional design: The more specific, feasible, flexible and
open and the more centralised its organisation structure, the
higher the effectiveness of the water regime.
2.1.4 Country-specific Factors
Determinants of international regime effectiveness are not restricted to insti-
tutional regime design but also include country-specific characteristics
(Mitchell 2001: 13). The latter comprise all those specific features of regime
member countries that influence the implementation and thereby the success
of the respective regime (Brown-Weiss/Jacobson 1998: 7). Despite the obvious
difficulty to integrate country-specific factors into an analytical framework
they range from cognitive-informational capacities, political-institutional
attributes and economic-technological context to aspects of political culture
and individual leadership I make an attempt to consider and systematise
their influence.
419
Stefan Lindemann
Of central importance is the concept of capacity (Jnicke 2002): Regime mem-

ber countries have very different capacities to implement the agreed standards
and/or to impose behavioural change on relevant national actors. Against this
background, deficits in the effectiveness of environmental regimes can to a
considerable extent be attributed to insufficient implementation capacities
(Haas/Keohane/Levy 1993; Brown-Weiss/Jacobson 1998). But what exactly are
the capacities that determine water regime effectiveness?
First, I consider the economic-technological capacities of regime members as
an important influencing factor. It is an intuitive assumption that the socio-
economic situation of a member country will affect the prospects of a regime:
Levels of economic development vary a lot between countries and lead to very
different scopes of action, especially between developed and developing coun-
tries. More specifically, I look at the economic-technological capacities of the
national water sectors. If the latter do not possess sufficient (1) financial and
administrative resources to plan and administer international water projects;
and (2) technical capacities for data generation and project implementation,
water regime effectiveness is likely to suffer. Secondly, there is reason to take
into account the impact of political-institutional capacities. Given the impos-
sibility to consider the influence of different political systems and regime
types in this paper, I limit my analysis to the role of political stability. If the
regime member countries are characterised by high levels of political stability,
there a good prospects for high water regime effectiveness.
Hypothesis 4: The effectiveness of water regimes varies with
country-specific factors: The higher the (1) economic-
technological; and (2) political-institutional capacities of the
member countries, the more effective is the water regime.
2.1.5 Factors of International Context
Beyond country-specific factors, the effectiveness of international regimes is
influenced by factors related to international context (Mitchell 2001: 12). Here,
I first need to take into account the state of the bilateral relations between
regime member countries, which results from historical and current interac-
tions and conditions, the patterns of communication, and the level of trust.
The state of bilateral relations is judged by the existence or non-existence of
foreign policy conflicts between member countries. If bilateral relations are
strained by historical or current foreign policy conflicts, there is no trust basis
420
for the implementation and/or further development of the water regime and
its effectiveness is bound to suffer.
Furthermore, the effectiveness of international regimes varies with the influ-
ence of international organisations (Breitmeier 1997; Brown-Weiss/Jacobson
1998). This influence is exercised through multiple channels: International
organisations provide financial resources, offer their technical and cognitive
expertise and act as independent mediators between conflict parties. Even
though these activities are not per se positive, there is reason to assume that
the support of international organisations promotes water regime effective-
ness, especially in the developing world where financial, technical and cogni-
tive resources are particularly scarce. In analogy, the effectiveness of interna-
tional regimes is influenced by the activities of non-state actors networks that
comprise international NGOs, local interest groups, journalists, policy experts
or academics (Brown-Weiss/Jacobson 1998: 7; Mitchell 2001: 13). These net-
works mobilise and transfer knowledge about the problem at hand, initiate
political campaigns and thereby contribute to a public debate that impacts on
the evolution of the respective regime and should usually enhance its effec-
tiveness.
Hypothesis 5: A water regime depends on its international con-
text. Water regime effectiveness increases (1) the better the state
of bilateral relations between regime members; and the higher
the support by (2) international organisations; and (3) non-state
actors networks. Figure 1 summarises the different components
of the outlined research framework.
421
Stefan Lindemann
Fig. 1: Political determinants of water regime formation and effectiveness
Problem factors
Problems related to transboundary externalities vs. collective problems
Amount of problem pressure
Process factors
Mechanisms to balance incentive structures
Instruments to reduce transaction costs
Regime formation
Factors of
Country-specific international context
factors Institutional factors State of bilateral relations
Economic-technological Specificity between regime members
capacities Feasibility Influence of international
Political-institutional Flexibility organisations
capacities Centralised organisation structure Influence of non-state
Openness actors networks
Regime effectiveness
2.2 Methodological Considerations
In order to test my research framework, I conduct qualitative case studies

based on a structured and focused comparison (George/McKeown 1985) de-
fining and standardising the data requirements for each case study according
to the theoretically deduced variables. Afterwards, I engage in process tracing,
that is, I focus on whether the intervening variables between a hypothesised
cause and an observed effect move as predicted by the theories under investi-
gation (Bennett 2004: 22). Due to the indeterminacy of the research design I
have more inferences to make than implications observed (King et al. 1994:
119) I cannot identify causal effects. However, this apparent shortcoming
stems from a conscious decision: I think of the developed research framework
as a means to systematise the most important determinants of water regime
effectiveness not as an empirical generalisation.
422
With respect to the selection of cases, it is necessary to ensure variation in the

explanatory variables, while allowing for the possibility of at least some varia-
tion on the dependent variable (King/Keohane/Verba 1994: 140ff.). On the basis
of these criteria, I select four cases of Southern African water regimes: (1) The
Permanent Water Commission on the Okavango River Basin (OKACOM); (2)
the Zambezi Action Plan (ZACPLAN); (3) the Zambezi River Authority (ZRA);
and (4) the Lesotho Highlands Water Project (LHWP).
The findings of these four case studies are based on the examination of pri-
mary and secondary sources. Where necessary and possible, additional data
were generated through telephone interviews and email exchange with se-
lected water experts in the region.
3 Empirical Findings
In this section, I first assess the effectiveness of the four water regimes (3.1)
and then go on to identify the political determinants of water regime forma-
tion and effectiveness (3.2).
3.1 Assessing Water Regime Effectiveness
The first water regime under investigation is the Permanent Water Commis-
sion on the Okavango River Basin (OKACOM). The Okavango River originates
in Angola, crosses Namibia and then discharges into the Okavango Delta in
Botswana. While so far little Okavango water has been used, growing water
needs since the early 1990s have led to plans for an increased water use and
provoked tensions between the three riparian countries (Ashton 2003: 170).
Thus, the riparian countries created OKACOM in 1994 for the conservation,
development and utilisation of common water resources (OKACOM Treaty
1994). Sine then, OKACOM has successfully institutionalised conflict poten-
tial, generated continuous dialogue at the political level and conducted a
transboundary diagnostic analysis. While some behavioural change can be
observed, the three riparian countries remain mainly concerned with national
interests and sovereignty (Swatuk 2003: 129) and a river basin wide political
perspective is far from being achieved (GEF 2002: 12). Despite some achieve-
ments and undeniable potential for improvement, OKACOMs effectiveness
remains therefore rather limited.
423
Stefan Lindemann
The situation along the Zambezi River is even more difficult. Shared by An-
gola, Zambia, Zimbabwe, Namibia, Botswana, Malawi, Tanzania and Mozam-
bique, the Zambezi is the regions largest river basin and a veritable artery of
life and development (Sderbaum 2002: 118) for the eight riparian countries.
While the Zambezi is generally rich in water, both weather extremes and
population growth have put increasing pressure on the available water re-
sources. As early as in 1987, the Zambezi riparian countries agreed on a Zam-
bezi Action Plan (ZACPLAN) aiming at an environmentally sound manage-
ment of the Zambezi River basin (ZACPLAN Treaty 1987). The comprehensive
action plan consists of 19 sub-projects and envisages, among others, the devel-
opment of a regional water law, the creation of a common monitoring system
and the elaboration of an integrated management plan for the entire basin.
However, the ZACPLAN has not functioned as a powerful locomotive to pro-
mote environmentally sound management of the Zambezi river basin with
participation of riparian countries, to the extent it was originally supposed to
do (Nakayama 1999: 398): The implementation of the ambitious water regime
has been considerably delayed and only two of the sub-projects have led to
visible results. Almost 20 years after the creation of the ZACPLAN, an inte-
grated basin wide management is still a distant vision and the basin remains
an arena of different national interest in which the various riparian states are
developing diverging policies and plans that are usually not compatible (Chi-
uta 2000: 153). Since no behavioural change can be observed, the ZACPLAN can
be qualified as ineffective.
While the ZACPLAN has so far been a failure, bilateral attempts for an interna-
tional management of the Zambezi stretch between Zambia and Zimbabwe
have proved more successful. Faced with electricity shortages after World War
II, North and South Rhodesia felt the urgent need for a coordinated develop-
ment of the common water resources a need that led to the construction of
the huge Kariba Dam between 1955 and 1976 (Tumbare 2002: 107). After the
end of the federation in 1963, the two countries established the Central African
Power Corporation (CAPCO) to allow for the continued operation of the
Kariba Dam. In 1987, Zambia and Zimbabwe decided to replace the CAPCPO
with the Zambezi River Authority (ZRA) to obtain for the economic, indus-
trial, and social development of the two countries, the greatest possible benefit
from the natural advantages offered by the waters of the Zambezi River and to
improve and intensify the utilisation of the waters for the production of en-
ergy and for any other purpose beneficial to the two countries (ZRA Treaty
1987). The focus of the ZRA remains on the operation of the Kariba Dam but is
424
extended to additional river development projects and environmental meas-

ures to combat the increasing water pollution. Within its limited mandate, the
water regime can be regarded as relatively effective. The ZRA is well estab-
lished in its role as an operation and maintenance organisation (Range-
ley/Thiam/Ander-sen/Lyle 1994: 42) and has recently done environmental ca-
pacity-building through the elaboration of an Environmental Monitoring
Programme (EMP). On the downside, the water regime has failed to plan and
implement additional river development projects, which indicates that the
ZRA could be perceived as a single task regime with little scope for spill over
into broader co-operation (Mutembwa 1998).
The Lesotho Highlands Water Project (LHWP) is situated in the Orange River
basin shared by Lesotho, South Africa, Botswana and Namibia. The upstream
part of the river basin features two fundamentally different riparian states:
The mountainous Kingdom of Lesotho, a least developed country but rela-
tively rich in water, and South Africa, the regions political and economic giant
suffering from mounting water scarcity especially in the Gauteng Area that
hosts 40 per cent of the countrys population and produces half of its wealth
(Turton 2004: 272-273). In this context, South Africa has since the late 1950s
pursued plans to transfer water from the water rich Senqu River in the Leso-
tho Highlands to the Vaal River in the Gauteng Area a project that material-
ised with the signing of the LHWP between South Africa and Lesotho in 1986.
The LHWP aims to enhance the use of the Senqu River by transferring in
four phases until 2020 70 m3/s of water to South Africa and by utilising the
transferred water to generate hydro-electric power in Lesotho, which also
receives financial compensation in the form of royalties (LHWP Treaty 1986).
Phases 1a and 1b of the LHWP have been successfully implemented establish-
ing a complex delivery system of dams and tunnels that currently diverts 29
m3/s of Senqu water to South Africa (Colombani 2003: 93). The LHWP can be
considered as highly effective in the sense that it creates a win-win situation
for both countries which would both be losers otherwise (Conley/van
Niekerk 2000: 137): While South Africa receives cost effective water to back up
its economic growth, Lesotho benefits from both royalties and hydro-
electricity to accelerate the development process of the country.
425
Stefan Lindemann
3.2 Political Determinants of Water Regime Formation and

Effectiveness
How can one explain these different levels of water regime effectiveness? First
of all, the case studies show that the underlying incentive structures do indeed
influence the prospects of water regime formation. In the cases of OKACOM
and ZACPLAN both characterised by the threat of transboundary external-
ities the initial constellation of interests proved an obstacle for cooperation,
while the relatively symmetric incentive structure in the case of the ZRA a
collective problem clearly facilitated the establishment of a water regime
around the Kariba dam. However, one should not exaggerate the importance
of incentive structures, which do not entirely determine the prospects of re-
gime formation but rather serve as an indicator of a given initial situation that
can be transformed during the negotiation process: As seen in the case of the
LHWP, initially asymmetric incentives can be transformed into win-win
situations. Also, taking a closer look at the ZRA case, one realises that the in-
centives of cooperation partners are almost never fully symmetric. Even if two
riparian states are affected by the same problem electricity shortages in the
case of the ZRA the degree of their affectedness or their preferred solutions
may differ and thus hinder water regime formation.
Furthermore, the empirical findings confirm the amount of problem pressure
as a relevant influencing factor. As the case of ZACPLAN clearly illustrates, a
lack of problem pressure may prevent far-reaching water cooperation:
There is not a real issue on the Zambezi. The Zambezi has got so
much water and so little is used, and there is no real threat. You
can manufacture threats if you want, but nobody is interested in
that (Piet Heyns, Interview 17 August 2004).
In the ZRA and LHW cases, on the other hand, high problem pressure linked
to the visible problems of electricity or water shortages facilitated the creation
of more comprehensive problem solving mechanisms. These findings indicate
that purely proactive initiatives for international river basin management that
are not linked to clearly identified problems may lead to half-hearted solu-
tions and implementation deficits.
With respect to the role of process factors, I had expected that asymmetric
incentive structures were to be balanced by direct or indirect cost incentives to
pave the way for water regime formation. This assumption was only confirmed
426
in the case of the LHWP where Lesotho agreed to arrange for a water transfer
when South Africa offered the payment of royalties and the provision of hy-
droelectricity in return. In the cases of OKACOM and ZACPLAN, the riparian
states created rather weak problem solving mechanisms that do not touch
upon incentive structures. This is due to low problem pressure (as for
ZACPLAN) as well as to high transaction costs resulting from a lack of hydro-
logical data (especially for OKACOM). Also, one has to take into account the
time perspective since it took several decades to balance incentive structures
in the case of the LHWP.
Secondly, I had assumed that the establishment of water regimes required the
use of political tools to reduce the transaction costs of the regime formation
process an assumption that was confirmed by all cases under investigation.
Information costs are usually reduced through shared (feasibility) studies that
generate new information and establish a common knowledge basis, while
preferred strategies to reduce negotiation costs include the implication of
independent experts as well as confidence-building meetings at the technical
level. Nevertheless, it is striking to note that the formation of all four water
regimes under investigation was to an important extent facilitated by
situative political events: The post-apartheid democratic moment in the case
of OKACOM, the first African Ministerial Conference on the Environment
(AMCEN) in the case of the ZACPLAN, the establishment of the federation
between Rhodesia and Nyasaland in the case of the ZRA and the regime
change in Lesotho in the case of the LHWP. This indicates that the formation
of international water regimes is not entirely in the hands of the riparian
countries but also requires favourable situative events that can hardly be inte-
grated in explanatory frameworks.
With view to explaining the effectiveness of the four water regimes, I first need
to emphasise that regime formation and effectiveness are closely interrelated
in the sense that problem and process factors do not only determine the pros-
pects of regime formation but also impact on the effectiveness of the problem
solving mechanisms: While the balancing of incentives in the case of the
LHWP leads to a mutual interest in implementation and thereby promotes
regime effectiveness, asymmetric interests and the absence of problem pres-
sure in the ZACPLAN case lay the foundation for the ineffectiveness of the
water regime.
As regards to the hypothesised importance of institutional regime design, the
empirical findings firstly confirm that specificity is advantageous: While the
427
Stefan Lindemann
LHWP and the ZRA are problem-oriented and contain specific rules and pro-
cedures that effectively guide the actors behaviour, the ZACPLAN is little
more than a series of vague projects that do not include any concrete rules and
procedures. Furthermore, especially in light of the regions limited resources
for international river basin management, it is not advisable to burden a water
regime with the multiple and highly complex goals of the integrated man-
agement approach since this may endanger the feasibility of the undertaking
(as seen in the case of the ZACPLAN). This does not affect the desirability of
integrated river basin management but raises questions concerning its feasi-
bility. The case of the LHWP demonstrates that it may be more promising to
start with limited but problem-oriented regimes that can then be extended
over time.
Also, the case studies indicate that water regimes should contain elements of
flexibility. The strictly output-oriented ZACPLAN with its 19 subprojects
proved overly rigid and little conducive to implementation (Granit 2000: 7-8).
The advantages of a flexible approach are further illustrated by the LHWP that
allows for a continuous monitoring and adjustment of regime provisions: In
light of changing circumstances the water needs in South Africa had initially
been overestimated the project phases two to four were put on hold in a
problem-oriented manner. Furthermore, the empirical findings confirm the
hypothesised importance of a centralised organisation structure. As seen in
the OKACOM and ZACPLAN cases, the lack of a centralised institution for
project planning and coordination for example in form of a river basin se-
cretariat has a clearly negative impact on water regime effectiveness. This is
confirmed by the LHWP experience where the initially decentralised organisa-
tion structure proved ineffective and had to be centralised. With respect to
assumed need for regime openness, the case study findings are less clear.
While the ZACPLAN is the only water regime that provides for public partici-
pation, openness has not been a characteristic of the decision making process
of the regime and decisions have been taken in groups of limited representa-
tion (Lamoree/Nilsson 2001: 35). Even though recent attempts to increase pub-
lic participation in OKACOM and the LHWP have proved beneficial, the find-
ings do not allow definite conclusions on the relevance of regime openness.
Assessing the relevance of country-specific factors, I find that water regime
effectiveness indeed varies with economic-technological capacities. The
OKACOM and ZACPLAN case studies unveil striking capacities deficits in the
national water sectors, which lack the financial, technical and administrative
428
capacities to plan and implement projects of international river basin man-

agement. The high capacities of the South African Department of Water Af-
fairs (DWAF), on the other hand, have proved crucial for the success of the
LHWP. With regard to the influence of political-institutional capacities, one
can observe a striking lack of political stability: Almost all countries in the
region having suffered from protracted civil war and violent conflict through-
out the past decades, political instability is a major obstacle to effective water
cooperation. The case of Angola in the context of OKACOM is exemplary: Due
to decades of civil war that only ended in 2002, the Okavango Basin in Angola
is still littered with landmines and hardly accessible a situation that prevents
project preparation, in particular the generation of hydrological data
(Porto/Clover 2003: 78), and thereby limits OKACOMs effectiveness.
Finally, the case studies reveal the importance of factors of international con-
text. The region is characterised by a history of political tensions, which go
back to the anti-colonial liberation wars, the conflict with the Apartheid state
in South Africa and the dynamics of the Cold War. Even though tensions have
eased since the early 1990s, bilateral relations are still strained by historically
rooted conflicts and distrust. This problem has exercised a very negative im-
pact on the water regimes under investigation. In the case of the ZRA, for ex-
ample, the historical debate about the benefits of the federation between
North and South Rhodesia now Zambia and Zimbabwe created the percep-
tion of historically disadvantaged states and communities, issues that still
inform debate about the ZRA and prevent more far-reaching water coopera-
tion (Mutembwa 1998). Lastly, the empirical findings underline the relevance
of third actor support. In a region suffering from considerable development
deficits, the activities of international (donor) organisations are of great im-
portance: The GEF in the case of OKACOM, the World Bank in the case of the
LHWP as well as UNEP in the case of the ZACPLAN all play an important role
with respect to the mobilisation of financial resources and/or national capacity
building. Despite the undeniable benefits of these activities, one should not
overlook their negative side-effects, for instance, problems related to slow and
overly bureaucratic project implementation (GEF in the OKACOM case) or a
lack of ownership (UNEP in the case of ZACPLAN). Beyond international or-
ganisations, the cases of the LHWP and especially of OKACOM illustrate that
the activities of non-state actors can significantly contribute to capacity-
building and to the launch of an informed public debate.
429
Stefan Lindemann
I think that the activities of organisations that are working to-

gether with OKACOM () are complementing the activities of
OKACOM in areas where OKACOM would not have been effec-
tive. OKACOM is a government organisation but it is much bet-
ter for an NGO to work with people on the ground than for gov-
ernment officials to do it. So it is a huge advantage to have this
complementarity in the activities of these other organisations
(Piet Heyns, Interview 17 August 2004).
4 Conclusions
The findings of the four case studies can be summarised as follows:
The characteristics of a given problem in international river basin man-
agement influence the chances of water regime formation: If the underly-
ing cooperation incentives are largely symmetric and the involved problem
pressure is high, there are good prospects for the creation of effective water
regimes.
To reduce the transaction costs of water regime formation, countries typi-
cally rely on common studies for data generation and project preparation,
the mediation of international experts and trust-building meetings at the
technical level. If in addition asymmetric interests are balanced through
cost incentives, one can expect far-reaching and effective water regimes.
Effective water regimes need adequate institutional design: Water regime
effectiveness is enhanced by problem-oriented and flexible management
approaches that take account of the available resources and are equipped
with a centralised organisation structure.
The effectiveness of international water regimes varies with country-
specific capacities: Sufficient economic-technological capacities in the na-
tional water sectors and political stability lay the foundation of water re-
gime effectiveness.
The successful management of international river basins requires a favour-
able international context: If the bilateral relations between regime mem-
bers are characterised by mutual trust and cooperation and third actors
international organisations and/or non-state actors support capacity
building and civil society participation, there are good prospects for water
regime effectiveness.
430
How can one judge the relevance of these findings? As already mentioned, I
am unable to draw causal conclusions since the developed research framework
does not allow for the identification of single effects. This means that I do not
know to what extent the failure of the ZACPLAN can be attributed to asym-
metric incentives, the lack of problem pressure, inadequate regime design or
national capacity deficits. Also, I face a typical dilemma of multi-case compari-
sons: As the nature, scope and context of the water regimes under investiga-
tion are quite different, one might question the comparability of the four
cases:
Regimes are specific and embedded in history, geography and
culture. There is no one size fits all. They are needs driven. This
is where many commentators make a mistake in my view by
comparing apples to eggs... (Anthony Turton, Email 30 July 2004).
Nevertheless, this is no reason to abandon multi-case comparisons. When
understood as a systemisation of the most important driving forces and not as
an empirical generalisation, the findings do offer some valuable insight into
the conditions for success of international river basin management. Here, it is
especially the integration of country specific and contextual factors so far
largely neglected in the literature on international river basin management
that is of particular interest: The high relevance of national capacity deficits,
political instabilities and strained bilateral relations illustrates that success
and failure in international river basin management need to be discussed
beyond the traditional institutional design matters approach. Of course, one
may object that capacity deficits and instabilities are unusually developed in
the Southern African region. But since large parts of Asia, Latin America and
Eastern Europe face at least similar problems, there are good reasons to pay
greater and more systematic attention to these influencing factors.
With view to giving practical policy advice, it may seem unattractive to rec-
ommend the build-up of national capacities or the creation of a favourable
political context since this is less feasible than the adoption of a certain insti-
tutional design at least in the short term. Nevertheless, there is reason to
believe that national capacity building and the creation of a favourable politi-
cal context both at the national and international level is the key to success in
international river basin management in Southern Africa but also in the
developing world as a whole. This means that neutral third parties (interna-
tional organisations and non-state actors) need to intensify their efforts for
capacity building and mediation between conflict parties (Turton 2003: 98).
431
Stefan Lindemann
Finally, the findings of the Southern African case studies should lead to cau-
tion with respect to the today omnipresent claims for integrated river basin
management especially in the context of developing countries. This does not
mean that one needs to question the general practicability of the integrated
approach as done by Marty (2001: 398). But against the background of the ex-
periences with the ZACPLAN, it seems more promising to first bundle the
scarce resources and capacities in a problem-oriented and functional manner
before considering extending and integrating the management approach over
time.
References
Ashton, Peter, 2003: The search for an equitable basis for water sharing in the
Okavango River basin, in: Nakayama, Mikiyasu (Ed.): International Waters in
Southern Africa (Tokyo New York Paris: United Nations University Press): 164-
188.
Beach, Heather L.; Hammer, Jesse; Hewitt, J. Joseph; Kaufman, Edy; Kurki, Anja; Op-
penheimer, Joe A.; Wolf, Aaron T., 2000: Transboundary freshwater dispute resolu-
tion: Theory, practice and annotated references (Tokyo - New York - Paris: United
Nations University Press).
Bennett, Andrew, 2004: Case study methods: Design, use, and comparative advan-
tages, in: Sprinz, Detlef F.; Wolinsky-Nahmias, Yael (Eds.): Models, numbers, and
cases, Methods for studying International Relations (Ann Arbor: University of
Michigan Press): 19-55.
Bernauer, Thomas, 1997: Managing International Rivers, in: Young, Oran R. (Ed.):
Global Governance. Drawing Insights from the Environmental Experience (Cam-
bridge Mass.: MIT Press): 155-196.
Bernauer, Thomas, 2002: Explaining success and failure in international river man-
agement, in: Aquatic Science, No. 64: 1-19.
Birnie, Patricia; Boyle, Alan, 2002: International Law and The Environment (Oxford
New York: Oxford University Press).
Breitmeier, Helmut, 1997: International organizations and the creation of environ-
mental regimes, in: Young, Oran R. (Ed.): Global governance: Drawing insights
from the environmental experience (Cambridge Mass.: MIT Press): 87-114.
Brown-Weiss, Edith; Jacobson, Harold K. (Eds.), 1998: Engaging countries: Strengthen-
ing compliance with international environmental accords (Cambridge Mass.: MIT
Press).
Chenje, Munyaradzi; Johnson, Phyllis (Eds.), 1996: Water in Southern Africa (Maseru
Harare: SADC - IUCN - SARDC).
Chiuta, Tabeth M., 2000: Shared water resources and conflicts: The case of the Zam-
bezi River, in: Tevera, Daniel; Moyo, Sam (Eds.): Environmental Security in South-
ern Africa (Harare: SAPES Books): 139-155.
Colombani, Phillipe, 2003: Le Lesotho Highlands Water Project (LHWP): Une coop-
ration russie dans lattente dune politique rgionale de leau, in: Afrique
contemporaine, 205: 91-102.
432
Conley, Alan H.; van Niekerk, Peter H., 2000: Sustainable management of interna-
tional waters: The Orange River case, in: Water Policy, 2, 1-2: 131-149.
Falkenmark, Malin, 1989: The Massive Water Scarcity Now Threatening Africa Why
Isnt It Being Addressed?, in: Ambio, 18,2: 112-118.
GEF [Global Environmental Facility], 2002: Environmental protection and sustainable
management of the Okavango River basin, Project document (Washington, D.C.:
GEF), at: <http://www.gefonline.org/projectDetails.cfm?projID=842>, 17 May 2004.
George, Alexander L.; McKeown, Timothy J., 1985: Case studies and theories of organi-
zational decision making, in: Coulam, Robert F.; Smith, Richard A. (Eds.): Ad-
vances in Information Processing in Organizations (Greenwich: JAI Press): 21-58.
Granit, Jakob, 2000: Swedish Experiences from Transboundary Water Resources Man-
agement in Southern Africa, SIDA Publications on Water Resources No. 17 (Stock-
holm: Swedish International Development Cooperation Agency).
Haas, Peter M.; Keohane, Robert O.; Levy, Marc A. (Eds.), 1993: Institutions for the earth:
Sources of effective international environmental protection (Cambridge, MA: MIT
Press).
Hartje, Volkmar, 2002: International dimensions of integrated water management,
in: Al Baz, Ismail; Hartje, Volkmar; Scheumann, Waltina (Eds..): Co-operation on
transboundary rivers (Baden-Baden: Nomos): 7-34.
Heyns, Piet, 2003: Water-resources management in Southern Africa, in: Nakayama,
Mikiyasu (Ed.): International Waters in Southern Africa (Tokyo New York Paris:
United Nations University Press): 5-37.
Hirji, Rafik; Mackay, Heather; Maro, Paul, 2002: Defining and mainstreaming envi-
ronmental sustainability in Water Resources Management in Southern Africa. A
Summary (Maseru - Harare - Washington DC: SADC IUCN SARDC - World
Bank).
Jnicke, Martin, 1999: Determinanten und Erfolgsbedingungen von Umweltpolitik,
in: Jnicke, Martin; Kunig, Phillip; Stitzel, Michael (Eds.): Lern- und Arbeitsbuch
Umweltpolitik: Politik, Recht und Management des Umweltschutzes in Staat und
Unternehmen (Bonn: Dietz).
Jnicke, Martin, 2002: The political systems capacity for environmental policy: The
framework for comparison, in: Weidner, Helmut; Jnicke, Martin (Eds.): Capacity
building in national environmental policy: A comparative study of 17 countries
(Berlin - Heidelberg - New York: Springer-Verlag): 1-18.
Keohane, Robert O., 1984: After hegemony: Cooperation and discord in the world po-
litical economy (Princeton: Princeton University Press).
Keohane, Robert O.; Levy, Marc A. (Eds.), 1996: Institutions for Environmental Aid:
Pitfalls and Promise (Cambridge, MA: MIT Press).
King, Gary; Keohane, Robert O.; Verba, Sidney, 1994: Designing Social Inquiry: Scien-
tific Inference in Qualitative Research (Princeton: Princeton University Press).
Klaphake, Axel; Scheumann, Waltina, 2001: Politische Antworten auf die globale Was-
serkrise: Trends und Konflikte, in: Aus Politik und Zeitgeschichte, Nr. B 48-49: 3-
12.
Krasner, Stephen D., 1983: International regimes (Ithaca: Cornell University Press).
Lamoree, Ben; Nilsson, Ake, 2001: A process approach to the establishment of interna-
tional river basin management in Southern Africa, in: Nile Equatorial Lakes Sub-
sidiary Action Program (NELSAP): Nile Basin Initiative, Report from NELSAP River
Basin Project Preparatory Workshop, Stockholm, 11 12 December: at:
<http://www.nile basin.org/nelsap/documents/nelsap_stockholm_workshop.pdf>,
17 June 2004: 28-40.
433
Stefan Lindemann
LHWP Treaty, 1986: Treaty on the Lesotho Highlands Water Project between the
government of the Republic of South Africa and the government of the Kingdom
of Lesotho, at:
<http://ocid.nacse.org/qml/research/tfdd/toTFDDdocs/164ENG.htm>, 17 April 2004.
Lindemann, Stefan, 2005: Erfolgsbedingungen von internationalem Flussmanage-
ment: Der Fall des Sdlichen Afrikas, in: Kipping, Martin; Lindemann, Stefan:
Konflikte und Kooperation um Wasser - Wasserpolitik am Senegalfluss und inter-
nationales Flussmanagement im Sdlichen Afrika (Mnster: Lit-Verlag): 108-234.
Marty, Frank, 2001: Managing international rivers Problems, politics and institutions
(Bern: Peter Lang).
Mitchell, Ronald B., 2001: Of course international institutions matter: But when and
how?, Paper for the 2001 Berlin Conference on the Human Dimensions of Global
Environmental Change Global Environmental Change and the Nation State, Ber-
lin, 7-8 December.
Mohamed, Abullahi E., 2003: Joint development and cooperation in international
water resources, in: Nakayama, Mikiyasu (Ed.): International Waters in Southern
Africa (Tokyo New York Paris: United Nations University Press): 209-248.
Mutembwa, Ammon, 1998: Water and the potential for resource conflicts in Southern
Africa, Occasional Paper No. 3, Global Security Fellows Initiative, University of
Cambridge, at: <http://www.dartmouth.edu/~gsfi/gsfiweb/htmls/papers/text3.htm>,
17 April 2004.
Nakayama, Mikiyasu, 1999: Politics behind the Zambezi Action Plan, in: Water Policy,
1, 4: 397-409.
OKACOM Treaty, 1994: Agreement between the governments of the Republic of An-
gola, the Republic of Botswana, and the Republic of Namibia on the establishment
of a permanent Okavango River Basin Water Commission (OKACOM), at:
<http://ocid.nacse.org/qml/research/tfdd/toTFDDdocs/190ENG.htm>, 17 April
2004.
Porto, Joao G.; Clover, Jenny, 2003: The peace dividend in Angola: Strategic implica-
tions for Okavango Basin cooperation, in: Turton, Anthony R.; Ashton, Peter;
Cloete, Eugene (Eds.): Transboundary rivers, sovereignty and development: Hydro-
political drivers in the Okavango River basin (Pretoria: African Water Issues Re-
search Unit (AWIRU) Geneva: Green Cross International): 65-82.
Rangeley, Robert; Thiam, Bocar M.; Andersen, Randolph A.; Lyle, Colin A., 1994: Inter-
national River Basin Organizations in Sub-Saharan Africa, Technical Paper, No.
250 (Washington, D.C.: World Bank).
Schiffer, Manuel, 2001: Global water and food scarcity Are the gloomy predictions
right?, in: Entwicklung + lndlicher Raum, 35,5: 4-7.
Schram Stoke, Olav, 1997: Regimes as governance systems, in: Young, Oran R. (Ed.):
Global governance: Drawing insights from the environmental experience (Cam-
bridge, MA: MIT Press): 27-63.
Sderbaum, Frederik, 2002: The political economy of regionalism in Southern Africa
(PhD Dissertation, Gothenburg University, Department of Peace and Development
Research).
Swatuk, Larry, 2002: The new Water Architecture in Southern Africa: reflections on
current trends (University of Botswana, Department of Political and Administra-
tive Studies), at: <http://www.kosa.org/documents/swatuk2.pdf>,17 April 2004.
Swatuk, Larry, 2003: Kant and should: Strategic thoughts about wise use of the
Okavango Delta system, in: Turton, Anthony R.; Ashton, Peter; Cloete, Eugene
(Eds.): Transboundary rivers, sovereignty and development: Hydropolitical drivers
434
in the Okavango River basin (Pretoria: African Water Issues Research Unit
(AWIRU) Geneva: Green Cross International): 119-140.
Teclaff, Ludwik A., 1996: The evolution of the River Basin Concept in National and
International Law, in: Natural Resources Journal, 36, 2: 359-392.
Tumbare, Michael J., 2002: Co-operation in the Zambezi River basin, in: Al Baz, Is-
mail; Hartje, Volkmar; Scheumann, Waltina (Eds.): Co-operation on transboundary
rivers (Baden-Baden: Nomos): 101-112.
Turton, Anthony R., 2003: The hydropolitical dynamics of cooperation in Southern
Africa: A strategic perspective on institutional development in international river
basins, in: Turton, Anthony R.; Ashton, Peter; Cloete, Eugene (Eds.): Transbound-
ary rivers, sovereignty and development: Hydropolitical drivers in the Okavango
River basin (Pretoria: African Water Issues Research Unit (AWIRU) Geneva:
Green Cross International): 83-104.
Turton, Anthony R., 2004: The evolution of water management institutions in select
Southern African international river basins, in: Biswas, Asit K.; nver, Olcar; Tor-
tajada, Cecilia (Eds.): Water as a focus for regional development (Oxford: Oxford
University Press): 256-294.
Victor, David G.; Raustiala, Kai; Skolnikoff, Eugene (Eds.), 1998: The implementation
and effectiveness of international environmental commitments: Theory and prac-
tice (Cambridge, MA: MIT Press).
Wolf, Aaron T., 1997: International water conflict resolution: Lessons from compara-
tive analysis, in: Water Resources Development, 13,3: 333-356.
Wolf, Aaron T., 1998: Conflict and cooperation along international waterways, in:
Water Policy, 1, 2: 251-265, at:
<http://www.transboundarywaters.orst.edu/publications/conflict_ coop/> , 14 Sep-
tember 2005.
Wolf, Aaron T., 2003: Southern Africa and the international water problematique, in:
Turton, Anthony R.; Ashton, Peter; Cloete, Eugene (Eds.): Transboundary rivers,
sovereignty and development: Hydropolitical drivers in the Okavango River basin
(Pretoria: African Water Issues Research Unit (AWIRU) Geneva: Green Cross In-
ternational): 1-2.
Wolf, Aaron T.; Yoffe, Shira B.; Giordano, Mark, 2003: International waters: Identifying
basins at risk, in: Water Policy, 5,1 (February): 29-60.
Young, Oran R. (Ed.), 1999: The effectiveness of international environmental regimes:
Causal connections and behavioural mechanisms (Cambridge, MA: MIT Press).
ZACPLAN Treaty, 1987: Agreement on the action plan for the environmentally sound
management of the common Zambesi River System, at:
<http://ocid.nacse.org/qml/research/ tfdd/toTFDDdocs/177ENG.htm>, 17 April
2004.
ZRA Treaty, 1987: Agreement between the Republic of Zimbabwe and the Republic of
Zambia concerning the utilization of the Zambesi River, at:
<http://ocid.nacse.org/qml/ research/tfdd/toTFDDdocs/178ENG.htm>, 17 April
2004.
435

(Innovation) (Jannicke) New Approaches To Ecological Modernisation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

(Innovation) (Jannicke) New Approaches To Ecological Modernisation

Uploaded by

Copyright:

Available Formats

Martin Jnicke Klaus Jacob (Eds.

Prof. Dr. Martin Jnicke

FFU Report 01-2006

Cover Design: Cornelia Wolter

Ecological Modernisation, focussing on innovations that extend beyond

Ecological Modernisation: New Perspectives 9

Lead Markets for Environmental Innovations:

Trend Setters in Environmental Policy:

Modelling Capacities for Environmental Policy-Making

The Diffusion of Environmental Policy Innovations:

The Global Diffusion of Regulatory Instruments:

Sub-national trans-Atlantic lesson-drawing related to governance

New Approaches to Environmental Governance 167

Coordinating sustainable development an evaluation of the

Institutions and Instruments for Government Self-Regulation:

Converging Objectives, Diverging Results? National Goal

Ecological Tax Reform An environmental policy innovation in

Phasing-Out Nuclear Power Generation in Germany:

Does Bureaucracy Really Matter?

The Institutionalization of Private Governance: How business

Success and Failure in International River Basin Management

capacities for environmental policy and on determinants of pioneering be-

Berlin, March 2006

1 Ecological Modernisation: Linking Ecology and

port the diffusion of these innovations. In general, an environmental problem

ment Protection Agencies, finally, recently advanced the concept of good

At present, two driving forces of ecological modernisation seem most re-

2 Political Modernisation: Reinventing Government

market position. In the same vain, Richard Barrington of Sun Microsystems

Tab. 1: Governments Claiming Leadership in Environmental Policy

() Norway shall be () world leading (in) environmental friendly

Source: Own compilation

Tab. 2: Elements of a smart" and innovation-friendly framework of envi-

Instruments are innovation-friendly if they ...

A policy style is innovation-friendly if is is

A configuration of actors is innovation-friendly, if

Source: Jnicke et al. 2000

The Japanese Top-Runner approach is a more recent example of an innova-

Tab. 3: Smart Regulation for Eco-Innovation: the Japanese Top-Runner

METI regulation for 18 energy-using products.

Source: Own compilation based on Naturvardsverket 2005

Similar examples of smart regulation that combine strict standards with

EU emission trading scheme and (possibly) the new EU Eco-design Directive.

4 Ecological Modernisation in a Complex World:

Insecurity as a driving force behind ecological modernisation requires some

Fig. 1: Original Actor Constellation of Environmental Policy

National Government Industry

Fig. 2: Dimensions of Modern Environmental Governance

Source: Jnicke 2003

Globalisation and the need for multi-level and multi-stakeholder approaches

Tab. 4: Pressure for Ecological Modernisation:

Volatile energy prices

Activities of pioneer countries

Attacks from green NGOs (e.g. Brent Spar)

Source: Own compilation

5 The Post-Rio Mode of Global Environmental

6 Environmental Governance beyond Technology

4. As a consequence, governance for ecological modernisation has to find

Why are some countries early in the introduction of

Fig. 1: Share of passenger cars equipped with catalytic converter in %

Source: Beise, Blazejczak et al. 2003

The Political Economy of Pioneering Environmental

petition, including more public spending in fields like higher education,