Legal Considerations

Given that the dimensions discussed above will create different policy spaces for different jurisdictions and cultures, it is nonetheless the case that there are certain fundamental legal principles and issues the student of industrial ecology should be aware of. Although perhaps in different guise, these come up with regularity in any effort to generate policies in the area of industrial ecology. Among the most important are the following:

1. The issue of intragenerational and intergenerational equity is important, especially as an egalitarian distribution of wealth and resources within and among generations is a key element of the concept of sustainable development (WCED 1987; Weiss 1989). The distribution of wealth and power both among nation states and between the elites and the marginalized populations within individual nation states is of course one of the thematic foundations of political science. It is also a highly ideological and contentious arena, where the interplay between law and culture is particularly charged. To the extent that any policy, such as sustainable development, implies a substantial shift in resources between rich and poor nations, as well as within nations, it is always controversial.

2. The issue of whether, and how, future generations can or should be given rights in existing legal proceedings is a difficult one. Rights only arise when there are identifiable interests, and it is almost by definition impossible to identify either future individuals or their interests with sufficient specificity to involve them in adjudication of such interests. Who, for example, knows what resources will be critical to future technologies? Who can say for sure what the preferences of future generations will be? Assuming that some degree of intragenerational inequality still exists, whose interests will be represented - those of the elites? The disenfranchised? And what about non-human species (Sagoff 1988)? The practical problems involved with establishing such representation are apparent upon a moment's reflection (but see Weiss 1989 for a proposed outline of an international system of legal obligations and duties which can support the implementation of intergenerational equity).

3. Both the complexity of the human and natural systems involved in industrial ecology and the need to deal with current uncertainty and emergent behavior as such systems evolve argue for the development of highly flexible legal tools. This is not trivial: because legal systems in many societies tend to be important components of social structure, they are usually conservative and relatively inflexible. Additionally, the inherent conservatism of legal structures is augmented by the tendency of regulation to create and nurture interests groups that benefit from it, and therefore come to constitute a significant barrier to subsequent regulatory rationalization. The price for this stability is paid in terms of inability to adjust to changing situations. Where change is rapid and fundamental, as it currently is with environmental issues, such inflexibility can lead to substantial inefficiency. Fortunately, there are a number of examples of such flexible mechanisms, ranging from schemes which, through emissions trading or similar policies, establish market systems designed to lead to efficient emissions reductions, to the 'covenant' system of The Netherlands, in which industry sectors and the government agree to binding, but flexible, contracts designed to reduce emissions to designated levels (Cairncross 1992; Matthews 1997; Biekard 1995; Netherlands Ministry of Housing, Spatial Planning and the Environment 1989, 1990, 1994a; OTA 1995).

4. Management of complex systems through flexible legal mechanisms imposes several requirements on the legal system if it is to be successful and stable over the long term. There must be adequate transparency to the policy development process: all stakeholders with a legitimate interest in the outcome should be represented as the regulations and implementation plans are developed (determining who has legitimate interests and how transparent the process should be will not necessarily be trivial in practice, and will probably be fact-dependent). There must also be performance validation mechanisms, such as deployment of sensor systems, data reporting requirements, or implementation of third party inspections. Finally, given the complexity of the natural and human systems involved, and the often considerable lag times involved in their dynamics, there must be mechanisms to assure that means and ends stay aligned over time. In most cases, these will probably take the form of long-term metrics or standards (Adriaanse 1993; Allenby 1999a).

The shift of environmental issues from overhead to strategic for firms and society as a whole require establishment of a more sophisticated environmental management system. Centralized command and control regulations will still be appropriate in some cases, especially where large-scale and irreversible impacts are possible: taking lead out of gasoline is an example; banning CFCs which cause stratospheric ozone depletion is another. In general, however, traditional environmental regulation is poorly suited for complex economic and technological systems. In such cases, establishing broader boundaries on behavior that motivates appropriate system evolution over time is much more effective. Product take back, which if properly implemented, internalizes to the producer the end-of-life costs associated with a product, is one example (Netherlands Ministry of Housing, Spatial Planning and the Environment 1994b). Regulations such as the 'community right-to-know' requirements in the USA, under which information regarding emissions is collected and submitted, and then made public by the regulator, are another.

More broadly, it is important to recognize that environmental regulators, or for that matter any centralized bureaucracy, become dysfunctional as the complexity of the system to be managed increases. To impose air scrubbers or water treatment requirements, for example, is a relatively simple matter: the technologies are not coupled to production and product design systems, and can be changed if inappropriate. On the other hand, once the jump is made in trying to regulate complex technological systems that are, in turn, coupled to other systems, the knowledge requirements and complexity of the systems involved increase beyond the ability of any central regulatory structure to manage. This is, in fact, why the economic structures of the Soviet Union and its satellites imploded. In such cases, a general rule would be, all else equal, that reliance on decentralized mechanisms such as the market is preferable to command and control approaches, and that regulatory management functions should be distributed so as to reflect the heterogeneity of the issues being addressed.

In this regard, it is also important to recognize the need to determine the appropriate jurisdictional boundaries. Political jurisdictions are creations of human culture and history, and there is no a priori reason why their boundaries should reflect underlying natural systems. It is thus no surprise that many problematic environmental perturbations are not coextensive with existing political boundaries. Europe, where virtually all riverine systems and airsheds are transboundary, is an obvious example, but by no means unique: emission of acid rain precursors in the USA or China cause acid rain in Canada or Japan; watershed degradation involving different nation states in Asia and the Middle East generates enormous legal and political conflict (Gleick 1993; US Department of State 1997). More subtly, industrial or consumer behavior may not be geographically or jurisdiction-ally co-located with the environmental perturbation to which it contributes. Thus, for example, much of the environmental impact of the economic activity of developed nation states is already embedded in the products or materials they import and, especially in the absence of prices which include all relevant social costs, will thus be virtually invisible to policy makers and consumers. Especially where the reach of the nation state does not extend - or, in some cases, cannot because of relevant international requirements such as trade law - this separation of behavior from impact can make management of such situations difficult. One obvious example of this mismatch in scale between political boundaries and environmental perturbations is Chernobyl, where a local power plant producing electricity for a national grid malfunctioned and created a European disaster (Shcherbak 1996).

Managing such issues inevitably requires complex negotiations, and probably always will. It is possible, however, to reduce the burden of such negotiations. For one thing, policies at each jurisdictional level, while addressing the specifics of the concern at that level, should reflect their impacts at all levels, and at the least not create unnecessary conflicts among levels. In particular, risk exportation to other jurisdictions is not a substitute for risk reduction, and should be avoided because it encourages the generation of externalities when the system is viewed as a whole. An obvious corollary is that harmonization of regulatory management structure at the same scale as the perturbation of concern is desirable. Thus, for example, the Montreal Protocol addressed the emission of ozone-depleting substances at the global scale, as did the Kyoto Protocol for global climate change. Given the behavior of the emitted substances and the global scale of the resultant impact, this is appropriate. On the other hand, a number of municipalities have passed regulations purporting to address the same phenomenon, in some cases adopting different standards, timelines and requirements than national or international agreements. Such 'symbolic legislation', which in many cases is not enforced in any event, is inappropriate. It not only is ineffectual in mitigating the perturbation, but generates substantial economic inefficiencies and, even if not enforced, results in inadvertent, sometimes virtually unavoidable, illegal behavior.

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