In Pursuit of Sustainable Development: A Governance Perspective

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1 In Pursuit of Sustainable Development: A Governance Perspective Susan Baker Professor, Environmental Social Science, Cardiff School of Social Sciences, Cardiff University, Glamorgan Building, King Edward VII Avenue, Cardiff, CF10 3WA, Wales, Britain. ABSTRACT We begin with a brief examination of the two key concepts of the paper, that of governance and of sustainable development. Attention is then turned to two very distinctive characteristics that are inherent in sustainable development as a policy objective: the scale of social transformation required and the multi-dimensional character of the steering logic involved. These two characteristics have significant implications for the governance of sustainable development and point to the specific governance requirements that are needed if society is to move along a more sustainable development trajectory. The paper focuses on the governance of sustainable development as it relates to the European Union (EU) and its member states. Key words: governance / sustainable development / European Union Introduction Discussions about governance and sustainable development may seem impossibly broad. They require examination of the means through which nation states and international agencies and actors reconcile economic, social and ecological goals. Our deliberations have also to take account of the decisions made by and interactions between economic, social and political agents and actors, across multiple levels and scales. In addition, key elements of the prevailing systems of governance are themselves very deeply implicated in promoting unsustainable patterns of development. This complexity of subject matter is to be expected (Meadowcroft, 2007). This is because we are dealing with discussions about how society can be steered towards an overarching social objective - promoting sustainable development - that embraces social, economic and political goals now and into the future. Governance Broadly speaking, the term governance refers to practices through which societies are governed. Governance deals with managing, steering and guiding action in the realm of public affairs, especially in relation to public policy decision making. More specifically, governance styles can be grouped into three ideal types : hierarchies, markets and networks (Pierre and Peters, 2000). Analysis of state steering through these ideal types focuses on the extent to which a particular state or international agency has the political and institutional capacity to steer, the tools that it uses to steer, and how account is taken of the interests of actors in governance processes and policy decisions (Pierre, 2000: 3). 1

2 Traditionally, governments have drawn heavily upon hierarchical styles, invoking regulations and sanctions as steering instruments, so-called command and control steering, although it also engages in bargaining with key interests. This gives the state a strong role in governance processes. However, the increasing complex, dynamic and interdependent nature of contemporary policymaking has challenged this style (Kooiman, 1993). These pressures are seen to have reduced the steering capacity of the sovereign nation-state as well as the effectiveness of its traditional policy tools. The result of these various pressures is that policymaking has now come to involve the enhanced engagement of economic and social actors in policymaking and delivery. Governance now takes place, it is argued, in the context of the displacement of political and institutional policy capacity downwards in the political system, outwards to agencies and NGOs and upwards to trans-national institutional systems such as the EU and the UN (Painter and Pierre, 2005: 1). Consequently, the practice of governance has changed. Governance, it is argued, is increasingly about the co-ordination of the actions of, and interactions between, public and private actors, across multiple layers and structures of governing. Thus the term governance is increasingly used to refer to the co-ordination of traditional, formal activities of government alongside other, informal processes that regulate societal development. Some authors use the term new governance to capture these complex developments. The theme of governance has come to form a major focus of academic research on the European Union (EU). However, earlier literature on EU governance was both fragmented and non-cumulative. However, a recent stream of reviews have taken stock, helped maintain conceptual clarity and given the work on governance more focus (Citi and Rhodes, 2007; Jordan, 2008; Kohler-Koch and Rittberger, 2006; Treib et al., 2007). Similarly, the focus on the relational aspect of governance has led many scholars to focus on the role of networks in governance processes and even to use the term governance as a synonym for what has hitherto been called network governance (Rhodes, 2007). Network governance can be defined as a system of governance in which central government bodies are dependent upon the cooperation and joint resource mobilisation of policy actors outside their hierarchal control (Börzel, 1998: 260). However, this rather narrow understanding of governance can be criticised for neglecting the continuing and important role of hierarchies in policymaking processes. In the environmental policy arena, for example, governments still pass legislation governing the environmental consequences of economic activity, ensure compliance with international agreements, set regulatory standards in relation to pollution prevention and control, oversee the application of the law, including within the workplace, negotiate voluntary agreements with industry, and monitor the impacts of its policies. This brings our attention to the role and function of the state in governance processes. It is generally accepted that despite the emergence of pattern of new governance, the state remains a central actor. Research has failed to find much by way of evidence that the scale or scope of state activities have been substantially curtailed, or that states have lost central coordinating capacity, or even that globalisation has substantially restricted their policy autonomy across a wide range of policy arenas (for a summary 2

3 of this research see Bell and Park, 2006; see also Baker and Eckerberg, 2008). For this reasons, some discussions on governance has begun to focus on so-called metagovernance. The concept of metagovernance is designed to capture the empirical fact that government and the wider state apparatus still play a crucial function in supporting and governing any governance arrangements. It reminds us that the state carries the mantle for the legitimacy and accountability of new governance arrangements. The concept governance can also be understood also as a normative prescription, that is, it can be used to describe the type and style of steering that should be adopted to achieve a preferred societal end point. In the context of this paper, this can be referred to as governance for sustainable development. The Governance Dimension of Sustainable Development Sustainable development is an Objective of the European integration process and this commitment is enshrined in Community Treaties and in policies. While this declaratory commitment to sustainable development is symbolically important, the promotion of sustainable development still requires a process of policymaking that steers the EU along a sustainable development trajectory. As such, sustainable development is a political concept replete with governance questions (Meadowcroft et al., 2005, p. 143). Governance of sustainable development raises issues that have long preoccupied social scientists, such as the role of different institutional arrangements in promoting welfare, the character of social innovation, the appropriate relationship between experts and citizens in democratic decision making and the linkages among decisionmaking bodies at various geographical scales (Meadowcroft, et al., 2005). In addition, the governance of sustainable development takes place in the context of the reciprocal interactions within and between multi-level social, economic and ecological systems, across temporal and social scales. However, these conditions appear to be inherent in any governance for substantive societal ends. This does not tell us much about what is specific about the governance challenges of promoting sustainable development. The early years of the twenty first century have seen the publication of several studies exploring governance and sustainable development, including sector and country specific work, as well as work of a comparative nature (Baker and Eckerberg, 2008; Kemp et al., 2005; Lafferty, 2004; OECD, 2001). This work has looked at various structural variables, especially nation state and governance traditions, and how these have shaped practical engagement with the promotion of sustainable development, particularly in European states. We draw upon this work in our examination of two very distinctive characteristics that are inherent in sustainable development as a policy objective: namely the scale of social transformation required and the multidimensional character of the steering logic. These two characteristics have significant implications for the governance of sustainable development. 1. The Scale of Transformation Practical experiences of linking environment and developments policy making, particularly since the 1990s, has led to a new understanding of the complexities of 3

4 social, economic and ecological interactions. This has given some insight into the scale of the transformation necessary to promote sustainable development. Promoting sustainable development requires action across a variety of temporal and spatial scales, for example, taking account of future generations in present policy, and taking action at both the local and global levels in both the design and implementation of policies. Promoting sustainable development is a very ambitious project that also requires decoupling development from environmental harm. This has to be done in the context of climate change as well. Thus, as a policy objective, the characteristics of sustainable development present challenges that go beyond the need to promote sound practices of environmental and resource management. As a policy objective, the promotion of sustainable development requires the governance of change, in particular changes in both production patterns (what is produced) and consumption levels (how much is consumed and by whom). From a global perspective, promoting sustainable development requires consumption reductions in high consumption societies in order to make way for ecologically legitimate development in the Third World (Baker, 2006). In turn, this requires transformation of key sectors, including energy, transport, agriculture, manufacturing and construction. These are premised upon changes in cultural value, particularly those related to western consumerism. All of these changes have to be underpinned by technological advances taking place alongside profound shifts in the organisation of society. In addition, both behavioural change and systems innovation need strong societal engagement to be successful and cannot simply be imposed from the top (for a fuller elaboration of these changes see Baker, 2006) 2. The Steering Logic (i) Steering in the Context of Uncertain and Ambivalent Steering Objectives Promoting sustainable development is not a blueprint nor is it about helping society reach an identified or identifiable end state, nor establishing static structures or facilitating fixed qualities of social, economic or political life now or into the future (Baker, 2006). Rather, promoting sustainable development is an open-ended process, one that is not usefully conceived of as aiming towards a specified or specifiable target (Kemp et al., 2005: 16), although, as discussed below, sub-optimal targets do need to be adopted along the way. Promoting sustainable development is an on-going process, whose desirable characteristics changes over time, across space and location and within different social, political, cultural and historical contexts. Thus, promotion efforts are undertaken in the context of open-ended goals and on-going change, in short, within the context of inherent policy ambivalence. Promoting sustainable development also has to take place amidst a profound lack of knowledge about the complex and dynamic interactions between society, economic development, technology and nature. The ecological system, including the climate system, is poorly understood, and forecasts for the future have large margins of error. This knowledge is also highly contested, including in relation to the nature of the scientific basis of this knowledge and the privileged input of scientific expertise over and above other forms of traditional and experiential knowledge. Thus, the promotion of sustainable development has to be undertaken in the context of inherent uncertainty. 4

5 In short, governance has to cope with the complexity and the indeterminacy of sustainable development as a steering objective. This can present problems because traditionally policymaking starts from the basis that effective steering requires clear goals. In addition, policymaking is traditionally premised on the belief that a good understanding of the relevant causal relationships is a prerequisite for effective steering. In contrast, governance for sustainable development has to acknowledgement that efforts to promote sustainable development are characterised by inherent policy ambivalence and uncertainty. At the same time, parts of the requirements for the promotion of sustainable development do have a known technical component and many technical solutions are now being put to use, including in the energy and industrial sectors. Governance of sustainable development has thus to take place in a dual context: acting now in technical and often sub-optimal ways while at the same time steering towards more transformative approaches, which must themselves remain open-ended. With such steering, care has to be taken to endure that the choices made at present do not unduly foreclose options for the future. (ii) Steering from the Top The promotion of sustainable development requires state steering, or what can be referred to as goal directed intervention by government. In this context, the state has several governance functions: promoting new patterns of behaviour, for example, in relation to consumption; supporting groups in society that are particularly vulnerable, for example in the face of climate change; and re-ordering social institutions in ways that help them promote sustainable development. Indeed, it has been argued that the continued existence, even pre-eminence, of a pro-active state is essential, particularly if the intergenerational and intra-generational aspects of sustainable development are to be respected (French, 2002). The rise of global environmental problems also means a heightened role for international agencies and actors, such as the EU and UN. Equally, we are reminded that the state remains an important cornerstone of international affairs, and continues to be recognized as a vital institution possessing real political authority at the international level. The state has also to intervene in the face of market failure. The market, left on its own without appropriate institutional direction, can neither sufficiently achieve public goals, such as poverty eradication and environmental conservation, nor meet wider societal objectives, such as meeting the equity aspects of sustainable development (French, 2002). As Baker and Eckerberg have argued: The failure of the market to protect the global environmental commons still remains a solid ground for government intervention. Market failure is particularly evident as society pursues the promotion of sustainable futures, because markets work on short-term horizons, deal with profits and promote individual advancement. The pursuit of sustainable development requires transition to a society whose policy processes guards the future, promotes equity and pursues the common good (Baker and Eckerberg: 2008). 5

6 However, while it is clear that the governance of sustainable development gives a heightened and positive role for the state in directing societal change, we also know that this steering remains open-ended and increasingly collaborative in nature. It is for this reason that many governments, particularly in Western Europe, seek to promote sustainable development through the formulation and implementation of sustainable development strategies as opposed to traditional plans. Plans are often seen as lacking the flexibility needed to promote sustainable development (Niestroy, 2007). In contrast, a strategy will rarely imply initiating a completely new or standalone strategic planning project. Strategies are considered particularly apt for efforts to promote sustainable development as innovation and adaptive change, in relation to both structures (such as institutions) and processes (such as planning) are seen as hallmarks of sustainable development governance. The European Strategy for Sustainable Development, which was adopted at the European Council in Gothenburg in 2001, provides an example (CEC, 2001). As a governance project, this Strategy also includes in its guiding principles the aim to enhance the involvement of citizens, businesses and social partners in the promotion of sustainable development. (iii) Steering for the Long-Term Sustainable development has a strong intergenerational element. However, long-term decision-making presents particular governance problems, as it adds to uncertainties and the further into the future we project, the weaker our knowledge base becomes. This means that steering for the long term requires institutional flexibility, to enable institutions to both anticipate and handle unforeseen problems or opportunities. Policy processes have also to find was to put future problems on the agenda and work with them now. However, governments have often only limited incentives to learn these new skills, as future problems are not popular with politicians, have limited issue salience and do not bring new votes at elections. (iv) Steering through Multiple Levels The importance of the role of sub-national, regional and local authorities in the promotion of sustainable development is increasingly acknowledged, particularly in the context of LA21. We are also aware that this requires steering activity that cuts across functional and administrative boundaries and established territorial jurisdictions. The recent growth of regional environmental authorities that cut across jurisdictional boundaries, such as river basin authorities (Danube) or new governance arrangements for the environmental management of the Black Sea and the Mediterranean (Baker, 2008) provides examples. Increasingly, these complex multilevel governance structures and processes encounter economic actors, as well as civil society organisations, such as environmental NGOs, that also operate across multiple levels. Tensions and struggles within and between the authorities and actors operating at these different levels are typical of modern political processes. One reason for this is that each of these authorities operates in interdependent ways, with overlapping but not always clearly defined competencies. This presents challenges not only for policy co-ordination and for the delineation of responsibilities, but it also makes transparency and accountability more difficult to ensure and can give rise to problems with respect to the monitoring of compliance. Therefore, promoting sustainable 6

7 development requires overcoming co-ordinating failures in public policies. Indeed, as pointed out in our earlier discussion, part of the governance function of governments is to help ensure such co-ordination. More specifically, however, analysis has identified two co-ordination needs that are crucial for the promotion of sustainable development, namely horizontal and vertical co-ordination. The vertical dimension refers to the linkages between higher and lower levels of government, including their institutional, financial, and informational aspects. Vertical co-ordination addresses the need for coherence, compatibility and complementarities between the policies and actions that operate across the different layers; horizontal co-ordination focuses on the co-ordination of action within each layer. Co-ordination is particularly important in the EU context. Within the EU s system of governance, sovereignty is exercised in common at the Community level. Here member state functions, including those operating at sub-national, regional and local levels, and Community functions are interwoven, and institutions depend on one another to form a functioning whole. The EU also promotes the use of policy networks in policymaking. To capture this complexity, the EU is now typically characterised as a system of multi-level governance. This system is built upon both horizontal and vertical division of power between the EU, its member states and the different authorities that operate at their national and sub-national levels of government. In this context, the pursuit of sustainable development becomes contingent upon how sustainable development is promoted vertically across the different levels of governance and horizontally, that is between the different governance actors operating at each level. The specific problems encountered in horizontal co-ordination can be explored more fully by turning our attention to an examination of the EU s attempt to promote sustainable development in its sectoral policies (v) Horizontal Co-ordination: Steering across Multiple Sectors In the 1960s and 1970s, environmental policy was conceived and implemented as a stand alone policy area, largely independent of policies in other sectors. This view was not confined to the environmental policy sector, as developments in the modern state, particularly in the post-war period, resulted in an increased degree of sectoral specialisation to deal with what were seen as differentiated problems. While this specialisation helped in the development of more targeted policy responses to particular problems (Kemp et al., 2005: 19), it also led to the neglect of broader considerations. Often solutions to one set of problems displaced the problem either to other sectors, to future generations or to other countries. However, by the 1990s, the limitations of specialisation and differentiation were increasingly evident, resulting in new awareness of the need to take environmental considerations into account in a wide range of sectoral policies. Thus, the need to coordinate policies and governance practices began to be keenly felt. Otherwise, gains from stand alone environmental initiatives could be outweighed by the negative environmental consequences of other policy developments, particular in the areas of energy, transport, industry and agriculture. EU transport policy in Eastern Europe provides a good example. The extension of EU transport policy eastward has seen a 7

8 prioritisation of road building and has given rise to concerns that road-building programmes are at odd with EU nature and biodiversity protection policy. The EU funded Via Baltica transport corridor, for example, has generated considerable controversy, and came before the European Court of Justice because the Polish section ran through the Rospuda valley, a protected EU Natura 2000 site. Similarly, the potential destruction of the Drava wetlands, due to motorway construction along the Budapest (Hungary) Sarajevo (Bosnia and Herzegovina) Ploče (Croatia) corridor, provides another example of sectoral conflict (Baker, 2008). When policy moves from concern about environmental management to the adoption of the more encompassing sustainable development policy framework, the need for sectoral integration becomes even more pressing. The effectiveness of steering efforts to promote sustainable development is to a large measure based on the extent to which policy approaches are crosscutting and take account of sectoral linkages. The term environmental policy integration (EPI) is used not only to refer to sectoral integration but more generally to the integration of environmental protection requirements into the definition and implementation of all EU policies and activities. The successful promotion of EPI hinges upon acceptance of common overall objectives, the co-ordinated elaboration and selection of policy options and engagement in co-operative implementation (Kemp et al., 2005: 19). However, beyond this rather general understanding of good policy practices, there is a great deal of dispute as to what exactly is required for effective EPI. At its most radical, EPI is seen as demanding a principled and consequential prioritisation of the environment over and above sectoral interests (Lafferty and Hovden, 2003). Viewed as such, this approach to EPI involves prioritising, over and above sectoral interests, the sustainable development implications of specific policies, programmes and activities. To date, efforts to promote EPI both at the EU and at the member state levels fall short of this radical interpretation. EPI continues to presents several governance challenges for the EU. These include finding new ways of ensuring that actors move beyond narrow, sectoral driven approaches to policy formulation and implementation. One way this can be done is through identifying and making greater use of synergies between sectoral developments strategies, such as between the enhancement of public transport and efforts to mitigate climate change or between agriculture and nature protection policies. In order to identify and promote such synergies, many EU countries have made structural adjustments, particularly to their systems of pubic administration. These include setting up inter-ministerial committees, establishing cross-sectoral agencies, appointing integration officers within and between ministries, and introducing mandatory reporting and monitoring requirements and imposing sustainable development criteria on decision-making. As such, member states have sought to promote EPI mainly through institutional adjustments. Here, progress is patchy and the effectiveness of this approach is unclear (EEA, 2005). Part of the problem lies with the failure of many member states to allocate specific resources to EPI, particularly within institutions operating at the sub-national levels. Nevertheless, some countries have tried to move beyond this institutional approach and have started to exploit opportunities to link strategic planning, budgeting and auditing, in order to promote EPI objectives. Research has identified some good practices cases 8

9 in the area of budgeting in Dutch and UK policy (EEA, 2005). The UK and Portugal have also instituted environmental auditing of (some) sector policies and green accounting initiatives have been introduced, for example, in Sweden and the UK. Despite these developments, however, little progress has been made overall. The EEA has identified several additional weaknesses, including the lack of coherence and coordination within governments and between different levels of government in their approach to EPI, the lack of a clear mission statement, and limited support to help overcome existing compartmentalisation (EEA, 2005). The EU itself has also made efforts to integrate environmental considerations into its sectoral policies, and to promoting sustainable development in its economic, employment and social strategy (The Lisbon Strategy). The EU has responded to the EPI imperative through three means: treaty modification, institutional innovation and via policy developments. First, the EU s commitment to the integration of environmental protection requirements into the definition and implementation of Community polices and activities has been enshrined as one of the basic principles of the European Community. The 1992 Treaty on European Union (the Maastricht Treaty) has given EPI a relatively prominent legal basis (Article 6 of the EC Treaty). Article 6 states that environmental protection requirements must be integrated into the definition and implementation of the Community policies and in particular with a view to promoting sustainable development. Secondly, the Council launched the so-called Cardiff Process in the late 1990s, specifically to support the development of strategies for the integration of environmental considerations into key EU policy sectors. However, it is fair to say that the Cardiff Process has now withered from lack of high-level support within the Union. The third means used by the EU to promote EPI has been the adoption of the Strategy for Sustainable Development in 2001 (CEC, 2001), since revised. EPI (or rather sustainability policy integration) has a central role in the Strategy, which states that sustainable development should become the central objective of all sectors and policies (p. 6). While at the declaratory level, the Strategy reflects a relatively strong commitment to promoting fundamental changes in policy, the question nevertheless remains as to how this commitment is to be implemented and applied in real world policy-making. According to the Institute for European Environmental Policy (IEEP) relatively little attention has been given in the Strategy to conceptual clarification and to the necessary revision of the traditional hierarchy of policy objectives. This leads to a confusing variety of methods for integrating environmental concerns in sector policies across the Strategy as a whole. We could argue that new processes related governance requirements are needed, over and above declaratory or institutional changes to promote EPI. These process related requirements includes the need to set shared long-term objectives; to agree common criteria for planning and for the approval of major development projects; to set out specific rules for making trade-offs and compromises between ecological, social and economic considerations; and the need to reach agreement on indicators on progress towards sustainable development. (vi) Steering Together 9

10 It has become acceptable dogma that public engagement, that is, participation, from both economic actors and from within civil society, in a necessarily quality of sustainable development governance. Participatory processes are institutional settings that bring together various actors at some stage in the policy-making process. Such practices can be located along a continuum, ranging at their extremes from, on the one hand, allowing only a minor, consultative role for non-state actors to, on the other, facilitating more deliberative processes in which societal actors have a major say in shaping policy goals through dialogue and social learning (van Zeijl-Rozedma et al., 2008). There are several arguments put forward in support of participation, ranging from instrumental benefits to arguments from democratic principles. The Commission in particular hopes that such processes can improve the implementation deficit, while helping to enhance the democratic legitimacy and accountability of Community actions. Like many of its member states, the EU has sought to encourage network governance thought the enhancement of multi-stakeholder deliberation and participatory decision mechanisms and processes. The so-called Climate Policy Process provides an interesting example. This Process was established in 1996 by the Commission in advance of the negotiations leading up to the Kyoto Conference of the Parties to the UN FCCC. It was designed to bring together researchers, the Community climate negotiation team, other Commission interests ( insider stakeholders) and a range of outsider stakeholders, such as industry, finance, employment, environment, consumer and citizen interests. The objective of the participatory process was to furnish the Commission s negotiation team with inputs that emerged from deliberations across these range of interests and perspectives. From the point of view of providing the Commission with negotiation input that reflected the complexity of interests involved in climate policy, this participatory process has been judged successful. It is seen as helping to address some of the problem solving requirements of climate change policy. Another example is provided by the sustainable development advisory councils that have been established by national or regional governments within the member states and at the EU level. The Councils provide a forum for the participation of stakeholders and typically involve actors drawn from the public sector, economic interests, environmental NGOs, community groups and the scientific and academic communities. Beyond their official functions, Councils have also been shown to be webbing into society, organising discussions with a wide range of actors and fostering high level commitment to the promotion of sustainable development including from business leaders, politicians and from within academia (Niestroy, 2007: 6). The capacity for participatory processes to provide a meaningful forum for deliberations is heavily dependent on several factors. These include: the type of formal access to policy making that is given; the stage in the policy making process in which participation is allowed; the opportunities structures that exist within the policy process to influence policy making, and the institutional constrains that are placed on both on them; and that are present more generally (Hallstrom, 2004). 10

11 A rather narrow range of participatory fora is used within the EU. The Commission for example, relies heavily upon hearings, advisory committees and expert consultants, which depends on flows of information and expert knowledge rather than more discursive or participatory interactions (Hallstrom, 2004). The information collecting and policy making style of the Commission has been repeatedly shown to favour input from EU-level industrial federations and their scientific or technical resources. In this context, participatory processes can become skewed by the unequal distribution of power, including financial resources, between the participants, for example, between corporate interests and environmental activists. The Commission can also limit the role of outsider stakeholders in environmental policymaking. In studies of transitions societies in Eastern Europe, participatory processes have became a means of disseminating EU decision, garnering public support for the EU and increasing public knowledge about the EU, which has done little to enhance societal engagement with decision making, particularly at the stage of policy formulation (Hallstrom, 2004; Baker, 2008). Within member states, central government remains a key player within governance networks, as their activities are subject to hierarchical steering by government and government actors made use of their privileged position to promote their own interests within these networks (Rauschmayer, et al, 2009; Baker and Eckerberg, 2008). In addition, in many transition states, even if environmental NGOs manage to gain access to decision making processes, their political influence remains limited, and they have to operate in a context where environmental concerns are rarely integrated into transition agendas. The fact that power to influence outcomes of participatory processes is not evenly distributed presents particular challenges, as it can weaken the ability of participatory fora to reflect wider, collective interests that, in turn, can undermine their credibility. Thus, participatory processes can become an arena for the expression of narrow self-interest. There is also no guarantee that participation will lead to better sustainable development outcomes. Local interests can capture participatory processes, intent on the spatial and temporal displacement of environmental problems to other regions or to future generations the so-called NIMBY phenomenon. This brings our discussion back to the importance of the state - as the guardian of the common good and as the authority with the legitimacy to act as arbitrator in interest disputes. As Jänicke has argued, in the growing complexity of environmental governance the question of final responsibility for solving the relevant environmental problems has become crucial. If everybody is responsible, nobody will be responsible. In this regard there is no functional equivalent to national government. Its role has been changed, but not diminished (Jänicke, 2005:9). Thus, the state must be seen as the core of governance for the promotion of sustainable development. This helps to explain why promoting co-operative approaches to governance, including enhanced participation of economic and social actors is not about diminishing the role of the state, but paradoxically about enhancing that role. This is not least because promoting participation itself needs additional government capacities. The total administrative load that is required to develop participatory modes of government can be surprisingly high (Jordan et al., 2003: 222). 11

12 In other words, we are reminded that government is central to governance for sustainable development. Of course, that is not to suggest that the state fully embraces the sustainable development agenda. Neither is it to forget that the prioritisation of traditional goals of economic growth by many states, including within the EU, continues to act as a barrier to effective governance for the promotion of sustainable development. (vii) Steering with Tools and Instruments Recent practices of governance have made a range of new tools available for the promotion of sustainable development. This follows attempts to use taxation and financial instruments, that is, markets, for sustainable development governance. This has been driven, at least in part, by the desire to foster the internalisation of sustainable development norms into business practices and consumer behaviour. The past decade has seen the EU significantly increased the range of instruments involved in its portfolio of environmental policy instruments. On a pragmatic level, it is hoped that the use of new instruments will help reduce the implementation deficit with respect to environmental policy, thereby helping to achieve more effective implementation of EU regulatory and sustainable development goals. The Commission is also of the belief that the use of these new instruments can relieve regulatory burden by reducing the overall volume of legislation, while at the same time fostering participation and responsibility among policy actors. Here, the overlap between, on the one hand, the rise of neo-liberalism and its belief in the efficiency of markets and their associated economic instruments, compared to interventionist measure and, on the other hand, the growth of new forms of governance can be clearly seen (Lenschow, 1999: 40-41). The emergence of new forms of governance is due, at least in part, to the rise of neo-liberalism in many European states. This lead to a belief in the advantages offered by tools such as environmental taxes, tradable permits and voluntary agreements over and above traditional forms of hierarchical command and control steering. Interventionist governance modes were seen to encroach upon the scope for action within member states. Changing to new, more flexible modes was also seen as more in keeping with the principle of subsidiarity (i). It has been argued the subsidiarity principle favours the development of new governance modes (Héritier, 2002; Holzinger, et al, 2006). Enhanced reliance upon markets can be seen in the growing use of voluntary agreements and in the development of codes of practice within business and industry to address environmental concerns. Within the Commission, voluntary environmental agreements are seen as a form of co-regulation that can complement the traditional command-and-control approach. They are also believed to be in keeping with the two key principles that have driven EU environmental policy (Holzinger, et al, 2006: 406). The first is the principle of compatibility between ecology and the economy, that is, that environmental protection could be carried out in cost-effective ways and that under certain circumstances, environmental protection can contribute to solving economic problems the principle of ecological modernisation. The second is the polluter-pays principle, as voluntary agreements are designed engage producers in environmental protection. In addition, it is hoped that a voluntary approach might raise environmental awareness in companies and encourage their use of environmental management systems. The EU s so-called Environmental Management 12

13 System (EMS) provides an example. EMS gives both public and private sector companies a framework though which their environmental performance can be monitored, improved and controlled. The Commissions faith in voluntary agreements is nicely summed up in a statement they made in the Fifth Environmental Action Programme: Whereas previous environmental measures tended to be prescriptive in character with an emphasis on the thou shalt not; approach, the new strategy leans more towards a let s work together approach. This reflects the growing realisation in industry and in the business world that not only is industry a significant part of the problem but it must also be part of the solution. The new approach implies, in particular, a reinforcement of the dialogue with industry and the encouragement, in appropriate circumstances, of voluntary agreements. accessed Friday, March 13, 2009 The Sixth Environmental Action Programme also endorses the use of voluntary agreements. Although application of voluntary agreements is patchy and standardised guidelines for their use are lacking, there are now several hundred negotiated, voluntary agreements in force throughout the member states and these operate across national, regional and local levels, although they are limited at the EU level. Despite strong arguments in favour of voluntary agreements, concerns have been raised about whether they can adequately protect the environment, let alone promote sustainable development. Research has found that reliance on voluntary agreements rather than mandatory regulations can lead to reduced levels of environmental quality relative to what might have been achieved legislatively (Segerson and Miceli, 1998). The European Parliament has also been vocal in its criticisms. It has raised concerns about the oversight of voluntary agreements, pressed for the inclusion of quantifiable targets within such agreements and called for the introduction of a more transparent monitoring system. Their use has also been heavily criticized by ENGOs. They argue that there is little evidence that voluntary agreements are effective in protecting the environment; that the risk of non-compliance is high; and that the existing monitoring requirements are based on self-monitoring and hence prone to bias ( accessed Friday, March 13, 2009). In addition to the use of voluntary agreements, the EU also relies on other soft policy tools, such as policy appraisal, including environmental and sustainability impact assessments and strategic environmental assessment, which are aimed at making policy more anticipatory, coherent and effective. As well as broadening the range of policy tools it uses, the EU has also sought to make its existing tools, in particular regulation, more amenable to its new approaches to governance. This includes introducing flexible regulatory instruments, such as framework legislation, as well as feed-in tariffs and emission trading. It also tries to steer with information and the so-called Open Method of Coordination. The OMC has been characterised as a soft approach, compared to hierarchical governance, and even as a form of network 13

14 governance (Héritier, 2002). It takes practices from market governance, such as benchmarking, target setting and peer review, and uses them to fix guidelines and set timetables for achieving set goals within the member states. The OMC also uses benchmarks as a means of comparing best practices to form the basis for mutual learning and policy transfer across the member states. The use of soft mechanisms, based on information, learning and peer review, is seen as particularly advantageous for transition and accession countries, because they require relatively few financial resources and less administrative capacity than traditional command and control, regulatory approaches (Von Homeyer, 2004: 70). However, it is also subject to a great deal of criticism, including that it has evolved into a highly technocratic process operating in a closed policy network. Nevertheless, we need to remember that the OMC remains premised upon the Commission s exclusive right of legislative initiative, and the legislative (and budgetary) powers of the Council of Ministers and the European Parliament, that is, upon hierarchical steering. We have also to remember the continued importance of rule making, for at the heart of the European integration project has been the growth of the European regulatory state. To this is added the importance of institutions (Kellow, et al. 2002), which remain a central component of EU governance. EU policy making takes place through a complex chain of institutions, each of which can veto any agreement or policy proposal. Thus, in our discussion on the use of new environmental policy instruments it is important to point out that these tools do not replace but co-mingle with traditional governance tools, particularly command and control approaches to environmental management (Baker and Eckerberg, 2008). We also need to be aware that, at least up until the late 1990s, almost eighty percent of EU directives and regulations we still of the command and control variety (Holzinger et al., 2003). In addition, we need to remember that most national environmental agreements are only semi-voluntary, since typically there is some carrot and stick involved, in the form, for example, of tax reductions, retroactive penalties, threats of future regulation, or license requirements. Thus, we are reminded of the words of Sharpf that network and market governance always operates in the shadow of hierarchy (Scharpf, 1997). Furthermore, as evidence shows, the use of new environmental policy instruments may not always be good for the promotion of sustainable development. In Ireland, to take an example, the use of public / private partnership agreements for the management of waste has diminished the control of Local Authorities over the strategic management of waste. In addition, as privatisation saw a rise in charges to domestic consumers for waste disposal, this had the unintended consequence of increasing the rate of illegal dumping in the country. In turn, the commercialisation of waste has turned waste into a profitable commodity, a process that does little to encourage waste reduction (Connaughton, et al 2008). As this case shows, new governance arrangements can weaken the role of environmental administrators, especially when the administration looses competence over implementation (Holzinger et al., 2003). Faced with these concerns, Baker and Eckerberg have pointed out that the use of new governance instruments for the promotion of sustainable development must continue to relies on the on-going, central and formal role of governments, not least in: initiating actions, co-ordinating responses, 14

15 legitimising and entrenching decisions and monitoring the performance and the unintended consequences of any new processes that are put in place if we are to steer society towards more sustainable development trajectories. (Baker and Eckerberg, 2008) Conclusion The last few decades have witnesses several challenges to traditional methods of governance and, as a result, the state centred structures of governance have been transformed. Governance now takes place across complex multi-centred, multilayered and diffuse structures, composed of relatively autonomous but co-existent public and private systems. These structures are important, because they provide new ways in which the state - and the EU - is able to connect private interests to public objectives (Glasbergen, 2007: 16). The promotion of sustainable development takes place within the context of these wider changes, while at the same time, presenting several governance challenges that are specific or unique to the sustainable development agenda. These include the need to govern a process of deep societal transformation; to steer in the context of inherent uncertainty and ambivalence, to steer for the long-term and through multiple levels and across multiple sectors; while at the same time, combing steering from the top with steering together, using an array of new tools and instruments along the way. At a fundamental level, the uniqueness of the governance requirements for sustainable development arises because sustainable development is not a blueprint for change but a process wherein what is considered appropriate and workable always depends on the social, political, ecological and economic context within which policy responses are framed. Thus, its core governance requirements and general rule need always to be accompanied by context specific elaborations (Kemp et al., 2005: 15). There is no best form of governance for the promotion of sustainable development. Governance structures and processes have to be context specific and open-ended; they have to embrace uncertainty, yet set intermediate, realisable goals for policy action and delivery. Our brief review of the EU has shown that, while the governance of sustainable development now takes place within a complex set of actor constellations and in the context of multi-level dispersal of power, traditional government and the EU regulatory regime remains powerful and important. Our brief review has also shown the weaknesses in existing governance arrangements. The power of vested economic and political interests continues to disrupt transition to more sustainable forms of societal development. There is a variety of ways to design and strengthen the various foundations and practices of governance to respect the commitment to the promotion of sustainable development. If we are to move from existing governance practices to a fuller commitment to governance for sustainable development, we need to find the smart mix of appropriate governance approaches. What is needed is a situational mixture of network governance, market governance and hierarchical governance. Here network governance can provide new ideas, insights and options, as well as lay the basis of consent and of long-term support; market governance can stimulate entrepreneurship 15