Green Transition

by Johanna Järvelä & Lotta Aho

What happens when a country moves from purely voluntary regulation towards binding laws? In our research paper we examine how the changes in Chilean environmental regulation affected the mining conflicts in the country.

In Chile, neoliberal policies were implemented to a great extent during 1970’s and 80’s and the legacy of these policies was an almost absent environmental regulation until 2010. Given this background, Chile represented an interesting case to study what were the outcomes of the absence of environmental regulation and ensuing privatized regulation to the environment and society in Chile. And why, especially in time when global tendency was more towards deregulation, Chile was taking the path of re-regulation. 

The first environmental institutions were founded in 1995,  but it was not until 2010 that true change in environmental sector happened because new environmental regulation was introduced and actually enforced for the first time. Even though many of the bigger mining companies were following international voluntary standards, they started to get fines from the Superintendencia del Medio Ambiente (SMA) and the amount of the fines given out by SMA grew each year. It was not because companies were becoming more irresponsible but rather that their ‘business as usual’ was not tolerated anymore and the international voluntary standards proved to be inadequate for environmental protection.

The cowboy practices of past, known for example as ‘senor con el maletin’, the man with the (money) briefcase, were not only condoned no more but also started to cause problems for the companies engaging in these practices. There was a momentum in Chile when simultaneously environmental regulation and institutions were strengthened, and environmental awareness and the number of mining conflicts were increasing. The root cause of the conflicts was environmental breaches that had been happening long before the environmental authorities started to fine companies for them. However, the new environmental laws and growing civil society movements offered the people a stronger position in making the claims and opportunities to seek environmental justice through courts along with bringing the claims more publicity. This in turn forced the companies to not just launch new corporate sustainability programs but also improve their communication with the communities.

The main takeaway from this study is that regulation in itself – be it voluntary or public – is a dead letter without proper implementation and enforcement. To achieve any real change the states need to ensure there is a separate institution to monitor that the laws are abided and sanction those who breach the laws. From private-public interactions perspective, it was the international private regulation together with civil society campaigns and need to align with OECD country standards that in the end instigated the change in Chilean regulation. As more diverse actors and interests became part of the powerplay deciding the regulatory outcome, it helped to de-capture of the political system of environmental regulation from purely industry interest.

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To read more about this institutional change and it’s impacts read the recent working paper by Johanna and Lotta: Going Against the Tide : Towards Binding Environmental Regulation of Mining in Chile. 

By Andrew Crabtree

The 2020 Human Development Report is entitled The Next Frontier: Human Development and the Anthropocene. Whilst previous reports have related to sustainability, the 2020 Report moves beyond this and places human development within Earth Systems science. Thus, it goes beyond the common assertion that humans and the environment are “interconnected” or “interlinked” as Earth Systems science explains and provides ample scientific evidence on how humans are part of the non-human environment. It is not without significance that the director of the report, Pedro Conceiçao, first earned a degree in physics before going on to study economics. It is refreshing to see the humanities, social sciences and natural sciences supplementing one another.

The Report is ambitious. Part I examines human development in the Anthropocene, Part II considers how changes can be made and includes an investigation of social norms, structures and power. Part III explores new metrics and introduces a planetary pressures-adjusted Human Development Index. In this short blog, I will concentrate on two aspects, namely the introduction of a new concept – that of nature-based human development – and the new Index.

Nature-based human development examines the relationship between humans and the planet at all scales from the local to the global and over different time scales. On the one hand the Report emphasizes the importance of regulation and taxation policies, and on the other it explores the advantages of nature-based solutions: from constructed wetlands, to regenerative agriculture, to marine protection areas and the importance of sea grass. In this connection, it also stresses more traditional human development-related concerns such as indigenous peoples, local communities and their rights, while recognizing potential clashes. These ideas are very close to those being propounded by the United Nations Environmental Program and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) as well as the UN’s decade of Ecosystem Restoration.

Equally interesting is the introduction of the planetary pressures-adjusted Human Development Index. The Human Development Index has been the flagship of the Human Development Reports. In academic terms, no-one has been particularly fond of it including its inventor Amartya Sen. For one thing, as it is a composite indicator made up of three indexes covering Gross National Income, life expectancy and education, the HDI implicitly places a price on people’s lives. However, the index did have the desired political effect as attention was moved away from growth.

The human development approach has not been anti-growth, rather it has seen growth as instrumental to achieving other ends. The new index changes this by introducing the material footprint index which measures the extraction of biomass, fossil fuels and ores. Doing this goes some way to measuring the impact of GNI growth (the measure is also used as an indicator for SDG 12 – responsible production and consumption). Production based carbon emissions are also taken into the overall equation. The consequence of this is that there are only nine countries that are classified as “very high human development”. Norway drops to 16th and is replaced by Ireland at the top (Denmark is 4th). Although the new measurer has received attention in the international press, its deeper impact remains to be seen.

By Diego Angelino Velázquez

In the context of the climate crisis and the pursuit of the Sustainable Development Goals (SDGs), the decarbonisation of production and energy models has been identified as a major goal for societies around the world. This transformative goal should be made a priority in order to respond to the climate crisis and its economic and humanitarian-related effects.

Major investments in Renewable Energy (RE) sources, such as solar photovoltaic, wind (onshore and offshore), geothermal, biomass (waste from urban centres communities, local markets), appear attractive and are increasingly pursued by countries. However, energy transition goes beyond good intentions and “green dreams”. Apart from the tremendous work required to undertake the drastic transformations of economies based on oil, gas, and large-scale hydropower; the energy transition goal faces resource scarcity of minerals; a threat to the entire functioning of the sector.

This phenomenon occurs because RE is sustained by a select group of raw materials and minerals with unique properties for energy production. Lithium, for example, is a key mineral for building batteries. Rare Earth Elements (REEs) provide special conditions for energy conductivity. These minerals, along with having unique characteristics, are also scarce and highly concentrated in a small number of countries. This resource scarcity is further influenced by economic and geopolitical variables, suggesting that the management of raw materials and minerals related to the energy transition is subject to complex, strategic decision-making. Furthermore, they are key to the possibility of an effective energy transition, which is a priority for the fulfilment of the goals related to climate response and sustainable development.

This can be illustrated with a number of examples. In the case of wind energy, the turbine generator requires REEs such as Neodymium (ND), Praseodymium (Pr) and Dysprosium (Dy). The solar photovoltaic requires crystalline silicon, made of Silicon and Silver, and the panels and other related technologies require important quantities of Silicon, Iridium (In), Copper (Cu), Gallium (Ga), Selenium (Se), Cadmium and Tellurium. The electric vehicle industry requires Lithium, Cobalt and Graphite for the batteries, and, for the electric traction motor, large quantities of rare earths such as Praseodymium and Dysprosium are required. Most of these materials are highly concentrated. China, for example, has control over 65-70% of the reserves of the total of Rare Earth Elements and Graphite.

It is necessary for the public sector, private sector and academia, as well as civil society, to reflect upon the potential implications of resource scarcity in the development of the energy sector. Especially for academia, it is important to increase the production of studies and articles that suggest practical solutions for the escalation and rapid development of capacities within topics such as circular economy, resource efficiency and others related to energy transition. Such insights provide us with sufficient time to develop potential substitutes and new engineered solutions that can help humanity navigate and advance within the scarcity paradigm.

Maje Müllenborn, Caroline Breinholt, Joss Lyons-White, Dr. Kristjan Jespersen

Deforestation: the byproduct of agricultural expansion

Deforestation to pave the way for agricultural expansion is a major global problem. This is particularly evident in Brazil, where deforestation has been making international headlines for decades. Deforestation threatens Brazilian ecosystems including the Amazon rainforest, which play a central role in global environmental processes. If progressively degraded, the Amazon may be pushed past tipping-points that induce runaway change, leading it to permanently shift to savannah. As such, deforestation endangers biodiversity, contributes to climate change, and could even affect continental rainfall patterns. Additionally, aggressive agricultural expansion often infringes on the rights of indigenous communities and can have detrimental effects on human health. This makes it critical to improve the governance around agricultural expansion to help reduce deforestation.

We have been investigating how governance could be configured to reduce deforestation more effectively, using the idea of combining policy instruments into what Rogge and Reichardt call “policy mixes”. This concept allows us to go beyond the realm of public policy analysis and conventional legal instruments, and acknowledge the effect of other factors that may influence governance, including global supply chains and production networks, financial and trade flows, and international organizations and agendas. The policy mix concept also encompasses interactions between instruments, as well as the processes through which instruments emerge, and can thus help understand how governance changes over time.

Brazilian soy as a driver of deforestation

Agriculture plays a central role in the Brazilian economy and development. A challenge for governance therefore revolves around balancing economic development and conservation of Brazilian ecosystems. Of the many commodities that Brazil produces, soybeans are the top export: around 73% of domestic soy production is destined for international markets (about 120 million metric tons). As such, soy is at the crux of the Brazilian deforestation problem, with high market demand, an important role in the Brazilian economy, and a huge domestic production network. In our study of Brazilian deforestation, we concentrated on soy-based deforestation and governance targeting Brazilian soy production.

We conducted a systematic literature review to investigate the relationship between the Brazilian soy policy mix and deforestation rates between 2000 and 2018 in the Amazon rainforest and Brazil’s Cerrado woody savannah ecosystem. From an initial search that identified 881 relevant articles, we conducted a more detailed analysis on 56 articles. We found that in the study period, many international institutions and organizations, states, civil society actors and others dedicated themselves to combating Brazilian deforestation through various mechanisms. Governance included everything from conventional “hard law” instruments, such as Brazil’s Forest Code, to newer “soft law” solutions, such as voluntary third-party certification schemes like the Roundtable for Responsible Soy. Hybrid governance forms, such as collaboration between municipalities and NGOs, also took place.

Successes and challenges in the Brazilian soy policy mix

The Brazilian soy policy mix was associated with considerable reductions in soy-driven deforestation in the mid-2000s. The Brazilian Space Agency (Portuguese acronym INPE) began monitoring deforestation in 1988, and their data reveal that deforestation rates have ranged from as much as 29,059 km2 in 1995 to as little as 4,571 km2 in 2012. In July 2019, INPE data indicated that 9,762 km2 had been deforested in the preceding 12 months and recent articles have indicated that this increase continued in 2020. So, despite large improvements up to 2012, fluctuations in the deforestation rate in the mid-2010s and a rebound in recent years suggest problems in the policy mix remain, and the underlying drivers of deforestation have not been sufficiently tackled.

Figure 1: Deforestation rates 2000-2019

From low adoption rates to weak enforcement, we identified numerous problems and only few successes in the Brazilian soy policy mix. These included:

1. Conflicting objectives in the policy mix, e.g. between state and non-state actors and between international and domestic levels of governance, often between
2. Zero gross deforestation objectives, aimed at preventing all deforestation; and
3. Zero net deforestation objectives, aimed at preventing zero gross deforestation, i.e. allowing for reforestation of cleared land.
4. Successful top-down delegation and hybrid governance setups, although a lack of smallholder engagement was widespread, as initiatives often targeted larger farmers (and agribusinesses) in a pursuit of the greatest additionality, i.e. catching the biggest deforestation “culprits”.
5. High costs of compliance with governance instruments, without sufficient benefits. This generally increased the likelihood of non-compliance and, therefore, deforestation.
6. Lack of capacity of the Brazilian government to enforce legislation due to weak monitoring and sanctioning.

The future of governance?

So, where do these insights lead us? How can governance be interpreted more efficiently to prevent Brazilian deforestation? Our study of the Brazilian soy policy mix suggests that a successful policy mix must value hybrid governance, involving policies deployed by the state, private and civil society actors – and preferably in collaboration – to achieve sustainable agricultural production. Additionally, our review indicates that the existence of a leading actor within a polycentric governance model, who can organize efforts, streamline objectives, and most importantly, delegate tasks to other levels of governance (e.g. state or municipal levels), might be key. However, finding the balance between centralization and decentralization may be difficult and successful governance instruments exist both in top-down and bottom-up setups.

Of the many governance instruments at play, the Municípios Prioritários (“priority municipalities”) program of 2008, which targeted municipalities with high deforestation rates through blacklisting, was arguably among the more successful. The program pressured municipalities to take ownership and actively work towards reducing deforestation. Essentially, it allowed “federal government [to] create the conditions for severe political and economic disruption at the local level”. As such, our review suggests that local engagement and delegation of responsibility are key when it comes to designing governance to prevent deforestation.

Studying policy mixes has implications for the way in which we support governance-making, for the design of policy instruments, and for the evaluation of performance within the deforestation discourse. State, private and civil-society stakeholder must all look beyond governments as the sole governing actors and instead consider how to balance efforts between the many actors involved. In particular, it is important to acknowledge the impact that private sector and civil society can have to address deforestation effectively.

Stefano Ponte is Professor of International Political Economy at Copenhagen Business School and Director of the Centre for Business and Development Studies. His latest book Business, power and sustainability in a world of global value chains was published by Zed Books in 2019.

The COVID-19 crisis has made evident the limitations of existing thinking, preparedness and policy in relation not only to health pandemics but also to the sustainability challenges we face, locally and globally. Contemporary capitalism, with its hyper-individualistic culture and just-in-time – instead of just-in-case – approach to infrastructure and essential equipment, is not geared towards solving global problems that require coordination, cooperation and solidarity. As some activists, scholars and medical personnel have stated recently, ‘We don’t need heroes if we have preparation’.

Clear examples that have emerged with particular force in the past few months include the political inability to coordinate emergency responses within the EU and the US, cut-throat competition among countries seeking to procure essential medical gear, and the realization that we have been undermining the working conditions for ‘essential workers’ for decades. Therefore, an expansive economic stimulus to restart the economy during/post covid-19 cannot be based on the first-line response of capitalism – restoring production and consumption back to ‘usual’.

This is the time to expand and rethink our socio-economic models to stimulate a more sustainable approach to consumption – not limited to consuming more sustainable goods and services (such as organic milk, ecotourism holiday or FSC certified timber), but also on consuming less.

We need to rethink the current organization of the global economy, reform the national economic and political institutions that govern it and devise new forms of governance and collective action within states and across borders. Contemporary hyper-capitalism, rather than humanity per se, is the root cause of the global sustainability crisis and the spread of pandemics – and thus should be the focus of action.

To achieve this, we need a different kind of ‘green entrepreneurial state’ that de-couples sustainability from growth, and that does not intervene to bail out carbon intensive industries tout court. Oil markets have tanked in recent weeks, and $0 (or even negative) oil prices are devaluing oil industry assets dramatically. A green and just recovery in the oil industry transition means focusing on helping workers first and foremost, rather than executives or shareholders. This could entail partial nationalization of assets to essentially shut the oil industry down in the mid-term and open the way for further investment in renewables, which would otherwise be dampened by competition from cheap oil.

Second, what we need is more community involvement in the economy, changes in labour law to make unionization easier, tax reforms to make municipal and cooperative forms of organization more attractive, corporate regulation to facilitate employee ownership, and stimuli to expand the radical and democratic ecological experiments that are already in place – such as the shared living communities that have been active in Denmark since the 1970s.

Third, important insights for a recovery plan can be offered by the idea of ‘just sustainability’, which incorporates ‘the need to ensure a better quality of life for all, now and into the future, in a just and equitable manner, whilst living within the limits of supporting ecosystems’. Therefore, a path towards recovery during-and-post COVID-19 needs to address inequality – as it drives competitive consumption and leads to lower levels of trust in societies, making public action (including under a pandemic) more difficult. Excluding companies from recovery funds which have made use of tax avoidance tools is one of the necessary steps. But broader and collective actions to stamp out tax heavens are needed more than ever.

Just sustainability entails focusing on improving quality of life and wellbeing, rather than growth. It demands a community economy and increased public, not private, consumption. It involves meeting the needs of both current and future generations and at the same time reimagining these needs. It demands a paradigm of sufficiency, rather than maximization of consumption. Finally, it recognizes that overconsumption and environmental degradation affect the right to enjoy a decent quality of life.

The imperatives of growth and ever-growing consumption are part of the problem and cannot be the solution. Paying attention to what we buy and consume, and how it was produced remains important, but we cannot buy our way into a sustainable future.