Regulation in an Eco-economy Transforming economic drivers

The Crisis of Markets The Swing to Regulation

Principles & Trends increasing economic complexity demands more conscious involvement and direction. Planning is more, not less, important, but… The state cant do it all. Integrated design: Social & environmental Cross-disciplinary

Trends & Principles -2 political-economic integration moves beyond the state more connected to overall rules of economic life more connected to all stakeholders involved [should be] part of a movement toward direct democracy

Knowledge-based / Quality-based development Greater focus on the human factor From mindless to mindful markets: Centrality of end-use & purpose of production Integrated design: multi-dimensional goals Greater levels of democracy/participation From hierarchical to decentralized regulation From external to internal self-regulation Greater stakeholder involvement Greater integration with everyday exchange & civil society Role of The Commons: ecological, physical, electronic; Sharing & saving

Historical Trends in Regulation early industrialism: separation between state and markets. Focus on production. Fordist & state-socialist industrialism: More concern with consumption / demand. Need for more planning: political-economic intervention. Today: even greater involvement of consciousness & planning is necessary; integrated ecosystem-based design. Post-Fordist globalization: avoidance or disguising of conscious planning. Suppression of new modes of mass collaboration.

Trends in Mainstream Regulation End of pipe control and cleanup : 70s Point Source Prevention : 80s Consumption Patterns and Product & System Design : today

Contending Alternatives to Command-and-Control Corporate critique Regulation: costly and inefficient Trade: a panacea Avoidance of accountability Focus on single bottom line In Practice: tends to starve governments of regulatory resourcesproducing a self- fulfilling prophecy

Design Perspective on Regulation Commoner, Hawken, Boyd, Geiser, Stahel, etc. Need for levels of incentives/disincentives Regulatory pluralism From prescriptive to performance standards Democracy: inclusion of stakeholders, growth of accountability Movement toward fundamental solutions: 1.Service economy: redefining output 2.Lake economy: organic redesign Must deal with silo structures

The Precautionary Principle one of the two central principles of eco-regulation (along with the life-cycle approach) not the basis for 70s regulatory initiatives encourages benign materials design and use requires product/substance bans & phaseouts

Next Generation Regulatory Instruments … Often a confused combination of corporate and design elements Variations of Regulatory Pluralism self-regulation co-regulation voluntary agreements regulatory flexibility negotiated agreements environmental partnerships informational regulation economic instruments.

Questions about Instruments Do they accept or reinforce chronic underfunding of government? Are they based in corporate ideology (i.e. obsolete views of market forces)? Do they deal with fundamental problems and solutions?

Elements of Green Economic Self-Regulation the Scale of the economy : community and bioregional organization, harnessing technological potentials for decentralization via reutilization-industry, distributed energy-generation, eco- infrastructure, local money, co-operative consumption, etc. Participatory democracy: Green Municipalism, participatory Green City Plans, community indicators & pattern-language development. a Green regulatory structure: including community design pattern-languages, performance standards, product stewardship systems, product & substance bans, and other rules which encourage bioregionalism, quality and community. Green market mechanisms: ecological tax systems, account- money & other community currencies, and a green financial infrastructure. Knowledge as a regulatory force: via resource inventories, eco-accounting, product information & labelling, and community indicators.

Surrogate Regulators community groups, NGOs buyers / suppliers investors financial institutions insurance companies Question: are these surrogates, or just vital elements of regulation today?

Possible Instruments in the Integrated Product Policy (IPP) Toolbox InstrumentIncluding Voluntary instrumentsVoluntary agreements Self-commitments Industry awards Voluntary information instrumentsEco-labels, Product profiles Product declarations Compulsory information instrumentsWarning labels, Information responsibility, Reporting requirements Economic instrumentsProduct taxes and charges Subsidies Deposit/refund schemes Financial responsibility Regulatory instrumentsBans/phase-outs Product requirements Mandatory take-back

Extended Producer Responsibility (EPR) designing ownership patterns to achieve stewardship a positive form of accountability that can change the DNA of corporate entities closes loops and encourages service production takes different forms in different industries and situations.

Varieties of EPR liability where responsibility for environmental damages caused by a productin production, use, or disposalis borne by the producer; economic responsibility where a producer covers all or part of the costs for managing wastes at the end of a products life (e.g. collection, processing, treatment or disposal); physical responsibility where the producer is involved in the physical management of the products, used products or the impacts of the products through development of technology or provision of services; one common expression of this would be… ownership where the producer retains ownership of the product over it entire service life, and informative responsibility where the producer is required to provide information on the product and its effects during various stages of its life cycle. (Thorpe and Kruszewska,1999; Linquist, 1998)

Expressions OF EPR Product take back for waste management Life-cycle partnerships for waste management Materials selection Materials management Extended environmental management programs Leasing systems Delivering service and function instead of products Design-for-the-environment programs Environmental purchasing

Frontiers of EPR Braungarts Intelligent Product System 1.Consumables 2.Products of Service 3.Unmarketables Product-Service Systems … typically tries to facilitate: --sale of the use of product (rather than the product itself); --operational leasing, rather than ownership by consumers --repair rather than throwaway relationships

Strategic Modes of Regulation Civil Society-based Certification systems Ecological Tax Reform / tax shifting Subsidies / green scissors Green Procurement EPR legislation Guidelines for Green Finance: green development plans, etc.

Sector-based Action green belts building codes / zoning renewable portfolio standards & standard offer contracts product & substance bans, etc.

Other Resources Conroy Powerpoint: Branded: How the Certification Revolution Facilitates New Ethics in International AffairsBranded: How the Certification Revolution Facilitates New Ethics in International Affairs Braungart : Cradle to Cradle designCradle to Cradle design McDonough on Cradle to California