B o o k Rev iew

G. B r u c e D o e r n , E d i t o r , Getting It Green: Case Studies in Cana- dian Environmental Regulation (Po l i cy S t u d y 12, C.D. H o w e I n s t i t u t e , T o r o n t o a n d C a l g a r y ) . 214 pp., I S B N 0-88806-269-9. 1990.

B r u c e M i t c h e l l

Department of Geography University of Waterloo Waterloo, Ontario, Canada

Getting It Green is the third publication by Doern which explores the relationships amongthe private sector, the market and public policy. The earlier publications were Privatization, Public Enterprise and Public Policy in Canada (1988) and The Environmental Imperative: Market Approaches to the Greening of Canada (1990). In the first sentence of the opening chapter, Doern states that "Getting It Green examines one of the key issues Canadians face in environmental policymaking and implementation. It looks c a r e f u l l y . . , at the relationships between the use of direct regula- tion and market approaches in achieving tougher environmental standards. A more concrete debate on these issues is essential".

Doern's argument is that "in the 1990s, market approaches must be used to a far greater extent as a complement to regulation". However, he also emphasizes that "the task of implementing environmental policy is not a stark "either-or" choice between the role of government and the greater use of market approaches. This is why I refer to the relationship between the two sets of instruments of policy -- regulation and market approaches - - as the essential environmental partnership of the 1990s. It calls for a more sensible pairing of functions for those aspects of environmental policy that only the state can do well -- setting standards in a democratic way and ensuring overall compliance -- with those that only markets can do well -- doing it at least cost, through the use of competitive technologies and price signals, by choices made at the firm or micro-organizational level". It is this perspective that sets the direction for the book.

Getting It Green contains eight chapters, two of which are written by the editor. All of the authors are academics working in Canada. Four are economists (Carleton, Lakehead, Laval, Queen's). One holds a joint

Journal of Agricultural and Environmental Ethics 1992

236 Bruce Mitchell

appointment in economics and law (Toronto). Another (the editor) is in a public administration program (Carleton) and the other was a doctoral can- didate at Carleton.

The first three chapters present perspectives on regulatory and market approaches. In Chapter 1, Doern discusses some of the challenges in implementing environmental policy with particular regard to political values, physical and technological issues, and roles for public and private implementors. He then reviews experience in the United States with eco- nomic approaches to environmental policy, especially relating to the appli- cation of tradable or marketable rights. Doern concludes that the American experience indicates that the potential cost savings from tradable rights are significant, but also that achieving such savings involves a substan- tial political-economic learning curve.

In concluding the first chapter, Doern suggests that market approaches such as tradable permits and taxes and charges offer the prospect for strong environmental policies with less social costs compared to total reliance on traditional regulation. Furthermore, he believes that Canada may be more suited institutionally than the United States to implement trading regimes because the Canadian regulatory approach has been more flexible. On the other hand, he concludes that idealogically Canada is further away from using market approaches because there is less ingrained appreciation of the value of markets in the Canadian political culture.

In the second chapter, Conway considers the nature of the regulatory record in Canada during the 1970s and 1980s. He reviews the traditional regulatory or "Command and control" approach, describes the evolution of the federal Department of the Environment, and outlines recent regula- tory changes within that department related to the Canadian Environ- mental Protection Act.

Conway suggests that the traditional regulatory approach in Canada and most other democratic countries has three overriding characteristics: a preference for regulatory standards setting, a tendency to negotiation and exhortation as a substitute for strict legal enforcement of standards, and spending to facilitate industrial adjustment. Furthermore, he argues that most environmental regulation has been technology based, in that it is founded on enforcing and encouraging "best practical technology" or "best feasible technology". He concludes that the success of applying both tradi- tional regulatory approaches and market approaches will require a stronger role for the Department of the Environment, more reliable enforcement and compliance practices, stable federal-provincial relationships, improved scientific and investigative capability, and much improved economic and legal literacy by officials and managers.

In Chapter three, Laplante examines the strengths and weaknesses of the two main options used within the command and control approach: regulating performance, and regulating design standards. Laplante presents two basic arguments. First, lack of information for establishing

Book Review 237

appropriate emission limits prevents adequate enforcement of environ- mental policies. Alternatively, even if inadequate information does not pre- vent a regulator from setting targets, it allows polluters to manipulate the monitoring process to their advantage. Second, the social cost of an emission-abatement program may be lower with a design standard, even though the polluter's cost is lower under a performance standard. As a result of these two arguments, Laplante concludes that technology-based emission limits result in higher costs compared to market-oriented policies.

The next four chapters present case studies. In the fourth chapter, Doern discusses nitrogen oxides (NOx) and volatile organic compounds (VOCs). NOx emissions occur primarily from the burning of fossil fuels. VOCs are released during combustion in various industrial processes. Both NOx and VOCs are air pollutants. It is the secondary combined effects of NOx and VOCs in the form of ground level ozone -- a key component of urban smog -- which is the main concern for managers.

Doern provides a detailed review of the consultation process used to estab- lish complex regulations and standards. The process was still underway when he wrote the chapter, but this case study was used to illustrate the implications of international and federal-provincial relations, and the inter- actions of key stakeholders (Canadian Council of Ministers of the Environ- ment, industry, environmental groups) during the development of a national management plan. The responses of Alberta and Ontario to the proposed national management plan illustrate "some of the emerging sub- tleties of positions and tactics". Doern concludes his chapter by considering the implications of the NOx and VOC case for the role of tradable permits to complement traditional regulation, the role of cost factors in the standards-setting process, the question of regional variation, the issue of single versus multiple hazards, and the consultation process.

In the following chapter, Smith examines Canadian policies to protect the stratospheric ozone layer. His interest is the extent to which control policies based on economic incentives might provide the same or greater environmental benefits at a lower cost. Smith outlines the opportunities and problems created by the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer signed by 32 nations, with particular attention of Canada's implementation of it. Canadian implementation has relied heavily on market-oriented environmental controls. Rather than concen- trat ing upon mechanisms for reducing consumption of CFCs (chloro- fluorocarbons) and halons, the Protocol focused upon targets and allowed firms to choose which mechanisms were the most appropriate.

Smith concludes that these controls have been successful in reducing con- sumption of CFCs and halon, and also that control costs have been distri- buted efficiently among users. In addition, Smith indicates that the private sector has exceeded the Protocol's consumption-reduction requirements.

In the sixth chapter, Dewees considers the regulation of sulphur dioxide in Ontario. He describes the main sources of sulphur dioxide in Ontario,

238 Bruce Mitchell

as well as the opportunities for reduction of pollution. He outlines the regulatory framework in Ontario, and contrasts it with regulations for other air pollutants in Ontario and the United States. He then presents a strategy which would incorporate marketable rights, and considers its advantages and disadvantages. One of the main challenges is that the four largest installations in Ontario (INCO, Ontario Hydro, Algoma Ore, Fal- conbridge) discharged over 70 percent of total human-generated emissions. Dewees commented t ha t "not many trades would be expected among the four major sources, but even a single trade might save tens of millions of dollars per year".

Water pollution and the Canadian pulp and paper industry is the sub- ject of the next chapter writ ten by Bonsor. He notes that the pulp and paper industry was the first major industrial sector in Canada to be subjected to widespread pollution regulations. As a result, there is over 20 years of experience to assess how well the regulatory approach has worked.

Bonsor recognizes that many pulp and paper mills are in relatively iso- lated one-industry communities, resulting in governments being hesitant to apply pollution regulations in a hard-nosed manner. The result has been that after 20 years only a small minority of mills have effluent that meets performance standards, prosecutions have been rare despite widespread violations, and fines have been insufficient to serve as deterrents. Further- more, mill-specific control orders have led to effluent quality standards varying dramatically from mill to mill. For example, in 1990 some mills in Ontario were among the cleanest in the world while others had extremely high discharge rates.

Having examined the Canadian experience with regulations, as well as approaches in the United States and Scandinavian countries, Bonsor con- cludes that existing regulations have not been enforced, and that the basic foundations of the approach -- one size fits all, end-of-pipe performance standards -- are inherently flawed. He argues that a better approach would recognize the need for site-specific, water quality standards in establishing overall pollution loadings for receiving waters. With that task done, he maintains that a mix of regulatory and market-based approaches should be used.

in the eighth and final chapter, Olewiler considers the role that taxa- tion might have in environmental policy making. She takes a balanced and practical approach, and argues that "no single type of policy instru- ment is appropriate for all types of environmental problems. Canadian governments act as if command-and-control policies are the policy of first choice. Taxation is rarely examined seriously. Marketable permits or trad- able emissions rights have recently become a "fashionable" instrument to consider, but permits are not universally applicable to all environmental problems". To redress this situation, Olewiler reviews the potential benefits of pollution taxes, but also examines the obstacles which would have to be overcome. In that manner she presents a balanced analysis. Her final

Book Review 239

argument is that taxes are not a general solution, but could be used to augment other approaches.

Getting It Green provides a systematic and balanced overview of the oppor- tunities and problems of combining market approaches with "command-and- control" approaches. Nearly all the authors are economists, so it is under- standable that they favour market-based instruments. Nevertheless, they identify and discuss obstacles and problems in implementing market approaches. Furthermore, they emphasize that there is not one market approach, but a number which require careful analysis and choice in developing a strategy. The chapters are generally written for the non- specialist, so readers with non-economics backgrounds can follow the argu- ments without getting buried in economic jargon. Combining a review of general concepts with four case studies of specific environmental policy sit- uations, Getting It Green should be of particular interest to the general reader who wants to become familiar with the strengths and weaknesses of market approaches for environmental quality management.