Environmental policies are guidelines and frameworks related to conservation and economic development. Whether at the local or international level, environmental policies often balance competing interests to achieve conservation objectives without significantly compromising or, ideally, by supporting economic development.
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Government laws and regulations primarily define economic policies. They are also explicitly overseen by environmental agencies, such as the Environmental Protection Agency (EPA) in the United States. While other agencies may have responsibilities that relate to conservation, the EPA is specifically tasked with environmental governance, which involves monitoring and regulating commercial activities related to the environment.
At the international level, economic policies are defined by international agreements, specifically by those related to conservation. From mitigating climate change to protecting biodiversity, global environmental treaties are negotiated and enacted by participating countries, typically through international organizations.
Examples of Environmental Policies
Environmental laws and regulations play major roles in environmental governance. These laws relate to various issues, from air quality to waste management. For example, the Clean Air Act in the United States established emissions standards for vehicles and factories to decrease air pollution.
While environmental governance attempts to support conservation by restricting certain activities, market-based environmental policies aim to support conservation through economic measures. For example, cap and trade programs are designed to lower greenhouse gas emissions by establishing limits and then creating a market for organizations to buy and sell allowances to stay under those limits. While these policies are effective, they tend to be seen as a way for the private sector to skirt strict regulations.
Corporate pledges and non-governmental organizations (NGOs) also shape environmental policies. For example, Amazon and the NGO Global Optimism founded the Climate Pledge to reach net-zero carbon emissions by 2040.
Key Global and Regional Environmental Policies
The Kyoto Protocol and the Paris Agreement are two of the biggest global environment treaties.
Created in 1997 as an addendum to the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol is an international treaty that established legally binding objectives for lowering emissions. The protocol was confirmed by 192 parties, and countries were divided into three groups according to differing levels of commitments: industrialized countries, industrialized countries that invest in developing countries, and developing nations. The Kyoto Protocol established cap-and-trade programs and processes to support accountability.
The Kyoto Protocol was superseded by the Paris Agreement, which was signed in 2016. While the former mandated emissions reductions for developed countries only, the Paris Agreement mandated emissions reductions for all parties. The Paris Agreement also addressed climate change policies used to keep the average global temperature increase below 2 °C, which is said to be the limit for avoiding catastrophic climate change.
Impact Analysis
The impact of national environmental governance and global environmental treaties is broad, deep, and often difficult to quantify. National productivity and clean technology innovation are two key areas that show the impact of environmental regulations and policies.
According to a recent study in the journal Energy Economics, when a country adopts stricter environmental policies, production costs typically increase. However, researchers found that further increasing policy stringency can increase productivity in the long term.
A recent working paper from the International Monetary Fund (IMF) looked at the impact of climate change policies and other regulations on clean technology innovation. Looking at both regulatory and market-based policies, IMF researchers concluded electricity innovation, in particular, has been positively impacted by environmental policies. The IMF paper thus supported strong environmental policies that encourage the adoption of clean technologies.
What are the Challenges of Environmental Policy?
The potential negative economic impact is the biggest challenge to national environmental policies and global environmental treaties. The Energy Economics study notes that production costs increase when countries adopt stricter environmental policies. This reality leads to significant pushback from the private sector on new environmental regulations.
Challenges can also come from governments themselves, particularly national governments looking to avoid the burden of additional regulation. Unfortunately, most international treaties have weak enforcement mechanisms. Countries often sign onto climate change policies but then skirt these same policies due to a lack of accountability.
Future Outlook of Environmental Policies
Predicting the future of environmental policies and their impact is difficult because they are constantly changing. While massive storms, droughts, and other impacts of climate change might push governments to adopt stricter policies, commercial interests will continue to oppose regulations that could negatively impact productivity.
If climate change's impacts become more severe, public opinion will likely favor stricter environmental policies at the national level. Countries may also comply more with global environmental treaties by including market-based solutions and enforcement mechanisms.
References and Further Reading
American Public University (2020). What is environmental law - And why does it matter? [Online] Available at: https://www.apu.apus.edu/area-of-study/security-and-global-studies/resources/what-is-environmental-law/
Eugster, J. (2021). The Impact of Environmental Policy on Innovation in Clean Technologies. International Monetary Fund. https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021213-print-pdf.ashx
Feng, G. et al. ( 2021 August). The impact of environmental policy stringency on industrial productivity growth: A semi-parametric study of OECD countries. Energy Economics. https://www.sciencedirect.com/science/article/abs/pii/S0140988321002267
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