THE PARTICIPATION PRINCIPLE

Right to know

The US EPA (2004a: 2) points out that an emissions trading programme needs to be transparent to the public to ensure that it has full public con­fidence. This means giving the public access to allowance data, to data on emissions discharged and on whether companies are complying.

Emissions trading programmes are not as transparent in practice as the ideal portrayed by the EPA. It can be very difficult for local residents to find out exactly what standards a company is meeting and the extent to which it is buying up rights to exceed those standards (Drury et al. 1999: 278-9). Prices paid for emissions credits often remain secret and in some cases, such as happened in the leaded petrol trading programme, so does the ownership of credits. In other cases, such as the much vaunted acid rain programme, emissions data is made public but only some time after the emissions are made: 'It is possible to find out in 2002 the amount of pollution that came from a smoke stack in 1999 - long after a death or illness would have occurred - but not what will be emitted in 2003' (Moore 2004a: 10).

In the case of emissions trading, it has been argued that 'accounta­bility, public participation and environmental integrity are being crushed to reduce investor uncertainty' (Climate Justice 2001). The allocation of carbon pollution rights is seldom a matter for public participation. In the United Kingdom, for example, the National Allocation Plan, rather than being subject to public scrutiny and debate, was 'more a matter of quiet negotiation between business and government, and between govern­ment departments' (Lohmann 2004: 12).

Similarly, few if any details of transactions undertaken under the joint implementation and the clean development mechanism of the Kyoto Protocol are published (IETA 2005: 15).

Decision-making power to industry

As public pressure has mounted to tighten up and increase regulation, industry preference for economic instruments has increased - because industry would prefer to retain the choice of discharging wastes into the environment, even if it has to pay for the privilege. Economic instruments are less likely than legislative methods to encounter industry resistance because economic instruments accord industry greater autonomy in its pollution control decisions. In other words, the public is not consulted.

Many economic instruments allow the polluters to decide how much pollution there will be in a particular area or neighbourhood. Although a government agency may set a pollution charge or emissions cap, the decision to pollute above set standards by paying charges or buying pol­lution rights is made by individual firms and is not subject to public con­sultation. Such decisions are made on the basis of company economics, not on the basis of what is best for the community or the environment. In the end it is the polluters who decide what trade-offs should be made between economics and environmental quality, not the community.

Market-based measures grant the highest decision-making power over environmental quality to those who currently make production decisions. A market system gives power to those most able to pay. Tradeable pollution rights mean that permission to pollute above a certain level is auctioned or sold to the highest bidder.

Depoliticising the debate

Advocates of economic instruments argue that market-based instru­ments transform environmental conflicts from political problems to eco­nomic transactions:

A major advantage of the market as an allocational device is that it provides a non-political solution to the social conflict raised by resource scarcity. Individuals obtain title to scarce resources through voluntary exchange and such exchange represents a solution to what would otherwise be a political issue.

Jeff Bennett (1991), from the conservative Australian think tank, the Institute of Public Affairs (IPA), has argued that the political process of allocation of scarce environmental resources is 'highly divisive, con- frontationist and largely inefficient', because resources are misallocated and a great deal of time and money is spent on 'the largely unproductive activities of lobbying and protesting'. Instead, he argues, if the market could be used to allocate environmental resources on the basis of supply and demand, just as other choices are made (for example, between growing wool or wheat on a farm), these decisions could be removed from the political arena.

The idea of removing some aspects of environmental policy from the political arena can be attractive to certain politicians who see the 'envi­ronmental problem' as being one of potentially damaging political con­flict. Currently, communities can influence governments to protect the environment through legislation by campaigning and demonstrating as well as by voting. In a system where the optimum level of environmental protection is decided 'automatically' by a market responding to prices which are supposed to have incorporated environmental costs, commu­nity influence is far more difficult.

Criminal activity or business transaction?

Businesses like the way economic instruments remove their polluting activity from the 'criminal sphere' and legitimise it. Unlike a fine that is imposed for doing something wrong, a charge or a tax indicates that the activity is official and done with approval. Economist Thomas Schelling (1983: 6-7) is quite adamant that this is how economic instruments should be viewed:

It is typical of fees and charges... that no moral or legal prejudice attaches to the fee itself or the action on which or for which it is paid. The behaviour is discretionary. The fee offers an option... a fee enti­tles one to what one has paid for... It is not levied in anger, it does not tarnish one's record...

Similarly, a tradeable pollution 'right' implies that the pollution is an entitlement rather than a misdemeanour. By 'using euphemisms such as quot;allowancequot; rather than quot;pollutionquot;', the stigma attached to polluting firms is reduced, 'which, in turn removes from the hands of the public one of its most effective tools, moral suasion' (Moore 2004a: 7). Drury and his colleagues (1999: 270) point out:

Pollution trading removes the social stigma associated with pollu­tion. Rather than treating pollution as a social ill that we should attempt to eliminate to the extent feasible, trading programs turn pollution into another commodity, to be traded when economic effi­ciency dictates. What is wrong with polluting, when only money for the required pollution credits stands between socially acceptable behavior and socially aberrant activity?

Economic instruments make a virtue out of the profit motive and the pursuit of self-interest whereas those arguing for a new environ­mental ethic take the traditional approach of trying to combat self­interest through morality. Hermann Ott and Wolfgang Sachs (2000: 17) point out:

In essence, the opponents expect conversion of the sinner, not just payment for damages. In their eyes, it is not enough that the polluter pays; the polluter has got to change as well. 'No reparation without re-socialisation' could be their slogan.

Even more importantly, the community should have the right to decide which business activities and practices are morally acceptable and which are not, and to be able to recognise and label those that kill people as criminal.