Governance Models for Sustainable Development
Final Report
Submitted to:
The Policy Research Initiative
August 2002
Prepared by:
Stratos Inc.
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Governance models for sustainable development August 2002
TABLE OF CONTENTS
1 Purpose 1
2 Background 1
3 Challenges of SD governance 2
3.1 SD is a vague concept 3
3.2 SD upsets the status quo 3
3.3 SD is a cross-cutting issue 4
3.4 SD requires a long-term perspective 5
3.5 SD requires trade-offs 5
4 Core elements 6
5 Analysis of the Federal sd governance approach 8
5.1 Institutions 9
5.2 Ideas 10
5.3 Processes 13
6 Review of selected foreign governance approaches 17
6.1 Long-term Planning for Sustainable Development 17
6.2 Strategic Environmental Assessment 18
6.3 Environmental Accounting 20
6.4 Coordinating mechanisms 20
6.5 Performance Reporting 22
6.6 The precautionary principle 23
7 a possible research agenda 24
8 Conclusions 26
9 Appendix 1: Definitions of governance 28
10 Appendix 2: selection of comments from the reports of
the Commissioner of the Environment and Sustainable Development 29
11 References 33
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Governance models for sustainable development August 2002
1 Purpose
The purpose of this paper is to identify:
· governance models that could be used to increase integrated decision-making for sustainable development (SD) at the federal level;
· policy-relevant research gaps in the subject area and, therefore, future areas for research.
The Policy Research Initiative has also commissioned a companion paper on Governance Tools for Sustainable Development and research on organisational management for SD, both of which touch on some of the matters covered in this paper.
2 Background
Governance describes the relationship among institutions, processes and ideas (see the list of definitions in Appendix 1). Applied to public policy in the context of sustainable development, governance includes matters such as the existence of a national vision or SD goals, the mandates of key environmental and economic development agencies and the strength of coordinating mechanisms among them, the adequacy of market signals and incentives to promote more sustainable patterns of production and consumption, the transparency and accountability of decision-making processes and opportunities for stakeholder participation. While the many dimensions of SD governance, and the variety of possible models, make it a difficult concept to define precisely, they also provide many avenues to pursue in introducing possible reforms.
Every country pursuing SD has developed its own governance model based on its history, geography, demographics, political economy and vision of SD. Several countries, however, are widely perceived to be innovative or more “advanced” in the promotion of SD (e.g., Nordic countries, The Netherlands). While it would be inappropriate to consider importing a particular approach in its entirety and seek to apply it in a different context, these countries have undertaken specific SD governance reforms that may hold useful lessons for Canada. As the federal government has already begun to institutionalise many of the aspects of SD governance, the challenge it faces is not so much to create a new model as to adapt existing institutions, processes and policies, fill in gaps, correct inadequacies and provide senior-level support.
An integrated framework of effective institutions is essential for sustainable development. Building this framework requires coherent integration of policies across the economic, social, and environmental spheres; significant participation of civil society in policy-making and implementation; co-ordination between national governments and international organisations; and strong political commitment to a long-term perspective.OECD: Sustainable Development: Critical Issues (p 2)
As we shall see below, Canada’s SD governance model compares favourably to most countries, at least on paper. Canada has been discussing the elements of SD governance explicitly for only 15 years (viz., the recommendations of the 1988 National Task Force on Environment and Economy), a relatively short period of time in terms of institutional change. During the 1990s, the federal government put in place new institutions (e.g., Commissioner of the Environment and Sustainable Development), new decision-making processes (e.g., on climate change) and developed new tools (e.g., Strategic Environmental Assessment) to promote SD. Although its focus was primarily environmental, the 1990 Green Plan was one of the first national sustainable development strategies in the industrial world. More recently, however, the low priority accorded to SD issues on the political agenda (partly the result of the dominance of more urgent priorities such as adapting to free trade, fighting the deficit and preserving national unity) and the corresponding absence of a national consensus on SD goals (viz., the debate on climate change) has arguably eroded the impact of several of the SD governance initiatives taken over the last few years.
While the SD governance choices the federal government makes matter, so do the many policy choices it confronts in a variety of key agendas, including climate change, innovation, health, sustainable communities, natural resource development and biodiversity. All of these agendas involve governance issues, such as: What should be the roles and responsibilities of various agencies? How will public input be sought and used? Do existing coordination mechanisms among decision-makers need to be strengthened? How will progress be measured? How the federal government answers these governance questions will influence the effectiveness of its policy choices. It is the policy choices, however – e.g., what goals should Canada pursue? What incentives need to be put in place – that will largely determine whether Canada achieves more sustainable patterns of development.
The rest of this paper is organised as follows:
- What is the challenge in making the shift to SD governance?
- What are the core elements of an SD governance model?
- What are the strengths and weaknesses of the Canadian governance model?
- Are there approaches used in selected foreign jurisdictions that could improve federal SD governance in specific areas?
- What recommendations for a possible research agenda and conclusions can we draw from the above?
3 Challenges of SD governance
Strengthening governance approaches in order better to promote SD raises a number of challenges[1] (OECD 2002). These include:
3.1 SD is a vague concept
The concept of sustainable development has arguably lost some of its cachet since the Brundtland Commission introduced it to the public debate in 1987 because an operational definition of the term remains elusive[2]. The Brundtland Commission’s very broad “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”, begs numerous questions concerning the definition of present and future needs, and the geographical and temporal scale at which these need to be met. As it has proved impossible to reach a consensus on answers to these questions, the value of the term as a normative goal has declined: it is difficult to make progress when people cannot agree on the meaning of the goal they claim to share. Nevertheless, over the years, many organisations, private and public, Canadian and foreign, have developed customized definitions of SD to guide them.
3.2 SD upsets the status quo
Institutional change is never easy: “…even when people are convinced, changing institutions, cultures and policies is extremely difficult in a world where those things have been built up over long periods of time.”… (Pierce and Barbier, 2000: 250). Yet, SD challenges deep-seated values and attitudes (e.g., that Canada is a largely empty country with plentiful natural resources; the pursuit of undifferentiated economic growth should be one of the prime goals of public policy) and requires changes to our institutions, policies and processes.
In general, the key barriers to institutional change within government include:
· Institutional inertia. Change is difficult because organizations and the people within them find the status quo easier to live with than the upheavals associated with change. Moreover, large, well-defined organizations such as government agencies often have well established organizational cultures or missions, and can be expected to resist change that threatens these established norms.
· Limited analytical capacity to manage comprehensive change. As public administration scholars such as Lindblom and Wildavsky have long observed, the overall decision-making process within government is cumbersome and complex, and proceeds on an incremental basis through a process of “muddling through.” From this perspective, we should not expect fundamental change to be easy.
· Little political incentive to promote change. As Olson (1973) and others have observed, current outcomes represents an accumulation of special interests, each of which can be expected to protect its interests vigorously, whereas the benefits of fundamental change may be diffuse and spread out over time, and therefore appear less salient to political and other decision-makers within government.
3.3 SD is a cross-cutting issue
A recent OECD study notes that “[SD] contradicts the way policies have traditionally been formulated and developed” (OECD, 2002, 10). Others suggest that the “… driving forces of pollution, habitat loss and development reside in virtually every sectoral ministry …[such that] with the exception of economic policy, [SD] is probably the most cross-cutting of all issues facing governments.” [3]
In industrial societies, governments are typically organised by sectors or issue areas with responsible departments enjoying (and protecting their) considerable autonomy. While a governance model based on specialized agencies can be both efficient and effective, it can also lead to inconsistent policies and complicates the task of policy coordination. A former Clerk of the Privy Council (Bourgon) observed that horizontal policies are the most challenging to implement. Both the 1988 Task Force on Environment and the Economy and the 1990 Green Plan emphasized the need for greater policy integration and coordination in order to promote sustainable development.
“…to think that we would somehow be able to manage sustainable development issues in narrow stovepipes is naïve. Teamwork becomes critical across departments, levels of government, internationally, and with the private sector”.Mel Cappe, Clerk of the Privy Council[4]
The structure of political systems also makes a difference. European Union experience suggests that large reforms, of the type often called for to achieve sustainable development, are more feasible in systems with centralised policy-making structures.[5] Overcoming jurisdictional fragmentation is a major challenge in any government and more so in any federal system, where reform capacities are typically assessed as being relatively poor.[6] Canada is no exception.
The federal nature of the Canadian constitution requires extensive coordination with the provinces and territories which have primary responsibility over natural resources and environmental protection[7]. The challenge of coordination is therefore not only horizontal (i.e., among federal departments) but also vertical (between the federal government and the provinces and territories and, increasingly, municipal governments).
3.4 SD requires a long-term perspective
Because of their short-term electoral cycles, democracies have traditionally had difficulty addressing long-term issues that require sustained commitment (e.g., health care; pension reform; debt reduction) (OECD, 2002, 30). Nevertheless, it is important to note that democracies can, and have successfully focused on long-term initiatives when a societal consensus exists:
· in Canada, the Liberal Government made several unpopular program cuts in the mid-90s in order to eliminate the deficit even though the political pay-off was several years in the future;
· The Netherlands has pursued the long-term environmental sustainability goals articulated in the National Environmental Policy Plan for the past decade and a half through successive governments.
Corporations face similar pressures from their investors to show short-term results, particularly in North America. This short-term focus discourages SD investments with long-term paybacks (e.g., many companies will not invest in increasing energy efficiency if the pay-back is more than a few years). Here too, it is possible to point to exceptions and companies that have made environmental or social investments in spite of lower or unquantifiable expected rates of return.
“Sustainable development is an intergenerational issue and as such solutions require strategic choices for the longer-term and a capacity to maintain commitments over time, as well as a capacity to provide decision-makers with adequate information and knowledge to support their decisions”.OECD 2002 (p 10)
3.5 SD requires trade-offs
Notwithstanding the rhetoric that it provides opportunities for “win-win” solutions, SD will often require trade-offs among environmental, social and economic values, particularly in the short-term. Negotiating such trade-offs in a participatory and accountable manner is very challenging. Yet, in a democracy, such trade-offs need to be negotiated rather than be imposed as “…sustainable development cannot simply be ‘delivered’ by politicians and officials, but demands an active and creative input from all sectors of society” (Lafferty and Meadowcroft, p 435).
The negotiation of such trade-offs is complicated by the fact that some values important to SD are under-represented (e.g., the rights of future generations and vulnerable populations; endangered species and spaces) in decision-making processes. Current accountability mechanisms have difficulty accommodating such values.
“One key obstacle to achieving sustainable development is the difficulty of replacing the rhetoric of ‘win-win’ solutions, which are unlikely to be found, by efforts to elaborate appropriate arbitrage techniques for conflict resolution”.OECD (2002), p 26)
Largely as a result of these challenges, SD governance models around the industrial world have tended to emerge piecemeal over time in response to specific crises or opportunities rather than as full-blown plans. It is also worth noting that international initiatives appear to influence national activities to a significant extent. Agenda 21, for example, prompted a number of countries to broaden their SD governance framework to reflect various sections of this agenda. A number of United Nations Conventions or protocols (e.g., on climate change, on biological diversity) and trade liberalisation have created obligations on national governments that include governance elements. More recently, Germany developed its national sustainable development strategy largely in response to the upcoming World Summit on Sustainable Development.
4 Core elements
While international SD governance models vary to reflect national political, institutional and other factors, they share a set of core elements that can be categorised under three broad headings: institutions, ideas and processes[8].