In the first part, four external control measures are proposed to increase the use of LCAs in products. In the second part of this blog post, Paul Sabatier's framework is used to assess the potential effectiveness of external control.
Part 1: Four external control measures proposals
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LCAs as a tool to gain more knowledge in environmental impacts of products |
1) Mandatory LCAs and information disclosure
External control: The first proposed measure is the most stringent method. It involves rule making by the government. Performing LCAs and documenting the results are required before the company's new products can be put on the market. For the products already on the market, grace period is given to allow the company to perform LCAs while the products are allowed on the market if demonstrating a plan to perform LCAs. Inspections will be done by the government for compliance check. Companies fail to comply with the rules will be fined. Product is banned on the market if LCAs are not performed after the company received 3 warning notices from the inspector. Business operation will be forced to shut down if the products without LCAs remain on the shelf. The results of LCAs will be translated into green ranking and made public to encourage a more sustainable consumption pattern on the market. the information disclosure and the rankings can help drive the competition for sustainable production.
Boundary conditions: To demonstrate an extreme case, the range of the products in this policy measure covers the full spectrum of products. All products sold on the market in the country are subject to prove that LCAs has been done in a report. This include retailers, importers, manufacturers, raw material suppliers, etc. The business entities are responsible for delivering the report while most of the data needs to be obtained from the upstream supply chain members, making all the supply chain members that is involved in any economic activity responsible for their products' environmental impact.
2) Mandatory LCAs and information disclosure - multistage implementation
External control: Identical to the first proposal, the second proposal requires the companies to perform mandatory LCAs for their products. Companies are required to demonstrate LCAs are performed and the LCAs results are made available for their products.
Boundary conditions: Scope of the policy subject is narrowed down by timeline in this proposed measure. Industrial sectors such as resource extraction and resource processing are prioritised because they have a relatively straightforward product supply chain comparing with products with a complex supply chain, such as cellphone manufacturers. Prioritising the upstream industries could help filling the data gap during LCAs for the further downstream sectors and achieve more sophisticated LCAs results.
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Cefic, European Chemical Industry Council,
an industrial association of chemical
industry in Europe.
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3) Voluntary LCAs, in cooperation with industrial associations
External control: In this proposal the LCAs are voluntary initiatives. The government works with industrial associations such as chemical industrial association to promote using LCAs tool among their members. No obligatory measures are required. Companies are encouraged to share their information among the association members or to the public. The data made public can be used as a reference for future regulatory controls. Comparing with the mandatory LCAs measure, there is less incentives in this measure to motivate industrial association members to adopt voluntary LCAs since such initiative involves human resources and cost. If the companies demonstrate that their products are low in environmental impact, the products are less of environmental concern so they have less possibilities of being subjected to certain rules. Companies have incentives of a more free market given that they prove their products to be low in environmental impacts.
Boundary conditions: Industrial associations chosen to be partners for LCAs promotion are identical to the logic for prioritisation process in proposal 2. The upstream industrial sectors are chosen first to fill in the data gap for the further downstream industrial sectors.
4) Voluntary LCAs with tax break as reward
External control: In the last external control proposal, the government will draft the guidelines and standards of LCAs for companies to adopt while performing LCAs. The companies voluntarily participate in this initiative and meet the requirements will be able to enjoy a tax break for the particular product. Tax break is used as an incentive to stimulate the motivation of companies to invest in the technical capacity and human resources.
Boundary conditions: The boundary condition in this case covers the companies that participate in the voluntary program. Companies that choose to take part in this voluntary LCAs program need to interact with the government.
2. Assessing the effectiveness of external controls
To assess how effective the four external control measures proposals are, Sabatier's framework is used in below. Sabatier's framework is built upon three pillars, 1) tractability of the problem; 2) ability of statute to structure implementation; 3) non-statutory variables affecting implementation. While effective governmental external controls can be seen in many examples, it is truly challenging to design an external control measure that will work in practice, especially when the incentives for the actors are sometimes not easily identified immediately. The four proposed measures are assessed based on the three criteria from Sabatier's framework.
1) Tractability of the problem
For all four proposals, availability for valid technical theory and technology are at a similar level since the LCAs tool is generally considered accessible. Although overall the actors in option 1 and 4 might face more challenges with some data gaps due to the wide coverage of industrial actors. Target actors in proposal 2 and 3 have a relatively less complex supply chain and are expected to encounter less obstacles due to the lack of information. The behaviours of the actors in all four proposals are expected to vary significantly. Since proposal 1 and 2 are obligatory, the interests of the companies are at stake. Stronger response from the industrial actors are expected to be seen.
Diversity of target group behaviour is expected to be higher when the companies are not obligated to perform LCAs. This is because companies have the choice to determine if it is desirable to invest in the resources to perform LCAs. In the first proposal where the scope of the measures cover the widest range, the target groups takes up the biggest proportion of the population. Extent of behavioural change required is larger for the mandatory LCAs measures, companies do not have an option to choose the degree of how compliant they want to be. Companies need to put in more efforts in order to survive on the market. For the voluntary measures, companies can take their time to assess the feasibility of the investment in LCAs or how much effort they want to put in. Therefore the extent of behavioural change is less than the mandatory measures in general.
2) Ability of statute to structure implementation
Among the four measures, adequate causal theory is best incorporated in the second and the third proposals. The issue of data gap in LCAs could be addressed by targeting the prioritised groups first. Mandatory LCAs can be less unambiguous with requirements and target group while the voluntary measures require less financial resources for implementation because they require less recruitment of human resources and investment to enforce the rules. However, voluntary LCAs with tax breaks also require financial resources to compensate for the reduction of tax revenue.
The integration within and among implementing institutions are considered to work the best for the mandatory measures since the government agencies are more structured and responsibilities distribution is less ambiguous. On the other hand, the structure and interactions between the actors implementing the measures in the voluntary options are considered less formal and more flexible, which might be an advantage that the mandatory proposals do not possess. In order for the results of LCAs to be reviewed and examined by outsiders, it is crucial for the measures to have a mechanism to open up its data and process to professionals or organisations from outside the institution.
Challenges are expected to be encountered in all measures but especially in the third option where the LCAs is voluntary. Information of the processes of the business operation is regarded as confidential for many business entities. For an outsider to have access to these information might cause concern for the companies because it might be considered as a threat to business.
3) Non-statutory variables affecting implementation
To assess how the non-statutory variables affect the implementation of the measures proposals, social economic and technological environment are reviewed. Here the socio-economic environment is considered not favouring the third option since it has less incentives for the industries to gain interests in the voluntary program. Although exceeding the regulatory requirement would help the industry maintain its reputation, the cost associated with the efforts do not guarantee the return of investment and the uncertainty is high. On the other hand, media attention and public support could put pressure on the industries to comply with the policy measures. It is expected that the mandatory measures would receive the most positive results from these pressure since the companies will only considered to be legitimate if they meet the requirements.
All measures share the same level of support from the sovereigns and the constituency groups except for the third measure where the LCAs is voluntary. With the cooperation between the industry and the government, major responsibility will be expected to fall on the industrial association. organisation within the industry is expected to take on the burden. The threshold for accountability of implementing officials the first and second proposals. Therefore the commitment and leadership skills are more demanding for these two proposals.
Conclusion
Overall speaking, the criteria under Sabatier's framework seem to favor proposal 2. With relatively specific target group and clearer implementation timeline, proposal 2 stands out as the strongest option. The introduction of LCAs into companies are extremely complex in this case since in reality the nature of industries vary from one another significantly. Therefore without setting the scope to cover specific targets, the results of the assessment would be overly generic and would not generate results that are representative enough. Various challenges are foreseeable in the introduction of the LCAs, however, with the specific target group in proposal 2, it is also expected that proposal 2 has the best conditions to resolve emerging problems.