27 September 1995 - 30 September 1995

Business, Government and the Environment

Our alternate-year conference in Canada took us to Alberta, into the Rocky Mountains; and it was apt, for discussions focused upon the environment, that our sense of the natural heritage should have been heightened both by the marvellous setting of Lake Louise and by a stimulating field-trip on the way back to Calgary at the conference’s close.

We recognised early on that at the heart of the debate lay two major questions: first, how to build into decision-making due account of all relevant values; second, how to secure adequate public acceptance of decisions so made. The latter issue came to bulk no less large than the former in our discussions. We heard opinion and evidence that environmental issues might not now rate at the top of priorities among our publics, especially some segments of the young; but it was at least questionable - even if such concerns as unemployment were ranked higher - whether publics in general really accepted that environmental concerns had to entail trade-offs with economic goods. The environmental issues were increasingly complex as the agenda moved on from first-generation “smoke-stack” settings, and indeed several participants urged that trade-off was often avoidable - that with imagination and resolve many if not most business/environment problems could be tackled in “win-win” ways bringing benefit in both dimensions, especially in the longer run; technological advance could often agreeably confound both gloomy extrapolation and “no-can-do” disclaimers.

We did however accept that “win-win” could not be achieved everywhere, not least because businesses had to survive the short run; and that risk which could rarely be reduced to zero had to be balanced against cost and its consequences. Trade-off was at the core of living in the real world, and adequate communication ought to be able to persuade publics of the need for it. Publics often needed just to be shown reasonable improvement, not perfect solutions, and to be convinced (albeit in terms more accessible than these) that decisions allowed for time - discount assumptions dealing fairly with future generations.

There was, we fell sure, no neat model of environmentally-relevant decision-making that could objectively capture all the factors and values external to business’s own evaluation models; values were often rooted in fundamental ideologies, and scarcely capable of measurement. The best route towards consensus or acceptance probably lay in process - in patterns of dialogue that identified concerns, and gave their proponents a sense of being heard, early in the decision-making pattern.

Who were to be the participants in dialogue? Business, government, regulators, customers, scientists, so we heard; but awkward issues arose about identification, credibility and legitimacy. The role of government was in principle both extensive and central. Governments should be the organisers of process, the prime actors in the international dimension, the balancers, the setters of goals and priorities, indeed the ultimate stewards and arbiters of values on behalf of the community. But we heard doubt expressed about whether governments currently did enough early enough to inform, to organise dialogue and to persuade; and still more doubt about whether governments were generally believed and trusted, especially in environmental matters - even where they were inter-departmentally coherent, they were too often perceived as just another actor with their own agendas and partialities, rather than as society’s elected voice. This perception (which we noted with an unease reaching farther than just the conference’s particular field) was often partnered by a widespread sense that public concerns were more truly represented by non-governmental pressure groups. That too left a certain disquiet; while we recognised the broad value of organisations which alerted society to and raised awareness of environmental values, and recognised also that environmental NGOs anyway varied widely in purpose and attitude, there were questions about responsibility, accountability and motivation. The performance of Greenpeace over the disposal of the North Sea Brent Spar oil-rig attracted diverse comment, with some participants noting the general temptations upon pressure groups - not least for fund-raising reasons - to dramatise, over-simplify and demonise. Whatever the merits, however, the existence of vocal self-starting groups was a necessary aspect of healthy civil society, and a fact of life for business and governments.

All these considerations underscored the value of timely dialogue and transparency to underpin decision-making, though it was unrealistic to expect that consensus could always be reached and cost-risk bargains durably signed up to by everyone interested. Sound science often had an important part to play. Scientists had no unique claim to objectivity - as their customary presence on every side of almost any environmental argument showed - nor could they establish tidy and lasting certainties (the quest for which was often a recipe, deliberately or not, for delay); but they could help to illuminate real options and degrees of risk, and sometimes to narrow divergence. One of Government’s responsibilities should be to nurture the scientific contribution, especially as it bore upon health.

As we turned to discussion of what instruments might best serve to inject into business decision-making the factors and values not naturally present in commercial calculations we heard spirited argument that the widest possible extension of private-property rights, and so of focused concern to preserve assets, was a concept more powerful and more widely applicable than received wisdom currently acknowledged. Beyond this, we touched on options for the use of taxation - workable in some settings, no doubt, but apt to generate effects not always fitting well with the wide variety of practical circumstances, and also to mix revenue-raising aims uncomfortably with other purposes. Permits, vouchers or fiscally-neutral levy-and-grant systems - all these as rationing instruments where the realistic need was to limit pollution or other damage rather than expunge it entirely - could be useful, though instinctive public distaste for “selling the right to pollute” then had to be managed. We heard of the increasing use in some North American municipalities of sewerage or waste-disposal charges directly related to the volume of burden placed upon services. Voluntary restraint agreements found few friends in our discussion; they lacked reliability, especially among smaller businesses - and, often, municipalities - where environmental problems might be most severe. Widespread dependence on tort litigation, too, was viewed as having sharp limitations, such as clumsiness and long time-lags.

Perhaps surprisingly, direct regulation was not the target of generalised criticism, provided that it was well designed (a host of issues, naturally, embraced in that proviso). Regulation could be more precisely targeted than most other instruments, and it carried a presumption of equity as between one business and another. There remained however significant qualifications. Amid shifting technology, scientific uncertainty and changing circumstances particular regulations could quickly prove too rigid, especially if zeal for comprehensive exactitude led to very elaborate specification, burdensome administratively to small businesses. Flexibility and the stability which industrial planning and investment needed were inevitably in tension, and bureaucratic discretion to ease this tension carried risks of its own; transparency, accountability, external scrutiny of inspectors and regulators, and feed-back monitoring of the real effects of regulation were all needed in a balanced régime.

We noted three further points about experience of regulation. First, there was much to be said for expressing it, wherever possible, in terms of output rather than input - of toxicity discharge, say, rather than use of specified materials or technologies. Second, the sensible design of regulation was inescapably complicated further by the fact that uniform prescription might have very non-uniform impact as between one setting and another - the start-line for measures against air pollution was not the same in Wyoming as in Los Angeles. Third - and related to the second - there was a strong case for environmental subsidiarity, for pushing decisions to the most local level at which their impacts could reasonably be weighed: if District A then chose to impose on business more costly requirements than did District B, the downside effects on business location and jobs might reflect legitimate local choice.

Much could often be achieved simply by the efficient and timely dissemination, whether by government or industry or even within firms, of proven good practice. Businesses should recognise - and in many segments increasingly were recognising - that environmental concerns (like health and safety, and business ethics) were integral to management and not add-ons or the affair of some separate cell; they were, if not objectives in a direct sense, among the key shapers of the context of business - and for that matter, of the context of all government departments, not just Departments of the Environment. Sustainable development, even where the concrete significance of its integration into business strategies was not immediately evident, merited consideration as a regular component of goal-statements.

We were conscious, amid time limitations, that our debate had been oriented essentially to the conditions and possibilities of the developed world. Less wealthy countries mostly had to cope with different starting- points, less awareness of environmental concerns, less NGO-style domestic impetus towards tackling them and relatively more severe economic trade-off problems in attempting to replicate the norms and policies of richer countries whose actions, present and past, were anyway the prime global source of environmental problems.

We reverted, in our final stocktaking, to the key importance of transparency, timely dialogue and effective communication - in all of which business as well as government had an active part to play. Rationality of decision-making was hard enough to attain amid complexity and disparate values; but even its attainment could win only half the battle. Rational decisions lacking a minimum of public understanding and acceptance were failed decisions. The public could well be brought - especially if credible process was established - to understand problems, trade-offs and the realities of cost touching their purses; but no participant suggested that either the scale of effort or the design of process was yet generally adequate to achieve this dependably.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression.

Chairman: The Hon Allan Blakeney, PC, OC, QC
Formerly Premier of Saskatchewan


Professor Graham Ashworth, CBE, DL
Chairman, Going For Green
Mrs Anne Burdus
Director, Argyll Group pic, Next pic
Mr Charles Henderson, CB
Deputy Secretary, Department of Trade and Industry
Ms Bronwen Maddox
Financial Times; Conference Rapporteur
Mr Derek Norman
Director of Environmental Affairs, Pilkington pic
Mr Derek Osborn, CB
Director-General Environmental Protection, Department of Environment
Mr Roderick Paul
Lately Chief Executive, Severn-Trent Water
Mr David Smith
Proprietor, DGS Associates
Professor William Turmeau, CBE, FRSE
Chairman, Scottish Environment Protection Agency
Mr Robert Worcester
Chairman, Market and Opinion Research International

Mr R C Basken
Executive Vice-President, Communications, Energy and Paperworkers Union
Mr Mel Cappe
Deputy Minister, Environment Canada
Professor Don Dewees
Professor of Law and Economics, University of Toronto
Mr Richard Dicerni
Deputy Minister of Education and Training, Ontario

Grand Chief Phillip Fontaine
Assembly of Manitoba Chiefs
Mr John P Jarrell
Director, Environment and Safety, Cameco
Mr James Leslie
Senior Vice-President, Sustainable Development, TransAlta Corporation
Mr Douglas McArthur
Deputy Minister to the Premier of British Columbia
Mr John D McNeil
Chairman and CEO, Sun Life Assurance Company of Canada
Dr Tim Padmore
President, Impax Policy Services International
Ms Ann Park
Director, Economic Development Policy, Department of Finance Canada
Professor Peter H Pearse
Professor of Forestry, University of British Columbia
Mr Grant Reuber, OC, FRSC
Chairman, Canada Deposit Insurance Corporation
Mr Ronald S Ritchie

Chairman and CEO, Futureline Communications Co Ltd
Mr R J Routs
Vice-President Manufacturing and Distribution, Shell Canada Ltd
Mr Henry Swain
Deputy Minister, Industry and Science Canada
Mr David Tones
Member, IWA-Canada National Executive Board
Mr W M Vrooman
Vice-President Environment, Avenor Inc

Monsieur Robert Lion
Founder and President, Energy 21

Herr Peter Mencke-Glückert
Chairman, Commission for the Environment, Association for Middle and Small Industries

The Hon Richard Benedick
President, Committee of the National Institute for the Environment
Mr Ralph W Benson
Executive Vice-President, The Trust for Public Land
Dr Kathleen B Cooper
Chief Economist, Exxon Corporation
Professor James P Lassoie
Director, Center for the Environment, Cornell University
Professor Bruce R Lippke
Professor, College of Forest Resources, University of Washington, Seattle
Dr Rudolph A Oswald
Director, Economic Research, AFL-CIO
Dr Lynn Scarlett
Vice-President of Research, Reason Foundation, Los Angeles
Mr Fred L Smith Jr
Founder and President, Competitive Enterprise Institute, Washington DC