ESPM 169: Private Economic Actors in IEPOctober 28, 2003 - motivation: profit, protecting investments - simple model: corporations act when interests are threatened by environmental regulations - but: story can be more complex: corporate environmentalism - not always "the enemy" - often accept regulations when they realize opportunity costs of not accepting them are higher; some firms are even pro-active (personal interests cf. institutional constraints) - above all: want a predictable regulatory environment and maintain competitiveness in international markets - but: don't all walk to the beat of the same drum, cf. other sorts of actorsLevels of business involvement in IEP1. Getting firms to change their behavior; developing environmental service industry2. Controlling environmental behavior of MNCs: Pollution Haven Hypothesis3. Business involvement in IEP negotiations (trade associations)4. Developing private regulatory regimes - www.corpwatch.orgIndustry actors in CBD: primarily, the biotech industry1. Market Based Mechanisms in Environmental Regulation  getting industry to behave in sustainable ways without imposing undue costs Di Leva article: emissions trading schemes/ tradable quotas (fish - total catch allocated amongfishers, who can then catch or sell their quota), eco-labeling, taxes, eco-tourism incentives for waste minimization (Germany), alternative energy sales and royalties from bioprospecting: INBio (Costa Rica's National BD Institute) and Merck - Merck agreed to pay over $1m for access to screen INBio's biotic collection, agreeing that 50% of all royalites be used for conservation projects in Costa Rica (Di Leva)2. Multinationals - defining MNCs: vertical and horizontal integration; firms with large export markets also important - global spread: economic power: 7000 in 1970, 45,000 in 1995 - involved in 70% of world trade; more than 30% of this is intra-firm - sales by foreign affiliates outweigh total international trade - 300 firms account for one quarter of the world's productive assets - PHH - economic power translating into political power - "green" activities: Karliner's view of the Environmental Services Industry Mulitnationals - not the only problem - domestic firms may have lower standards3. Emergence in IEP - most important thing they do: lobby national governments - but have recently started playing more direct roles in IEP - Rio: Business Council on Sustainable Development2- technocratic, private, top-down approach to international regulation - various positions: need good science, support trade rules, combat environmental NOT social problems - cases: ozone, hazardous waste, climate change - regulatory capture cf. regulatory entrepreneurialism - firms: Shell, BP and emissions tradingWhat does involvement and influence depend on? - relationship with governments; regulations - nature of issue - industry structure, firm structure - shareholders4. Private Regulation Regimes ISO 14001, 14000 series and environmental management standards - environmental management scheme - ecolabelling and certification: wood products, tuna private environmental regulation depends on monitoring - 1st party (firms), 2nd party (industry association), 3rd party (NGOs)5. Private Economic Actors and the CBD: The Biotech Industry3 biosafety protocol also international food and agriculture, pharmaceutical regulations what biotechnology is: modification of existing organisms - genetic modification the most contentious type issues around CBD include the property rights around genetic resources (pharmaceuticals, especially) and the possible threat to biodiversity from GM seeds (agriculture) - note that these resources were free prior to CBD CBD set up as alternative to other organizations, thought to be more pro-industry - or less pro-BD… (WIPO, WTO, FAO) - key forum for conflict; argued that biotech industry in US key in blocking ratificationBiotech industry: sees itself as saving the world, protecting BDPublic, especially in poorer countries: sees unknown risks, economic control by large firms biotech firms located overwhelmingly in the NorthFirms most affected by CBD measures: firms engaged in bioprospecting (as opposed to R&D type firms or marketing firms)Industry structure: has been rapidly changing see Osgood - large pharmaceuticals, industrial agriculture firms - Monsanto, Novartis, Merck - small start-ups (often developing a single drug - ImClone) - face serious constraints - 1995: 1300 firms in US, 485 in Europe - recent round of mergers4- represented by trade associations: Biotechnology Industry Organization; Senior Advisory Group on Biotech (based in Brussels) seen as a highly innovative sector; firms viewed the CBD as "market-eroding"; bigger clout in US, therefore influenced policy process more strongly driven by IPRsRaustiala's argument: that firms in the US opposed the CBD owing to strict and litigious (judicial) enforcement of environmental regulations, as opposed to UK's more flexible, informal stance - impose fewer costs of adjustment on firms biosafety protocol: opposed - "must comply with international trade rules" - Miami Group strongly supported by industry - ultimately defeated - though not entirely: e.g. labeling likely to be vague, e.g. "may contain" - WTO may be forum for dispute resolution - optimistically: provides a framework - parts of industry claim governments lagging behind them still - but one dimension over international biotechnology struggles - industry moving towards targeting SD initiatives: "feed the world" - made representation at WSSD; battle continuing on many fronts - strong opposition to GM foods in Europe - dispute with US - genetic medicine (less