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‘The rise to dominance of neo-liberal policies is a significant constraint on efforts to achieve sustainability in international environmental governance’

By theadacke May 11, 2014 4099 Words
TMA DU311 05
‘The rise to dominance of neo-liberal policies is a significant constraint on efforts to achieve sustainability in international environmental governance’

Environmental governance can be identified through different policies and legislations which are established in effort to manage and control certain practices affecting the environment. The objectives of these controls main focus are to achieve sustainability with regard to nature, people as well as the economy. However, maintaining sustainability for all three can prove to be a difficult task, especially due to the current political influence of neo-liberalism which is dominating a significant proportion of countries worldwide. The impact of this can be argued as achieving economical sustainability; an opinion of those who benefit from the system. Other important aspects including people’s livelihoods and well-being as well as nature it-self can suffer as a consequence of the profit driven society which neo-liberalism has produced. By looking at two environmental issues; ‘food and agriculture’ and ‘hazardous waste’, and the political, social and environmental relationships within them will help to assess whether the impact of neo-liberal policies has benefited, or causing significant constraint on international environmental governance achieving sustainability. The rise of neo-liberalism

‘Neo-liberalism’ is a political form in which the ‘market system’ plays a prominent role in society as opposed to ‘structuralism’ where the control and accountability lies with the ‘state’. The dominance of markets allows countries down to individuals to openly trade in a profit driven, competitive environment. Followers would argue as this being the driving force of a rising economy due to the entrepreneurial aspect with which it is associated. However, it is also blamed as a major cause of problems, in particularly; increasing inequalities and large- scale environmental pressures. Neo-liberalism (or liberal capitalism) has been the political destination by the governments of the industrialised North as well as increasing Southern countries since the 1980’s who consider it as ‘leading to the desired result of modernisation’. The philosopher Karl Marx described the basis of the neo- liberal system as “who owns the means of production have the power to appropriate surplus, whereas those do not own means of production have to sell their labour power (Thomas, p.45, 2000). This emphasises the gap between the rich and the poor, removing any chance of an equal society (Thomas, p.42, p.43, 2000). The success of neo- liberalism can be analysed through the different economic structures adopted by governments. The basis of these structures began with the ‘Bretton Woods era’; an economic agreement at a conference in Bretton Woods, 1944 where industrialised nations made agreements for a financial governance system, favouring state intervention in domestic economies at the same time as free international trade. This was achieved through the UN charter giving all nations sovereign status to govern themselves, allowing for the control of exchange rates to manage the international economy. The International Monetary fund (IMF) (now known as The World Bank) and the International Bank for Reconstruction and Development (IBRD) were both established from the conference. The IMF was empowered to manage the fixed exchange rates by giving loans to poor countries to keep the economies stable, whilst the IBRD would invest in developing and war stricken countries. As all exchange rats were fixed to the American Dollar, this allowed the USA to become the dominant economic power which it is today (Sarre, p.369, p.370, p.371, 2009) The period that followed witnessed fast growth and greater prosperity resulting in inflations and recessions, in part because of the oil crisis leading up to the 1970’s. Governments agreed that economic governance had to change resulting in the end of the Bretton Woods era from the 1970’s onwards where the rolling back of the state allowed for the rise of free markets (neo-liberalism). This resulted in an acceleration in globalisation as developing countries became de- colonised and opened up to the global market system. The competiveness of the markets and pressure from the IMF made these countries reliant on export from commodities including agriculture and mining as they were forced to exploit their natural resources to keep up with market competition The period of ‘Fordism’ began in industrialised countries; a society of mass consumption as a result of the recent prosperity brought by neo- liberalism. This supported the success of increasing Multi National Companies (rather than national based companies) as they were able to keep up with the diversity of consumer demand (Sarre, p.373, p.374, 2009). Trading inequalities and increasing environmental degradation would follow as a result of this profit driven, consumer society now witnessed on a global scale and lacking authoritative state governance. Environmental Governance

‘Governance’ is; ‘an exercise of power and management to control collective problems, incorporating actors who are not restricted to formal institutions of government’ (Budds, p.128, 2009). This management operates on a range of levels encompassing the three sectors of society; state, market and civil society, from the international political system down to individual organisations and communities. The governing of these sectors is about ensuring that the different relations between them of; co-ordination (state), competition (market) and co-operation (civil-society) are properly balanced and that essential policies are followed. The dominance of neo- liberalism and the decreased role of the state meant that any power to regulate the market had been lost. As the purpose of the market is not directed towards reducing inequalities or addressing environmental concerns , this has led to an increase in purpose led forms of governance including; the United Nations and their framework as well as NGO’s who try to regulate any vulnerable sections of society and maintain environmental sustainability. The term ‘environmental governance’ is specific to controlling how the environment is managed and is deemed necessary by environmentalists due to the global dimension of problems involved. Environmental governance is a response to how environmentalists see these problems as being beyond the control of unilateral agreements and rather they should be dealt with through the multilateral sector involving the participation of non-state actors; private sector, non- profit and NGO’s. The UN has played a key role in tackling such issues which is demonstrated through the first global intergovernmental conference on the environment: the United Nations conference on the Human Environment, Stockholm 1972. Participants agreed on the importance and urgency of the problems of the human environment which led to the setup of the United Nations Environmental Programme (UNEP) established as a catalyst and coordinator in stimulating international environmental negotiations (Sarre, p.271, 2009). The success of environmental governance is largely dependent on the current form of economic governance; ‘neo- classical economics’ which principle is how the market will always be the best way of allocating resources to maximise the well- being of society. This identifies how markets can fail as costs can be externalised to non participants such as in the form of ‘negative externalities’ (a market transaction which reduces the well being of somebody who is neither the buyer nor seller) (Budds, p.103, 2009). Neo-classical economics can be applied to the environment and according to writer Steven Bernstein; ‘privately owned resources as a result of free markets are necessary to deal with environment issues because affluent people value the environment more highly and are therefore better placed to help improve standards’ (Sarre, p.383, 2009). This view is supported by the findings of the ‘Kuznets curve’ which shows how industrial pollution increases as GDP rises, but eventually lowers, supposedly as a result of a society desiring a cleaner environment (Mawdsley, p.76, 2009). The Earth Summit in Rio 1992 also adopted the idea by stating that ‘free markets are widely seen as compatible and necessary to environmental protection’ (Sarre, p.383, 2009). However many others are following the argument that the effects of neo-liberalism contribute to the weakness of environmental agreements and are a major cause of inequalities. Food and agriculture

To assess whether the rise of neo- liberalism has helped or hindered the application of environmental governance, it is necessary to look at specific examples of where these forms of governance have been applied. The networks and relationships connected to food and agriculture have been subject to changes over the way they have been governed, influenced by neo- liberalism. Firstly, the development of The World Trade Organisation which has been supported by the success of globalisation and the free market system has heavily influenced the trading of food between developed and developing countries. This has caused changes to the ways food is produced with regard to the use of heavy industry, as well as changes to the situation of small scale agricultural farmers facing competition from powerful multi- national companies. Secondly, whether or not the rise of ‘alternative food networks’ has been successful in bringing sustainability back into the production of food, as well as trying to eradicate some of the inequalities that are now associated with this multi- national industry. The networks of food and agriculture are not only vast, but are completely dependent on the relationship between society and nature. This incorporates different actors including farmers, distributers and consumers who are all dependent upon these networks being sustained as well as the biological and ecological functions of nature which is the basis for all food production. According to Guy Robinson, author of ‘Geographies of Agriculture’; “These networks are becoming increasingly unequal due to the force of industry, market led competition and monopolies of powerful companies” (Goodman, p.222, 2009). This is witnessed through the ‘Industrial Farming Paradigm’; a description for how the production of foods and agriculture commodities is predominantly through the use of mechanisation, synthetic chemicals (pesticides and herbicides), and fertilisers (Goodman, p.221, 2009). Robinson argues that this industry has grown as a result of neo-liberal policies forcing farmers into a competitive system with increasing economic forces. This is also having a devastating effect on environmental degradation including; soil erosion, loss of biodiversity, water pollution, as well as social implications involving large companies colonising areas of land which was the case for the peasants in the Talamanca region of Costa Rica (Goodman, p.234, 240, 2009). Another argument over inequalities is that of subsidies which are given to farmers by governments in order to support food production, as well as the agreements of tariffs which are charged at different rates depending on what type of food is being traded. The governance of this was taken on by The World Trade Organisation (WTO) in the 1990’s who took over from The General Agreement on Trade and Tariffs (GATT) which had been in operation since 1947. The main objectives of the WTO were to reduce subsidies in the EU and USA, whilst opening up the markets to multinational food corporations in developing countries to encourage multilateralism. Their formal objective was a concentration on sustainable development, whilst promoting ‘a positive influence in governing both economy and environment with fair competition, environmental, health and labour standards’. This international system of trading in food was believed to be advantageous for all countries as the reduction of subsidies in the EU and USA would enable developing countries to produce goods at the lowest possible price (Goodman, p.228, 2009).

Supermarket: effects of heavy industry.

The WTO was opposed by some farmers from developing countries who exposed the hypocrisy of subsidies by pointing out that developed countries are seen to subsidise their farmers with sums six times more than they give in aid to developing countries. The WTO trade talks in 2001 also discovered that developing countries were being undercut by wealthier companies (Goodman, p.229, 2009). According to the book ‘Why must we get the WTO out of agriculture’ this ‘leaves farmers subject to unfair competition from artificially cheap imports which are preferred by corporations who have economic and market power to influence public policy to buy cheap and sell for inflated profit’. As different countries are better at producing certain food products than others (referred to as ‘competitive average’) such as coffee, they are supposed to benefit from freer trade which is now implemented through the WTO. However, it is argued that these ‘comparative average’ excuses are distorted through subsidies, effects of market concentration and misguided government policy. This insinuates that despite the WTO claiming to be helping foreign trade by opening up the markets and reducing barriers such as tariffs, there is still a lot of unfairness felt by small- scale farmers who do not see any of the potential economic benefits from this free market structure (Rosset, 2006). As a result of this increasingly un-sustainable food industry, some farmers have come up with possible solutions which can be witnessed in the increasing market shares of ‘alternative food networks’. One example is ‘Fair Trade’; an initiative set up as an attempt for farmers to access the economic benefit and bringing greater equality in the way profits are distributed. The development of the ‘Organic Foods’ industry is another example which is categorised as an ‘ecocentric’ response; a solution which changes consumption patterns and resource allocation in the agricultural sector (Goodman, p.249, 2009). Organic food is now widely available with the global market growing at about twenty per cent per year since the 1990’s. One of the reasons why this farming system is thought to be so successful is due to the growth of the environmental movement which has gained more attention amongst certain groups of civil society in recent years, along with a greater disposable income from a more affluent economy. Organic food is therefore supported by the neo-liberal affects on society; however this leaves poor people to be restricted to more conventionally grown foods. Unfortunately the principles underlying organic food as an alternative and sustainable solution for the inequalities that the agricultural industry faces have become victim to the effects of market competition. Although started by a group of Californian farmers in the 1970’s, nowadays the ‘ecocentrism’ of organic farming has become mainstream as supermarkets including Sainsbury’s and giant superpower Tesco have now implemented their own organic range. The effect this has on small scale farmers is that they are again out powered by larger companies who are able to mass produce organic food, making it much more profitable for distributers to buy from them rather than the smaller companies. This happened when multi- national company Mars bought organic food purveyor Seeds of Change (Goodman, p.256, 2009). Due to the precise measures taken in the labelling of organic food means those large scale food corporations are able to access the information and food networks much to their benefit, allowing these companies to influence the standards for organic food. Although the organic food market is a response to the industrial farming paradigm, it has is now heavily entrenched by the same companies who have already taken over such a large proportion of the entire food industry. Hazardous Waste

The study of ‘Hazardous Waste’ is similar to food and agriculture as it is also largely affected by the forces of globalisation and trade between developed and developing counties, where inequalities, economics and politics play a role in shaping how this problem is governed. The term ‘waste’ refers to materials that are unwanted whereas ‘hazardous waste’ refers to liquids, solids or gases which are harmful to human health or the environment. One of the major contributors to hazardous waste is ‘e- waste’; either electrical such as refrigerators and other household appliances, or electronic waste including televisions, computers and mobile phones which are problematic due to the toxic chemicals and heavy metals that they contain. The main polluters of this are industrialised countries who produce over 300 million tonnes of hazardous waste per year (Brown, p.306, 2009).The problem of e- waste has significantly increased over the last couple of decades which is argued a result of a consumer driven society, leading to an increased market trading of these products. There are different forms of international legislation, most comprehensive being; ‘The Basel Convention on the control of transboundary movements of hazardous wastes and their disposal’. This is a form of governance that was initiated following the discovery of Africa and other developing countries being deposits of toxic wastes imported from abroad. Their objective is to “protect human health and the environment against the adverse effects of hazardous waste” by implementing controls over which countries should take waste (The Basel Convention, accessed July 2012). This success of Basel requires the cooperation of countries to ratify this agreement which unfortunately is not the case as the USA have signed the agreement but are yet to ratify it (Chapter 5-Basel, accessed 2012). Despite attempts at regulating the problem, e-waste is increasingly traded illegally from developed to developing countries. The causes of this are argued to be a problem of economics, as well as the non- application of legislation leading to socially irresponsible behaviour. March 2007 witnessed the launch of the UNEP in response to the scale that e-waste is growing with the EU producing 40 million tonnes in 2000. The worldwide figures for the production of electrical goods in 2006 were; 230 million computers, 1 billion mobile phones, and 45.5 million televisions. The figures estimated for the illegal exportation of this waste is 10% of all maritime freight.The question remains as to why; despite the increased legal restrictions including Basel such a large amount of illegal trading is still occurring? Part of the problem is considered to be the classification process surrounding recyclables which is arguably being exploited as items are purposively miss- categorised so they can be shipped abroad. According to Greenpeace; 12 million tonnes of e-waste is sent to Asia every year which the majority of ends up being incinerated or buried rather than recycled (Bensebaa e al, 2011). A reason as to why there is so much e- waste being produced can be blamed on the concentrated section of the market which specifically deals with electronic production. As a result of such high levels of consumer demand for the electrical goods category, manufacturers are forced into a position of high levels of competitiveness where there is a constant race to grow and innovate. Firms have to therefore make every effort to maintain profit, leading them to act in an irresponsible manner concerning their attitude towards environmental legislations which they are expected to follow. Disposing of waste within the same country that the product is sold and used can prove costly compared to it being exported to a country displaying a more relaxed approach to environmental policy. This is seen in the cost of recycling a computer in the USA which is approximately $30, whereas in China it is only $2. With the USA being one of the biggest producers of e-waste, policy makers fear that implementing too tighter controls will result in companies moving abroad to a destination where they can continue to produce such large quantities of waste without it effecting their profits; a situation which allows ‘free rider’s’ to continue avoiding being forced to change their behaviours towards an environmentally sustainable capacity (Bensebaa e al, 2011).

Recycling worker in China

These arguments demonstrate that the need to maximise profit is the basic cause in preventing firms from dealing with the waste locally. However, there is also considerable profit to be on the receiving end, leaving an incentive for the developing countries to carry on accepting it. Legislation attempts adopting tougher environmental standards can be blamed as a reason as to why the problem is increasing at the rate it is doing so. For example; the EU legislation stipulates that countries dispose of waste as close to the source as possible, however as environmental standards increase, this makes it less possible for these countries to dispose of waste locally. Therefore, it can be argued that the increasing environmental movement, particularly from the recent surge of NGO’s has positively coincided with the increase in the trade of dumping in hazardous waste (Bensebaa e al, 2011). The mainly developing countries in parts of Asia and Africa on the receiving end of hazardous waste can earn substantial payments from accepting the dumping of this waste which they urgently need to help with their national economies. In Guiya, a province in China more than 100 000 people are employed in processing e- waste which is considered a huge financial advantage. Foreign debts such as those given from the IMF in previous years are also a reason for developing countries to try and make money at any opportunity available (Brown, p.306, 2009). With the apparent failure of attempting to govern the trading of hazardous waste, there are other ideas concerning alternative solutions to the problem. Enforcing the regulation of the ‘polluter- pays principle’ where companies are held directly responsible for the entire life span of the product that they manufacture and sell. This would take the consumer away from having to deal with product disposal and would hopefully bring environmental thinking back to the companies with the use of materials in the design, along with increasing the product life- span. Another solution would be for local negotiations to take place between companies, scientists and government agencies to establish a set of regulations consistent with the technologies available. This would enable countries to try and tackle the problem on an individual basis rather than trying to follow an international guideline which may be appropriate for one country but not for another, due to the technologies that are available . Conclusion

This essay has shown how the rise of neo-liberalism has brought an open market system, allowing markets to control and shape the economy, society as well as the environment. Its followers believe that the competitive trading element it brings is the best way of bringing maximum well-being, however many others would argue that neo- liberalism causes inequalities and environmental degradation. The issue of sustainability is questioned which has resulted in various environmental governance attempts for managing specific environmental issues becoming increasingly vulnerable from a combination of political, social and economic elements. The example of food and agriculture shows a situation where the effects of globalised trade has resulted in a market which is dominated multi-national companies who are able to keep up with the heavy force of industrialisation, leaving small- scale farmers to suffer. An attempt a regaining sustainability through organic food production has also been taken over and re- shaped when the profit potential has been recognised by larger companies. The case of hazardous waste shows how a saturated market area from high consumer demand has lead to a worldwide problem of prohibited waste being traded as a result of the need to maintain such a high level of profit, as well as substantial earning opportunities which can be gained. It is also apparent how efforts of governance along with the increased awareness of environmental problems can have a negative impact which seen in the tighter controls of waste causing higher levels of illegal trading. Despite the idea associated to neo-liberalism that the markets will never fail, it is quite obvious from these examples that the market has developed a society where the desire to economically grow dominates over concerns of inequality as well as the sustainability for people and the planet over profit. Words 3,812

Reference List:
Allen, T. And Thomas, A (2000) ‘Meanings and views of development’ in Poverty and Development into the 21st Century, Milton Keynes, The Open University/ Oxford, Oxford University Press. Bensebaa, F. Boudier, F. (2006) ‘Hazardous waste management and corporate social responsibility: Illegal trade of electronic and electrical waste’ [online] The Open University Library, accessed July 2012. Brown, W (2009) ‘Analysing international environmental agreements: ozone depletion, endangered species and hazardous waste’ in Aradau, C. Brown, W. Budds, J. (eds) Environmental issues and responses, Milton Keynes, The Open University. Budds, J. (2009) ‘Urbanisation: social and environmental inequalities in cities’ in Aradau, C. Brown, W. Budds, J. (eds) Environmental issues and responses, Milton Keynes, The Open University. Dawson, G. (2009) ‘Climate change: economic valuation and policy’ in Bromley Blowers, A. Humphreys, D. (eds) A Warming World, Milton Keynes, The Open University. Goodman, M (2009) ‘Rural Challenges: food and agriculture’ in Aradau, C. Brown, W. Budds, J. (eds) Environmental issues and responses, Milton Keynes, The Open University. Mawdsley, E. (2009) ‘Industrialisation, development and environmental degradation in India’ in Aradau, C. Brown, W. Budds, J. (eds) Environmental issues and responses, Milton Keynes, The Open University. Rosset, P. (2006) ‘Food is different: Why must we get the WTO out of agriculture’ [online] accessed July 2012 Sarre, P. (2009) ‘Governing the international economy: growth, inequality and environment’ in Aradau, C.

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