Regulating the polluters: markets and strategies for protecting the global environment

Regulating the polluters: markets and strategies for protecting the global environment Is concentrated business power bad for the environment? Alexander Ovodenko's Regulating the polluters bucks intuition by showing how, under certain conditions, oligopolies can in fact facilitate effective environmental protection at the international level. This carefully researched study makes a valuable contribution to the international political economy literature on environmental protection, a field whose increasing importance to global politics has not yet been matched by commensurate attention from International Relations (IR) scholarship. Ovodenko argues that the market structure of the industry producing an environmental harm shapes the nature of international regulatory agreements that states create to manage that harm. Both the concentration of producers and the elasticity of demand matter. When producers are oligopolistic and consumers have few options, companies are able to generate and diffuse the technological innovations required to satisfy environmental regulations, in part by passing costs along to consumers. International regulatory regimes will therefore be legally binding, integrated and standardized, as oligopolies will have incentives to ‘level the playing field’. In contrast, when producers are fragmented and consumers can pick and choose among them—or simply decide not to buy the products in question—producers will have little ability or incentive to generate and diffuse environmental technologies. They will therefore oppose ‘command and control’ style regulation and states will instead create non-binding obligations, disconnected international rules and divergent standards. Ovodenko shows how this market explanation of regime design applies across a range of environmental issues in a series of well-chosen, empirical comparisons. For example, states have sought to regulate ‘international’ greenhouse gases from maritime shipping and aviation—neither of which can be straightforwardly attributed to a single country—in specialized international organizations. But in the past regulation has moved faster for shipping than for airlines, a difference Ovodenko attributes to the highly competitive nature of the airline business. Customers can choose between a range of airlines, and will simply choose not to fly if prices are too high, while in international shipping, even if marginally more expensive, such circumstances matter little to purchase decisions. Other chapters exploit variation within a single issue area, showing how, even in the same treaty, regulation of ozone-depleting substances or mercury is highly legalized and centralized for industrial processes with a few large producers, but more voluntary and diffuse for more competitive industries. The chapters on aviation and shipping, ozone and mercury are particularly valuable empirical contributions because they address aspects of those regimes poorly represented in the IR literature. An important scope condition of the book is that it considers only cases in which some kind of international regulation has emerged. Given a decision to regulate, oligopolies can help create hard, centralized regimes. But, as Ovodenko notes, concentrated business power is a ‘double edged sword’, because it may also prevent states from regulating in the first place. The literature on business regulation contains countless examples of how powerful business interests are able to avoid or weaken regulation, or even undo existing regulation. Exploring negative cases, in which regulation is attempted but fails, or in which it is rolled back, would have perhaps created a more balanced interpretation of the role of oligopolistic business power in regulation. Moreover, though Ovodenko's theory explains why businesses may prefer certain kinds of international regimes over others, the book does not devote much attention to how certain preferences win out over others in domestic politics. Nor does it explore how negotiations between states are shaped by differential power. Such ‘two level game’ approaches, a standard international political economy framework, are assumed but not developed in Ovodenko's argument. Without considering such dynamics, it is difficult for Regulating the polluters to rebut plausible alternative or complementary explanations for some of the empirical examples raised in the book. For example, is the regulation of mercury for artisanal gold mining soft law because of the industry's market structure, or is it because such mining happens almost exclusively in poorer countries in sub-Saharan Africa? Are agricultural applications of ozone-depleting substances regulated less stringently than industrial ones because the industry is less concentrated, or is it instead because electoral institutions give farmers greater sway in domestic politics in key countries? Is regulation of aviation more difficult than regulation of shipping because the market structures are different, or because airlines and aircraft manufacturers matter a lot to big markets like the United States, which is able to resist regulation, while the shipping industry is dominated by smaller nations? As a theory-building book, Regulating the polluters remains valuable despite leaving the reader wondering what other factors may account for some of the empirical examples raised. Certainly it shows that students of international environmental politics must consider the structure of markets in order to understand how business interests may shape regulatory outcomes. In this way, Ovodenko provides an important theoretical argument to the growing literature on international regulation. * See Leanne Welham and Sophie Harman, Pili, pp. 458–59. © The Author(s) 2018. Published by Oxford University Press on behalf of The Royal Institute of International Affairs. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Affairs Oxford University Press

Regulating the polluters: markets and strategies for protecting the global environment

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Publisher
The Royal Institute of International Affairs
Copyright
© The Author(s) 2018. Published by Oxford University Press on behalf of The Royal Institute of International Affairs. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.
ISSN
0020-5850
eISSN
1468-2346
D.O.I.
10.1093/ia/iiy005
Publisher site
See Article on Publisher Site

Abstract

Is concentrated business power bad for the environment? Alexander Ovodenko's Regulating the polluters bucks intuition by showing how, under certain conditions, oligopolies can in fact facilitate effective environmental protection at the international level. This carefully researched study makes a valuable contribution to the international political economy literature on environmental protection, a field whose increasing importance to global politics has not yet been matched by commensurate attention from International Relations (IR) scholarship. Ovodenko argues that the market structure of the industry producing an environmental harm shapes the nature of international regulatory agreements that states create to manage that harm. Both the concentration of producers and the elasticity of demand matter. When producers are oligopolistic and consumers have few options, companies are able to generate and diffuse the technological innovations required to satisfy environmental regulations, in part by passing costs along to consumers. International regulatory regimes will therefore be legally binding, integrated and standardized, as oligopolies will have incentives to ‘level the playing field’. In contrast, when producers are fragmented and consumers can pick and choose among them—or simply decide not to buy the products in question—producers will have little ability or incentive to generate and diffuse environmental technologies. They will therefore oppose ‘command and control’ style regulation and states will instead create non-binding obligations, disconnected international rules and divergent standards. Ovodenko shows how this market explanation of regime design applies across a range of environmental issues in a series of well-chosen, empirical comparisons. For example, states have sought to regulate ‘international’ greenhouse gases from maritime shipping and aviation—neither of which can be straightforwardly attributed to a single country—in specialized international organizations. But in the past regulation has moved faster for shipping than for airlines, a difference Ovodenko attributes to the highly competitive nature of the airline business. Customers can choose between a range of airlines, and will simply choose not to fly if prices are too high, while in international shipping, even if marginally more expensive, such circumstances matter little to purchase decisions. Other chapters exploit variation within a single issue area, showing how, even in the same treaty, regulation of ozone-depleting substances or mercury is highly legalized and centralized for industrial processes with a few large producers, but more voluntary and diffuse for more competitive industries. The chapters on aviation and shipping, ozone and mercury are particularly valuable empirical contributions because they address aspects of those regimes poorly represented in the IR literature. An important scope condition of the book is that it considers only cases in which some kind of international regulation has emerged. Given a decision to regulate, oligopolies can help create hard, centralized regimes. But, as Ovodenko notes, concentrated business power is a ‘double edged sword’, because it may also prevent states from regulating in the first place. The literature on business regulation contains countless examples of how powerful business interests are able to avoid or weaken regulation, or even undo existing regulation. Exploring negative cases, in which regulation is attempted but fails, or in which it is rolled back, would have perhaps created a more balanced interpretation of the role of oligopolistic business power in regulation. Moreover, though Ovodenko's theory explains why businesses may prefer certain kinds of international regimes over others, the book does not devote much attention to how certain preferences win out over others in domestic politics. Nor does it explore how negotiations between states are shaped by differential power. Such ‘two level game’ approaches, a standard international political economy framework, are assumed but not developed in Ovodenko's argument. Without considering such dynamics, it is difficult for Regulating the polluters to rebut plausible alternative or complementary explanations for some of the empirical examples raised in the book. For example, is the regulation of mercury for artisanal gold mining soft law because of the industry's market structure, or is it because such mining happens almost exclusively in poorer countries in sub-Saharan Africa? Are agricultural applications of ozone-depleting substances regulated less stringently than industrial ones because the industry is less concentrated, or is it instead because electoral institutions give farmers greater sway in domestic politics in key countries? Is regulation of aviation more difficult than regulation of shipping because the market structures are different, or because airlines and aircraft manufacturers matter a lot to big markets like the United States, which is able to resist regulation, while the shipping industry is dominated by smaller nations? As a theory-building book, Regulating the polluters remains valuable despite leaving the reader wondering what other factors may account for some of the empirical examples raised. Certainly it shows that students of international environmental politics must consider the structure of markets in order to understand how business interests may shape regulatory outcomes. In this way, Ovodenko provides an important theoretical argument to the growing literature on international regulation. * See Leanne Welham and Sophie Harman, Pili, pp. 458–59. © The Author(s) 2018. Published by Oxford University Press on behalf of The Royal Institute of International Affairs. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com.

Journal

International AffairsOxford University Press

Published: Mar 1, 2018

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