By Akihisa Mori
Despite democratisation and foreign assistance, many East Asian nations are stuck in the mud in terms of developing domestic environmental governance. Their enthusiasm for regional environmental governance has collapsed due to the incapability of addressing the costs and revenue structures of major players, as well as the inability to overcome mutual distrust among neighbouring nations. Below, Akihisa Mori discusses how a global climate regime is providing an opportunity to get out of the mud, and highlights the challenges that still remain.
East Asian nations have undergone rapid industrialisation, urbanisation, and poverty reduction. Export-oriented industrialisation, coupled with deregulation of foreign direct investment, is often referred to as the key factor of rapid economic growth, as it has removed price distortion and utilised a comparative advantage in international trade. Political elites have supported this strategy to keep the legitimacy of authoritarian regimes, recognizing that this can ensure rapid economic growth, and material welfare of the majority of people.
Export-oriented industrialisation has both accelerated the exploitation of natural resources and caused serious environmental degradation. In response, increasing numbers of victims and groups have intensified protests against industrial plants and state infrastructure development projects. State and/or industrial plants are forced to give up their locations and/or to shut down the plants. States have gradually recognised that environmental degradation has become a bottleneck of economic growth.
Emergence of Domestic Environmental Institutions
The first state response was the top-down, administrative approach in implementing environmental policies. States developed authoritative government organizations, implemented environmental policies and decentralised management, and allocated budget to industrial pollution control and environmental infrastructure development, such as sewerage and solid waste disposal systems. They enacted environmental impact assessment (EIA) and allowed public participation in the process, although the range and extent of participation and information disclosure varies among nations.
Since then, East Asian nations have swung back and forth in developing domestic environmental institutions.1 South Korea adopted a participatory approach in creating a national sustainable development plan, but reverted to the top-down approach in creating a low-carbon, green growth strategy. Thailand banned logging and promoted reforestation to protect forests, but industrial reforestation caused serious land conflicts with indigenous people who had traditional land entitlement. The Thai government’s disregard for the people’s voice in the EIA led to the administrative court’s judgment on the suspension of the location of key industrial plants, but it hesitated to implement stringent industrial pollution control policies. The Chinese national government has gradually implemented stringent environmental policies, but local governments tend to ignore them to pursue economic growth in order to obtain promotion in the governmental and party hierarchy, and/or to gain from their own profits. While the national environmental ministry mobilises people and the media as watchdogs, the state does not permit any grassroots environmental protests and movements.
Export-oriented industrialisation has an indirect effect on the development of environmental institutions. It relies heavily on cheap labour and foreign direct investment that the host country states provide a variety of privileges to attract. Benefits are unevenly shared, while costs are unevenly distributed. This can widen the income gap between executives and workers, between large and small firms, between urban and rural areas, and among regions, unless the state intentionally implements distributional policies. This can bring about social divide within a nation, making it difficult for people both to share a generalised interest and to unite to realise their interests. In the democratisation process, environmental rights are recognised as part of human rights, a right that should be obtained and protected, but it is no longer perceived as a generalisable interest and has lost appeal to a wide range of people in a ‘divided’ society. Consequently, business and political elites perceive less pressure from social and environmental groups. All of these factors cause East Asian nations to be stuck in the mud in terms of developing environmental institutions.
Declining Influence of International Assistance
At the initial stage of developing environmental institutions, international assistance provided the financial and intellectual capital that nations needed to take countermeasures against both environmental degradation and protests. International donors funded pollution control, cleaner production and environmental infrastructure projects to reduce pollution, and induced East Asian nations to implement EIA acts so that their assisted projects would not cause environmental disruption and social disputes. In the process, several nations such as China learned to develop effective environmental policies and innovation capacities by themselves.
As East Asian nations grew to obtain a variety of financial resources, they declined to receive any international assistance that required radical policy reform, such as forest sector reform and water privatisation. In response, international donors shifted focus toward market-based solutions and street level assistance. Such assistance goes beyond demonstration only when the private sector and/or local people perceive short-term profits: they do not invest in technologies that require high initial costs or long-term payback, even if they recognise environmental benefits. Community-based environmental management, if proven effective on the assisted project, is seldom diffused widely unless the host government develops an institutional capacity to support it.
Absence of Regional Environmental Governance
Economic and ecological crisis in the late 1990s motivated East Asian nations to establish regional initiatives and frameworks. The 1997 financial crisis in Thailand was spread over East Asia, bringing South Korea and Indonesia into economic and political turbulence. Japan and South Korea increasingly suffered from transboundary acid rain and marine pollution, ASEAN member states began to suffer from haze caused by forest and land fires in 1997-8. Transboundary trade of end-of-use products increased rapidly, while improper disposal and recycling at the importing nations cause severe pollution.
In response, regional environmental initiatives and frameworks were proposed. However, these were purely environmentally focussed, without any linkage with trade regimes that pursued a levelling of the playing field among nations. This is in sharp contrast with Europe and North America, where the primary drivers of regional environmental protection are concerns about the differences in environmental standards affecting national competitiveness and market access.
In reality, regional arrangements cannot break through the prevailing principles and political structures of East Asian nations. China aims to thwart Japan’s power and to take over leadership in East Asia, and South Korea is reluctant to accept Japan’s leadership in environmental politics in the region. ASEAN and China emphasise principles of sovereignty, non-intervention and non-interference to refute legally binding commitments. This results in many unilateral, bilateral and regional initiatives and frameworks; with such frameworks overlapping on the one hand, and a reliance on voluntary cooperation, non-binding agreements, and weak institutional infrastructure on the other.
These regional arrangements do not work well for the nations concerned, who rarely share similar interpretations on the underlying cause of the problem, or the procedures for solving it. China subscribes to the view that acid rain deposition in Japan mainly comes from volcanoes in Japan, and bears little responsibility. Malaysia and Singapore attribute the cause of haze to land and forest fires in Indonesia, while Indonesia asserts that land and forest fire is caused by poverty, corruption, land rights conflicts, and illegal logging, some of which are caused by Malaysian and Singaporean companies. These inconsistent interpretations, coupled with their locations, enable China and Indonesia to exercise a de facto veto power to refuse in-depth international joint investigation. Despite Japan’s bulk amounts of assistance for industrial pollution control, China refuses to recognise the link between Japan’s assistance and acid rain management. ASEAN’s offer on smaller, ineffective actions has not encouraged Indonesia to ratify any pact.
These inactions on the part of China and Indonesia in part cater to the emitters. There are small numbers of large emitters that have political influence, and a large number of small and heterogeneous ones that require high compliance costs. While Japanese environmental assistance allowed the economic and environmental gains of industrial pollution control measures to benefit large emitters, it could not share its knowledge and technologies, thus could not change the perceived costs and revenue of small and medium size emitters that collectively cause serious pollution.
As a result, East Asian nations fail to evolve regional initiatives and frameworks into regional environmental regimes that have binding agreements and a strong institutional infrastructure. Widening social divide encourages states to create conflicts with neighbouring nations in order to shift people’s concerns away from domestic to foreign affairs. Each nation pursues its own economic and financial stability without reliance on a regional arrangement once the immediate crises disappears. This shift is especially apparent in South Korea, a nation that abandons regional approaches to conclude bilateral free trade agreements (FTA) with a number of nations. ASEAN member states spur regional economic integration while setting environmental challenges aside. These shifts miss opportunities for efficient reduction of regional carbon emissions through the tripartite FTA among China, Korea and Japan, or the Trans-Pacific Partnership (TPP), and by the creation of East Asian carbon markets, as discussed in Environmental Governance for Sustainable Development: An East Asian Perspective.2
Global Climate Regime Helps Break the Deadlock
A global climate regime has helped East Asian nations to get out of the above deadlock in two ways. First, it has brought an influential transnational environmental norm into the region. This has introduced stronger pressure for nations to commit to emission reductions, while allowing them to reflect their national interests in the multilateral negotiation process and in the nationally appropriate mitigation actions (NAMA). Singapore has attempted to shift the understanding of the haze problem by strategically linking climate change and loss of biodiversity with Indonesian forest fires and by appealing to the UN General Assembly.
Second, a global climate regime can and/or has changed the interests of major players, and thus offers them an opportunity to recognise the need for more fundamental solutions.
Clean Development Mechanism (CDM) has provided a variety of gains to China, and to a lesser extent Malaysia and Indonesia. It enables them to obtain advanced environmental technologies, to gain large amounts of windfall financial benefits, and to reduce local air and water pollution. Coupled with the global hike of energy prices in the mid-2000s, they have come to recognise that energy saving and renewable energy provides larger profits in the long run. In the process, South Korea and China refocus environmental challenges as economic opportunities. South Korea initiated the rhetoric of ‘low carbon, green growth’ to place climate challenges as the core target zone for investment and growth. The South Korean government encourages private companies to invest on such environmental technologies as wind turbines, photovoltaic technology and membrane filtration for water purification, and has begun to export them though foreign aid and export finance. China embraced the rhetoric of ‘low carbon development’ to attract foreign companies to obtain the latest low-carbon and/or energy efficient technologies, and to foster domestic industries to produce them at an affordable price to them.
Multilateral negotiation under the UNFCCC opened the window for forest groups to propose the Reducing Emissions from Deforestation and Forest Degradation in developing countries (REDD) as a core agenda. In response, the United Nations set up the REDD programme to provide funds to those partner countries whose national program was approved, such as Indonesia, Vietnam, the Philippines and Cambodia. This scheme has great potential to change the perceived costs and revenues of major emitters, in that major emitters will be paid in exchange for stopping forest degradation. This may offer an opportunity for Indonesia, Singapore and Malaysia to find a common interest to reduce forest fire and haze.
A variety of international environmental certifications, such as ISO 14001, energy efficiency, standard labelling, and forest certification have been adopted in many East Asian nations, and have changed the behaviours of exporting companies and industrial estates that harbour exporting industries. But these instruments are voluntary in nature. State and domestic industries only adopt such behaviours if they perceive clear benefits.
There remain many challenges in sharing the refocus of environmental issues as economic opportunities, to make the REDD and REDD plus work for reducing both greenhouse gas emissions and land and forest fires, and to capitalize on this refocus to change the current course of development that relies on dirty and cheap labour-dependent export practices toward more sustainable ones. China still suffers from severe air pollution, and it is suspected it will cause transboundary air pollution in Japan by 2013. Thailand has hesitated to implement stringent environmental policies, because accelerated development of infrastructure and industrial estates in neighbouring nations such as Laos and Myanmar signify increasing domestic demand. Singapore and Malaysia suffer the worst haze at present, while the Indonesian government refuses to investigate the root cause of the problem.
Further developments of national, regional and global institutional arrangements are urged for East Asian nations to address the root causes of such issues, and to change the conventional course of economic development toward inclusive, equitable and sustainable development.
About the Author
Akihisa Mori is an Associate Professor of the Graduate School of Global Environmental Studies, Kyoto University. He is the author of Environmental Aid (Yuhikaku 2009 in Japanese, translated in Korean and published at the Institute for the Environment and Civilization, 2012) and the editor of Environmental policy in East Asia (Showado 2012 in Japanese). He has served as Director and Secretary General of the East Asian Association of Environmental and Resource Economics since its establishment in 2010.
References
1. Mori, A. (ed.), Democratization, Decentralization and Environmental Governance in Asia (Kyoto University Press, March 2012).
2. Mori, A. (ed.), Environmental Governance for Sustainable Development: An East Asian Perspective (United Nations Press, February 2013).
