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Business Actors in Global Environmental Governance

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Divergence and Convergence of Automobile Fuel Economy Regulations

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Abstract

The purpose of this chapter is twofold: to show where the book stands in the discipline of the political science, and to demonstrate how it would advance the study of business actors in global environmental governance. To begin with, this chapter firstly classifies existent literatures on business actors approach in the discipline of global environmental governance into following four categories: business self-regulations, public-private partnerships, non-state market driven governance and business conflict school . Second, based on the first point, a constructivist perspective on business actors and environmental governance is introduced. Finally, given the insights of the constructivist theory, it explains how the case of automobile industry would add new insights on extant approaches.

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Notes

  1. 1.

    Liberal institutionalist position associates with so-called ‘Neo-Liberal Institutionalism’ in International Relations. The core assumption of the theory is placed on the role of international institutions in international politics. By drawing upon the Prisoner’s Dilemma in game theory, it argues that the key to solve the Dilemma is to convince and shift the perception of the other parties that it is possible to gain mutual benefits achieved by long term cooperation, rather than the imaginary benefits that could be gained by the act of Defection. To put simply, it is needed that Prisoner’s Dilemma to be played over time. To ensure the game to be played over time is to establish international regimes. Regimes facilitate cooperation because for example, they do change patterns of transaction costs and provide information to participants, so that uncertainty is reduced. Thus regimes facilitate cooperation because they disseminate information, monitor behaviour and therefore help to prevent cheating. Moreover, regimes facilitate cooperation among states because they: facilitate issue inter-linkage; increase number of interaction; help states to find partners to cooperate because regimes allow reputation to be developed and this influence states’ future potential to do so (Keohane and Axelrod 1985).

  2. 2.

    Regimes refers to a set of explicit of implicit “principles, norms, and decision making procedures around which actor expectations converge in a given issue-area” (Krasner 1983).

  3. 3.

    Earth system transformation is marked by “persistent uncertainty regarding the causes of global environmental change, its impacts, the interlinkage of various causes and response options, and the effects of possible response options….Uncertainty hence poses particular governance challenges. It requires governance to be stable over decades and centuries to withstand sudden changes of earth system parameters (or changes in out knowledge about these parameters), but also to be flexible enough to adapt to changes within the larger stable framework. Governance must be oriented towards the long term, but must also provide solutions for the near future” (Biermann 2007, pp. 329–330).

  4. 4.

    The UNCTC was established in 1972 as the focal point, for all matters related to transnational corporations and foreign direct investment within the United Nations system. In 1993, the UNCTC was transferred to the Division on Investment, Technology and Enterprise Development of the United Nations Conference on Trade and Development United Nations Conference on Trade and Development (UNCTAD) (UNCTAD) in Geneva.

  5. 5.

    WBCSD was originally established in 1990 as Business Council for Sustainable Development among 48 business leaders to represent the voice of business at the 1992 Earth Summit in Rio. The WBCSD was formed in 1995 in order to “galvanize the global business community to create a sustainable future for business, society and the environment” (WBCSD n.d.).

  6. 6.

    BASD is a joint initiative between WBCSD and International Chamber of Commerce in order to form a “comprehensive network of business organizations that have come together under one banner in the interests of sustainable development” (BASD n.d).

  7. 7.

    As applied in the case of climate change politics, there are several evidences that support business self-regulations. These supports are driven by the perceptions that “over the long term the world will have to deal with climate change, so their climate-friendly investments will pay off” (Bang et al. 2005, p. 292). Firstly, the Global Climate Coalition (GCC), which exercised strong anti-active lobbying efforts to block any international regulations of GHGs emissions during 1990s, was dismissed in early 2002. By 1997, with the growing scientific and public consensus regarding the high risks of climate change issue, a number of GCC supporters reconsidered the negative PR implications of their involvement in the group. Consequently, with the withdrawn by the BP, a numbers of major companies abandoned GCC such as American Electric Power, Dupont, Shell, Ford, Daimler Chrysler, Texaco and General Mortars (Source Watch n.d.). Secondly, instead of abandoning the GCC, some of these business actors such as BP and Shell, formed a pro-active environmental coalition called the ‘Partnership for Climate Action’, which aims to reduce their aggregate emissions by 15 percent from 1990 levels by 2010 using market-based mechanisms, such as by developing an internal carbon trading scheme (Bang et al. 2005, pp. 291–292). Thirdly, the ‘Chicago Climate Exchange Chicago Climate Exchange’ (CCX, for short) is established in June 2001. The CCX is a ‘greenhouse gas emission registry, reduction and trading system for all six greenhouse gasses’ where ‘members make voluntary but legally binding commitment to reduce greenhouse gas emissions’. The member of CCX includes such as Ford, DuPont, and American Electric Power. It sets the goal for all members to reduce direct emissions of 4 % below a baseline period of 1998–2001, by the end of December 2006 (CCX n.d.). Fourthly, some oil companies such as BP and Shell have begun to invest in solar energy. In the case of Shell, it established the Shell International Renewables in 1998, and invested $500 million over five years in renewable energy (Levy 2005, p. 84).

  8. 8.

    ‘Rationalists’ refers to those who adopted so-called neo-realism and/or neo-liberalism, those of which emphasize the importance of international system and treat the interest of states as given.

  9. 9.

    The rise of Constructivism is sometimes referred as ‘the middle way’ between Rationalism (a theory of International Relations that adopted positivist epistemology) and Reflectivism (other theories that reject positivism, including critical theory and postmodernism). Constructivism is also labeled as ‘new orthodoxy’, as it offers new ontological perspective that is different from Neo-Realism and Neo-Liberal Institutionalism .

  10. 10.

    Ozone depletion is an issue that the total volume of the ozone layer is destroyed by man-made ozone-depleting substances (ODS), such as halocarbon Chlorofluorocarbon (CFC).

  11. 11.

    The first mover’s advantage or, Porter’s hypothesis, claims that any companies would gain the advantage by occupying market segment.

  12. 12.

    Alternative Fluorocarbons Environmental Acceptability Study in 1987.

  13. 13.

    Program for Alternative Fluorocarbon Toxicology Testing in 1988.

  14. 14.

    European companies were the biggest producer of CFC in 1986, that produced 48 % of the world share compare to the US which produced 28 %.

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  1. Department of International Relations, Faculty of Foreign Studies, Kyoto Sangyo University, Kyoto, Japan

    Masahiko Iguchi

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Iguchi, M. (2015). Business Actors in Global Environmental Governance. In: Divergence and Convergence of Automobile Fuel Economy Regulations. Springer, Cham. https://doi.org/10.1007/978-3-319-17500-3_2

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