The Organisation of Environmental Policy in Sweden. A Historical Perspective

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1 The Organisation of Environmental Policy in Sweden A Historical Perspective Måns Lönnroth report 6404 DECEMBER 2010

2 The Organisation of Environmental Policy in Sweden - A Historical Perspective Måns Lönnroth NATURVÅRDSVERKET

3 Orders Phone: + 46 (0) Fax: + 46 (0) Address: CM Gruppen AB, Box , SE Bromma, Sweden Internet: The Swedish Environmental Protection Agency Phone: +46 (0) Fax: +46 (0) Address: Naturvårdsverket, SE Stockholm, Sweden Internet: ISBN ISSN Naturvårdsverket 2010 Electronic publication Cover photo: SXC Language editing: Martin Naylor

4 Foreword Changes in environmental policy take time and are seldom a quick fix. Being one of the oldest environmental protection agencies in the world, we often receive questions about the priorities, driving forces and overall development of environmental policy. In 2009 the Swedish Environmental Protection Agency published an environmental history of Sweden, Use and Misuse of Nature s Resources. One of the authors, the historian Lars J. Lundgren, has also written a brief summary of the history of the last fifty years in Sweden s Environment Problems and Protection, , which will be published in As a complement to this, we asked an experienced policymaker, Måns Lönnroth, to give his account of the organisation of environmental policy in the public sector since the 1960s, and to reflect on the current situation. With a background in futures studies, and as an adviser to a former Prime Minister, State Secretary in the Ministry of the Environment, and later Director of Mistra, an independent environmental research foundation, Måns Lönnroth has had a personal involvement in policy development in this area. This essay reflects the opinions of the author, which are not necessarily shared by the Swedish Environmental Protection Agency. Stockholm, December 2010 Per Thege Director, International Secretariat Swedish Environmental Protection Agency 3

5 Contents FOREWORD 3 CONTENTS 4 SUMMARY 5 THE ORGANISATION OF SWEDISH ENVIRONMENTAL POLICY IN FORMATIVE CONDITIONS 9 FORMATIVE PHASES 11 TAKING STOCK OF THE ORGANISATION OF SWEDISH ENVIRONMENTAL POLICY 17 THE YEARS AHEAD 19 4

6 Summary Politics and policy is made real through organisation There is no policy without organisation and no public policy without legislation. Organisational charts and legal texts nevertheless tell us next to nothing about the reality of policy. This reality emerges only in the practical details of operations and legal practice, which in turn reflect the amount of public resources available, recruitment practices and professional competence, the quality of relations between key stakeholders and, last but not least, the overall relationship of this particular policy area to other policy areas on the political agenda. These practicalities, moreover, evolve over time as experience grows, as existing issues are addressed, as new issues emerge and old ones recede, and as political, social and economic conditions develop. The aim of this paper is to describe how the formal organisation of Swedish environmental policy, and of its implementation, has evolved. Two themes are recurrent and intertwined: the relationship of environmental policy to the overall modernisation of Sweden, and the relationship of environmental legislation to other areas of legislation of importance for the environment. 5

7 The organisation of Swedish environmental policy in 2010 Sweden s environmental policy is based on four characteristics: A knowledge platform resting on a strong academic base of natural science and technology. Rule of law as defined in an independent legal system, with transparency, essentially no corruption, and credible means of enforcement and monitoring. A broad national consensus on the importance of protecting human health and the natural environment. A shared societal view of the need for a small country with an open economy to be in the vanguard of economic modernisation. The first two characteristics underpin the organisation of environmental policy and guarantee predictable implementation. The last two underpin the standing of this policy and of the organisational framework for it within Swedish society at large. The ability of environmental policy to protect the environment depends on all four characteristics. The last two have been largely aligned when it comes to controlling industrial pollution, and largely at cross purposes when it comes to nature conservation. Thus, the two faces of modernisation industrialisation and exploitation of natural resources (and land) have markedly different relationships to environmental policy. This is also reflected in how property rights are seen. The Polluter Pays Principle, which implies restrictions on the use of property for industrial plant owners, has no equivalent in nature conservation, where property owners are expected to receive full or virtually full compensation for any restrictions on their pursuit of economic benefits. The organisational structure for Sweden s environment policy could be seen as an extended organisation, much like an extended family. The core consists of the Ministry of the Environment and government agencies concerned solely with environmental protection; this core is then surrounded by agencies under other ministries and with other missions, but which are also required by law to take the environment into consideration. Twenty-odd agencies have been thus designated. The core is surrounded, moreover, by the organisations of civil society, reflecting various interests. The other government agencies designated to participate in this extended organisation each have their own structure of civil society organisations, trade associations, interest groups and stakeholders not all of which have the environment as a key priority. Swedish ministries are small by international standards, and implementation is largely delegated to central government agencies. The Ministry of the Environment has as its central agencies the Swedish Environmental Protection Agency (Swedish 6

8 EPA), the Swedish Chemicals Agency and, from July 2011, a new agency, the Swedish Agency for Marine and Water Management, solely responsible for protecting the marine and fresh water environment, including fisheries. The system of environmental courts is part of the courts system under the Ministry of Justice. The central environmental agencies in turn rely on regional county administrative boards and local authorities to implement the Government s environment policy. A large part of the practical implementation of environmental protection is carried out by these boards and authorities. They have many and important tasks under the Environmental Code, relating to licensing, inspection and reporting. The county administrative boards also set environmental objectives for their counties, and often local authorities set goals for their municipalities, all based on the national environmental objectives. Policy and politics generally depends on citizens expressions of their personal experiences of implementation. Environmental policy is somewhat different, in the sense that it also has to be founded on a solid base of natural science and technology which, on the whole, is inaccessible to the population at large. Policy on the environment is therefore expert-driven to a larger extent than most other policy areas. This base is necessary to identify the environmental problems to be given priority; to link effects in the environment to the human causes, such as business or individual behaviour; and, lastly, to identify possible remedies in the form of abatement measures. One of the key tasks of the Swedish EPA is therefore monitoring the state of the environment. The science and technology knowledge base is provided by several agencies involved in academic research and innovation (Formas and Vinnova), as well as one independent foundation, Mistra. The Swedish EPA has its own budget for academic research in support of its activities as an agency. The Swedish EPA is responsible for nature conservation and is the owner of a system of national parks (designated by Parliament). A large number of nature reserves and other sites with various forms of landscape protection also receive financial support from it. The civil society around the core organisation consists of bodies such as: IVL, the Swedish Environmental Research Institute, with core funding from Swedish industry plus central government. IVL plays an important role in applied research on environmental quality, abatement strategies and technology. The (Nordic) Swan, an ecolabelling organisation set up in 1990 by the Nordic Council. KRAV, a member-based ecolabelling organisation set up in 1985, primarily but not exclusively concerned with organic food. 7

9 SNF, the Swedish Society for Nature Conservation, a member-driven organisation founded in 1909, WWF, Greenpeace and other environmental NGOs. The Swedish Environmental Management Council, responsible for voluntary and non-binding measures such as EMAS and environmental product declarations. 8

10 Formative conditions The organisational structure for Sweden s environmental policy has been shaped by several factors, some generic to Sweden and some specific to the environment. The following are among the most important. Industrial structure. During the 20th century, Sweden s industrial structure was dominated by mining, iron and steel works, paper and pulp mills, and large-scale manufacturing, based on abundant forests and minerals, easily exploitable hydropower and a strong tradition in engineering and the natural sciences. Early on, pollution of air and water was substantial. Swedish industry was, moreover, organised into strong trade associations and largely owned by powerful families, with an inclination for the longer term and capable of both cooperation and confrontation with unusually strong trade unions with close links to the Social Democratic Party. Natural geography. Sweden is a large country second only to France within the EU and sparsely populated. Heavy industry has primarily been located close to rivers, lakes and the coast, partly determined by the proximity of hydropower. The country s fresh waters are essentially national; there are no international rivers like the Rhine or the Danube. Thus, inland water pollution was entirely domestic. However, Sweden shares the air shed north of the Alps and the Carpathians with other heavily industrialised European countries. Swedish soils are very sensitive to acid rain and regional air pollution has been a key component of the load on the environment. The Baltic Sea, almost cut off from the North Sea, has a unique ecology and is accordingly one of the world s few full-scale laboratories of chemical pollution of the ecosystem and marine food chains. International relations in environmental policy. Sweden was a founding member of the OECD and the UNECE but not of the Common Market and thus early on used the OECD and the UNECE as arenas for international cooperation. The cold war, however, limited the scope for progress until The election of a democratic government in Poland, German reunification, the collapse of the Soviet Union and the subsequent re-emergence of independent Estonia, Latvia and Lithuania totally transformed the European international scene. As a result, Sweden decided to join the European Union and the conditions for the country s environment policy were totally transformed. Constitutional theory and practice. Sweden is a unitary rather than a federal state, with a strong tradition of rule of law, with three levels of government and, according to Transparency International, one of the least corrupt countries in the world. The regional level consists of twenty-odd directly elected county councils and the county administrative boards, which are state bodies charged with implementing national policy. There are 290 local authorities, which are directly elected, have the right to raise income taxes and hold a strong position within the Swedish political 9

11 system. Both counties and local authorities have key roles to play in implementing national policies. Central government agencies, compared to their equivalents in other countries, have quite a free position. Only the Government as such, not the individual minister, can give orders and instructions to an agency, and only of a general nature. The constitution expressly forbids the Government to give directions to agencies in individual cases concerning private citizens. The director general of an agency is appointed by the Government for a six-year period. The environment minister s control of environmental policy is thus indirect rather than direct. Political culture of modernisation. Environmental policy and its organisational structure have to be seen in the light of Swedish political culture. From a comparative point of view, three characteristics should be mentioned. The first is a tendency to choose consensus over confrontation; the second is a broad consensus for modernisation, expressed as quite a marked lack of sentimentality for tradition; and the third, linked to the second and perhaps also to the first, is a high premium on science-based rationality. As discussed below, these three characteristics have, taken together, been favourable to the integration of environment policy once the decision was taken to embark on that path into the overall development of the Swedish welfare state, which was, in itself, seen as both a result and a driver of modernisation. Nature conservation, however, has been much more contentious than the control of industrial pollution. 10

12 Formative phases The organisational framework for environmental policy has evolved more or less continuously over the decades, but it is possible to identify three distinct formative phases. The first the founding phase occurred during the early 1960s and in parallel with similar phases in other industrial countries. But the Swedish version of it had some special characteristics worth noting. In the early 1960s Arne Geijer, the chair of LO, the powerful Swedish blue collar union, and Bertil Kugelberg, Geijer s counterpart on the employer side, together toured the United States. They demonstrated to an incredulous US Senate that labour and capital could develop a synthesis of confrontation and cooperation that drove modernisation and was thus to the benefit of both labour and capital. Labour accepted large profits, as long as they were reinvested in industrial expansion. Swedish industry realised in the early 1960s that, sooner or later, an environmental policy would emerge. It chose cooperation over confrontation and proposed to the Government to set up a joint research organisation (IVL). When the Government subsequently decided to establish the Environmental Protection Agency in 1967, and to introduce the corresponding legislation (the Environment Protection Act of 1969), industry opted for cooperation rather than confrontation. Its representatives accepted that the best available technology should be the basis for environmental protection, in exchange for an influence over the rate of introduction of new technology and hence over the economics of its introduction. Environmental protection came to be seen as yet another force for the modernisation of Swedish industry. Pollution was regarded as the result of old, dirty and inefficient technology, rather than of industrialisation as such. The trade unions, too, accepted pollution control as another driver of modernisation. Government subsidies for sewage treatment plants further greased the wheels of modernisation. This consensus emerged, moreover, against the background of a fierce struggle over the exploitation of hydroelectric power and thus over nature conservation that went on for many years. This struggle represented the other side of modernisation, namely the exploitation of natural resources. Industry and trade unions were agreed here as well, and the struggle involved other sectors of Swedish society, such as environmental NGOs. A truce was called only when nuclear power emerged. In 1967, the Government established two central agencies under the Ministry of Agriculture: the Swedish Environmental Protection Agency and a separate National Licensing Board for Environment Protection. The latter was in practice a court, with experts from both industry and the Swedish EPA taking part in its de- 11

13 liberations. Over the years, a consensus between the two sides developed over an acceptable rate of change. The higher the levels of investment, the faster the improvements in the environment. The opposite also held true recessions killed off old, dirty and inefficient plants. The Licensing Board was responsible for the largest industrial and municipal installations, while smaller plants were licensed by county administrative boards. (Since the 1990s, the smallest ones have been licensed by local authorities.) Four aspects are worth pointing out: Licensing was integrated. When an industrial plant was up for review by the Licensing Board, all pollution issues were up for review. This made investment conditions reasonably predictable and therefore acceptable to industry. The Swedish EPA rapidly developed considerable technical expertise, based in part on strong international networks. A consensus gradually developed between the Swedish EPA and industry over environmental priorities. This consensus was underpinned by considerable resources invested in academic research. Monitoring of compliance was delegated to industry itself. The Swedish EPA decided early on to trust the large industrial companies and focused on auditing their self-monitoring. Barring the odd exception, there is nothing to suggest that this trust was betrayed. Industrial monitoring programmes but not necessarily actual emissions were also audited by independent consultants. Nature conservation was from the start part of the Swedish EPA s mandate, but did not play any major political role during the founding phase. Protection of the shorelines of coasts and inland waters was already established. The fierce struggle over hydroelectric power during the founding years did not prevent the consensus on industrial pollution. The second formative phase emerged during the second half of the 1980s and was triggered by two independent chains of events which, taken together, transformed the conditions for the organisation of Swedish environment policy. The first chain of events began with the gradual realisation that the big clean-up of Swedish industry was within sight. Industrial pollution could conceivably be brought down to essentially harmless levels by the turn of the century. Other issues then emerged from lower down the agenda. The following should be mentioned: 12

14 Pollution from products, not least chemicals. Scientific studies identified the risk of large-scale pollution of ecosystems and food chains from industrial chemicals. Since chemicals are products that are traded internationally, Sweden could not legislate unilaterally. Cooperation with other, likeminded countries became critical. Nature conservation became contentious only when the issue was redefined from protecting interesting areas of land to conserving biological diversity. Biodiversity is, as an academic concept, singularly difficult to express in terms of policy and its implementation. The policy focus then shifted from acquiring land to influencing private owners of it to protect ecosystems that often did not neatly follow the boundaries of land ownership. Forest owners were required by law to adapt their production methods in order to preserve ecosystems, something that also required a wider and deeper knowledge base among forest owners, forestry workers and regulators. Agriculture, forestry, transport and other non-industrial activities were thus found to have major environmental impacts. These activities could not be addressed by existing policies and had to be tackled through new policies. The outcome was the so-called sectoral principle, requiring other government agencies to take the environment into account within their respective mandates. As large-scale industrial plants became less of a problem, attention shifted to the many smaller facilities (dry-cleaning plants, gasoline stations and the like). Here, local authorities were in charge of implementing national environmental policy and had to develop their skills and capabilities. International pollution moved up the agenda, in particular regional air pollution. Efforts to influence the governments of other European countries were intensified. The UN General Assembly decided to set up the Brundtland Commission, which provided a definition of sustainable development. The outcome regarding the organisational structure for environmental policy was sixfold: A separate Ministry of the Environment was established in The Swedish Chemicals Agency was established with the role of improving chemical safety. The Government could have broadened the mandate of the Swedish EPA to include chemicals, but chose to establish a new agency. County administrative boards and local authorities were given a strengthened role in relation to both environmental protection and biodiversity issues. Several important tasks were thus decentralised from the national level. A product policy was launched with the aim of reducing the environmental burdens associated with products. Since Sweden did not have an exclusive 13

15 right to legislate on product characteristics, other ways had to be found. The Nordic Swan, an ecolabelling scheme under the umbrella of the Nordic Council, was established. Energy and environment taxes were reviewed as part of a complete overhaul of the Swedish taxation system. A carbon dioxide tax was introduced, together with a tax on sulphur in fossil fuels. A charge on nitrogen oxides emissions from energy plants was introduced. The sectoral principle formally defined the extended environmental policy organisation. Other government agencies over which the Swedish EPA had no formal authority were now mandated and obliged to take the environment into account. Thus, the Swedish EPA evolved from being the key actor in controlling industrial pollution to one actor among many in other policy areas of importance for the environment. The second chain of events had nothing to do with the environment, but had a profound effect on how Swedish policy in this area was to be implemented and hence also organised: The decision to introduce majority voting on large parts of the EC s internal market legislation totally transformed the role of the EC in European environment policy. The cost of non-membership increased dramatically as a series of new directives on the environment, with a direct influence on Sweden and its legislation, became law. Democratisation of the central and eastern European countries in 1989 suddenly made it possible to address the pollution coming from those countries to the Baltic Sea and the northern European air shed. The re-emergence of Estonia, Latvia and Lithuania as independent states in the fall of 1991 added a new international dimension to Swedish environment policy. A programme was created to support the establishment of new environmental agencies and legislation. The end result of these geostrategic changes was Sweden joining the EU in This in turn ushered in a major overhaul of the relationship between the environment ministry and its agencies. The agencies have had to learn to become proactive when represented in the working groups of the Commission, which is where ideas for new legislation are developed and where, for a small country, the specific weight of an argument is directly linked to its legal and scientific quality. The ministry, meanwhile, has had to learn how to decide what positions the agencies should pursue in these working groups. It is no overstatement to say that this has been rather a painful process. The third formative phase occurred during the second half of the 1990s and against the background of a changing political climate. As other issues than major industrial plants rose on the agenda, the role of the Environment Protection Act diminished. Domestic legislation was clearly inadequate when the focus shifted towards 14

16 the environmental characteristics of imported products including the impacts of activities along their production chains, located in other countries or indeed on other continents. The fact that this was not seen to be acceptable by the World Trade Organisation did not make things easier. Simultaneously, the political climate shifted into a more market-friendly mode and the enlightened self-interest of business came to be seen as a change agent for the environment. Producer responsibility was introduced for waste streams. Increases in environmental taxation were to some extent offset by reductions in income tax. Great hope was perhaps by default placed in market forces. The net effect of these new tendencies/forces was to shift the emphasis of the core environmental policy organisation away from areas where it had a unique legal authority and into areas where it had a shared, and therefore much diluted, authority. Thus, the focus shifted from licensing to advising and coordinating other decision-makers. The organisational structure for environmental policy developed two new characteristics. First, the legal system of environmental protection was comprehensively reviewed. Fifteen separate legal acts were brought together into a unified Environmental Code. The Licensing Board from the late 1960s was disbanded and licensing of larger plants was integrated into the existing courts system. Medium-sized plants continued to be licensed by county administrative boards. Sectoral integration was codified in the instructions given by the Government to the twenty-odd designated agencies and also incorporated into the legal acts that guided their licensing decisions. Sustainable development was declared to be the overall aim of the Environmental Code and was expressed as a set of rather general rules of consideration. The net result was that the designated agencies gradually developed their understanding of environmental issues and therefore also, in time, increased their ability to take these issues into account. Second, a system of environmental quality objectives was formulated by the Government, to provide a more nuanced definition of the environmental component of sustainable development. These objectives serve as guidance to other government agencies, to counties and municipalities, and to other, private actors. Thus, for the first time, an acceptable state of the environment was defined and decided upon by the Government. Moreover, it was stated in the late 1990s that these goals were to be reached within one generation, i.e. in the mid to late 2020s. The precise formulations took into account the fact that some of the goals were global (e.g. the one concerning climate) and others were regional, and with very long recovery periods (as was the case with soils and lakes acidified by European emissions). All in all, fifteen environmental quality objectives were formulated (later a sixteenth goal was added). An Environmental Objectives Council was set up, with all the designated 15

17 government agencies as members and charged with formulating strategies for reaching the environmental goals within the defined time frame. This third formative phase has put the extended environmental policy organisation on a firm and formal footing. At the same time, the core organisation has had to evolve into one with much more of an emphasis on communication. This is a more complex role, partly owing to the successes of the previous phases and the evolving understanding of environmental issues. But also owing to the fact that many activities with profound impacts on the environment agriculture, forestry, housing and transport infrastructure are regulated by other legal acts that give a high priority to production and exploitation in comparison with the environment. This is the other side of the relationship between modernisation and protection of the environment. The year 2010 has so far seen two changes, affecting both the core and the extended environmental policy organisation. It is too early to assess their impact. First, a new agency will be established in summer 2011 for certain aspects of the environment. All activities concerning the marine environment and thus also fresh waters will be moved out of the Environmental Protection Agency and merged with the Board of Fisheries into a new agency for marine and water management. The aim is to concentrate all efforts relating, in particular, to the Baltic Sea. The advantages are clear; whether they will outweigh the disadvantage of creating silos within the environmental policy structure is a more open question. Second, after some ten years of existence, the Environmental Objectives Council has been replaced with a standing parliamentary commission (the All Party Committee on Environmental Objectives), appointed by the Government and charged with developing strategies for achieving the environmental quality objectives. The purpose is to strengthen and deepen the political support necessary for actions to reach the objectives. 16

18 Taking stock of the organisation of Swedish environmental policy The organisational structure for environmental policy in Sweden can be assessed along two dimensions. The first dimension concerns the relationship between environmental policy and the forces of modernisation in industry, agriculture, forestry, physical planning, transport and so on. The structure for environmental policy has been more successful when that policy has been aligned with and thus helped to speed overall modernisation, and less successful when it has run counter to modernisation. Controlling industrial pollution is a case of the former and protecting biodiversity a case of the latter. This is also reflected in the fact that it has been significantly more difficult to achieve the environment quality objectives that deal with various aspects of land use. The second dimension concerns the structure of legislation. The environmental policy organisation has clearly been successful when it has had unique regulatory authority as in the case of national industrial pollution. In areas where legal authority has been shared with others, the results have been more chequered. The two main instances of the latter are EU legislation and sectoral integration with other Swedish agencies. One example is chemicals regulation: Swedish ambitions to regulate chemicals have been constrained to a not inconsiderable degree by other nations with somewhat less strict a view of chemical safety (as seen from a Swedish vantage point). Combining these two dimensions into a single score card produces the following results: Reducing industrial pollution, almost to the point of eliminating it, has been the biggest success. In this area, environmental policy has been fully aligned with modernisation and the organisational structure surrounding it has had full statutory authority. Smaller plants and activities may still represent something of a problem, as these fall under the regulatory authority of the municipalities. But here, too, notable progress has been made. Nature conservation has also, arguably, been a success as long as public ownership to protect unique elements of the landscape has been the chosen option. Since the structure for environmental policy has had full statutory authority in this area, the main constraint has been availability of funding (which has been ample over the last decade). Nature conservation defined as protecting biodiversity has been less of a success, however, since it depends critically on private landowners willingness to forgo the economic benefits of modernisation. The statutory authority of the environmental agencies is shared with other government agencies charged with 17

19 promoting forestry, agriculture and transport infrastructure. Nevertheless, viewed over many years, progress has been made. Many though not all private landowners and also public agencies have become much more aware of the need to protect biodiversity. The struggle against international pollution has been successful in terms of European air pollution, but less so in terms of marine pollution and in particular protection of the Baltic Sea. Air pollution is a generalised case of industrial pollution and has been subject to the same alignment between modernisation and statutory authority in Europe as industrial pollution in Sweden. By and large, other (north) European countries have had the same priorities as Sweden. Efforts to protect the Baltic Sea have made progress when it comes to industrial and urban sources, for the same reasons as air pollution, following enlargement of the EU. The disappointments have come largely from a failure to control agricultural run-off, due to resistance to and difficulties in enforcing existing legislation. Finally, efforts to control the environmental impacts of products in international trade have had mixed success. 18

20 The years ahead The organisation of Swedish environmental policy faces major challenges as domestic, European and global issues become increasingly interconnected. The purely domestic agenda of nature protection as expressed in the conservation of biodiversity discussed above will remain an issue for years to come. Two other challenges should also be mentioned. Climate change is a domestic, a European and a global issue. On the domestic side, efforts have so far met with some success. Swedish emissions have decreased, thanks to environmental taxes, subsidies and the like. The Swedish EPA administers the European emissions trading scheme. Climate change will remain a major concern for decades to come. Product supply chain management is gradually moving up the political agenda as the environmental impacts of manufacturing in other countries become contentious. Examples include textiles, electronics manufacturing, hardwood exploitation and global fisheries in and around Africa and parts of Asia. Managing these issues will require a range of measures to influence imports and distribution systems through labelling, procurement, producer responsibility and the like. Environmental regulation and the regulation of international trade will gradually overlap. 19

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