Dieselgate and the dirty smog around climate regulation

Written by Olivia Arigho-Stiles on . Posted in Current features, Features

Philip Schleifer is a Max Weber Fellow at the EUI and co-author of  the Global Climate Legislation Study. In the second interview in EUI Times’ new series on climate change, he argues for a complementary system of private and state environmental philip_portraitregulation.

Dubbed ‘#dieselgate’, revelations that German car manufacturer Volkswagen has been systematically cheating US emissions tests have shaken the world of climate governance. The scandal has undermined faith in the idea that private companies can be relied upon to self-regulate when it comes to carbon emissions. Jean-Michel Glachant, Director at the Florence School of Regulation (FSR) tells EUI Times resignedly, ”The Volkswagen “dieselgate” puts into strong doubt‎ what we citizens can expect from industry self-regulation: do companies really self-regulate in the interests of consumer safety? It also deeply questions our approach to the EU: why do we deny EU institutions the right and the duty to be as harsh as US federal agencies when a European company ‎voluntarily harms EU public interest?”

Yet even so, Philip Schleifer, a Max Weber Fellow and former Jean Monnet Fellow at the EUI, is adamant that state and private regulation can be complementary. Formerly affiliated with the LSE’s Grantham Research Institute headed by Lord Stern, Schleifer believes that progress on reducing emissions reductions can only arise through amicable rather than adversarial relations with big business.

”If [businesses] adopt the right policies they can really make a difference. They can promote environmental change in a good way. To get them to do this they need the know-how which can be partly supplied by NGOs but also to some extent they need to be pressured into it because business is ultimately about business.”

On the question of dieselgate, Schleifer adds, ‘’Scandals across industries show that companies cannot be trusted to self-regulate effectively. Therefore, there needs to be regulatory oversight by states (or civil society). If this is done well, it can work. But this is not easy to design in practice, especially in the context of transnational production.’’

In the past three decades, as protecting the environment has mushroomed in importance for policymakers, one of the most striking developments has been the détente between business and state in formulating policy responses. Indeed the Volkswagen scandal has exposed the problem of state and business getting too cozy. ‘’In Germany, there is clearly a problem with automotive industry and regulators being too close (many top politicians taking up positions in the industry and its associations, the state of Lower Saxony holding a significant share of Volkswagen’s shares).’’

Policies to curb emissions have not been imposed upon businesses, but rather, generated in partnership with them, alongside NGOs and other civil society groups. Yet this represents a major discursive shift at a worldwide level. Historicizing the prevailing tendencies in the global policymaking sphere, Schleifer points out that ‘’In the 1970s when the first UN conference took place, limits to growth was very strongly on the policy agenda.  In the early days of environmental policy, it was more in this critical, neo-Malthusian approach.’’

In contrast, today’s political climate has seen a departure from the anti-systemic, disruptive forms of environmental protest which defined the 1970s and 80s, towards a greater tendency for a collaborative approach.  Schleifer, a self- proclaimed pragmatist, sees no need to remove global capitalism in its entirety. ”One position would say capitalism and environmentalism are reconcilable in principle. Others would argue it needs a greater regime shift. I would hope they are reconcilable because I don’t see a radical shift coming. When we look at civil society today, we see a division of labour, with different types of civil society groups taking a different approach to working with business. For example, you have WWF, the largest environmental NGO which has taken a more collaborative approach, partnering with businesses such as Unilever. But we also see NGOs which have taken a more adversarial approach such as Greenpeace and Friends of the Earth. Both are important. It’s good that business is doing something. In a global world, in the context of transnational production, large businesses are powerful players.’’.

Yet these are the same players who have a vested interest in preserving the system which guarantees healthy profits currently at the expense of the planet. Capitalist production requires increasing rates of consumption and reproduction, which for de-growth advocates, means it is on a collision course with the finite capacity of the planet. So how can businesses self-regulate when they have little immediate interest in anything other than profit margins?

But as Schleifer points out, multi-level regulation is already the new reality of climate governance. For him, the emphasis must lie in adapting to this new trend and in promoting democratic legitimacy in a milieu where elected bodies are no longer the only ones producing regulation. ”More and more regulation is supplied by the private sector and not by public or states. It would be wrong to oppose the two. They often interact in very complex ways, with many actors coming together. This is why the question of legitimacy is so important. We need new theories of democratic legitimacy that are fitted to the new realities of climate governance”.

But what of the role of consumers, of ordinary citizens far removed from this parallel world of international treaties? Is consumer demand sufficient to encourage companies to invest in eco-friendly alternatives? In the first of the EUI’s series on COP 21, Jean-Michel Glachant suggests that the call for alternatives from consumers is not yet powerful enough. Glachant told EUI Times, “The political resistance is mainly people and not political parties or governments. This is your aunt, your neighbour, the average guy in the street…It’s a failure of policy, but the roots of failure are in the mind-sets of our compatriots.’’

Schleifer also doubts whether change can occur without government administered incentives. ”Policy frameworks are very important in the way they provide incentives for individuals. I don’t think people will wake up one day and say, ‘’ok we’ll behave in a carbon neutral fashion and stop driving cars’’. So I think having the right policies in place is very important, and it’s important to have these policies in place at the international level, but then these also have to be implemented at a domestic level.’’

As COP21 in December draws nearer, extracting tangible agreements out of the smoky haze of global power dynamics and international realpolitik forms the challenge to a new era of green governance. As dieselgate testifies, neutral and effective regulation at both private and state levels is essential to this.



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