Does environmental policy really work?

I am happy to share my talk on climate change and administrative science that I gave on September 5, 2019 at Gorky Park, Moscow. My talk was part of the Open Talk series at the annual Open Doors Event of the National Research University Higher School of Economics (pictured above). I really enjoyed the event. And thanks to the audience for the interesting and thoughtful questions.

Good afternoon Ladies and Gentlemen, thank you very much for your interest in the Higher School of Economics and my talk in particular! In the next 20 minutes I will try to answer three questions:

Should we panic about climate change?

What might governments do to protect the environment?

Are authoritarian regimes more effective in combating climate change?

I would like to start with a joke. Two planets meet. The first one asks: “How are you?” “Not so well”, the second answered “I’ve got the Homo Sapiens.” “Don’t worry,” the other replied, “I had the same. That won’t last long.” (Retrieved from http://www.die-klimaschutz-baustelle.de/climate_change_jokes.html, date of access 2019-09-04)

How do you feel about that joke? Are you amused, is there a pondering silence, or do you even panic internally? No matter whether this joke makes you feel happy, thoughtful, or panicking: It became obvious that people have been starting to think about the environment more than in the past.

Should we panic about climate change?

Our planet is getting hotter. There are ever more hurricanes. A month ago Irkutsk region suffered from the most severe flood since years. This time we experience a hot summer, next time there will be never-ending rain. People in urban areas around the globe suffer from polluted air; the ‘silent killer No. 1’ according to the World Health Organization (WHO).

There are different views on those phenomena. To some they are part of regular cycles that have been occurring repeatedly throughout time. We just did not monitor them as closely as we do now. To others they are messengers of climate change. At least, most environmental researchers agree that global warming accelerated.

But many people outside universities do not agree. Critics state that the hype about Greta Tintin Eleonora Ernman Thunberg is simply a substitute religion. The term sustainability has come under criticism as marketing bluff. We need to take those counterarguments seriously. We need to acknowledge that forecasts about global warming built on complex models. Just change some parameters and those models will forecast that planet earth will cool down by 2050.

But I am not about blaming statistical model building. I am about real-life environmental policy issues and how political science researchers study them.

People usually do not care about remote events. Things taking place far away do not attract their attention. If climate change does not affect me personally, e.g. if a flood tears away my house, I probably won’t get emotionally attached. There are many examples of serious issues nearby. Volokolamsk, north-west of Moscow, hosts a huge garbage site that takes up the waste from the Russian capital. The trash dumb is toxic, and toxic fumes reportedly spread over the town last year, leading to several injuries. That is something that people do panic about.

Another example: Since many years people in German cities suffer from polluted air. Berlin, Hamburg, or Cologne regularly exceed critical values set by the European Union in 2010. Only after courts ruled bans for diesel-engine cars political activity started. We wonder why.

One year ago I mentioned that Earth Overshoot Day is a measure to what extent human mankind overuses natural resources. On global average, Earth Overshoot Day in 2018 was August 1, down from early October 20 years ago. This year World Overshoot Day is July 29. “From July 30 we started to consume more resources than the planet can regenerate in a year.” (retrieved from https://www.overshootday.org/, date of access 2019-09-04). The situation has not become better, yet. We should not panic about climate change. But I believe that most people are aware that we need to change something in the way we live, travel, consume, work, and behave.

What might governments do to protect the environment? And what do governments actually do?

I am an Assistant Professor at the School of Politics & Governance at the HSE. My research covers what governments might do to protect the environment and to foster a sustainable way of living. Here are some of topics of my research:

  • It takes a generation to shift consciousness among people. Awareness training should start with schoolchildren. How does sustainable behavior find its way into curricular?
  • Diesel-engine cars are the main source of nitrogen dioxide (NO2) emission, a greenhouse gas, in German cities. Why do politicians not simply ban all diesel-engine cars?
  • Is a tax on carbon dioxide, another famous greenhouse gas, helpful in combating climate change?
  • What public infrastructure a city government needs to offer to reduce traffic in an urban area?
  • Several local authorities in the Western hemisphere declared climate emergency. This is a non-binding commitment to spend efforts and realize resources to tackle climate change. How does such a commitment affect the jobs of top- and street-level bureaucrats? The mayor of a German city that declared climate emergency abstains from using an official car. That’s nice. But red tape already slows down large scale infrastructural projects in Germany, such as building a railway line. Officials will now additionally have to consider the environmental impact of each decision. Will they ever get something done?

It seems strange: Most people acknowledge environmental pollution that comes in multiple types: polluted air, light pollution and environmental noise. We know that they harm human and animal life. And we know how to address them. But decision makers fail to take bold measures. And managers struggle to implement them. I seek to understand why. We need be aware that environmental protection essentially is a huge management issue. Politicians and managers face multiple interests from different stakeholders. They have to deal with conflicts of interests, goal ambiguity, and goal multiplicity. In my research I am analyzing those conflicts, and the multiple understandings on how a good policy might look like.

It is not a secret that I am a German. In Germany the political discussion centers around a tax on emission of carbon dioxide. In such cases we look for evidence from previous experiences elsewhere to judge this idea. In 2012 Australia introduced a carbon pricing scheme. The plan was to combine a carbon tax with a certificate trading scheme. In a first step federal government sold certificates to emit carbon dioxide to industries. Polluters were able to buy as many certificates as they wanted over a 3 year course. The price was 23 AUD (about 2,000 Rubles) per ton of carbon dioxide. In a second step, according to the initial plan, the scheme would shift into a trading scheme. The amount of emission, i.e. certificates, would have been fixed, market would determine price. But this has never happened. The scheme was scrapped in 2014.

The scheme had mixed impact. Carbon dioxide emission decreased from 407 MtCO2 in 2012 to 393 MtCO2 in 2014, the second year of the scheme. Soon after emission increased and reached pre-tax level in 2016 and 2017 (413 MtCO2). The carbon pricing induced some temporary decrease in greenhouse gas emissions. But it also raised electricity costs for households, i.e. regular people. This undermined the public confidence in the scheme and environmental protection as a whole (https://www.centreforpublicimpact.org/case-study/carbon-tax-australia/, 2019-09-05).

A tax on greenhouse gas emission is a measure at federal or European level. I would like to give two brief examples what local decision makers in Germany do to address environmental pollution. Those examples also point to problems of implementation.

Berlin, Germany’s capital has an ambitious vision. City government passed plans on mobility transition (Verkehrswende). Inner-city cycle routes should support bicycle traffic. Sounds good. But the devil is in detail. A closer look at the budget plan reveals that in 2020 only 73,000 Euros (about 5.5 Million Rubles) are dedicated for building new cycle routes. 6.5 Mio. Euros (about 500 million rubles) are available for feasibility studies. Such figures nurture sceptics that green interest group capture policy-making.

Berlin is good in writing plans, but implementation is an area for improvement. Too often elected and appointed officials opt for avoiding blame and conflict. Another goal in Berlin is to replace fossil fuels in public transportation by 2030. New routes for tramways in Berlin are reportedly planned in a way that they do not conflict with existing routes for cars. This leads to contradictions.

Trolleybuses are another approach to e-mobility. They are cheaper compared to tramways as they do not require railway lines. They are more sustainable as they do not require rechargeable batteries. The production of batteries causes huge environmental damages. But supporting power supply lines face resistance from residents and local authorities alike. Key essential is a political will and a clear vision of top decision makers in the administration. In my research I analyze such implementation problems. And I do compare the experiences and trends in Germany with Russia.

Are hybrid and authoritarian regimes the more effective environmentalists?

What about Moscow? The major has a clear vision of Moscow’s future development. The last round of capital renovation extended sidewalks at the expenses of roads.

In public transport Moscow takes bold measures that are necessary to transform mobility. Moscow is a best-practice how to maintain and extend a modern public transportation network. Moscow extends the metro. Moscow opened the new MCC, the Moscow Central Circle. And Moscow works on a network of surban trains to further smooth commuting.

Are hybrid and authoritarian regimes the more effective environmentalists? The answer is a clear no!

All those benefits come at monetary and social costs. Ticket prices increased but are still modest. Construction sites cause long-term noise pollution for residents. Public participation beyond the Active Citizen platform is an area for improvement. Bold actions for sustainable development do not vary by political regime. They vary by awareness, willingness, and ethical standards.

To sum up: Research in political and administrative science investigates government actions. Economists propose measures based on sky-high mathematical models. The School of Governance and Politics at HSE looks at policy-making and implementation at the ground. We investigate conflicts and interests. This enables us to advice what will work and what will probably not. Our research informs decision making. It provides transparency.

I started with a joke. I would like to finish with a quote from Alexander Gerst, a European Space Agency (ESA) astronaut. He travelled to International Space Station in 2014 and 2018.

“Not everything up here [at the ISS] is just cool and fun. Living in space, even on a space station, imposes multiple privations upon you. But I love my job because I know: it provides a meaning to my life.” (http://blogs.esa.int/alexander-gerst/2018/10/01/deutsch-ein-platz-in-dieser-welt/, 2019-09-05, translation by the author). I consider this an excellent example about what motivates people to do the right and sometimes challenging things. Sustainability starts at the individual level. Looking for a meaning in life is a long-term journey. Studying at HSE might contribute to this endeavor.


Sustainability in the public sector

Below is a talk that I delivered today at Higher School of Economics (HSE) Day 2018 in Moscow’s famous Gorky Park.

What is the meaning of life?

I recently finished reading the autobiography of the famous Austrian psychologist Viktor Frankl. Frankl is famous among applied psychologists, he invented logotherapy, a theory and counseling approach about what motivates people.

Frankl experienced a, say, more than challenging life, if not to say, a multi-year nightmare. Being a Jewish doctor in Vienna in the 1930ies, he suffered from the Fascist regime. He survived the holocaust and four concentration camps, including Auschwitz. But his wife, his brother and his parents died or were killed in a concentration camp.

A man who lost almost his whole family during the holocaust, what will be his answer to the question: What is the meaning of life? Viktor Frankl’s response was: Identifying a purpose in life.

Frankl established the notion that identifying a purpose in life is crucial for an individual’s well-being. His bestselling book was “Man’s search for meaning”. Frankl further argued that a meaningful life requires two ingredients: one’s desire to benefit other people and acting beyond pure self-interest. Taking care about one’s both social and natural environment motivates a meaningful life. In other words we should behave in a sustainable manner.

Viktor Frankl’s lesson leads us to the broader concept of sustainability. More formally, sustainability is a logic of action aimed at a careful use of resources that secures the well-being of current and future generations. The point I want to make here is that sustainability not only ensures that this world will be a life-worthy place for our kids. It will also satisfy you and me — right here and right now, because it satisfies man’s search for meaning in life.

How does this relate to government and public administration? To answer this question let us take a step back. In this academic year I am teaching a course that deals with management and sustainability in the public sector. We will study the role of the public sector in promoting sustainable development. It is beyond the scope of today’s talk to summarize all the evidence on this topic. Instead, I will highlight the two faces of the public sector when it comes to sustainability, the ugly and grey one, and the professional, the green one.

Earth Overshoot Day

It is an undisputable fact that the global population consumes more natural resources, such as water, oxygen, soil, than the global ecosystem can regenerate. And we are producing more carbon wastes than the global ecosystem can absorb. Our ecological footprint, a population’s demand for resources, by far exceeds ecosystems’ bio capacity, the supply of those resources. In other words, human mankind is running an ecological deficit. Earth Overshoot Day is a common measurement of this deficit. In 2018 Earth Overshoot Day was on 1st of August which is almost two months earlier than in the early 1990ies. We are more far away from carefully using resources than ever.

Economically developed countries use nature more extensively compared to less developed countries, as they are producing more goods and services, like cars, machinery, etc. Vietnam has the smallest gap between ecological footprint and bio capacity; Earth Overshoot Day for Vietnam is December 21. For Germany, the UK, or Switzerland Earth Overshoot Day is between May 2 and May 12. Earth Overshoot Day for Russian Federation is April 21.

Ecological footprint > bio capacity → ecological deficit

The job of government and administration is to improve the well-being of citizens. Earth Overshoot Day demonstrates that policy makers need to regulate economic activities. Environmental protection and sustainability receive most attention on a global level. In 2005 policy leaders agreed on the UN Sustainable Development Goals. They include a commitment to end hunger and starvation, and to balance ecological footprint and bio capacity by 2030. Elected decision makers set environmental policy goals, public administration run policy programs to achieve those goals. Policy makers regulate economic activities and peoples’ behavior.

For example, in order to cut greenhouse gas emissions and to increase energy efficiency the European Union in 2005 launched its Emission Trading Scheme. Essentially factories will need to pay for emitting greenhouses gases. The underlying idea is that if you have to pay for emissions you will seek to reduce them.

Another example is air pollution. Polluted air is the ‘silent killer No. 1’according to the World Health Organization (WHO). In order to secure public health policy makers set an annual limit value for nitrogen dioxide of 40 microgram per cubic metre (µg/m3).

On the one hand, the public sector acts as a promoter of sustainable development.

The ugly face: Regulatory capture

There is plenty of evidence where governments fail to promote the well-being of their citizens, however. Germany serves as an excellent example for policy failure and regulatory capture. People in several well-known German cities suffer from polluted air. Berlin, München, Düsseldorf, Hamburg, or Köln regularly exceed critical values set by the European Union in 2010. Diesel-engine motor vehicles are the major source for air pollution; they are responsible for 70% of nitrogen dioxide emission (NO2) in Germany up from 15% twenty years ago (2000). There are good reasons to ban or at least regulate this technology.

Federal government, including Chancellor Merkel, and most state governments tend to ignore the problem however. The state prime minister of the largest German state recently said that he considers diesel-bans to be unreasonable and unlawful.[1] German politicians oppose a sustainable transport policy. Policy makers continuously jeopardize public health of the people. Why?

The first explanation centers around regulatory capture: Regulatory capture means that lobbyists and well-organized interest groups capture the state. Germany has the world’s hugest and most profitable car industry. Being a huge taxpayer and donor to almost all political parties Volkswagen, Mercedes-Benz and BMW heavily lobby and successfully influence policy-making in Germany and the European Union. Regulatory agencies, such as the Federal Office for Motor Traffic (Kraftfahrtbundesamt, KBA) in Germany fail to act in the public interest.

In his 1965 seminal book “The Logic of Collective Action” Mancur Olson argued that small self-serving interest groups have a stronger voice compared to a diverse group of people. Politicians seek for reelection. German car makers provide jobs to hundreds of thousands of skilled engineering workers, either in their own factories, or in the supplying industry. Unions are doing a good job in organizing those workers and voters to combat tough regulation of the car maker industry. But it difficult to organize the millions of people that suffer from polluted air.

In 2018 the European Commission sued to court Germany and five other countries. This imposed at least some pressure to act. In spring 2018 the German federal administrative court ruled that municipalities in Germany may impose bans on diesel-powered cars to combat polluted air. Hamburg was the first city to impose such a ban, though a very limited one. Two inner-city routes are now closed to older diesel-engine cars. It is questionable whether banning particular groups of cars from entering cities is a useful attempt to improve air-quality for community members.

(The idea of banning dirty cars from entering city centers is not novel to Germany. Imposing city bans on dirty cars is a practice that has been in operation since 2007. Since then local governments are allowed to establish so called “low emission zones”, in which heavy polluters are not allowed to enter. Those low emission zones proved to be an inefficient policy tool however.)

But reality is not just black and white. There are several shades of green. At the local level public policy makers act as frontrunners and role models for sustainable behavior. My example here is urban transportation. E-mobility is the only sustainable approach to urban transportation in the 21th century. For example, Berlin, Germany’s capital, currently runs a pilot project with a fleet of 25 e-buses. In another German city, Mainz, state government funds the replacement of diesel-engine buses by e-buses.

Yet another approach to e-mobility is trolley coaches. Moscow has been using trolley coaches since 1933. In the Western world trolley coaches and the supporting power supply lines have been demolished during the 1960ies and 1970ies. Urban planners now admit that this was a huge mistake. E-buses now experience a comeback.

Modern public managers will need to shift their attention from protecting an over-subsidized car industry to developing comprehensive and integrated public transportation systems. Public e-mobility is the future of urban transportation. Uber is NOT a solution to polluted air, and congestion. In US cities where Uber operates, its service has increased, not reduced, the volume of traffic, a recent study demonstrates.

This brings us back to the question “What is the meaning of life?”. Sustainability is much about psychology. Sustainability starts at the individual level. At the end of the day it is your choice: whether to or not to ride the metro or by Yandex.Taxi, whether or not reject a plastic bag when shopping. It is up to you to make a difference.

You think that sustainability does not pay? There you are mistaken. There is a business case for Corporate Sustainability. Sustainable investments can drive financial performance. Return on invest (ROI) is 5% higher for companies that put their money into responsible investments compared to those who do not account for responsibility when making an investment decision, a recent meta-study from Oxford reports (Clark, Feiner, Viehs, 2015; Khan, Serafeim, Yoon, 2015)[2][3]. And the risk is lower compared to orthodox investments.

But this argument is based on an extrinsic, financial motivation, increasing profit. Intrinsic motivation will form a more solid base for sustainability. You will not only help to secure the future of your kids; it will make you feel better right now, too.

[1] https://www.handelsblatt.com/politik/deutschland/gerichtsentscheidungen-juristen-werfen-politik-falschen-umgang-mit-urteilen-vor/23009350.html.

[2] From the Stockholder to the Stakeholder. How Sustainability Can Drive Financial Outperformance. https://arabesque.com/research/From_the_stockholder_to_the_stakeholder_web.pdf 2018-09-11.

[3] Corporate Sustainability: First Evidence on Materiality. http://ssrn.com/abstract=2575912