Contemporary Environmental Policy: The Need for an Economics and Management Approach

Abstract

With respect to environmental quality, separate actions of corporations have collective consequences. Any prospect, therefore, for lower pollution levels depends on the consideration of the interests of others. Society manages this interdependence through accountability. For corporations, higher levels of accountability – to stakeholders, shareholders and government – lead to more responsible environmental performance. By bringing together research usually reported in isolation, this paper first provides examples of successful policies and programs – external and internal to the firm – that have been successful in improving environmental quality. This paper then develops a comprehensive program of environmental oversight (EO) that entails coordination among public and private sectors, a mix of public sector and market based governance, and the empowerment of corporate stakeholders. The program of EO would achieve three goals. First, in the regulatory process, policy makers, corporations and stakeholders would come together to set new regulation. Second, corporate accountability and transparency would increase. Third, for specific pollution situations, a single framework would make clear the full range of available environmental policies and procedures.