DEUDA A CORTO Y LARGO PLAZOS:

There is a distinction between traditional environmental policy and EPI and their instruments (von Homeyer, 2009). Traditional environmental policies do not green sectoral political decision making although they regularly change the behaviour of sectoral non-state actors. Only when significant feedback is provided in sectoral decision making then EPI is supported to an extent by traditional environmental policies. Such feedback effects can usually be linked to more flexible environmental policy instruments like emission trading, eco-taxes or eco-labelling. A reason could be that, contrary to less flexible instruments, they “create stronger incentives for polluters to reflect on their activities and tend to be more compatible with established sectoral rationality and routines” (von Homeyer, 2009, p. 4).

For many decades, environmental issues have been managed through regulation (Lenschow, 2002a), which included market based instruments like emission trading and environmental taxes and also voluntary agreements (Jordan et al., 2003). In the last few years, a change of choices of instruments has started slowly. Reasons for the resistance seem to be mainly based on national interests and concerns about protecting competiveness and national sovereignty (Jordan et al., 2003). The analysis of European climate policies had revealed that there is still, among other things, a preference for more regulatory instruments. To some extent this could be explained with the ineffectiveness of voluntary approaches (Haug et al., 2010). In the transport sector, European regulation has mainly concentrated on promoting and requesting technological improvements and only to a limited extent on supporting more environmentally friendly modes of transport (Dhondt, 2003)

A traditional instrument is command-and-control regulation. This is a form of legislation that is traditionally used by most European governments and is applied, for example, in policy making that is related to emission standards, prohibitions or requirements to employ particular technologies or licenses (Börkey and Lévêque, 2000). The attraction of this form of regulation is based on the reasonable certainty as to the

end result. Clear responsibilities and environmental standards can be set in order to prevent or limit environmental damage. However, the effectiveness of legislation depends, for example, on companies complying with the legislation and following the administrative and legal structures which promote the standard (Bailey, 2003). There are concerns that command-and-control regulation does not cope with longstanding environmental problems and does not integrate environmental objectives adequately into mainstream planning and economic decisions (Ekins, 1999). Legislation does not impose direct charges on polluting activities. Nevertheless, costs are obviously incurred by public authorities in monitoring compliance and by industry in setting up procedures to meet standards (Beder, 1996). As a result, legislation is sometimes seen as unnecessarily expensive. Arguments in that respect are that the standards set in such regulations are developed by government officials who are detached from market conditions (Baumol and Oates, 1988).

Two instruments related to command-and-control regulation are environmental taxes and charges. Fiscal instruments are often used with the aim to correct environmental externalities and the negative impacts on the environment caused by the failure of markets (Bailey, 2003, Ekins, 1999). Externalities occur where private individuals or companies consider only their use value of environmental resources and neglect the costs that are caused by different forms of pollution. So, with environmental taxes and charges, it is possible to re-internalise some of the costs of excessive environmental degradation and to provide the chance to encourage a more thoughtful use of resources or pollution patterns. The primary function of these two instruments is to create a financial incentive for reducing pollution which is based on two principles; either the polluter pays principle or the user pays principle (Bailey, 2003). However, there are also critics of fiscal instruments as they could create a license to allow pollution as polluters and/or users could argue that they have paid their dues to society (Beder, 1996). In order to use environmental taxation to achieve higher consideration of environmental issues, it would require a shift away from governments who act as reactive agent to democratic pressure, a new emphasis ecological valuation of resources, the introduction of an independent agency dealing with taxation, and a widening of the tax basis including the integration of the level of environmental disruption, of national resource depletion and the intensity of material use in production and distribution (O'Riordan, 1994).

Hey (2002) conducted a research on environmental taxation for heavy goods vehicles and concludes that environmental interests were not represented in the taxes and that there was a general favouring of conservative decisions. He expresses the impression that European transport policy making tends to produce symbolic policies and makes trend-enhancing policy decisions. Therefore, it would be necessary for institutional reform to change the sectoral structure of the policy making system as it, so far, often excludes contradictory issues like the environment in order to protect core interests (Hey, 2002)

Another command-and-control instrument is tradable permits. This instrument is a rights based mechanism following the principle that “any increases in prescribed emissions or other polluting activities by one company must be offset by an equivalent or greater reduction elsewhere” (Bailey, 2003, p. 47). In this case, regulation and a financial incentive are combined. At the beginning, the government calculates a quantitative limit of allowable emissions for an area. Following this, the level is sub- divided into pollution permits. These permits are sold to polluters and can also be traded between companies (Bailey, 2003, Carter, 2007). So, companies get an incentive to reduce their emissions and those that have a low impact could also sell their permits to higher pollutants (Carter, 2007). As a result, the market forces working behind tradable permits can support achieving environmental standards. A further reduction of emissions can be achieved if the government chooses to reduce the number of permits in the trading system or when the government starts buying back permits (Bailey, 2003). A widely recognised example of tradable permits is the European Union Emission Trading System. It started in 2005 and is currently in the third phase of implementation. However, the high hopes that were put on this scheme have been modified in recent years (Vlachou, 2014).

A more recent instrument of regulation is voluntary agreements. They represent a cooperation between industry and public authorities for defining environmental standards and implementation methods (Börkey and Lévêque, 2000). They are supposed to supplement or replace instruments of command-and-control regulation (Bailey, 2003). The increased popularity of voluntary agreements can be explained by a greater flexibility in how targets are achieved, reduced administrative costs for regulation, an increased innovation, the removal of the need for legislation, and the rapid and relatively non-controversial implementation (Nunan, 1999). With the agreement, environmental

standards are established that are comparable to those that are based on using a legislative instrument (Segerson and Miceli, 1998). However, in this case, representatives of industries and public authorities need to be equally strong to not give too much influencing power to one side (Segerson and Miceli, 1998, Nunan, 1999) which could lead to a manipulation of agreements to the benefit of companies and the disadvantage of wider public interests (Bailey, 2003). Depending on the number of participants in the agreement the negotiation process could become more complex as a wider range of interests has to be considered (Bailey, 2003).

In order to evaluate the impact of these instruments and also of policy making processes and their implementation, instruments like Environmental Impact Assessment, Strategic Environmental Assessment (SEA) and policy appraisal can perform as good indicators on the position of EPI (Hertin et al., 2008, Turnpenny et al., 2008, Carter, 2007, Lafferty and Hovden, 2003). An overview and analysis of the possibilities that SEA creates related to EPI was done, for example, by Bina (2008). The evaluation of policies is necessary, as it can help to identify what effects the chosen instruments and regulations are actually having or not. An evaluation would need to cover three elements that are whether clear objectives were formulated at the beginning; following that, to what extent these objectives have been met; and how changes have come about, i.e. whether the imposed obligations are themselves an ample response to the related situation and whether the effects have created the anticipated results (Etherington, 2006).