Persuasive innovators for environmental policy: green business influence through technology-based arguing

ABSTRACT

Green industries and companies provide crucial political support for ambitious environmental policy. In this article, I examine through which mechanisms green business interests influence international environmental negotiations. I theorize technology-based arguing as an influence mechanism that builds on combined technological and discursive power and can outstrip relational and structural business power rooted in material resources. I probe these propositions in a process-tracing case study of new wastewater regulations for ships in the Baltic Sea negotiated in the Helsinki Commission and International Maritime Organization. I find that green business built, expanded, and sustained state support for ambitious nutrient removal standards by persuasively arguing that advanced treatment was feasible. Provision of tangible evidence of technology development, availability, and uptake undermined the influence of reluctant and materially superior business interests. I conclude that even small green business actors can facilitate ambitious environmental policy when communication channels between innovators and policymakers are strong.

KEYWORDS:

• Business power
• business influence
• international environmental negotiations
• arguing
• technology
• shipping

Introduction

Green industries are important supporters of ambitious environmental policy that gives them advantages over more polluting competitors (Vormedal 2012, Allan et al. 2021). Research investigating the role of business in different issue areas holds that political influence hinges on material resources (Culpepper 2015, Young et al. 2018). In the environmental realm, industrial policy can increase the material resources and influence of green businesses as exemplified by the growing renewable energy industries that support climate policy (Meckling et al. 2015, Meckling 2018). This narrative captures the distributive aspects of environmental policymaking and sustainability transformations but neglects deliberative aspects (Allan and Hadden 2017, Gehring and Ruffing 2008). Deliberations feature competing arguments, for instance, about what policies are technologically feasible to reduce businesses’ ecological footprint. To the extent that such arguments matter politically, however, the influence of green business might not solely rely on material resources.

In this article, I ask through which mechanisms green business influences environmental policy. I focus on the international level that can address transboundary pressures on planetary boundaries, including climate change, biodiversity loss, and use of shared resources (Sterner et al. 2019). My main argument is that green business can influence policy not only through use of material resources but also through technology-based arguing. Technology-based arguing refers to the use of arguments and supporting evidence in political negotiations about the practical feasibility of proposed policies. Although typically motivated by corporate interests, technology-based arguing unfolds political effects through combined technological and discursive power. Innovation in environmental technology and management creates leeway for ambitious policies by persuading decision-makers of their feasibility. Linking research on business power (Falkner 2008, Vormedal 2008, Downie 2014) to communicative action theory (Risse 2000, Ulbert and Risse 2005), this argument explains business influence when states argue about technological feasibility.

In the following, I formulate technology-based arguing as an influence mechanism distinct from influence through material resources. I then explain the combined process-tracing and congruence method used to assess both mechanisms in a case of recent wastewater regulation for maritime shipping. My analysis shows that, through technology-based arguing, a handful of innovative wastewater treatment manufacturers gained greater influence than the materially superior cruise industry. The mechanism’s scope conditions are discussed against the backdrop of alternative explanations. I conclude that researchers and policymakers should pay attention to persuasive innovators as a pathway towards sustainable transformation.

Mechanisms of business influence

Researchers distinguish different forms of business influence on policy decisions. This includes direct influence through relational power, indirect influence through structural power, the creation of new policy options through technological power, and the diffusion of policy-relevant frames and norms through discursive power (Fuchs 2005, Falkner 2008). Many studies treat these forms of power complementary (Falkner 2008, Ford and Newell 2021, Madariaga et al. 2021) without explicitly linking them to broader decision-making logics. Establishing such missing links suggests two ideal-typical modes of international negotiations and mechanisms of business influence (Table 1).

Table 1. Two ideal-typical modes of international environmental negotiations.

	Bargaining	Arguing
State preferences	Focused on distributive consequences: state is transmission belt for domestic interests	Focused on policy feasibility: state executives have discretion in judging competing arguments
State roles	Pushers (benefit from policy), intermediates (face benefits and costs from policy), and draggers (loose from policy)	Proponents (are convinced of feasibility), audience states (are undecided regarding feasibility), and opponents (are convinced of infeasibility)
Business power	Material resources: relational and structural power	Technology-based arguing: technological and discursive power
Hypothesis	Business actors with largest material power resources in influential states shape international policy decisions the most	Business actors with most tangible evidence about technological (in-)feasibility shape international policy decisions the most
Mechanism	Business actors with largest material resources shape state preferences → preferences of states with high bargaining power shape international decisions	Business actors’ claims about technological (in-)feasibility shape state positions → positions of states backed with most tangible evidence shape international decisions

Source: Author. Terminology of state roles in bargaining adopted from Sprinz and Vaahtoranta (1994).

Influence through material resources

Relational and structural business power matter most in bargaining contexts. Bargaining under a politico-economic logic of consequences assumes self-interested actors that seek to maximize utility regarding distributional consequences of policy (Grundig 2009). States strive for international policies that address own ecological vulnerabilities and secure the competitiveness of domestic industries (Sprinz and Vaahtoranta 1994). The underlying assumption is that states are mere transmission belts of domestic interests. Interests represented by states with high material bargaining power, including the strategic use of side payments, issue linkages, institutional rules, and unilateral threats, stand the largest chance of shaping international policy decisions.

Considering the distributive effects of environmental policy on domestic industries, state preferences reflect the comparative relational and structural power of green versus grey businesses. All else equal, states hosting powerful green businesses that benefit from environmental regulation (e.g., air filter suppliers and electric car manufacturers) or large sectors that suffer from environmental degradation (e.g., tourism) are more likely to push for protective policies (Meckling 2018). States with strong polluting businesses that lose from ambitious policies (e.g., coal plant operators and fossil fuel car manufacturers) are more likely to be draggers. States incurring both costs and benefits take an intermediate position (Sprinz and Vaahtoranta 1994).

Both relational and structural power of green and grey businesses rely on material resources. Relational (or instrumental) power comprises the use of financial and organizational resources and access to relevant decision-making venues for lobbying of policymakers (Fuchs 2005, Vormedal 2008). Indicators are the existence of a business interest organization, its formal status in international negotiations, and the number of staff attending these meetings. Structural power is the pressure that host countries feel to advocate policies ensuring the continued prosperity of their most important companies and sectors (Falkner 2008, chap. 2, Fuchs 2005). Metrics include a company’s revenues, profits, number of jobs provided, and its broader economic impact.

Technology can appear as another material resource when conceptualizing it as mere ‘information’ (Vormedal 2008) or when considering its effects on abatement costs and political coalitions (Schmidt and Sewerin 2017, Meckling 2018). An example is the role of the chemical company DuPont in reducing ozone-depleting substances under the Montreal Protocol. DuPont facilitated the phase-out of chlorofluorocarbons through its leadership in developing cleaner substitutes (Maxwell and Briscoe 1997). Interestingly, its technological power operated in conjunction with market power and relational power vis-à-vis the highly influential US delegation (Falkner 2008, chap. 3). This example suggests that technology can unfold political effects in concert with other material resources.

Influence through technology-based arguing

In deliberation contexts, combined technological and discursive business power is crucial. Deliberations under a logic of arguing assume actors are open to persuasion by the better argument resonating with principles and norms they hold (Ulbert and Risse 2005). A key parameter for states in international environmental policymaking is the feasibility of solutions (cf. Sprinz and Vaahtoranta 1994). When technological feasibility of policy options is contested, states need to evaluate competing arguments from businesses in control of technology development and implementation (Vormedal 2008). Assuming that state executives have considerable discretion in judging competing feasibility claims, I hypothesize that the tangibility of the supporting evidence about technological feasibility is crucial for understanding which claim prevails. For instance, real-world applications of novel emission-reducing technology are a more tangible proof for the feasibility of stringent emission standards than design studies.

State positions reflect the comparative discursive and technological power of competing business interests. Technology leaders and suppliers usually argue for ambitious policies (Falkner 2008, chap. 2). States to which these businesses early provide tangible supporting evidence are likely to become proponents of greener policies. By contrast, technology laggards and users dispute the feasibility of such policies (Falkner 2008, chap. 2). States mostly exposed to evidence from these businesses are likely to oppose greener policies. States that remain undecided about the feasibility of greener policies (e.g., because no ties with relevant businesses exist) assume an audience role. The ability of proponents and opponents to persuade and mobilize audience states decides which position comes to shape international policy decisions.

The combination of technological and discursive business power that I propose expands the two well-established – but often separate – power concepts. Environmental politics research has framed discursive business power as complementary to relational and structural power but omitted its entanglement with technological power (Ford and Newell 2021, Madariaga et al. 2021). Discursive business power denotes the framing of environmental problems and solutions to serve corporate interests. Examples include efforts of the fossil fuel industry to downplay the problem of climate change (Ford and Newell 2021) and business support for market-based policy instruments to achieve economic and environmental ‘win–win’ solutions (Levy and Newell 2005). Importantly, Science and Technology Studies suggest that technology is subject to discursive contestation too (Hess and Sovacool 2020). Technology is not purely material because individual actors may imagine its development and implementation quite differently (Callon 1986). Sociotechnical imaginaries have guided societal responses to technology, as exemplified by cross-country differences in dealing with nuclear energy (Jasanoff and Kim 2009). Applied to international environmental policymaking, this suggests that the policy positions of negotiators are shaped by their assessment of a technology’s availability and problem-solving potential.

In my argument, technological power has both material and discursive facets. Technology access materially shapes businesses’ policy preferences but unfolds discursive influence in policymaking. To the extent that technology-related arguments matter, material power resources are less decisive and large corporations from key states are not necessarily the most influential ones in international negotiations. Smaller firms can compensate for inferior material endowment by providing tangible evidence for the technological feasibility of ambitious policies. Indicators of such evidence include the availability of design studies, promising pilot technology, certification or approval of the new technology by public authorities, commercial order of compliant equipment, and regular operation of it.

Method

I probed the propositions about business influence studying the case of nutrient standards for sewage discharges from ships in the Baltic Sea negotiated between 2005 and 2016. The Helsinki Commission (HELCOM), the Baltic Sea’s regional governance body, prepared the regulation and the International Maritime Organization (IMO), shipping’s global regulator, adopted and reviewed it. The regulation mostly reflects green business interests that had fewer material resources than grey business interests but provided tangible evidence for policy feasibility. This makes it a deviant case for the dominant explanation of business influence through material resources and a typical case for the hypothesized mechanism of technology-based arguing. In the context of tracing causal mechanisms, the former helps examine why a mechanism fails and the latter is the only way to probe and specify a new mechanism (Beach and Pedersen 2018). Hence, for technology-based arguing, the case serves the dual purpose of probing the plausibility of this deductively developed influence mechanism and of building more specific propositions about its scope conditions. Furthermore, the case offers internal comparisons addressing additional explanatory factors: two different institutional settings produced similar decisions; and state support for ambitious standards grew between adoption and review despite similar scientific knowledge and NGO pressure.

I studied business influence through causal process-tracing and elements of congruence analysis (Blatter and Haverland 2012) building on three core elements. First, a comprehensive storyline structures the negotiations into analytical sequences separated by branching points, when decision-makers chose one policy path over alternatives, and critical moments, which prepare, specify, or consolidate this choice (cf. Bengtsson and Ruonavaara 2017, pp. 50–53, Blatter and Haverland 2012, pp. 111–113). I developed the storyline from international meeting reports and changes in draft regulations. Second, the analysis of the sequences assesses the congruence of the empirical observations with theoretical expectations deduced from the two causal mechanisms (Blatter and Haverland 2012, pp. 144–145). Based on the material resources and technological evidence supply of competing business interests in each sequence, I formulated expectations about the resulting policy choices. I then empirically assessed these expectations by examining negotiation dynamics ahead of branching points and critical moments. Third, the evaluation of collected evidence considers the temporal, spatial, and social proximity of causes and effects. I drew on within-case comparisons and first-hand insights of negotiators to identify ‘smoking gun’ evidence that features ‘a cluster of observations, which together provide a high level of certainty for a causal inference’ (Blatter and Haverland 2012, p. 115).

The empirical material comprised rich primary sources of different types. I obtained over 200 meeting documents from the electronic archives of HELCOM and IMO (meeting reports and state and nonstate submissions at all institutional levels) and had access to audio-records of three IMO committee meetings (2014–16). I collected additional first-hand insights on business influence and state preferences along the storyline from semi-structured interviews with some leading negotiators and close observers (see Supplement). Although the interviews corroborated my analysis of other materials, I used them cautiously given some memory gaps and strategic responses of interviewees. Contextual insights from participatory observation in the IMO Marine Environment Protection Committee (MEPC) between 2017 and 2019 complemented these sources. The evidence for technology-based arguing presented in the following narrative is further expanded and contextualized in the Supplement to this article.

Business influence and nutrient regulation for ships

Nutrient regulation for passenger ships in the Baltic Sea has been a global first and potential model for other regions. Nutrients like nitrogen and phosphorus in discharges of sewage from ships’ toilets contribute to marine eutrophication. Eutrophication increases noxious cyanobacteria blooms that lead to ‘dead zones’ where most marine life in bottom waters cannot be sustained due to oxygen depletion. Eutrophication and dead zones affect many sea basins and coastal oceans (Diaz and Rosenberg 2008). In the Baltic Sea, dead zones have grown tenfold in the last century to almost equal the size of Lithuania, mainly due to anthropogenic nutrient inputs (Carstensen et al. 2014). Ships’ sewage accounts for a small share of inputs but can have significant local impacts along shipping routes (Hänninen and Sassi 2009, p. 58).

A contentious issue in the international negotiations were the limits for the nutrient content of sewage effluents. Some states advocated ambitious limits; others preferred more permissive ones or opposed regulation altogether. Underlying was a business conflict mainly between innovative equipment manufacturers that were developing new wastewater treatment technology and cruise lines that would have to buy and operate more costly equipment. The former contributed to the development of demanding nutrient standards; the latter opposed them. With the adoption of demanding standards, a handful of medium-sized equipment manufacturers prevailed over the multi-billion-dollar cruise industry.

Storyline

The negotiations of nutrient regulation had three main sequences (Figure 1). Initially, HELCOM discussed the problem and developed a policy proposal for submission to IMO. The 10 HELCOM members – the Baltic Sea coastal states (all except Russia being EU members) and the EU – take unanimous decisions (HELCOM 2013). In 2009, they adopted a draft regulation for making the Baltic Sea a special area under Annex IV of the MARPOL Convention, which is developed by IMO and addresses sewage from ships. Compared to HELCOM regulation, the legal advantage of MARPOL is that it also applies to ships flying non-HELCOM flags. Inside the special area, passenger ships would have to deliver all sewage to port reception facilities or discharge it in compliance with demanding nutrient limits (HELCOM 2009c). Agreement on these limits was critical because, despite opposition from the cruise industry and some skeptical states, it predefined what would become the ambitious policy option in IMO.

Figure 1. Timeline of HELCOM and IMO negotiations about nutrient limits.

Source: author.

Next, the provisions proposed by the Baltic Sea states were negotiated in IMO. The cruise industry and flag states with many registered cruise ships opposed the demanding nutrient limits and advocated more permissive ones. The 174 member states of IMO strive for consensus, so formal majority voting with one vote per state is rare (Corbett et al. 2020, p. 829). When state positions diverge, the committee chair typically counts interventions to inform her conclusions. In 2012, IMO adopted the demanding standards based on ‘a very slight majority of the delegations who took the floor’ (IMO 2012, para. 11.16). This was a branching point because states chose this path when a less ambitious option was on the table too. The additional agreement to review the standards before their entry into effect (IMO 2012, para. 11.60) underscores the decision’s pivotal nature.

Finally, IMO reviewed the nutrient requirements. This was another critical moment as renewed controversy created an opportunity for relaxing the required reductions. However, in 2014, a clear majority of state delegations confirmed the demanding standards (IMO 2014a, 2014b, para. 8.4). This broad support marked a noticeable change compared to the razor-thin decision two years before. Discussions about implementation continued after the review but primarily concerned the availability of adequate port reception facilities as an alternative to onboard treatment. Following a compromise on this issue (IMO 2016, para. 10.15–10.18), the nutrient requirements took effect for new ships in 2019 and for existing ships in 2021. Next, I show that, in each of the three sequences, the summarized policy decisions partially deviated from the theoretical expectations of material business influence but matched those of technology-based arguing (Table 2). In the analysis, I also address the roles of environmentalism, state power, and institutional setting as non-business-related factors.

Table 2. Theoretical expectations and empirical observations of business influence.

	Material resources	Technology-based arguing
Proposal
Starting point	Cruise industry has superior material power resources in relation to almost all Baltic Sea states, except for Finland – need for consensus decision in HELCOM	Equipment suppliers provide tangible pilot evidence for feasibility of demanding standards, but some uncertainty regarding performance in marine applications
Expectation	HELCOM rejects demanding standards	HELCOM leans towards demanding standards
Observation 1 Observation 2	✔Many HELCOM states initially skeptical about demanding standards advocated by Finland X State positions change and HELCOM adopts relatively demanding standards	✔ Following evidence from suppliers, many states abandon their initial skepticism and support the Finnish position ✔ HELCOM adopts relatively demanding standards that accommodate uncertainties about performance in marine context
Adoption
Starting point	Cruise industry is materially superior in several influential flag states and within IMO; suppliers materially superior only in few host countries	More suppliers claim feasibility and first tangible signs of technology uptake, but some uncertainty about future equipment availability
Expectation	IMO adopts less demanding standards	IMO leans towards demanding standards
Observation 1 Observation 2	✔ Flag states prefer less demanding standards, whereas supplier countries prefer more demanding ones X Advocates of demanding standards mobilize more support and shape IMO decision	✔ Slight majority of states support the more demanding standards proposed by HELCOM states ✔ IMO adopts the demanding standards temporarily and agrees to review them to address uncertainties about equipment
Review
Starting point	Cruise industry continues to have superior relational and structural power in all major flag states and within IMO, whereas suppliers dominate in Finland and Norway	Suppliers inform about type approval of compliant and suitable systems and provide evidence for technology uptake, which undermines claims about lack of equipment
Expectation	IMO makes standards less demanding	IMO confirms the demanding standards
Observation 1 Observation 2 Observation 3	✔ Still two opposed camps around cruise industry and supplier interests X Opposition from non-European flag states weakens and fails to shape IMO decision	✔ Majority backing the demanding standards grows and opposition weakens ? Supporters of the demanding standards are mainly EU states✔ IMO confirms the demanding standards

Empirical observations match a theoretical expectation (✔), do not match it (X), or raise new question (?).

Source: Author.

Policy proposal: building support through pilot technology

From 2005 to 2009, support for nutrient regulation built up regionally within HELCOM. An early proponent was Finland where discharges of untreated sewage from ships raised domestic concerns. A subsequent study found that ships’ sewage represented only 0.5% of all nutrient inputs into the Baltic Sea but was relevant because of geographic concentration and direct uptake by cyanobacteria (Huhta et al. 2007, pp. 7–9). Sweden, Latvia, and Poland generally supported regulation, whereas Denmark, Estonia, Germany, and Russia were skeptical (Finland 2007, pp. 5–10, HELCOM 2007a, para. 3.10). In negotiating the Baltic Sea Action Plan, however, all states agreed on preparing a proposal to IMO for addressing sewage discharges from passenger ships under MARPOL (HELCOM 2007b, p. 26). Preparing the proposal, states contemplated a maximum nutrient content of 10 mg nitrogen and 0.5 mg phosphorus per liter effluent from onboard treatment plants (Finland 2008, p. 5). Following further consultations, they adjusted this to 20 mg nitrogen or at least 70% reduction and 1.0 mg phosphorus or at least 80% reduction (Finland 2009, Appendix 3, Annex 3). Although somewhat relaxed, these requirements still represented a demanding proposal to IMO.

The proposal development involved business conflicts between economic interests along the supply chain and, to a lesser extent, between different supplier interests. Innovative manufacturers of sewage treatment plants supported demanding requirements that promised to increase demand for advanced equipment (Interview 8). For a medium-sized cruise ship, the requirements would increase the total annual costs of wastewater treatment by €100,000 or 18% (Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russian Federation, and Sweden 2009a, para. 7.18). Considering installation and operation costs, the cruise industry opposed the ‘potentially enterprise-threatening’ standards (Interview 6). Additionally, the standards threatened the competitive position of less innovative equipment suppliers; and ferry operators preferred an upgrading of port reception facilities to costly shipside regulation (Interview 9). The requirements chosen by HELCOM largely reflected the preferences of innovative suppliers and marked a first defeat of the cruise industry and its allies.

The cruise industry’s defeat is surprising given its superior material power resources. As for relational power, Cruise Lines International Association (CLIA), the sector’s global organization, used the HELCOM observer status of its regional sister organization (European Cruise Council, ECC) to lobby against demanding requirements. Observers can attend meetings, submit written documents, and make oral interventions (HELCOM 2015, para. 3). In contrast, few equipment manufacturers, which had no association speaking with one voice, were involved in policy discussions (Finland 2008, p. 5). Other sectors benefitting from reduced eutrophication, such as fishing and tourism, were not visible in negotiations or domestic consultations. As for structural power, cruises create significant economic impact in the Baltic Sea (2018: revenues of €1.5 billion and over 12,500 jobs; Menke zum Felde 2020, p. 2), especially in ports like Copenhagen (Denmark), Helsinki (Finland), Kiel, Rostock (both Germany), Stockholm (Sweden), St. Petersburg (Russia), and Tallinn (Estonia). The economic importance of the manufacturers supporting demanding requirements – one Finnish and one German company – mainly related to their home countries and was still arguably smaller than that of passenger shipping and related sectors like shipbuilding. Furthermore, long-term demand for wastewater treatment systems itself depends on cruise lines’ continued prosperity. If material resources had determined influence, the cruise industry should have prevailed politically.

Bargaining could explain some facets of the policy proposal but not the nutrient standards as such. In HELCOM, states early focused on passenger ships, representing only 6% of all ships but two-thirds of nutrient inputs from shipboard sewage in the Baltic Sea (Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russian Federation, and Sweden 2010, para. 12). This focus avoided economic impacts for cargo shipping and potential opposition from many flag states (Interviews 1, 2, 7). In the comprehensive Baltic Sea Action Plan, even HELCOM states skeptical about the need for regulation, such as Denmark, agreed on developing a joint regulatory proposal. Their aim was to secure the larger package deal (Interview 4). Beyond this, however, there are no indications that Finland used any side payments, issue linkages, or threats to build the consensus around demanding nutrient standards.

Technology-based arguing helps to fully understand the victory of innovative equipment suppliers. Initial uncertainty within HELCOM about the availability of nutrient removal technology (Estonia and Germany in Finland 2007, pp. 5–7) created a need for external expertise. While a study reported effective nutrient removal in onshore treatment and phosphorus removal in certain marine systems (Huhta et al. 2007, p. 27, 43), the reduction capacity of advanced systems on cruise ships remained largely unclear (Denmark and Germany in Finland 2008, pp. 13–14). States consulted the cruise industry, which referred to equipment manufacturers by stating that ‘the technology is coming, but not yet here, to practically remove all nitrogen and phosphorus’ (CLIA in Finland 2008, p. 19). In retrospect, this contributed to shifting responsibility and decision-makers’ attention onto equipment suppliers. The Finnish supplier Evac early communicated expected nutrient removal values, which, in the absence of other data, negotiators inserted as first standards into the draft regulation (Finland 2008, pp. 2–5).

Innovative manufacturers persuaded delegates that demanding nutrient limits were feasible as counterarguments lacked strong evidence. Evac provided performance data from an onshore pilot and the German manufacturer Hamann announced plans to upscale a system capable of removing most nutrients (Evac Oy 2009, Hamann AG 2009, HELCOM 2009a, para. 4.5–4.7). The cruise industry responded that, in its experience, ‘most manufacturers claims are significantly exaggerated,’ which jeopardized the viability of its operations (ECC/CLIA 2009, p. 3, 9). A British equipment manufacturer informed that own trials had not proven feasibility and that marine application of onshore technology was challenging (Hamworthy Water Systems 2009, p. 16). These arguments highlighted remaining uncertainties but did not invalidate Evac’s and Hamann’s expertise, which acknowledged the need for design improvement, upscaling, and shipboard testing (HELCOM 2009a, para. 4.6–4.7). Decision-makers accommodated these uncertainties by adding a ‘safety margin’ and alternative reduction benchmarks to the standards that the cruise industry continued to oppose (HELCOM 2009b; Interview 2). Combined technological and discursive power rather than material power resources made the innovative suppliers win this first round of arguing.

Policy adoption: expanding support through accumulating technological expertise

From 2009 to 2012, international support for demanding nutrient requirements in the Baltic Sea grew within IMO. Already before the submission of the HELCOM proposal, environmentalists had raised problem awareness in IMO. The WWF successfully advocated a largely symbolic MEPC circular encouraging cruise ships to refrain from discharging wastewater into seas threatened by eutrophication (IMO 2009, para. 14.1–14.6). Negotiations about concrete standards began after the HELCOM members had submitted their proposal of 20 mg nitrogen per liter effluent or at least 70% reduction and 1.0 mg phosphorus per liter or at least 80% reduction (Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russian Federation, and Sweden 2009b). Major flag states – the Bahamas, Liberia, and Marshall Islands – became opponents advocating less demanding limits of 35 mg nitrogen or at least 30% reduction and 2.0 mg phosphorus or at least 70% reduction (Bahamas, Marshall Islands, Liberia, and CLIA 2011, para. 3; Interview 3). Other flag states, including Panama as the world’s largest, shared their position (Interviews 3, 7). After controversial discussions, MEPC 64 supported the more demanding standards with a narrow majority and agreed to review them after two years.

The negotiations reflected an intensified business conflict between progressive equipment manufacturers and reluctant cruise lines with their allies (Table 3). Equipment manufacturers provided the technical expertise behind documents of the Baltic Sea states that backed demanding standards (Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Russian Federation, and Sweden 2009a, para. 7, 2010, para. 10). The cruise industry, while expressing commitment to improving environment performance, continued to strongly oppose demanding limits and advocated the less demanding standards achievable with existing equipment (CLIA 2010, para. 5, 2011). Shipowners and operators represented by the International Chamber of Shipping and a less innovative manufacturer supported this position (ICS, CLIA, and Interferry 2010; Interview 5). Again, however, the cruise industry and its allies failed to change the policy outcome.

Table 3. Business and state positions on IMO nutrient standards.

	Demanding standards	Less demanding standards
Main business actors	Innovative equipment suppliers (Evac, Hamann, Scanship, and others)	Cruise industry association (CLIA)
Business allies	-	Other shipping industry associations (ICS), less innovative supplier
Key state allies	Finland, Norway	Bahamas, Liberia, Marshall Islands
Other state supporters	Baltic Sea coastal states (e.g., Estonia, Sweden), EU member states (e.g., Cyprus, France, Greece, Ireland, Italy)	Non-European flag states (e.g., Dominica, Panama)

Source: Author.

Material power resources of competing business interests can explain some state positions but not the overall outcome. Regarding relational power, CLIA as a consultative organization was familiar with IMO procedures, sent several staff members to meetings, and had the possibility and capacity to prepare documents and make oral statements (cf. IMO 2019, rules 7–8). The equipment suppliers lacked a joint representation, were less familiar with IMO processes (Interview 8), and had no possibility to submit own documents or make statements during formal negotiations. A few individual company representatives served as experts in their home country delegations (Interview 5) but, compared to CLIA, their lobbying capacity was limited. Regarding structural power, influential ‘flags of convenience’ that capitalize on shipping with low regulatory burdens (DeSombre 2008) supported the cruise industry. The Bahamas and Panama, where 36% and 12% of all cruise ships were registered in 2008 (Boy 2011, p. 64), and major flag states in cargo shipping, like Liberia and the Marshall Islands, sought to avoid any precedent for ambitious shipside requirements for sewage. Material allies of innovative equipment manufacturers were their home countries, including Finland (Evac), Germany (Hamann), Norway (Scanship), and France (Veolia), but these countries also had ties with passenger shipping via major shipbuilders, cruise and ferry operators, and seaports (Interviews 1, 9). Hence, material lenses cannot elucidate how equipment suppliers trumped the cruise industry as the latter possessed clearly superior relational and structural power resources (Table 4).

Table 4. Main business actors and their power resources.

	Innovative suppliers	Cruise lines
Business actor unit	Individual companies	Organized sector
Sample companies analyzed here	Evac, Hamann AG, Scanship	Carnival Corp., Royal Caribbean Cruises, Norwegian Cruise Line
1) Material resources	Inferior	Superior
a) Revenues (million USD)	94.7	27ʹ083.8
b) Net profit (million USD)	9.6	2ʹ472.3
c) Number of employees	320	183ʹ300
d) Countries with direct economic benefits	Host countries: Finland, Germany, and Norway	Major flag states (as of 2008): Bahamas, Panama, Italy, Bermuda, US, Netherlands, Cyprus, and Greece
e) Countries with indirect economic benefits	Mainly host countries (e.g., taxes, innovation, cluster effects)	Many cruise destinations (e.g., tourism in port cities of Baltic Sea states)
f) Industry association present in international negotiations	No	Yes: CLIA/ECC
g) Company or industry association status	HELCOM: Provided invited input to expert group reports and meeting; IMO: Occasional observers in two state delegations and presentation at side-event	HELCOM: ECC is accredited as observer and involved itself ad-hoc; IMO: CLIA is accredited as consultative organization and involved itself continuously
h) Number of staff at international negotiations	HELCOM: 0–2; IMO: 0–3	HELCOM: 0–1; IMO: 7–14
2) Technology evidence	More tangible	Less tangible
a) Design studies	Evac confirmed feasibility of demanding standards in 2008; since then five more suppliers have confirmed feasibility	CLIA/ECC disputed feasibility of demanding standards based on information from one equipment supplier
b) Pilot technology	Performance data from Evac onshore trial demonstrating feasibility of demanding standards in 2009	CLIA/ECC raised doubts about marine application based on general arguments (e.g., space constraints)
c) Certification/approval	Type approval of Evac and Scanship equipment meeting the demanding standards reported in 2014	CLIA raised doubts about type approval but had to concede that it may be correct
d) Commercial order	First cruise line order of Scanship equipment compliant with the demanding standards reported in 2012, a dozen additional equipment orders reported in 2014	Equipment order by Norwegian Cruise Lines contradicts CLIA’s claim about lack of equipment; CLIA considered reports about additional orders to be misleading but provided evidence for a single case only
e) Regular operation	Operation of compliant Scanship equipment onboard two cruise ships and availability for different ship sizes reported in 2014	Equipment operation by Norwegian Cruise Lines contradicts CLIA’s claim about lack of equipment; CLIA raised doubts about availability for different ship sizes but failed to substantiate them

Source: Author’s own calculations for 2014 based on company information and assessments of HELCOM and IMO documents (for details and sources, see Supplement).

The result is surprising also on the level of states’ bargaining power. While the cruise industry’s state allies, such as the Marshall Islands, are among the least powerful in international relations (Corbett et al. 2020), they have high issue-specific bargaining power. The reason is that amendments to MARPOL require tacit acceptance by two-thirds of the contracting parties representing at least 50% of the world’s tonnage (MARPOL 1973, art. 16(2)(f)(ii)). This gives substantial institutional weight to flag states, which are major channels for the shipping industry’s influence on IMO decisions (Bateman 2015, p. 53). Conversely, countries that supported demanding nutrient standards have not threatened unilateral regulation (e.g., within the EU) as they have done for other environmental impacts to gain a bargaining advantage.

For the adoption of demanding nutrient standards, arguments about their technological feasibility were critical. The opponents argued that the standards proposed by the Baltic Sea states were aspirational and neither achievable nor practicable (IMO 2012, para. 11.18). According to CLIA, available advanced treatment systems could comply with the less demanding standards proposal at best (CLIA 2012, paras. 10–11). The proponents rebutted these arguments by referring to equipment manufacturers and stressing ‘that a number of the companies (at least six) had indicated that the proposed standards were achievable, and that onshore equipment could be designed for marine use and made available before the application date for those standards’ (IMO 2012, para. 11.17). The cruise industry questioned this statement by asserting that only three manufacturers had tested equipment partially and that real-world compliance remained uncertain (CLIA 2012, para. 14).

The proponents’ arguments prevailed for two reasons. First, tangible evidence from a supplier about the order of a system that would comply with the demanding standards undermined the assertion of unavailable equipment. Indeed, CLIA itself had to concede that ‘one manufacturer has accepted an order to deliver an AWTS [advanced wastewater treatment system] to meet the more stringent of the two proposed nutrient standards’ (CLIA 2012, para. 14). One delegate reported that, for mobilizing the narrow majority behind the demanding standards, ‘it was important that technology was not only available in theory but also in practice’ (Interview 2). Second, MEPC accommodated some opponent arguments via relaxed implementation dates (IMO 2011, para. 6.9–6.11) and amended type approval criteria (IMO 2012, para. 11.60.1). Importantly, the committee agreed on reviewing the standards ‘to determine that the required removal standards for Nitrogen and Phosphorus are met by type approved sewage treatment plants’ (IMO 2012, para. 11.60.3). Resulting from technology-related evidence rather than material superiority, this temporary victory of innovative suppliers concluded the second round of arguing.

Policy review: sustaining support through evidence of technology uptake

From 2013 to 2014, support among IMO members for the demanding standards consolidated. In the review at MEPC 67, the majority behind them was now much more solid, with 11 supporting states and only 4 opposing (IMO 2014a). Finland and Norway advocated the demanding limits and mobilized support from European audience states inside and outside of the Baltic Sea region. The Bahamas and Liberia renewed their opposition; the Marshall Islands did not. The remaining opponents received support from Panama and Dominica, whereas China and the UK proposed postponing the decision. Given this picture, which differed markedly from the narrow decision two years earlier, the committee confirmed the demanding standards. Continued disagreements about port reception facilities delayed implementation somewhat but did not change shipside nutrient limits.

The review marked the showdown of conflicting cruise industry and innovative supplier interests. The cruise industry continued to challenge the rationale and feasibility of the demanding standards (CLIA 2014a). Organizations representing shipowners and shipyards supported the call for standards that could be met with available equipment (IMO 2014a). Amongst the equipment suppliers, Evac and the Norwegian company Scanship were central in providing expertise and evidence backing the demanding standards (Finland and Norway 2014). Possessing the most advanced technology, both manufacturers had high stakes in these standards. The confirmation of the demanding limits by IMO was the final defeat of the cruise industry on this matter.

Increased support for the demanding standards did not follow from any shifts in relational or structural business power. The relational power balance was similar to 2012. The cruise industry made another major lobbying effort by submitting documents to MEPC 67, talking to delegations, and speaking in plenary. The leading equipment suppliers relied on direct relations with their Finnish and Norwegian home country delegations. The structural power landscape had not changed either. The cruise industry’s total economic impact of 117 billion US dollars in 2013 (Business Research & Economic Advisors 2014, 3–4) clearly outperformed that of a few medium-sized suppliers. While major flag states like the Bahamas and Panama remained the cruise industry’s closest allies, other flag states acted differently. The Netherlands (5% of all cruise ships globally) did not oppose the demanding limits and Italy (8%), Cyprus (2%), and Greece (2%) even supported them (Boy 2011, p. 64, IMO 2014a). Hence, relational and structural power resources did not determine state positions.

States’ bargaining power had only changed partly. The most notable change was that Finland was now very proactively supported by Norway, itself an influential IMO member (Psaraftis and Kontovas 2020, p. 169). Support for demanding standards from several EU countries might look like another bargaining pattern, but no direct cross-issue deals were evident and only some EU countries expressed support. Furthermore, it appears unlikely that EU flag states such as Cyprus, Greece, or France would have confirmed a new standard for the industry without proof of compliant equipment. Environmental concerns also did not appear as a key driver as only 3 out of 11 countries supporting the demanding standards mentioned eutrophication in their statements (IMO 2014a).

Technology-based arguments enabled the confirmation of the standards. The cruise industry claimed that compliant equipment was unavailable as it was ‘not aware of any sewage treatment plant currently fitted to a CLIA member line ship in service having been issued a Type Approval Certificate by the ship’s Administration to meet the more stringent standards for nitrogen and phosphorus’ (CLIA 2014a, para. 7). It acknowledged ongoing technological progress but stressed the lack of onboard testing (CLIA 2014a, paras. 8–9). Finland and Norway (2014, para. 8) challenged the assertions by explaining that systems from Evac and Scanship, fulfilling the standards with a ‘good margin,’ had obtained type approval. They informed that Scanship’s system was operating on two large cruise ships and that five leading cruise lines were planning its installation on several new ships (Finland and Norway 2014, annex 2). CLIA (2014b) responded to this bombshell evidence arguing that system capacity was unsuitable for typical ships in the Baltic Sea and that type approval certification was not in accordance with the new standards.

Both arguments of the cruise industry collapsed as new tangible evidence spread at MEPC 67. In a lunch break presentation, Scanship informed about its system’s type approval by a classification society on behalf of the Norwegian administration. In the negotiations, CLIA then conceded that type-approved equipment might exist indeed (IMO 2014a). Norway confirmed that type approval according to the standards had been granted based on a system onboard a ship of Norwegian Cruise Lines, a CLIA member. The evidence that one of its members was operating compliant equipment severely undermined CLIA’s argument about unavailable equipment. Norway also clarified that type approval applied to a series of systems, which, according to Scanship, were suitable for all ship sizes in the Baltic Sea from 150 to 10,000 passengers (IMO 2014a). The list of ships, for which the system’s installation was planned, served as powerful evidence. While CLIA called the list ‘misleading’ (CLIA 2014b, para. 6.1), it demonstrated inaccurate information for only 1 of 11 ships. According to one delegate, the availability of the Scanship system was ‘the decisive impetus’ for several states to back the demanding standards (Interview 3). Indeed, several supporting delegations referred to evidence of feasibility that Finland and Norway had provided based on their equipment suppliers (IMO 2014a). In this third round of arguing, tangible evidence of technology uptake made the innovative suppliers’ temporary victory a permanent one, despite their material inferiority.

Discussion

The case study demonstrated how green business influenced international environmental policymaking through technology-based arguing. Its expectations largely match observed policy decisions and explain how materially disadvantaged equipment suppliers prevailed over the cruise industry in all three key moments. Initially, their pilot data informed the first set of proposed standards and built regional state support. Later, the suppliers’ confirmation of the development and first orders of compliant treatment systems helped expanding international support for the adoption of demanding standards. Finally, information about type approval and operation of equipment onboard new cruise ships helped sustain support in the review phase. The growing majority for demanding standards between adoption and review comes closest to smoking gun evidence of technology-based arguing: as evidence of an uptake of compliant treatment technology accumulated, the cruise industry’s arguments seemed to crumble. The case study showed that the effects of technology-based arguing can outstrip business influence through material resources.

The explanatory limitations of material business power, international bargaining, and non-business-centered explanations help to hypothesize about scope conditions of technology-based arguing. Material business influence matched the initial interest configurations among states with high economic stakes but struggled to predict positions taken by states with lower stakes. This suggests that arguing is more likely in settings where economic stakes vary across states, for instance, because of an industry’s uneven geographic distribution. Bargaining among states shaped some basic elements of the regulation and its entry into force but did not produce the nutrient standards. Rather, the focus on a technology-based solution to an environmental problem put negotiations into arguing mode. Mobilization of audience states was highest among the EU member states, where strong and regular communication channels exist. Furthermore, environmentalism underscored the need for regulation but did not determine which standards decision-makers deemed feasible. The high complexity of wastewater technology was more suitable for expert debate than public mobilization. Moreover, institutionalized norms about legitimate business participation in IMO and solution-oriented deliberation increased the value of technological expertise (Hendriksen 2022) but did not determine which of the competing arguments would prevail. Differences of competing business interests in technology access and information seem to be another important prerequisite for technology-based arguing.

Three major limitations apply to the analysis. First, the focus on nutrient limits neglected gaps in monitoring and enforcement (Interview 5) and discussions about port reception facilities as a compliance option (Wilewska-Bien and Anderberg 2018). Integrating these aspects would raise questions about shipside regulation as a symbolic measure to avoid the upgrading of public port infrastructure. Second, the analysis of international negotiations did not consider domestic pressures exhaustively. Closer examination of domestic politics and consultations could help evaluate how arguing on international and domestic levels interacts (Ulbert and Risse 2005, Downie 2014). Third, any ex-post analysis comes with data gaps, such as memory gaps of interviewees or missing audio recordings. Resource-intensive collaborative event ethnography (Campbell et al. 2014), ideally with researchers embedded in state delegations, could close such gaps. While not undermining the validity of the findings, these limitations suggest avenues for widening the analytical scope.

Conclusion

The paper investigated mechanisms through which green business shapes environmental policy. I argued that relational and structural power based on material resources do not explain business influence in international environmental politics exhaustively. Business can exert influence through technology-based arguing based on combined technological and discursive power. I probed this mechanism using the case of nutrient standards for sewage from passenger ships in the Baltic Sea, which featured a business conflict mainly between innovative equipment suppliers and reluctant cruise operators. The materially weaker suppliers prevailed because, through tangible evidence of technology development and uptake, they persuaded decision-makers that demanding standards were feasible. The empirical findings support the plausibility of the novel mechanism for decision-making processes focused on complex technological solutions with different technology access in the industry and varying economic stakes of the countries involved.

These findings underscore and add to the academic policy advice that policymakers should strengthen green business interests as a basis for more ambitious environmental policy (Meckling et al. 2015, Meckling 2018). While building green interests remains crucial, technology-based arguments can be a pathway towards sustainable transformation in some sectors materially still dominated by grey interests. Important prerequisites for transformation are favorable conditions for corporate environmental innovation and the identification of resulting best practices. For green innovation and practices to have political effects, channels for communicating technology-related evidence to decision-makers are crucial (Hofmann 2022). These channels can be strengthened by (a) assessing corporate environmental innovation and practices systematically as input into regulatory processes; (b) facilitating access of green businesses to regulatory venues like international organizations; and (c) pool their expertise with that of other change agents like environmental NGOs and scientists.

The results raise three questions for future research. The first is how widespread business influence through technology-based arguing is. The hypothesized scope conditions may be present for other shipping impacts but also in other technology-intensive and geographically unevenly distributed industries, including offshore oil and gas, mining, chemicals, and aviation. Investigating cases from these industries through process-tracing and structured case comparisons can further specify the mechanism’s scope conditions. Such research could also consider parallel bargaining and arguing in international environmental negotiations (cf. J. I. Allan and Hadden 2017) and examine whether both mechanisms of business influence can operate simultaneously. The second question is how corporate decisions shape the success of technology-related arguments. Models of corporate environmental strategy (Skjærseth and Skodvin 2018) need to be integrated into theories of international bargaining and arguing. For instance, my observation of corporate technology choices that undermined infeasibility claims of an industry association reveals tensions between individual practice and collective arguing. The third question is whether the distinction of technology-forcing and -following regulation (cf. Franckx 2015, p. 753) still captures the reality of green business. Technology-based arguing understands the relation between green business and environmental policy as a dialectic one.

Informed consent

All interviewees referenced in the article consented to the recording of interviews and to the use of anonymized quotes for the purposes of the research explained to them.

Acknowledgments

The article is based on a Ph.D. thesis (Hofmann 2021) accepted by the University of St. Gallen, Switzerland. I thank the editor and two anonymous reviewers for constructive comments and am grateful for comments on earlier versions of the theory, method, and case study provided by James W. Davis, Klaus Dingwerth, Jon Birger Skjærseth, colleagues at the University of St. Gallen, and conference participants at ESG 2018 in Utrecht, ISA 2019 in Toronto, and SPSA 2019 in Zurich. I thank the Institute of Political Science at the University of St. Gallen for field research funding, the Swiss Maritime Navigation Office for the opportunity to observe four IMO MEPC meetings, and all of my interlocutors.

Supplemental data

Supplemental data for this article can be accessed online at https://doi.org/10.1080/09644016.2023.2178515

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Universität St. Gallen