Keeping things different: coexistence within European markets for cleantech and biofuels

ABSTRACT

Environmental policy increasingly resorts to market-based instruments in order to meet sustainability objectives. The ‘carbon market’ instituted by the European Emissions Trading directive from 2003 is a canonical example, which has been described, and critiqued, as a delegation of policy objectives to market exchanges. In this paper, we examine the complex ways in which the operationalization of policy objectives and the organization of markets are intertwined, focusing on two other examples of European environmental regulation. The first one is the Integrated Pollution Prevention and Control directive from 1996, which defined the ‘best available techniques’ to curb emissions in air, water and soil. The second one is the Renewable Energy Directive from 2009, which introduced criteria for the definition of the sustainability of biofuels. Through the analysis of the design and implementation of these two directives, we identify a central concern for the coexistence of various objects, and various initiatives undertaken by European institutions, member states and private actors. We use the notion of coexistence to describe a European political and economic ordering that is inherently hybrid, and cannot be reduced to a mere delegation of policy objectives to the market, or a legal constraint imposed on all European actors. It grounds its political legitimacy and economic rationality on the distribution of roles and responsibilities across public and private actors, and on the ability to ‘keep things different’ according to local variabilities.

KEYWORDS:

• European policy
• market construction
• valuation
• controversies
• clean technologies
• biofuels

Acknowledgements

For their helpful comments on earlier versions of this paper, we thank the editors of the themed section ‘Unsettling issues: valuing public goods and the production of matters of concern’, two anonymous reviewers, as well as participants in the following workshops: ‘The roles of states and markets in the extension of Tripartite Standard Regimes’ (Montpellier, May 2014), ‘The general interest and States resorting to markets’ (annual conference of the French association for political economy (AFEP), July 2014), ‘Can Markets Solve Problems?’ (EASST conference, September 2014), ‘Markets for Collective Concerns’ (Copenhagen Business School, December 2014), ‘Studying financialization through political and management devices’ (EHESS, April 2015).

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on Contributors

Liliana Doganova is associate professor at the Center for the Sociology of Innovation at Mines ParisTech (Ecole des Mines de Paris). At the intersection of economic sociology and science and technology studies, her research explores the links between valuation devices and the construction of markets. She has worked on business models, the valorization of public research, and markets for bio- and clean technologies. Her current research focuses on the history of discounted cash flow analysis as a valuation technique.

Brice Laurent is a researcher at the Center for the Sociology of Innovation at Mines ParisTech (Ecole des Mines de Paris). His work focuses on the relationships between the production of knowledge and democratic ordering. He has published about nanotechnology policies and regulation, and is currently working on European regulatory and standardization initiatives targeting technical objects.

Notes

1. It should be noted that delegation is also present in the implementation of the European carbon market, and the ETS directive has been differently implemented across member states (Campins Eritja, 2006). Nevertheless, the standardization of the objects being exchanged (emission allowances) is central to the functioning of carbon markets, while in the markets that we examine here, it is the variation in the objects being exchanged (clean technologies and sustainable biofuels) that appears as a central concern.

2. When certification schemes are developed by consortia of private companies (in 2013, there were 13 of them), they are theoretically independent from any member state. In practice, many of them are developed by national professional organizations.

3. For example, the farmers’ professional association produced alternative calculations, claiming that the operational costs of the clean technologies that were indicated turned out to be higher than expected. Conversely, the firms that developed these technologies claimed that the total cost for the farmer was lower than stated, because the technologies allowed making savings in other parts of the farm. Moreover, the exclusive focus on ammonia and phosphorous emissions in the assessment of the environmental effects of BAT was challenged by farmers’ concerns over animal welfare (impacted by techniques which consisted in changing the feeding of animals or lowering the temperature in animal houses) and by the publication of reports that used different methodologies such as life cycle analysis. Should not the fact that animals receive a poorer diet and get chilly be taken into account in the calculation of the costs of BAT? And are not animals as much part of ‘the environment' as the air, water and land polluted by ammonia emissions is? Such questions were raised in the discussions triggered by the publication of the BAT assessments in Denmark.

4. A similar critique can be found in the case of environmental certification initiatives such as the Forest Stewardship Council. For a discussion of this critique, and a description of the spaces for debate and participation surprisingly opened by what can yet be described as a neoliberal form of governance, see Klooster (2010).

5. As mentioned above, in the revisions of the IPPC directive the construction an ETS was put forward as a means to achieve harmonization; it was adopted for some emissions but abandoned for others following expert reports and public consultation. In the case of RED, the ETS was a negative reference during the discussions on sustainable biofuels: for the NGOs in particular, the future market for sustainable biofuels had to preserve a connection between the materiality of the product and the ‘sustainable' qualification.

6. We thank the two anonymous reviewers for this observation.

Additional information

Funding

One of the authors acknowledges support from the project Performabusiness funded by the European Research Council (ERC Starting Grant 263529).