THE EVOLUTION OF ENVIRONMENTAL GOVERNANCE MECHANISMS: AN INSTITUTIONAL FRAMEWORK APPLIED TO BIOFUELS1

Abstract

This article proposes an analytical tool to assess the evolution of environmental governance mechanisms. The institutional path of certification systems is driven by three pre-existing variables that interact to determine the evolution of environmental governance: public regulations, industry competition and organisation, and legitimation mechanisms. Competition among certification systems results in the convergence of public and private environmental regulations, which tend to move towards the median demand for sustainability standards. This framework is later applied to the still incipient sector of biofuels, seeking to predict the certification schemes that have better chances to prevail. As an important normative implication, the efficacy of environmental governance depends on compliance costs for producers and, consequently, hinges on prevailing public regulations. These regulations must be designed not only by accounting for their direct effects but also by considering their indirect effects on the development of private certification systems.