The political economy of industrial pollution control: environmental regulation in Swedish industry for five decades

Abstract

The paper analyzes the prerequisites for a regulatory-driven transition toward radically lower air and water pollution in industry. This is achieved in the empirical context of the Swedish mining and metals industry, and by investigating the environmental licensing processes during two regulatory systems. The paper derives an analytical framework that explores under what circumstances such licensing processes can result in radical emissions reductions without seriously jeopardizing the competitiveness of the industry. Archived material covering six environmental licensing processes, three during each system, is used to illustrate the various design and implementation issues. The results suggest that regulatory-driven green transitions benefit from trust-based bargaining procedures in which companies are involved in repeated interactions with regulatory authorities, and which extended probation periods permit tests of novel abatement technologies (including innovation). The findings also illustrate the importance of abstaining from simplified normative notions about policy instrument choice (e.g. taxes versus standards).