Evaluating the current legal and policy aspects to support sustainable blue growth – Midterm results of Work Package 3
Response to research targets so far
We analyse the current legal and policy obstacles and opportunities for sustainable blue growth in Finnish fresh, coastal and marine waters and establish research-based guidance on how the aquatic environmental regulations and policies should be designed in Finland and in the EU to achieve this overall objective.
The ability of law and governance to facilitate sustainable blue growth, i.e. growth not jeopardizing the ecological status of waters, depends on its adaptivity. Adaptive law theory suggests that the key elements of such regulation are (1) management of indirect and cumulative impacts; (2) integration of scientific knowledge into decision-making; and (3) versatile and integrated mix of regulatory instruments (regulatory mix). These procedural elements call for strong, legally established goals to set societal direction for adaptation. In blue economy, the most relevant legal goal is the good ecological status of waters as established by the EU Water Framework Directive (2000/60/EC, WFD).
The three key aspects of adaptive law theory are well illustrated by the recent Supreme Administrative Court of Finland decision (KHO 2019:166) in the Finnpulp case, a proposed 1.4 billion euro bioeconomy investment. The Supreme Administrative Court overturned earlier permit decisions on the grounds that nutrient and other discharges from the factory would, in combination with cumulative impacts, jeopardise the ecological status of lake Kallavesi (element 1). Interestingly, most nutrients impacting the ecological status originate from diffuse sources (mainly agriculture and forestry) and the planned investment would have increased this load by less than 10 %. The decision was based on scientific models that indicated a risk of a drop in at least one biological quality element during the 40 years operation period of the factory (element 2). The authorities – or the operator – did not have the regulatory tools to manage cumulative impacts (element 3).
Environmental legal framework for sustainable blue growth derives from the WFD and the Finnish legislation implementing it. The key requirements of WFD are to prevent the deterioration and to achieve the good status of aquatic ecosystems. Sustainable blue growth can be realized only within the limits set by this legal framework. In addition to WFD, other relevant regulation for sustainable blue growth are, for example, national planning systems (maritime spatial planning, land use planning), various permitting mechanisms, (particularly the Environmental Protection Act and the Water Act), and incentives concerning particularly agriculture and energy (support schemes and taxation).
Deficiencies of the current national regulation
Based on our research, the current national regulation suffers from a number of deficiencies. First, there is no effective means to manage indirect and cumulative impacts in the context of environmental permitting, as the Finnpulp case demonstrates. In WFD, the river basin management plan and the programme of measures are the key instrument for the management such impacts. However, in Finland, they are not properly linked to permitting or to the management of non-point source pollution (particularly agriculture and forestry).
Second, while environmental permit decisions are based on estimations of future environmental impacts, using ecological modelling tools always contains uncertainties. In principle, modellers have several means for conceptualising uncertainties, but in practice this seldom takes place. As a consequence, decision makers may not be able to consider such uncertainties properly in environmental permitting. Furthermore, the main emphasis in regulation is on front-end permitting and it is hard to change permits afterwards in the light of new scientific knowledge. In the case of Finnpulp, the Supreme Administrative Court concluded that Finnish law does not provide effective means to revise a permit and thus lacks the adaptive capacity, which forces the Court to consider long-term uncertainties at the permitting phase.
Third, the management of cumulative impacts and the use of scientific knowledge is possible only if regulation contains versatile and flexible tools to this end. As already referred to, the authorities should, based on reliable and verifiable scientific evidence, have effective means to change permits after they have been granted. This calls for a new balance between stability (legal certainty) and flexibility (environmental needs based on legal goals and scientific knowledge). In addition, better management of cumulative impacts requires integrating permitting systems with key planning instruments. Furthermore, economic instruments should be developed so that they support the management of cumulative impacts. One example is financial aid to concentrated manure treatment plants.
The way forward
Our research is based on state-of-the-art understanding of global adaptive governance theory as well as empirical and legal doctrinal work applied to the project’s sectoral focus areas. Our assessment covers water and environmental law generally with particular focus on aquaculture, offshore wind energy, hydropower, restoration of waters, ecological compensation and nutrient recycling.
In the continuation, our main task is to work on an interdisciplinary synthesis gathering observations and ideas from our own research and other work packages on how the aquatic environmental regulations and policies should be designed in Finland and in the EU to achieve the overall policy objective sustainable blue growth. In addition, we are working with some specific issues. First, we will study whether the environmental objectives, set in the Water Framework Directive, are feasible under on-going climate change, and concurrent slow ecological recovery due to potential retardation caused by regime shifts of aquatic ecosystems. Secondly, we will ask whether there is a sufficient policy mix to drive joint societal actions for halt deterioration and support restoration. In this context, we will study the current collaborative governance approaches, namely Water Visions, may provide collaborative approaches to tackle the challenges in management, for instance in cases where the state does not have legal authority, resources, or will to act.
Research Professor Jukka Similä, University of Lapland, firstname.lastname@example.org