Law, Governance & Sustainability- Week 3 Lecture

Introduction

• Week $3$ of the unit; final week of “foundations”.
• Guest lecturer: Professor Felicity Dean (Law School; teaches Taxation Law, researches economic instruments, trade & climate change).
• Topic focus: Law, Policy, Governance & Sustainability.
• Acknowledgement of Country: Traditional Owners – Tarrawal and Jagera peoples.

Lecture Structure & Logistics

• One–hour slot with many definitions; easy → hard order.
• Q&A options: after class or via email (to be posted on Canvas).
• Upcoming Lunch-and-Learn: meet $11{:}30$, starts $12{:}00$; $50$ students on wait-list, cancel early if unable to attend.
• Next week = Ekka Public Holiday → no live lecture; pre-recorded podcasts will replace it.

Essential Terminology

Legislation

• Formal, binding rules enacted by parliament.
• Clear procedure; black-letter law; studied in Law $101$.

Policy

• “Stated goal/objective”; can be governmental, organisational, or personal.
• May be achieved through legislation or other means.
• Used by courts to interpret legislation, but non-binding if not embedded in statute.
• Election example: net-zero emissions by $2050$, nuclear-power debate.

Regulation

• Term has multiple usages:
  • Interchangeable with “legislation” in casual speech (e.g., “environmental regs”).
  • Delegated/secondary legislation (Capital-R Regulations).
  • Course definition (LAWS $108$): “Any rule endorsed by government with an expectation of compliance.”
• Broader than legislation; can include standards, self-regulatory codes, industry circulars, incentive mechanisms, technology-based limits (e-scooter speed-limiter).

Governance

• Broader again; concerns who makes decisions & how problems are addressed.
• Elements: decision rules, accountability pathways, power boundaries, cultural shaping.
• Can be framed by:
  • A specific problem (e.g., point-source vs non-point-source pollution).
  • A whole entity (state governance, corporate governance, sport governance).

Comparing the Four Terms

• Policy = goal/plan.
• Legislation = formal rules.
• Regulation = broader rule-set endorsed by state, expectation of compliance.
• Governance = structures & actors that create/apply policy, legislation, regulation.

Illustrative Examples

• Legislation: Criminal Code, Environmental Protection Act $1994$ (Qld).
• Delegated regulation: EP Act’s regulation-making power.
• Industry self-regulation: media codes, professional standards.
• Tech-based regulation: e-scooter software speed caps.
• Point-source pollution: asbestos dumped from a single facility.
• Non-point pollution: greenhouse emissions causing climate change.

Readings Overview

Gunningham Chapter (≈ $30$ pages)

• Traces shift: Law → Regulation → Governance continuum.
• Historical arc: state-centric environmental law → multi-actor governance.
• Introduces neoliberalism (market freedom, minimal state).
  • Promoted by Thatcher & Reagan ($1980$s); resurfaces in deregulation debates (e.g., Morrison Govt Deregulation Taskforce).
• Concept of regulatory capture: industry lobbying ≈ watering-down rules.
• Key thesis: “Smart mixes” work best only if backed by a credible “gorilla in the closet” (strict enforceable legislation).
• Climate change cited as “greatest market failure”; lack of adequate regulation.

Bell & James Article

• Focus: enforceability of policy under the Environment Protection & Biodiversity Conservation Act $(EPBC)$ $1999$ (Cth).
• Distinguishes binding legislative duties vs non-binding ministerial policies.

Cases Discussed

1. (Unnamed) Minister reconsideration case – decision remitted, same outcome once policy “considered”.
2. JP Highway Extension – Minister approved project with offsets; challengers argued offsets should be “last resort”. Court held offset policy non-enforceable because not in statute.

• Conclusion: critical policies (e.g., offsets “mitigation hierarchy”) need embedding in legislation; echoed by $2020$ Samuel Review of EPBC Act.

Sustainability & Environmental Regulation

• Three classic drivers:
  1. Resource conservation (secure future supply).
  2. Human harm prevention (pollution, waste).
  3. Protection of remaining natural assets.
• Conflict: rules may limit certain industries → lobbying for “cutting $\text{red}$ / $\text{green}$ tape”.

Economic Theory Foundations

Externalities

• Negative externality: cost imposed on third parties (e.g., pollution).
• Solution (Pigou, $1920$s): internalise cost via Pigovian tax.
• Alternative (Dales, $1960$s): assign property rights & allow cap-and-trade → market finds efficient price.

Neoliberalism

• Favors deregulation, small government, free trade; critiques: environmental degradation, climate inaction.

Regulatory Instruments Typology

Offsets as Economic Instruments

• Definition: compensate environmental harm at site $A$ by positive action at site $B$ (ideally “like-for-like”).
• Found federally & in all jurisdictions; intended last resort.
• Cost must be purchased (changes project’s financial calculus).
• Problems: non-equivalence, leakage, monitoring challenges, unenforceable if only in policy.

Carbon Pricing & Australian Experience

• CPM $2012–2014$: fixed-price $\text{phase}$ → intended transition to emissions trading; labelled “carbon tax”.
• Safeguard Mechanism (current): baseline-and-credit, not full cap-and-trade. Entities buy Australian Carbon Credit Units (ACCUs) if exceeding baseline.
• Subsidies: fossil-fuel tax concessions counteract climate aims (perverse economic instrument).

“Smart Mix” Principle

• Combine:
  • Strict back-stop law (command-and-control).
  • Flexible tools (economic instruments, self-regulation, info).
• Especially vital for non-point pollution (e.g., climate change) where single-source enforcement is impractical.

Practical / Ethical Implications

• Who pays? Cost distribution between polluters, consumers, society, future generations.
• Governance shapes culture: power dynamics, accountability, public trust.
• Ineffective rules → biodiversity loss, climate risk, long-term productivity decline.

Connections to Upcoming Content

• Week $9$: deep dive into EPBC Act.
• Next lecture (after holiday): corporate governance & sustainability (Monica).
• Tutorials: apply Gunningham & Bell-James arguments; know definitions & case facts.

Final Reminders

• Readings: prioritise key points above, but full texts enhance comprehension.
• Email questions; watch for Canvas announcement with meet-up spot for Lunch-and-Learn.
• Podcasts uploaded next week due to public holiday — no live class.