Environmental regulation and business 'self-regulation'

Both in Europe and in the United States there is now active advocacy, in some business and government circles, of increased `self-regulation' of businesses for environmental protection and pollution reduction. Speci¢c proposals include sectoral pollution-reduction `covenants,' market trading of emissions permits, third-party certi¢cation of environmental performance (e.g. under the European Union's Eco-Management and Auditing Scheme [EMAS] and the ISO 14001 Environmental Management System certi¢cation), ad hoc negotiation of regulatory £exibility in exchange for superior environmental performance, and others. Recent proposals for industries in both Europe and the United States, for instance, have argued for a more `voluntary' approach to environmental protection, in which the government would set an overall `framework' while allowing industries themselves to decide how they would organize their operations to achieve the requirements of this framework. The Confederation of Netherlands Industry and Employers (1995), for instance, has asserted that