Current Trends in Innovation and Integration in Ontario

1
Current Trends in Innovation and Integration in
Ontario Multi State Working Group
Conference Toronto, October 17, 2006 Steve
Neville, Ontario Ministry of the Environment
2
The Context for Integrating Environmental Policy
ToolsSome Definitions and Assumptions
3
What do we mean by Environmental Tools?

• Activities undertaken by regulators (or others)
  intended to improve environmental performance of
  regulated parties
• There is a range of tools that can influence
  behaviour, from voluntary to command-and -control
• Can include activities to influence behaviour
  through third party regulatory surrogates (e.g.
  banks)

4
Why are tools needed?

• Studies have examined reasons why behaviour of
  regulated parties does not conform to societal
  rules or norms
• Compliance (or non-compliance) of a target group
  can be explained by one or more of three key
  factors the target group must
• Have AWARENESS KNOWLEDGE of the rule or norm
• Be WILLING to comply
• Be ABLE to comply
• It is assumed that the same principles apply to
  conformance with beyond compliance behaviour
• (Reducing the Risk to Policy Failure Challenges
  to Regulatory Compliance, OECD)

5
Spectrum of Tools

• Drivers (address willingness)
• Information
• Informal / Voluntary instruments
• Regulatory incentives
• Economic tools
• Coercive / regulatory
• Capacity-building tools (address knowledge and
  ability)
• Technical / compliance assistance
• Education / awareness
• Technology development support
• Regulatory oversight tools
• Inspection, monitoring reporting

6
Integrating Tools Assumptions

• Environmental agencies are in the business of
  behaviour change
• There are drivers and barriers to improved
  behaviours
• Environmental policy tools are intended to either
  increase motivation (drivers) or remove barriers
• Tool selection should address the specific
  barriers and drivers of the regulated segment
• Governments are not the only influencers of good
  behaviour

7
Current Trends in Innovation and Integration in
Ontario
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Regulatory trends

• Sector compliance strategy
• Getting tough on polluters focus
• One-time inspection sweep of sectors
• Risk based selection of sectors
• Administrative Penalties
• Proposed regulations for imposing penalties for
  spills and other violations
• Regulations posted for public comment (Oct 2006)
• Flexible site-wide air approvals

9
Compliance Assistance

• Current approach is ad hoc and silo based
• Owners of regulations undertake outreach and
  education to explain new / existing regulations
• However, non-compliance is still widespread,
  especially for SMEs
• The Ministrys compliance assistance function is
  under review
• Reviewing options for integrated, sector based
  approaches

10
Compliance Assistance Pilots

• The ministry undertook three-year pilots in two
  sectors (2002-2004)
• autobody repair and metal finishing
• Provided funding support to industrial
  associations to deliver program
• Delivered outreach and education program

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Compliance Assistance PilotsFindings

• Attempt to integrate beyond compliance approaches
  did not succeed
• Financial sustainability not feasible
• Efforts well received but no clear results in
  terms of improved compliance
• Therefore, need to integrate assistance with a
  credible enforcement threat

12
Integrating Compliance Assistance

• Ontario Govt seeking to improve compliance
  reduce regulatory burden for SMEs
• Developing a cross-Ministry, sector-based
  compliance assistance initiative
• Piloting in the autobody repair sector
• One-stop web site with all relevant compliance
  information across all departments
• Project will identify compliance priorities and
  develop focused strategies to address them

13
Other Trends in Ontario

• Increased emphasis on risk-based approaches
• Recognise that approvals reform is needed
• Focus efforts on highest risk activities
• Increased focus on proactive risk-based
  inspections
• Need to differentiate between leaders and poor
  performers
• Recognise SMEs as a special challenge that may
  require a different approach
• especially compliance assistance

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Case StudyOntarios Environmental Leaders
Program
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Ontarios Environmental Leaders Program

• Ontarios voluntary environmental leadership
  program, launched in 2004
• Offers incentives to leading companies that
  commit to beyond compliance environmental
  improvements
• Program is aimed at leaders and sets a high bar
  for entry

16
Ontarios Environmental Leaders Program Current
Status

• 5 program members in first two years
• Two office furniture, one chemical, one hospital,
  one food processor
• 2 Sector-level leadership agreements
• Automotive Parts Manufacturing Association (APMA)
• Canadian Chemical Producers Association (CCPA)

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Ontarios Environmental Leaders Program
Incentives Challenges Opportunities

• Ministry perspective
• Reasonably good package of incentives aimed at
  Leaders
• Recognise incentives do not provide strong enough
  business benefits to encourage widespread
  participation
• Therefore, need aggressive marketing campaigns
• Need to match performance expectations to
  incentives

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Ontarios Environmental Leaders Program
Incentives Challenges Opportunities

• Industry perspective why attracted
• Some companies desire recognition as Leaders
• Some want to be ahead of the competition
• Flexible approvals are attractive to some
• Program may help facilities meet corporate (head
  office) commitments

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Ontarios Environmental Leaders Program
Incentives Challenges Opportunities

• Industry perspective barriers
• Many feel that incentives do not provide
  significant business benefits
• Concern with transaction costs vs benefits (esp.
  length of time to enter program)
• Some concerned with lack of harmonisation with
  similar federal initiatives
• Other barriers staff resources, busy with other
  initiatives, not the right time, etc.

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Ontarios Environmental Leaders Program
Opportunities

• Seek to expand / improve incentives
• Pursue harmonization with federal government
• Develop tiered approach
• Continue and improve marketing and outreach
• Integrate as mainstream Ministry program

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Future Opportunities for Integrating Tools
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Integration of toolsFuture Opportunities and
Issues

• Sector approaches
• Better integration of current sector approaches
• Include rigorous analysis of drivers and barriers
  for each sector, and apply tools accordingly
• Continue to address SME challenges
• Measuring success of integrated approaches is
  challenging

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Integration of toolsFuture Opportunities and
Issues

• Consider adding new tools to the toolbox, e.g.
  economic instruments
• Maximize leverage by working with partners and
  regulatory surrogates (e.g. associations, banks,
  insurance companies)
• EMS policy - no clear position at this time

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Additional Information Resources

• Steve Neville Environmental Innovations
  Emerging Sciences Branch
• Tel [phone]
• e-mail steve.neville_at_ontario.ca
• OECD paper
• Reducing the Risk to Policy Failure Challenges
  for Regulatory Compliance, OECD, 2000
  (www.oecd.org/dataoecd/48/54/1910833.pdf)
• Sector Compliance Branch in MOE
• www.ene.gov.on.ca/envision/scb/
• Proposed Environmental Penalties Regulation
• www.ene.gov.on.ca/envision/general/penalties/index
  .htm
• www.ene.gov.on.ca/envision/general/penalties/EPCon
  sultationpaper.htm
• Flexible air approvals in in MOE
• http//www.ene.gov.on.ca/envision/gp/4391e.pdf
• Auto Body Repair Compliance Assistance Web site
• www.gov.on.ca/ont/portal/!ut/p/.cmd/cs/.ce/7_0_A/.
  s/7_0_252/_s.7_0_A/7_0_252/_l/en?docidSTEL01_0342
  05
• Ontarios Environmental Leaders program
• www.ene.gov.on.ca/envision/general/leadership/inde
  x.htm