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ava i l ab l e a t www.sc i enced i rec t . com

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METHODS

Stakeholder participation in the design of environmentalpolicy mixes

Rui Santos *, Paula Antunes, Gualter Baptista, Pedro Mateus, Luísa MadrugaEcological Economics and Environmental Management Centre, Department of Environmental Sciences and Engineering,Faculty of Sciences and Technology, New University of Lisbon, Quinta da Torre, 2829-516 Caparica, Portugal

A R T I C L E I N F O

⁎ Corresponding author.E-mail addr ess: rfs@fct.un l.pt (R. Santos).

0921-8009/$ - see front matter © 2005 Elsevdoi:10.1016 /j.ecolecon.2005. 11.025

A B S T R A C T

Article history:Received 21 March 2005Received in revised form22 November 2005Accepted 27 November 2005Available online 23 January 2006

This paper presents a new approach to the development of environmental policy, relying onthe combination of several instruments to achieve different objectives and on the activeinvolvement of the stakeholders in the policy development process. The development of aninnovative system of environmental policy instruments for sustainable management of pigfarming in a municipality in Portugal is used to illustrate the proposed approach. Thesystem is based on the adoption of a policy mix, combining a command and controlapproach, established through a regulation for the pig farming sector, with economicinstruments (a sustainability fund and a tradable pig raising rights system) and voluntaryapproaches (an eco-label for meat products from farms with superior sustainabilityperformance). The design of the instruments has followed a participatory and transparentapproach, where the stakeholders were actively engaged in the decision making process.

© 2005 Elsevier B.V. All rights reserved.

Keywords:Stakeholder participationDesign of environmental policyinstrumentsMarket-based instrumentsVoluntary approachesSustainable pig farming

1. Introduction

Agriculture and other natural resource-related activities, suchas cattle raising, olive oil production and aquaculture, are acause of serious environmental problems in many areas.Besides the environmental pressures generated directly by theactivities themselves, such as water pollution, soil contami-nation and odours, there are often land-use conflicts, namelywhen facilities are located in regions with high ecologicalvalue, or near areas where other human activities, such asurban development or tourism, take place.

Usually the number of stakeholders involved in theseactivities in a given region is high, as a result of particularnatural or socio-economic conditions that create absolute orcomparative advantages for their location. In fact, in many

ier B.V. All rights reserve

cases, there are a considerable number of firms operating inone area, ranging from very small family-based units toconsiderably larger business units.

The diffuse nature of the environmental problems gener-ated, the large number of stakeholders involved as well as thespatial, temporal and technological heterogeneity of agricul-tural and cattle raising systems, turn the design and imple-mentation of environmental policy instruments rather dif-ficult and challenging tasks, not only from an environmentalpoint of view, but also on the social and economic dimensions(see, for example, Weersink et al., 1998; Romstad, 2003).

It is nowadays acknowledged that new instruments arerequired to handle sustainability issues in agriculture andrural industries (Mech and Young, 2001). The current agendastresses the potential of industry to develop its own solutions.

d.

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The adoption of mixed approaches, combining government-led regulation with economic incentives and voluntaryschemes, is seen as a promising route, likely to result in thebest environmental, marketplace and social outcomes (Weer-sink et al., 1998).

The need to shift the way that environmental policy isformulated towards a greater transparency and inclusivity hasalso been widely acknowledged (Funtowicz and Ravetz, 1994;van den Hove, 2000; de Marchi and Ravetz, 2001). Participationin the development of public policies is seen as a way to gainthe support of stakeholders: the more they feel that they havea voice in decisions affecting them, the more likely that theywill comply with the new requirements (Bryner, 2001). It isrecognized that cooperation is better than conflict and thatcooperative efforts produce superior solutions to problems.Moreover, public participation can also contribute to buildsocial capital, strengthen civil society and enhance thecapability of communities to solve problems and pursuecommon concerns (Bryner, 2001).

This has resulted in calls for more active participation ofstakeholders and citizens in decision-making processes.However, the practical implementation of these principlesstill faces considerable difficulties and research is needed onthe development of effective participatory approaches.

This paper presents the developments in these areas(stakeholder participation and design of policy mixes)achieved in the scope of a project – PIGS1 – aimed at developingnew environmental policy instruments for the pig-farmingsector in Montemor-o-Novo, Portugal. The main innovation ofthe research presented lies in the combination of a theoreticalscientific perspective with practical implementation, by wayof a participatory approach together with major stakeholdergroups. In the following sections, we will describe the processof developing the instruments in an open and transparentprocess, with the collaboration of the stakeholders.

2. Design of environmental policies

2.1. Environmental policy instruments

Environmental policy instruments can be generally describedas the means adopted by authorities to promote the adoptionof measures, or the change in agents' behaviour, in order toachieve societal goals, namely reducing and controlling thepressures and impacts originated by economic activities in theenvironment (Santos and Antunes, 1999; Stavins, 2003). Therange of possible environmental policy instruments is as wideas the range of concerns they intend to address, and they aregrouped in different ways in the economics and policyliteratures (Russell and Powell, 2002). A simple and widelyused approach is to consider that environmental policy instru-ments can be grouped into three broad categories, which arenot mutually exclusive (Field and Field, 2002): (1) commandand control or regulatory approaches; (2) economic, incentiveor market-based instruments and (3) decentralized policies.

1 PIGS – Projecto Integrado de Gestão de Suiniculturas (IntegratedProject for Pig Farms Management) EC – LIFE/ENVIRONMENTProgram (LIFE00ENV/P/000829).

In command and control approaches, authorities establishthe behaviour that should be adopted by the actors/firms, bymaking it mandatory, allowing for little flexibility in themeans of achieving policy goals. This group of instrumentscan include approaches as different as product prohibitions,technology-based discharge standards or production quotas.For this reason, some authors consider that this term is tooinclusive to be useful (Russell and Powell, 2002).

Economic instruments encourage behaviour through pricesignals rather than through explicit directives regardingpollution control levels or methods. These instruments arebased on the correction of prices in existing markets whichpresent distortions, or in the creation of new markets thatenable the internalisation of environmental externalities. Intheory, if properly designed and implemented, market-basedinstruments allow any desired level of pollution cleanup to berealized at the lowest overall cost to society, by providingincentives for the greatest reductions in pollution by thosefirms that can achieve reductions with least cost (Stavins,2003).

There are diverse foundations to sustain the adoption ofdifferent types of market-based instruments. The Pigouvianapproach has been used as the basis to propose the adoptionof a system of unit taxes (or subsidies) to control externalities.Theoretically, the tax on a particular activity should equal themarginal social damage it generates. However, the evaluationof such damages is not always easy or even possible. For thisreason, several authors have proposed, in the spirit of thePigouvian tradition, the use of emission or resource taxes,stressing their cost-effectiveness properties (Baumol andOates, 1971). Coase (1960) considered the Pigouvian approachinappropriate and proposed a change. Considering that theright to do something that has a harmful effect is also a factorof production, he proposed that the free trading of rightsbetween the parties (e.g. polluters and victims) may attain anefficient solution, if transaction costs are not relevant,avoiding the need of intervention in the market. The Coasianproperty rights approach has inspired the proposal and/orimplementation of several environmental policy instrumentslike, for example, the SO2 allowance trading scheme adoptedin the US (Solomon, 1999; Burtraw, 1999), the trading ofproduct life cycle emission rights (Cerin and Karlson, 2002) orthe Kyoto protocol emission trading mechanisms.

Decentralized approaches rely on policies that allow theindividuals involved in a case of environmental pollution towork it out themselves (Field and Field, 2002). This category ofinstruments includes mainly the so-called voluntaryapproaches, where agents voluntarily adopt a commitmentof improving their environmental performance, going beyondsimple compliance with existing regulations (Baeke et al.,1999; OECD, 2003). Approaches based on the provision ofinformation are often also included in this category.

The adoption of regulatory approaches in the environmen-tal policies of industrialized countries is widespread (Dietz andVollebergh, 2002). In the initial stages of development ofenvironmental policy, this has resulted in significant improve-ments in environmental quality, allowing for the reduction ofthe environmental impacts associated to a diversified numberof industrial sectors and activities (Goodstein, 1999). However,there are limits in the improvements that can be achieved

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with this type of approach. First of all, the inflexible andprescriptive nature of command and control approaches tendsto hinder the developments of innovative environmentalmanagement practices (Coglianese and Nash, 2001; Mechand Young, 2001). On the other hand, although regulatoryapproaches have proven to be fairly effective in the control ofpollution problems associated to point sources, their applica-tion to non-point sources of pollution, as is the case inagriculture and rural industries, is much more problematic,given the control and enforcement difficulties arising from thediffuse nature of the sources (Weersink et al., 1998).

The recognition of the limitations of the adoption of strictlyregulatory approaches in the agricultural sector (and others)has led to the search for instruments which provide room foragents to find their own solutions, moving decision-makingand opportunities for innovation to the market place, such aseconomic instruments and decentralized approaches relyingon voluntary action (Mech et al., 2003). However, the frequentpleas for the application of market-based instruments havehad a lower impact on the actual design of environmentalpolicies than expected (Dietz and Vollebergh, 2002) and theenthusiasm on these instruments has often ignored thescepticism of the instruments' literature of the 1980s (Russelland Powell, 2002).

Each type of instrument has distinct characteristics thatmake it more likely to succeed in some circumstances than inothers. It has long been recognized that “for every indepen-dent policy goal we must have and independent policyinstrument” (Tinbergen, 1952, cited in Daly, 1992). In thiscontext, environmental policies should adopt mixedapproaches integrating command and control strategieswith economic incentives and decentralized approaches, inorder to achieve multiple objectives (Gustafsson, 1998; Santosand Antunes, 1999; Mech and Young, 2001).

The understanding of the role and preferences of thedifferent interest groups is also an important issue in theanalysis of the current use of environmental policy instru-ments (Dietz and Vollebergh, 2002). We argue that thepotential and effectiveness of environmental policy instru-

Table 1 – Advantages and disadvantages of citizen parfrom )Irvin and Stansbury, 2004)

To citizen participants

Benefits of citizen participationDecision

processEducation (learn from and inform government)Persuade and enlighten governmentGain skills for activist citizenship

Outcomes Break gridlock; achieve outcomesGain some control over policy processes

Risks/disadvantages of citizen participationDecision

processTime consuming (even dull)Pointless if decision are ignoredMisrepresentationLoss of legitimacy to oppose unwanted decisions

Outcomes Risk of decision being heavily influenced byopposing interest groups

ments can be significantly enhanced if stakeholders' perspec-tives and viewpoints are taken into account in the early stagesof policy formulation processes.

2.2. Participation if the formulation of environmentalpolicies

The development of environmental policies is nowadaysparticularly challenging since it requires the combination oflarge amounts of data and scientific knowledge about thefunctioning of Nature, with the uncertainties and plurality oflegitimate perspectives which characterize the environmentalpolicy arena (Funtowicz et al., 1999). Participation has beenadvocated as a way to tackle these difficulties, through theinvolvement of social actors in an extended dialogue wherethe different types of knowledge and perspectives are broughtto the policy development process and taken into consider-ation (Gibbons, 1999; de Marchi and Ravetz, 2001).

Participatory approaches have been advocated on groundsof procedural justice and democracy and on the appreciationthat complex, multi-attribute issues should not be evaluatedin a one-dimensional basis, but require the consideration ofthe diverse perspectives and viewpoints of different stake-holders (de Marchi and Ravetz, 2001).

The benefits of citizen participation in government deci-sion making have been largely discussed (see for example,Beierle, 1999; Petts, 2001; Irvin and Stansbury, 2004), focusingon the advantages of the process itself as well as on thebenefits associated with the delivery of better decisions.However, participatory processes also have some costs andrisks associated, which should not be ignored. Table 1,adapted from Irvin and Stansbury (2004), summarizes thebenefits and risks/disadvantages of citizen participationconsidering two tiers of analysis, (1) process, i.e. the benefitsthe process itself, such as social change, and (2) outcomes, i.e.better decisions obtained, and two groups of beneficiaries, i.e.government and citizens.

A large number and variety of participation techniqueshave been suggested and discussed in the literature, ranging,

ticipation in government decision making (adapted

To government

Education (learn from and inform citizens)Persuade citizens; build trust and reduce anxiety or hostilityBuild strategic alliancesGain legitimacy of decisionsBreak gridlock; achieve outcomesAvoid litigation costsBetter policy and implementation decisions

Time consumingCostlyMay backfire, creating more hostility towards government

Loss of decision making control

Possibility of bad decision that is politically impossible to ignore

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for example, from opinion polls, to focus groups, citizen juriesand consensus conferences (see for example OECD, 2001).Careful consideration of the objectives of a specific participa-tory process, as well as of the risks/disadvantages that may beassociated, is fundamental to ensure an adequate structuringof the participation process, as well as the choice of the moresuited participation technique.

Although with some tradition in countries like the US,direct public participation in decisionmaking is relatively newin Europe. In spite of the calls for more active participation ofcitizens in decision making expressed, for instance, in the RioDeclaration of 1992, the 5th Action Programme on theEnvironment launched by the European Commission in 1993,or the Aarhus Convention of 1998, the practical resultsachieved have been below expectations (de Marchi andRavetz, 2001). In this paper, we present a case study where aparticipatory approach was actually used with success in anenvironmental policy development process.

3. Pig farming in Montemor-o-Novo

Montemor-o-Novo is located in the Alentejo region ofPortugal, which is considered a less favoured region, withhigh unemployment rates, poor productive infrastructuresand low diversity of economic activities, resulting in a highshare of the primary sector in the regional product. Populationhas been decreasing and getting older, with people concen-trating in urban areas. This pattern can eventually be reversedwith the creation of more and better job opportunities andwith an improvement in infrastructures favouring the attrac-tiveness of the region for young, active population.

Pig farming industry has developed in this regionmostly inthe past 20 years and it is, currently, a very important sector inthe local and regional economy. Nowadays, there is atendency for the development of large facilities of intensiveproduction, which coexist with the traditional family-basedunits, in a total of about 100 facilities. These pig raisingactivities cause serious environmental problems in the region,accounting for an organic pollution load which is 12 times theload generated by the population, contributing to water, soiland air pollution. They are also responsible for the majority(90%) of environmentally related claims received by themunicipality's offices, mainly related with nuisance, odoursand water pollution.

An audit performed by the municipality in 2001 concludedthatmost of the facilities' wastewater treatment systemswerenot working properly and that many did not comply withexisting environmental regulations. Besides the pollutionproblems, many farms are located on environmentallysensitive areas (such as groundwater recharge areas or zoneswith high nature conservation value) or near urban zones,creating a location problem.

A survey was conducted in order to obtain informationabout the physical, operational and economic characteristicsof the farms and also to analyse pig farmers' attitudes towardsenvironmental and sustainability issues. A questionnaire wasapplied in series of face-to-face interviews to a samplecovering 50% of Montemor-o-Novo pig farmers, includingunits of different types, exploration regimes, dimensions, and

ensuring spatial representativeness. The methodology andresults of this survey are described in detail in Santos et al.(2002).

The survey concluded that there is a tendency for theconcentration of production in large farms, and that themost significant environmental problem is related witheffluents and their treatment. Most of the existing waste-water treatment systems are poorly designed and operatein conditions that are very far from desirable. Landspreading is very often adopted as the option for disposalof the final effluent. Wastes and water and energyconsumptions are also important environmental aspectsfor most farmers.

The survey also concluded that is a tendency for theprevalence of cattle management practices, such as mutila-tions and space restrictions, which do not comply withsocietal concerns regarding animal welfare.

However, farmers revealed a high awareness for environ-mental issues, which account for their major concern, mainlydue to potential effects on competitiveness. The bureaucraticburden associated with the licensing of new installations orthe expansion of existing ones, alongwith the stress caused bythe competition from foreign producers, are also majorconcerns.

In summary, this diagnosis concluded that there is largeneed for improvement of the pig farming sector in Montemor-o-Novo, both in environmental, social (e.g. working conditionsand quality of life in the neighbourhood) and animal welfareaspects, as well as in the management practices andproductivity, in order to assure a sustainable future for thesector. The mentioned difficulties associated with the licens-ing process and the need to promote a relocation of farmsmaypoint to an opportunity for the application of instrumentswhich can make these procedures more flexible and contrib-ute to the improvement of environmental, social and eco-nomic conditions of the region.

4. Environmental policy mix for sustainablepig farming

4.1. Adopted approach

Having in mind the need to implement effective and efficientpolicies to deal with pig farming development in Montemor-o-Novo, an integrated system of environmental policyinstruments was developed, adopting a participatory ap-proach during the whole process. This system intends topromote a better environmental, social and economic per-formance of pig raising activity, combining the existingregulations with economic instruments and decentralizedvoluntary action.

The instruments scheme was designed to achieve thefollowing objectives:

• To create the conditions to ensure compliance with allenvironmental regulations by pig farmers;

• To provide an incentive and reward the farms that wish todevelop innovative projects aimed at the improvement oftheir environmental performance;

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• To develop a mechanism to promote the re-location of thefarms which are actually located in areas with a lowersuitability for pig raising activity, without introducingsignificant distortions for those agents which already havedully licensed (although poorly located) farms;

• To promote the voluntary adoption of sound practices froman environmental, ethical (animal welfare) and social pointof view, in a scheme where the agents thrive to improvetheir performance beyond regulatory compliance, obtainingat the same time economic and market advantages.

Fig. 1 displays the main components of the proposedsystem and their relation with the above mentionedobjectives.

The Integrated Environmental Policy Instruments Scheme(IEPIS) comprises:

▪ A Local Environmental Regulation for Pig Raising Activities,which integrates all existing regulatory requirements ap-plied to the sector in the municipality;

▪ A Sustainability Fund financed through earmarked reven-ues (arising, namely, from the penalties collected fromviolations to the regulations and other sources of income),which supports new projects aimed at the improvementof the environmental and social performance of thefarms;

▪ A Tradable Pig Raising Rights System, which aims atpromoting a reduction of the number of farms installednear urban and environmentally sensitive areas, and theirrelocation to more suitable areas, through the creation of aninnovative tradable rights market;

▪ A Sustainable Production Label, which is an eco-labellingscheme applied to the meat products originated from thefarms that have voluntarily adopted more stringent envi-ronmental, social and economic performance criteria. Thisscheme will allow the translation of actions towardssustainable production into potential competitive advan-tages for farmers in the meat market.

In the following sections, the new economic and voluntaryinstruments that comprise the scheme are described.

Commandand Control

EIn

SustainabilityFund

LocalRegulation

EnvironmentalPerformance

of Farms

Animal WelfareSocial

Responsibility

Approach

PolicyInstrument

PolicyObjective

Fig. 1 – Integrated environmental po

4.2. Sustainability Fund

The earmarking of revenues from environmentally relatedactivities, such as those arising from penalties from violationsto environmental regulations or from environmental taxes, topromote the attainment of environmental policy objectives isan instrument with applications in many situations andactivity sectors. Although from a theoretical point of viewthe application of this type of instruments, such as subsidies,financial subventions or other types of aid, raises equity anddynamic efficiency concerns, under some circumstances, andfor specific purposes, environmental effectiveness criteria canjustify their adoption. These instruments are particularlyadequate when policies aim to achieve environmental objec-tives and promote changes in agents' behaviour in a shortterm. In a longer-term perspective, other instruments whichprovide a real incentive to the progressive reduction ofpollution levels should be adopted.

The Sustainability Fund is an economic instrument of theIEPIS aimed at promoting in the short term a better sustain-ability performance of pig farming in Montemor-o-Novo. ThisFund enables the allowance of incentives to the farms thatsubmit proposals for projects with an acknowledged contri-bution to the improvement of the farm's environmental,economic and social performance.

The Fund is financed through several sources of income,mainly revenues generated from the penalties collected forviolations to the Local Environmental Regulation and afraction of the revenues arising from the taxes paid by farmersin the licensing process. The Fund can also be financedthrough donations and municipal budget allocations.

The Fund is applied to the financing of projects which cancontribute to the improvement of sustainability performanceof pig raising in Montemor-o-Novo, namely investments forthe improvement in environmental or animal welfare prac-tices, facilities, education initiatives, conversion of intensiveproduction units to extensive production and actions directedto local population. Any individual pig farmer, association ornon-governmental organization can apply for the Fund.

The Fund can be an important instrument to promote theadaptation of existing farms (especially small, family-based

conomicstruments

VoluntaryApproaches

SustainableProduction

Label

SustainableLand Use

EconomicDevelopment

Tradable PigRaising Rights

licy instruments scheme (IEPIS).

Table 2 – Suitability criteria

Classification Suitability for

Location of units in coveredfacilities

Agricultural sludgevalorization

Effluentsspreading

Effluent discharge in waterbodies

Unsuitable 0 0 0 0Conditioned

suitability1 1 1 –

Suitable 2 2 2 2

Table 3 – Suitability classes

Class Score

A – Highly suitable ≥7 pointsB – Fairly suitable 5 or 6 pointsC – Poorly suitable 4 pointsD – Unsuitable ≤3 points

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farms) to the new performance requirements set up by theother instruments that comprise the IEPIS.

The Fund also includes a strong participation of the localcommunity and involved stakeholders, namely in the evalu-ation of funding proposals and in the allocation of thesubsidies, through a Community Evaluation Commission.

4.3. Tradable Pig Raising Rights

The Tradable Pig Raising Rights Scheme is partially inspiredon the principles of Transferable Development Rights (TDR's).Its objectives are to control growth of the sector and topromote the reduction of pig farming activities in areasclassified as sensitive (for instance near urban dwellings,water bodies or ecologically valuable areas) and transfer theirdevelopment to more suitable areas, with a larger carryingcapacity for this activity.

TDR's theoretical background lies in the concept of tradablepollution permits first introduced by Dales (1968) and formal-ized byMontgomery (1972). TDR's have been appliedmainly tothe control of urban development and tourism activities(Panayotou, 1994; Levinson, 1997).

In these systems, the right to develop an area is separatedfrom the property right. In a TDR scheme, the areas wheregrowth must be prohibited or limited are identified by theauthorities and classified as sending areas. The areas wheregrowth can be authorized or even promoted are classified asreceiving areas. Development rights are allocated to all agentsinvolved in the process, but they can only be exercised inreceiving areas. The owner of a property in a receiving areathat intends to promote its development beyond the amountthat was initially allocated must buy the corresponding rightsin the market. Those whose properties are located in sendingareas may sell their development rights in the market (beingin this way compensated financially by the fact that they cannot develop their property) or exercise them in a propertylocated in a receiving area (Convery and Rooney, 1998).

This instrument enables the control of urban development(or other activities) providing at the same time a mechanismfor the compensation of the owners of land in those areaswhich are subject to stronger restrictions.

The Tradable Pig Raising Rights System that was created isbased in the allocation of pig raising rights to all pig farms inMontemor-o-Novo. Two fundamental concepts are applied inthis scheme:

• The Tradable Pig Raising Right, that represents the right togrow an animal-equivalent, during a given period of time,which can be traded in the market;

• The Trading Ratio, which is a coefficient to be applied in thetransaction of rights between two farms. This ratio iscalculated as a function of the differences in suitability forthe development of pig raising activities of the farmsinvolved in the transaction.

In the initial stage of the system, each farm receives anumber of rights equal to the allowed number of animalsestablished in its operating license. These rights can then betraded among the participants. However, each farm has tohave a number of rights at least equal to the number ofanimals that is being raised there at a given moment.

The farms are classified into suitability classes accordingwith their location and with the characteristics of theiroperations, namely concerning effluents spreading practices,agricultural use of sludge or effluent discharge in waterbodies (see Table 2). A Geographical Information System(GIS) is used to support this task. Each individual farm isclassified into a suitability class according with the totalscore obtained (calculated as the sum of the cores obtainedfor the individual suitability criteria), as shown in Table 3.This classification process is described in more detail inSantos et al. (2003).

The rights owned by a farm are automatically allocated tothe corresponding suitability class. The rights can be traded inthemarket applying the trading ratios defined as a function ofthe suitability classes of the farms involved, as depicted inTable 4. The traded rights are automatically converted to thesuitability class of the buyer farm.

The trading ratios create an incentive to the location offarms in the areas with higher suitability. Farmers located inunsuitable areas (class D-sending areas) are not allowed tobuy rights in the market, although they can exercise therights that they own. Additionally, in each evaluationperiod, 10% of the class D rights are automatically replacedby class A rights. So, the owner has the opportunity to movehis production to suitable areas or to sell rights to otheragents operating in the market. In this way, the signal fromtrading rations is reinforced by the TDR component of thescheme.

Table 4 – Trading ratios

Class Seller suitability

A B C D

Buyer suitability A 1.0 1.1 1.2 1.3B 0.8 1.0 1.1 1.2C 0.6 0.8 1.0 1.1D 0.0 0.0 0.0 0.0

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The trading ratios can be adapted by the authorityresponsible for the management of the scheme, during theevaluation periods (every 2 years). The operational andmanagement aspects associated with the scheme are fullydescribed in Santos et al. (2003).

4.4. Sustainable Production Label

In a society where consumption patterns are one of the majordriving forces behind environmental degradation, ecologicallabelling schemes emerge as an environmental policy instru-ment with a large potential to contribute to an effectivereduction of environmental impacts associated with econom-

Table 5 – Criteria adopted for the sustainable production label

Dimension Issue

Environmental performance Biodiversity

Water and soil quality

Global warming

Air quality

Economic aspects Pork meat quality

Economic development

Ethics and social responsibility Animal welfare

Working conditions

Quality of life of local popu

ic activities. Ecolabelling seeks to fulfil two objectives: (1) toprovide consumers with more information about the envi-ronmental effects of their consumption, generating a changetowards more environmentally friendly consumption pat-terns and (2) to encourage producers, governments and otheragents to increase the environmental standards of products/services (Gallastegui, 2002).

Ecolabels work through the voluntary provision of infor-mation to consumers. Their effectiveness is largely dependenton the provision of clear and reliable information, thusallowing a conscious choice (de Boer, 2003). Companies thatseek to develop, produce or trade ecolabelled products expectto see their efforts recognised by consumers, as the label actsas an instrument for their promotion in the marketplace,allowing them to gain a competitive advantage, either throughan increase in the market share or in the form of a pricepremium.

Ecolabelling schemes generally:

• Are voluntary instruments;• Involve third party auditing procedures;• Result in the labelling of the products;

Criteria

Genetically modified animalsGMO-free feed

Effluents BOD and CODTotal nitrogen concentration in effluentsAmmonia concentration in effluentsPhosphorus concentration in effluentsTotal suspended solids in effluentsCopper, zinc and nickel concentration in sludgeWater consumptionDangerous wastes productionSolid wastes production

Energy consumptionBiogas recovery

Indoor ammonia concentrationUse of BAT in spreading

Anti-microbial agentsFast before killingAmount of cereals in feed

Local employment

Access to water and foodAvailable areaResearch and handling materialsMutilation practicesFacilities floorReproduction practices

Workers trainingNoise inside the facilities

lations Neighbourhood acceptanceIntegration in local activitiesNoise in the neighbourhood

Fig. 2 –Sustainable Production Label – Montemor-o-Novo PigFarmers Association.

2 http://www.delibera.info.

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• Are based on established environmental criteria, usuallydefined adopting a life cycle approach, which are madepublicly available;

• Are used to promote products with superior environmentalcharacteristics.

Ecolabelling (or, more recently, sustainability labelling)schemes have become more and more popular around theworld. These schemes seem to fit perfectly into a sustainabil-ity strategy, which seeks to reconcile economic, social andecological objectives, promoting innovation to the develop-ment of more sustainable production and consumptionpatterns, with higher resource use efficiency and lowerenvironmental impacts (Muller, 2002).

An ecolabelling scheme, called Sustainable Production –Montemor-o-Novo Pig Farmers Association was created to pro-mote better environmental management practices and thetranslation of this effort into a competitive market advantage.Adhesion to the scheme by farmers is totally voluntary.

The methodology adopted in the design of the ecolabellingscheme involved the collection of information about cattleand environmental management practices currently adoptedby the farmers of Montemor-o-Novo compared with the bestavailable techniques (BAT) and legal requirements establishedfor the sector.

Based on this information, the criteria to be adopted for theecolabel awarding process were defined, considering theobjective of promoting the adoption of best practices and theattainment of environmental and animal welfare standardsstricter than those legally required. Compliance with estab-lished regulations is a pre-requisite for application to thescheme.

The adopted criteria, developed through a stakeholderparticipation process which is described in Section 5, cover thethree sustainability dimensions, i.e. (1) environmental improve-ment, (2) economic performance and (3) social responsibilityand animal welfare issues. Each dimension integrates differentissues/problem areas, for which the criteriawere defined. Table5 presents the list of criteria adopted.

Verification and control issues were key factors taken intoaccount in the criteria definition procedure. For this reason,several criteria are directly related with the adoption ofparticular practices whose verification is relatively simple toperform (this is the case mostly for the animal welfarecriteria). In other cases, where monitoring is already manda-tory, as is the case ofmany environmental aspects, the criteriawere defined in relation to the desired quality targets,providing room for the adoption of innovative practices, notidentified in the BAT lists.

The criteria are evaluated in a scale from 1 to 5 points,where 1 corresponds to poor and 5 to excellent performance.Penalties can be applied in cases of severe incompliance witha criterion. For some criteria, the evaluation of the farms iscalculated as a function of the overall performance of thesector in previous periods, thus providing an incentive foroverall continuous improvement.

The awarding of the label is decided based on the averagescore obtained by a candidate farm. The label cannot beawarded to farms with a high number of penalties (N3), even ifthey attain the average score required.

The ecolabelling scheme will be managed by the PigFarmers Association of Montemor-o-Novo, created in thescope of the PIGS project (see Section 5). The scheme is beingimplemented within the legal framework established by thePortuguese voluntary pig meat labelling scheme, throughwhich any producer (or association) can propose the adoptionof a label, provided that appropriate procedures are put inplace to ensure the reliability and accuracy of the associatedclaims. The logo that was created to identify the label in themarket is shown in Fig. 2.

5. Participatory instruments' design process

As stated above, it is nowadays recognized that theadoption of inclusive and transparent approaches areessential elements in the process of developing policiesfor sustainable development. Having this in mind, thedevelopment of the instruments' scheme has adopted aparticipatory approach, where the major stakeholders wereinvited to participate actively in the process as partners inthe project, thus creating the conditions to foster a highereffectiveness and adhesion to the adopted policy. Besidesthe Montemor-o-Novo municipality, responsible for theoverall project coordination, the consortium included sev-eral pig farmers, acting either as active partners or in aconsultative role, the Portuguese Federation of Pig FarmersAssociations, the Regional Environment Directorate, theRegional Agriculture Directorate and the Montemor-o-NovoHealth Centre.

Throughout the process, several working meetings tookplace, where issues such as the identification of managementpractices, the definition of the criteria for the ecolabellingscheme and the creation of an entity that should be respon-sible for the implementation andmanagement of the ecolabelwere thoroughly discussedwith thepartners. Thedetails of thefunctioning of the sustainability fund and tradable pig raisingrights schemes were also discussed.

An adaptation of the Delibera2 system was used for theapproval of the criteria for the Sustainable Production Label by

Fig. 3 –Delibera cards.

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the partners. Delibera is a tool that has been used to supportcollective evaluation of the positive and negative aspects of adecision, making use of coloured cards (Fig. 3), which alloweach participant to express his/her opinion regarding a givenissue. This tool is particularly useful for meetings with manyissues, a broad range of stakeholders involved and a shorttime to take decisions. The easy and fast visualization of theobtained results contributes to a perception of effectiveparticipation by the stakeholders in the process.

The partners' opinion has been consensual regarding theacceptance of 28 of the 35 criteria that were voted. The criteriaforwhich therewasnoconsensuswere further discusseduntil aformulationwas reached that could be accepted by all partners.

During the process, three seminars were organized by themunicipality, with a wider audience includingmany pig farmersandother interestedparties, to report theprogress thatwasbeingmade and to discuss methodological issues and results attainedregarding the design and implementation of the several policyinstruments that comprise the integrated scheme.

As a result of this participatory process the pig farmersinvolvedhavedecided to launch the creationof theMontemor-o-Novo Pig Farmers Association, which congregates a significantnumber of the farmers in the area. As stated above, thisAssociation will be responsible for the management of thesustainable production label, but it is expected that it will alsoplay amajor role as a representative of the pig farmers' interests.

Currentlicensingprocess – MunicipalRegulation

MunicipalRegulation

+SustainabFund

+SustainabProductionLabel

Stage 1 Stage

Fig. 4 – Integrated environmental policy i

This participatory process has worked as a crossed-learning experience among the several actors, allowing onone hand, to raise awareness regarding sustainability issuesamong the pig farmers in the area, enabling, on the otherhand, a better understanding and perception of the localauthorities and project team members of the problems andchallenges that the sector faces nowadays.

6. Concluding remarks

This paper has described the process of development of aninnovative integrated environmental policy instruments'system (IEPIS) for sustainable management of pig farming inMontemor-o-Novo. The major distinctive features of thissystem lie on its formulation as a policy mix, comprisingeconomic and decentralized policy instruments as a comple-ment to the existing regulations, and on the adoptionparticipatory and transparent approach in the policy formu-lation process, where the stakeholders were actively engagedin decision making. These two aspects can contribute to ahigher acceptance and adhesion of stakeholders to theproposed policies, therefore contributing to improve policyeffectiveness. The scheme also provides an incentive to thepursuit of innovative solutions, which can bring efficiencygains for all parties.

ility

le

MunicipalRegulation

+SustainabilityFund

+SustainableProduction Label

+Tradable PigRaising Rights

2 Stage 3

nstruments implementation process.

109E C O L O G I C A L E C O N O M I C S 6 0 ( 2 0 0 6 ) 1 0 0 – 1 1 0

Given the complexity and practical difficulties that may beassociated to the implementation of the IEPIS, it was suggestedthat a gradual implementation strategy, as described in Fig. 4,should be adopted. This strategywas formally approved by theMontemor-o-NovoMunicipal Council, which has established aprogressive timetable for the implementation of the economicinstruments, after the approval of the Municipal Regulation.The implementation of the Sustainable Production Label hasbeen proceeding under the initiative of the Pig FarmersAssociation.

The instruments package that was created can contributeto the implementation of the current EU policy recommenda-tions, which call for the adoption of market-based andvoluntary approaches as a complement to existing environ-mental regulations, as well as to the principles expressed inthe 6th Sixth European Community Environment ActionProgramme:

“A strategic integrated approach, incorporating new waysof working with the market, involving citizens, enterprisesand other stakeholders is needed in order to inducenecessary changes in both production and public andprivate consumption patterns that influence negativelythe state of, and trends in, the environment.” (Decision No1600/2002/EC of the European Parliament and of theCouncil of 22 July 2002).

The main contribution of the research that was presentedin this paper lies in the combination of theoretical develop-ment with practical implementation and active stakeholderparticipation, in order to enhance science's contribution toprogress towards sustainable development.

Acknowledgements

The work presented herein was developed in the scope of aproject funded through the EU LIFE-ENVIRONMENT program(LIFE00ENV/P/000829).

The authors would like to thank the contribution of thePIGS' project partners, in particular Luis Jordão and othermembers of theMontemor-o-Novomunicipality, aswell as thestakeholders involved in the process, namely the members ofthe Federation of Pig Farmers Associations and the individualpig farmers, whose attitude and cooperation were essential todevelop this work.

We also would like to thank the useful critiques andcomments by two anonymous referees, which have contrib-uted to improve the quality of the manuscript. The responsi-bility for any remaining deficiency rests with the authors.

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