1. Using regulation as a last resort? An assessment of the performance of voluntary approaches Donal McCarthy, Royal Society for the Protection of Birds (RSPB) envecon 2015

2. Introduction to Voluntary Approaches What? Arrangements involving actions by the private sector that go beyond existing legal requirements or regulatory standards Example: Public Health Responsibility Deal Why do firms participate and comply? Moral responsibility vs. economic self-interest? For vs. Against? Cost vs. effectiveness? For “Regulation is not cost free...some policy aims might be delivered more flexibly through voluntary measures.” Against “...like putting Dracula in charge of the blood bank“

3. UK Policy Context “I want us to be the first government in modern history to leave office having reduced the overall burden of regulation, rather than increasing it” – David Cameron (2010) The Government’s Principles of Regulation We see conventional regulation as a last resort. The Government will regulate to achieve its policy objectives only:  having demonstrated that satisfactory outcomes cannot be achieved by alternative, self-regulatory, or non-regulatory approaches  where analysis of the costs and benefits demonstrates that the regulatory approach is superior by a clear margin to alternative, self-regulatory or non- regulatory approaches Source: Better Regulation Framework Manual (BIS, 2013)

4. Existing Evidence Data availability limited: schemes lack clearly specified targets and transparent monitoring/ reporting requirements Effectiveness: limited improvements in participants’ performance beyond ‘business as usual’ Cost-effectiveness: largely unproven

5. Data and Methods Extensive web-based search to identify relevant schemes: further targeted search to obtain detailed performance-related information (e.g. academic literature, progress reports, newspaper articles etc.) 161 schemes assessed: UK (29%); Other EU Countries (30%); USA and Canada (19%). Range of sectors and issues covered: 68% of schemes “environment-related” Assessing performance: do schemes deliver desired policy objectives? Scoring: 3 ‘performance dimensions’ on a 3-point scale –Target Achievement –Target Ambition –Level of Uptake

6. Scoring Target Achievement: proportion of scheme targets achieved or rate of compliance [≤50% = 0; 51-75% = 0.5; >75% = 1] Target Ambition: extent to which scheme targets went beyond ‘business-as-usual’ or were in line with what would be required to achieve the overarching policy objective. Level of Uptake: proportion of ‘relevant’ firms participating, ideally based on ‘problem coverage’ [≤50% = 0; 51-75% = 0.5; >75% = 1]

7. Case Study: Campaign for the Farmed Environment (2009) 50% of targets achieved; no progress against key target to retain and increase area of un- cropped land. Just over half of arable farmers recorded land in at least one Campaign measure. Verification monitoring found consistent over-recording (farmers doing 30% less than reported). Target AchievementTarget AmbitionLevel of Uptake 00.5

8. Case Study: Country of Origin Food Labelling (2010) “...we will continue to improve the level and clarity of country of origin information” – BRC (November 2010) Initial evaluation in 2011 based on product label information: –Meat: 70% compliance with principles –Dairy: 65% compliance with principles Follow-up in 2012: –No statistically significant difference in overall rates of compliance Target AchievementTarget AmbitionLevel of Uptake 0.5 “The EU is considering new rules …while Defra would prefer industry to respond voluntarily…[we] will also be pressing for the option of compulsion to be kept open” – Defra Press Release (August 2010 )

9. Results: Individual Performance Scores

10. Results: ‘Average’ and ‘Impact’ Scores Note: * denotes a significant difference at the p<0.05 level, ** at the p<0.01 level, and *** at the p<0.001 level. Performance MetricFormula Average Performance Score Scheme Impact Score

11. Results: ‘Policy Drivers’ Are complementary ‘policy drivers’ important? Presence (but not absence) information available for 40% of schemes Schemes implemented as part of a policy mix or under the threat of regulation performed significantly better (p<0.001)

12. Conclusions and Policy Implications Regulation ‘as a last resort’? overall impact of most voluntary schemes limited; rarely an effective substitute for regulatory measures or fiscal incentives in seeking to achieve public policy objectives. Implement as part of a policy mix: voluntary schemes work best when used as a complement to other regulatory/fiscal measures that provide incentives to firms to participate and comply. Design and evaluation: clear unambiguous targets (set against well-defined baseline), transparent reporting and monitoring/ verification requirements. –Helps to improve evidence-base, strengthen incentives, and prevent free- riding

13. Thanks for Listening! The RSPB is part of BirdLife International, a partnership of nature conservation organisations working to give nature a home around the world.