Environmental Economic Geography - Wiley Online Library

Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x

Environmental Economic Geography Roger Hayter* Simon Fraser University

Abstract

This article advocates evolutionary institutionalism as a conceptual platform to launch a systematic approach to environmental economic geography. Evolutionary institutionalism interprets industrial transitions through the lens of innovative behaviour that is shaped by reciprocal economic and non-economic processes and periodically restructures economies in the form of new techno-economic paradigms (TEP). In this approach, environment–economy relations need not be zero-sum games, as is often assumed. Rather, as a result of innovation and choice, these relations have been recalibrated historically and can be redefined again towards developing a green TEP in which development and sustainability are co-imperatives. It is argued that the mandate of environmental economic geography is to assess and prescribe how place makes and should make a difference to a green TEP and the article sketches a research agenda to promote this goal. This research agenda focuses on the themes of regions as institutions, remapping resource use and sustainable value chains.

Environmental Economic Geography in Institutional (Evolutionary) Perspective Change is permanent and irreversible; time repeats never repeating. (Freeman and Louça 2001, 3)

Pleas for an ‘environmental economic geography’ (EEG) were enthusiastically embraced at a recent (2004) conference in Cologne and in subsequent publications (Bridge 2008; Gibbs 2006; Soyez and Schultz 2008). The assembled apostles essentially urged economic geography to take the environment more seriously. Such a plea may be surprising because the idea of geography conjures up an inherent interest in nature, partly rooted in an older framing of economic geography as The Human Use of the Earth (Wagner 1960). However, since the 1960s economic geography’s contemplation of location dynamics, regional development and the spatial division of labour has largely marginalized environmental considerations as more or less passive location conditions (Hanson 1999; Soyez 2002). The recent surge of interest in EEG offers to rectify this neglect, albeit belatedly. After all, the ‘greening’ of society is firmly established, specifically reflected in escalating environmental policies, expressions of public concerns and preference, corporate initiatives to clean-up and pre-empt environmental damage, the rise of the © 2008 The Author Journal Compilation © 2008 Blackwell Publishing Ltd

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environmental service industry and the emergence of modern environmental non-government organizations (ENGO) (Angel 2000; Braun 2002; Eden 1996; Florida 1996; Gibbs 2002; O’Riordan 1976; Soyez 2002). As Gibbs (2006) notes, the urgency for EEG is rooted in the policy pregnant implications of environmental change for ongoing economic restructuring and the nature of human activity in the future. But, to use Bridge’s (2008, 76) phrasing, can we move EEG beyond its present ‘loose grouping’ of burgeoning but disparate studies to a more coherent and influential ‘epistemic project’? To contribute towards this challenge, this article advocates an institutional approach, variously labelled as ‘old’, ‘radical’, ‘dissenting’ and (increasingly) ‘evolutionary’ economics (Hayter 2004; Martin 2000) as a conceptual, analytical platform for EEG. Overall, this approach seeks to understand the dialectics of stability and transformation among and within market economies and provides a ‘reasoned history’ to the interpretation of long-run patterns of industrialization through the kaleidoscope of reciprocal, quasi-independent processes of science, technology, politics, culture, economic history and ecology (Freeman and Louça 2001). Within this kaleidoscope, innovation is a central, unifying theme that co-evolves in institutional and technological dimensions, according to changes that are incremental, major, radical and paradigmatic. The power of innovation to drive evolution is convincingly cast in the theoretical framework of ‘techno-economic paradigms’ (TEP). TEPs are concurrences of technological, market and institutional forces, recognized as fundamental restructurings of capitalist dynamics that are ‘permanent and irreversible’ (Freeman and Louça 2001, 3). Each TEP is connected and different – ‘time repeats, never repeating’ – and economic evolution is geographically differentiated by place-based institutions, notably with respect to innovation systems, and as economic and social landscapes are variously created, modified, destroyed and integrated in new ways. If previous TEPs created the present global environmental morass, they were not mechanically driven but shaped by social and political forces. Freeman (1992) suggests that societies have the potential to create a green TEP in the future in which environmental imperatives are cofeatured with those of development. If Freeman (and others) is right how is economic geography to provide realistic explanations of economic processes and maintain its relevance? A basic challenge to EEG is rooted in blinkered, specialized research communities in which economic geography’s focus on work or jobs tacitly leaves investigations of environment or nature to other subdisciplines such as resource geography (Soyez 2002). Moreover, this knowledge-based fragmentation has been strongly reinforced by public discourses and attitudes that express ‘economy or environment’ as a rhetorical question that implies a zero-sum game suggesting that society can have workers or nature but not both. Evolutionary-institutional perspectives, however, reject the idea of such simple trade-offs. Clearly, the opportunity costs of actions © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd

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are real, defined by foregone alternatives and at least implicit recognition of trade-offs among desirable characteristics. But over time innovation raises possibilities of positive-sum games and changes in trade-off relationships. Indeed, broadly stated, the relationships between industrialization as represented by successive TEPs and ‘environmental phases’, defined as particular combinations of environmental attitudes, policies and outcomes, are varied, non-linear and changing now (Hayter and Le Heron 2002). The green TEP is a realistic idea. This article advocates evolutionary institutionalism as a theoretical basis for EEG as a distinctive methodological approach that offers public policy (normative) implications for a green TEP. As objects for inquiry, institutions comprise ‘prevalent habits of thought’ (Veblen as quoted by Hodgson 2001, 142) or ‘routines, conventions, rules and procedures, both of a formal and informal nature’ and evolutionary institutionalism seeks to analyse how habits and routines both stabilize societies and direct socio-economic changes (Martin 2000, 79). In anthropocentric perspective, nature may be regarded as an institution that describes a human–environment split that has arisen as industrialization has withdrawn people from coexistence with the so-called natural world. Furthermore, society’s impacts and concerns for nature are explicitly institutionalized through property rights regimes and given animus by ENGOs (Brubaker 1995). From a broader environment–economy perspective, the discussion draws on the related ideas of ecological modernization (Hajer 1995; Mol 1995; Spaargaren et al. 2006) and industrial ecology (Ayres 2001; Frosch and Gallopoulos 1989). Ecological modernization in its advocacy for a green economy through innovatory regulations, producer and consumer behaviour, and technological change particularly has received attention in economic geography (Gibbs 2000; Murphy 2000; Soyez 2002). However, even sympathetic reviews of ecological modernization are disquieted by its theoretical deficiencies and limited integration of geographical perspectives (Buttel 2000; Gibbs 2006). Similar concerns afflict industrial ecology that has been narrowly focused on designing industrial complexes (in situ) in ways that minimize waste and energy flows (Richards 1997). This article suggests that evolutionary institutionalism as a paradigmatic approach to understanding how the economy actually works and evolves over time and space in terms of the behaviour and interdependencies of economic and non-economic institutions theoretically empowers ecological modernization (and industrial ecology). Different paradigms of environment–economy relations, based on neoclassical environmental economics (Pethig 2001) and neo-Marxist political ecologies (Castree 2001; Smith 1984), are by-passed in this article. In the remainder of the article, the TEP model is first placed in the context of evolutionary institutionalism for EEG as prelude to its heuristic elaboration with respect to environmental phases and potential future green TEP. Finally, three themes for a research agenda for EEG are outlined with respect to regional economic geographies, remapping and value chains. © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


Institutional Perspective on the TEP Model Evolutionary institutionalism, inspired by Thorstein Veblen at the end of the 19th century, developed within economics principally as an alternative to neoclassical orthodoxy (Hodgson 2001). Neoclassical economics seeks universal principles of market behaviour based on static, economistic models of the economy that make strong a priori assumptions of rationality, the virtues of perfect competition and equilibrium tendencies in resource allocation (Hodgson 2001). Institutionalism is also sceptical of Marx’s general tendencies of capitalism as an appropriate starting part for analysis. Rather, evolutionary institutionalism rejects the idea of a universal model of capitalism and derives its generalizations and prescriptions from close observation, measurement and interpretation of real-world institutions that are variously expressed as formal and informal organizations, movements and common values. In this view, the analytical focus of evolutionary institutionalism is the habits, conventions, attitudes or simply the routines that define institutions – what routines are and why routines are created, maintained, destabilized and restructured. Moreover, such routines are social and political constructs as well as economic relations that are differentiated in place and underpin economic interdependencies across space. For EEG, evolutionary institutional analysis investigates the implications of the routines of institutions for the environment and how these routines have changed over time and place. Such analyses of actual behaviour provide the basis for thinking through how routines should be changed for a green TEP. An insistent theme for evolutionary institutionalism is the power of big business to shape the nature of market economies, rather than simply passively responding to consumer sovereignty and government regulation. In evolutionary institutionalism, big business provides economies of scale and scope, not least with respect to research and development (R&D) and technology transfer, vital to economic development but also exercises disproportionate power over small firms, consumers, governments and labour. Indeed, economic development is a highly uneven process characterized by both a deepening division of labour underwriting increasing wealth and market failures, variously expressed in terms of excessive profits, income inequalities, unemployment and environmental degradation. In Schumpeter’s (1943) words, capitalism is creatively destructive. With respect to the environment, market failure has occurred because business (and other institutions) have externalized – ignored – the costs of their behaviour created by water, air and land pollution. Can business be expected to internalize environmental impacts and in consequence be motivated to reduce these costs? This expectation may seem counter to narrow interpretation of firms as profit maximizers or exploiters of surplus value and nature. Institutionalist accounts, however, begin with a definition of what a firm is: ‘. . . an integrated and durable organization of people © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


and other assets, acting tacitly or otherwise as a “legal” person, set up for the purposes of producing goods and services, with a capacity to sell or hire them to customers, and with associated and recognized corporate legal [or customary] entitlement and liabilities’ (Hodgson 1999, 238; italics in the original). The entitlements refer to legal rights to property, prior to exchange, or remuneration for contracted services while liabilities refer to, for example, failure to meet regulations and accepted conventions. As a social creation, the firm has formal legal status and related sets of property rights that define ‘the property holder with respect to something of value’ (Bromley 1991, 2) and that are claims to benefits or income streams that imply exclusivity, security and transferability (Scott 1995, 11–2). In Bromley’s (1991) classification, property rights regimes are held privately by individuals, in common among a defined group (of ‘commoners’) or by governments and are sanctioned by law and/or custom. In general, institutions that hold property rights at least implicitly incorporate environmental values and attitudes and typically incorporate rights and responsibilities regarding the environment. From this perspective, the so-called tragedy of the commons is really the tragedy of ‘open access’ resource regimes over which property rights have not been recognized. The interpretation of environmental degradation as negative externalities of institutional behaviour in turn implies that nature has been treated as open access resources. But as legally defined social institutions, the entitlements and liabilities of firms (and other institutions) are changed by policy and/or reformulation of attitudes. In practice, the environmental policies of governments across all market economies have escalated over the past 50 years to redefine property rights in terms of environmental responsibilities and to increasingly internalize environmental costs. Simultaneously, the ENGO movement dedicated to protecting environmental values has emerged to influence and reinforce the behaviour of business, labour, governments, consumers and other institutions (such as Aboriginal peoples) in favour of environmental priorities and property rights (Soyez 1995). Indeed, ENGOs have become an accepted, ubiquitous formal or informal presence on committees and debates on development and the environment in the smallest of local and the biggest of global forums such as the Kyoto and Montreal Protocols (Raustiala 1997; Rohrschneider and Dalton 2002). These debates, however, are often highly conflicted and there is particular concern over the compatibility of economic and environmental goals. In the academic literature, pessimistic interpretations of possibilities (e.g. Lipietz 1992), including explicit framing of economy and environment as a zero-sum game (Hornborg 2003, 215), are countered by the claims of ecological modernization and evolutionary institutionalism, as well as voices within the wider environmental movement (Elkington 1998; Gore 2006). In supporting its claims for the compatibility of economic and environmental goals, ecological modernization draws largely from sociology and © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


political science and focuses on governments, especially nation-states and their policy initiatives as the basis for stimulating innovatory behaviour (Buttel 2000; Mol 2000; Murphy and Gouldson 2000). But this discussion is not connected to broader theories of national and regional economic development. In contrast, evolutionary institutionalism provides a comprehensive, coherent analysis of market economies in terms of the political-social economy of economic institutions, notably business and markets, and their interactions with non-market institutions as they evolve historically and over space. The TEP model assigns explanatory priority to innovation to provide embedded, path-dependent interpretations of the economic/institutional transformations that have created such big differences among rich and poor nations (Freeman 1987; Freeman and Louça 2001; Freeman and Perez 1988). The TEP model recognizes innovation as a social process and draws on detailed analyses of the origins, nature, diffusion and impacts of all kinds of innovations and of the structure of national innovation systems (Freeman 1974, 1995; Freeman and Soete 1997; Freeman et al. 1982). In privileging learning-based explanations, the TEP approach is complimented by Nelson and Winter’s (1982) theory of organizational evolution (and its emphasis on routines) and Lipsey et al.’s (2005) structuralist-evolutionary theory (and its emphasis on general purpose technologies). The TEP model’s claim as ‘reasoned history’ reflects its insistence on the close interrogation of evidence in relation to ideas and hypotheses about innovation and the actual evolution of institutions. This approach in turn underlies its prescriptive implications for the future, as they are shaped by place. Towards a Green Techno-Economic Paradigm In brief, the TEP model stylizes industrialization in terms of (roughly) 50-year ‘Kondratieff cycles’ or ‘long waves’ of development, namely, the Mechanical (1760s–1820s), Steam (1820s–1870s), Electrical (1870s–1920s), Fordist (1920s–1970s) and the information and communication technology (ICT) TEPs (1970s–2020s). A green TEP would be next. TEPs are classified according to distinctive key factor industries; economic infrastructures; leading industries; rapidly emerging industries; new organizational forms for business, R&D, labour and other institutions; new national and international systems of regulation; lead nations; and principles of productivity that define ‘engineering common sense’. Key factor industries refer to materials that are abundant, low cost and have pervasive applications and new TEPs are created by paradigmatic technological innovations that utilize key factors throughout the economy, as well as in new industrial categories, and that in turn require ‘matching’ (or co-evolution) of organizational innovations. The productivity potentials of the TEP are then realized through myriad radical, major and incremental technological and organizational innovations over the course of the long wave. Historically, TEPs are connected by © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


path dependencies and cumulative causation, including most notably by the accumulation and elaboration of know-how. Geographically, the model emphasizes national differences in innovation systems and has been elaborated within economic geography to conceptualize industrial location dynamics and the themes of agglomeration, dispersal and new economic spaces at various scales (Glasmeier 2000). Each TEP is unique, differentially shaped by scientific, technological, cultural, economic, political and ecological processes. In the case of Fordism, for example, oil was the key factor industry, engineering common sense emphasized the exploitation of internal economies of scale at product, factory and firm levels and the new technologies of mass production and standardization were matched by the spread of divisionalized corporations, labour unions and scientific management (or Taylorism), in-house R&D laboratories and, after 1945, by a commitment to free trade orchestrated within Pax Americana. Auto manufacture illustrates a lead industry during Fordism, suburbanization and non-metropolitan industrialization were important location trends, and electronics constituted newly emerging ‘high-tech’ activities located in new economic spaces such as Silicon Valley. In general, the transformation from one TEP to another occurs when the productivity increases of existing arrangements decline and mismatches occur between existing institutions and new technologies, problems that become exposed by economic crises. In Fordism’s case, productivity problems were evident by the 1970s, while the newly emerging micro-electronics industries required new institutional forms, for example, more flexible labour relations in replace of the rigid, demarcated labour relations of Fordism. The increasingly severe recessions in North America and Western Europe in the 1970s provided the immediate context for industrial restructuring. The TEP model overlaps with regulation theory, especially with respect to understanding the attributes of industrialization during Fordism and since. As evidenced in Boyer and Saillard (2002), however, regulation theory’s focus on governance structures, policies, organization and control in relation to ‘regimes of accumulation’ and ‘modes of production’ largely marginalizes innovation, especially technological innovation, a neglect that, with few exceptions, has carried over in economic geography’s incorporation of the regulation approach. From this perspective, the potential of regulation theory as a basis for EEG, as Angel (2000) and Gibbs (2006) advocate, relates to (assuredly important) issues of governance and distributional issues. However, innovation (technological and institutional) is vital for understanding capitalist dynamics, both in terms of its destructiveness and creativity, its potentials for resolving environmental problems and for meeting development aspirations. The institutional privileging, and regulation theory marginalization, of innovation leads to starkly different assessments of a green paradigm (cf. Freeman 1992 with Lipietz 1992). The evolutionary imperative of a green TEP is to develop rules, conventions and habits of thought that enhance standards of living by meeting appropriate © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


material needs and development goals in ways that are ecologically sustainable. Freeman et al. (1973) criticized the famous Club of Rome study (Meadows et al. 1972) that predicted ecological (and developmental) catastrophe by 2050 for its reliance on statistical simulations of trends without thought to institutional agency, and subsequent revisions of this study offered more optimistic scenarios. Freeman (1992, 190–211; 1996) argued that society’s demonstrated ability to restructure itself in previous TEPs raised realistic hopes for a green TEP and for positive-sum relationships between economy and environment. This argument is underlined by elaborating the TEP model in terms of environment phases to reveal how public and private sector policies and attitudes towards the environment have changed since the onset of industrialization (Figure 1). Thus, summarizing Hayter and Le Heron (2002), in the first three TEPs, environmental ‘frontierism’ reflects the laissez-faire interpretation of nature as a freely available commodity to be used and abused as economic calculus dictates, combined with strong tendencies to transform land and seascapes not recognized under formal titles to private property, public domain or as open access resources. Environmental impacts are externalized but localized, offset by a few pioneering initiatives of resource conservationists (including with respect to national parks) and utopian entrepreneurs. During Fordism, especially after 1950, market economies grew remarkably, natural resources were considered abundant, cheap and mainly as industrial inputs, resource exploitation expanded enormously around the globe, state regulation of private property increased and industrial organization was dominated by powerful integrated multinational corporations (MNCs). With rising incomes, Fordism heralded a new environmental phase of ‘amenity and protection’ widely formalized and implemented within urban and regional planning, to improve housing conditions, air quality and access to recreation. However, mass production and consumption generated negative environmental externalities that had become truly global in scope, underlain by widespread social assumptions, incorporated in business attitudes, about the resilience of air and water to absorb effluent. Sparked by Carson (1962) and the subsequent rapid, widespread emergence of dedicated, professional ENGOs, by late Fordism, societies became increasingly agitated over environmental degradation. With the onset of the ICT, environmental commitments have deepened to emphasize ‘resource management, protection and sustainability’, stimulated by escalating environmental policies by national and local governments and in global forums. These policies have been both led and reinforced by ENGOs that, if diverse in philosophy and tactics, collectively provide: strenuous support for environmental priorities around the world by routine formal or informal participation in environmental decision-making from the most local to the most global meetings; and as adversaries and watchdogs over the environmental practices of business. In broad terms, policies and conventions are redefining nature from open (unregulated) access resources © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


Fig. 1. Coevolution of Economy and Environment in Institutional Perspective.

to some form of property rights, including (regulated) common property. In terms of industry’s response, end of pipe approaches to reduce environmental pollution are shifting to more ‘pre-emptive’ solutions, such as pollution prevention, product stewardship and design for the environment. Yet, the © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


flexibility imperatives driving the ICT are primarily motivated to increase productivity of machines and labour, and in terms of manufacturing innovations, the green implications of the ICT are conflicted. Thus, the development of computer assisted design and computer assisted manufacturing systems has resulted in more precise measurement, less waste and greater energy efficiencies throughout the economy but a plethora of new problems have arisen. For example, e-waste represents the burden of new products while the destruction of habitat to extract commodities and rare minerals, toxic waste in processing, and separation of manufacturing/recycling facilities from end-of-life products, are all driven by accelerated product cycles. The continued growth of advanced economies and massive industrialization elsewhere is amplifying often unregulated resource use and pollution outputs. Despite efficiency gains, development is outstripping the earth’s capacity to supply and more importantly its capacity to assimilate waste. As a future scenario, a green TEP implies a new environmental phase of eco-development that gives copriority to environmental sustainability and development (Figure 1). In general, this scenario anticipates the practical, comprehensive attainment of environmental sustainability that Jaccard (2005, 12) usefully defines in terms of two criteria: endurance over long-time periods and benignness in that flows of energy, materials and by-products (from extraction to consumption) must not significantly compromise the ability of land, water and air to provide them. In tandem, a green TEP requires a redefinition of ‘engineering common sense’ regarding productivity in which engineers routinely minimize or eliminate material inputs and negative environmental externalities in designing machines, factories and infrastructure. Within industry (and among consumers), sustaining the environment is a habitual state of mind and green firms and market relations in which legally defined property rights explicitly incorporate environmental obligations dominate industrial organization. The transformation of open access property regimes with respect to land, air and the oceans to properly regulated private, state or common property regimes is comprehensively established. A green TEP reduces the scale of environmental problems ‘back’ to local impacts and implies that ENGOs shift from the politics of confrontation to more of a monitoring role. In general, the reroutinization of behaviour in a green TEP implies the innovative, pervasive restructuring of economies towards eco-development that requires adaptation, renewed growth and/or downsizing of many existing activities (while re-introducing neglected traditional environmentally benign practices) and add new layers of activities that support sustainability. Such a future green TEP is by no means pre-determined and may be thwarted by political and resource allocation overemphasis on security concerns (and misplaced imperialism), by narrow views of development, and R&D priorities driven by other goals. Nevertheless, if uncertain, a green TEP is a realistic option that is gathering momentum in public policy, public attitudes and business behaviour. This momentum is reflected in © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


market-based policy initiatives that penalize bad behaviour (e.g. taxing polluters), reward good behaviour (e.g. subsidizing consumer prices for infant green industries that have not developed economies of scale), and that do both as in carbon markets, while new regulations and certification conventions are setting new standards of environmental compliance across all sectors of the economy. Moreover, vital to TEP thinking, subsidies and regulation are encouraging widespread experimentation and innovation in the energy and transportation sectors to reduce their massive environmental impacts, for example, with respect to solar (phototvoltaic and concentrating), wind, cellulosic biofuels, geothermal and carbon capture, and sequestration energy substitutes, often in association with electric and hydrogen powered vehicles, magnetic trains, wind driven ocean ships, air ships (Zeppelins) and devices that capture energy from walking and the clothes people wear. Rapid progress in nano- and biotechnologies further reveals considerable potential to reduce or eliminate the environmental effects of industrial activity. While such new developments highlight the job-enhancing effects of the greening of the economy (Patchell 1999; Schulz 2002) environmental sustainability, for example, as indicated by forestry certification or clean coal mining technologies, is vital to maintaining jobs in traditional industries (Jaccard 2005; Stringer 2006). In contrast to previous TEPs that were motivated by development goals and the need to resolve productivity dilemmas, incipient trends towards a green TEP appear to be motivated by changing public values, the role of ENGOs and are regulation driven. Moreover, contemporary environmental concerns are both global and intensely geographically differentiated and integrated. However, with its focus on understanding economic transformation over time, the TEP model’s geographic sensibilities are limited, expressed mainly by the identification of lead nations that develop distinctive powerful innovation systems that exert global impacts. This lacunae is a significant opportunity for EEG. Towards an Agenda for EEG: Regions, Remapping and Sustainable Value Chains The TEP model, as elaborated by environmental phases, provides a theoretical and analytical platform for an epistemic EEG that explicitly addresses the issues of environment and development. In turn, EEG offers to assess and prescribe how place and space influence work-environmental interactions that are site-specific, globally interdependent and multiscalar. Given the environmental priorities of business, government and public, a non-EEG runs a serious risk of obsolescence and policy marginalization. Environment and development are widely considered the central, related challenges facing the globe today (Martin 2001). Yet, if economic geography claims a strong development emphasis its environmental credentials are weak. To offset this neglect, the potentials of three important trends in the economic © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


geography research literature for an EEG agenda are briefly noted. The three trends relate to ‘new’ regional geographies, remapping land use and value chains (while other possibilities are left for future consideration). First, recent pleas for revitalized regional geographies are powerfully enforced by environmental imperatives (Allen et al. 1998; Massey 2005). In institutional terms, regions are ‘meeting places’ for (instituted) interactions for ‘power geometries’ expressed as local–global dynamics that are organized by (locally and globally or externally based) governments, businesses, labour, ENGOs and other institutions, including formal and informal conventions and attitudes (Hayter 2004; Holmén 1995, 85). Hitherto, these power geometries have been largely centred on capital, state and labour. However, as O’Riordan and Church (2001, 3) argue, ‘globalism’ and ‘localism’ are two discourses that ‘entwine to form social identity, the basis for self-actualization and the bedrock of any transition to sustainability’. Indeed, the ‘localization of globalization’ (O’Riordan 2001, xix) or its (instituted) ‘grounding’ (Bridges 2002) are powerfully shaped by humanenvironmental interactions that are locally distinctive, often site-specific, as well as globally interdependent and multiscalar (Clapp 1998; Walters et al. 2008). In this regard, the documenting of local experience in the creation and maintenance of institutions that blend work and nature is an important is an important task for EEG, as illustrated by the ‘rural’ case studies in O’Riordan (2001) and Patchell’s (2007) analysis of wine growers who compete globally by cooperating locally in ways that equate economic and environmental sustainability, the latter helping to define brands, reputation and quality. Parallel initiatives are evident as regards urban sustainability. More general institutional framings of regional development (Patchell 1996; Storper 1997) could also be revisited with the green TEP in mind. An environmentally informed regional focus is important in public policy terms. International, national and regional governments are widely engaged in environmental policy experimentation that needs to be documented, compared and assessed with respect to impacts, articulation and fairness. In TEP terminology, lead nations are especially important in this regard and candidates for such a role in a green TEP include the Netherlands, Japan and ‘tiny’ Iceland, the latter seeking to become the first hydrogen-powered economy in the world, as directed by the Icelandic New Energy Ltd. (Árnason et al. 2001). Because of its size, peripheral status and ability to develop distinct capabilities that draws on global expertise, Iceland’s case is particularly instructive. Environment–economy problems are geographically highly varied, solutions need not be top down, and to be successful a green TEP needs to be global in reach. Furthermore, an EEG can usefully document the regional impacts of environmental (climate) change for economic activities and associated policy and behavioural responses. Regions are complex institutions that coordinate and direct development, in detail and strategically, and are both defined by common norms and © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


conventions and, conversely, disputes over what these norms should be. Remapping, the second theme proposed for EEG, is rooted in these disputes. Remapping is especially associated with resource peripheries that have become increasingly conflicted places around the world (Hayter et al. 2003). The economic geography of export-based resource production is often the root of these problems as vested corporate and government interests are opposed by ENGOs and Aboriginal peoples who give priority to the non-industrial values. In poor developing countries, such ‘resource wars’ are literally deadly. In rich peripheries, such as in Canada, Australia and New Zealand, conflicts remain bounded by conventions of civility and the rule of law, although civil, and even criminal, disobedience occurs in these places. According to the contested resource periphery hypothesis, the scale and scope of resource conflicts features a clash of institutional interests over the proper use of resources. In effect, different industrial, political, environmental and cultural organizations are seeking to maintain their vested interests or to remap land, resources and associated property rights according to their particular values. Resource contestation is further complicated by the politics of security (and trade). At a time when global oil supplies are soon expected to dwindle, for example, the morally and strategically muddled tragedy of the Iraq War has ‘something to do’ with securing control over oil supplies and ensuring such supplies continued to be valued in US dollars (and not the euro as Iraq was thinking about doing). Contested resource peripheries are institutional battlegrounds that signal broader debates about local possibilities for a green TEP and considerable potential for analysing relationships between economy and environment by the incorporation of distinct but overlapping institutional interests and the changing nature of property rights. Remapping is a normative response that involves issues related to moral judgements, democracy, control and sustainable development and that can also be ‘measured’ by (changing) territorially based resource property rights as, for example, in the conservation areas, treaties, community resources and/or more private property, with stronger or weaker environmental regulations, as well as by changing patterns of resource use. An EEG interprets resource periphery restructuring in this broader sense of remapping, often led by ENGOs, not just in terms of technological change, market dynamics and labour (Bradshaw 2007; Clapp 2005; Hayter 2003; Soyez 1995). The third proposal for an EEG agenda advises the environmental elaboration of value chains. Recently, economic geography’s interests in value (and related production, commodity) chains have escalated and have focused on a wide range of producer- or buyer-driven and resource- and manufacturing-based chains (e.g. Coe et al. 2004; Hayter and Edgington 1997; Hughes and Reimer 2004; Smith et al. 2002). Basically, value chains situate economic activities within complex networks of value adding processes that comprise multifaceted resource extraction, manufacturing, service (marketing, R&D, © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


financing, planning) and distribution (logistics, warehousing, procurement and distribution) activities and stretch across global scales. Value chain analysis addresses how these highly varied functional interdependencies are organized within and among populations of firms and shaped by corporate strategies, structures and government policies, especially with regard to the implications of where value is created, the nature of skill formation and the locus of control for local development. Value chains also have great potential for incorporating environmental considerations, for example, by the incorporation of: energy systems; the environmental costs of transportation; green ‘chains of custody’ in firm-supplier relations; and the dynamic implications of innovation and diffusion in relation to environmental imperatives. Energy directly links the environment in every step of value chains, measurable in terms of direct costs and externalities in the form of various emissions, and provides important sustainability criteria to combine with work and profit considerations in the assessment of location dynamics. Second, environmentally informed value chains need to give greater profile to transportation systems that impose significant environmental costs, often unpriced, and are more important as a location factor at various spatial scales, not just the global as is commonly assumed (Hall et al. 2006). To what extent, does environmentally priced transportation put breaks on globalization and/or reinforce flexible specialization? Third, economic geography’s interests in firm-supplier networks value chains can be environmentally elaborated by incorporating the environmentalists’ interpretation of ‘chains of custody’ that seeks to ensure that entire value chain from resource producers to final consumers are sustainable through appropriate certification and regulation (Stringer 2006). What regional and industrial patterns are evident in emerging chains of custody? What are the organizational and location implications? In answering these and related questions, industrial ecology, with its concerns for industrial technical and location configurations that minimize energy costs during product life-cycles, including recycling, is a rapidly developing resource for EEG (Allenby 1999; Lyons 2007; Richards and Forsch 1997; Seuring 2004; Sterr and Ott 2004). In close complement to value chains, there is considerable interest in economic geography in understanding tendencies towards agglomeration, industrial districts or clusters, notably in regard to innovative (R&D, design, advertising, consulting, etc.) activities, including the increasing connections among agglomerations and to manufacturing ‘dispersed’ elsewhere often in other kinds of agglomerations (Bathelt et al. 2004; Crevoisier 2004; Florida 2005; Oinas and Malecki 2002). This research is wide-ranging, encompassing both ‘high-tech’ activities (Patchell 1993; Rees 2005; Reiffenstein 2006) and the innovative ‘up-grading’ of ‘low-tech’ activities (Crewe 1996; Leslie and Reimer 2006; Rantisi 2002), as well as activities in between. With exceptions (e.g. studies of the location evolution © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


of electric vehicles; Patchell 1999; Scott 1995), the environmental neglects in value chain analysis also apply to the clustering literature. The industrial ecology literature makes strong environmental claims about clustering and these claims need investigation (not tacit acceptance). Moreover, both the value chain and clustering literatures have tended to eschew fundamental normative questions (Martin 2001). Policy advice, however, demands answers to such questions as: What is the proper distribution of economic activity that provides sustainable work? Are national, regional and spatial innovation systems properly organized and located to resolve environmental problems that are globally and locally idiosyncratic (Prudham 2003)? What are the potentials for developing innovative capacity, creating jobs and sustaining the environment in resource peripheries and poor countries (Hall and Lubina 2007)? In this latter regard, the ‘democratization of innovation’ in the sense of a geographic dispersal of innovative activity that addresses local challenges and opportunities is an important thrust for both development and the environment. In answering normative questions, EEG will have to overcome, as Proctor (1996, 276) notes, geography’s discomfiture with moral dogmatism and moral aphasia or ‘an unwillingness or inability to speak of right and wrong in the light of all the complexities surrounding moral issues’, decidedly not characteristics of environmentalism. An EEG that contributes to public policy must overcome moral aphasia while opposing dogma. EEG as a Picnic Environmentalists like to emphasize society’s dependence on nature: without nature, jobs cannot be sustained is the approximate slogan. I suggest the reverse can also be claimed: without jobs, meaningful purpose and acceptable standards of living, there is no incentive to save nature. The green TEP offers realistic hope – through the reasoned history of human experience and choices – for a transformation in economic trajectories that harmonize with nature. A reasoned, epistemic EEG is needed to capture this evolution in order to show its geographic conditioning, differentiation and scope. Places, as well as time periods, are unique but connected, to paraphrase Freeman and Louça (2001, 3), ‘space repeats, never repeating’. As in picnics where people and consume both goods and nature, EEG offers an array of research opportunities that address central public policy challenges of the 21st century – development and environment. The analysis of regional institutional structures and suggestions for new forms of governance, the remapping of land use dynamics and the development of (innovative) sustainable value chains are part of these challenges. Reasoned analyses of these challenges can help inform policies that offset capitalism’s destructive, unequal tendencies. In terms of practice, EEG implies revitalized regional economic geographies and a re-integration of © 2008 The Author Geography Compass 2/3 (2008): 831–850, 10.1111/j.1749-8198.2008.00115.x Journal Compilation © 2008 Blackwell Publishing Ltd


economic geography’s (industrial, transportation, energy, resource geography) subdisciplines and (location, land use, interaction) perspectives with environment and work as combined yardsticks. As White (1996, 185) observes ‘most humans work and work is embedded in nature’ and needs to be understood as such, and the very poorest deserve the dignity of picnics. Acknowledgements I am grateful to Dietrich Soyez for raising the flag of EEG and his encouragement to me, for Jerry Patchell’s numerous insights and the advice of Neil Coe and two referees. This article is based on a presentation in a stimulating first conference on EEG that he and his colleagues generously organized in Cologne in 2004. I am also grateful to the financial support of Social Science and Humanities Research Council, grant no. 410-2001-0071. Short Biography Roger Hayter is a Professor of Geography. He is an economic geographer with particular interests in industrial location dynamics, resource peripheries and the forest sector. He has written widely on the evolutionary location dynamics of British Columbia’s forest economy, exploring several themes related to corporate strategies, foreign investment, labour markets, trade policy, innovation, community development and the environment. These interests are expressed in Flexible Crossroads: The Restructuring of British Columbia’s Forest Economy (UBC Press, 2001). He has also written on aspects of Japanese forestry, especially with respect to timber markets, trade and high value, localized production. His interests in industrial geography are illustrated in a text book, originally published in 1997 (freely available at http://www.sfu.ca/geography/people/faculty/Faculty_sites/ RogerHayter/dynamics_book.htm), and he is currently investigating trade disputes, the environment and location adjustments in resource peripheries, and co-writing with Jerry Patchell, Economic Geography in Place and Space: An Institutional Perspective. He holds an MA from the University of Alberta, a PhD from the University of Washington and is currently editor of the Canadian Geographer. Note * Correspondence address: Roger Hayter, Department of Geography, Simon Fraser University, 8888 University Drive, Burnaby, BC, Canada V5A 1S6. E-mail: [email protected].

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