Environmental Law’s Untapped Potential for Environmental Governance
By Ismo Pölönen, Professor of Environmental Law at the University of Eastern Finland
This blog post was first published on the Blog of UEF Law School (16 September 2026).
A healthy academic community is pluralistic. The purpose of this blog is to present a partly alternative framework in relation to the theoretically sophisticated research conducted by esteemed colleagues on the law of sustainability transitions. I approach the topic particularly from the perspective of the underutilized potential of environmental law. The text is largely based on my article (Pölönen 2025) concerning the general doctrines of environmental law.
The insufficiency of environmental legislation and the legal system in the context of sustainability law
In recent years, legal scholarship has increasingly referred to the insufficiency of environmental legislation as a means of addressing environmental problems. This argument has been advanced particularly from the perspective of sustainability law (e.g. Similä 2021; Soininen et al. 2021). From a sustainability law perspective, the deep structures of the legal system contain significant structural biases from an environmental viewpoint. It emphasizes the need for systemic change and new cross-disciplinary legal solutions (Aaltonen et al. 2026; Soininen et al. 2026).
For example, sustainability law identifies the protection of property rights and legitimate expectations as factors limiting necessary changes in environmental policy unless long transition periods or substantial compensation schemes are provided. It therefore seeks solutions to these challenges (Lähteenmäki et al. 2021; Soininen et al. 2026). In practice, such solutions imply, among other things, weakening protection for property rights and legitimate expectations.
One of the core questions of sustainability law is how regulation, including regulation not primarily designed to address environmental issues, can contribute to desired broad-based systemic change (Similä 2021). It encourages scholars from other fields of law to engage more extensively with environmental themes, including at the level of the legal system’s deeper structures (see also Paloniitty 2022).
New concepts, old questions
Sustainability law redefines longstanding questions, concepts, and general doctrines of environmental law (e.g. theory of environmental policy instruments), partly through new terminology. Environmental problems themselves are often referred to as a “sustainability crisis,” even though the prioritization of the environmental dimension of sustainable development lies at the core of the approach.
Based on my experience supervising and examining master’s theses and doctoral dissertations, I have observed that students and early-career researchers often approach the theses of sustainability law in a somewhat ahistorical manner. Even if the new concepts and frameworks are here to stay, it remains important to understand their connections to longstanding research traditions. This is necessary not only for understanding the continuity of academic debate but also for recognizing the essential limitations of sustainability law and sustainability-transition thinking.
Insufficient legislation, not insufficient environmental law
When discussing the adequacy of environmental law, it is important to be clear whether one is referring to the current state of environmental legislation or to environmental law as an academic discipline, including its general doctrines and the regulatory and governance models developed within environmental law scholarship. In this contribution, I use the term environmental law in the latter sense.
The inadequacy of environmental legislation is evident. Environmental conditions have deteriorated significantly according to multiple indicators, and without major changes, considerably worse developments can be expected. Environmental law, however, offers numerous solutions to environmental problems, and there is nothing new about cross-disciplinary approaches. For decades, environmental law has drawn upon the tools available in other fields of law.
Examples include the Finnish Act on Compensation for Environmental Damage (737/1994) and Chapter 48 of the Criminal Code (39/1889) concerning environmental crimes, grounded to the Code in 1995. More recently, environmental law has become increasingly intertwined with commercial law as addressing environmental challenges such as climate change requires directing capital flows toward environmentally responsible investments and businesses. This development is particularly evident in the new body of sustainability regulation governing financial markets and corporate conduct.
Environmental law offers a wide range of regulatory instruments, ranging from prohibitions on emissions, substances, products, activities, and harmful environmental impacts to area and species protection, planning and impact assessment obligations, carbon border measures, emissions trading, extended producer responsibility, environmental taxes and subsidies, ecosystem restoration, ecological compensation, corporate sustainability regulation, and various forms of information-based governance.
Far more effective regulatory solutions are available at both the global level, such as ambitious emission-reduction obligations, and the local level, addressing both point-source and diffuse pollution. Administrative, economic, and information-based instruments, as well as combinations thereof, can significantly influence production and consumption, and thereby our way of life. Even the instruments currently in use remain substantially underutilized globally and nationally. They could be made considerably more effective without altering the deep structures of the legal system.
Political prioritization as a brake on effective environmental law
Responding to environmental problems is one of the core functions of environmental law. In this respect, the primary obstacle to the effectiveness of environmental law has not been a lack of environmental law solutions, cross-disciplinary approaches, general legal doctrines, or the fundamental structures of law.
Rather, the greatest constraint has been political prioritization, in which business lobbying has often had greater influence than the recommendations of environmental scientists. In legislative drafting, policymakers follow the sword of the election winners.
The surface level of law, namely statutes, regulations, and administrative decisions adopted by lawmakers, largely determines whether environmental protection is strengthened or weakened in practice and how economic resources are allocated among policy sectors. Researchers working on sustainability transitions face a similar obstacle, which becomes particularly pronounced when the proposed approach entails a substantial weakening of property rights, legitimate expectations, and other established elements of the legal order.
Balancing interests is a strength, not a weakness
It follows from the above that the balancing nature of environmental law, namely its ability to reconcile competing interests and benefits, is not in particular need of revision. Balancing is not an obstacle to environmentally more effective regulation; it is often the only realistic path forward.
It remains essential to develop regulatory models that reconcile economic, social, and ecological sustainability and that can secure sufficient support from both policymakers, who are highly sensitive to the short- and medium-term priorities of voters, and economic actors. In developing regulatory models, it is important to recognize the actual dynamics and realities of politics and legislative drafting.
Change can occur rapidly
It is entirely possible to intervene rapidly in environmentally harmful activities through changes in regulatory instruments. Such interventions do not always entail compensation liabilities or major costs for taxpayers.
For example, in the early 2020s, emissions trading and tax reforms significantly reduced the use of peat for energy production, leading to a rapid contraction of the peat industry in Finland. Similarly, emissions trading and energy taxation weakened the competitiveness of coal, resulting in a major decline in coal use during the latter half of the 2010s, before its national prohibition through the Act Prohibiting the Use of Coal for Energy Production (416/2019).
Coal use in Finnish energy production ended completely in the spring of 2025 on a voluntary basis, without compensation payments to energy companies. The phase-out was based on the investment and production decisions of the companies themselves.
These examples illustrate that although explicitly banning industries and economic activities may be difficult, slow, and costly due to constitutional constraints (see also Soininen et al. 2026, especially pp. 257-262), the same objectives can often be achieved through changes in economic policy instruments. The deep structures of law are therefore not, as a rule, an obstacle to many major changes within a reasonably short timeframe. By contrast, changing those deep structures themselves is the slow path.
Global problems require pragmatic solutions
A particularly important issue in addressing global environmental problems concerns regulatory and governance models in, and in cooperation with, countries that are not democratic states governed by the rule of law.
For example, the greening of law, policy, and practice in China, which plays a crucial role with regard to environmental issues, cannot be ignored when seeking genuinely effective regulatory models and practical solutions.
Neither the European Union nor its Member States can achieve environmental sustainability solely through their own legal and economic reforms, since emissions are well known not to respect national borders. A pragmatic approach is required: diplomacy, the creation of incentives, and the recognition of different legal and political systems as realities that must be engaged with.
Realities determine the length of our strides
Environmental problems represent an existential challenge for humanity, and addressing them requires a significant strengthening of regulation that reduces environmental impacts. Research in sustainability law meaningfully broadens our understanding of the options for developing legal systems to achieve environmental objectives over different time horizons.
The central message of this contribution is that substantial improvements can also be achieved by further developing existing regulatory instruments without fundamentally altering the deep structures of law, which are politically the most uncertain targets for reform.
In the real world, progress in environmental matters still requires seeking a balance between economic, social, and ecological sustainability. This is particularly evident in the context of public-finance sustainability crises, which significantly affect the political feasibility of environmentally ambitious legislative proposals. Likewise, changing geopolitical and security considerations, which emphasize economic concerns, must be taken into account.
Research aimed at reforming environmentally relevant legislation should therefore place particular emphasis not only on regulatory effectiveness but also on cost-efficiency, social acceptability, and proportionality, while recognizing the consequences and counter-risks of an extreme application of the precautionary principle. The legal system functions most effectively as a catalyst for change through radical reforms, but in the foreseeable future, only in theory.
Sources
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Lähteenmäki-Uutela, A. – Lonkila, A. – Huttunen, S. (2021). Legal Rights of Private Property Owners vs. Sustainability Transitions? Journal of Cleaner Production 323, 129179.
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