THE CHALLENGES OF IMPLEMENTING CLIMATE CHANGE POLICY

Implementing climate change policy poses difficult political economy challenges.

First, the international context affects how governments approach climate policy. The making of such policy can be thought of as a two-level interaction. At the upper level, the world’s governments interact strategically, each seeking to benefit from the global climate change regime while reducing their costs. Since there is no international authority with strong sanctioning power, this can be considered a “game” of voluntary contributions to a public good: climate stabilisation. At the lower level, climate policies are formulated and implemented within each country by national governments once the international level is settled.

Domestic policymaking depends in the first instance on the structure of government. Governments differ in the number of institutional veto players – or actors whose agreement is necessary for policies to be enacted – that they contain. This depends on whether the parliament consists of two chambers, each with strong powers; whether there is a president; and whether the constitution is federal in the sense of granting veto-power over central policy to regional governments or their representatives. In addition, it depends on the number of parties in the ruling coalition, since defection by a coalition member can preclude a bill’s passage. The more veto players there are and the more divergent their views, the more difficult it is to change policy. One veto player, the agenda setter, gets to make the proposals to which other veto players respond. Hence, the identity of the agenda setter also affects what policy is chosen. The motivation of these veto players depends on the degree of political accountability. In democracies, parties and individual politicians in the government have reason to take into account the views of their constituents. The more responsive the democracy, the more the preferences of the electorate matter. The degree of responsiveness depends on the electoral rules, but also on the degree of media freedom, which affects the accuracy and amount of information available to the voters. The ability of voters to extract accurate information from the media and other sources depends on their level of education.

Finally, the characteristics of interest groups also affect the outcomes of domestic policymaking. In part, the landscape of interest groups simply reflects the underlying economic interests in the society, associated with the inherited economic structure. However, particular interest groups are better organised in some places than others for historical reasons. The outcomes of policy reflects the set of pressures – or bids – from competing interest groups.

There are a number of reasons why one country might pursue climate policy more actively than another. First, some countries are more dependent on carbon intensive industries than others. If the income of the majority of the electorate depends on such industries, then one might expect democratic politicians to resist reforms that would threaten the livelihood of their constituents. If the benefits of developing clean industry exceed the costs of retiring heavy polluters, the voters could in principle be compensated. However, promises to do so may not be credible. Even if the majority of voters do not depend on carbon-intensive industry, the carbon-intensive industry lobby can still achieve political influence disproportionate to the share of votes it can mobilise, as long as it is well organised. Thus, a strong presence of high-carbon industries may result in the effective blocking of reform

However, other interest groups and issue-oriented lobbies such as environmental non-governmental organisations (NGOs) may balance the pressures of carbon-intensive industry, informing both the public and politicians about the benefits of climate policy. Low-carbon industries may lobby for policies that support their activities. Indeed, the battle over climate change policies is in part a battle of ideas. Supporters and opponents of climate policy seek to inform – and sometimes to misinform – both the public and politicians on the causes of climate change and the costs and benefits of mitigation. Given this, a lot depends on the sophistication of the general public – which in turn depends on the level of education – and on the extent to which the media are free and motivated to pursue the truth rather than to represent corporate or government interests.

Public beliefs are also shaped by history. In many transition countries, an abundance of fossil-fuel reserves coupled with an energy-intensive and wasteful industrial structure tends to be associated with a widespread assumption that energy use is less costly to society than it actually is. This may be another reason to expect slower reforms in countries where the energy-intensive sector is larger.

If the government is not democratic, then the paths of influence will tend to go directly from interest groups to government actors, with less influence by the public along the way. If the energy intensive industry is well organised, it may succeed in blocking the implementation of climate policy commitments that benefit the public but are costly to entrenched interests.

The nature of the political regime may affect reform in one other way: by determining the time horizon of policy-makers. Preventing climate change has potentially huge long-term benefits, but also large short-term costs. If leaders are focused on winning the next election (as in a democracy), or on avoiding an imminent coup (in an unstable autocracy), their regard for the future may be lower than that of the broader society. By contrast a (well-informed) autocrat who expects to remain in power for 20 years might take the threat of global warming more seriously.

Most of the macro variables likely to affect climate policy – democracy, press freedom, even the relative size of carbon-intensive industries – may have conditional or even conflicting effects. How economic structure, the extent of democracy and other factors influence countries’ performance in climate change mitigation is therefore an empirical question.