The governance model to take on climate change

Source– The post is based on the article “The governance model to take on climate change” published in Live mint on 14th September 2022.

Syllabus: GS3- Climate change. GS2- Important aspects of governance.

Relevance– About governance model

News- The article looks into the collaborative governance model needed to manage the ongoing transition in the world economy.

Why is there scepticism about the government’s ability to lead the transition?

Polarisation and authoritarian populism have undermined the capacity of societies to mount collective action at local and international levels.

Government has neither sufficient information nor the capabilities necessary to achieve positive structural change in the economy. If given too much power, they will direct resources toward the wrong places. They will promote special interests.

What are the policy challenges on climate?

Governance is difficult here. The regulations must not only be effective at the national level, they also must be negotiated globally among states with different interests and circumstances.

Why is the Montreal protocol successful in comparison with UNFCCC?

Both have similar challenges because both involve significant scientific and technological uncertainty. There are also major differences among the positions of advanced and developing economies. This is the reason why UNFCCC took Montreal protocol as its model.

Case of Montreal protocol– Montreal Protocol created sectoral committees in which ODS emitting firms joined national regulators and scientists in seeking technological alternatives.

These groups multiplied as knowledge was accumulated, capabilities were acquired and trust was built among parties.

This approach worked because the problem solving was devolved to local actors called firms with the requisite technological know-how.

Case of UNFCCC– Under the climate regime, firms have been kept at arm’s length from regulators. This has created conflicts of interest and hampered innovation.

What are other successful examples?

There are examples like the US Advanced Research Projects Agency–Energy (ARPA-E) Ireland’s agricultural-pollution regime.

In each case, ground level experimentation is coupled with higher level goal setting.

At the local level, the most successful initiatives took the form of private-public collaborations. They bring together training programs, businesses, non-profit groups and public officials.

What should be the proper strategy?

We should start out with ambitious, somewhat ill-defined goals. Program leaders must acknowledge deep uncertainty and hence the likelihood of mistakes.

We must use a carrot and stick approach. There must be incentives for the parties with the most detailed and accurate information. There must also be a threat of regulation.

There is a need for frequent reassessments and revisions, setting milestones and monitoring progress. When solutions do emerge, they can be generalized in the form of standards or regulations.

This kind of policy making differs from current approaches. The ‘state versus market’ dichotomy is simply irrelevant. States and markets are complementary. The standard top-down, principal-agent model of regulation is not useful.