What Stands in the Way Becomes the Way: Sequencing in Climate Policy to Ratchet Up Stringency Over Time
This report develops a conceptual model of policy sequencing rooted in climate economics and political science as a pathway to achieving the aspirations of the Paris climate agreement. The ideas are illustrated with examples from Germany and California.
A major outcome of the Paris climate agreement is the aspirational goal of greenhouse gas (GHG) neutrality. How and through which policy pathways can this be realized? Economists stipulate dynamically cost-effective pathways with rising carbon prices over time. Yet pricing expands slowly in the face of various barriers, while some success is found in different policy trends. We outline a theory of change to overcome barriers to carbon pricing with path dependency and sequencing at its core. The mechanism involves second-best policies that compromise on cost-effectiveness at earlier stages to pave the way for more stringent and cost-effective policies later. We observe California and Germany to identify how policy barriers have been addressed in a sequential manner. We hypothesize that long-term success hinges on building coalitions, reducing costs, avoiding bad policy lock-ins, and other dynamic factors. We hope this framework stimulates a new research agenda of practical value.
Key findings
- The Paris climate accord embraced an iterative process of nationally determined commitments (pledge and review) as the global framework for reducing emissions over time.
- Frameworks to think about the evolution of policies are scarce, and none explicitly considers increasing stringency as a guiding principle.
- We postulate the existence of barriers to greater stringency in climate policy and argue that policy sequencing can be a way to overcoming these barriers over time.
- To make the model analytically useful, barriers are characterized along with related sequencing options, drawing on illustrative examples from Germany and California.
Authors
Michael Pahle
Christian Flachsland
Nina Kelsey
Eric Biber
Jonas Meckling
Ottmar Edenhofer
John Zysman
