Early Lessons From Climate Policy Implementation

Two upcoming international conferences will draw tens of thousands, eager to push for new environmental targets, make bold pledges, demand breakthrough pathways, and call for more funding.

With the UN Climate Change Conference (UNFCCC COP 29) and UN Biodiversity Conference (CBD COP 16) around the corner, we are reminded how these gatherings are collective platforms of hope that strive to align scientific goals with economic shifts and cooperative action around future timeframes.

What is often overlooked are the micro-level, technical, or mundane administrative tasks that translate targets to results. To paraphrase the late Mario Cuomo, former Governor of New York, we pledge in poetry, implement in prose.

As the Paris Agreement on climate change approaches its first decade, there has been a welcome shift from target setting to implementation, prompted also by the first Global Stocktake which leaves little doubt that the 1.5ºC temperature goal will likely be missed.

There are no shortcuts, but the world must own up to its climate shortcomings.

A recent report from the Potsdam Institute reviewed 1,500 domestic measures across 41 countries, concluding that only 63 delivered effective and cost-effective climate mitigation outcomes.

The most effective results rely less on a single, major instrument like a regulation or subsidy than on the interaction between measures generating synergies that improve outcomes.

Early findings from Organisation for Economic Co-operation and Development (OECD) work on climate clusters similarly suggest most effective reductions result from the interaction between measures. These clusters refer to groups of emissions-cutting policy measures that comprise regulations, standards, and green subsidies.

A common denominator across 50 countries is the pivotal role of market-based measures such as carbon prices and emissions trading. A carbon price applied to automotive fuels can further incentivize shifts to low-carbon options where there are viable substitutes, including reliable public transport, affordable electric vehicles (EVs) made more accessible through tax incentives or rebates, or better EV recharging infrastructure.

Promisingly, a growing number of policies are effectively working together. For example, California has a pilot that allows some EV truck owners to sell power back to the grid, even during pricey peak hours. Bidirectional or vehicle-to-grid programmes are also rolling out.

However, too many policies remain out of sync, or worse, entail one measure that negates another. The most egregious example remains environmentally-harmful subsidies, in which USD 1.2 trillion annually directly lead to soil and water contamination, the overuse of fossil fuels, overfishing, and other wastage.

As climate policies expand, successful implementation hinges on effective coordination. Nearly all climate mitigation frameworks comprise a mix of regulations, performance standards, green subsidies, fiscal incentives, mandatory climate risk disclosure rules for the financial sector, market-based instruments, and procurement, among others. Most focus on energy, electricity, and transport and extend to hard-to-abate sectors such as industry and agriculture.

To illustrate, in addition to the EU’s Green Deal, of which its Emissions Trading System (ETS) plays a foundational role, there are 2,200 domestic climate mitigation measures across its member States. Canada has roughly 440 measures across federal, provincial, county, and municipal jurisdictions. Making them work in tandem becomes even more complex due to the need, as the environmental scientist Vaclav Smil and others have argued, to accelerate timetables and ambition in order to avoid overshoot.

One route to policy coherence can be seen in the new wave of green industrial policies. The International Monetary Fund (IMF) recently identified 2,500 industrial policies, of which climate is the second leading objective after competitiveness. Countries such as China and the US are linking competitiveness with carbon objectives, while the recent report on EU competitiveness by the former Italian Primer Minister and European Central Bank President Mario Draghi similarly mapped out sector-specific technology innovation pathways stemming from carbon neutrality goals. Yet green industrial policies still face similar challenges to other big policy goals. For example, the US Inflation Reduction Act is reported to face a delay involving 40% of its funding.

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Among the most trusted independent sources scrutinizing the design and delivery of climate policies are national audit offices. Dozens of performance audits across countries have found similar implementation gaps from unclear policy frameworks lacking a clear mapping of the intended performance of each measure, assumption around synergistic effects, inadequate data measurement systems that track and attribute outcomes, poorly defined roles and responsibilities, and unclear public communications. For example, a 2022 report by the UK national auditing office pointed to the administrative challenges facing multiple ministries and agencies in implementing multiple climate targets without a single lead ministry or central agency. Tools like carbon budgets are helping the UK and other jurisdictions compare targets to outcomes.

Other lessons are fast emerging. First, there is no one-size-fits-all when it comes to public governance approaches to climate mitigation. Governments have different systems, incentives, and traditions. Still, countries can share lessons when updating their nationally determined contributions (NDCs), through for example the International Organization of Supreme Audit Institutions’ (INTOSAI) work among national audit offices on climate mitigation.

A second lesson is that stringency matters. Even the most well-designed and coordinated climate mitigation measures with low targets unsurprisingly deliver underwhelming results.

And third and most decisive factor in determining climate policy success relates to fairness and equity. Multiple surveys analyzed by OECD repeatedly confirm that public support for climate action hinges on their perceived fairness, while surveys reveal that policies perceived as unfair or disproportionately intrusive, such as those targeting specific industries or regions, are met with resistance.

Quality matters. The shift from target setting to implementation is not about dropping ambition. It is about upholding the ambition while turning targets into reality. It is also clear that fairness and equity matter not only because it is the right thing to do but because success depends on them.

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This article was originally published by the International Institute for Sustainable Development (IISD) and is republished here as part of an editorial collaboration with the IISD. It was authored by Bernice Lee, a Hoffmann Distinguished Fellow for Sustainability at Chatham House and Chair of the Sustainability Accelerator Advisory Board; Neil Maxwell, a former Assistant Auditor General of Canada; and Scott Vaughan, an IISD Senior Fellow.