Hands joining at a climate march, in front of a crowd carrying signs with shallow depth of field.
Given the growing concentration of greenhouse gases in the atmosphere, one can be tempted to regard the outcomes of the twenty-eighth UN climate conference (COP28) as insufficient. However, one must not forget the progress that has been made in the last years. More than 101 countries have pledged to achieve zero net emissions within the next few decades. Costs for green technologies have dropped and their penetration has soared. Analyses carried out at the World Bank in over forty countries show that these advances make it possible to achieve our climate objectives without compromising economic development or poverty reduction.
"Analyses carried out at the World Bank in over forty countries show that these advances make it possible to achieve our climate objectives without compromising economic development or poverty reduction."
All too often, progress in climate action is masked by the publicity given to conflicts and aborted reforms. While the freeze of the carbon tax in France and the withdrawal of the energy price reform in Ecuador have made the front pages, more than 4,500 climate policies have been adopted worldwide, most often quietly, and they are already having an impact on emission trajectories.
These measures, of course, are not sufficient: the idea here is not to be naively optimistic, but to acknowledge and learn from these successes in order to replicate them in other contexts, as well as to understand why it is so difficult to turn ambitious commitments―such as those agreed upon at COP28―into actual policies.
"While access to finance is a critical obstacle, given the magnitude of the required investments, it does not explain everything. No matter how viable and desirable a policy change or a project is, it can stumble against political economy obstacles"
While access to finance is a critical obstacle, given the magnitude of the required investments, it does not explain everything. No matter how viable and desirable a policy change or a project is, it can stumble against political economy obstacles, such as an unsupportive institutional architecture, coordination failures between agencies or ministries, perceived or real negative effects on certain populations and territories, or the degree of polarization of the political life. Yet, Canada has succeeded in establishing a carbon tax which is now widely accepted and participates in reducing both emissions and inequalities. Egypt has reformed its fossil fuel subsidies and has used the freed-up resources to fund social protection. Kenya has transformed its energy system in a way that has both increased the share of renewables and improved access to electricity. Our recent report, “Within Reach: Navigating the Political Economy of Decarbonization”, highlights four traits which contributed to the success of these initiatives.
A climate governance tailored to the country context and politics. It is necessary to establish a climate governance in which climate objectives are part of a wider political agenda that can include, for instance, job creation and access to energy. There is no one-size-fits-all solution: while the European Union has designed an overarching climate plan called "Fit for 55", other countries have linked climate policies to objectives of a different nature. India, for example, has doubled its green energy production capacity by emphasizing energy security and access to energy rather than emission reduction.
The right sequencing of interventions. While countries cannot do everything everywhere all at once, political constraints are not immutable: they can be lifted through long-term strategies, using some policies as stepping stones for more ambitious action. Carbon taxes, for instance, are generally unpopular; yet they can become acceptable if prior action is taken to ensure firms and people have access to affordable low-carbon alternatives so that they can respond to the price change. For example, before introducing carbon pricing, the Chinese authorities supported the development of renewable energies in order to reduce their costs, demonstrate their job-creating potential, and counterbalance the influence of fossil fuel interests.
A policy design built to facilitate acceptance and connect to other societal goals. It is important to take into account policies’ redistributive effects and to integrate climate action into wider policies that are perceived as fair and employment friendly. In Egypt, Indonesia and Canada, incentives to reduce emissions have been integrated into broader reforms which included financial transfers and/or tax cuts to protect the poorest, and aimed at making the transition easy for the rest of the population. While protecting the most vulnerable is an absolute imperative, political opposition mainly comes from organized groups, mostly those who represent industries or territories whose revenues and well-being depends on fossil fuels. Sectoral or place-based policies are therefore critical, for example to help coal-mining areas develop other activities, as has been done for some mining communities in Germany or the Netherlands.
A policy process that boosts policy legitimacy and listens to all stakeholders. The success of climate policies depends on both their legitimacy in the eyes of citizens and the transparency of the decision-making process. General mistrust of the government explains why the gas subsidies reform in El Salvador in 2011 was poorly received by the households that were expected to benefit most from it. The level of support only increased (from 30% to 60%) when the positive impacts became clearer to all. Likewise, in Chile and Ecuador, the violent opposition to climate policies was based on a widespread distrust towards the political system rather than on a rejection of the measures per se.
The political economy of climate strategies is specific to each country, but it is not independent of the obstacles and support found at the international level. The Paris Agreement recognizes this by calling for both nationally determined contributions―without imposing predetermined emission reduction trajectories―and international financial and technical support. Climate action cannot happen without making resources available to help developing countries finance the necessary investments and remove the political obstacles to their decarbonization, for example by strengthening institutions or supporting social transfers to the most vulnerable.
"Sequencing institutional reforms, investment programs and social reforms in a strategic manner will not slow down climate action: on the contrary, by removing political blockages, it will enable countries to move faster."
An approach built around political economy, deliberation and compromise may seem time-consuming, and therefore undesirable in a context of climate emergency. However, sequencing institutional reforms, investment programs and social reforms in a strategic manner will not slow down climate action: on the contrary, by removing political blockages, it will enable countries to move faster. Climate objectives will be achieved through a series of tipping points, these points in time when social, technological or political evolution makes more radical change possible. When it comes to climate change, navigating the political economy is not a luxury: it is a fundamental condition to accelerate action.
This piece was originally published in Le Monde on December 15, 2023: COP28 : « Un séquençage intelligent de réformes institutionnelles, de programmes d’investissements et de réformes sociales ne ralentit pas l’action climatique »
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