Chapter 1: Setting the Stage: Climate Change and Sustainable Development
1.5 Integrating Across the Essential Domains–Costeffectiveness, Equity, and Sustainability
Decisions that lead to the emissions of GHGs that result in global warming are made under, and generally because of, the system of incentives and institutions in place, and are based on the information available to decision makers. Influencing such decisions requires policy intervention at global, national, or local levels. Conversely, the existence of institutions and legitimacy determines the effectiveness of the menu of potential governmental policies outlined above. There is significant heterogeneity within most countries in the types of climate change impacts that might be expected and in the likely impact of GHG mitigation policies. The ability to adapt to climate change depends on the level of income and technology, as well as the capacity of the system of governance and existing institutions to cope with change. The ability to mitigate GHG emissions depends on industrial structure (the mix of industrial activities), social structure (including, e.g., the distance people must travel to work or to engage in recreational activities), the nature of governance (especially the effectiveness of government policy), and the availability and cost of alternatives. In short, what is feasible at the national level depends significantly on what can be done at the subnational, local, and various sectoral levels. However, most studies assume that the national level is the most appropriate for assessing and reacting to the externalities that result from emissions of GHGs and for negotiating international climate change agreements.
The prospect of climate change is just one of many issues of concern to governments, and in most countries climate policy is debated within a broader framework. National policymakers, therefore, have to make trade-offs in implementing climate policies within a comprehensive national and international political economy framework. Many political parties and stakeholder groups oppose climate policy because of perceived conflicts with private sector interests. They also perceive conflicts with traditional macroeconomic goals, like full employment, price stability, and international competitiveness. They also sometimes fear competition with other traditional objectives for public attention and public expenditure (e.g., health care, national security, infrastructure, and education). Likewise, some people may resist mitigation policies (regardless of who pays for them) because of the perceived adverse impacts on economic growth and poverty eradication, even though others might suggest that the implementation of such policies could provide potential opportunities for sustainable development.
Also, many countries have more than one national policy-making authority. In some cases, this diversity may reflect a separation of the executive and legislative branches of government. In others, it may simply be that separate agencies are responsible for economic policy, environment, and international affairs. These agencies will have different views regarding both the needs for climate policy and its likely impact on other goals. The decision-making process invariably reflects the relative political influence of these groups, and involves political negotiations and compromises between them. As a result, O’Riordan et al., 1998) argue that issues considered by governments to be on the policy periphery, like climate change, are not easily factored into consideration of issues at the policy core (such as health care, education, national economic policy, or corporate manufacturing strategy). The issue networks and policy communities around environmental ministries in most countries are weak relative to those around economic and defence ministries. Climate change is sometimes invoked to boost support for existing policy agendas, such as industrial restructuring. Nonetheless, climate change has seldom, if ever, been perceived within the powerful ministries and their policy communities as sufficiently threatening to their departmental interests to fundamentally change those agendas (O’Riordan and Jäger, 1996; Beuerman and Jäger, 1996).
There is, as well, enormous variety in the range of institutional and other conditions in various countries at the subnational level. The political decision-making process in developed countries is affected to a certain degree by powerful non-governmental institutions–including corporations and issue-based non-governmental organizations (NGOs; March and Rhodes, 1992; Sabatier and Jenkins-Smith, 1993; Smith, 1993; Michaelowa, 1998; O’Riordan et al., 1998). These can be a source of resources and new ideas to address climate change as it occurs, but they can also impede the identification and response to changes because of vested interests in the current or some desired allocation of resources. In developing countries, a growing number of institutions have emerged to champion environmental agendas. These range from groups concerned with narrowly defined problems and opportunities (e.g., grassroots groups, wetlands protection groups) to broad-based rights groups (e.g. women’s groups) that address a range of common problems (see, e.g., Banuri et al., 1994). However, significant differences continue between the legitimacy and reach of such groups in the developed and developing regions.
The role of the informal sector can also differ between developed and developing countries (see, e.g., Cantor et al., 1992). Although the term is defined somewhat loosely in the literature–often referring to urban, small-scale, non-organized economic activities, and elsewhere to activities not covered in national tax nets–estimates suggest that the informal economy may cover as much as one-third of the economic activity of some developing countries. Given its relative imperviousness to analysis as well as policy influence (indeed, its very existence is credited by some writers to its ability to escape policy influence), it is difficult to project how this sector will react to impacts from climate change or mitigation policies.
