Individual decisions about climate change, important as they are, are not the only human decisions that shape the trajectory of climate change. Some of the most consequential climate-relevant decisions and actions are shaped by institutions—such as markets, government policies, and international treaties—and by public and private organizations.
Institutions shape incentives and the flow of information. They can also either encourage or help us avoid situations where individual actions lead to outcomes that are undesirable for both the individual and the group (sometimes called "the tragedy of the commons"). The problem of decision making for the collective good has been extensively studied around localized resources such as forests or fisheries (Chhatre and Agrawal, 2008; Dietz and Henry, 2008; McCay and Jentoft, 2009; Moran and Ostrom, 2005; NRC, 2002b; Ostrom, 2007, 2010; Ostrom and Nagendra, 2006). This body of research can provide important guidance for shaping effective responses to climate change at local and regional levels. It can also inform the design and implementation of national and international climate policies (see Chapter 17). However, improving our understanding of the flexibility and efficacy of current institutions and integrating this body of knowledge with existing work on international treaties, national policies, and other governance regimes remains a significant research challenge.
Many environmentally significant decisions are made by organizations, including governments, publicly traded companies, and private businesses. Research on environmental decision making by businesses covers a broad range of issues. These include responses to consumer and investor demand, management of supply chains and production networks, standard setting within sectors, decisions about technology and process, how environmental performance is assessed and reported, and the interplay between government policy and private-sector decision making (NRC, 2005a). Re sponses to climate change in the private sector have not been studied as extensively, but such research efforts might yield important insights.
A number of state and local governments have also been proactive in developing policies to adapt to climate change and reduce GHG emissions. To learn from these experiences, which is a key aspect of adaptive risk management, research is needed on both the effectiveness of these policies and the various factors that influenced their adoption (Brody et al., 2008; Teodoro, 2009; Zahran et al., 2008). In the United States, local policies are almost always embedded in state policies, which in turn are embedded in national policies, raising issues of multilevel governance—another emerging research area (see Chapter 17).
Finally, it is clear that public policy is shaped not only by the formal organizations of government, but also by policy networks that include government, the private sector, and the public. An emerging challenge is to understand how these networks influence policy and how they transmit and learn from new information (Bulkeley, 2005; Henry, 2009).
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