Introducing Realistic Complexity into Analyses of Climate Policy

In the United States as of December 2009, 32 states and the District of Columbia had adopted mandatory standards that, over the next 10 to 20 years, will require that between about 10 and 15 percent2 of the energy supplied by utilities come from alternative and renewable sources (Pew Center on Global Climate Change, 2009). Four other states have voluntary standards. State and local governments as well as the federal government have a variety of programs, including labeling, appliance standards, and

2 States vary in how the standards are defined so comparisons of goals can only be approximate.

investment in technology development and adoption, that are intended to promote energy efficiency (North Carolina State University, 2010). It is not completely clear how existing policies will be affected by, or will affect, future ones, especially across governance scales. If policy analysis is to inform policy decisions, then it has to find ways to understand and model these complex interactions (Selin and VanDeveer, 2007).

These interactions can have substantial influence on the effectiveness of polices. As the IPCC has concluded, programs intended to inform and influence behavior can multiply the effects of other policies. For example, home weatherization programs offering identical financial incentives differed in impact by more than an order of magnitude, depending on how they were implemented (Stern et al., 1986). Legislation and regulations also involve political compromises that add complexity and cause actual policies to deviate from their original goals (Pressman and Widalvsky, 1973). Moreover, domestic climate policies could enhance or retard the U.S. balance of trade depending on how they are structured (Houser et al., 2008).

Nor are these interactions restricted to the U.S. context. International climate policy will interact with many other international agreements and laws. For example, trade agreements may either contradict or complement mechanisms for enforcing emissions limitations (Weber and Peters, 2009). Efforts to encourage transfer of technologies to reduce emissions may be facilitated or inhibited by intellectual property agreements (Brewer, 2008). Development funding can enhance or retard efforts to reduce and adapt to climate change (Klein et al., 2007; World Bank, 2009). A substantial literature has identified the possibility of these complex interactions, but their implications are only just beginning to be explored in depth. There may be advantages to such complex policies, if they can be designed taking into account both political reality and the implications of the complexity involved—complexity that may lead to more robust policy (Anderies et al., 2004; Andersson and Ostrom, 2008; Ostrom, 2007; Pinto and De Oliveira, 2008). Interactions can be also positive as policy instruments try to reap co-benefits across policy goals. A few mechanisms, such as the CDM and the United Nations Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries, seek to reap co-benefits both across mitigation and adaptation and across climate policy and development. For example, the CDM allows Kyoto Annex 1 countries to offset their carbon emissions by generating carbon credits (through the creation and implementation of projects) in Annex 2 countries. Besides generating carbon credits, CDMs are also required to produce a "development dividend" by creating jobs, promoting sustainable development, and other methods (the definition of what constitutes sustainable development requirements varies substantially across countries). However, empirical research has found that suc cess in promoting sustainable development has been mixed (Olsen, 2007; Pearson, 2007; Sutter and Parreno, 2007).

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