5—Polycentric Governance Flashcards
What are the main issues with such an approach in relation to global environmental problems?
-3 main problems:
- Leakage. If measures to counter environmental problems are adopted locally, defaulting industries could easily move to an unregimented region
- Inconsistent policies. If policies do not incentive technological progress, it would be unproductive for industries to invest in solutions to tackle environmental problems
- Freeriding
Local actors could be incentivised to counter environmental problems by a sense of responsibility or the will to act as a leader
What is the collective action problem? What are its weaknesses?
The collective action problem, describes a situation where certain measures would benefit everyone yet their cost makes it implausible for a single actor to implement them alone, due to the risk of free riding. Thus, the traditional theory suggests that an external authority is needed to implement such measures.
Weaknesses:
- Empirical research shows that the level of trust and the ability to cooperate with other actors in solving the collective action problem is determinant in reducing the risk of free riding.
- To implement internationally agreed measures on a national and local level, governments must also be trusted by citizens, in the sense that the associated cost of compliance is lower than circumventing the provisions
What is the polycentric approach? What are its advantages?
- The Polycentric approach denotes a system comprising various independent centres of decision-making, both on the horizontal and the vertical levels, rather than a monocentric unit.
Advantages:
- Empirical research shows that more independent decision-making centres do not interfere with each other, and instead are more efficient than monocentric governing units.
- In a polycentric system, individuals learn from the trial and error processes in which others are also involved.
- Polycentric systems enhance innovation, trustworthiness, learning, cooperation and more equitable outcomes at different levels. They also offer a solution to the “matching principal ” of international law, which requires cooperation at different scales (e.g. international, national, regional, and local)
How does leakage occur in a polycentric system?
There are two types of leakage in a polycentric system:
- Leakage between locations: if an actor implements stricter regulations on GHGs emissions in its area, producers shift their facilitates to another region with looser provisions and export goods to avoid complying
- Market leakage: generally, if an actor implements provisions to preserve the environment (e.g. prohibiting deforestation in certain areas) the result will be an increased price of timber, which will lead to foresting other lands. However, if the enforcement and compliance mechanisms are loosened, there will be a higher economic incentive to circumvent the law and cut timber from the protected area.
What is the problem with inconsistent policies?
Policies varying from one region to another offer no incentives for firms to develop green technology, as it is more profitable to relocate facilities to an area with loosened environmental regulations
What is the problem with the carbon emission market?
Incentives to capture and destroy refrigerant gases are almost twice their market price. Thus, many industries in the refrigerating sector only produce gases to eventually destroy them, profiting from the incentives
How collective action problems can be countered?
Through social norms, legal action, taxes and incentives
When do social norms fail to effectively counter collective action problems?
When people interact with large and diverse groups, making the sacrifice unworthy to bear
[Reflection]
How do international treaties try to address collective action problems? Can you think of any examples?
International treaties until the Paris Agreement tried to address the collective action problems through legally-binding provisions, although, as research shows, it might be more effective to rely on state-based pledges, which are easier to meet and provide a solid basis to build cooperation and trust among the actors.
[Reflection]
What would be an alternative in a situation in which an enforceable agreement on the international level is lacking, while avoiding free-riding?
Climate clubs could be a feasible alternative. Including only countries devoted to decreasing their emissions, agreements would be facilitated and free-riding risk avoided.
[Reflection]
Can you think of examples of environmental problems in which leakage has occurred?
Stricter environmental rules in the EU, for example, led industries to transfer their activities to other countries.
[Reflection]
What could be a possible solution to leakage, taking into account its causes?
The most obvious solution to leakage would be to include the largest number of countries in the environmental agreements. Having a common international regulation would avoid both leakages between locations and market leakage.
