8.3.1 Assessment of Outputs, Outcomes, and Impacts

A sustainable energy future hinges on a worldwide uptake of renewable energy. Many of the institutions that operate in the renewable energy subfield relate their work both to the SDG 7 target on clean energy and to the Paris Agreement’s temperature target (Chapter 4). This section assesses the effectiveness of the densely crowded subfield for renewable energy.

First, with regard to output, Chapter 4 showed that the majority of renewable energy institutions focus on information-sharing through dissemination of research and publishing reports. Consequently, the renewable energy subfield displays a diversity of knowledge and expertise on energy sources and technologies from a wide range of perspectives, which is frequently shared at various meetings, conferences, and platforms.Footnote ¹ In addition, there are a fair number of renewable energy institutions working toward capacity-building and project implementation (see also Chapter 4). These particularly focus on deploying renewables for the purpose of expanding energy access in the developing world. Financing schemes, regulations, standards, and commitments are produced to a lesser extent.

Second, in terms of outcome, awareness and capacity are growing along a wide spectrum of stakeholders. For example, via renewable energy institutions, national governments are increasingly sharing experiences and taking note of best practices.Footnote ² Simultaneously, nonstate engagement is spreading, which is illustrated by the growing number of private initiatives and multi-stakeholder partnerships for renewable energy (see Chapter 4). Businesses, trade associations, financial institutions, NGOs, and other civil society organizations show increasing interest in renewables. In short, renewable energy institutions appear to stimulate if not behavioural, then attitudinal changes amongst their members and beyond.

Third, assessing the level of goal attainment or problem-solving capacity suggests a low degree of effectiveness. Despite 2017 being a record-breaking year for the share of renewables in the global energy mix, the growth rate is currently falling short of meeting either the ‘substantial increase’ by 2030, as targeted by SDG 7, or the 2-degrees target set by the Paris Agreement (IRENA 2018; REN21 2018; United Nations 2018). It is difficult to determine the level of effectiveness based on broad perceptions, let alone for an institutional complex that includes such a high number of different institutions. This notwithstanding, the currently inadequate growth rate for renewables suggests that the subfield’s institutional complex has suboptimal performance.Footnote ³

Why is this the case? We could identify various bottlenecks through our interviews and literature review. First, the renewable energy subfield inherited the dominance of national policy making in global energy governance (Karlsson-Vinkhuyzen et al. Reference Karlsson-Vinkhuyzen, Jollands and Staudt2012; Röhrkasten Reference Röhrkasten2015; Van de Graaf and Zelli Reference Van de Graaf, Zelli, Van de Graaf, Sovacool, Ghosh, Kern and Klare2016). Even though renewable energy may be a less strategic issue for national security compared to traditional sources of energy, national governments have remained hesitant to give up sovereignty.Footnote ⁴ Second, the subfield is steered by three different challenges, each of which controversial in its own right – energy security, energy access, and environmental sustainability – resulting in trade-offs and potential conflicts across institutions (see Chapter 4; Newell et al. Reference Newell, Phillips and Mulvaney2011; and Röhrkasten Reference Röhrkasten2015). Furthermore, there is no clear definition of what constitutes a renewable source of energy, leading to further controversies, for example related to nuclear power, bioenergy, and hydropower.Footnote ⁵ These aspects at least hinder the effectiveness of the subfield as a whole in terms of accelerating a renewables uptake. Several other bottlenecks relate to institutional complexity and are therefore discussed in the next subsection.

8.3.2 Consequences of Institutional Complexity: What Are the Implications for Renewable Energy?

To what extent can the low degree of effectiveness be attributed to the institutional complexity of the renewable energy subfield? Compared to the other two cases in this edited volume, carbon pricing and fossil fuel subsidy reform, the renewable energy subfield can be regarded as highly institutionally complex. The subfield is densely populated by a diverse set of institutions, which do not only differ in terms of their structural characteristics but also with respect to the functions they perform, the sources of energy and technologies they cover, and the challenges they seek to address (see Chapter 4). While this complexity makes it difficult to establish a causal relationship with the level of effectiveness, our interviewees on balance expect more advantages than disadvantages with institutional complexity.Footnote ⁶

On the one hand, institutional complexity is considered to support effectiveness in two ways. First, the variety of institutions involved renders more comprehensive information available from a wide range of perspectives on renewable energy sources and technologies as well as on developments and innovations in the field.Footnote ⁷ Second, institutional complexity provides the opportunity to disaggregate an intricate issue such as renewable energy into smaller challenges and to work on them in parallel with different degrees of progress.Footnote ⁸ Such a compartmentalizing approach has proven to be effective for the climate change realm and may be particularly suitable for a subfield such as renewable energy, characterized by the diversity of energy sources and technologies and differing challenges to tackle.

On the other hand, institutional complexity may turn out problematic for effectiveness in several ways. First, the interviewees express concerns about duplication of work and conflictive impacts among the renewable energy institutions.Footnote ⁹ With several institutions working on similar issues, it is sometimes unclear whether there are overlaps, or worse, incongruences, trade-offs, and conflicts between institutions (Biermann et al. Reference Biermann, Pattberg, van Asselt and Zelli2009). As a consequence, it is difficult for national governments to decide which organizations, partnerships, and initiatives to participate in, and for the institutions themselves to identify thematic and functional gaps that need to be filled. Second, there exists competition over resources, visibility, sphere of influence, and media attention. This competition may involve institutions that target different renewable energy sources, but also institutions from related issue areas such as energy efficiency.Footnote ¹⁰ Third, there is no single institution with universal membership in the renewable energy subfield.Footnote ¹¹ Such an institutional umbrella may, according to some observers, be ultimately necessary to achieve the common goal to substantially increase the share of renewables in the global energy mix. However, with 160 states as members and 23 in accession by 2019, IRENA is well on its way to positioning itself as one and to continue its unique multilateral success story in global (renewable) energy governance (Röhrkasten and Westphal Reference Röhrkasten and Westphal2013; Urpelainen and Van de Graaf Reference Urpelainen and Van de Graaf2015).

Yet, there is also a different perspective. Various scholars have recently argued that the emerging global transition toward renewable energy is not the result of deliberate and integrated international cooperation, but rather the result of an organic proliferation of bottom-up initiatives (e.g. Aklin and Urpelainen Reference Aklin and Urpelainen2018; Meckling Reference Meckling2019). Although it is difficult to assess the overall consequences of institutional complexity on effectiveness in the renewable energy subfield, our findings tend to support the argument that the current institutionally complex structure seems fitting, and perhaps even required, for the renewable energy subfield (see also Young Reference Young2002). Furthermore, there may be less of a need for institutional integration today than prior to 2015: with the Paris Agreement and SDG 7 agreed upon, ‘discursively there is in any case a high degree of consensus’.Footnote ¹²

8.3.3 Management Options for the Renewable Energy Subfield

The general view among climate and energy experts interviewed is that the renewable energy subfield is functioning fairly well, institution-wise, partly guided by the targets and principles presented in the Paris Agreement and SDG 7.Footnote ¹³ This notwithstanding, there is a need for increased coordination among the renewable energy institutions to resolve the potentially negative implications of institutional complexity and, ultimately, to achieve targets to substantially accelerate the worldwide uptake of renewables.

First, it is necessary to map out existing renewable energy institutions, and their functions and targeted impacts, and to keep track of the progress being made.Footnote ¹⁴ This will help to prevent and resolve duplication of work and conflictive impacts and to identify docking points and gaps that need to be addressed among existing institutions. To clarify the latter, there is no need for new institutions trying to reinvent the wheel, but rather to find ways for collaboration to strengthen the overall outcome.Footnote ¹⁵ Second, with a plethora of knowledge and expertise comes a variety of scenarios, statistics, and data, based on a range of different methodologies and definitions that are not always compatible across institutions. In order to prevent and resolve competition among different measurements and related practices, more cognitive alignment and agreement is needed with regard to methodologies to determine the uptake of renewables and to find some common understanding for what constitutes a renewable source of energy.Footnote ¹⁶ Finally, it is necessary to coordinate interaction and collaboration beyond the renewable energy subfield – with sectors that deploy renewables such as transportation and heating, but also with sectors that are reluctant to deploy renewables, as well as with the issue area of energy efficiency.Footnote ¹⁷

While these coordination efforts appear feasible, these are merely desirable as long as they do not add another level to the management structures of renewable energy institutions.Footnote ¹⁸ Furthermore, coordination attempts should neither compromise the autonomy of institutions nor constrain them in their functioning and experimenting.Footnote ¹⁹

8.4.1 Assessment of Outputs, Outcomes, and Impacts

There are persuasive economic, social, and environmental reasons to tackle fossil fuel subsidies. Over the past decade, more than a dozen international institutions have begun to address this issue from various angles, from information provision and agenda setting to capacity-building and financing of reform efforts.

Taken together, these activities have led to a range of outputs. Members of several forums – including the G7 (Group of 7), G20 (Group of 20), APEC (Asia-Pacific Economic Cooperation), Friends of Fossil Fuel Subsidy Reform (Friends), and the 2030 Agenda process – have expressed commitments to phase down fossil fuel subsidies, although the precise nature of the commitment varies (Chapter 5). The G20 and APEC have also put follow-up mechanisms in place, which allow countries to report on their subsidies, and to have them reviewed by their peers (APEC Energy Working Group 2013; G20 Energy Sustainability Working Group 2013). One key requirement for reform is to ensure an adequate understanding of the scale and impacts of fossil fuel subsidies. Resources such as the Organisation for Economic Co-operation and Development (OECD) and International Energy Agency (IEA) Inventory of Support Measures for Fossil Fuels (OECD 2018a) and the International Monetary Fund’s (IMF) post-tax estimates of fossil fuel subsidies (Coady et al. Reference Coady, Parry, Sears and Shang2017) seek to shed light on this question. Drawing on such work, as well as the experience of their members and external experts, institutions such as the World Bank, IMF, APEC, and Friends have supported and facilitated workshops, events, and webinars to improve governments’ understanding of reform.Footnote ²⁰

The outputs of these various institutions can, in turn, be linked to a range of observable outcomes. Reporting mechanisms introduced under the G20 and APEC have prompted members to provide information on their domestic subsidies, although overall such estimates have been much lower than expected (Asmelash Reference Asmelash2016), with some countries even claiming to have no subsidies at all (Van de Graaf and Blondeel Reference Van de Graaf, Blondeel, Skovgaard and van Asselt2018). Since 2015, more than a dozen G20, APEC, and Friends members have also voluntarily undergone more in-depth peer- or self-reviews, or are in the process of doing so. While the results of these exercises have in some cases been considered disappointing (e.g. ODI 2017), they have, in other cases, facilitated concrete reform plans and timelines (e.g. China Reference China2016). Moreover, it is likely that engagement in review itself can play a valuable role in increasing internal awareness about a country’s subsidies and ways to address them.Footnote ²¹ Interviewees have also highlighted the helpful role of workshops and other capacity-building activities to strengthen countries’ understanding of fossil fuel subsidy reform (FFSR).Footnote ²²

While international institutions’ activities in the FFSR space can be associated with several outputs and outcomes, it is more difficult to determine to what extent their efforts have led to increased reform on the ground. At first glance, the data on national reform activities is promising. According to the IEA, global fossil fuel subsidies dropped by just over US $300 billion between 2009 (the year the G20 and APEC committed to phase out fossil fuel subsidies) and 2015 as a result of reform (IEA 2018). The Global Subsidies Initiative estimates that around forty countries underwent some sort of FFSR between 2015 and 2017 alone (Merrill et al. Reference Merrill, Gerasimchuk and Sanchez2018).

In practice, however, there is limited knowledge about the role that an institutional complex as a whole, or even an individual institution, may have in driving such reform. Indeed, it is likely that low oil prices over the past years have contributed significantly to governments’ decisions to adjust or remove the subsidies they provide to consumers of fossil fuels (Benes et al. Reference Benes, Cheon, Urpelainen and Yang2015): while consumption subsidies are currently in decline (Merrill et al. Reference Merrill, Gerasimchuk and Sanchez2018), upstream production subsidies appear on the rise (OECD 2018a). Domestic fiscal pressures could be another key driver of reform (Skovgaard and van Asselt Reference Skovgaard, van Asselt, Skovgaard and van Asselt2018). Yet, while in many cases such decisions may be taken independently from the international context, global developments may also help to inform decisions taken in this regard. Steenblik, for instance, notes that a focus on tax reform in China’s 2016–2020 five-year plan may have been partially informed by the country’s heightened awareness of shortfalls in its internal tax expenditure monitoring system, following its FFSR peer review under the G20.Footnote ²³ This may suggest that capacity-building and information-sharing can play a more significant role than high-level international commitments in driving reform. Finally, it is worth bearing in mind that efforts to promote reform may take years to come to fruition (with possible setbacks along the way). As such, this analysis should be considered an initial indication, rather than a decisive assessment, of international institutions’ contributions.

8.4.2 Consequences of Institutional Complexity: What Are the Implications for Fossil Fuel Subsidy Reform?

While the overall effectiveness of international institutions in FFSR is difficult to establish, the fact that multiple international institutions are active in this area appears to be largely advantageous for promoting reform.

One advantage of institutional complexity is that different international institutions are associated with different approaches and types of expertise, such as agenda setting, capacity-building, and research.Footnote ²⁴ The efficiency of the FFSR institutional complex is strengthened by the fact that different organizations can contribute to FFSR efforts in their speciality area(s), as opposed to one institution needing to specialize in all these approaches. At the same time, the fact that multiple institutions are engaged in this area has likely helped ensure that more resources are dedicated to international reform efforts.Footnote ²⁵ Having multiple institutions working in this area also provides FFSR advocates with increased opportunities to keep this topic on the international agenda, with the respective framing tailored according to the institution’s financial, climate change, trade, or broader social mandate.Footnote ²⁶

Moreover, the involvement of multiple forums allows advocates of FFSR to point to developments in other institutions to enhance ambition in their own forum, lest it falls behind.Footnote ²⁷ One example of such positive reinforcement is the peer-review mechanisms established under both the G20 and APEC, described in more detail in Chapter 5. Nevertheless, it should be noted that such dynamics also create potential for upholding the lowest common denominator. This may constitute one explanation for why otherwise more ambitious groupings such as the Friends have opted not to set a timeline for FFSR (see Chapter 5). Finally, institutional complexity also offers the opportunity to widen the geographic scope of FFSR efforts. For instance, the fact that peer reviews are conducted under both the G20 and APEC has allowed economies from both groups to become engaged. Likewise, engagement under the High-level Political Forum on Sustainable Development (HLPF) has provided opportunities to increase traction for reform among various African countries.Footnote ²⁸

Despite such benefits, there are also certain challenges associated with the institutional complexity in this area. First, and like in the case of renewables, it heightens the risk of duplication of work. Although the peer reviews undertaken under the G20 and APEC can largely be seen as synergistic (Chapter 5), both forums have had to identify guidelines and approaches for review, which means that the process may have not been as efficient as it would have been under one single institution. Another, perhaps more consequential, example is the subsidy estimation work conducted by the various international organizations that produce estimates of fossil fuel subsidies, namely the IEA, IMF, OECD, and, in the future (as custodians of SDG Indicator 12.c.1), UNEP. For instance, although the IMF reports estimates for more countries than the IEA does, both organizations take a similar approach to subsidy estimates that take consumer price support as a starting point. Better coordination among the various institutions involved could help minimize the risk that labour-intensive efforts are unnecessarily repeated and, indeed, prevent inconsistencies in definitions and data from being used as an excuse to postpone action (see OECD 2018b, 10).

A second potentially problematic consequence of institutional diversity in this area has been competition among standards for defining a subsidy. At US $5.3 trillion a year, the IMF’s ‘post-tax’ estimates of fossil fuel subsidies put such support in another order of magnitude compared to OECD and IEA estimates (Coady et al. Reference Coady, Parry, Sears and Shang2017; Chapter 5).

The ambiguity has been a contributing factor for countries to claim they do not have any fossil fuel subsidies at all (e.g. South Africa, Burton et al. Reference Burton, Lott, Rennkamp, Skovgaard and van Asselt2018). At the same time, such contestation of what constitutes a subsidy may have certain advantages: it may enable countries to engage in reform at a pace suitable to their national circumstances;Footnote ²⁹ and different definitions and valuation approaches can highlight complementary information about subsidies, such as, in the case of the IMF definition, their broader societal cost. The extent to which definitions diverge should also not be overstated since there are several areas of measurement on which international organizations are in agreement (Koplow Reference Koplow, Skovgaard and van Asselt2018).

8.4.3 Management Options

These findings suggest that there are a few areas in which improved management between different institutions could enhance the effectiveness of international FFSR governance. In terms of duplication of work, while there may be an ownership rationale for the G20 and APEC to take their own approaches to VPRs, better coordination between the intergovernmental organizations involved in monitoring fossil fuel subsidies, such as the IEA, IMF, OECD, UNEP, and the World Bank, may allow both institutions to generate their data more efficiently, and indeed, is something that their members ‘could be demanding’.Footnote ³⁰ One challenge in this regard, however, is that the IEA depends on data sales for much of its revenue.

Whether international FFSR governance would benefit from enhanced coordination around the definition of a fossil fuel subsidy remains an open question. The first internationally agreed-upon methodology for the measurement of fossil fuel subsidies, issued in the context of monitoring progress on SDG indicator 12.c.1. on fossil fuel subsidies, marks an important step in this regard (UNEP et al. 2019). If efforts to elevate FFSR to the World Trade Organization (WTO) space prove successful (Verkuijl et al. Reference Verkuijl, van Asselt, Moerenhout, Casier and Wooders2019), the WTO’s overarching definition for subsidies may also gain more traction in this context. Nevertheless, given that fossil fuel subsidies’ definitional ambiguity may also be associated with certain advantages, it will be important to ensure that such a universal definition neither sets too high a threshold for action – creating a risk that some countries may disengage – nor too low a bar, which would see certain policies be needlessly excluded from FFSR discussions. Going forward, it will be important for advocates of reform to get this balance right.

8.5.1 Assessment of Outputs, Outcomes, and Impacts

Placing a (substantial) price on carbon emissions constitutes a key component in the response to climate change and is, according to some scholars, the most or even the only effective instrument for mitigating climate change (Nordhaus Reference Nordhaus2008; Rabe Reference Rabe2018). As discussed in Chapter 6, a range of public, private, and hybrid institutions promoting carbon pricing internationally have emerged over the last twenty-five years. Due to the partial overlaps in terms of governance functions and the interlinkages between these institutions, it is difficult to pinpoint the effectiveness of the individual institutions. Yet, it is possible to discuss their combined output, outcome, and impact effectiveness.

First, outputs have been substantial and increasing exponentially over time. Companies that join private institutions – such as the UN Global Compact, Caring for Climate, or the Carbon Neutral Protocol – thereby commit to adopt mitigation strategies, including internal carbon pricing or ensuring carbon neutrality inter alia via offsetting. Joining the Carbon Pricing Leadership Coalition (CPLC), for instance, entails a commitment to support carbon pricing, although not necessarily to adopt it. When it comes to aviation, the Carbon Offset and Reduction Scheme for International Aviation (CORSIA) will in the future constitute a mandatory instrument for pricing emissions placed on the individual airlines. Regarding more technical output, most of the institutions in the subfield have been active in producing reports and other information that raised awareness and increased knowledge of carbon pricing. They also established standards for offsets and for carbon-market units. The subfield is less effective, however, when it comes to operational activities such as research and development as well as financing. Here, only the Partnership for Market Readiness provides rather modest amounts for capacity-building.

Second, concerning outcome, there has been significant behavioural change in terms of carbon-pricing policies. By early 2018, sixty-six such policies had been adopted globally by public actors (states as well as supra- and sub-national polities such as the EU or American states), and an additional fifty-two carbon pricing policies were being actively considered (Skovgaard et al. Reference Skovgaard, van Asselt, Skovgaard and van Asselt2018).Footnote ³¹ The policies were put into place in all regions of the world, with a notable spike from 2015 and onwards, coinciding with the emergence of many of the institutions. While these figures do not include carbon pricing by companies on aviation, the 2016 adoption of CORSIA as a future mandatory pricing scheme in this sector fits the trend.

Yet, it is difficult to assess to what degree the output of the institutions has affected behaviour change among the actors targeted by that output (e.g. states, companies). The decision to adopt carbon pricing is inherently a polity- or business-level decision. With their standards and commitments, the governance functions of the institutions may incentivize the adoption of carbon pricing, but they may well lack the leverage to drastically alter polity- and business-level decisions (e.g. sanctions or shaming of norm violation). From the mid-1990s to the early 2010s, private institutions, particularly IETA, have been important in promoting carbon markets, particularly in industrialized countries (Meckling Reference Meckling2011; Paterson Reference Paterson2012; Paterson et al. Reference Paterson and Hoffmann2014). More recently, the Partnership for Market Readiness, as well as other institutions embedded in the World Bank and the United Nations Framework Convention on Climate Change (UNFCCC) Secretariat, have provided expert assistance to several of the developing countries that had adopted or were considering carbon pricing within the last ten years. They also facilitated learning processes among such countries.Footnote ³² It is thus plausible that this assistance has increased the likelihood of carbon-pricing proposals being adopted, but this is ultimately a subject for future research.

Third, the assessment of impact proves even more difficult. As an approximation, we briefly focus on the impact of the carbon-pricing policies that have already been implemented, while bracketing the question to which degree they have been driven by certain intergovernmental or transnational institutions. The impact effectiveness of the public carbon pricing policies can be measured in three ways. The first is to appraise the share of global emissions covered. The World Bank and Ecofys (2018) estimated that public carbon-pricing policies implemented by 2018 cover about 15 per cent of global emissions, rising to 20 per cent once the Chinese emission trading system (ETS) (scheduled for 2020) is operational. This is below the CPLC’s goal of 25 per cent of global emissions by 2020, but still a sizeable share and a drastic increase compared to about 8 per cent by 2012 and less than 1 per cent by 2004 (World Bank and Ecofys 2018).

A second indicator, and arguably a more important one than the share of global emissions covered, is the incentive for reducing emissions that carbon pricing actually provides. This incentive can be measured in terms of the price of emitting one metric tonne of CO_2-equivalents. Mainstream climate economists argue that getting the price right is the chief objective of carbon pricing (Tol Reference Tol2011). The price is right if it corresponds to the costs to society of emitting one tonne of CO₂ equivalents, meaning that the externality has been fully internalized. To which degree emitters actually choose to cut emissions is less important in this thinking – a notion that might be at odds with the goal to keep temperature increases to 1.5 or 2 degrees (UNFCCC 2015). Yet, no matter whether the objective is internalizing the externality of climate change or limiting temperature increases, current carbon prices are too low. According to the World Bank and Ecofys (2018), 46 per cent of the emissions subject to carbon pricing are valued below 10 US $/tonne, and most of the emissions above 10 US $/tonne are priced between 10 and 20 US $/tonne. As a reality check, the report by the High-Level Commission on Carbon Pricing (2017) found that price levels should be between 40 and 80 US $/tonne in 2020 to meet at least the 2 degrees target. Likewise, a meta-study of various economic estimates about the social costs of carbon found that the actual average price should be 80 US $/tonne (Tol Reference Tol2011).

Third, it is difficult to isolate the impact of carbon-pricing policies, since emissions are influenced by various additional factors – including fuel prices, technology development, economic growth, and other emissions-reducing policies (e.g. fossil fuel subsidy reform or policies supporting renewable energies). These difficulties notwithstanding, existing studies of individual carbon-pricing policies indicate that their impact is limited. Carbon taxes have had at least some success in reducing emissions – as they generally have higher price levels than carbon markets and mainly have been adopted by smaller, European countries (Rabe Reference Rabe2018, 9). The impact of carbon markets, however, is more modest. On the upside, the sectors covered by the EU ETS, by far the world’s largest carbon market, have experienced falling emissions since its inauguration in 2005. However, this drop in emissions is predominantly attributed to the economic crisis and renewable energy and energy-efficiency policies, with the ETS playing a smaller role (Hu et al. Reference Hu, Crijns-Graus, Lam and Gilbert2015; Bosello et al. Reference Bosello, Davide and Alloisio2016). Likewise, the Californian ETS, which is also among the largest carbon-pricing schemes in the world, has played a limited role in curbing emissions compared to other policy instruments such as renewable-energy policies (Bang et al. Reference Bang, Victor and Andresen2017).

8.5.2 Consequences of Institutional Complexity: What Are the Implications for Carbon Pricing?Footnote ³³

The carbon-pricing subfield is characterized by a number of institutions (13) that fall somewhere between the figures for the renewable energy and fossil fuel subsidy reform subfields. The same way that it was much easier to assess the output than the outcome and especially the impact or environmental effectiveness of carbon pricing, it is also easier to do so for the consequences of institutional complexity. We therefore concentrate on output and outcome in this subsection.

Regarding potential positive effects, institutional complexity has improved output in terms of simply increasing knowledge-sharing in terms of technical reports, workshops, and other dissemination formats. Concerning outcome, our informants highlight that the sheer number of institutions promoting carbon pricing should have a positive impact to keep it on the political agenda. Furthermore, the diversity of institutions, especially in terms of their memberships, helps to reach a wide variety of actors (business, policy-makers, civil society) from different sectors, e.g. with CORSIA and IATA_COP specifically targeting aviation emissions.

As for possible negative effects, the output of the various institutions is not necessarily coherent. As discussed in Chapter 6, the institutions’ interpretation of the core norm of carbon pricing may diverge, with different objectives emphasized (e.g. whether the objective is functioning carbon markets or pricing emissions through carbon markets or taxes), and several informants therefore highlighted the risk of incongruent or even conflicting messages. At the same time, the interviewees also stressed that (especially cognitive) interlinkages between the institutions, as well as deliberate management efforts, help to reduce such incoherence. The risk of conflicting messages also pertains to outcome effectiveness. One example is the various institutions that promote particular standards for linking carbon markets, either under Article 6 of the Paris Agreement or for voluntary offsets. Having several standards may result in them undermining each other and incentivizing forum shopping by members. Incongruent messages also characterize the overall choice between carbon markets and taxes, since some institutions only promote carbon markets, whereas others promote both carbon markets and carbon taxes. Finally, different audiences – be they governmental, business, or civil society actors – may be less convinced if they are presented with differing arguments about the merits of carbon pricing, which may undermine the legitimacy of the instrument.

Altogether, it is difficult to gauge whether the positive consequences (larger volume of output, outreach to a diversity of audiences) outweigh the negative ones (incoherent messages and standards). This notwithstanding, and as we discuss in the following subsection, management efforts should target the negative consequences rather than reinforcing the positive ones. The positive consequences are mainly a direct consequence of the number and composition of the institutions and exist independently of management efforts.

8.5.3 Management Options

Given the current moderate levels of (mainly informal) management of the carbon-pricing subfield, it is perhaps not surprising that informants thought that more management efforts would increase effectiveness without being a game-changer. As an option, they particularly pointed to increased coordination between the existing institutions, rather than orchestration by a particular institution. Such coordination could mainly imply scaling up existing coordination efforts, while promoting a common narrative around a shared understanding of key tenets. Such tenets may include, for instance, that there is no one-size-fits-all approach but that the promotion of carbon pricing needs to be adjusted to local circumstances. With such a form of coordination, the aforementioned contradiction or incongruence of messages could be limited, as could incoherent standards for linking carbon markets or voluntary offsets.Footnote ³⁴

Beyond incoherence, existing informal divisions of labour, e.g. between the Partnership for Market Readiness (PMR) and the UNFCCC Secretariat (see Chapter 6), could be supplemented by a more overarching division of labour – one that also covers areas where such coordinating arrangements do not currently exist. Such arrangements are relevant for determining which institutions should target which actors, not only among specific business sectors or groups of countries but also among different ministries and agencies within the same government.Footnote ³⁵ A respective division of labour could also take into account actors that may be currently overlooked, since institutions may easily cluster around the same actors when seeking them out independently of each other.

Our interviewees were not in agreement regarding whether coordination should cover all institutions within the subfield or just some, e.g. the UNFCCC and the World Bank–embedded institutions (CPLC, PMR, and Networked Carbon Markets, see Chapter 6). Altogether, they indicated that more coordination could improve effectiveness, mainly in terms of outcome, i.e. behavioural change, since output was already relatively high and would not be significantly affected by coordination. This said, increased coordination would not necessarily improve outcome effectiveness radically, since incoherence is not a major impediment to such effectiveness and is already addressed through existing coordination to some degree.