"The Regime Complex for Climate Change"

Discussion Paper 10-33, Harvard Project on International Climate Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School

January 2010

Authors: Robert O. Keohane, David G. Victor

Harvard Project on Climate Agreements Discussion Paper Series

Belfer Center Programs or Projects: Harvard Project on Climate Agreements

ABSTRACT

There is no integrated, comprehensive regime governing efforts to limit the extent of climate change. Instead, there is a regime complex: a loosely coupled set of specific regimes. We describe the regime complex for climate change and seek to explain it, using functional, strategic, and organizational arguments. It is likely that such a regime complex will persist: efforts to build an effective, legitimate, and adaptable comprehensive regime are unlikely to succeed. Building on this analysis, we argue that a climate change regime complex, if it meets specified criteria, has advantages over any politically feasible comprehensive regime, particularly with respect to adaptability and flexibility. These characteristics are particularly important in an environment of high uncertainty, such as in the case of climate change where the most demanding international commitments are interdependent yet governments vary widely in their interest and ability to implement such commitments.

For two decades, governments have struggled to craft a strong, integrated and comprehensive regulatory system for managing climate change. Instead their efforts have produced a varied array of narrowly-focused regulatory regimes—what we call the "regime complex for climate change." The elements of this regime complex are linked more or less closely to one another, sometimes conflicting, sometimes mutually reinforcing.

This paper explores the continuum between comprehensive international regulatory institutions, which are usually focused on a single integrated legal instrument, at one end of a spectrum and highly fragmented arrangements at the other. In-between these two extremes are nested regimes and regime complexes, which are loosely coupled sets of specific regimes. We outline an analytical framework to interpret and begin to explain why regulatory efforts in different issue-areas yield outcomes that vary along this spectrum. Further, we argue that for the case of climate change the structural and interest diversity inherent in contemporary world politics tends to generate the formation of regime complexes rather than a comprehensive, integrated regime. For policy makers keen to make international regulation more effective, we argue that the outcome is not just likely but also may allow for more effective regulation when compared with comprehensive regimes. In settings of high uncertainty and policy flux, regime complexes are not just politically more realistic but they also offer some significant advantages such as flexibility in substantive content and scope.

In Part I we describe the regime complex for climate change, which has not been comprehensively designed but rather has emerged as a result of many state choices at different times and on different specific issues. The description of these institutional arrangements provides almost a textbook illustration of a regime complex.

In Part II we seek to explain why efforts to regulate climate change have yielded a regime complex and also interpret the changes that have occurred over time. We first describe the variety of problems that are addressed by regulatory action on climate change. Different problems imply different tasks; that is, there are functional reasons that help to account for the observed outcome of a regime complex. However, we also consider strategic and organizational explanations, which usefully supplement the functional account.

Our objective is to think about international regimes and regime complexes in ways that could facilitate effective action on the pressing contemporary set of problems surrounding climate change. In Part III we therefore explore some implications for policy from these insights. In our view pressures favoring regime complexes over integrated regimes are strong. Efforts to create an integrated, comprehensive regime are therefore unlikely to be successful and may even divert attention from more practical efforts to create regime complexes. Furthermore, such regime complexes have some advantages over coherent, integrated regimes. They may well be more flexible and adaptable—a point we illustrate with examples from international emissions trading, forestry and land-use innovation, accommodation of border tax adjustments, and cooperation on technology policy. Yet the fact that such regimes are comprised of loosely coupled elements does not necessarily make them superior. They still need to meet standards of coherence, effectiveness, determinacy, sustainability, accountability, and epistemic quality.

SUMMARY FOR POLICYMAKERS

OVERVIEW

Keohane and Victor use the term 'regime complex' to describe the loosely coupled set of regulatory regimes that currently governs international efforts to address climate change. There are functional, strategic, and organizational reasons why a single, unified approach to reducing global greenhouse-gas emissions has failed to emerge thus far and is likely to remain out of reach for the foreseeable future. In this context, a regime complex may be preferable to the next realistic alternative and may even offer advantages in terms of flexibility and adaptability. To be effective, however, a regime complex needs to meet certain functional criteria, which are not being satisfied by the array of climate-change arrangements and institutions that exists today.

DISCUSSION

For two decades, governments have struggled to craft a comprehensive regulatory system for managing climate change. Instead their efforts have produced a complex of more or less closely connected regulatory regimes that includes institutions and clubs (such as the World Bank and G20), legal regimes and agreements (such as the United Nations Framework Convention on Climate Change — UNFCCC), expert assessments (such as those developed by the Intergovernmental Panel on Climate Change), and various bilateral and unilateral initiatives, to name just some examples.

Multiple factors account for this outcome, in which international efforts are neither fully integrated nor completely fragmented. From a functional standpoint, the specific regulatory challenges involved are so varied that a single institutional response is exceptionally difficult to organize. From a strategic standpoint, the benefits of a comprehensive regime may not seem sufficient to justify the bargaining efforts and concessions that would be required of individual states with often divergent interests. On the other hand, an entirely fragmented response is unlikely to satisfy the interests of leading states that expect first-mover advantages and make the largest investments in building institutions. These states will seek linkages among issues. A third set of factors involves path-dependence and organizational practices. Having decided to engage the climate issue at different times and in different ways, individual actors are likely to resist later changes to institutions and arrangements that they are already invested in.

Given these realities, policymakers may do better to focus on building an effective regime complex for climate change rather than pursuing a unified approach in the face of daunting political difficulties. The last sections of the paper discuss the importance of criteria such as coherence, effectiveness, sustainability, and accountability and suggest avenues for improving the current climate-change regime complex along these dimensions.

KEY FINDINGS & RECOMMENDATIONS

• Managing climate change is a politically difficult problem and the incentives for governments to organize around a common set of rules are weak. In this context, efforts to create an integrated, comprehensive regime are unlikely to be successful and may divert attention from more promising opportunities to build an effective regime complex.
• Regime complexes can have important advantages in terms of flexibility and adaptability, but these advantages are not automatic. Dispersed institutions can produce chaos, a proliferation of veto points and a tendency toward gridlock that deters investment in solutions to the climate-change problem.
• Six criteria can be used to evaluate the effectiveness of a regime or regime complex:

  1)Coherence,in the sense that components of the regime complex are compatible and mutually reinforcing.

  
  

  2)Accountability, in the sense that actors can be held to a set of standards and sanctioned if they fail to meet those standards.

  
  

  3)Effectiveness, in the sense that the regime complex produces appropriate rules and a reasonable level of compliance with those rules.

  
  

  4)Determinacy, in the sense that the rules of the regime have readily ascertainable normative content and foster the certainty needed to support costly, long-term investments.

  
  

  5)Sustainability, in the sense that each element of the regime complex represents a coherent equilibrium such that large shocks would be required to destroy or fundamentally alter the overall arrangement.

  
  

  6)Epistemic quality, in the sense that (a) the rules of the regime complex are consistent with scientific knowledge; (b) regime managers are accountable to those rules; and (c) both the rules and the terms of accountability can be changed if necessary.

• The existing regime complex for climate change ranks low on all these criteria. It could be improved by expanding international emission trading among states willing to do so, through a linked set of national and regional trading systems in which offsets would play a positive role, generating flows of resources to developing countries willing to take effective action. Border tax adjustments could play a positive role in conjunction with a non-universal trading system. Such a regime complex could also exploit opportunities for innovation around land-use and forestry offsets and strengthen and coordinate efforts to accelerate technology development.

CONCLUSION

With care, policymakers who seek more effective mechanisms to limit global greenhouse-gas emissions can deploy regime complexes to their advantage, using the six criteria described above to guide their investment in particular initiatives. The UNFCCC can continue to play an umbrella role and perform essential functions, such as providing a legal framework, developing information, and creating a forum for negotiations. If the policy preferences of key actors converge over time, the UNFCCC could yet evolve into an integrated and comprehensive regulatory regime. At the present juncture, however, political reality and the need for flexibility and diversity both argue in favor of working toward a loosely linked but effective regime complex for climate change.

Robert O. Keohane is Professor of International Affairs at the Woodrow Wilson School of Public and International Affairs, Princeton University. David G. Victor is Professor; Director, Laboratory on International Law and Regulation, School of International Relations and Pacific Studies, University of California, San Diego.

For more information about this publication please contact the Harvard Project on Climate Agreements Coordinator at 617-496-8054.

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