November 1, 2016    9 minute read

The ‘Polycentric’ Approach To Climate Change: Targeting Multiple Levels

Cultivating The Environment    November 1, 2016    9 minute read

The ‘Polycentric’ Approach To Climate Change: Targeting Multiple Levels

American political economist Elinor Ostrom (2009) acknowledges that climate change is a global problem but that formulating and implementing policy solely at the global or international level is not the best nor the only way of dealing with climate change. This is especially since the negotiations and corresponding decision-making are too slow and often largely ineffective in tackling the problem.

Instead, she argues that climate change has benefits and costs at the local, regional, national and international levels and that it would be fruitful to formulate policy at these various levels to complement a truly effective general framework (however slow it may be in its emergence). Ultimately, therefore, progress needs to be made on multiple scales by various decision-making units; polycentric.

One could build upon this by identifying constraints to its adoption that can only effectively be tackled via international policymaking and that, therefore, international policymaking could orientate itself toward cultivating a global environment conducive to the voluntary adoption of the polycentric approach.

Advantages And Limitations

The main benefit of a “polycentric approach”, Ostrom claims, is that it would encourage;

“experimental efforts at multiple levels, leading to the development of methods for assessing the benefits and costs of particular strategies adopted in one type of ecosystem and compared to results obtained in other ecosystems”.

She states that tackling climate change requires “individuals, families, firms, and actors at a much smaller scale” to engage with the issue. Of course, such a strategy traces its roots back to traditional American liberalism, and this means that, although it is pragmatically presented, it still has ideological limitations in the sense of its view of the state’s role in social, political and economic life.

Professor of Politics Wyn Grant, for example, says that “What she describes as ‘a very considerable role for large-scale governments’ (Ostrom, 1998: 17) is quite a limited one. Her list includes national defence, internal peace, providing arenas for conflict resolution (i.e., a judicial system), monetary policy, foreign policy, trade policy and moderate redistribution.” Nonetheless, ideological inspiration does not necessarily preclude the possibility for pragmatic public policymaking, but it does require us to explore its limitations and identify that which constrains its ideals.

The Importance Of Corporates

Professor of Politics Wyn Grant (forthcoming), believes that Ostrom does not place enough emphasis on the role of the business community and that this must be taken into account. He also argues that Ostrom’s approach seems to be tailored to the American Federal system of government but that it may not be suitable for other models of government (such as the EU) since her writing seems to exhibit limited knowledge of the European context, for example. I concur with this and Grant’s assertions that in a “polycentric order” there is a “general framework that guides mutual action, but there is also respect for the autonomy of actors which may appeal to business.”

Businesses Must Volunteer

However, given the potential of polycentric, one must wonder what the barriers and costs are that are preventing its widespread adoption? After having attempted to identify some of these obstacles, removing these costs are so politically problematic that they would require international agreement to provide the optimal conditions for Professor Ostrom’s (2009) approach.

Professor Grant shows that many businesses are increasingly seeing an incentive to adopt policy responses and positions to climate change – this is at least partly “to enhance their environmental reputation and hence their standing with consumers”. Hence, we observe an emergent institutional desire amongst businesses akin to what we see amongst many consumers that engage in consumption to signal virtues such as their environmental concerns and their desire for ‘ethically’-sourced produce (Prof. Ryan Murphy at Southern Methodist University in Texas, 2016). This begs the question concerning the source(s) of the incentives motivating this institutional evolution. A major explanatory factor to what is effectively voluntary cooperation according to Associate Professor of Political Science, Amy Poteete, Professor at Arizona State University, Marco Jansen, and Professor Ostrom (2010) includes reliable information being available about the immediate and long-term costs and benefits of actions for businesses.

Getting The Truth Out There Effectively

The reliable information criterion corresponds to the scientific community’s overwhelming consensus regarding the threat of climate change despite the fact that many (especially American) businesses still seek to refute this claim. However, perhaps many peer-reviewed scientific analyses remain inaccessible, ineffectively disseminated or even poorly presented for many actors to internalise the “costs and benefits”. The fact that the causes of climate change have micro-foundations but that its impacts are global does not modify the fact that some areas and localities are more adversely affected than others.

The evolution of (social) media and the reduction of content access-costs has meant more are informed and, furthermore, more have knowledge that others have this knowledge. This could explain the institutional developments with regards to businesses’ reputation-building (Prof. Wyn Grant, forthcoming – ‘Business: Greening at the Edges’) and consumers’ virtue-signaling (Prof. Ryan Murphy, 2016). Of course, when many individuals have limited or even no access to the internet (and China, for example, being subjected to censorship), it is clear that the obstacles to the information access and dissemination must be holistically tackled so that (virtual) social network expansions and their resultant information feedback (rapidly) raises awareness of global impacts.

Professor Elinor Ostrom (2009) also states that “decisions to reduce subsidies to various types of economic development that increase emissions are difficult for any government to make, but some of these decisions can reduce the administrative costs of government as well as improving the environment”. Professor Grant provides a more specific European example of the political problem:

“that the farming end of the food chain has made less progress on measures to mitigate climate change”.

This in spite of the fact that farming is a fossil fuel intensive industry and is also a generator of a particularly significant greenhouse gas, methane from livestock, as well as nitrogen dioxide from fertilisers. The idea that the Common Agricultural Policy (CAP) might incorporate a third, climate change pillar was swiftly stifled at the beginning of the last round of CAP reform negotiations.”

The Politics

The political unpalatability of phasing out subsidies for agriculture specifically means that no one government or jurisdiction is willing to take the lead on this. Hence, the involvement of an international policymaking body may be desirable to shift the focus of responsibility from local politicians to global policymakers. Indeed, particularly for livestock production, coalitions can be made with animal rights groups and possibly even religious groups (those who might morally object to taxpayers’ funds going to subsidise non-halal, non-kosher, etc. activities, for example).

Additionally, subsidies, on a classical liberal worldview, could crowd out private sector investment, and the phasing out of these subsidies may well incentivise and increase investment in developing alternative food-production technologies (e.g., cultured meat) which are more efficient and also emit far fewer greenhouse gases. However, the difficulty here is that traditional farmers will protest at the loss of income. One could address this key stakeholder concern by looking to open up alternative sources of income for farmers and rural communities more generally.

Agricultural Concerns

I would argue that alternative income streams have been constrained for farmers, rural communities and landowners more generally because of (agricultural) land-use restrictions. Wholesale and holistic agricultural land-use liberalisation could, therefore, open up the potential for earning income through conservational, sustainable eco-tourism, offering a larger variety of services and even investing in infrastructure development (such as hospitals, schools and roads). On the one hand, this may in itself degrade the environment, but it could wean farmers off the direct subsidies to fossil-fuel intensive production.

A wider issue here is that nation-states have historically been concerned with food security; the Roman adage “Si vis pacem, para bellum (if you want peace, prepare for war)” (The Roman writer, Publius Flavius Vegetius Renatus, 4th century) seems to prevail in geopolitics. Perhaps international policymaking can move to simultaneously encourage the greater adoption of the polycentric approach alongside promoting peaceful relations?

On the impact of subsidies on innovation more generally, subsidies to and governments’ purchase of green technology may even disincentivise further innovation because producers and manufacturers’ costs are artificially depressed whereas they would have had to innovate in the face of natural market forces to reach commercial viability (myself, the author of this article, 2014). For example, Professor Ostrom (2009) describes how “payments to refrigerant manufacturers and carbon market investors to governments and compliance buyers for HFC-23 credits have exceeded €4.7bn when the costs of merely abating HFC-23 would have been about €100m—a major distortion of the market. (Professor of Energy Policy Benjamin Sovacool and Professor of Public Policy Marilyn Brown, 2009: 14, citing Michael Wara (previously at Stanford University), 2007; and Michael Wara and David G. Victor (Stanford University), 2008)”. Since sufficient and sustainable innovation is a concern, one might wonder exactly where the solution lies if neither market nor state seems able to muster the desired technology?

Returning To Policymaking

For many, this dilemma marks the limits of the libertarian ideologically-motivated public policy. However, libertarianism does not necessarily need to be of the ‘right-wing’ variety; ‘left-libertarianism’ contends that legal and coercive enforcement of private intellectual property rights stifles innovation, reinforces inequality and enables social exploitation (including left market anarchists who advocate “Markets, not Capitalism”; Distinguished Professor of Law and Business Ethics Gary Chartier and Center for a Stateless Society (C4SS) Senior Fellow, Charles Johnson, 2011). Indeed, perhaps the innovation of alternative technologies should not necessarily be presumed to be motivated by the profit motive. Therefore, intellectual property rights legislation that hamper would-be innovators need to be substantially revised (or even abolished) to fully enable “experimental efforts at multiple levels” (Professor Ostrom, 2009) by reducing the associated costs. However, this would mark a notable and significant departure from traditional American liberalism.

Policymaking Can Work If The Barriers Are Placed

Furthermore, for many (political) economists, agents’ expectations are crucial for understanding behaviour: on this view, the very expectation of international policymaking orientating itself toward cultivating an environment conducive to a polycentric approach could feedback into the present and thereby encourage wider, voluntary adoptions of a polycentric approach.

Ultimately, the polycentric approach holds significant potential and could yield immense benefits for mitigating climate change. However, it would be fruitful to build upon this by identifying what is constraining its wholesale, holistic and voluntary adoption, to make their alleviation a priority for international policymakers’ striving toward a general framework.

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