The role of public policy

One of the main functions of government is to enable different actors with a wide range of interests to reach a consensus about the common good in society. To achieve this goal, national and local governments can introduce policies and regulatory measures designed to influence the attitudes and behaviours of civil society and shape the environment in which businesses operate (Blowfield & Murray, 2019).

While these policies can aim to encourage behavioural change in specific areas (eg energy use, technological innovation or food consumption patterns), it is important to recognise the interconnectedness of social, technological, economic and institutional systems in policymaking. Policy approaches in one area may have unintended consequences in another. For example, government incentives to drive economic growth in one sector or region may have a negative environmental, social or economic impact in another (Howlett & Cashore, 2014). Therefore, adopting a systemic approach to policy and regulation is a challenging but important task for policymakers at all levels.

In addition, the relationship between different levels of government (local, regional and national) can be complex, and varies greatly between countries. In some countries, local governments have a great deal of autonomy and state-led funding, whereas in other countries, the political mandate is primarily bestowed upon a centralised, national, decision-making body. To effectively deliver climate-related policies, all these branches of government need to work in an integrated way. However, this is rarely a matter of simply cascading policies from one level to another. In fact, in some countries local or regional authorities have led the way and adopted more ambitious decarbonisation targets than their national governments (Ash Vie & Appleby, 2019).

There is a range of policy approaches and regulatory instruments that can be used by policymakers to address climate change mitigation, adaptation or other aspects of the net zero transition. These approaches and instruments can be organised into the following categories:

  • Regulatory policies: These policies are designed to regulate certain types of behaviour by limiting the discretion of individuals or organisations. Non-compliance is punished through fines or sanctions.
  • Market-based instruments: These instruments are based on the idea that certain behaviours can be encouraged through economic incentives, such as taxes, tax incentives, carbon credits, permits or fees.
  • Voluntary measures: These measures include standards and agreements that can be adopted by a specific sector or industry but are not mandated in law. Examples include standard specifications, test methods or operating procedures usually assessed by a third party.

The boundaries of these categories are not always clear-cut, as a single policy initiative could contain a mix of all these elements. However, the general structure provides us with a useful indication of their intended purpose and, to some extent, how they are likely to drive change.