Policy Design Features Research Articles

On the acceptance of high carbon taxes in low- and middle-income countries: a conjoint survey experiment

Abstract Changing consumption patterns from growing middle-classes with consequent rising energy use and emissions in low- and middle-income countries (LMICs) present key challenges for the energy transition and climate change mitigation. Carbon taxes are an effective policy instrument to counter these developments, yet concerns about low public acceptability hinder their introduction. Here, we seek to fill a research gap and identify publicly acceptable carbon tax designs in LMICs. We provide novel evidence from three conjoint experiments with 2700 middle-class respondents in Ghana, Peru, and the Philippines. We show that overall, the majority in all three countries supports even high taxes of USD-PPP 75/tCO2 per year, irrespective of specific policy design features. The support for a very high tax rate is especially high if revenues are recycled for environmental purposes. Thus, governments in LMICs have political leeway to finance the transition to a low-carbon economy via carbon taxes. Moreover, revenue recycling for the poorest receives high support from important subgroups. These insights are crucial to achieving an effective, acceptable, and just carbon tax policy design.

Do China's pilot emissions trading schemes lead to domestic carbon leakage? Perspective from the firm relocation

The limited geographical coverage of pilot emissions trading schemes (ETS) raises domestic carbon leakage risks. Since relocation represents a primary channel that causes carbon leakage, this paper investigates the impact of China's pilot ETSs on firms' cross-provincial relocation with a method combining propensity score matching and staggered difference-in-differences. The empirical results, based on the data of Chinese listed industrial firms from 2009 to 2020, show that the ETS has accelerated firm relocation by increasing negative attention and social capital investments. According to the threshold analysis, firms with sufficient abatement efforts do not undertake relocation strategies. The theoretical analysis can also be confirmed by further investigations on the price signal distortions and the negative impact of relocation on carbon prices. Moreover, the study also demonstrates the heterogeneous effects across firm characteristics, industry types, and policy design features. Overall, these findings provide a reference for China's government to prioritize the establishment of domestic leakage prevention mechanisms for ETS.

Developing an Operationalized Framework for Comparing Consumer-Directed Care for Older Adults: Evidence from Expert Survey and Cross-National Comparison

ABSTRACT Consumer-directed care (CDC) programs for older people aim to optimize health outcomes by offering clients control and flexibility regarding service arrangements. However, policy design features may differ due to heterogenous sociostructural systems. By operationalizing a framework with three dimensions of CDC, i.e. control and direct services, variety of service options, and information and support, we analyzed how countries vary in their policy designs to achieve consumer direction. Using an expert survey (n = 20) and cross-national document analysis, we analyzed 12 CDC programs from seven selected countries: the United States, the United Kingdom, Germany, the Netherlands, China, Australia, and Spain. Among the three dimensions, CDC programs placed more emphasis on and displayed more homogenous performance of policy designs that achieve consumer direction in the dimension of control and direct services, while less emphasis was placed on and more heterogenous performance displayed in the dimensions of variety of service options and information and support. We offer a systematically operationalized framework to investigate CDC policy designs. Findings advance our understanding of CDC policy features from a cross-national perspective. Policymakers could incorporate these findings to empower older people in their respective societies.

A cross-country comparative analysis of congestion pricing systems: Lessons for decarbonizing transportation

Alongside national and sub-national climate action, local governments play a particularly important role in implementing climate change mitigation policy. While substantial efforts are being taken to reduce greenhouse gas emissions in some communities, additional efforts are needed to encourage behavioural change in driving demand and mode of transportation. Congestion pricing is a key policy which can motivate this change. Using a comparative analysis of congestion pricing systems worldwide, this study examines government policy documents and academic literature to identify policy design features that are most desirable for achieving GHG and air quality emissions targets. Specifically, congestion pricing policies are evaluated against the attributes of implementation context, design characteristics, effectiveness, and political acceptability. In total, 16 congestion pricing systems across 11 cities in OECD member countries are assessed. Findings suggest that area-based congestion pricing systems can provide local governments with a relatively cost-effective tool to implement consistent reductions in greenhouse gas emissions in areas with a pre-existing air quality concern. Congestion pricing policies can achieve broad acceptability with thoughtful design and implementation focusing on equity and user engagement.

Policy design receptivity and target populations: A social construction framework approach to climate change policy

AbstractThe public‐elite policy feedback mechanism of the Social Construction Framework (SCF) postulates that the public rewards policymakers for the appropriate distribution of benefits and burdens to target populations. In this article we test a key part of this dynamic by examining public receptivity to policy design features as a function of target population choice. We conduct a national survey experiment of approximately 3350 Americans. Our instrument asks respondents to indicate support or opposition to a range of policy tools in a suite of six climate change policies, but varies who would be responsible for options based upon Schneider and Ingram's idealized types. Our research design tests the independent effects of deservingness and power foundational to the construction of target populations in the SCF. We find, in general, deservingness to be a stronger predictor of support for policy tools than notions of power. We also identify situations where deservingness acts independently of power in ways not anticipated by the SCF—notably public favor for burdens on powerful groups. Our findings offer implications for theoretical and empirical development of the SCF regarding the influence of policymakers' perceptions of public acceptance of policy design in crafting public policies.

The role of policy design in policy continuation and ratcheting-up of policy ambition

Abstract Effectively addressing grand societal challenges like climate change and environmental degradation requires policy intervention that is not only continuous but also increasing in ambition over time. However, negative feedback could lead to policies being weakened or even discontinued after a while. An important but unresolved policy question, therefore, is whether policies can be deliberately designed to survive (i.e., to “stick”) and, ideally, be replaced with more ambitious ones over time (i.e., to “ratchet up”). We bridge policy feedback and policy design scholarship to derive hypotheses on the effects of two policy design features—“intensity” (i.e., a measure of policies’ overall design) and “specificity” (i.e., a measure of policies’ targeted focus)—on policy (dis-)continuation and ratcheting-up (-down) of ambition. Focusing on policy design, we contribute to the theorization and empirical understanding of endogenous factors behind policy change. We test our hypotheses with an event history dataset of 627 low-carbon energy policies in eight developed countries. Conducting a multilevel survival analysis, we find statistically significant evidence of more intense policies being replaced with less intense ones, i.e., more intense policies lead to ratcheting-down of ambition. We also find that more specific policies are more likely to be replaced with more intense policies, i.e., more specific policies lead to ratcheting-up of ambition. Based on these novel insights, we discuss how policy design can navigate these complex dynamics. In this sense, our approach also contributes to the discussion about the “forward-looking” potential of the policy sciences.

A closer look at demand-side explanations for the Matthew effect in formal childcare uptake in Europe and Australia

Although formal childcare is considered a key social investment policy to combat inequality, available research indicates that in most European and other high-income countries parents with lower socio-economic positions are less likely to use formal childcare. As the literature on the underlying causes of this so-called Matthew effect has not yet converged, this article is the first to assess whether educational gradients in formal childcare uptake can be accounted for by micro-level employment potential and work–family attitudes in 14 European countries and Australia. Complementing available research on supply-side factors such as policy design features, this study indicates that a large part of the educational gradients in formal childcare uptake persist after controlling for socio-demographic background variables, employment potential, and work–family attitudes as micro-level predictors. However, this study also shows that a considerable part of the educational differentiation in formal childcare uptake reflects differential employment potential. This finding turns attention to policies other than childcare to enhance labour market outcomes for lower educated groups, which in turn might attenuate the Matthew effect in formal childcare. Furthermore, a positive relation between individual-level work–family attitudes and the uptake of formal childcare is also identified as a partial explanation for educational gradients in formal childcare uptake. Although the explanatory power of work–family attitudes as an underlying determinant of the Matthew effect is more limited compared to employment potential, such variation in the acceptance of maternal employment and formal childcare should also be considered in the design of inclusive work–family policies.

A need for control? Political trust and public preferences for asylum and refugee policy

AbstractPolitical trust matters for citizens’ policy preferences but existing research has not fully understood how this effect depends on policy design. To advance this research area, we theorise that policy controls that limit or condition policy provision can function as safeguards against uncertainty, thereby compensating for a person’s lack of trust in generating support. Focusing on public preferences for asylum and refugee policy, we conduct an original conjoint experiment in eight European countries. We find that individuals with lower levels of trust in European political institutions are less supportive of policies providing unlimited or unconditional protection and more supportive of restrictive policies. We also show that policy design features such as limits and conditions can mitigate perceived uncertainty for individuals who are less trusting in European political institutions. These findings have important implications for the theoretical understanding of how political trust pertains to citizens’ preferences.

Unravelling the Role of Institutions in Market-Based Instruments: A Systematic Review on Forest Carbon Mechanisms

Forest ecosystems provide various services that are crucial to human beings, in which carbon sequestration and storage is one of them with the most market potential and is usually governed by market-based instruments (MBIs). MBIs do not operate alone but in the hybrid governance arrangements. While the importance of public institutions has been identified, there is still a need to examine the specific role of public institutions in the market-oriented mechanism. Our work seeks answers to this question. This meta-study presents an up-to-date picture of MBIs targeted at forest carbon, in which 88 mechanisms are synthesized in a quantitative database. We analyze and discuss policy design features of these mechanisms and group them into nine types of MBIs. We find that many instruments coexist and/or interact with other instruments. In light of these results, we introduce the concept of policy mix and argue that the interplay among policy instruments can be complementary or interdependent. Using cluster analysis to identify underlying patterns, we reconfirm previous findings that there are distinct differences between public and private PES schemes, but also recognize a new cluster and label it as a ‘legally binding mechanism’. We discover that the role of public institutions is pronounced in the forest carbon mechanisms, and they can be the buyer, seller, regulator, coordinator, intermediary, and facilitator. Besides, public institutions tend to play an increasing role in the future climate policy arena. We believe that public institutions should stand out and create enabling conditions for private governance and finance.

Policy and behavioral response to shock events: An agent-based model of the effectiveness and equity of policy design features.

In the aftermath of shock events, policy responses tend to be crafted under significant time constraints and high levels of uncertainty. The extent to which individuals comply with different policy designs can further influence how effective the policy responses are and how equitably their impacts are distributed in the population. Tools which allow policymakers to model different crisis trajectories, policy responses, and behavioral scenarios ex ante can provide crucial timely support in the decision-making process. Set in the context of COVID-19 shelter in place policies, in this paper we present the COVID-19 Policy Evaluation (CoPE) tool, which is an agent-based modeling framework that enables researchers and policymakers to anticipate the relative impacts of policy decisions. Specifically, this framework illuminates the extent to which policy design features and behavioral responsiveness influence the efficacy and equity of policy responses to shock events. We show that while an early policy response can be highly effective, the impact of the timing is moderated by other aspects of policy design such as duration and targeting of the policy, as well as societal aspects such as trust and compliance among the population. More importantly, we show that even policies that are more effective overall can have disproportionate impacts on vulnerable populations. By disaggregating the impact of different policy design elements on different population groups, we provide an additional tool for policymakers to use in the design of targeted strategies for disproportionately affected populations.

A classification framework for carbon tax revenue use

ABSTRACT Carbon pricing could assist in the dual pursuit of mitigating global climate change and contributing to government coffers. The way in which a government allocates carbon tax revenues is a key factor in the public’s acceptance of carbon pricing policy and ultimately in its enduring success. To that end, this article presents an innovative, simple classification framework of carbon tax revenue usage which has four modalities to cater for various policy design features. These are: a constrained approach as opposed to an unconstrained one; a revenue-neutral recycling approach as opposed to a revenue-raising one; an approach according to public preference; and a thematic approach. Thereafter, various attributes are examined to assist policymakers in selecting an appropriate modality. The classification framework will be useful for policymakers as a quick point of reference before embarking on more complex and in-depth policy deliberations. Key policy insights Carbon pricing is the most cost-effective regulatory approach for reducing greenhouse gas emissions and is recognized as a significant contributor to government revenue. Carbon tax revenue use can be classified into four overarching modalities to cater for various policy design attributes. There is no dominating revenue use option from an economic or political viewpoint, owing to trade-offs across various fiscal policy objectives. Carbon taxes are elements of broader tax reform and therefore revenue use options should be aligned with a jurisdiction’s broader fiscal policy charter.

Australian non-domestic buildings policy as an international exemplar

The Australian policy approach, based on the NABERS energy performance benchmarking scheme for commercial offices, is promoted as a ‘success story’ and is of interest to governments internationally. This paper explores the evidence for the impacts of the Australian approach on energy use and carbon emissions, identifies the key elements of its conception, design and implementation, and investigates the role of government. It uses a mixture of literature review, re-analysis of quantitative data and analysis of 30 original stakeholder interviews. The literature suggests that NABERS’ appeal to multiple benefits of energy efficiency and its place in the wider policy mix should help deliver positive results. Analysis of publicly available data has highlighted data gaps. However, evidence suggests significant energy savings have been made, although the attribution to NABERS alone, given the policy mix, is uncertain. The interviews show high levels of agreement that the policy mix has transformed large commercial office buildings. They also highlight the wide range of actors mobilised to deliver this change and the central role of well-designed government intervention and support. The Australian experience is rightly of interest to international governments, but they must recognise that replicating its success requires attention to detail and long-term commitment. <em><strong>Policy relevance</strong></em> The decarbonisation of commercial buildings is challenging and many countries, including the UK, are struggling to make progress. In-use performance benchmarking policies such as NABERS are considered to be effective by engaging with industry and promoting the multiple benefits of energy efficiency. The lessons from the Australian experience help to identify four key policy design features for governments to consider: (1) political leadership, adequate financial resources and people with the right engineering and market skills and experience; (2) an in-use performance benchmark designed to allow industry to innovate and aligned with the way both buildings and energy managers operate; (3) the careful and progressive application of government interventions to tackle poor performance without compromising the voluntary nature of the policy; and (4) a governance model to give industry effective, but measured and proportionate, influence over the design and implementation of the policy.

Challenges in applying design thinking to public policy: dealing with the varieties of policy formulation and their vicissitudes

Policy design is a type of policy formulation activity centred on knowledge application in the creation of policy alternatives. Expected to attain public sector goals and government ambitions in an effective fashion, it can be undertaken many different ways. The current literature on policy design features an ongoing debate between adherents of traditional approaches to the subject in the policy sciences and those importing into policymaking the insights of design practices in other fields such as industrial engineering and product development: ‘design-thinking’. Issues examined in more traditional approaches to policy design are very wide-ranging and address a wide variety of formulation modalities and their strengths and weaknesses. Efforts to promote ‘design-thinking’ in the public policy realm, on the other hand, focus on policy innovation and rarely deal with issues such as the barriers to implementation, political feasibility or the constraints under which decision-making takes place. This article discusses these differences and argues adherents of design-thinking need to expand their reach and consider not only the circumstances facilitating the generation of novel ideas but also the lessons of more traditional approaches concerning the political and other challenges faced in policy formulation and implementation.

Capacity vs energy subsidies for promoting renewable investment: Benefits and costs for the EU power market

Policy makers across Europe have implemented renewable support policies with several policy objectives in mind. Among these are achieving ambitious renewable energy targets at the lowest cost, reducing CO2-emissions and promoting technology improvement through learning-by-doing. Using a detailed country-level model of generation markets, we address the question of how policies that subsidize renewable energy (feed-in premia and renewable portfolio standards (RPSs)) versus capacity (investment subsidies) impact the mix of renewable investments, electricity costs, renewable share, the amount of subsidies, and consumer prices in the EU electric power market in 2030 and how they interact with other policies such as the EU ETS. Our analysis shows that subsidies of energy output are cost-effective for achieving renewable energy targets in the short run, whereas policies tied to capacity installation yield more investment and might be more effective in reducing technology costs in the longer term. The difference in costs between these two policy options diminish with higher CO2-prices. Although the differences are significant, they are smaller than cost impacts of other renewable policy design features, namely the effect of not allowing EU members to meet their individual targets by trading renewable credits with other member states.

Designing Policy Pilots under Climate Uncertainty: A Conceptual Framework for Comparative Analysis

An ongoing challenge while designing policies pertains to their proportionality with the change that is likely or expected in a future policy context. This article conceptualizes proportionality as a feature of policy design to compare different policy strategies launched in response to current and expected changes in the policy context and contributes to comparative policy theory and practice. The conceptual framework is operationalized with climate change as a complex policy problem that challenges policymakers in designing proportionate strategies to enable adaptation to change in the climate and associated impacts. Under conditions of uncertainty, policy piloting provides an opportunity to experiment and test the design features of alternatives to status quo policies to function in a changed policy context. The theoretical discussion is supplemented with examples of policy pilots launched as a form of policy experimentation to address climatic risks to agriculture in rainfed zones of India. Policy design features in four settings of change in policy context, ranging from small-scale incremental to highly flexible adaptive responses, are compared using the framework of proportionality.

Fast track or Slo-Mo? Public support and temporal preferences for phasing out fossil fuel cars in the United States

ABSTRACT Policies to phase out fossil fuel cars are key to averting dangerous and irreversible changes to the earth’s climate. Given the potential impacts of such policies on every-day routines and behaviours, the factors that might increase or decrease their public acceptance require investigation. Here we study the role of specific policy design features in shaping Americans’ preferences for policy proposals to phase out fossil fuel cars. In light of the urgency of action against climate change, we are specifically interested in citizens’ preferences with respect to the timing of phase-out policies. Based on a demographically representative sample of 1,520 American residents rating 24,320 hypothetical policy scenarios in a conjoint experiment, we find that Americans prefer phase-out policies to be implemented no later than 2030. Policy features other than timing are also important: higher policy costs significantly reduce public support; subsidies for alternative technologies are preferred over taxes and bans; and policy co-benefits in terms of pollution reduction increase public support only when they are substantial. The study also investigates the role of individual characteristics in shaping policy preferences, finding that perceived psychological distance of climate change and party identification influence policy preferences. The results of this study have important implications for the political feasibility of rapid decarbonization initiatives like the ‘Green New Deal’ that are now being discussed in the US and beyond. Among these is the insight that smart sequencing of policies (early implementation of subsidies for low-emission technologies, followed by tax increases and/or bans) might help ensure majority support for a fossil fuel car phase-out. Key Policy Insights On average, respondents prefer policies to phase out fossil fuel cars to take effect no later than 2030. Party identification and perceived psychological distance of climate change influence timing preferences for phase-out policies. On average, subsidies for low-emission alternatives find higher public support than hard regulations, such as increases of fossil fuels taxes and bans on new fossil fuel cars sales. Smart sequencing of subsidies for alternative technologies and hard regulations should help increase the public acceptance of a phase-out of fossil-fuel cars.

Greening the common agricultural policy: a behavioural perspective and lab-in-the-field experiment in Germany

Abstract This study investigates the behavioural economic underpinnings of current policy approaches to integrate environmental objectives into the Common Agricultural Policy. We conduct an economic lab-in-the-field experiment with farmers in Germany. We analyse the impact of the following policy design features on farmers’ decisions to adopt sustainable agricultural practices: (i) framing of the policy: whether farmers perceive themselves as being part of the problem or the solution, (ii) degree of control: mandatory vs. voluntary policy and (iii) framing of incentives as either losses or gains. All policy designs tested result in a significant increase in hectares conserved compared to a baseline scenario without policy. Also, behavioural factors do significantly affect farmers’ behaviour at the individual level. Only framing is found to significantly affect policy effectiveness.

Nevada's experience with the Renewable Portfolio Standard

The Renewable Portfolio Standard (RPS) is widely considered the most important state-level renewable energy policy in the U.S. RPS policies are designed to move the state's electric sector toward renewables while minimizing electricity cost increases for customers but the specific design elements vary widely from state to state. And yet, the impacts of specific policy design features on outcomes has received relatively little attention in scholarly research. This study employs an in-depth case study approach to examine stakeholder perceptions of how and why particular policy design features of Nevada's RPS have changed as the result of social and political dynamics of Nevada's electric sector and the perceived impacts of these changes on policy outcomes. Although most expert stakeholders perceived Nevada's early RPS as critical to spurring growth in renewables, addition of a credit multiplier and allowance of existing and out-of-state resources, the long-term banking of RECs, credits for energy used to operate geothermal facilities, and energy efficiency measures were viewed as undermining policy objectives and delocalizing important economic and environmental benefits. Stakeholders perceived these changes as the result of an electric-sector culture that is resistant to change and a single, powerful electric utility that has significant sway over its regulator.

Empirical evaluation of the stringency and design of renewable portfolio standards

In two decades of experience with state renewable portfolio standards (RPSs), the United States has observed immense growth in renewable energy markets, initially in wind energy and more recently in solar power. During this time, RPSs have experienced considerable policy reinvention and increased diversity. Here, we explain how changes in RPS policy design features relate to different market outcomes. We develop a score for measuring RPS stringency and show that a one-point increase in RPS stringency leads to increases of 0.2%, 1% and 0.3% in renewable energy, solar generation and renewable energy capacity, respectively. Other important design features include resource eligibility, planning processes, cost recovery and geographical restrictions. These findings are then reaffirmed through 42 semi-structured phone interviews with experts in the field of RPS implementation from government agencies, including public utility commissions and state energy offices, electric utilities and various renewable energy firms and associations. Renewable policy standards have been instrumental in the growth of renewable energy in US states. Through a ranking of policy stringency and interviews with industry stakeholders, researchers show the significance of stringency and other policy design features towards a standard’s effectiveness.

Evaluating Consistency in Environmental Policy Mixes through Policy, Stakeholder, and Contextual Interactions

This paper introduces a method to analyse and explore consistency within policy mixes in order to support the policymaking cycle and applies it to energy and climate change policies in the United Kingdom (UK) biofuels policy context. The first part of the paper introduces a multi-level method to evaluate consistency within policy mixes implemented over a period of time. The first level explores consistency across policy design features in policy mixes. The second level evaluates how stakeholders, and their interactions with policy instruments and each other, can impact consistency within a given context. These interactions influence the implementation of policies and can lead to unintended outcomes that fail to meet the overarching goals. In the second part of the paper, we apply our method to the UK biofuels policy mix, to explore a sector that cuts across the policy areas of transportation, energy, land-use, air, and climate change. Our analysis demonstrates how, by overlooking complex interactions in the design and implementation of policies in the biofuels sector, policy mixes have conflicted with the development of a potential low-carbon technology.