Science Adl6547
Science Adl6547
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icies, and is of high quality, ensured by draw-
eeting the Paris Agreement’s climate sment of climate policy interventions that pays ing on official data verified by countries. Its
objectives necessitates decisive policy careful attention to the diversity among policy consistent, theory-based categorization of 48
action (1). Although the agreement seeks instruments and their mutual complementarity. distinct climate policy instrument types en-
to limit global average temperature in- Assembling such a global stocktake of ef- ables systematic assessments of synergies be-
crease to “well below 2°C above pre- fective climate policy interventions is so far tween different instruments.
industrial levels and pursuing efforts to limit hampered by two main obstacles: First, even The empirical challenge is that the candi-
the temperature increase to 1.5°C,” its success though there is a plethora of data on legislative date pool of effective policy interventions is
critically hinges on the implementation of ef- frameworks and pledged national emission re- too large to tackle for standard evaluation
fective climate policies at the national level. ductions (8–10), systematic and cross-nationally tools with their focus on single, known inter-
However, scenarios from global integrated as- comparable data about the specific types and ventions. For example, controlling for all pos-
sessment models suggest that the aggregated mixes of implemented policy instruments are sible policies from the OECD database in a
mitigation efforts communicated through na- lacking. Second, empirical tools are typically conventional policy evaluation setting would
tionally determined contributions (NDCs) fall tailored to isolate the effect of single policy label all countries as treated and leave us with
short of the required emission reductions (2), instruments and are predominantly applied to very few degrees of freedom and little if any
and the United Nations (UN) estimates quantify policies that researchers subjectively deem par- statistical power. Rather than resorting to a
a median emission gap of 23 billion metric tonnes ticularly relevant. Consequently, only a few subjective selection of particular policies to
(Gt) carbon dioxide equivalent (CO2-eq) by 2030 headline policy instruments receive much at- analyze, we aimed to identify large reductions
(3). The persistence of this emissions gap is not tention. For example, carbon pricing is well- in emissions and subsequently attribute them
only caused by an ambition gap but also a gap studied in high-income countries (11–13), whereas to potential policy interventions. We did so by
in the outcomes that adopted policies achieve in countless alternative policy instruments such applying a machine learning–based extension
terms of emission reductions (4). This raises the as standards remain sparsely evaluated, spe- of the standard difference-in-differences (DID)
fundamental question as to which types of pol- cifically in lower-income countries. Last but approach to evaluate policy.
icy measures are successfully causing mean- not least, there are few tools to empirically First, we exploited methods of break detec-
ingful emission reductions. Despite more than evaluate mixes of multiple, simultaneously com- tion from the time series literature in a gen-
two decades of experience with thousands of bined policy instruments. Thus, although policy- eralized DID setting using well-established
diverse climate policy measures gained around makers heavily rely on policy mixes (14–16), variable selection tools from the machine learn-
the world, there is consensus in neither science assessing which combinations of policies ef- ing literature to generate data-driven hypothe-
nor policy on this question (5–7). This high- fectively unfold complementarities and can ses about previously known or unknown policy
lights the need for a fine-grained global asses- deliver stronger emission reductions is poorly interventions with meaningful emission reduc-
understood. For all these reasons, the emis- tion effects. In comparison with the standard
sion gap is intertwined with an equally notable DID approach, which requires a priori knowl-
1
Potsdam Institute for Climate Impact Research (PIK),
knowledge gap on effective climate policies. edge about where and when a small subset of
Potsdam, Germany. 2Mercator Research Institute on Global This also hampers learning in Intergovern- policies was implemented, we neither made
Commons and Climate Change (MCC), Berlin, Germany. mental Panel on Climate Change (IPCC) as- any assumptions about which country is treated
3
Institute of Physics, University of Potsdam, Potsdam,
Germany. 4IZA Institute of Labor Economics, Bonn, Germany.
sessments that can only draw on descriptive at which point in time, nor did we restrict the
5
Climate Econometrics, Nuffield College, University of reviews of selected studies and instruments number of potential interventions. Allowing
Oxford, Oxford, UK. 6Smith School of Enterprise and the (17) rather than systematic evidence for the for any country to be potentially treated at any
Environment, University of Oxford, Oxford, UK. 7Institute for
entire spectrum of diverse climate policy instru- point in time permits us to identify large re-
New Economic Thinking, University of Oxford, Oxford, UK.
8
Organisation for Economic Co-operation and Development ments at the global scale (18). ductions and reduces concerns around omit-
(OECD), Paris, France. 9Department of Economics, University Here, we provide a global, data-driven causal ting potentially influential policy interventions.
of Victoria, Victoria, BC, Canada. 10Faculty of Economics and impact assessment to identify effective policies Second, we estimated the effect size for the
Management, Technische Universität Berlin, Berlin, Germany.
*Corresponding author. Email: stechemesser@pik-potsdam.de that have led to large emission reductions out agnostically detected country-specific interven-
(A.S.); koch@mcc-berlin.net (N.K.) of a universe of about 1500 climate policy mea- tions using two popular estimators from the
A
tightenings per country
Average number of 8
adopted policies & Buildings
6 Electricity
4 Industry
Transport
2
0
2000 2005 2010 2015 2020
B 80
Financing mechanism
Air pollution standard
40 Renewable auction
Label (appliances)
Adoption subsidy
Building code
Label (cars)
Carbon tax
Carbon tax
Carbon tax
20
Road toll
Fuel tax
Fuel tax
Fuel tax
Fuel tax
0
Developed Australia, Austria, Belgium, Bulgaria, Canada, Czech Republic, Denmark, Finland, France, Developing/Transitioning Argentina, Brazil, Chile, China, Colombia,
Germany, Greece, Hungary, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Poland, Portugal, India, Indonesia, Mexico, Peru, Russia, Saudi Arabia,
economies Romania, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom, United States economies South Africa, South Korea, Turkey
FIN
NOR
SWE
CAN
RUS
GBR DNK
POL
NLD
IRL DEU
USA CZE SVK
BEL
ITA BGR
PRT ESP TUR
MEX
GRC
COL
Number of detected breaks in SAU
IDN
ARG
ZAF
4+
3
AUS
2 NZL
1
Fig. 1.
Fig. 1. Increase in climate policy and detected 69 success cases with large emission reductions across sectors and countries. (A) Increase in average
number of adopted policies and policy tightenings per country between 1998 and 2022. A policy tightening is a substantial increase in stringency of an already existing
policy instrument (SM section 3). (B) Visualization of the number of adopted policies and policy tightenings across the whole timeframe for each instrument
type, highlighting the diverse number of instruments used. Developed and developing or transitioning economies are considered separately. (C) Number of large
emission reductions for each country and sector as detected with the break detection DID analysis. Overall, we found 69 breaks.
causal inference literature that address differ- country-specific interventions without prior the TWFE DID model to estimate effect sizes
ent identification concerns. In the last step of knowledge of their occurrence [supplemen- of emission breaks conditional on their detec-
our methodology, policy attribution, we com- tary materials (SM), materials and methods]. tion (SM section 8).
bined these estimates with our comprehensive The realized emission breaks are unevenly dis-
policy data from the OECD to draw systematic tributed across sectors and countries (Fig. 1C). Association of breaks with known and
inference on the (differential) effectiveness of Most breaks occur in the buildings sector unknown policies
single policies and various policy mixes. The com- (24 cases), followed by transport (19 cases), in- The timing of the identified structural breaks
bination of conservatively controlling for the risk dustry (16 cases), and electricity (10 cases). A matches well with newly adopted or tightened
of spuriously identifying false positives, the use total of 48 and 21 breaks are identified in climate policies, which are visualized as squares
of control groups in a panel setting, and a cross developed and developing or transitioning eco- along the time axes of Figs. 2 and 3. Of 69
Estimated
Counterfactual
Estim.
Effect Size
Detected Break
Policy Categories
Fig. 2. Most emission breaks in the electricity and industry sectors can be policy intervention is symbolized by a colored square along the x axis. Policy
associated with policy mixes. For each country and sector, the black line interventions include both newly adopted policies and tightened policies. The
indicates the observed emissions over time, and the blue line indicates the model color of the boxes indicates the policy instrument. If a box falls into the 2-year
fit, which follows the true emissions closely. Detected emission breaks are CI around detected break dates, we attribute the given policy to an emission
indicated with vertical red lines, and counterfactual emissions are indicated in break. Adoptions and tightenings of EU labels, EU performance standards, and
red. Each break is surrounded by a statistical CI (dark gray) and a 2-year CI the EU emission trading scheme are indicated with symbols (tag, gear, and euro
(light gray), which in some cases overlap. The 2-year CI captures both the icons, respectively). For electricity and industry, 67 and 54% of the matched
statistical uncertainty as well as leads and lags in the policy response. Each breaks, respectively, are associated with a policy mix.
Estimated
Counterfactual
Observed CO2
Emissions Model Fit
Detected Break
Attributed Policies
Implemented Policies
Policy
Categories
Fig. 3. Most emission breaks in the buildings and transport sectors can be indicates the observed emissions over time, and the blue line indicates the model fit,
associated with policy mixes. For each country and sector, the black line which follows the true emissions closely. Detected emission breaks are indicated
with vertical red lines, and counterfactual emissions are also indicated in red. The color indicates the policy instrument. If a box falls into the 2-year CI around
Each break is surrounded by a statistical CI (dark gray) and a 2-year CI detected break dates, we attribute the given policy to an emission break.
(light gray), which in some cases overlap. The 2-year CI captures both the Adoptions and tightenings of EU labels, EU performance standards, and the
statistical uncertainty as well as leads and lags in the policy response. EU emission trading scheme are indicated with symbols (tag, gear, and euro icons,
Each policy intervention is indicated with a colored square along the x axis. respectively). For buildings and transport, 60 and 94% of the matched breaks,
Policy interventions include both newly adopted policies and tightened policies. respectively, are associated with a policy mix.
In the industry sector, the break in China in the most widely used regulatory instruments subsidies. Instead, regulation is the most effec-
2016 occurs with some lag after the launch of and subsidy schemes may require comple- tive stand-alone policy (33%), but pricing is an
seven pilot emission trading schemes begin- mentary instruments to enable substantial equally important element of effective policy
ning in 2013. Again, prior literature has shown emission reductions. The effect sizes of policy mixes because 50% out of all successful policy
that the carbon price reduced emissions (23, 25), mixes that combine these non–price-based in- mixes include pricing. In the industry sector,
but these studies frequently do not consider struments with taxation or reduced fossil fuel pricing plays a prominent role. It is most ef-
the role of the simultaneous reduction of fossil subsidies (Fig. 4A, thick black lines) suggest fective individually in developed economies
fuel subsidies in 2016 and the strengthening that in most cases pricing is the complement (43%) and shows the most synergy with other
of financing mechanisms for energy efficiency that enables effective emission reductions. For policies in developing economies (50%). How-
A 0
Avg. Effect Size
Mix Single Policy
−10
−20
−30
−40 Not detected
Policy Mix Fossil fuel subsidy reform Taxation Adoption subsidy Financing mechanism Ban & phase out Building code Performance standard Label
Single Policy Pricing Subsidy Regulation Information
Avg. Effect Size
of Mix with Pricing
0
−10 Mix with Pricing
−20 Not detected
Average effect size (%)
−30
−40
Policy Mix Fossil fuel subsidy reform Taxation Renewable subsidy Air pollution standard Ban & phase out Renewable planning Renewable portfolio standard
Single Policy
Pricing Subsidy Regulation
0
−10
−20
−30
−40
Policy Mix Fossil fuel subsidy reform Taxation Financing mechanism Energy efficiency mandate Performance standard
Single Policy Pricing Subsidy Regulation
0
−10
−20
−30
−40
B
Developed economies Developed economies
Subsidy
27.3%
Subsidy Regulation
Pricing
33.3% 33.3%
18.2% of detected 16.7%
18.2% 18.2% Regulation
successful interventions
were policy mixes 27.3%
27.3% of detected
of subsidies and pricing Pricing successful interventions 16.7%
9.1% were regulation alone
Regulation Subsidy
Subsidy
25% 25% 25% 25% Information
33.3% 33.3% Pricing
Fig. 4. Effective policies and policy mixes. (A) On the basis of point estimates for combinations of policy types [definitions of categories are provided in (A), x axis] are
country-specific breaks in emissions (tables S12 to S19), we compared the average effective in each sector separately for developed and developing economies. For
effect sizes of all breaks in which a policy instrument appears individually with each circle area, the percentage indicates which share of successful interventions in
that of all breaks in which this policy instrument appears in a mix. For non–price- this sector was made up by a specific individual policy type or a specific combination
based policies, the black thick line also indicates the average effect size of a mix of policy types. An individual policy type encompasses breaks that match a single
with a given policy instrument and pricing (through taxation or reduced fossil policy instrument (for example, one subsidy scheme) or a combination of policy
fuel subsidies). (B) Euler diagrams (SM materials and methods) show which instruments of the same type (for example, two or more different subsidy schemes).
which is in line with the theoretical under- Our approach identifies country-specific pol- 3. UN Envrironment Programme (UNEP), Emissions Gap Report
standing that these specific instruments alone icy interventions that have led to large emission 2022, (2022); https://www.unep.org/resources/emissions-
gap-report-2022 (accessed July 2023).
often have a limited scope (for example, only reductions. Thus, we are unable to quantify 4. T. Fransen et al., Nat. Clim. Chang. 13, 752–755 (2023).
new cars or new appliances) and are subject the effect of policies with minor effects (a dis- 5. T. Sterner et al., Nat. Sustain. 2, 14–21 (2019).
to rebound effects (28). Additional instruments cussion on minimum effect size is available in 6. D. Rosenbloom, J. Markard, F. W. Geels, L. Fuenfschilling,
Proc. Natl. Acad. Sci. U.S.A. 117, 8664–8668 (2020).
such as pricing can effectively address both SM section 6.1). However, regarding the size of 7. O. Blanchard, C. Gollier, J. Tirole, Annu. Rev. Econ. 15, 689–722
factors and thus generate positive synergy the emissions gap and the commitment to the (2023).
(15, 29). Further explanations for the comple- Paris Agreement, it is arguably most impor- 8. S. M. Eskander, S. Fankhauser, Nat. Clim. Chang. 10, 750–756
(2020).
mentarities include that policy mixes can ad- tant to identify combinations of policy instru- 9. G. Martin, E. Saikawa, Nat. Clim. Chang. 7, 912–919 (2017).
dress a multitude of market failures (7) and ments that have large effects. In addition to 10. C. Le Quéré et al., Nat. Clim. Chang. 9, 213–217 (2019).
may be more successful in increasing the over- the detected effects of national climate poli- 11. P. Bayer, M. Aklin, Proc. Natl. Acad. Sci. U.S.A. 117, 8804–8812
(2020).
all policy stringency (30) and maximizing pol- cies, there might also exist impacts of inter-
12. J. J. Andersson, Am. Econ. J. Econ. Policy 11, 1–30 (2019).
icy credibility, which shapes the expectations national or regional policies that are only 13. M. Leroutier, J. Environ. Econ. Manage. 111, 102580 (2022).
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Seminar of OECD for valuable comments on a draft of this and N.K. wrote the manuscript, with contributions from all authors. 12773811 (40). All results can be explored in more detail in an
paper. Funding: A.S., P.K., H.V., E.D., L.M., and A.W. acknowledge Competing interests: The authors declare that they have no interactive web dashboard available at http://climate-policy-
the financial support by the Werner Siemens Foundation. F.P. competing interests. M.S. is employed by the Austrian Ministry of explorer.pik-potsdam.de. License information: Copyright © 2024
acknowledges support from the Robertson Foundation and the Finance. The views expressed here are those of the authors and the authors, some rights reserved; exclusive licensee American
SSHRC. E.M. gratefully acknowledges funding from the Robertson not those of the Ministry of Finance or the Austrian government. Association for the Advancement of Science. No claim to original
Foundation. M.S. acknowledges support from the Clarendon M.S. was paid for consulting services for a government client US government works. https://www.science.org/about/science-
Foundation and from the Einstein Stiftung Berlin. Author on implementing carbon taxes in 2021. D.N. is employed by licenses-journal-article-reuse
contributions: N.K., F.P., M.S., E.M., P.K., and A.S. designed the OECD. The views expressed here are those of the authors and not
analysis. D.N. contributed the Climate Actions and Policies those of OECD or its member countries. Data and materials
SUPPLEMENTARY MATERIALS
Measurement Framework (CAPMF) data. E.M., E.D., L.M., and availability: The CAPMF data are publicly available from the
A.W. collected further data. F.P. and M.S. wrote the getspanel OECD Data Explorer (https://oe.cd/dx/capmf) (39). Data for the science.org/doi/10.1126/science.adl6547
package for the break detection method. E.M. and A.S. wrote the United States are not publicly available from the OECD Data Materials and Methods
program code for the analysis and ran the break detection models, Explorer. They were downloaded in March 2023 from the IPAC Supplementary Text
with support from N.K., F.P., M.S., and P.K.; A.S. processed the Dashboard from https://www.oecd.org/climate-action/ipac/ Figs. S1 to S47
policy data, with contributions from P.K., H.V., E.D., L.M., and dashboard and from the data visualization tool from https:// Tables S1 to S43
A.W. and analyzed it with support from P.K. and H.V. Main oecd-main.shinyapps.io/climate-actions-and-policies. The EDGAR References (41–79)
figures were designed by all authors and realized by A.S.; P.K. emissions data are available from https://data.jrc.ec.europa.eu/
conducted the supplementary analysis using the synthetic control collection/EDGAR. The code and data to replicate the study is Submitted 1 November 2023; accepted 19 July 2024
method. All authors discussed and interpreted the results. A.S. publicly available from Zenodo under https://zenodo.org/records/ 10.1126/science.adl6547