Climate and Energy Policy Evaluation in Terms of Relative Industrial Performance and Competitiveness

Abstract

Due to differences in greenhouse-gas abatement costs within the industrial sectors, there is an ongoing discussion on potential negative competitive effects of climate and energy policies. This article argues that policymakers must acknowledge the relative performance of industrial operations parallel to the competitors, the compulsoriness of policies, and the harmonization of policies accordingly. To this end, the authors suggest a tool aimed for robust participatory policy evaluations at decision-maker levels. The tool promotes policy learning, transparency, and consensus building, hence contributing to more effective and efficient policy design and management process. The tool is exemplified in a Swedish context.

Keywords:

• Policy analysis
• Policy learning
• Participatory policymaking
• Industrial competitiveness
• Partial equilibrium costs

Notes

¹These theories involve non–policy maker actors in the policy processes as policy analysts and highlight the possibility to improve these processes through learning from these actors' experience and knowledge. The evidence in literature for policy learning and participatory policy making as a tool to utilize experiences in the policy environment to improve the framework is strong (van Ast and Boost 2003; Driessen et al. 2001; Etheredge and Short 1983; Geurts and Joldersma 2001; Szarka 2006). See e.g. Bennett and Howlett (1992) and Schofield (2004) for overviews of policy learning theories.

²The policy environment is determined by the regional system boundaries that include the stakeholders that are submitted to, or concerned with, a given policy or set of policies. The policy environment thus also includes actors not submitted to the policy (or policies) but are affected due to market impacts or by other means.

³The interviewee representatives from industry, non-governmental business organizations, state agencies, and ministries were purposively selected to provide an overview of the Swedish industry sector as well as an international outlook. The interviews with management and high-level staff with climate and energy policy responsibilities included a focus on design and management processes of implemented policies and the associated arenas for dialogue.

⁴While the article focuses on climate-related policies, the industry sector is also submitted to other energy related policies that amplifies the effects of operational characteristics and relative performance. This means that additional policy pressure from energy efficiency and other environmental performances (such as emissions of particulate matter, sulfur, and nitrogen oxides) amplifies operational constraints, economic impacts, and consequently competitiveness. It is thus important that the entire policy framework is considered in evaluating effects on competitiveness.

⁵Here we distinguish the difference between a climate agenda and an environmental agenda. Also, as an example of this, see the results of the international climate policy stakeholder meeting organized under the Harvard Project on International Climate Agreements (John F. Kennedy School of Government 2008).

⁶Group Support Systems are also commonly referred to as policy labs. See, for example, Ramírez et al. (2008) on the utilization of policy labs in a sustainability and climate policy context.

⁷Such analyses have been carried out by, e.g., Vattenfall (2008).

⁸Or group of operations, depending on which actor configuration is targeted in the analysis.

⁹The BREF for energy efficiency was not formally adopted at the time of submitting this article (April 1, 2008). See http://eippcb.jrc.es for more information on IPPC and full BREF documents.