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Polycentric Carbon Pricing Governance: Cooperation, Contestation and Connectivity

Periodic Reporting for period 4 - PolyCarbon (Polycentric Carbon Pricing Governance: Cooperation, Contestation and Connectivity)

Berichtszeitraum: 2024-07-01 bis 2024-12-31

The PolyCarbon project’s objective was to uncover, investigate and understand the underlying mechanisms and conditions for the expansion and contraction of the global system of carbon pricing governance. It aimed to
1. chart the global system of carbon pricing policies,
2. explain the causes of adoption and rejection of (ambitious) carbon pricing policies, and
3. analyse the interaction amongst the various carbon pricing policies globally.

The global system of carbon pricing policies will become exponentially more effective as it expands since carbon leakage is reduced. This depends however on the individual policies’ level of ambition, which has remained low in most cases. For this reason, the PolyCarbon project took a critical look at carbon pricing policies, while acknowledging that carefully crafted and ambitious carbon pricing policies can be powerful tools for transitioning to a low-carbon economy in the urgent pursuit of international climate goals. Understanding the underlying mechanisms and conditions for the expansion and contraction of the global system of carbon pricing governance and of the determinants of individual carbon pricing policies’ ambitiousness and effectiveness can provide insights for fast-tracking the formation of the global carbon pricing system; thus, accelerating the transition to a low-carbon economy.

The project revealed the multiplicity of policymakers' motivations to pursue carbon pricing policy. In many cases, the main primary motivation is not necessarily climate mitigation but rather generating revenues, encouraging economic growth, and responding to international factors. The PolyCarbon project generated a nuanced understanding of local context-specific motivation for adopting carbon pricing policies.

The project also identified international factors facilitating the agenda setting and carbon pricing policy making process in several countries.

Based on the insights on local motivations and contextual factors, on the one hand, and on the international dynamics, on the other, the PolyCarbon project team developed a novel analytical framework straddling local and international processes and factors in a systematic manner.
The PolyCarbon project team has developed a novel analytical framework that captures the complexity of local and international processes and their interactions. We combine insights from various strands of academic literature, most prominently polycentric governance, policy diffusion and transfer, norm localisation and public policy approaches.

PolyCarbon zoomed into several core aspects to understand the adoption and design of carbon pricing policies. We specifically focused on analysing and explaining:
· The agenda-setting, policy formulation, adoption and implementation processes of individual carbon pricing policies in Latin America (lead: Martin Rabbia);
· The role of carbon pricing policies in a broader policyscape with an empirical focus on the United Kingdom (lead: Valeria Zambianchi);
· Carbon pricing policies’ embeddedness in the challenging country context of a regulated electricy market with an empirical focus on South Korea (lead: Asgeir Barlaup);
· Agenda-setting and the role of capacity building and policy promotion in diffusion carbon pricing policies to several African countries (lead: Charlotte Debeuf);
· The politicisation of carbon pricing policymaking and diversification of carbon pricing policy designs (lead: Katja Biedenkopf).

The project team brought all insights together in an analytical framework on the expansion and contraction of the global carbon pricing system.
The PolyCarbon project moved beyond the state of the art by focusing on countries that have not yet been analysed in the context of carbon pricing policymaking, exploring and conceptualising the interactions between carbon pricing policies and their contexts in a systematic and detailed manner, and integrating domestic and international policymaking dynamics in a coherent framework.

Several results have already been published in journal articles. The book that brings together the overall results is still being finalised.
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