Governance of Environment-Enhancing Technical change - past experiences and suggestions for improvement

There is much talk about environmental policies being faulty. Past policies are being criticisedfor failing to achieve environmental goals (the environmentalist complaint), for being overlyexpensive (the industrialist complaint) and for failing to encourage innovation and dynamicefficiency (the complaint of economists dealing with innovation). This paper looks at theinnovation and technology adoption effects of past environmental policies. It finds indeed fewexamples of environmental policies that stimulated innovation. The common technologyresponse is the use of expensive end-of-pipe solutions and incremental process changesoffering limited environmental gains. This begs the question: why did the policies fail topromote more radical innovation and dynamic efficiency? One explanation—well-recognisedin the economic literature—is the capture of government policies by special interests. Thispaper offers a second explanation—based on innovation and technology adoption studies—which says that in order to have a decisive and socially beneficial influence policy instrumentsmust be fine-tuned to the circumstances in which sociotechnical change processes occur and tipthe balance. Within this alternative view, the starting point of government interventions is thecapabilities, interests, interdependencies and games of social actors around an environmentalproblem instead of the set of environmental policy instruments for achieving an environmentalgoal. The paper sees a need for government authorities to be explicitly concerned with technicalchange (rather than implicitly through a change in the economic frame conditions) and to beconcerned with institutional arrangements beyond the choice of policy instruments, and act as achange agent. This requires different roles for policy makers: that of a sponsor, planner,regulator, matchmaker, alignment actor and ‘creative game regulator’. The paper offers twoperspectives on environmental policy: an instrument one and a modulation one. The latter isespecially important for promoting innovation and bringing about radical change, somethingwhich is very difficult with traditional regulatory instruments. Instruments for promotingenvironment-enhancing technical change are appraised and suggestions are offered for thepurposes for which different policy instruments may be used in differing economic contexts.environmental economics ;

Local and Global Interactions in an Evolutionary Resource Game

Conditions for the emergence of cooperation in a spatial common-pool resource game are studied. This combines in a unique way local and global interactions. A fixed number of harvesters are located on a spatial grid. Harvesters choose among three strategies: defection, cooperation, and enforcement. Individual payoffs are affected by both global factors, namely, aggregate harvest and resource stock level, and local factors, such as the imposition of sanctions on neighbors by enforcers. The evolution of strategies in the population is driven by social learning through imitation. Numerous types of equilibria exist in these settings. An important new finding is that clusters of cooperators and enforcers can survive among large groups of defectors. We discuss how the results contrast with the non-spatial, but otherwise similar, game of Sethi and Somanathan (1996).Common property, Cooperation, Evolutionary game theory, Global interactions, Local interactions, Social norms

Improvement of the Public Participation Waste Management System in Banda Aceh City

This study investigates how changing environmental governance in Banda Aceh City can benefit from public participation. The secret to improving environmental governance is figuring out how to involve the public, businesses, and government in the process. The interaction and influencing factors among enterprise pollution control, government oversight, and public engagement are examined using evolutionary game theory, and an empirical study is conducted using data from  Banda Aceh City from 2017 to 2021. The findings of the study demonstrate that government oversight has a favorable impact on environmental governance and can motivate businesses to aggressively reduce pollution. The income and cost of businesses limit the impact of government regulation, hence it is necessary to increase the fines for passive pollution control. Enhancing the government's reputational damage can also effectively encourage environmental oversight activity on the part of the government. Three industrial wastes are substantially better governed when the public participates, and the cost and psychological advantages of involvement have a strong correlation with public enthusiasm. To some extent, public participation can take the place of governmental control. Environmental governance benefits from interactions between the public and the government. The study's findings will enhance environmental governance performance and public satisfaction while assisting in the development of an efficient system

Przepisy dotyczące zanieczyszczenia powietrza w Chinach: podejście do symulacji polityki i gry ewolucyjnej

In the institutional context of China’s political centralization and fiscal decentralization, this study explores the environmental regulations that make the central and local governments join efforts in air pollution control. Policy simulations in an evolutionary game show that the best approach is to internalize environmental costs and benefits in local governments’ objective function. The effectiveness of several policy instruments is examined individually and jointly, including administrative inspection, transfer payment, and environmental taxes. It is shown that in case environmental consequences are not internalized, appropriate application of policy instruments can incentivize goal-oriented local governments to choose the socially optimal strategy.W kontekście instytucjonalnym chińskiej centralizacji politycznej i decentralizacji fiskalnej, niniejsze badanie analizuje regulacje środowiskowe, które zmuszają rządy centralne i lokalne do wspólnych wysiłków na rzecz kontroli zanieczyszczenia powietrza. Symulacje polityki w grze ewolucyjnej pokazują, że najlepszym podejściem jest internalizacja kosztów i korzyści środowiskowych w funkcji celu samorządu. Skuteczność kilku instrumentów polityki jest badana indywidualnie i wspólnie, w tym kontroli administracyjnej, płatności transferowych i podatków ekologicznych. Wykazano, że w przypadku braku internalizacji konsekwencji środowiskowych, odpowiednie zastosowanie instrumentów polityki może zmotywować zorientowane na cel samorządy lokalne do wyboru społecznie optymalnej strategii

“Good” Governance and Policy Analysis: What of Institutions?

Policy formation is only one the three main components in the continuum of policy formation – policy implementation – policy evaluation – policy formation. To fully understand why policy outcomes often fall significantly short of policy intentions we need to examine the structuring factors, i.e., the institutions of governance, that shape the policy process. This paper focuses on the interplay between the policy process, governance, and institutions to articulate a framework for conducting institutionally sensitive policy analysis. A comparative study of the waste subsystems in the Netherlands and the United Kingdom reveals that each subsystem is the product of its “own” institutional landscape, and not directly and immediately subject to the whims of policy making at the EU scale of governance. Although there are signs of “Europeanization” in both cases, national problems, policies, and politics as manifest through the full spectrum of formal and informal institutions continue to play a major role in facilitating and curtailing change in each of the two waste subsystems. The paper concludes with a discussion of the implications of institutionally sensitive policy analysis for the current discourse on governance for sustainable development at the European scale.Economics ;

The Parched Earth of Cooperation: How to Solve the Tragedy of the Commons in International Environmental Governance

This article proposes a way to strengthen international environmental agreements, such as the Paris Agreement and the Kyoto Protocol. Multilateral environmental agreements such as these are extremely fragile. At the heart of the problem is what is known as the tragedy of the commons—a unique dynamic that viciously sabotages cooperation. The cause of this tragedy is that no one can trust that other actors will conserve the common resource, which triggers a race to the bottom—a race to deplete. Global warming and our inability to halt it is perhaps the ultimate example of a tragedy of the commons on a truly massive scale. On a domestic level, the tragedy of the commons is easily solved through regulation. However, on a supranational level, where there is no overarching authority, governance mechanisms tend to collapse. The hard truth is that without robust enforcement of some kind, international cooperation is extremely difficult to maintain. This article proposes the following idea: governments joining (or already party to) an agreement, contribute an upfront deposit to an international regulatory body (the Commons Management Fund (“CMF”)) with the understanding that their contribution will be forfeited if they fail to honor their treaty commitments. The idea, while ostensibly simple, is deceptively complex. The focus is not the penalty, but rather the ability of governments to credibly signal commitment. In game theory, credible signaling can prevent a tragedy of the commons by generating confidence that everyone will stick to their commitments. The CMF is designed to exploit this effect. Now, more than ever, a solution to the tragedy of the commons on a supranational level is desperately needed—the CMF is such a solution

Potential Maximization and Coalition Government Formation

A model of coalition government formation is presented in which inefficient, non-minimal winning coalitions may form in Nash equilibrium. Predictions for five games are presented and tested experimentally. The experimental data support potential maximization as a refinement of Nash equilibrium. In particular, the data support the prediction that non-minimal winning coalitions occur when the distance between policy positions of the parties is small relative to the value of forming the government. These conditions hold in games 1, 3, 4 and 5, where subjects played their unique potential-maximizing strategies 91, 52, 82 and 84 percent of the time, respectively. In the remaining game (Game 2) experimental data support the prediction of a minimal winning coalition. Players A and B played their unique potential-maximizing strategies 84 and 86 percent of the time, respectively, and the predicted minimal-winning government formed 92 percent of the time (all strategy choices for player C conform with potential maximization in Game 2). In Games 1, 2, 4 and 5 over 98 percent of the observed Nash equilibrium outcomes were those predicted by potential maximization. Other solution concepts including iterated elimination of dominated strategies and strong/coalition proof Nash equilibrium are also tested.Coalition formation, Potential maximization, Nash equilibrium refinements, Experimental study, Minimal winning

Introduction to \u3cem\u3eThe Economics of Social Institutions\u3c/em\u3e

This volume includes thirty-six important contributions to the economics of social institutions by leading figures in the history of the field. Its nine Parts are: Early Contributions, Methodological and Conceptual Issues, Old Institutionalism, New Institutionalism, Social Costs, Growth and Development, Institutions and Change, Institutions and Organizations, and The Third Sphere of the Economy and Institutions. This set of topics provides a comprehensive review of the origins and development of the economics of social institutions. It addresses the main theoretical and policy concerns that have occupied contributors to the approach. The economics of social institutions has a been well-established research program for over a century, and continues to evolve and develop new areas of investigation. This collection provides researchers, scholars, and interested students and extensive review of the leading contributions to the subject. It can be used to advance future thinking about the economics of social institutions and as a key resource for university teaching and education