Stretching or conforming? Financing urban climate change adaptation in Copenhagen

Cities worldwide are struggling to build resilience to the risks posed by climate change for their infrastructures, economies and quality of life. However, no city government has sufficient capacities to fund the adaptations required to ensure such resilience alone. Copenhagen’s efforts to secure financing for adaptation and mitigation are investigated, focusing on its innovative arrangements for funding projects to protect against extreme rainfall and flooding. A mixed-methods approach explores how municipal actors and investors accessed finance for supporting transition to a climate-adapted city. Mobilising concepts from the multilevel perspective to analyse the governance and market conditions that facilitate or impede such financing, this paper contributes to sustainable transition theory and the assessment of different funding approaches. The case study confirms the comprehensiveness and effective implementation of the city’s plans, especially its innovative financing product for adaptation to urban flooding. However, this approach has knock-on effects for tackling other climate hazards, partnerships and investment urgency. Although extreme rainfall events in 2011–13 opened a valuable ‘window of opportunity’ for change at the system landscape level, catalysing a radical shift in government policy and investment, this disruption did not elicit a commensurate response from the city’s finance sector.   'Practice relevance' Several challenges exist for municipalities and investors when financing urban adaptation. Innovation is needed not only in technology but also in approaches to financing and investment. A key strength of Copenhagen’s adaptation approach lies in its innovative financing arrangements for funding an effective response to the risks of extreme rainfall, 'i.e'. combining measures to protect against urban flooding with improvements in the urban public realm. A sustainable transition model can help guide cities in planning and funding adaptation to climate change. Recommendations include equal prioritisation by all actors of climate adaptation and mitigation; the removal of constraints on private sector participation; government engagement with a diverse set of private capital providers; experimentation with different financing mechanisms; the development of bankable adaptation projects; and efforts to monetise and unlock the value of adaptation projects

Advancing the Payments for Ecosystem Service Discourse through Institutional Theory

My research interest centers on payments for ecosystem services (PES), a prominent strategy to address economic externalities of resource extraction and commodity processing, improving both social and ecological outcomes. Given the novelty of these kinds of institutions, my research uses them as a set of compelling cases for studying institutional creation, and my driving research question is “How are institutions in support of PES created?” Importantly, my research spans environmental economics and business studies to study how PES schemes might more fully incorporate the private sector, an outcome that will be essential to their success. In the face of widespread enthusiasm, PES still has faced considerable legitimate critique. My research agenda is focused on a critical analysis of the development of PES from the perspective of organizational institutionalism. I principally use the literature on institutional work, which serves as a lens for understanding the reorganisation of existing practices and norms (Lawrence & Suddaby, 2006). The research seeks to offer a unique contribution by interpreting PES through a neo-institutional perspective. Through both qualitative and quantitative approaches, the work identifies a key flaw in many current studies of PES: a thin conception of institutions as rules that ignores more subtle ways in which institutions and power are involved in the creation of PES systems. This dissertation is comprised of four papers each contributing to the debate on PES by drawing insights from the institutional theory literature. Comprised of a meta-analysis literature review, two case studies and a contextual theory-driven paper, the findings are applicable for both PES scholars and practitioners. By engaging in this new perspective, PES scholars and practitioners will better understand how less frequently or easily observed institutions and forms of power can affect the development and effectiveness of PES initiatives. Collectively, the findings indicate that in order for PES to become a successful tool for sustainability, it must break from singularly using rational action and transaction cost theory as governing theories. The research offers recommendations to conceptually reframe PES as a tool for enabling sustainable relationships with nature, conserving and restoring ecosystems and their benefits for people

Offsetting, Insetting, or Both? Current Trends in Sustainable Palm Oil Certification

Private environmental standards attempt, in part, to internalize environmental externalities. Offsetting firms’ environmental externalities by buying credits is one option. Another is insetting, in which firms attempt to address externalities and provide positive benefits within their own supply chain. These two approaches to internalizing externalities can be in tension, leading toward different types of sustainable markets. Firms adopting private standards as way of avoiding reputational risks may be more likely to support insetting than offsetting strategies if their primary goal is to distinguish themselves from the rest of their industry, but these strategies can also risk separating the market into niche, high-quality producers alongside a low-quality majority. These tensions play out in the Roundtable on Sustainable Palm Oil (RSPO), where offsetting and insetting exist side-by-side. Strategic pressures promoting insetting strategies lead firms to exit the system’s offset market, but this comes with the cost of losing some of the flexibility and lowered entry barriers the offset approach offers. New technologies might allow standards to combine the benefits of both approaches, keeping the reputational benefits of insetting and the flexibility of offsetting

Navigating Input and Output Legitimacy in Multi-Stakeholder Initiatives: Institutional Stewards at Work

Multi-stakeholder initiatives (MSIs) are a form of private governance sometimes used to manage the social and environmental impacts of supply chains. We argue that there is a potential tension between input and output legitimacy in MSIs. Input legitimacy requires facilitating representation from a wide range of organizations with heterogeneous interests. This work, however, faces collective action problems that could lead to limited ambitions, lowering output legitimacy. We find that, under the right conditions a relatively small group of motivated actors, who we call institutional stewards, may be willing to undertake the cost and labor of building and maintaining the MSI. This can help reconcile the tension between input and output legitimacy in a formal sense, though it also results in inequalities in power. We test this claim using a case study of organizations’ activities in the Roundtable on Sustainable Palm Oil (RSPO). We find that a small group of founding members—and other members of long tenure—account for a disproportionate level of activity in the organization

Sustainable production of forest-risk commodities: governance and disarticulations

Although commodities associated with deforestation – such as palm oil, soy, beef, timber, coffee and cocoa – vary geographically, their growing global demand increases pressure on forestlands in many tropical regions. The landscape changes that accompany expansion of production areas result in the loss of ecosystem services at local and global levels, and restrict local access to forests and forest resources. Increased awareness of ‘telecouplings’ between distant producer and consumer systems, through new forms of information exchange, has led to changes in how production systems are governed in relation to sustainability, including through private-sector led and hybrid governance initiatives. One such example is through private-sector ‘zero-deforestation’ commitments, which promise to eliminate deforestation from the supply chains of the commodities that companies produce, trade, and/or source. Using the concept of ‘disarticulations’, this chapter brings an analysis of global production networks into conversation with critical political economy’s emphasis on discourse and knowledge production. We examine some of the complexities in the implementation ‘zero-deforestation’ commitments, how socio-economic processes in global production are linked or delinked, and how people can be connected to or excluded from these chains. Finally, we reflect on opportunities for research and practice in shifting towards sustainable production and consumption of deforestation-risk commodities

Payments for ecosystem services: rife with problems and potential—for transformation towards sustainability

Payments for ecosystem services (PES) programs are one prominent strategy to address economic externalities of resource extraction and commodity production, improving both social and ecological outcomes. But do PES and related incentive programs achieve that lofty goal? Along with considerable enthusiasm, PES has faced a wide range of substantial critiques. In this paper, we characterize seven major classes of concerns associated with common PES designs, and use these as inspiration to consider potential avenues for improvements in PES outcomes and uptake. The problems include (1) new externalities, (2) misplacement of rights and responsibilities, (3) crowding out existing motivations, (4) efficiency-equity tradeoffs, (5) monitoring costs, (6) limited applicability, and (7) top-down prescription/alienating agency. As currently practiced, many PES programs are thus of limited benefit and even potentially detrimental to sustainability. From this dire conclusion, we highlight several innovations that might be combined and extended in a novel approach to PES that may address all seven problems. Recognizing that PES necessarily articulate and even normalize values, our proposed approach entails designing these institutions intentionally to articulate rights and responsibilities conducive to sustainability—those we might collectively seek to entrench. Problems remain, and new ones may arise, but the proposed approach may offer a way to reimagine PES as a major social and economic tool for enabling sustainable relationships with nature, conserving and restoring ecosystems and their benefits for people now and in the future

Re-Imagining PES

Payments for ecosystem services (PES) programs are one prominent strategy to address economic externalities of resource extraction and commodity production, improving both social and ecological outcomes. But do PES and related incentive programs achieve that lofty goal? Along with considerable enthusiasm, PES has faced a wide range of substantial critiques. In this paper, we characterize seven major classes of concerns associated with common PES designs, and use these as inspiration to consider potential avenues for improvements in PES outcomes and uptake. The problems include (1) new externalities, (2) misplacement of rights and responsibilities, (3) crowding out existing motivations, (4) efficiency-equity tradeoffs, (5) monitoring costs, (6) limited applicability, and (7) top-down prescription/alienating agency. As currently practiced, many PES programs are thus of limited benefit and even potentially detrimental to sustainability. From this dire conclusion, we highlight several innovations that might be combined and extended in a novel approach to PES that may address all seven problems. Recognizing that PES necessarily articulate and even normalize values, our proposed approach entails designing these institutions intentionally to articulate rights and responsibilities conducive to sustainability—those we might collectively seek to entrench. Problems remain, and new ones may arise, but the proposed approach may offer a way to reimagine PES as a major social and economic tool for enabling sustainable relationships with nature, conserving and restoring ecosystems and their benefits for people now and in the future.Science, Faculty ofNon UBCResources, Environment and Sustainability (IRES), Institute forUnreviewedFacultyGraduat