Combating climate change requires a fundamental simultaneous transformation of various sectoral systems that are key to the functioning of our economies and societies, such as energy, industry, transport, housing, and agriculture. This report by the COP21 RIPPLES project examines sector-specific challenges to decarbonisation and what contribution international governance could make to overcoming these challenges.
Taking a sectoral perspective, the report identifies the key governance challenges that exist internationally towards the deep transformations required, and specifies the resulting key governance functions to be fulfilled by means of international cooperation/international institutions.
To this end, the report first clarifies a number of key concepts, including international (climate) governance, international and transnational institutions, institutional complexes and poly-centricity. It then derives a number of functions that international institutions can fulfil from the relevant literature: providing guidance and signals, setting rules, providing transparency and accountability, providing capacity building, technology and finance, and facilitating knowledge and learning. This is the basis for an investigation into the key governance challenges and the potential of international governance in 14 key sectoral systems.
Much mitigation-related governance activity is evident in a range of sectoral systems, and regarding particular governance functions. However, there is a tendency for this activity to relate to the easiest functions to address, such as "learning and knowledge building", or to take place in somewhat limited "niches". Across all sectoral systems examined, the gap between identified governance needs and what is currently supplied is most serious in terms of the critical function of setting rules to facilitate collective action. A lack of "guidance and signal" is also evident, particularly in the finance, extractive industries, energy-intensive industries, and buildings sectoral systems.
Of the sectoral systems examined, the power sector appears the most advanced in covering the main international governance functions required of it. Nevertheless, it still falls short in achieving critical governance functions necessary for sufficient decarbonisation. Significantly, while the signal is strong and clear for the phase-in of renewable energy, it is either vague or absent when it comes to the phase-out of fossil fuel-generated electricity. The same lack of signal that certain high-carbon activities need actively to be phased out is also evident in financial, fossil-fuel extractive industry and transport-related sectors.
More effective mitigation action will need greater co-ordination or orchestration effort, sometimes led by the UNFCCC, but also from the bodies such as the G20, as well as existing (or potentially new) sector-level institutions. The EU needs to re-consider what it means to provide climate leadership in an increasingly "polycentric" governance landscape.