IPCC Fourth Assessment Report: Climate Change 2007
Climate Change 2007: Working Group III: Mitigation of Climate Change Interactions

The shift from ‘government to governance’ has been accompanied by both theoretical and a practical interest in how the three main arenas of actors – state, market and civil society – interact, including how they might work in concert to achieve improved outcomes from a sustainability perspective. A variety of perspectives are offered that cast light on these questions including ‘partnerships’ (Najam et al., 2003; Hale, 2004; Forsyth, 2005), ‘deliberative democracy’ (Levine, 2000; O’Riordan and Stoll-Kleeman, 2002; Gutmann and Thompson, 2004), and ‘transition theory’ (Geels, 2004; Elzen and Wieczorek, 2005)

Each of these studies considers issues of governance in the context of sustainable development and climate change mitigation. Partnerships considers forms of cooperative governance and action, deliberative democracy deals with issues of representation in decision-making, Transition theory seeks to explain how technological innovation occurs and how these processes might be channelled towards changing the technological composition of development pathways, for example, in support of de-carbonization.

Partnerships: Partnerships between public and private actors can maximize impact by taking advantage of each partner’s unique strengths and skill sets. Partnership programmes can provide citizens groups with a lever for increasing pressure on both governments and industry to change in support of improved sustainability. From an economic development perspective, one of the potentially fruitful styles of partnership has been between governments and industry through BOT projects - Build, Operate, Transfer. Despite their promise as a means of financing large-scale capital intensive projects, there have been significant difficulties in practice (see Box 12.4).

Box 12.4: Public Private Partnerships

Globally, public private partnerships (PPPs) are an increasingly popular tool governments use to fund large-scale infrastructure projects. Broadly, PPPs involve the investment of private capital and the use of private sector expertise to deliver public infrastructure and services. There are various forms of PPPs. In the power generation sector, popular examples of PPPs are Build-Operate-Transfer (BOT) projects. Private partners (investors) provide the financing and technology, they build, and they operate the power generation facility for a concessionary period of up to 35 years. During the concession, a government partner provides the investor with ownership rights and gradually buys back the project by providing the developer with the right to charge consumers a fee for its product. At the end of the concession period, the facility is transferred to government ownership at no further cost to the government.

BOT projects have enabled developing country governments with growing energy needs to access new financial capital for green or intermediate fuel technologies for power generation. For example, Vietnam is utilizing such investments for natural-gas fired turbines, and Laos is engaging in a large programme of hydropower construction to supply electricity to a regional power grid in the Greater Mekong Sub region. However, BOT projects have also enabled governments to bring on-line more conventional fossil-fuel powered generating capacity in regions where alternative fuels are not available - heavy oils in some regions of China and coal in Thailand.

While PPPs have assisted governments with access to new financial capital and expertise to invest in cleaner power generating capacity, care needs to be taken in evaluating their costs, benefits and risks to governments and consumers. In uncertain investment environments such as that in developing countries, private partners require a range of onerous guarantees from governments to reduce their investment risks over the life of the projects. These include take-or-pay guarantees where governments commit to purchase a minimum level of production, guarantees to cover currency exchange risks, fuel supply price guarantees, political risk guarantees to protect against government regulatory change. In the aftermath of the East Asian financial crisis that began in 1997, governments such as the Philippines and Indonesia, paid a high price for guaranteed power purchases that were denominated in US dollars as their currencies devalued respectively and power demand from industry dropped.

Sources: Estache and Strong, 2000; Handley, 1997; Irwin et al., 1999; Tam, 1999; Wyatt, 2002.

Cooperative environmental governance models offer advantages such as a more structured framework for pluralist contributions to policy, consensus-building, more stable policy outcomes, and social learning. Although these cooperative models allow for more stakeholder participation, it is also suggested that they fail to fully address exclusion of minority and less powerful groups, non-representative outcomes, and a failure to integrate local knowledge. An analysis of waste-to-energy projects in the Philippines and India confirms that such problems will be encountered (Forsyth, 2005).

The notion that partnerships between sectors is the wave of the future was given particular salience by the World Summit on Sustainable Development in Johannesburg, South Africa, in 2002. There, several ‘Type II’ partnerships were launched involving various combinations of governments, business and civil society actors (Najam and Cleveland, 2003; Hale, 2004; Bäckstrand and Lövbrand, 2006). Although too early to evaluate the impacts, these particular partnerships, represent a larger trend in the last decade with a far greater level of partnership activities between governments and NGOs, and between government and business, and now increasingly all three. Such multi-sector forums and partnerships are no longer limited to a few industrialized countries or to particular sectoral mixes. There are now cross-sectoral partnerships and the search for meaningful cross-sectoral partnerships in developing and industrialized countries alike and initiated equally by governments, business and civil society.

Deliberative Democracy: According to Pimbert and Wakeford (2001), various social and political factors have brought support to the use of deliberative processes in policy-making, planning and technology assessments. According to Levine (2000), public debate over issues such as global warming provides the public opportunity to form opinions, where otherwise such an opportunity might not exist. Additionally, deliberative processes provide decision-makers with insight into the public mood and, public deliberation provides the opportunity for the public to justify their views on matters of concern.

Notions of deliberative democracy emerge from the observed shift from ‘government to governance’, in that they refer to shared responsibility for the design of policy. O’Riordan and Stoll-Kleeman (2002) suggest that policy spaces are no longer characterized by hierarchical orders; opportunities have been opened for a variety of forms of public-private cooperation, policy networks, formal and informal consultation, working across scales from multinational to local. The drivers, they suggest, include a need for new approaches to decision-making, occasioned by new mixes of private, public and civic actors.

There are at least five issues that continually challenge social scientists engaged in the design and implementation of participatory mechanisms, such as consensus conferences, focus groups, citizens’ juries, and community advisory boards. These are:

  • Representation – Who and how to select. The challenge is achieving representativeness of a community and establishing the legitimacy of those participating to speak on behalf of others;
  • Resources – Participatory decision-making requires substantial investment by all parties, chiefly, funding and logistical support on the part of governments and business and time on the part of citizens;
  • Agenda framing – Too narrow a framing prejudges the issues, but overly broad framing frustrates closure;
  • Effectiveness – Does citizen involvement have impact on decisions. Disaffection deepens when citizen deliberations are not seen to have traction and people think their time has been wasted;
  • Evaluation – This is seldom done, and when done, is usually self-evaluation of process rather than of outcomes.

Transition Theory: What can loosely be referred to as ‘transition theory’ (Elzen and Wieczorek, 2005) offers another perspective on ‘society – market – state’ relations, but importantly also presents some insights into how societies can shift onto more sustainable paths. Berkhout (2002) observed that energy and climate change policy communities are confronted with a major challenge in the form of shaping a substantially de-carbonized future. This necessitates a better understanding of the links between technologies and the institutions in which they are imbedded (Geels, 2004).

The important questions refer to the factors that impede transitions and, of particular interest to policy communities, how transitions could be induced. Socio-technical systems are often characterized by technological lock-in and path dependency. Actors and organizations become imbedded in interdependent networks and mutual dependencies (Walker, 2000; Berkhout, 2002; Geels, 2004). Elzen and Wieczorek (2005) outline options for inducing innovation under different governance paradigms – the top-down, command-and-control approach (state) a market model, or through policy networks (processes, interactions, networks). Geels (2004) and Smith (2003) approach the same question from a different perspective, both concluding that radical innovations are nurtured in ‘niches’. Thus: “Climate change, for instance, is currently putting pressure on energy and transport sectors, triggering changes in technical search heuristics and public policies” (Geels, 2004). Berkhout (2002) offers that substantial commitment is required from governments and businesses to invoke transitions.

While the literature on transition theory is vague on how to induce innovations, such as those that might bring about a shift onto a more sustainable development path. It usefully emphasizes the importance of interactions among actors/organizations, technology, and institutions. For a shift to a more sustainable path, Smith (2003) provides an important reminder that technical change has traditionally occurred in the context of economic growth. Sustainable development, he suggests, implies that “the problem ordering shifts subtly yet profoundly”, which will establish new challenges in achieving “publicly managed transitions towards environmentally sustainable technological regimes” (Smith, 2003). In the context of climate change, acknowledged in the literature on transition theory as an impetus for technological innovation, this challenge needs to be addressed; this will require new approaches to the governance of technological change and innovation (Berkhout, 2002; Elzen and Wieczorek, 2005).