Are Commitment Devices A Solution To Climate Myopia?

Commitment devices can help close the gap between climate pledges and action by binding policymakers to long-term sustainability goals. While mechanisms like renewable energy mandates and carbon pricing have proven effective, challenges like reduced flexibility and democratic deficits need careful consideration for lasting success.

by Leena Joshi

In the climate space, the chasm between promises and implementation often seems insurmountable. The grandeur of policies and pledges frequently fizzles out when it comes to their execution. But what if there was a mechanism to bind policymakers to their commitments, to ensure that today’s promises translate into tomorrow’s actions? Enter commitment devices.

Understanding Commitment Devices

In essence, commitment devices are institutional arrangements designed to make it difficult  to deviate from a predetermined course of action. They act as a buffer against short-term thinking and impulsive decision-making, particularly in the realm of policymaking. Think of them as the guardrails that keep governments on track, even when political winds shift [1].

Historically, commitment devices have found success in various political arenas. One notable example is the delegation of monetary policy to independent central banks. Countries aim to create stability and credibility in their economic policies by insulating monetary decisions from the volatility of political cycles [2].

The Climate Crisis and Commitment Devices

So, how do commitment devices apply to the climate crisis? Imagine a scenario where governments set long-term targets for carbon emissions reduction and enshrine them into law. These targets could be accompanied by near-term incentives, providing a roadmap for sustainable progress. Such measures align with the concept of ‘precommitment strategies’, advocated by legal scholar Richard Lazarus, which embed protections in legislation to safeguard future generations from the whims of present-day lawmakers [3].

Real-world examples offer glimpses of hope into the potential of commitment devices to address the climate crisis. For instance, in 2018 California passed the 100 Percent Clean Energy Act which requires the state to produce 100% of its electricity from renewable sources by 2045. The state also operates a cap-and-trade system to price carbon emissions. Germany’s Energiewende policy targets a significant share of energy from renewables, supported by the EU ETS and a national carbon pricing system. Sweden’s high carbon tax drives investment in clean technologies, while the UK has set a legally binding net-zero target by 2050 and employs a carbon pricing mechanism. New Zealand’s comprehensive emissions trading scheme and net-zero target by 2050 further illustrate these strategies in action [4][5].

Other compelling examples include international agreements and treaties that impose binding commitments on participating countries to reduce greenhouse gas emissions collectively. The Paris Agreement, for instance, requires countries to prepare and submit Nationally Determined Contributions (NDCs) that outline their commitments to reduce greenhouse gas emissions as part of climate change mitigation. It also establishes mechanisms for monitoring, reviewing, and updating these NDCs, enhancing transparency and accountability among nations [6]. 

Moreover, commitment devices can be tailored to incentivize specific sectors to adopt sustainable practices. For instance, in the agriculture sector, the European Union’s Common Agricultural Policy (CAP) provides subsidies for environmentally friendly farming techniques, such as organic farming and conservation tillage. Additionally, the U.S. Environmental Protection Agency’s (EPA) Agricultural Conservation Easement Program offers financial incentives to farmers who implement conservation practices that reduce emissions and improve land use. These measures encourage positive action and innovation in sustainable agriculture technologies [7].

The Pitfalls of Commitment Devices

Notwithstanding their many advantages, the application of commitment devices in climate governance faces certain challenges. One critical issue is the complexity of international agreements and the potential for non-compliance or withdrawal by key stakeholders. For example, the Paris Agreement lacks hard enforcement mechanisms and relies heavily on the willingness of participating states to uphold their pledges, even amidst periods of political and economic instability. A notable instance is the United States’ temporary withdrawal from the Paris Agreement under the Trump administration in 2020, which underscored the fragility of such commitments. Although the U.S. rejoined the agreement in 2021 under President Biden, the episode highlights how domestic policy shifts can impact international climate commitments [8].

In addition, some argue that commitment devices are associated with a risk of democratic deficit. These mechanisms may limit the scope of democratic deliberation and citizen input by restricting the options available to future governments. Critics argue that such constraints undermine the very essence of democratic governance, where responsiveness to changing public preferences is paramount [9].

In conclusion, commitment devices offer a promising approach to addressing myopic thinking and ensuring the longevity of climate policies. By embedding long-term goals within institutional frameworks, governments can enhance their credibility and offer certainty to citizens. However, careful consideration must be given to the design and implementation of these devices to ensure their effectiveness in addressing the climate crisis. In other words, they need to strike a delicate balance between stability and adaptability, accountability and flexibility. If this balance is achieved, these tools may prove to be indispensable in our fight to address climate change and environmental degradation. 

References:
1. Commitment Devices research paper by Gharad Bryan, Dean Karlan, and Scott Nelson Department of Economics, Yale University, New Haven, Connecticut. https://houdekpetr.cz/%21data/public_html/papers/Bryan%20et%20al%202010.pdf . Accessed on 13/06/2024
2. Monetary Policy and Central Banking, International Monetary Fund. (2023). https://www.imf.org/en/About/Factsheets/Sheets/2023/monetary-policy-and-central-banking accessed on 13/06/2024.
3. Precommitment Strategies. Lazarus, R. (2015), Journal of Environmental Law and Policy, 12(3), 45-68. https://scholar.google.co.in/scholar?q=Lazarus,+R.+(2015).+Precommitment+Strategies.+Journal+of+Environmental+Law+and+Policy,+12(3),+45-68.&hl=en&as_sdt=0&as_vis=1&oi=scholart accessed on 13/06/2024.
4. Renewable Portfolio Standards, U.S. Energy Information Administration (2023). https://www.eia.gov/energyexplained/renewable-sources/portfolio-standards.php. accessed on 13/06/2024.
5. Pricing Carbon, World Bank. (2023). https://www.worldbank.org/en/programs/pricing-carbon accessed on 13/06/2024.
6. Paris Agreement, United Nations Framework Convention on Climate Change. (2015). https://unfccc.int accessed on 13/06/2024.
7. Sustainable Agriculture Practices, Brookings Institution. (2021). https://www.brookings.edu/articles/sustainable-agriculture-practices accessed on 13/06/2024.
8. The Fragility of International Climate Agreements, Brookings Institution. (2021). https://www.brookings.edu/articles/the-fragility-of-international-climate-agreements accessed on 13/06/2024.
9. Democratic Deficit in Commitment Devices, Brookings Institution. (2021). https://www.brookings.edu/articles/democratic-deficit-in-commitment-devices accessed on 14/06/2024.