Capacity to govern climate mitigation in China and Russia

Both China and Russia have experienced difficulties implementing domestic climate mitigation policies. The CAPGOV project examines how well Chinese and Russian leaders can formulate and enforce policies that deliver real greenhouse gas emission reductions. The research focuses on the institutional conditions that prevail below the actual policy-making level, which sets national goals. One of the starting points for the research is the assumption that actions on this level below policy-making have a great impact on the success and failure of climate policies. We propose that mechanisms, which have been possible to establish as a result of the weakness of the formal institutions (rules), and the strength of informal institutions typical for these transforming economies, can partially explain why it has been so difficult to successfully reduce greenhouse gas emissions. We look for mechanisms - patterns that stakeholders follow - typical to the Chinese and Russian systems that are important to the practical outcomes of mitigation policies. How do these mechanisms look like in practice, who is behind them and why, and how do they influence climate policy processes? How are the outcomes of climate policies shaped by these mechanisms? We also ask how these mechanisms differ between the Chinese and Russian systems both in terms of their organization as well as the results of policy processes? This project is based on in-depth case studies that look at climate mitigation policies, such as increasing the share of renewable energy, improving energy efficiency, reducing emissions from associated petroleum gas flaring and establishing an emissions trading scheme. The first case study on Russia focused on limiting the burning (flaring) of associated petroleum gas (APG) - gas similar to natural gas, which is a side product of oil production - in the atmosphere. The Russian government established a rule that maximum 5% of APG could be flared from 2012; in reality this policy goal has not been met. When looking at the dynamics behind the problems to limit flaring, the role of informal institutions is obvious: mixed roles of authorities, gaps and grey areas in legislation, informal interests converted into parts of formal regulations, lobbying, and even bribes and negotiations over fine payments were found. Informal institutions clearly do not support the formal policy goals set by the government. The analysis suggests that the Russian government must approve of the informal activities around the APG law, and perhaps even benefit from them, as it allows them to go on. Still, clear improvement has been achieved by the formal policy as the flaring has been reduced even though the policy goal has not been achieved. The second case study on Shanghai carbon market pilot focuses on the interaction between the local government managing the emissions trading scheme and the companies involved in it. The analysis shows that since the Shanghai local government lacked formal means to enforce compliance, informal communications and discussions gained importance. The local government also responded to the informal information it received by holding an extra auction. In this case it was clear that the culture of keeping good relations with the authorities and regional competition led to full compliance with trading scheme, even when the formal enforcement measures were not particularly terrifying for the companies. Thus, informal approaches were used to support policy implementation. The third case study looks at Russia's 2009 energy efficiency law, which has remained largely unimplemented and has more or less been abandoned as a policy goal over time when the political focus has shifted away from the issue. This has left a large body of legislation and regulations half defined and thus in many cases impossible to implement. Regulations have established energy service companies as legitimate actors, but their activities have been severely handicapped by the unfavorable business environment and the mismatch with existing rules on the energy sector. The public sector has shown some interest in energy saving projects and adjusted hindering formal institutions to facilitate this work. Some informal institutions seem to be supportive of energy saving projects in the public sector. Tax benefits to support energy efficiency, on the other hand, seem mostly declarational as the formal rules and their changing interpretation by courts make these formal institutions redundant. Informal institutions are here mostly working against policy implementation, in many cases through selective use of law. When comparing China and Russia, we have found that informal institutions can both deter and support policy implementation processes. The former case seems to be more typical to Russia, while the latter case we found to apply to China. Further, the role of the state was found to be central to the use of informal institutions in both countries.

outcomes: our updated competency on a theoretical approach novel to us, and to our knowledge first time applied to China and Russia in a systematic and comparative manner. Our competency has also increased in terms of comparing China and Russia on system level. A new PhD. impacts: new networks in case countries which facilitate access to informants; this is particularly important as China and Russia have been limiting such access to foreign scholars recently. A new Norwegian collaborator with whom we are likely to continue cooperation with co-applications. Also new ideas for further research applications and publications. Our public presentations have brought up the institutional approach to Chinese and Russian policy studies both domestically and internationally and will do also in the future.

Both China and Russia have difficulty implementing their domestic climate mitigation policies. The CAPGOV project examines the capacities of China and Russia to govern - formulate and implement - climate mitigation policies that deliver real emission red uctions. The focus of research is the specific institutional environments below the statutory (national goal) level that plays an important role leading to success and failure of mitigation policies. We propose that mechanisms embedded in the weak formal institutions and the strong informal institutions typical for these transforming economies can partially explain the low capacity to govern, and therefore the problems with mitigation policies. We will identify mechanisms created in this particular insti tutional environment that determine the practical outcomes of mitigation policies. How do these mechanisms look like in practice, who drives them and why, and how do they influence mitigation policy processes? How are the outcomes of mitigation policies s haped by these mechanisms? We also ask how these mechanisms differ between China and Russia both in terms of their institutional anchoring as well as the outputs of policy processes? This project will make both empirical and theoretical contributions; it is based on four in-depth case studies of ongoing mitigation policies (including renewable energy and energy efficiency), and develops an institutional component that enables the veto players theory to generate more accurate analysis of the transformin g economies China and Russia.