Climate policy, ‘just transition’ and the quality of government

In our series on ‘just transition’, Marina Povitkina and Bo Rothstein argue neglected issues around quality of government need addressing to secure public legitimacy.

The challenges which climate change is heralding are nothing if not formidable. Effective policies against this threat to human wellbeing on our planet will imply huge changes for many sectors of the economy and society in general. In November 2019 a global coalition of more than 11,000 scientists warned the earth was facing a ‘climate emergency’, which would cause ‘untold human suffering’ unless drastic steps were taken.

Many industries will cease to exist and many jobs will go. There is no solution to the climate crisis which will not imply huge costs for many sectors and the individuals employed there. Energy, manufacturing, agriculture and forestry, which currently employ millions of workers, will have to undergo serious restructuring.

The ‘just transition’ idea was initiated by the International Trade Union Confederation, fearing that workers would be forced to bear the costs, leading to unemployment and exclusion. The Paris climate agreement refers to the idea, which implies that governments commit to various policies to help workers who lose their jobs obtain new skills or other forms of support. The central question is whether voters will trust that their governments are capable of implementing those policies needed for a ‘just transition’.

‘Active labour-market’ policies

Economic restructuring is nothing new: over the history of modern capitalism, many sectors and branches have shrunk dramatically or even disappeared (agriculture, mining, switchboard operators, typesetters …). In some countries, ‘active labour-market’ policies have been a large part of governments’ ambition to ease the transition for individuals caused by technological innovation, competition from countries with lower wages or other forms of structural change in the economy. These have entailed extensive counselling, resources for retraining and upgrading of skills, help for the unemployed to move to areas with better job opportunities, temporary relief jobs and so on.

This is, however, a type of policy quite difficult to implement. Every person who is, or is likely to become, unemployed is unique, in terms of skills, age, social and family situation, education, ambitions and interests—in short, everything that makes a person suitable for a specific job. Exactly what type of support the individual needs to find a new job cannot be stated in a law or general principles (contrast, for example, pension entitlements).

Instead, the ‘street-level bureaucrats’ who are to implement the policy have to be given a large amount of discretion as to how each unemployed person can best be supported. As is well-known from research about the problems of implementing public policies, such discretion is a sensitive thing when it comes to securing legitimacy for the policy—the unemployed person in question can feel ‘at the mercy’ of the implementing agency.

Quality of government

When it comes to winning support for a policy, this question of the quality of the government institution with responsibility for implementation is very often neglected. People may very well think that a policy in itself is a worthwhile undertaking yet mistrust the government’s ability to implement it in a fair and competent manner. But in obtaining support from voters, this quality-of-government aspect is as crucial as their ideological orientation.

The Swedish sociologist Stefan Svallfors has explored survey data for 29 European countries, including questions about the fairness and competence of public authorities (public health and tax) and respondents’ ideological leanings and policy preferences. He has shown that, overall, there is a preference for more economic equality—and a respondent in a country where he or she believes these two authorities are basically just and competent will affirm willingness to pay higher taxes for more social spending. In a country where citizens perceive these two institutions are treating people unfairly or lack competence, however, the same leftist ‘ideological type’ of respondent will prefer lower taxes and less social spending.

We find the same pattern when it comes to support for policy measures addressing climate change. For example, carbon taxes are recognised to be one of the most cost-effective tools to reduce greenhouse-gas emissions, yet numerous studies in political-opinion research show that people often do not support carbon taxes if they do not trust their governments.

In their recent study of 23 European countries, the sociologists Malcolm Fairbrother, Ingemar Johansson Sevä and Joakim Kulin show that, while most Europeans (78 per cent) believe in anthropogenic climate change and worry about its dangers, only a minority (33 per cent) support increasing taxes on fossil fuels. The researchers convincingly demonstrate that people concerned about climate change and its effects only support carbon taxes if they trust their governments. Similarly, the political scientists Dragana Davidovic, Niklas Harring and Sverker Jagers show that leftist political ideology only explains support for environmental taxes in countries with high governmental quality but does not matter in contexts with low quality of government.

Rule of law

For environmental taxes to gain more public support, political leaders can consider various types of targeted compensation: tax rebates or redistribution to improve fairness, subsidies for using ‘green’ electricity or switching to electric and hybrid cars, more information and educational programmes about the advantages of protecting the environment. Such reward-based measures are better supported in countries where people trust their governments and each other more—coercive measures, such as heavy fines, being more popular in less-trusting countries. Nevertheless, to be successful, all these instruments require effective implementation, which is hard to achieve without a competent, largely non-corrupt public administration and a strong rule of law.

If there is one thing the current wave of populist politicians have in common, it is they attack precisely the competence, honesty and fairness of the public institutions with the responsibility for implementing public policies. The populists often point to issues related to corruption and incompetence when they attack policies for achieving climate change. Addressing these quality-of-government concerns is thus paramount if there is going to be support for policies to address climate change as such, and the ‘just transition’ measures that will follow.