Global climate governance has an increasingly polycentric character with heterogeneous actors of different scale, constitutional shape and preference profiles interacting and mutually affecting others’ climate actions. Enabling the effective and efficient expression of individual climate policy preferences to ensure a maximum feasible level of global climate policy ambition even in presence of potential veto players is a key challenge for the emerging polycentric climate governance regime. One classical and promising policy instrument for balancing heterogeneous interests and building support for raising climate ambition are transfers. While being a hard-fought point of contention in the bargaining processes in European and global climate negotiations (as exemplified by the Green Climate Fund), the distributional effects of sound transfer rules might transform a diversity of heterogeneous actors into supportive constituencies for ambitious climate policy.
This contribution examines the conceptual and empirical significance of transfers and their redistribution effects for generating support for ambitious climate policy. It considers the EU ETS as one of the most advanced carbon price regimes as a case study asking: What has been the role of cross-country transfers in negotiating the level of ambition of the EU ETS cap and other design features? Were transfers central to persuade reluctant member states to drop resistance and to raise their own climate policy ambition? Did policymakers deliberately aim to create supportive long-term ‘carbon pricing constituencies’ within and across countries? How did the redistribution empirically develop in EU ETS reform processes, how are revenues spent within different countries, and what is the potential for creating further buy-in in ongoing and upcoming EU ETS reforms? Finally, are there lessons to learn from other carbon pricing schemes and relevant strategies for international climate policy, i.e. the emerging climate finance architecture? The case study combines document and media analysis with expert interviews and a literature review to address these questions.
