Climate Policy Diffusion: Interdependence through Economic or Normative Considerations?

Abstract

Climate policy implementation under the Paris Agreement seems to rely on reciprocity and the related social norms connecting participating countries. By contrast, the analysts of interdependent climate policy have sought to explain the interdependence of policy implementation mainly based on economic considerations.

To fill the gap between these two approaches, we evaluate the directions and channels associated with

the policy influence of other countries in reference to both economic and normative considerations.

Drawing on the policy diffusion literature, we analytically develop an empirical model to comprehend

the multiplicity of policy influence—directions and channels.

The multiplicity was only partially examined by previous studies, which focused on the positive and negative complements (e.g., race to the top and bottom) related to economic activities.

Our empirical results identify instead a pattern of substitutive behavior, or free-riding, characterized as policy deterioration, in response to improvement by peers, as well as altruism, as an improvement in response to deterioration.

The former ensues through income competition driven by economic considerations, and the latter through regional ties embracing normative considerations. These results provide an important implication for innovative global climate policy management.

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