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Guglyuvatyy, Evgeny --- "Identifying Criteria for Climate Change Policy Evaluation in Australia" [2010] UNSWLRS 25

University of New South Wales Faculty of Law Research Series

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Identifying Criteria for Climate Change Policy Evaluation in Australia [2010] UNSWLRS 25 (2 July 2010)

Last Updated: 2 September 2010

Identifying criteria for climate change policy evaluation in Australia


EVGENY GUGLYUVATYY, UNIVERSITY OF NEW SOUTH WALES


CITATION

This article was published in the Macquarie Journal of Business Law (2010) Vol 7 98-130.


ABSTRACT

This paper relates to the research project designed to identify which tool: an emission trading or carbon tax would be more appropriate measure to reduce GHG emissions in Australia. To evaluate both of these instruments, this research uses the multi-criteria analysis (MCA) which generally requires two main inputs – evaluation criteria and alternatives performance ranks concerning the criteria. To obtain and verify the evaluation criteria specific to Australian conditions and rank relative importance of those criteria, the Delphi method is utilised by this research. The Delphi study makes use of a group of Australian experts to verify, update and weigh the criteria essential for policy evaluation procedure. This paper reports upon the conducted Delphi study and presents its findings.


I INTRODUCTION


Many countries have implemented taxes and/or emissions trading to address various environmental pollution problems including climate change. In particular policymakers in several OECD states have adopted emissions trading to reduce GHG emissions. For example, in the European Union, emissions trading scheme (ETS) has been in operation since 2005 while some other countries such as Australia, the US and Canada consider its implementation. Environmental taxes, in turn, have been implemented in a number of countries to decrease various emissions. However, only a few nations have opted to introduce an explicit carbon tax. Several EU member countries, particularly Scandinavian nations, have implemented carbon and energy taxes to control GHG emissions.[1]


A number of economists and legal scholars suggest that a carbon tax is a better approach to climate change mitigation. [2] Other scholars consider emissions trading to be a superior option.[3] Politicians and policymakers have a tendency to prefer ETSs. As a result, there is a debate on which instrument is better suited to address the climate change issue: carbon tax or emissions trading. There is a lot of general guidance on how to evaluate and select among policy instruments but these guidelines are neither uniform nor concrete. This is not surprising, given that climate change is a complicated policy area with many interacting variables. The conceptual and empirical challenges are exacerbated by the absence of well-defined criteria and an objective procedure for attributing weights to the competing criteria.[4]


Many researchers agree that to select an optimal instrument the policies should be first evaluated regarding the set of definite criteria.[5] Evaluation of policy instruments needs to be undertaken with due consideration of the specifics of climate change issues, otherwise there is a serious risk that policy will be ineffective. This would be the case if not all the related factors were considered and thus some evaluation criteria might be omitted.[6] Identifying criteria for policy evaluation is a task that has progressively occupied scholars and policy-makers in recent years. Numerous institutions, academics and policy-makers have developed various lists of criteria potentially applicable to climate policy evaluation. However, there is no mutual agreement on precisely what criteria an optimal climate change policy should satisfy.[7] This paper reports on study utilising the Delphi method to assess a set of criteria. In particular, the Delphi study is conducted to verify the list of the criteria for evaluation of GHG reduction policies and to examine relative importance of these criteria in Australian context.


II CRITERIA FOR CLIMATE CHANGE POLICY EVALUATION


The evaluation criteria are typically determined as a result of analysis of literature and/or discussions with decision makers, stakeholders and/or experts. Keeney and Raiffa (1976)[8] argued that the established criteria should satisfy five principles: completeness, decomposability, non-redundancy, operational feasibility, and minimum size. More recently, Pomerol and Barba-Romero (2000)[9] suggested that out of these five principles, completeness (all of the criteria necessary for particular decision problem have been identify); and non-redundancy (all of the identified criteria are critically needed)[10] are fundamental for the quality of any MCA application. A complete and non-redundant set of criteria should be determined to express all the aspects to be considered in the decision.[11]


This study identifies evaluation criteria on the basis of existing literature and similar studies assessing climate change policies. Furthermore, to satisfy the principles of completeness and non-redundancy this study suggests testing identified criteria by means of the Delphi study. The Australian experts involved in the Delphi will examine the selected criteria with a view of updating and verifying the list and confirming the completeness of the criteria list. This approach is expected to induce an additional objectivity and bring an essential Australian perspective to the study.


The Australian experience with GHG reduction policy is rather recent while there was a range of evaluation studies concerning climate policy during the last 20 years. The first evaluation of GHG reduction policies applying specific criteria were conducted in Netherlands in 1990s (Table 1).[12] Later in 2000s the Government of New Zealand performed the evaluation study aimed to find appropriate climate policy options to comply with the Kyoto protocol.[13] The IPCC also recommended a range of criteria to support decision makers in identifying optimal climate change policies.[14] There were a few ex-post evaluations of GHG reduction policies in Europe (Denmark, Finland, Netherlands, Finland and Sweden). However, most of these evaluations were ex-post rather than ex-ante (except for New Zealand) and aimed to assess certain aspects of policies thus applying limited number of criteria (Table 1).


Table 1 Criteria of evaluation (practice)


Evaluators
Used sets of criteria
Evaluation of
Governmental departments of Netherlands (1990)
Cost effectiveness, equity, flexibility, transparency
Netherlands GHG mitigation policies
Hoerner and Muller (1996)
Effectiveness, environmental incentive, administrability, fairness (actual and perceived) and revenue loss
Carbon taxes
Pearce and Howarth (2000)
Causal, efficiency, equity, macro-economic and jurisdictional
Climate policy instruments
Perrels (2000)
Social cost, used potential, compliance risks, distribution effects and public/administrative cost
Finnish climate policy
Government of New Zealand (2001)
Economic efficiency, equity, feasibility, environmental
New Zealand’s climate change mitigation policies
IPCC (2001)
Environmental effectiveness, cost effectiveness, distributional considerations, administrative and political feasibility
Climate change mitigation policy options
Kete and Petkova (2001)
Environmental outcomes, economic/social outcomes, technical outcomes, institution building potential, project sustainability, dissemination/replication potential
National case studies (Central and Eastern Europe), climate mitigation policies and measures
Philibert and Pershing (2001)
Environmental effectiveness, cost effectiveness, contribution to economic growth and sustainable development, and equity
Fixed, binding, dynamic, non-binding, sectoral targets, policies and measures for climate change mitigation policy
Sorrell (2001)
Environmental effectiveness, static economic efficiency, dynamic economic efficiency, administrative simplicity, equity, transparency and participation, political acceptability
EU-ETS, national climate policy instruments (France, Germany, Netherlands, UK, Greece) and policy interactions
Ministry of Housing, Spatial Planning and the Environment (the Netherlands) (VROM) (2002)
Cost effectiveness, efficiency, innovation, implementation according to schedule, certainty of the intended emission reductions
National climate policy
Johannsen (2002)
Static concerns, dynamic concerns, institutional demands on the regulator and regulatee, political dimensions, risk.
Danish agreements scheme on energy efficiency in industry
Torvanger and Ringius (2002)
Responsibility, need, capacity, universal applicability and simplicity, easiness of making it operational, allowance for future refinements, allowance for flexibility and allowance of country-specific circumstances
Burden-sharing rules in international climate policy
Aldy et al. (2003)
Environmental outcome, dynamic efficiency, cost effectiveness, equity, flexibility, in the presence of new information and incentives for participation and compliance
Global climate policy architectures
VROM (2005)
Cost effectiveness, administrative costs, innovation, differentiated responsibilities
Package of domestic climate policy instruments
Germany’s Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) (2005)
Ecological effectiveness, investment security, socially acceptable, cost efficiency, administrative effort, openness
Renewable Energy Sources Act
Ericsson (2006)
Competitiveness, cost efficiency, side-effects (free riding), effectiveness, flexibility
Danish agreements scheme on energy efficiency in industry
Konidari and Mavrakis (2007)
Environmental performance (which includes: direct and indirect environmental effects), political acceptability (which includes: cost efficiency, dynamic cost efficiency, competitiveness, equity, flexibility, stringency for non-compliance), cost effectiveness (which includes: implementation network capacity, administrative feasibility, financial feasibility).
EU ETS performance

Sources: IPCC (2001), Ericsson (2006), Konidari & Mavrakis (2007) and others named in the table. [15]


Another important study conducted by the US Government Accountability Office (GAO) focused on experts’ opinions concerning climate change economic policy options.[16] The group of qualified experts was asked in particular to identify and rank criteria for evaluating GHG reduction policy options.[17] This study is probably the only one making the most of highly ranked professionals to facilitate appraisal of climate change policy options and thus represents an indispensable source. In particular, the experts in this study identified the following criteria:


  1. Cost-effectiveness
  2. Political feasibility
  3. Flexibility to allow decision makers to adapt the actions/policies based on new information
  4. Economic efficiency
  5. Environmental effectiveness
  6. Predictability/regulatory certainty
  7. Positive effect on international negotiations or actions by other countries
  8. Effect on technology development or deployment
  9. Transparency
  10. Administrative ease/simplicity
  11. Implementation costs associated with the action or policy
  12. Risk and uncertainty associated with thresholds or abrupt changes
  13. Minimize rent seeking
  14. Independence from political influence
  15. Minimize emissions leakage
  16. Distribution of benefits and costs across income groups in the U.S.
  17. Distribution of benefits and costs across countries
  18. Distribution of benefits and costs across U.S. economic sectors
  19. Distribution of benefits and costs across generations
  20. Distribution of benefits and costs across income groups in different countries
  21. Distribution of benefits and costs across income groups in different generations

Some of the criteria identified by the GAO study will be adopted by this research, although it should be noted that most of the experts recruited by the GAO are economists and therefore, it seems that economic related criteria are prevailing in the list. Some essential criteria are not on the GAO’s list whereas others seem to be valued on the basis of their economic benefits more than anything else. Thus, this study’s selected criteria differ from the GAO’s list of criteria.


This study’s aspiration is to identify all essential criteria and distinguish those frequently used for appraisals concerning carbon taxes and ETSs. The list of the criteria is cautiously developed by adjusting the criteria applied in GAO (2008)[18] study and complementing them with the concepts in some other studies, including Konidari and Mavrakis (2007)[19] in EU ETS evaluation, Aldy et al. (2003)[20] in economics, IPCC (2001)[21] and Sorrell (2001)[22] in climate policy and other studies. The identified criteria are kept at a high level of abstraction. Furthermore, the criteria are independent meaning that the contribution of any single criterion to the total score of an option is autonomous from other criteria values. The preliminary criteria list (Table 2) is considered to be complete and each criterion is comprehensive, measurable and non-redundant. Some of the criteria presented in table 2 reflect the general principles of rational climate change policy, but the others are frequently excluded from the discussion on GHG reduction policy options.


Table 2 Preliminary list of the criteria for climate change policy evaluation


Selected criteria
  1. Environmental effectiveness
  1. Cost-effectiveness
  1. Correct price signal
  1. Competitiveness issues
  1. Administrative costs
  1. Compliance costs
  1. Predictability/regulatory certainty
  1. Effect on technology development
  1. Minimise rent-seeking
  1. International harmonisation
  1. Flexibility of the policy
  1. Political acceptability
  1. Transparency
  1. Distribution of benefits and costs across income groups
  1. Public acceptability
  1. Distribution of benefits and costs across generations

Generally, decision making process, akin to MCA, requires assessing criteria weight. A criterion weight may be defined as a value which specifies its importance relative to other considered criteria and indicate the concern of the decision maker about the criterion importance.[23] The criteria weights can significantly influence the final results of policy evaluation.[24] Even a minor alteration of weights can result in a different ranking of the options. Thus, applying weights to criteria requires great attention.[25]


The weights may be obtained directly from the decision maker, stakeholders or may be developed by applying appropriate methods. Nonetheless, it is very difficult to obtain objective quantitative weights, as knowledge and the confidence are typically rare.[26] Criteria weighting is sensitive to the expressed preferences of decision makers or stakeholders which adds an additional subjectivity to the outcome. Considering this it is necessary to limit the degree of subjectivity in weighting process for this purpose some policy evaluation procedures involve experts. Employing experts instead of decision makers or stakeholders is expected to bring an element of unprejudiced and objective assessment of the required information.


There is an argument that decision makers tend to assess the criteria alongside a common background of evidence and experience that is susceptible to focus decision makers towards largely parallel assessments.[27] In the context of the climate change policy making, multidisciplinary approach is absolutely vital. Therefore, it is logical to suggest that a group of experts representing various disciplines can increase objectivity of the criteria assessment and consequently, the validity of the policy evaluation results.


The opinions of experts are needed as an input in many policy areas in which objective data is unavailable and subjective judgements play a significant role.[28] Given that individual experts may hold widely differing opinions, it is logical to seek a consensus of opinions of a panel of experts. The value of consensus-forming techniques is based on the assumption that opinions of a group of experts will be more accurate than opinions of individual experts; correcting for individual bias.[29] Moreover, since climate change policy should be assessed considering stances of different disciplines it is rational to apply consensus-forming method such as Delphi.


III THE DELPHI METHOD


The Delphi technique is a process for forecasting future events by means of a series of questionnaires combined with controlled-opinion feedback.[30] The aim of most Delphi applications is the examination of ideas as well as the creation of appropriate information for decision-making.[31] The Delphi method is a structured process for accumulating knowledge from a pre-selected group of experts via a series of surveys.[32] The method is equipped to handle a complex problem or task in a systematic way. The questionnaires could be sent, for example, by mail or via computerised systems. The questionnaires are designed to obtain personal responses to the issues posed and to allow the experts to verify their views. According to Turoff and Linstone (2002),[33] the major characteristics of Delphi are anonymity, controlled feedback, and statistical response.


The Delphi technique could commence the process with a set of carefully selected options. These pre-selected options may be drawn from various sources including related reviews of the literature and practice.[34] The primary advantage of a Delphi activity, which starts with a selected set of options, is that it increases the opening round response rate, and facilitates a solid foundation in earlier work.[35] In the context of the present study, the Delphi technique with a set of pre-selected options appears to be the most suitable approach.


However, the Delphi method has been criticised on the basis of soundness and reliability of its application. Sackman (1974)[36] suggested that the Delphi technique is unscientific, and therefore inherently misleading, and there is no possible way to improve it. Also, some authors have raised issues related to the selection of experts; for example, their origin, their individual bias and the reason for them to be considered experts.[37] There are several other issues, such as potential administrative complexity and low response rate, that require attention before conducting a Delphi study.[38] On the other hand, there have been several studies supporting the Delphi method. A study conducted by Basu and Schroeder (1977)[39] reports that the Delphi forecasts were 10–15 percent more precise than quantitative methods of forecast. In general, the Delphi method is useful when its results are serving as inputs for further analysis.[40]


A significant aspect of the Delphi study is a selection of participants. It is suggested that the Delphi respondents should be well informed in the appropriate area.[41] Concerning the appropriate number of participants needed to be involved in the Delphi study, the literature differs. The number of participants is usually dependent on the study design (Brockhoff 1975).[42] Brockhoff (1975)[43] argues that, under perfect conditions, groups as small as four can achieve good results. Ludwig (1997)[44] notes that the approximate size of a Delphi panel is generally under 50. Many researchers agree that the greater part of the Delphi studies recruited between 10 and 20 respondents.[45]


The individuals selected for this study are experts in the fields related to climate change policy. Evaluation of climate change policy evidently involves a number of disciplines such as environmental sciences, politics, law, human geography, economics, and others. Accordingly, a comprehensive analysis of policy options would require interdisciplinary research. Every discipline tends to be preoccupied with its own realm of concerns; an interdisciplinary approach, on the other hand, could combine knowledge from a number of subject areas. In this mode it would work towards a broad understanding and analysis of climate change policy. Therefore, using different types of panellists to react to the complexities of the issues would provide unique perspectives of interdisciplinary specialised opinions.


IV THE DELPHI PROCEDURE


The two-round Delphi study was conducted targeting a group of 30 experts, who were selected to represent different viewpoints between the experts from various disciplines related to climate change debate. The membership of the panel is perhaps the most critical point in using the Delphi. The effective selection of the panel not only maximises the quality of responses, but also gives the results of the study a credibility with the wider audience.[46] Experts are qualified through their knowledge, skill, experience, training and education; therefore, to select the experts for this research the following decisive factors were considered:


The group of experts composed policy professionals, economists, and academics. The individuals selected to participate in the inquiry were considered to satisfy the requirement to be an experts in the field of climate change volunteering to participate due to their interest in the topic and their own perceived ability to make a significant contribution.


It is important that respondents are provided with a brief account of the origin of the research topic that the Delphi study is focusing on and the investigation procedures to be used. In this way, participants are better informed about the rationale for the study and the questions. Close attention is paid to the structure and content of the first round of questions, as this will affect the rest of the study. The critical aspect of the Delphi - questionnaire is designed to minimise ambiguities. Closed ended-questions and five points Likert scale are utilised for the first part of questionnaire and open-ended questions for the second part. On the one hand, the experts assess the criteria weights in measurable numerical term which is significant for the aims of this study, besides, it provides an extra data on change and variability of experts’ views. On the other hand, the open-ended question provides the experts with opportunity to convey their views thus, facilitating in-depth analysis of the criteria. Hence, the Delphi study endowed with required quantitative information on criteria weights and qualitative data necessary for in-depth analysis. Finally, it is important that this Delphi study strives for stability rather than consensus. In this way, divergent opinions can be acknowledged and included in the findings.


V CONDUCT OF THE DELPHI STUDY


The Delphi rounds commenced on October 22, 2009 and closed on January 31, 2010. The Delphi study was prepared using two rounds with questionnaires. For round one, the invitation letters and questionnaires were sent via email to the experts’ addresses at same time on the same day.


When the respondents returned the questionnaire from the first round, the results were collated and analysed. The 11 experts responded to the first round representing Australia wide and internationally recognised specialists bringing high level of expertise to the study. In particular, three of the Delphi experts have contributed to the recent report of the Inter-Governmental Panel on Climate Change (IPCC) Fourth Assessment Report 2008 which is leading in the climate change field. One of the experts has been the coordinating lead author for the ocean chapter in the IPCC report. Another expert is former director of the United Nations’ World Climate Research Programme. The other expert has served as science adviser to the Department of Climate Change of the Australian Government. However, all of the participants currently represent experts from the Australian institutions which is essential for this study.


In the questionnaire for the first round, the respondents were asked to think of the potential criteria for the climate change policies and then to verify and update the proposed 16 criteria required for policies evaluation in the Australian context. An explanatory note was appended with each criterion to provide a quick definition (appendix 3). The second question seeks participants’ views on importance of those criteria. Based on their experience, experts were asked to weigh these criteria in terms of importance of consideration in the process of evaluation and selection climate change policy for Australian. The experts were asked to weigh each criteria based on a standard rating scale 1-5, where -1 indicating not at all important or considered least necessary criteria and -5 indicating extremely important, and/or most critical criteria. During the first round, panel members were asked to add any criteria or suggestions which they believed would be imperative for the climate change policy evaluation process. The panel members were allowed to ask any questions regarding any ambiguities of the weightings or criteria and definitions.


The first round responses of the Delphi study were tabulated and analysed using a distribution ranking table to annotate the necessity and the average weighting of each criteria as indicated in tables 3 and 4 below. Experts were denoted by alphabetical letters.


Table 3 - The necessity of the criteria


The necessity of the criteria assessed by experts
Criteria
A
B
C
D
E
F
G
H
I
J
K
% of YES answers
Environmental effectiveness
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
100.00
Cost-effectiveness
Y
N
Y
N
Y
Y
Y
Y
Y
Y
Y
81.82
Correct price signal
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
90.91
Competitiveness issues
N
N
Y
Y
Y
N
Y
N
Y
Y
N
54.55
Administrative costs
Y
N
Y
Y
Y
Y
Y
N
Y
Y
N
72.73
Compliance costs
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
90.91
Predictability/ regulatory certainty
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
90.91
Effect on technology development
Y
Y
Y
Y
N
Y
Y
N
Y
Y
Y
90.91
Minimize rent-seeking
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
100.00
International harmonization
Y
N
Y
Y
N
Y
Y
N
Y
Y
Y
72.73
Flexibility of the policy
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
100.00
Political acceptability/ feasibility
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
100.00
Transparency
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
90.91
Distribution of benefits and costs across income groups
Y
Y
Y
Y
N
Y
N
Y
Y
Y
Y
81.82
Public acceptability
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
100.00
Distribution of benefits and costs across generations
Y
Y
Y
Y
N
N
Y
Y
Y
Y
Y
81.82

There were none of the criteria identified as unnecessary by more than 50 percent of the participants. Interestingly, the lowest desirability was associated with the criterion which is frequently prioritised by policy-makers, namely, competitiveness issues. However, since 54.55 percent of the panel members consider competitiveness as essential, it is suggested that this criterion need to be considered. There were five of the criteria regarded as indispensable for climate change policy evaluation by all of the panel members these are: environmental effectiveness, minimise rent-seeking, flexibility of the policy, political acceptability/feasibility and public acceptability criteria. Hence, the absolute consensus has been reached by the panel members concerning only these five criteria. The rest of the criteria have been assessed as essential by the majority of the panel members. Overall, there was a high level of agreement concerning necessity of the proposed criteria except for competitiveness issue.


Table 4 The importance of the criteria weighted by experts (round 1)


The importance of the criteria weighted by experts

Experts weighting (experts denoted by alphabetical letters)

Criteria
A
B
C
D
E
F
G
H
I
J
K
Average
Environmental effectiveness
3
5
5
5
5
4
3
5
5
5
5
4.54
Transparency
5
2
3
5
4
4
5
5
4
5
4
4.18
Minimize rent-seeking
5
3
4
5
4
2
4
5
4
5
3
4
Correct price signal
5
1
4
5
5
5
4
5
3
3
3
3.90
Flexibility of the policy
3
4
4
4
5
4
2
3
5
4
5
3.90
Predictability/regulatory certainty
5
1
4
2
5
5
2
3
4
5
3
3.54
Political acceptability/ feasibility
3
3
4
2
3
4
4
5
4
2
4
3.45
Public acceptability
3
4
4
3
3
3
2
4
5
3
4
3.45
Effect on technology development
4
3
4
5
1
4
2
1
4
4
4
3.27
Cost-effectiveness
5
1
4
0
5
4
3
2
4
4
2
3.09
Compliance costs
4
2
4
3
4
3
2
3
3
2
4
3.09
Distribution of benefits and costs across generations
4
4
4
5
1
2
2
3
2
2
5
3.09
Distribution of benefits and costs across income groups
3
4
4
3
1
3
1
4
3
2
3
2.81
Competitiveness issues
1
2
4
2
5
3
2
1
3
3
2
2.54
International harmonization
3
2
4
1
1
2
3
1
4
3
4
2.54
Administrative costs
4
2
3
2
4
2
3
1
2
2
2
2.45

The assessment of importance of the criteria by panel members has also brought some unexpected results. In particular, surprisingly, the administrative costs is weighted as least important criterion. Similarly, the competitiveness and international harmonisation criteria are regarded only slightly more important than administrative costs. On the contrary, transparency, frequently ignored by policy makers, is assessed as second most important criterion following the environmental effectiveness which is widely accepted as one of the most critical criterion. The rest of the criteria have been evaluated in a range of 2.82 to 4 median weights. However, the second round of the Delphi study might change the criteria weights.


The panel members were also asked to add any other relevant criteria. There were suggested 17 new criteria related to climate change policy (table 5).


Table 5 The criteria suggested by experts


Criteria
Need to assess the social benefits and costs of different targets in choosing the target.
Precautionary Principle
Polluter Pays Principle
Human Rights
Public Participation
Collateral damage of policy (for example, does it cripple voluntary mechanisms)
That policy does not depend on subtle omissions and manipulations such as those that contaminate the DCC and ORER websites to cover up that businesses and individuals cannot reduce National emissions under the proposed CPRS.
Credibility
Bipartisan support (different to just government acceptable above)
Speed of effect of policy implementation on environment
Correct price signal need to be transferred to business not just to consumers
Timeframe the need for effective action immediately
Adaptable to respond to the latest science
Does not disproportionally burden the socially disadvantaged
Mitigation is verifiable, verified and permanent (no leakage)
Appropriate science basis to support the policy decisions and criteria
Climate Services that support policy and maintain the regulatory framework

Some of the suggested criteria are closely associated with the criteria identified by this study and presented to the Delphi panel members for consideration. Several of the proposed criteria might be considered as new to this study, however, many others narrate to the actual design of the climate change policy and supplementing mechanisms. Nevertheless, for the rationale of transparency and completeness all of these criteria are presented for the consideration of the experts in the second round of the Delphi study.


The second round of the Delphi study has commenced on January 7, 2010. The summarised responses to the round one questions from the experts have been included in the second round questionnaire (appendix 5) attached to the invitation letter. All 11 experts responded to the second round. The fundamental aspect of the Delphi process is that experts could revise their previous answers if they wished to do so and comments are still welcome. Thus, in the second round, the first question asked the panel members to review the summarised criteria weighting of the entire panel and reconsider whether they would make any changes in their weighting accordingly. In the first round, the panel members have recommended 17 new criteria which were presented in the second round questionnaire to identify opinions and obtain comments of the experts concerning these criteria.


The purpose of the second round was to create a consensus among the experts and/or to achieve the stability of the results. In addition, the second round increased the opportunity to get a deeper perspective on the evaluation criteria. After the respondents had completed these questionnaires, the material was collected and processed. The following section reports on the results of the Delphi study and analyses the criteria suggested by the experts.


VI RESULTS OF THE DELPHI STUDY


In interpreting the results of this study, one should be aware of its limitations. One of the shortcomings of the Delphi method is that it offers little insight in the reasoning underlying the participants’ responses. To reduce the negative impact of this condition, the participants were encouraged to discuss and comment on the criteria and their weighting. The anonymity of the participants relieves them of accountability and can lead to intrepid and honest responses.


Table 6 illustrates the criteria weightings and resulted average. Most of the panel members made changes to their weighting from the first round questionnaire and only two experts left their original responses unchanged. However, as mentioned above, there was a considerable level of agreement in experts’ responses concerning necessity of evaluation criteria proposed by this study. Furthermore, as the average weightings by and large remained the same (table 6), one can assume that a reasonable level of stability has been reached regarding the importance of the criteria.


Table 6 Comparison of weighting average


Criteria
Average (Round 1)
Average (Round 2)
Dynamics
Environmental effectiveness
4.54
4.63
Transparency
4.18
4.27
Minimize rent-seeking
4
4.09
Correct price signal
3.90
4.00
Flexibility of the policy
3.90
3.90
unchanged
Predictability/regulatory certainty
3.54
3.45
Political acceptability/ feasibility
3.45
3.45
unchanged
Public acceptability
3.45
3.54
Effect on technology development
3.27
3.36
Cost-effectiveness
3.09
3.27
Compliance costs
3.09
3.09
unchanged
Distribution of benefits and costs across generations
3.09
3.27
Distribution of benefits and costs across income groups
2.81
3.00
Competitiveness issues
2.54
2.45
International harmonization
2.54
2.36
Administrative costs
2.45
2.45
unchanged

Table 6 demonstrates that average weightings of four criteria remained unchanged from round 1. The relative importance of nine criteria has grown in the second round and only three of the proposed criteria were downgraded by the Delphi experts. In general, the consensus concerning all criteria weights was not achieved, though, the dynamics of criteria’s weights alterations illustrates relatively stable results of the study. That in turn leads to the conclusion that the obtained data is well-established and reliable.


To validate this point the resulted criteria weights were tested for the level of deviation by means of a descriptive statistic, namely, standard deviation test. Standard deviation is a widely utilised measure of the variability (dispersion).[47] It allows identifying how much variation there is from the average. A low standard deviation indicates that the data incline to be very similar to the average, whereas high standard deviation signifies that the data are remote from the average. Standard deviation could be used as a measure of uncertainty.[48]


Using Statistical Package for the Social Sciences (SPSS) software for Windows (SPSS Version 18, 2010), the weights deviation within the group was measured. The weights deviation allows analysing the difference in weights given by experts to single criterion. That, in turn, highlights the level of agreement among experts concerning importance of particular criterion. If the group agrees perfectly the deviation is 0.0 and it has value 2.6 if experts disagree maximally. The lower deviation in weights the higher level of consensus was achieved by the group. This is better illustrated by the following table 8. The group reached the highest level of agreement concerning the importance of public acceptability criterion where the deviation in weights is only 0,52223 followed by environmental effectiveness (0,67420), administrative costs (0,68755) and compliance costs criteria(0,70065). On the contrary, the cost-effectiveness (1,48936), effect on technology development (1,43337) and predictability/regulatory certainty criteria (1,36848) weights deviations were the highest that identified lower level of consensus. Except for the three mentioned criteria only four criteria’ deviations have exceeded 1.0. Nonetheless, overall weights deviations for the majority of criteria were lower than 1.0 which shows considerable level of agreement achieved by the group.


Table 7 Weights deviations


Criteria
Minimum weight
Maximum weight
Average weight
Standard deviation
Environmental effectiveness
3,00
5,00
4,63
0,67420
Transparency
2,00
5,00
4,27
0,90453
Minimize rent-seeking
3,00
5,00
4,09
0,83121
Correct price signal
1,00
5,00
4,00
1,26491
Flexibility of the policy
2,00
5,00
3,90
0,83121
Public acceptability
3,00
4,00
3,54
0,52223
Political acceptability/ feasibility
2,00
5,00
3,45
0,93420
Predictability/regulatory certainty
1,00
5,00
3,45
1,36848
Effect on technology development
1,00
5,00
3,36
1,43337
Cost-effectiveness
1,00
5,00
3,27
1,48936
Distribution of benefits and costs across generations
2,00
5,00
3,27
1,19087
Compliance costs
2,00
4,00
3,09
0,70065
Distribution of benefits and costs across income groups
1,00
4,00
3,00
1,00000
Competitiveness issues
1,00
5,00
2,45
1,29334
Administrative costs
2,00
4,00
2,45
0,68755
International harmonization
1,00
4,00
2,36
1,28629

The 16 criteria’s importance values in percentage are graphically presented in figure 1. The results indicate that some criteria were considerably more important than others. The four most important criteria were (in order): ‘environmental effectiveness’, ‘transparency’, ‘minimise rent-seeking’ and ‘correct price signal’. They had importance values of 80 percent and above, which means that the four criteria contribute significantly to the climate change decision-making. The ‘international harmonization’ was the least important criterion with ‘administrative costs’ and ‘competitiveness issues’ the second least important criteria with importance values of 49 percent. It pointed out that these three criteria contribute notably less to the decision-making. Most of the costs related criteria are appear to be of approximately equivalent importance. They clustered together with importance values from 60 to 65.4 percent except for administrative costs criterion which was valued at 49 percent.


Figure 1 Criteria's importance value
2010_2500.png


All 11 panel members thought that the ‘environmental effectiveness’ criterion is indispensable for the climate change policy evaluation. This criterion is frequently distinguished as extremely important, not surprisingly, the group positioned environmental effectiveness as most critical with 92.6 percent of importance value. Indeed, any environmental policy should be assessed foremost with reference to its perceived ability to address the main task, namely, environmental goal. To emphasise this point one of the panel members made the following comment:


I would suggest a more even balance between criteria on effectiveness of any policy for climate change mitigation and climate change adaptation outcomes, relative to criteria on costs and acceptability. A cheap policy that is acceptable but achieves little on climate change mitigation or environmental effectiveness may be worthless i.e. satisfies all criteria except the first and maybe the last.


Most of the panel members support this point by giving this criterion the highest weight (5). Only one panel member assessed this criterion as moderately important (3) and the other two assessed it as quite important (4). Nonetheless, on average there was a high level of agreement that this criterion is the most important among all other criteria. The standard deviation in experts’ weights is only 0.67420 for this criterion.


The second most important criterion is ‘transparency’. This is unexpected finding of the study considering that policy-makers and economists often tend to underestimate this criterion. For example, Garnaut review does not pay much attention to this criterion. However, the panel members judged ‘transparency’ as very important for climate change policy-making with value of 85.4 percent. Only one of the experts suggested that this criterion is somewhat important (2). The rest of the experts weigh this criterion relatively similar whit deviation of 0.90453 that demonstrates high degree of consensus.


The following criterion ‘minimise rent-seeking’ is closely linked with transparency of the policy.[49] The more transparent and open policy-making process and a policy are the less opportunity exists for lobbyism and rent-seeking. The importance of this criterion can be demonstrated with an example of ACPRS. The initial design of the ACPRS introduced in the Green Paper has been criticised for providing considerable compensations to the energy intensive industries. After the latest revision of the proposed ACPRS the energy intensive industries would receive even more free emissions permits and cash compensations. This is said to be directly associated with lobbying activities of the industries and rent-seeking. As a result the ultimate goal of the ACPRS – its effectiveness in reducing GHGs has been severely deteriorated. One of the panel members has commented that:

Currently, the issues that we need to discuss are buried and we don’t have sufficient quality reporting of policy issues that are important. The CPRS concept has been compromised to the extent that it won’t work and doesn’t provide anything close to least cost solutions.


Minimise rent-seeking as well as transparency of the policy will undeniably influence the design of the policy but more importantly these criteria will directly affect the ultimate target and effectiveness of the policy in achieving that target. Therefore, the rational for prioritising these two criteria by the Delphi group is utterly logical. The Delphi exerts valued this criterion at 81.8 percent and only three of the experts weighted it as moderately important that demonstrates certain consensus among panel members on importance of this criteria. It is confirmed by relatively low standard deviation in experts’ weights of 0.83121.


The next in order of importance is the ‘correct price signal’ criterion. All of the Delphi experts, except for one, believe that this criterion is compulsory for the climate change policy appraisal. The main rational for introducing carbon tax or emissions trading is to provide price signal to the polluting industries. If either of these instruments would not put the price label on GHG emissions such policy will be redundant. Therefore, the correct price signal criterion is reasonably judged by the panel members as imperative with value of 80 percent. However, there was fewer agreement on importance of this criterion comparing to the previous criteria and thus the weights deviation was higher of 1.26491.


The ‘flexibility of the policy’ criterion has been given an average weight of 3.90, which signifies its importance in the policy-making process. Some of the Delphi experts appraised this criterion as extremely important which is rational. Such complex policy as climate change must be informed by science and updated based on the latest information recurrently; otherwise, the policy might become outdated or even flawed. According to one of the Delphi experts:


It would seem appropriate that the policy about climate change should be informed by science, and that the science can be placed into the context of the policy for climate change. Adroit policy clearly should have be capable of being informed on a regular basis so that means that there must be climate information to be provided on a regular basis for the community and decision makers.


Thus, the flexibility of the policy is an imperative criterion weighted by the Delphi group as rather important with value of 78 percent and deviation in weightings of only 0.83121which shows significant level of agreement.


It is essential that policy is acceptable to the parties affected and is not encounter severe confrontation in the political process. The ‘public acceptability’ and ‘political acceptability/feasibility’ criteria has been considered as essential for climate change policy evaluation by the entire group. There was high level of agreement concerning importance of these criteria, especially public acceptability. In fact weights deviation for this criterion is 0.52223 the lowest among all other criteria. Weights of both political and public acceptability criteria have been raised in the second round. In the similar vein, both of these criteria have been assessed with close average importance value percentage of 70.8 and 69 respectively. This might be explained by the fact that these criteria are directly linked with each other. For example, one of the Delphi experts commented: ‘Political and public acceptability are very much the same – the political acceptability tends to flow from the public acceptability.’


However, in a real world public preferences might be excluded from the process of establishing climate change policy. It appears that often emissions reduction is regarded as dealing between industries on the one hand and government on the other. For example, despite the Australian Government broadly advertised the ACPRS and opened submissions regarding the proposed policy from all parties including members of public, it is yet offered no alternative policy. In fact the Australian Government preselected the policy and then offered to comment on the details of the policy but did not provide choice of options. While, Australian industry expansively lobby its interests (and this is one of the reasons why the government proposed ETS), public is omitted from the policy-making process. This practice contradicts to the very basis of democracy as well as economic theory which suggest that people’s preferences are main justification for all sorts of policy actions.[50] Consequently, it seems unreasonable to exclude public from the whole process of setting up GHG reduction targets and defining climate change policy options. Therefore, this study argues that political and public acceptability criteria despite being interrelated must be considered separately.


The following criterion ‘predictability/regulatory certainty’ is considered to be essential by all of the panel members excluding only one expert. However, in the second round the Delphi group downgraded weight of this criterion. The Delphi experts assess the importance value of this criterion at 69 percent, while, the deviation in weights was rather high of 1.36848. Predictability of the policy is an important criterion severely influencing investment decisions. Therefore, the rational of the Delphi experts for considering this criterion as imperative is understandable.


The ‘effect on technology development’ criterion has been assessed as necessary by 9 of the Delphi experts out of 11. The policy effect on the development of environmentally friendly technologies is vital criterion which is essential for the policy evaluation procedure. However, there were two of the Delphi experts who consider this criterion as redundant. One of them noted that:


I rated technological development as unimportant as I believe that the appropriate price signal (extremely important) will lead to technological development if this is called for. Technological development per se should not be a goal of the policy – this is more consistent with command and control.


Indeed, correct price signal, in theory, should lead to the development and implementation of eco-friendly technologies, however this proposition has been debated in theoretical literature and besides did not always hold true in practice. The comments of the Delphi experts confirmed that this is still a debateable issue. In particular, one of the panel members commented: ‘Need debate on system design, e.g. a carbon tax versus a tradable permit scheme, are special subsidies for R&D to reduce emissions needed in addition to existing R&D subsidies...’ Many commentators argue that either carbon tax, emissions trading or mix of these policies need to be supplemented by a subsidies for R&D.[51] Therefore, the rational for the inclusion of this criterion into the analysis of the policy options is evidently justifiable and generally confirmed by the Delphi group, despite, considerably low level of agreement with weights deviation of 1.43337.


The following criterion ‘cost-effectiveness’ have been assessed as imperative by the Delphi experts. However, the importance value of this criterion is 65.4 percent which is notably less than the value of the first five criteria. Economists, generally, prioritise this criterion, but the participants of the Delphi study representing diverse disciplines which explains relatively low average weights given by the participants to this criterion. The ‘cost-effectiveness’ criterion appear to be very controversial as well as preceding ‘effect on technology development’. The weights given to these criteria by the experts ranging from 1 to 5 which demonstrates high level of disagreement about importance of these criteria. In both cases, two experts assign maximum weight to these criteria while the other two assessed them as least important. Weightings of the rest of the group balanced in the range of somewhat important (2) to quite important (4). Overall, weights deviation of cost-effectiveness is 1.48936 which is the highest between all other criteria. Nonetheless, in the second round the average weight for both of these criteria have been raised which illustrates its significance for the climate change policy selection process.


The ‘distribution of benefits and costs across generations’ criterion also received the importance value of 65.4 percent which indicates increase from the first round. This criterion relates to the concept of intergenerational equity and is central to any policy designed to bring about ‘sustainable development’ over a longer time perspective. However, it is complicated to introduce practical policy instruments to satisfy this criterion. Climate change policy instruments can be used to reinforce these arguments and produce a more sustainable approach to the environment in the longer term. Therefore, it is logical that most of the experts consider that this criterion is vital and necessary to be incorporated among the objectives of any climate change policy. This is confirmed by reasonable level of agreement achieved by the group with weights deviation of 1.19087.


The ‘compliance costs’ is admittedly necessary criterion. Only one expert believes that this criterion is not essential for the evaluation process. Hitherto, the issue of the compliance costs concerning GHG reduction instruments has been widely recognised. For example, an ETS may imply the costs of monitoring and reporting; quantifying emissions; legal costs and other costs for the participants. While it is argued that generally, the compliance costs associated with carbon taxes are significantly less than the costs of ETS. The experts confirm that it is critical to incorporate this criterion in the evaluation process. The importance of this criterion is also demonstrated by the similarity of the weights assigned to this criterion by the experts ranging from 2 to 4 with deviation of only 0.70065 demonstrating high level of consensus among experts.


The ‘distribution of benefits and costs across income groups’ criterion has received 60 percent of importance value which is unanticipated outcome since, in practice, policy-makers pay special attention to this criterion. Relatively low weight of this criterion might be explained by the fact that the mechanisms addressing negative distributional effects of a climate change policy could be design to supplement either policy instruments. Therefore, this criterion could be associated with the design of the climate change policy rather than the policy objective. Nonetheless, 9 Delphi experts suggested that this criterion is essential for the evaluation and selection of the climate change policy options which confirms its necessity for this study. Generally, the group reach certain consensus as to weight of this criterion with deviation of 1.0.


Another criterion frequently prioritised by governments and policy-makers is the ‘competitiveness issues’. This criterion as well as ‘distribution of benefits and costs across income groups’, in practice, is very influential in the policy-making process. However, once again it might be argued that it relates to the design of the policy rather than the selection of the policy options. The mechanisms addressing competitiveness issues might be designed to supplement any policy instrument. This supposition partly explains that only 6 experts consider this criterion indispensable for the policy evaluation and selection procedure which is the lowest number among all other criteria. Another justification for such finding might be based on the assumption that industries are normally able to lobby its interests and therefore, there is no need to prioritise this criterion.


Generally, industry interest groups are winning by investing lobbying funds to direct the political process in their favour.[52] A small numbers of polluters potentially have greater chances grouping together as lobbyists than the more numerous, dispersed and unorganised members of public. However, for principles of equity and environmental effectiveness, it is important that business and public contribute equally mitigation efforts. This argument is another rational for the importance value of 60 percent given by the participants to the ‘distribution of benefits and costs across income groups’ criterion and the following ‘competitiveness issues’ criterion with the importance value of 49 percent. Moreover, the experts’ consensus on this criterion is quite low with deviation of 1.29334 which confirms its controversial nature.


The ‘administrative costs’ criterion has received one of the lowest medium weight of 2.45. Albeit, only 3 of the Delphi experts out of 11 consider this criterion unnecessary for the evaluation of the climate change policy options its importance value is assessed at 49 percent. This might be partially justified by the reference to the various literature suggesting that the administrative cost of GHG reduction policies might be rather low.[53] On the other hand, there is luck of comprehensive studies assessing administrative costs of the existing climate change policies. Therefore, while it is assumed that the administrative costs criterion is the second least important it is yet worth considering in the evaluation process. This point is justified by the low weights deviation of 0.68755 that demonstrates high level of agreement achieved by the Delphi group on this criterion.


The last criterion ‘international harmonisation’ is regarded as vital for climate change policy evaluation. However, its average importance value of 47.2 percent is the lowest among all criteria, although, weights deviation for this criterion is rather high 1.28629 meaning some consensus between experts. This is unexpected finding, especially, considering that the present ACPRS proposal largely based on this principal. Notwithstanding, the argument endorsed by Garnaut (2008)[54] that the efforts of one country would not be sufficient to mitigate climate change, it is justifiable to suggest that the climate change issue deserves urgent attention. Therefore, the international harmonisation criterion must not be prioritised if it is used as a basis for postponing GHG reduction policy. International agreements take years to negotiate, whereas, climate change requires immediate action.[55] Hence, while this criterion is needed for the evaluation process, the rational for the low average weighting of this criterion seems to be realistic.


Overall, the Delphi experts assessed 16 evaluation criteria. There was a high level of consensus concerning necessity of these criteria. On the other hand, the Delphi group indicated less agreement as to relative importance of the criteria for climate change policy evaluation. Nevertheless, the results of the Delphi are appeared to be stable and, thus, represent a solid foundation for policy evaluation.


VII CRITERIA SUGGESTED BY THE EXPERTS


All 17 additional criteria identified by the experts were listed together and presented for consideration of the panel members in the second-round questionnaire (appendix 5) with the view of obtaining further weighting/comments from experts. Only three criteria, namely, ‘polluter pays principle’, ‘credibility’ and ‘mitigation is verifiable, verified and permanent (minimise GHG emissions leakage)’ are considered to be essential for climate change policy evaluation by more than 50 percent of experts.


The ‘polluter pays principle’ represents the general principle of environmental law and frequently attributed to economic incentive instruments. Since the main assumption beneath the introduction of a tax or ETS is to make the polluters pay and by that to change their behaviour, the polluter pays principal is naturally fit in properly designed climate change policy. Considering this, it is suggested that adoption of polluter pays principle as a criterion would bring to the evaluation procedures an additional strength thus, this criterion is included in present study. The importance value of 69 percent also confirms necessity of this criterion. Despite, two experts were reluctant to give any weight to the criterion, nevertheless, its average weight is 3.45. Standard deviation in weights of the experts is 1.09291 which demonstrates sensible level of agreement concerning importance of this criterion.


Another criterion suggested by the panel members is ‘mitigation is verifiable, verified and permanent (minimise GHG emissions leakage)’. Carbon leakage may occur when the costs of production in one country increase due to GHG reduction policy, thus, another country with a lenient climate change policy (or absent of such policy) may have a trading advantage. If there is a demand for the goods, production may move offshore to the country with lax or no GHG reduction policy, thus, overall GHG emissions will not be reduced. This is critical for a climate change policy to minimise GHG emissions leakage. Thus, performance of both instruments against this criterion needs to be assessed. Besides, 6 out of 11 experts found that this criterion is desirable and evaluated its importance value at 76.2 percent. The panel also reach quite high level of consensus on weight of this criterion with deviation of only 0.78881. Therefore, it is logical to include this criterion to the following analysis.


The third criterion ‘creditability’ regarded by majority (54.5 percent) of the experts as necessary directly corresponds to predictability/regulatory certainty criterion identified by this study. Despite 6 out of 11 experts suppose that creditability criterion should be included in the evaluation exercise, this criterion, in actual fact, replicates the original predictability criterion. This is reflected in several similar answers of the experts to the question: Is creditability criterion necessary? – ‘No, already covered’. Therefore, it is considered to be illogical to evaluate performance of policy options adjacent to comparable criteria. Based on this postulation present study expels creditability criterion.


Overall, most of the suggested criteria do not represent milestones against which the policy options are evaluated. This argument has been confirmed by the Delphi experts most of whom rejected recommended criteria. Furthermore, it is essential to keep the number of the evaluation criteria as low as it is sufficient for the comprehensive evaluation process. Therefore, considering that most of the criteria proposed by the Delphi experts are not critical for this study and in the Australian context they will not be adopted for the evaluation procedure developed in this study. However, two of the criteria proposed by the Delphi experts are undeniably imperative for the climate change policy evaluation.


VIII SUMMARY


The results of the Delphi demonstrate that the main point of agreement was that the criteria identified by this study are valid and essential for climate change policy evaluation in Australian context. There was high scale of agreement among the Delphi experts about the significance of these criteria for policy appraisal. The main points of difference originate from the weightings provided by the experts. There was certain degree of ambiguity with the panellists when it came to weigh ‘cost-effectiveness’, ‘effect on technology development’ and ‘predictability/regulatory certainty’.


However, the group agreed that the environmental effectiveness is a principal criterion confirming that GHG reduction is the primary aim for a climate change policy. This is followed by transparency and minimise rent-seeking criteria that is unexpected finding of this study. These areas emphasise the non-economic aspects of a policy and are the criteria signifying equity characteristics of a climate change policy. On the other hand, the competitiveness issues, administrative costs and international harmonisation criteria have been given the lowest weights which is rather extraordinary finding. Although, the consensual points for weights of competitiveness issues and international harmonisation criteria are comparably low. Overall, the Delphi approach allowed obtaining reliable and methodically justified weightings for the climate change evaluation criteria.


Lastly, the experts assessed 17 proposed criteria. Most of these criteria were rejected by predominance of the panel members. Most of the suggested criteria have been already covered in the originally identified criteria. Although, some of these criteria are imperative features of the policy design, the analysis shows that it is problematic to utilise these criteria for the evaluation procedure. However, the Delphi study resulted in identification of two imperative criteria namely, ‘minimise GHG emissions leakage’ and ‘polluter pays principle’ which are included in the list of criteria of this study. Final list of the established criteria for climate change policy evaluation is presented in table 8.


Table 8 Established evaluation criteria


Criteria
Average weight
Importance value in percent
Environmental effectiveness
4.63
92.6
Transparency
4.27
85.4
Minimize rent-seeking
4.09
81.8
Correct price signal
4.00
80
Flexibility of the policy
3.90
78
Minimise GHG emissions leakage
3.81
76.2
Public acceptability
3.54
70.8
Political acceptability/ feasibility
3.45
69
Predictability/regulatory certainty
3.45
69
Polluter pays principle
3.45
69
Effect on technology development
3.36
67.2
Cost-effectiveness
3.27
65.4
Distribution of benefits and costs across generations
3.27
65.4
Compliance costs
3.09
61.8
Distribution of benefits and costs across income groups
3.00
60
Competitiveness issues
2.45
49
Administrative costs
2.45
49
International harmonization
2.36
47.2

The established criteria reflect the key criteria as judged by the experts. Since these criteria are assessed and validated by the climate change experts, they symbolise the determinants that promote joint environmental, economic and equity consideration of a policy. Consideration of these criteria in policy appraisal will ensure adequacy of the policy selection. The findings in the Delphi study provide a foundation for inclusive and balanced decision-making model to evaluate climate change policy options for Australia.



[1] EEA, Using the Market for Cost Effective Environmental Policy (2006) <http://reports.eea.europa.eu/eea_report_2006_1/en> at 27 October 2009.

[2] Many leading economists and legal scholars consider carbon tax as a more effective instrument than emissions trading. See, eg, Furman, J., Bordoff, J. E., Deshpande, M. & Noel, P. J., ‘An Economic Strategy to Address Climate Change and Promote Energy Security’ (2007) The Hamilton Project, Strategy Paper; Nordhaus, W. D., ‘To Tax or Not to Tax: Alternative Approaches to Slowing Global Warming’ (2007) 1 Review of Environmental Economics and Policy 26-44; Shapiro, R., Addressing the Risks of Climate Change: The Environmental Effectiveness and Economic Efficiency of Emissions Caps and Tradable Permits, Compared to Carbon Taxes (2007) <http://www.sonecon.com/docs/studies/climate_021407.pdf> at 11 September 2009; Freebairn, J., ‘Taxes or Tradable Permits to Reduce Greenhouse Gas Emissions’ (Paper presented at Musgrave Symposium, Sydney, 2008)

[3] See for example: Tietenberg, T., ‘The Tradable-Permits Approach To Protecting The Commons: Lessons For Climate Change’ (2003) 19 Oxford Review Of Economic Policy 400-419; McKibbin, W. J. & Wilcoxen, P. J., A Credible Foundation for Long Term International Cooperation on Climate Change (2006) <http://www.lowyinstitute.org/Publication.asp?pid=408> at 15 September 2008.

[4] Aldy, J. E., Ley, E. & Parry, I., ‘A Tax-Based Approach to Slowing Global Climate Change’ (2008) Resources for the Future, Discussion Paper 08-26.

[5] See generally: Smith, S. & Vos, H. B., Evaluating Economic Instruments for Environmental Policy (1997); Dovers, S., Environment and Sustainability Policy: Creation, Implementation, Evaluation (2005); Mickwitz, P., Environmental Policy Evaluation: Concepts and Practice (2006).

[6] Mickwitz, P., ‘A Framework for Evaluating Environmental Policy Instruments’ (2003) 9 Evaluation 415–436.

[7] See, eg, Dovers, above n 5; Gunningham, N. & Sinclair, D., ‘Policy Instrument Choice and Diffuse Source Pollution’ (2005) 17 Journal of Environmental Law 51-81.

[8] Keeney, R. L. & Raiffa, B., Decision with Multiple Objectives: Preferences and Value Tradeoffs (1976).

[9] Pomerol, J. C. & Barba-Romero, S., Multi-criterion decisions in management: Principles and practice (2000).

[10] Non-redundancy principle means that if one of the criteria is removed from the list the rest of the set no longer satisfying the requirements of completeness (Pomerol and Barba-Romero 2000).

[11] Pomerol & Barba-Romero, above n 9.

[12] Bonney, M., Climate change policies in the Netherlands: analysis and selection. In: Workshop on Good Practices in Policies and measures (2000) <http://unfccc.int/files/meetings/workshops/other_meetings/application/pdf/nld.pdf> at 02 November 2009.

[13] Government of New Zealand, New Zealand Climate Change Programme, Kyoto Protocol, ensuring our future (2001) <http://www.mfe.govt.nz/publications/climate/kyoto-protocol-ensuring-future/kyoto-protocol-ensuring-future-oct01.pdf> at 02 May 2010.

[14] IPCC, Climate Change 2001: Mitigation (2001) <http://www.grida.no/climate/ipcc_tar/wg3/228.htm> at 05 May 2010.

[15] Hoerner, A. J. & Muller, F., Carbon Taxes for Climate Protection in a Competitive World (1996) <http://www.rprogress.org/publications/1996/swiss_1996.pdf> at 10 May 2010; Pearce, D. & Howarth, A., Technical Report on Methodology: Cost Benefit Analysis and Policy Responses (2000) <http://europa.eu.int/comm/environment/enveco/priority_study/methodology.pdf> at 10 February 2010; Bonney, above n 12; Perrels, A., Selecting Instruments for a Greenhouse Gas Reduction Policy in Finland. (2000) Government Institute for Economic Research; Government of New Zealand, above n 13; IPCC, above n 14; Kete, N. & Petkova, E., Assessing Good Practices in Policies and Measures to Mitigate Climate Change in Central and Eastern Europe (2001) <http://unfccc.int/files/meetings/workshops/other_meetings/application/pdf/kete.pdf> at 08 April 2010; Philibert, C. & Pershing, J., ‘Considering the Options: Climate Targets for All Countries’ (2001) 1 Climate Policy 211-227; Sorrell, S. ‘Policy design and policy interaction: literature review and methodological issues’ (2001) A report to DG Research under the Framework V project 'Interaction in EU Climate Policy; VROM, The Progress of the Netherlands Climate Change Policy: An Assessment at the 2002 Evaluation Moment (2002) <http://www2.minvrom.nl/Docs/internationaal/evaluation_note_climate.pdf> at 09 November 2009; Johannsen, K. S., ‘Combining Voluntary Agreements and Taxes-an Evaluation of the Danish Agreement Scheme on Energy Efficiency in Industry’ (2002) 10 Journal of Cleaner Production 129-141; Torvanger, A. & Ringius, L., ‘Criteria for Evaluation of Burdensharing Rules in International Climate Policy, International Environmental Agreements: Politics’ (2002) 2 Law and Economics 221-235; Aldy, J. E., Barrett, S. & Stavins, N. R., ‘Thirteen plus one: a comparison of global climate policy architectures’ (2003) 3 Climate Policy 373-397; VROM, Climate Policy Evaluation Memorandum 2005, on the Way to Kyoto, an Evaluation of Dutch Climate Policy Aimed at Meeting the Kyoto Protocol Commitments (2005) <http://www.sharedspaces.nl/docs/internationaal/On%20the%20way%20to%20Kyoto.pdf> at 09 October 2009; BMU, BMU Information Paper on the VDEW Proposal for a So-Called ‘‘Integrative Model’’ for the Support of Renewable Energies in the Electricity Sector (2005) <http://www.bmu.de/english/renewable_energy/current/doc/36309.php> at 07 May 2010; Ericsson, K., Evaluation of the Danish Voluntary Agreements on energy efficiency in trade and industry (2006) <http://193.88.185.141/Graphics/Energibesparelser/alle_initiativer/tilskud_CO2_afgift/danish_agreement,%20Karin%20Ericson%202006.pdf> at 12 May 2010; Konidari, P. & Mavrakis, M., ‘A Multi-Criteria Evaluation Method for Climate Change Mitigation Policy Instruments’ (2007) 35 Energy Policy 6235-6257.

  1. [16] The group of experts includes respected professionals in the field of climate change economics: Joseph Aldy, Resources for the Future; James Edmonds, Pacific Northwest National Laboratory; Richard Howarth, Dartmouth College; Bruce McCarl, Texas A&M University; Robert Mendelsohn, Yale University; William Nordhaus, Yale University; Sergey Paltsev, Massachusetts Institute of Technology; William Pizer, Resources for the Future; David Popp, Syracuse University; John Reilly, Massachusetts Institute of Technology; Roger Sedjo, Resources for the Future; Kathleen Segerson, University of Connecticut; Brent Sohngen, Ohio State University; Robert Stavins, Harvard University; Richard Tol, Economic and Social Research Institute; Martin Weitzman, Harvard University; Peter Wilcoxen, Syracuse University; Gary Yohe, Wesleyan University.

[17] GAO, ‘Expert Opinion on the Economics of Policy Options to Address Climate Change’ (2008) United States Government Accountability Office.

[18] Ibid.

[19] Konidari & Mavrakis, above n 15.

[20] Aldy, Barrett & Stavins, above n 15.

[21] IPCC, above n 13.

[22] Sorrell, above n 15.

[23] Gough, C. & Shackley, S., ‘Towards a multi-criteria methodology for assessment of geological carbon storage options’ (2006) 74 Climatic Change 141-174.

[24] Nijkamp, P., Rietveld, P. & Voogd, H., Multicriteria Evaluation in Physical Planning (1990); Hobbs, B. & Meier, P., Energy Decisions and the Environment: A guide to the use of Multicriteria Methods (2000).

[25] Ibid., Hobbs & Meier.

[26] Nijkamp, Rietveld & Voogd; Hobbs & Meier, above n 24.

[27] See, eg, Munda, G., Nijkamp, P. & Rietveld, P., ‘Qualitative multicriteria evaluation for environmental management’ (1994) 10 Ecological Economics 97-112; Larichev, O. I., Theory and Methods of Decision-Making (2002).

[28] Ibid.

[29] Rowe, G., Wright, G. & Bolger, F., ‘Delphi: A Reevaluation of Research and Theory’ (1991) 39 Technological Forecasting and Social Change 235-251.

[30] Turoff, M. & Linstone, H. A. The Delphi Method: Techniques and Applications (2002) <http://is.njit.edu/pubs/delphibook/> at 28 October 2008.

[31] Gunaydin, H., The Delphi Method, Optimization Group (2006) <http://www.iyte.edu.tr/~muratgunaydin/delphi.htm> at 09 March 2009.

[32] Ziglio, E., ‘The Delphi method and its contribution to decision-making’ in Adler, M. & Ziglio, E. (ed.) Gazing into the Oracle: The Delphi Method and its Application to Social Policy and Public Health (1996).

[33] Turoff & Linstone above n 30.

[34] See for example, Brooks, K. W., ‘Delphi technique: Expanding applications’ (1979) 54 North Central Association Quarterly 377-385; McCampbell, C. & Helmer, O., ‘An experimental application of the Delphi method to the use of experts’ (1993) 9 Management Science 458-467.

[35] Ibid., McCampbell & Helmer.

[36] Sackman, H., Delphi Critique: Expert Opinion, Forecasting, and Group Process (1975).

[37] Helmer, O., ‘Problems in futures research: Delphi and causal cross-impact analysis’ (1977) 9 Problems in Futures Research 17-31.

[38] Miller, A. & Cuff, W., ‘The Delphi Approach to the Mediation of Environmental Disputes’ (1986) 19 Environmental Management 321-330.

[39] Basu, S. & Schroeder, R. G., Incorporating judgments in sales forecasts: application of the Delphi method at American Hoist and Derrick’ (1977) 7 Interfaces 18-27.

[40] Gatewood, R. D. & Gatewood, E. J., ‘The use of expert data in human resource planning: guidelines from strategic forecasting’ (1983) 5 Human Resource Planning 83-94.

[41] See, eg, Dalkey, N. C., ‘The Delphi method: an experimental application of group opinion’ in Dalkey, N. C., Rourke, D. L., Lewis, R. & Snyder, D. (ed.) Studies in the quality of life (1972); Brooks, K. W., ‘Delphi technique: Expanding applications’ (1979) 54 North Central Association Quarterly 377-385; Evans, C., ‘Unravelling the Mysteries of the Oracle: Using the Delphi Methodology to Inform the Personal Tax Reform Debate in Australia’ [2007] eJlTaxR 5; (2007) 5 eJournal of Tax Research 105-135.

[42] Brockhoff, K., ‘The performance of forcasting goups in computer dialogue and face-to-face discussion’ in Linstone, H. A. & Turloff, M. (ed.) The Delphi method: Techniques and applications (1975).

[43] Ibid.

[44] Ludwig, B., ‘Predicting the future: Have you considered using the Delphi methodology? (1997) 35 Journal of Extension 1-7.

[45] Evans, above n 41.

[46] Bjil, R., ‘Delphi in a Future Scenario Study on Mental Health and Mental Health Care’ (1992) 24 Futures 232-250.

[47] Dasgupta, A. & Haff, L. R., ‘Asymptotic Expansions for Correlations between Different Measures of Spread’ (2006) 136 Journal of Statistical Planning and Inference 2197-2213.

[48] Ibid.

[49] ALTER-EU, About Lobbying Transparency (2005) <http://www.alter-eu.org/en/about-lobbying-transparency> at 24 December 2009.

[50] Ahlheim, M. & Schneider, F., ‘Allowing for Household Preferences in Emission Trading – A Contribution to the Climate Policy Debate’ (2002) 21 Journal Environmental and Resource Economics 317–342.

[51] See, eg, Jaffe, A., Newell, R. G. & Stavins, R. N., ‘Environmental Policy and Technological Change’ (2002) 22 Environmental and Resource Economics 51-70; Fischer, C., I. Parry & Pizer, W., ‘Instrument Choice for Environmental Protection When Technological Innovation is Endogenous’ (2003) 45 Journal of Environmental Economics and Management 523-45; Pizer, W. & Popp, D., ‘Endogenizing Technological Change Matching Empirical Evidence to Modeling Needs’ (2007) Resources for the Future.

[52] Fredriksson, P. G., ‘The Political Economy of Pollution Taxes in a Small Open Economy’ (1997) 33 Journal of Environmental Economics and Management 44-58.

[53] Pope, J. & Owen, A. D., ‘Carbon Emission Taxes: Potential Revenue Effects, Compliance Costs and Overall Tax Policy Issues’ (Paper presented at ATTA Conference, Christchurch, 2009)

[54] Garnaut, R., Garnaut Climate Change Review (2008) <http://www.garnautreview.org.au/domino/Web_Notes/Garnaut/garnautweb.nsf> at 21 November 2009.

[55] For example, the 1997 Kyoto Protocol was negotiated in 1997, came into force in 2004 and the commitment period started in 2008.


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