The Role of Economic Regulators in the Green Transition

4. Conclusions

Abstract

This chapter concludes by considering several ways in which the gathered evidence base may be utilised to provide further insights, as well as options for further research. Specifically, the chapter discusses time-series analysis and other survey developments, options for more in-depth analysis of countries, sectors, and regulatory functions, and the exploration of governance arrangements not fully addressed by the green governance survey data.

This chapter concludes the publication by reflecting on the overarching trends identified in earlier Chapters and consider options to build on the insights presented. Regarding options for development, the chapter discusses opportunities for time-series analysis and other survey developments, options for more in-depth analysis of countries, sectors, and regulatory functions, and the exploration of governance arrangements not fully addressed by the green governance survey data.

The preceding chapters of this publication have covered a lot of ground. Beginning with a discussion of the changing context and role of economic regulators in Chapter 1, the publication has surveyed the numerous ways in which economic regulators may contribute to the green transition of network sectors (Chapter 2) and reviewed governance arrangements and tools for enabling economic regulators to deliver on the objectives and expectations set for them (Chapter 3). Throughout the preceding chapters, quantitative data from recent surveying of 184 regulatory authorities (151 unique institutions accounting for multi-sector regulators) across 42 countries has enabled insights and a view of the state of play to be developed for a range of issues. This data from the green governance survey has been supplemented by further qualitative information, case study data and insights from the academic literature and other sources, such as related OECD publications and normative guidance. Together, the analysis offers a unique evidence base on the role of economic regulators in the green transition.

However, inevitably, not all questions have been answered and there remain some limitations to the data and several avenues for further research. In conclusion, these limitations and potential next steps are discussed, and further resources are provided.

Ways forward

Time-series and other survey developments

The green governance survey was issued for the first time as part of the 2023 edition of the Governance of Sector Regulators (GSR) indicators survey. The GSR indicators survey has been running every 5-years and is now in its third edition. Whilst this publication provides a snapshot of the state of play on issues of green governance, a view over time would be valuable and allow an assessment of change in the context and role of economic regulators in the green transition.

The green governance survey was designed around eight core question areas focused on key governance issues, so as not to burden respondents. However, there a number of other governance issues to investigate, which could be the subject of separate research (see below) or included in future editions of the green governance survey as new questions.

In-depth analysis of countries, sectors, and functions

The quantitative analysis presented in this publication has focused on the state of play on aggregate and provided a comparative view of sectors at the same level. There remains the opportunity to explore country or jurisdiction-level findings in more detail. This opportunity could be met by the design and implementation of country-specific green governance surveying or other bespoke research efforts.

A more in-depth view by sector, considering the driving factors behind existing regulatory governance arrangements and green transition and testing the application of solutions, could also be developed. This in-depth analysis would complement the comparative sectoral view already provided by the quantitative survey data presented in this publication and could clarify recommendations. This opportunity could be met similarly by the design of sector-specific green governance surveying or other bespoke research efforts.

Finally, it would be possible to develop in-depth analysis of regulators’ functions, i.e. the tools for green transition identified in Chapter 2, such as tariff setting, or the regulation of network infrastructure planning, looking across sectors and countries to provide comparative analysis and develop recommendations.

The aim of these three strands of research would be to better explain the state of play findings and understand the full scale of different governance challenges, priorities and relevant solutions at the country, sector or function level.

Exploring further aspects of governance

As already noted, the scope of the green governance survey questionnaire was limited to a core set of questions around the governance arrangements of economic regulators. There is opportunity for a more in-depth exploration and consideration of governance principles, relating to both internal and external governance arrangements, not addressed directly by the green governance survey data. For example, governing body structure and its impact on the decision-making processes as it relates to environmental sustainability could be analysed further, as too could aspects of accountability and transparency, and the processes relevant to regulators’ activities in this area. Developing an understanding of the different experiences of countries and regulators in these other areas relating to governance may prove useful for the development of new guidance or identification of best practices relating to the governance of regulators, in the context of delivering the green transition and contributing to the environmental sustainability of network sectors.

Furthermore, some aspects covered by the survey questions could be developed and explored further, for example, under capacity and resources, different funding models for duties relating to environmental sustainability and the green transition could be investigated, as well as the use of performance assessment and other management processes to prepare the organisation for change.

At a higher level, future surveys could also be used to provide clarity on the institutional framework of countries regarding green transition and environmental sustainability, to aid the analysis and explanation of survey results. For example, an overview of the role of environmental agencies vis-à-vis economic regulators, gathered systematically as part of surveying, would provide valuable contextual information for the interpretation of results.

Further resources and complementary guidance

Beyond the discussion of internal and external governance arrangements in Chapter 3, there are further principles of good regulation and other necessary elements to support better regulatory outcomes. These elements include well-designed rules and regulations that are efficient and effective, as well as consistent and fair operational processes and practices. There will be a range of practical questions for both governments and regulators to work through in order to adopt a green lens toward regulatory activities (making regulation, operating regulation, reviewing regulation). The OECD’s paper Better Regulation for the Green Transition picks-up many of these themes in the context of regulating for environmental sustainability (OECD, 2023[1]).

Complimentary normative guidance issued by the OECD has informed the above discussion on governance arrangements and regulatory policy. Most notably, the OECD’s series on Best Practice Principles for Regulatory Policy1, which includes the 2014 OECD guidance on the governance of regulators (OECD, 2014[2]). Finally, prior OECD publications on Shaping the Future of Regulators (OECD, 2020[3]), The Role of Economic Regulators in the Governance of Infrastructure (OECD, 2017[4]), and Communication Regulators of the Future (OECD, 2022[5]) have been drawn upon as additional sources of information relating to the role of regulators in the green transition and environmental sustainability.

The data gathered as part of the green governance survey and Governance of Sector Regulators indicators will be made publicly available.2

References

[1] OECD (2023), “Better regulation for the green transition”, OECD Public Governance Policy Papers, No. 40, OECD Publishing, Paris, https://doi.org/10.1787/c91a04bc-en.

[5] OECD (2022), “Communication Regulators of the Future”, OECD Digital Economy Papers, https://www.oecd-ilibrary.org/docserver/f02209e6-en.pdf?expires=1717599579&id=id&accname=ocid84004878&checksum=736904CB07A78203993A78E25A357095 (accessed on  May 2024).

[3] OECD (2020), “Shaping the future of regulators: The impact of emerging technologies on economic regulators”, The Governance of Regulators, https://www.oecd-ilibrary.org/governance/shaping-the-future-of-regulators_db481aa3-en.

[4] OECD (2017), “The Role of Economic Regulators in the Governance of Infrastructure”, The Governance of Regulators, https://www.oecd-ilibrary.org/governance/the-role-of-economic-regulators-in-the-governance-of-infrastructure_9789264272804-en (accessed on  May 2024).

[2] OECD (2014), The Governance of Regulators, OECD Publishing, Paris, https://doi.org/10.1787/9789264209015-en.

Notes

← 1.  Available at OECD Best Practice Principles for Regulatory Policy | OECD iLibrary (oecd-ilibrary.org).

← 2.  Please refer to the relevant section of the OECD website (Regulatory Reform) for more information.