Global challenges are large in scale and have no clear-cut solutions. They span multiple domains and layers of responsibility and cannot be addressed by any government or institution alone. When successive global challenges are interconnected and threaten to surpass the limits to the impacts of human activities on the Earth system, addressing one challenge in an uncoordinated and fragmented way can have serious implications and costs for society as a whole. Policy coherence for sustainable development (PCSD), an important tool for implementing the 2030 Agenda for Sustainable Development, provides countries with a roadmap for co-ordinated and collective action. This chapter provides the context and rationale for applying policy coherence principles as a foundation for public governance that puts sustainability first.
Driving Policy Coherence for Sustainable Development
1. Addressing global and transboundary challenges: The role of policy coherence
Abstract
1.1. Introduction
The past decade has seen a rapid increase in the number of grave and interrelated economic, environmental, social and geopolitical crises – all with serious implications on countries’ prospects to develop sustainably and in line with their commitments to internationally agreed objectives, such as the Sustainable Development Goals (SDGs). These challenges have emerged in a world which can be characterised by volatility, uncertainty, complexity and ambiguity (VUCA). They include the human, economic, social and financial consequences of the COVID-19 pandemic; the cascading effects of Russia’s aggression against Ukraine on the global economy (which threatens the prospects for achieving e.g. economic growth (SDG 8), energy (SDG 7) and food security (SDG 2)); and the increasingly adverse impacts of climate change (SDG 13).
When successive global challenges are interconnected and when planetary crises are reinforcing each other, addressing one challenge in an uncoordinated and fragmented way can make other challenges worse. For example, many governments still support the production and consumption of fossil fuels, including as part of their COVID-19 recovery efforts. This seriously undermines international efforts to reduce greenhouse gas emissions and increases the risk of crossing climate tipping points. Moreover, evidence abounds on the nexus between climate change and trust in government (OECD, 2022[1]).
The possibility that more regular and interconnected crises may be a feature of governments’ operating environment calls for stepping up efforts to strengthen government capabilities to address trade-offs and spillover effects, and manage urgent short-term needs while continuing delivering on global commitments. This report aims at illustrating how the application of PCSD principles can act as a lever for governments to break out of sectoral silos, overcome short-termism and adopt a long-term and global perspective to critical challenges.
Chapter 1 sets the broader context for policy coherence challenges in an increasingly complex global reality. It provides the rationale for governments to apply principles of policy coherence for sustainable development (PCSD) to design, implement and monitor policies that are fit for purpose and for the future. Chapter 2 presents a more detailed analysis of the results of the OECD 2022 Survey on Institutional Capacities and Tools to enhance Policy Coherence for Sustainable Development, with a particular focus on the challenges and opportunities adhering countries face in implementing the OECD PCSD Recommendation. Finally, chapter 3 illustrates how PCSD principles could be applied to a policy sector by presenting a PCSD framework for sustainable governance of one of Earth’s largest global public commons – the ocean. It explores a policy coherence framework for integrating sustainability in the management and use of the ocean, seas and marine resources.
1.2. Global and transboundary challenges in a world between poly-crisis and perma-crisis
Global challenges are large-scale and often have no clear-cut solutions. They span across multiple domains and layers of competence and cannot be addressed by any government or institution acting alone. They can only be effectively addressed through comprehensive global responses grounded in international co-operation, in addition to what can be done nationally and sub-nationally. Examples of such issues are the existential climate and biodiversity crisis, navigating the digital transformation, tackling pandemics and other global crises, harnessing global value chains to secure the provision of essential goods, fighting criminal transboundary networks, handling global migration and preserving and governing global commons, such as our oceans, forests, and other resources that keep Earth stable and resilient.
The recent evidence (Spangenberg and Kurz, 2023[2]) highlights that this current state of polycrisis1 (Homer-Dixon et al., 2021[3]) will probably not go away and even aggravate while we are passing planetary boundaries, encountering the limitations of natural resources, and increasing social unrest and decreasing trust in government due to the growing inequality. This could bring the world to a new normal, characterised by a permacrisis2 (Collins Dictionary, 2022[4]). As a result, global and transboundary challenges are influencing national governmental challenges and the related political priorities more than ever. While a large part of government actions remains ‘business as usual’, crises and emergencies have penetrated into the capillaries of sectoral policy fields – also amplifying the complexity of the interactions between them. The COVID-19 pandemic is a case in point, showing global and national implications of a health emergency on energy supplies, food security, mobility, refugees, and inequality, for example. In this context, the distinction between national and global challenges has become less clear and less relevant.
Furthermore, as confirmed by the OECD Trust Survey, failure to address global and transboundary challenges3 can undermine trust in government and perpetuate vulnerabilities of economies and societies. For example, while half of the survey respondents, on average across countries, think the government should be doing more to reduce their country contribution to climate change, only 35.5% of respondents are confident that countries will actually succeed in reducing their contribution to climate change (OECD, 2022[5]). Consequently, the sustainability of the democratic model of governance will depend on governments’ capacity to anticipate and respond to future shocks and effectively address global challenges. Strengthening governments’ capacity to address global challenges in an integrated manner should therefore become a priority across all policy sectors, and at all levels of government. The OECD’s Reinforcing Democracy Declaration Initiative (RDI) identifies three key areas where governments should focus their efforts to achieve this (OECD, 2022[1]).
Steering action to tackle global challenges through building trust. Addressing any global challenge requires first and foremost setting an agenda and engaging stakeholders and broader society to build consensus and steer action.
Strengthening national institutions to make them fit to go global. While international relations often remain the prerogative of ministries of foreign affairs, most national institutions nowadays deal with public policy issues that extend beyond national borders.
Leveraging governance tools and innovation to enhance capacity for global action. Global challenges also create opportunities for governments to revisit and upgrade public governance tools, such as public budgets and public procurement and better regulation tools.
This was also recognised by United Nations (UN) Secretary-General António Guterres when he addressed the UN General Assembly Consultation on our Common Agenda/Summit of the Future in February 2023: “[…] our collective problem-solving mechanisms do not match the pace or scale of the challenges. The present forms of multilateral governance, designed in and for a bygone era, are clearly not adequate to today’s complex, interconnected and rapidly changing and dangerous world. The fragmentation of our global response and the fragmentation of our world are feeding off each other.” (António Guterres, 2023[6])
In this context, the simultaneous occurrence of many (global) crises has created a more complex operating environment for governments, while overstretching human, financial and other resources. Moreover, most - if not all - of these crises have a strong transboundary and global dimension. At the same time, the necessary focus on crisis management has an inherent risk and could undermine policy coherence. Concentrating government efforts, resources and skills on crisis management, may result in neglecting that there are at the same time wicked, complex and contested problems at the basis of most crises – all with significant impact on the SDGs. Addressing such complex problems requires different tools and mechanisms than the typical crisis-induced central command and control approach. Dealing with complex problems requires upgraded institutions and processes, which are deliberative and inclusive. These fundamental underlying problems are both urgent and complex, and represent the environmental, economic and social dimensions of sustainable development, respectively, e.g.:
Crossing planetary tipping points. Going beyond these points is irreversible. Tipping points can be seen as ‘points of no return’ in the Earth system. Unlike other climate impacts, crossing climate-related tipping points cannot be counteracted by more action later (OECD, 2022[7]). Nine such tipping points have been distinguished4, however this list is not exhaustive as many other parts of the Earth system have the potential to display tipping point behaviour (McSweeney Robert, 2020[8]) This is addressed by SDGs 13 (Climate action), 14 (Life below water) and 15 (Life on land), as well as SDG 6 (Clean water and sanitation). Scientists are cautioning that even if governments abide by the Paris Agreement's temperature target range of 1.5-2°C, there is still a significant chance of reaching critical tipping points in the climate system; six tipping points are likely to occur at current level of warming, and an additional four could be possible (Armstrong McKay et al., 2022[9]). These tipping points include the disintegration of the Greenland and West Antarctic ice sheets, the destruction of low-attitude coral reefs, and widespread abrupt permafrost thaw (Armstrong McKay et al., 2022[9]). This highlights the need for urgent measures to reduce the impacts of climate change and develop effective strategies to assess and cope with tipping point risks.
Persistence of unsustainable production and consumption patterns. The 2011 OECD Green Growth Strategy (OECD, 2011[10]) was a frontrunner putting this on the agenda, but the patterns are still mainly unsustainable. SDG 12 (Responsible consumption and production) targets this challenge, as does SDG 7 (Energy), SDG 2 (Agriculture), SDG 6 (Water) and SDG 11 (Cities). OECD countries have improved their environmental productivity in terms of carbon, energy, and materials, but with variations across countries and sectors (OECD, 2017[11]). Carbon emissions and fossil fuel use have disconnected from economic growth, but only relative decoupling has been achieved (OECD, 2017[11]). Misalignments in government policy remain major obstacles as OECD countries continue to rely on fossil fuels for 78% of their energy, while renewables, although increasing, still play a relatively minor share (OECD, 2023[12]). However, since 2000, they have increased their economic value per unit of material resources used (OECD, 2017[11]) and in 2021, the energy supply was lower than the ten-year average observed pre-pandemic (OECD, 2023[12]).
Unfair, unequal distribution of wealth. Inequality is rooted in economic systems and vested interests. SDG 10 (Reduce inequality) shows how UN member states have committed to address this, and SDG 5 (Gender equality) is another key element here. In most OECD countries, income inequality reached its highest level with, on average, people in the top 20% of the income distribution earning 5.4 times more than people in the bottom 20% (OECD, 2020[13]). While income inequality has remained stable since 2010, household incomes have risen (OECD, 2020[13]). This trend not only has serious social and political implications, but also economic ones as it hampers GDP growth by increasing the distance between the lower 40% of income earners and the rest of society (OECD, 2015[14]).
The cascading of crises and the blurring of the borders between what is global and what is national not only influences what kind of policies are needed (the ‘what?’), but also their implementation (the ‘how?’). As such, addressing the multiplicity of crises and other problems requires governance and public administration with built-in multiplicity, in order to enable countries to orchestrate their policy and governance together with other countries to the extent needed to reach the desired results.
1.3. Policy Coherence for Sustainable Development as foundation for effective governance arrangements
Policy coherence is critical for addressing interactions between economic, social and environmental areas in a balanced manner, while avoiding negative effects on the wellbeing of people here and now, elsewhere and later. Policy coherence, underpinned by the availability of the right data (systems), mechanisms for information exchange, and all required capacities, skills and governance processes is also key for enabling swift action to ensure alignment between local, national and international policy making. A lack of policy coherence across sectors and levels of government risks leading to fragmented government action; inefficiency, overlaps and duplication; and higher costs in government operations.
An era of multiple crises calls for greater policy coherence and increased government capacities to address global and transboundary challenges both domestically and through the multilateral system, which will be fundamental to respond to citizens’ rising expectations and to build resilience for the future. This makes international co-operation and multilateralism critical for addressing the challenges of global and transboundary impacts. Their governance and democratic accountability may need to be rethought, and national governments will need to build their capacity to tackle cross-border challenges (OECD, 2022[1]).
The eight principles of policy coherence for sustainable development (PCSD), embodied in the OECD Recommendation on PCSD (hereafter the PCSD Recommendation) (OECD, 2019[15]), and the closely corresponding eight domains (sub indicators) of the UN SDG indicator 17.14.1 on PCSD (UN Environment Programme, 2021[16]), comprise core national governance functions to effectively address global challenges. The principles together address a large part of the relevant sustainability governance challenges of governments, that it could be argued that PCSD is a proxy for public governance for sustainability. They can be linked to key aspects of the two dedicated governance Goals of the 2030 Agenda: Goal 16 aims to attain effective, accountable and inclusive public institutions; while Goal 17 contains a range of ‘means of implementation’, including Target 17.14 on PCSD.
Policy is about the vision, the goals, strategies, targets, timelines and measures. Governance is the other side of the coin. It is not about what should be done and when, but how to get it done and who should be involved. One of the reasons why complex policy challenges are often difficult to solve is that political, administrative and societal debates on sustainable development and other global and transboundary challenges tend to focus more on the ‘what’, than on the ‘how’ (Meuleman, 2021[17]). This is risky disbalance: political actors, policy-makers and stakeholders are more interested in policy solutions than in the administrative, institutional and relations machinery which are needed to effectively deliver the results.
With appropriate mechanisms for strengthened policy coherence in place, governments are better prepared to deal with potential policy conflicts, cross-border policy impacts and long-term implications of short- to medium-term actions. Countries have been working since 2015 to put such mechanisms in place, learned important lessons and improved as needed. These mechanisms for enhancing PCSD can now be leveraged further to address global challenges. In particular, they can support governments to:
improve co-ordination and decrease fragmentation in government’s operations at all levels, including the international level. Addressing trade-offs and achieving synergies while tackling global challenges and at the same time implementing the 2030 Agenda with its SDGs can only be done in a well-coordinated and integrated way.
increase the capacity of governments to implement and accelerate progress on the SDGs. PCSD is a means to address interlinkages across goals and targets and identify efficiency/sustainability gains, as well as areas where potential negative impacts across sectors could delay progress in the achievement of the goals. It is a means to effectively implement the highly integrated agenda and indivisible goals of the UN 2030 Agenda. However, the current geopolitical context with its implications for achieving global commitments (energy, food security crises, etc. undermining progress made on SDGs) makes it difficult to maintain long-term priorities. Investing in PCSD helps ensuring that short-termism does not dominate. It sets the conditions and provides the tools to make policies work in practice. This is crucial because global and transboundary policies cannot be implemented without the appropriate governance and adequate capacities and resources.
pair institution-building with trust-building. During the COVID-19 pandemic, many governments have operated with lower standards of consultation, transparency and oversight by the public or parliaments; thousands of emergency regulations were adopted, often on a fast track (Brezzi et al., 2021[18]). Lack of trust in governments could limit the support to reforms required to transition towards sustainable paths and achieve the SDGs. Making sure that public institutions are effective, efficient, reliable, inclusive, transparent and accountable is a strong investment in public trust in government. PCSD can help by e.g., reducing fragmentation in government operations, duplication or wasteful spending, but also by reducing negative spillovers and fostering contributions to global commons.
1.4. Policy insights: Policy coherence as a means for overcoming global and transboundary challenges in a crisis era
Addressing multiple crises and overcoming global challenges will require enhancing capacities and supporting mechanisms for improving coherence in setting and implementing policies. Governments face the challenge to ensure that complex and ‘wicked’ problems are understood and dealt with in an integrated manner, by:
Investing in a shift in conceptualisation away from straightforward linearity between policy action and results, as the complexity and ‘wickedness’ of global and transboundary challenges calls for navigating diverging priorities and policy conflicts.
Ensuring a good balance between policy and governance of global and transboundary challenges, as this helps focusing on the trajectories towards solutions rather than only on filling the policy ‘gaps’ between the goals and targets and the current situation.
Raising awareness of the inherent risk of focussing on agile crisis management, namely that this can pull away the priority and resources needed for addressing the complexity and wickedness of the origin of many crises, and the long-term dimension of the actions needed.
Creating an enabling environment for policy coherence and change by establishing cohesive systems for the national preparation of international policymaking.
Investing in policy coherence for sustainable development (PCSD), SDG Target 17.14, in order to improve the performance of institutions by strengthening coordination and decreasing fragmentation, and to increase government capacities to address the new challenges domestically and through the multilateral system.
References
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Notes
← 1. A polycrisis can be defined as “a single, macro-crisis of interconnected, runaway failures of Earth’s vital natural and social systems that irreversibly degrades humanity’s prospects” (Homer-Dixon et al., 2021, p. 3[3])
← 2. Permacrisis describes “an extended period of instability and insecurity” (Collins Dictionary, 2022[4])
← 3. In the context of this report, transboundary challenges refer to challenges related to the interactions between two or more countries, while global challenges refer to challenges related to global public commons or threats.
← 4. The nine tipping points are: Shutdown of the Atlantic Meridional Overturning Circulation, West Antarctic ice sheet disintegration, Amazon rainforest dieback, West African monsoon shift, Permafrost loss, Coral reef die-off, Indian monsoon shift, Greenland ice sheet disintegration and Boreal forest shift (McSweeney Robert, 2020[8]).