Which drives what? – A climate policy sequencing analysis

To meet the Paris Agreement Goals for each country, ratcheting up climate ambitions and policy stringency is necessary. Scholars have studied the hypothesis of climate policy sequencing, meaning that imperfect policies at an early stage can be conducive to allowing stringent policies later. Only a few have focused on quantitatively analyzing the links between climate targets, policy stringency (i.e., carbon price level), and decarbonization progress (emissions reduction). We conduct a country-based Granger Causality Analysis to understand how these factors affect each other, exploring hypotheses from different energy policy-relevant disciplines. For example, do stricter policies drive more decarbonization, or does more previous decarbonization make stricter policies feasible; does an ambitious target drive new and stricter policies, or do stricter policies trigger demand for tighter targets? We develop and analyze datasets for how policies, (sectoral) decarbonization progress, and targets have evolved in OECD, G20, and BRICs countries and potentially selected Global South countries over the last 20 years. The results of this analysis will help understand the sequencing between climate/energy targets and policies to drive down carbon emissions. In addition, this study will further suggest how slower-decarbonizing countries can speed up their ambition-ratcheting mechanisms.