Subclasses of policy instrument

[l-emele]

Description of the issue

We had an Oeko-internal meeting and identified a list of missing concepts including some first definition proposals and a priority. This meta issue deals with subclasses of policy instrument. See also related meta issues:

• Macro-economic and monetary concepts #1487
• Further price-related concepts #1488

Next step would be to discuss these concepts at an OEO dev meeting. Afterwards we might split the list into further sub-issues for closely related concepts.

Ideas of solution

English term	German term	Definition proposal	Comment	Priority & issue
economic instrument	ökonomisches Instrument	An economic instrument is a policy instrument that …	Price and volume policy control mechanisms: environmental charges/taxes, tradable certificates, tradable quotas, tariff policy, market reform/opening	medium
fiscal instrument	fiskalisches Instrument	A fiscal instrument is a policy instrument that …	Subsidies and public infrastructure spending: grants, concessionary loans, tax breaks, government investments	medium
voluntary agreement (instrument)	Verpflichtungserklärung	A voluntary agreement instrument is a policy instrument that …	Voluntary and negotiated self-commitments: Agreements by economic sectors, sectors or companies	medium
regulatory instrument	Regulierung	A regulatory instrument is a policy instrument that …	Regulatory regulations: prohibitions and bids, technical standards, product labeling	medium
information (instrument)	Information	An information instrument is a policy instrument that …	General information and advice: brochures, information centers, agencies, advice centers	medium
education (instrument)	Bildung	An education instrument is a policy instrument that …	Regulation and promotion of education: education, training and further education	medium
other instrument	anderes Instrument	An other policy instrument is a policy instrument that is neither an economic instrument, nor a fiscal instrument, nor an information instrument, nor an education instrument, nor an research instrument.	Other tools: appeals, indicative targets/planning, barrier reduction	medium

This proposed classification comes from the reporting of National Communications and may be referenced e.g. in editor notes.

Make existing classes subclasses of the new classes:

• effort sharing: Effort sharing is a regulatory instrument that sets a common emission reduction goal for a number of countries. Each country has a national reduction goal. Under- or overachievement of that goal can be compensated by trading emission certificates.
• feed-on tariff: A feed-in tariff is an economic instrument designed to stimulate investment in renewable energy technologies by offering long-term contracts to agents who are producers of renewable energy.
• levy: A levy is an economic instrument that consists of a compulsory financial charge imposed on an agent or institution by a governmental organisation.
• market premium: A market premium is an economic instrument that ensures a guaranteed remuneration, e.g. a fixed feed-in tariff, by paying to the producing agent the difference between a guaranteed return on a good/product and the monetary price for which the good/product is traded on the market

Workflow checklist

• I discussed the issue with someone else than me before working on a solution
• I already read the latest version of the workflow for this repository
• The goal of this ontology is clear to me

I am aware that

• every entry in the ontology should have a definition
• classes should arise from concepts rather than from words

[l-emele]

I've put this issue on the agenda for OEO dev meeting 60: https://etherpad.wikimedia.org/p/oeo-dev-60

[han-f]

Some suggestions for completing the definition proposals, I take them one by one and in comments, in case we want to discuss further.

• An economic instrument is a policy instrument that creates monetary (price) incentives to stimulate transformative measures.
  -- Example: subsidies for installation of renewable energy technologies, tradable permits,
  -- Note: would we not consider a fiscal instrument to be a subclass of an economic instrument? Do we need it separately?

[han-f]

Voluntary agreement, suggestions:
A voluntary agreement policy instrument is a contract between the government (institution) and one or more private institutions. The agreements goal is to ensure transformative measures by the participating private institutions

A voluntary agreement policy instrument is a contract between the government (institution) and one or more private institutions. The agreements goal is to maximise / minimise objective variable(s)

Notes:

• see also, maybe as further reading: https://archive.ipcc.ch/publications_and_data/ar4/wg3/en/ch13s13-2-1-4.html
  • objectives such as improving environmental performance beyond compliance to obligations required by regulations
• it is a voluntary agreement because the private organisations are not forced (in contrast to a regulation) to participate.
• we do not have government in the oeo, but it seems to be an institution. I do put in government here and below as the "author" of policy instruments, but in principle it could be any institution.
• we do not have objective in the oeo, but objective function and objective variable.

[han-f]

Regulatory instrument, suggestions:

A regulatory instrument is a policy instrument that stipulates rules made by a government (=institution) to control the way something is done.

[han-f]

Information instrument, suggestions:
An information instrument is a policy instrument where the government (=institution) provides information to
persons and/or institutions in order to stimulate transformative measures.

[han-f]

Education instrument - do we need this, is it possibly a subclass of an information instrument in the broadest sense?

[l-emele]

I see that information instrument and education instrument are similar. But I think one can distinguish those two:

• An information instrument aims at providing knowledge through facts, data, etc.
• An education instrument aims at fundamental understanding.

Let me show this difference at a concrete example in context of heat pumps:

• Informing the broad audience about the advantanges of heat pumps through flyers would be an information instrument.
• Training craftspeople how to dimension, install and operate a heat pump considering the situation of a specific building would be an education instrument.

Having this in mind I propose:

• An information instrument is a policy instrument that aims at providing knowledge to
  persons and/or institutions in order to stimulate transformative measures.
• An education instrument is a policy instrument that aims at providing the necessary understanding and skills to specific groups of people that these afterwards are able to perform specific transformative measures.

@han-f : What do you think?

[han-f]

@l-emele sounds sensible to me, suggest to simplify a bit:

• An information instrument is a policy instrument that aims at providing knowledge to persons and/or institutions to stimulate transformative measures.

• An education instrument is a policy instrument that aims at teaching the necessary understanding and skills to specific groups of people so that these are enabled to perform specific transformative measures.

[l-emele]

Alright, I think we have an agreement here and I will implement.

[l-emele]

I just implemented #1786 the instruments as suggested. For voluntary agreement, I think we have to distinguish between two concepts:

• voluntary agreement: A voluntary agreement is a contract between a two or more institutions that has a common goal but cannot be legally enforced.
• voluntary agreement instrument: A voluntary agreement instrument is a policy instrument that uses voluntary instruments between a government (institution) and one or more private institutions. The agreement's goal is to ensure transformative measures by the participating private institutions.

[l-emele]

Second question while implementing. In the issue opening I stated:

• Effort sharing is a regulatory instrument that sets a common emission reduction goal for a number of countries. Each country has a national reduction goal. Under- or overachievement of that goal can be compensated by trading emission certificates.

But I am not sure anymore. As the countries can trade AEAs and countries loose money if they do not comply with the ESD / EST targets, is effort sharing more a economic instrument?

[han-f]

But I am not sure anymore. As the countries can trade AEAs and countries loose money if they do not comply with the ESD / EST targets, is effort sharing more a economic instrument?

I would argue it is a regulatory instrument as we have the Effort Sharing Regulation that sets the binding AEAs and 2030 targets for Member States. When not reaching these, they can comply by using flexibilities which do have economic consequences. But the key is in my opinion the setting of the national targets via regulation.

[l-emele]

Okay, thanks for the feedback. Then I effort sharing will stay a regulatory instrument and I will distinguish between voluntary agreement and voluntary agreement instrument.