To ensure a holistic approach to green regulatory policy, the toolkit is structured along the three stages of the regulatory policy cycle (see Figure 1), a framework rooted in the concept of the Regulatory Governance Cycle (OECD, 2011[2]). This cycle represents an ideal state in which the different actions that make up effective regulatory governance are co-ordinated. The toolkit covers practices for the design, delivery, and evaluation of primary laws and subordinate regulations with a view of supporting green transition across all policy areas. In addition, the toolkit focuses on the different consultation, co-ordination and capacity-building practices (the 3 Cs) needed at each of the stages to embed environmental considerations.
Better regulation for the green transition stress‑testing toolkit
Source: Author’s own elaboration.
Insufficient attention to environmental concerns can result in ineffective rules with negligible environmental benefits and, in some cases, high costs for the economy and business. Simultaneously, the costs of inaction to respond to climate change and environmental degradation will only increase over time. Therefore, the toolkit emphasises the importance of systematically evaluating environmental considerations in the short, medium and long-term at each stage of the regulatory policy cycle across all relevant policy sectors. This approach extends beyond environmental laws and regulations to include those in other areas that could have a significant impact on the environment (e.g., transport, trade, industry). Furthermore, the toolkit aims to evaluate both the de jure and de facto situations in given jurisdictions. This dual focus makes the instrument useful for testing the readiness of the frameworks themselves, as well as assessing their implementation and providing insights as to potential gaps between policy design and execution.
The magnitude and urgency of addressing environmental challenges require comprehensive efforts on all fronts and from all actors (OECD, 2022[3]). Accordingly, the toolkit adopts a horizontal and whole-of-government approach as it can be used by individual ministries and relevant agencies across the administration, but also by a third party to evaluate regulatory policy frameworks.
To reflect these points, the toolkit itself presents the following characteristics:
It consists of a compilation of assessment questions that afford the relevant evaluating party the flexibility to assess the regulatory frameworks at any stage of the regulatory policy cycle deemed relevant. For example, the evaluating stakeholder may opt to focus solely on the delivery stage.
The assessment questions are presented in a manner that aims to reflect how decision-makers approach regulatory tasks within each of the relevant stages. For the design phase, for example, questions align with the regulatory impact assessment (RIA) process.
The questions are presented through an Excel spreadsheet to facilitate evaluation. For assessment, respondents are required to answer the questions in the three tabs of the file, each corresponding to a stage in the regulatory governance cycle (namely, regulatory impact assessment, regulatory delivery, and ex post assessment). For each question, respondents need to select if elements are in place and for what quantity of primary laws/subordinate regulations. Specifically:
A dropdown menu allows responses of 1) No, 2) For some, 3) For the majority/For all. Each answer is attributed a score (0, 0.5, or 1 point) respectively.
Additional subordinate questions (mainly requesting evidence) are not attributed a score but can be used for validating the main question.
All questions should be answered to ensure the file's proper functioning.
Upon completion of the assessment questions, and following validation of the answers by the evaluating party (as applicable), the toolkit will provide an indicative quantitative score. Presented in a “traffic light format”, this score will indicate the readiness of the tested frameworks for the green transition.
It is important to note that while this score offers a valuable starting point, a comprehensive accompanying qualitative assessment, for instance in the form of a review conducted by a third party, is recommended for a more thorough evaluation. The quantitative score and maturity levels are indicative only and should not be considered definitive without further qualitative analysis.
The toolkit can independently be applied by policymakers and regulators across government. Government officials in all line ministries can use the toolkit to determine whether their frameworks are sufficiently robust, resilient, and responsive to effectively pursue environmental goals and address environmental considerations. Due to its subject area, the Ministry of Environment (MoE), if possible in co-operation with the regulatory oversight body, may have a particular interest in promoting and supporting the use of the instrument in government. The MoE could decide to share the toolkit with counterparts in other ministries for policymakers to voluntarily apply it in their respective area of work.
In addition to government representatives, other stakeholders, representing for instance academia, experts, or civil society organisations, can use the toolkit as an analytical instrument to assess the readiness of regulatory frameworks for the green transition. Stakeholders can for example use the ex post review section of the toolkit to determine to what extent countries’ existing stock of legislation includes environmental considerations.