For regulators to act effectively on climate change, they need powers to collect and manage relevant data for their sector. Unfortunately, this is not the case for 56% of regulators overall (Figure 8.15); even among those with environmental objectives (see Figure 8.12 in previous section), more than one-quarter lack these powers. A majority of regulators in the air transport (69%) and water (64%) sectors collect environmental data, but only half (50%) of energy regulators. This may be due to collection powers being too narrowly defined, or because there is no requirement to assess the impact of decision making on environmental sustainability. Overarching targets can also be useful to guide regulators’ actions in support of environmental goals. At present, 56% of regulators have quantitative targets defined for their sector, but only 31% overall use such targets in their decision making (Online Figure J.5.3).
Less than one-quarter of regulators are required to assess the impact of regulation on environmental outcomes. E-communications regulators are the least likely to report such requirements (only 6%) compared to 38% of air transport regulators (Figure 8.16). Ex ante regulatory impact assessments (RIA) can help to reveal trade-offs and identify solutions with the greatest net benefits for the environment, whilst ex post evaluations help ensure regulations stay fit-for-purpose. Regulators may introduce a proportional and targeted approach to increase impact assessments and look to develop methodologies that encompass social and environmental in addition to economic criteria.
Regulators will require new skills and tools to support a focus on the green transition, including carrying out RIAs and quantifying environmental costs and benefits. Currently, 50% of regulators have not recruited staff with expertise in environmental sustainability and have no plans to, nor bring in external professionals (Figure 8.17). Only 30% of regulators have hired such staff in the last five years and 7% plan to do so, while 13% make use of external expertise. Barriers to hiring include budgets and uncertainty over their mandate. In some cases, regulators are unable to offer wages that can compete with the private sector, hindering their ability to attract staff with appropriate skills and sector knowledge.
Regulators may also need to engage with a wider range of stakeholders over environmental goals, such as civil society organisations (CSOs) or representatives of vulnerable groups affected by environmental threats. Currently, 79% of regulators provide avenues for environmental CSOs to have input into regulatory decision making, either through an open call for comments or a targeted request (Online Figure J.5.4) (OECD, 2024).
