Blog post – Global Governance of Carbon Pricing

Authors: Daniel Muth, Mathieu Blondeel, Philipp Pattberg (all three VU)

Published in February 2025

Climate change governance has become one of the most complex areas of international cooperation. While multilateral institutions remain central to global climate action, they no longer operate alone. Instead, climate governance now unfolds across a hybrid arena made up of formal international organisations, informal groupings, partnerships, and non-state actors. Understanding how this fragmented landscape works and how it shapes political outcomes is essential for effective climate action.

 

This NAVIGATOR working paper examines this evolving architecture and its implications for global cooperation and the European Union’s role in climate governance.

 

From Multilateralism to Hybrid Governance

 

For decades, global climate governance was largely structured around formal multilateral institutions, most notably the UN Framework Convention on Climate Change (UNFCCC). While these institutions continue to provide legitimacy, coordination, and rule-setting, they increasingly coexist with a growing number of alternative and complementary governance arrangements.

 

These include informal forums such as the G7 and G20, climate clubs, public–private partnerships, development banks, transnational initiatives, and sector-specific coalitions. Together, these actors form a hybrid governance arena that operates across different levels, issue areas, and degrees of formality.

 

This shift reflects both necessity and frustration. Formal multilateral negotiations are often slow and constrained by consensus rules, while climate action requires rapid responses, experimentation, and flexibility. Hybrid arrangements can fill gaps left by multilateral institutions, but they also raise questions about coherence, accountability, and inclusiveness.

 

A Crowded and Interconnected Governance Landscape

 

The working paper maps the key components of this hybrid climate governance arena, showing how institutions interact rather than operate in isolation. Multilateral organisations such as the UNFCCC, the World Bank, and other multilateral development banks remain crucial, particularly for agenda-setting, finance, and norm diffusion. At the same time, informal and minilateral platforms increasingly shape priorities, mobilise resources, and coordinate action among smaller groups of influential actors.

 

Rather than replacing multilateral institutions, these arrangements layer on top of them, creating a dense web of overlapping mandates and initiatives. This can generate innovation and momentum, but it can also lead to duplication, competition, and fragmentation.

 

The paper highlights that power dynamics matter greatly in this hybrid system. States and institutions with greater resources and convening power are better positioned to shape agendas, while less powerful actors risk being sidelined especially in informal settings where representation and transparency are weaker.

 

What This Means for Global Climate Cooperation

 

Hybrid climate governance offers both opportunities and risks. On the one hand, it allows for experimentation, faster decision-making, and targeted cooperation on specific issues such as climate finance, mitigation technologies, or adaptation. On the other hand, the proliferation of initiatives can make the overall system harder to navigate and undermine collective accountability.

 

The paper shows that effectiveness depends not only on the number of initiatives, but on how well different governance arrangements are coordinated. Multilateral institutions still play a vital role in providing overarching frameworks, legitimacy, and points of reference, even as climate action increasingly happens beyond them.

 

Implications for the European Union

 

For the EU, navigating this hybrid climate governance arena is both a challenge and an opportunity. As a strong supporter of multilateralism and an active climate actor, the EU is deeply embedded in formal institutions such as the UNFCCC. At the same time, it is increasingly active in informal forums, partnerships, and climate initiatives outside traditional multilateral structures.

 

The paper suggests that the EU’s effectiveness will depend on its ability to combine principled support for multilateral institutions with strategic engagement across the hybrid governance landscape. This includes coordinating actions across forums, supporting inclusive governance arrangements, and ensuring that informal initiatives complement rather than undermine multilateral processes.

 

Looking Ahead

 

As climate change intensifies, so too will the complexity of climate governance. The hybrid governance arena is likely to expand further, not contract. Understanding how its different components interact, and where power, influence, and accountability lie  is essential for shaping effective and equitable climate action. By mapping this evolving landscape, the NAVIGATOR working paper provides a framework for thinking more strategically about climate governance and about how the EU can navigate an increasingly crowded and contested global arena.

 

 

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Co-funded by the European Union

This project receives funding from the European Union’s Horizon Europe research and innovation programme under the Grant agreement ID: 101094394.

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