Addressing climate change in the MENA region through regulatory design: Instrument choice questions

The Middle East and North Africa (MENA) Region is experiencing an enormous urbanization spree. The rapid urbanization rate has led to congestion and pollution, as well as declining competitiveness of some of the region's cities and economies. At the same time, the region remains very diverse and heterogeneous in terms of economic and social development, and largely underdeveloped when it comes to regional integration. Addressing economic and social development, as well as regional integration, may create further sources of pollution that will have to be mitigated. Policy makers in the region stand thus at a critical juncture in terms of the legal and policy choices that need to be made to address both the developmental and climate protection concerns. Since the 19th century, public policies and the law have been largely based on an assumption of human behaviour: that individuals are rational. More recently, and thanks to seminal studies by Nobel Prize in Economics winner, Richard Thaler, among others, public policy makers are using different paradigms of human behaviour for the development of public policies. There are, accordingly, three major regulatory tools to help transition towards more sustainable development policy choices: command-and-control, market-based approaches, and nudges. As MENA countries increasingly develop legal and policy frameworks to address climate change, innovative regulatory approaches will be required. This chapter analyzes the use of regulatory policies to address climate change concerns in the MENA Region, and assesses their effectiveness in the background of the complex socio-economic conditions of the region.