The authors acknowledge financial support from the Mistra Carbon Exit research program (the Swedish Foundation for Strategic Environmental Research) and Climate Change Impacts and Policies in Heterogeneous Societies (CHIPS) as part of AXIS, an ERA-NET initiated by JPI Climate and funded by FORMAS (grant registration number 2018-0271). We have received valuable comments from participants of the Environment for Development annual Workshop November 2020 and seminar participants at the Centre for Collective Action Research in Gothenburg and the Florence School of Regulation. Research assistance from Petter Wikström is also acknowledged. We also wish to thank Linus Mattauch, Stephan Sommer, Niklas Harring, Sverker Jagers, Felicia Robertson, Simon Gren, Simone Borghesi, Stefano Carattini, Mattias Wahlström, Jan Steckel, Jeroen van den Bergh, and Aurélien Saussay for valuable comments.