Are Climate Change Policies Politically Costly?

Abstract

Are policies designed to avert climate change (Climate Change Policies, or CCPs) politically costly? Using data on governmental popular support and the OECD's Environmental Stringency Index, we find that CCPs are not necessarily politically costly: policy design matters. First, only market-based CCPs (such as emission taxes) generate negative effects on popular support. Second, the effects are muted in countries where non-green (dirty) energy is a relatively small input into production. Third, political costs are not significant when CCPs are implemented during periods of low oil prices, generous social insurance and low inequality.

Policy Sequencing Towards Carbon Pricing - Empirical Evidence From G20 Economies and Other Major Emitters

“…Our analysis also builds on previous more normative work on the benefits of alternative instrument types (Peñasco et al, 2021) and policy mixes (van den Bergh et al, 2021) including complementarities between carbon pricing and other instruments (Bertram et al, 2015), and more generally improves our understanding of climate policy adoption by examining its temporal dimension. Furthermore, we contribute to debates around the political economy of carbon pricing, and the feasibility of climate policy more broadly (for example, Klenert et al (2018); Dolphin et al (2019); Levi et al (2020); Ostry et al (2021)).…”

The Politics of Public Service Reform: Experimental Evidence from Liberia

“…It also illustrates a powerful driving force behind the status quo bias in service delivery reforms, furnishing empirical evidence to support the theoretical prediction that politicians rationally "pander" to voters rather than solve tough social problems (Fernandez & Rodrik, 1991;Maskin & Tirole, 2004). Political economy constraints frequently hinder the adoption of policies considered "first-best" by economists in domains such as trade and environmental regulation (Autor, Dorn, Hanson, & Majlesi, 2020;Che, Lu, Pierce, Schott, & Tao, 2016;Ostry, Furceri, & Ganslmeier, 2021). They are also a first-order concern for the design of public service policies.…”