Can Policy Design Make Climate Mitigation Policies Popular?

• In Event: Political Economy of Climate Change

Abstract

Transitioning away from carbon-intensive to more renewable energy sources is one key lever through which countries can mitigate climate change. Such transitions, however, create costs in terms of energy prices, jobs, and economic activity across consumers, regions, workers, and firms. These costs have the potential to generate substantial political opposition to mitigation policies even in a setting for which there is general support for combatting climate change. In this study, we investigate whether the design of climate policies can address these costs concerns and increase support for climate mitigation policy. We conduct three survey experiments designed to test how compensation and trade competition measures tied to climate policy affect public support for a transition to greener energy sources. The survey was fielded in Germany during the 2021 federal election campaign with each experiment designed to explore the effects of policy design in the context of active policy debates in Germany. We find that compensation measures do raise support for electoral candidates who run on a pro-energy transition platform. Compensation further raises support for climate policy plans in general, and for a full exit from coal energy in particular. Compensation has a larger impact if it is aimed at consumers and regions than when designed for investors, and progressive compensation policies are preferred to lump sum policies. Policies designed to ensure the competitiveness of domestic firms despite higher energy costs can also raise support for mitigation policies, but we find this effect evident only once the logic of such interventions are explained. Taken together our study indicates numerous policy design approaches that have the potential to substantially increase support for climate mitigation policy at least in country settings like Germany for which there is a baseline level of diffuse support for climate action.

Authors

• Isabela Mares, Yale University

• Kenneth F. Scheve, Yale University

• Christina Luise Toenshoff, Stanford University