The Decarbonizable Sector and the Rise of Fiscal Climate Policies

• In Event: Climate Action in the Private Sector

Abstract

Political scientists have conceptualized climate politics as a distributive struggle between the green winners and fossil losers of decarbonization (e.g. Aklin and Mildenberger 2020; Colgan, Green, and Hale 2021). This paper argues that while historically accurate, this understanding of climate politics as organized around a binary antagonism between a green and a carbon coalition no longer fully captures political conflict over climate policy. In particular, we argue that it does not properly recognize a group of industries that has emerged as drivers of recent climate policy progress: the decarbonizable sector—such as car companies, utilities, or producers of coal, steel, and chemicals. While these industries have traditionally been part of the carbon coalition, they can in principle develop new sources of economic competitiveness for the zero-carbon economy. We argue that the decarbonizable sector is therefore receptive to a bargain with the green coalition: embracing ambitious climate goals in exchange for policies that fund and de-risk their own decarbonization. We demonstrate this argument through a new data set on cliamte-related spending of G20 countries during the covid pandemic, a new measurement of the size of the decarbonizable sector in countries across the globe, as well as in-depth case studies of green fiscal spending in three countries: the US, Germany, and the United Kingdom. We show that the rise and unevenness of fiscal climate policies are a consequence of the size and political power of the decarbonizable sector in these three countries.

Authors

• Nils Kupzok, Columbia University

• Jonas M. Nahm, Johns Hopkins University