Mini-Conference on Green Industrial Policy and the Environment

Governments around the world are intensifying their efforts to make the global economy more sustainable, placing industrial policy at the center of this transformation. Countries are investing billions of dollars in incentives for businesses developing future-defining green technologies, such as electric vehicles and solar panels. This mini-conference brings together scholars from diverse sub-disciplines and geographic regions to evaluate the political economy of green industrial policy and its role in leading the way for the green energy transition. It offers a comprehensive exploration of the evolving landscape of green industrial policy, from domestic political challenges to international dynamics, providing an opportunity to explore key challenges, successes, and lessons from around the world.

The conference features five carefully curated panels. The first panel explores how countries can build domestic political support for green industrial policy programs, with a focus on engaging Republicans in the U.S. Morton, Dolsak, and Prakash analyze whether the IRA increased support for Republican candidates despite its lack of Republican backing in Congress. Benkler studies how non-partisan factors, such as renewable energy attributes specific to Texas districts, influence Republican attitudes toward green projects. Wu tests how messaging by co-partisans can shift Republican viewpoints on green policies using pre-registered experiments. Finally, Cao and Zhao investigate firms' preferences for green industrial policies, including carbon border adjustments and the Green New Deal.

The second panel shifts attention to the potential losers of green industrial policy and the risk of public backlash. Li offers an opposing view to the previous authors on the winners of the IRA, demonstrating that there were negative electoral effects in response to IRA Energy Community designations. Bradley focuses on the characteristics of local communities to theorize how human capital concentration affects economic performance and support for green industrial policies. Cha and Ryoo consider firm-level characteristics that may affect public support for green industrial policy using experiments – considering in particularly backlash against China from US voters. Finally, Oslan discusses the conditions under which green industrial policy programs might backfire using game theoretic models and case studies.

The third panel addresses the creation and implementation of green industrial policies, as well as their aftermath. Winkler discusses how firms’ engage in the creation of green industrial policy in order to influence green classification procedures. Next, Southin considers the unique implementation challenges of industrial policy in small liberal market economies that are reluctant to “pick winners” and coordinate innovation activities broadly. Echavarraia also discusses the challenges of implementation focusing on intermediary actors – rather than the government – in community solar projects. Wang and Yan consider how local protectionism manifest in public procurement can affect green industrial policy and EVs. Finally, Jud investigates the effects of phasing out subsidies using the case of German EV subsidies.

Moving to a global perspective, the fourth panel focuses on the experiences of developing countries with green industrial policy. O’Brien-Udry and Matush consider how climate change affects low and middle income countries’ industrial policy, and specifically whether they shift their policy to address issues caused by climate change. Zhu, Li, and Yu investigate how political incentives shaped China’s green industrial policy transition. De Gaspi and Allan compare Brazil and Mexico discussing the unique challenges that their governments faced in industrial policy. The panel also discusses firm and sector level considerations in green industrial policy in developing countries. Huang, Jensen, and Malesky investigate to what extent firms in developing countries engage in green activities, and which actors push them to do so. Ratan and Allan offer a new strategy with export data and a machine learning model to identify the most competitive sectors in which to pursue industrial policy.

The final panel explores how green industrial policy intersects with international conflict and cooperation. The papers by Dodyk and by Brownstein investigate how the increasing trend of industrial policy programs in developed states impact international cooperation in trade agreements and in the International Monetary Fund. Next, Toenshoff and Akbik consider citizens’ preferences for coordinating industrial policy internationally or maintaining a domestic piecemeal approach. Kenney considers how international cooperation on separate issues – such as tax evasion – can affect industrial policy and investment promotion in individual states. Finally, Brooks and Voeten consider how international geopolitical conflict affects industrial policy efforts.