Greening Policies in Argentina & Chile: Policy, Partisanship & Electoral Cycles

• In Event: Green Politics around the World

Abstract

When do governments adopt effective greening policies to decarbonize their electricity sectors? Existing research suggests that greening policies lead to the mobilization of fossil industries that intend to block them, and that leftwing governments are more prone to implement pro-environmental policies. In this paper I discuss these assumptions by analyzing the deployment of clean energies in latecomers developing countries. I argue that effective greening policies are those that dissolve previous policy structures and remove the sufficient conditions for policy failure within the electricity sectors. The design of such measures, yet, is endogenous to the type of electricity sector that emerged from previous market reforms. In firm-captured sectors, greening policies need to deconcentrate them; while in state-captured sectors, greening policies must deregulate them. Each type of greening policy, in turn, account for the actors who pay the economic costs of energy transitions and, therefore, the type of government that adopts it. Deconcentrating greening policies have concentrated costs since they directly harm incumbent producers who see their share in the market reduced by the entrance of new firms. By contrast, deregulating greening policies lead to diffused to costs across consumers, who pay higher electricity prices to cover producers’ initial investments. Leftwing governments are more prone to adopt broad policies that harm producers, while rightwing governments implement policies that affect consumers. Both types of governments, in turn, adopt these costly policies at the beginning of the electoral cycle to prevent the mobilization of those who are harmed by the reforms.
I test these theoretical claims by analyzing the cases of Argentina and Chile through a qualitative historical analysis based on archive data and over 60 interviews to stakeholders. In Argentina, market-controlled reforms in the 1990s led to a state-captured energy sector in the 2000s. To effectively foster a takeoff of solar and wind energies, governments needed to adopt liberalizing reforms that harmed consumers and, in consequence, were adopted by the right-wing government of Mauricio Macri in 2015/2016. In Chile, the unregulated sectoral reforms in the 1980s led to a firm-captured energy sector in the 2000s. Governments in Chile needed reforms that increased the level of competition in the sector and directly harmed incumbent utilities. Such measures were adopted by the left-wing government of Michelle Bachelet in 2014. Taken together, the findings of this paper inform policy debates on decarbonization by demonstrating that effective policies in developing countries need to be designed with previous policy legacies in mind and by emphasizing the moments and political contexts in which such measures can be adopted.

Author

• Santiago Lujan Cunial, University of Pennsylvania