Working Paper: CEPR ID: DP16273
Authors: Davide Furceri; Michael Ganslmeier; Jonathan D. Ostry
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.
Keywords: climate change policies; climate change; political support; political cost
JEL Codes: D72; J65; L43; L51; O43; O47; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| climate change policies (CCPs) (Q58) | governmental popular support (H11) |
| high fuel prices (R48) | governmental popular support (H11) |
| high reliance on dirty energy inputs (L94) | governmental popular support (H11) |
| low oil prices (Q31) | political costs of CCPs (D72) |
| income inequality and low social expenditures (D31) | governmental popular support (H11) |
| non-market-based measures (such as emission limits) (Q58) | governmental popular support (H11) |