Working Paper: CEPR ID: DP17359
Authors: Olivier De Groote; Axel Gautier; Frank Verboven
Abstract: We analyze the political impact of a generous solar panel subsidization program. Subsidies far exceeded their social benefit and were partly financed by new taxes to adopters and by electricity surcharges to all consumers. We use local panel data from Belgium and find a decrease in votes for government parties in municipalities with high adoption rates. This shows that the voters’ punishment for a costly policy exceeded a potential reward by adopters who received the generous subsidies. Further analysis indicates that punishment mainly comes from non-adopters, who change their vote towards anti-establishment parties.
Keywords: financing climate policy; photovoltaic systems; retrospective voting; buying votes
JEL Codes: C23; D72; H23; Q48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher solar PV adoption rates (Q48) | Decrease in votes for incumbent government parties (D72) |
| Financial burden of subsidy program (H20) | Decrease in votes for incumbent government parties (D72) |
| Neighbors of prosumers (D16) | Decrease in votes for incumbent government parties (D72) |