When it comes to cutting greenhouse gas emissions, carbon taxes work. Many policy makers who are working on reducing greenhouse gas emissions therefore put their focus entirely on passing laws that put these taxes in place. But getting these laws passed and enforcing them, especially in the United States, is always a fight, mostly with the wealthy, powerful carbon producing industries. A new policy paper by Berkley researchers advocates a different path. The Berkley team’s position is that the best and ultimately the most expedient course for reducing green house gas emissions is not to focus first on enacting carbon taxes. They say policy makers should first concentrate on building broad political support for green policies by investing in clean-energy industries, rather than penalizing polluters.
The paper, published today in the journal Science, was written by a multidisciplinary team of environmental, legal, and political experts. Why is the Berkley team advocating this seemingly softer approach? Jonas Meckling, assistant professor in the Department of Environmental Science, Policy and Management, and the study’s lead author explains, "This paper is about how can we build political support for progress on climate policy, toward decarbonizing our energy systems. … We find that the more green industries form or expand, the stronger the coalitions for decarbonizing energy systems become. This runs counter to the prevalent notion that pricing carbon is the first-best choice in climate policymaking."
Though at first glance, green industrial policy may appear less efficient economically, the Berkley team explained that supporting clean energy policies builds political support, so that further down the line, when policy makers propose carbon regulations, and carbon taxes, which impose costs on polluting industries, they won’t be going up against them alone. They’ll be entering the fray with a broad coalition of interests, individuals, and entities on their side.
“Basically,” says Nina Kelsey, a postdoctoral scholar at the Berkeley Roundtable on the International Economy and co-author of the paper, “if you can build political support and speed up the process overall by using less efficient but more powerful tools up front, you may still lower the total costs in the long run.”
The paper’s authors described a number of examples where this approach has worked before. They pointed out that in two-thirds of all countries such as Denmark and Germany, and states like California where some form of carbon pricing policy was successfully enacted, leaders had first implemented incentives for clean energy, which built the political support for green industry, which ended up being crucial for eventual de-carbonization.
The authors also outlined some strategies that are keys to building winning coalitions for this de-carbonization. The first is adopting sector-specific targeted policies. They cited rebates and subsidies for renewable energy as examples that provide concrete benefits to firms and households.
The second recommendation the authors made is focusing on direct policy measures like renewable portfolio standards and feed-in tariffs, again policies that provide benefits for some rather than costs for others. Creating this sort of buy-in to green industry, says the Berkley team, will create constituencies who will support subsequent climate policy moves, such as an eventual imposition of a carbon tax.