New Politics of Climate Change: From a Regulatory State to a Welfare State

• In Event: Environmental Policymaking: Challenges and Solutions

Abstract

Traditional approaches to climate policy have emphasized regulations to mitigate climate change. As per the Lowi-Wilson typology, this can be classified as regulatory politics. With concentrated costs imposed on specific sectors but diffused benefits with global public good features, climate politics faces opposition from interest groups representing the climate-exposed sectors. The pushback from the fossil fuel industry, the ongoing strike by UAW workers, and protests by Dutch farmers are some examples. Yet, as the salience of renewable energy has increased, a counter-mobilization by pro-mitigation interest groups in favor of climate regulations is also taking place—such as the push for net zero emissions targets.

In recent years, along with regulatory politics, a new type of distributive politics (e.g., the Inflation Reduction Act and Just Transition policies) has emerged which tends to create concentrated benefits for specific sectors but imposes diffused/hidden costs on the general public (typically in the form of, budgetary spending with inflationary potential).

What explains the emergence of the new climate-welfare politics, and might it displace climate-regulatory politics? We suggest that the rising salience of welfare politics is in response to the recognition of different types of risks posed by climate change and by climate policies enacted to address them. These risks are of three types: physical, transition, and liability. Physical risks mean that firms (and their supply chains) and households may suffer physical damage to their operations, and livelihoods from hurricanes, sea-level rise, forest fires, or slow-onset drought. Transition risk means that changes in regulations or consumer preferences may alter business models, hurting both labor and capital in carbon-intensive businesses and favoring low-carbon ones. Liability risk means that courts may increasingly hold firms responsible for climate costs and order them to compensate parties hurt by their actions or inaction. But this would also affect labor working in these firms, as well as financial funds that have invested in their assets.

Affected actors demand governmental intervention to help them mitigate these risks and provide some sort of insurance or compensation. This could be termed as the new politics of embedded environmentalism – embedding a new welfare state in climate policy. While Ruggie’s notion of “embedded liberalism” focused on social protection against risks from foreign trade, we extend this notion by focusing on social protection for different categories of actors from different types of climate risks. Of course, some social protection might still flow via the traditional regulatory route: for example, laws to enhance flood or wildfire disclosures on properties to protect homeowners against extreme weather events are a traditional type of information-based regulation. However, many of the social protection measures might require increased government spending, a complex issue given the multiple budgetary demands governments face.

How might this new politics play out for different policy instruments? This study explores this theoretical issue by classifying climate policies in various policy types alongside highlighting their politics in terms of key actors and their political demands. We will draw on global datasets of climate laws to suggest some broad descriptive trends. We will take a deep dive into US politics both at the federal level and by exploiting variation across states.

Scholars typically view climate politics through a partisan lens. We will highlight ideology is not always the best approach to understanding who supports which climate policy and why. For example, why might Republicans oppose renewable energy at the federal level but support it at the state level? Why do Democrats support the social cost of carbon but dispute when carbon pricing raises the prices of gasoline? Why do red states that have opposed the Inflation Regulation Act seem to be the biggest beneficiaries of this Act?

Finally, we will highlight the increased importance of budgetary subsidies as a tool to motivate climate action, as opposed to regulatory approaches which tend to invite a backlash. Might this mean that climate politics is tending to make a transition from the regulatory to a more distributive mode? Or might this motivate us to revisit the Lowi-Wilson approach on the relationship between policy and politics?

Authors

• Christopher Taylor Brown, University of California, Berkeley

• Aseem Prakash, University of Washington

• Nives Dolsak, University of Washington