The Electoral Impacts of Supply-Side Energy Transitions

• In Event: Energy, Politics, and the Public

Abstract

What is the political impact of a declining fossil fuel industry? The transition from hydrocarbons to cleaner sources of energy requires the reduction in oil and gas extraction. Nonetheless, we know relatively little about its political implications. We study the case of Mexico, a young and resource-rich democracy that has experienced a decline in hydrocarbons production for years. Using an instrumental variables approach, a geographic discontinuity, and a difference-in-differences, we find that electoral sections with access to oil wealth showed more electoral support for the candidate in favor of the industry’s revival and less for the party associated with the development of the sector. Our findings point to two potential mechanisms that could explain this relationship. First, constituencies rich in fossil energy are less likely to have firms in other economic sectors and are more sensitive to changes in the global energy markets. Second, individuals in oil-extracting regions have different political attitudes compared to their counterparts in non-producing ones. To study these questions, we employ highly disaggregated electoral returns, geo-referenced data on oil assets and firms in different sectors,
the economic census, and a nationally representative survey on political attitudes. Our results
have implications for the study of the political economy of energy transitions.

Authors

• Cesar B. Martinez-Alvarez, University of California, Santa Barbara

• Michael L. Ross, University of California, Los Angeles