The skeptic in you has probably dismissed the idea of making a formal complaint to a regulator because you think it’ll go nowhere.
But Jonathan Colmer of the University of Virginia found that environmental investigations prompted by citizen complaints may be more likely to uncover severe violations than inquiries that didn’t start with one. Colmer examined more than 130,000 citizen complaints to the Texas Commission on Environmental Quality, which monitors the state’s air and water, and saw that regulators are more likely to enforce the law when an investigation stems from a complaint. The bottom line: Citizen complaints boost regulators’ efficiency and make a difference.
Colmer and 13 other researchers gathered at Stanford Graduate School of Business in early February to present their work on environmental and climate matters. Over two days, speakers at the conference Political Economics of Environmental Sustainability examined areas ranging from the influence of climate issues on politics to theoretical structures of international climate agreements. They also discussed the use of carbon taxes and subsidies for renewable energy, as well as paying countries to reduce carbon emissions.
Courtesy of Patrick Beaudouin
About 75 scholars, researchers, and students attended the gathering. Stanford GSB’s Business and Environmental Sustainability Research Conference Series and Stanford Doerr School of Sustainability presented the event, organized by Partha Dasgupta of the University of Cambridge and the GSB’s Bård Harstad.
Conference speakers agreed that deep political polarization and the lobbying strength of the fossil-fuel industries are among the many obstacles to reducing carbon emissions. Still, there are reasons to be hopeful: Grassroots initiatives and individual efforts can prompt climate action, while new models of cooperation among countries may lead to productive international climate accords.
To Subsidize or to Tax, or Both, and When?
Countries continually grapple with carbon taxes and subsidies for renewable energy whether they’re acting on their own or as part of an international climate agreement. Matthew Kotchen of Yale University noted that while green subsidies can reduce carbon emissions, international climate agreements, which usually seek to boost carbon taxes, may in fact remove green subsidies, although they might tentatively raise them first. Harvard University’s Juan Dodyk suggested that policymakers can use a sequence of first reducing carbon taxes and offering green subsidies to prompt companies to develop green technologies. The goals of these first steps is “to disrupt the power of the polluters” and to “build a coalition” that supports stringent green policies, said Dodyk. The second stage of the sequence would introduce greater carbon taxes.
A country may be able to cut its total emissions with a carbon tax that doesn’t apply to every industry, making the tax politically feasible and more cost-effective than a broader one, said Stanford’s Lawrence Goulder. A narrower policy can impose different tax levels on various sectors or exempt entire areas, such as fuel for cars, he said. Likewise, a government can use climate policy to avoid future asset stranding, referring to the loss in value of a major resource such as a power plant or mine, said Achim Hagen of Humboldt University of Berlin. Asset stranding represents huge potential losses for the older voters who invested in those projects many years earlier. If the political party representing the young generation is in power and isn’t likely to be re-elected, it can use a high investment subsidy to ensure that its successor won’t eventually implement a high carbon tax that could strand a power plant or mine.
Environmental regulations matter politically, so subsidies, taxes, bans, or other regulations can induce ever-increasing political resistance that governments must navigate, said Stanford’s Allan Hsiao. In high-profile conservation areas such as Brazil and Indonesia, regulators weigh using carbon taxes versus imposing bans on activities such as deforestation or using peatland for agriculture, he noted.
Modeling a Model Climate Agreement
Identifying the perfect climate accord is difficult, as is persuading countries to agree on the agreement. One possible design is a “climate club” in which members implement a uniform carbon tax and trade freely among themselves while imposing tariffs on non-member countries, said the University of Chicago’s Thomas Bourany. He found that the optimal climate club includes all countries except Russia and former Soviet countries and requires a $100 tax per ton of carbon within the club and a 50% tariff on goods from non-members. Haaris Mateen of the University of Houston suggested a club model in which members have carbon abatement targets and pay non-members to reduce emissions. Non-members in turn can pay each other to cut emissions.
A club or other pact may not be necessary at all if one or two countries deploy solar radiation modification. Christian Traeger of the University of Oslo suggested that even a single country acting on its own could lower temperatures using the technology, which injects sulfate aerosols into the earth’s stratosphere. Still, he said, this technological route has disadvantages: It could give countries an excuse not to reduce emissions and have unintended consequences like disrupting rain patterns and ecosystems, harming entire economies.
Polarization and Power
Domestic political polarization can erode a country’s ability to fulfill its commitments in international climate pacts. Pressure from a sharply divided electorate forces political incumbents to consider their re-election prospects when they propose climate policy, said Sarah Spycher of the University of Bologna. Because climate-friendly candidates are likely to water down their ambitions to make them politically acceptable, both green and non-green incumbents may ultimately propose little action on the climate. On the other hand, voters on all sides of a political divide can force candidates to moderate their positions so their policies reflect the median voter’s views, Spycher added.
Communicating across political party lines is almost always constructive and promotes cooperation. But affective polarization, or political division deep enough to make voters love their own party more while trusting other parties less, may make them less likely to approach their political adversaries. In a study asking Democrats to recruit others to email Congress about climate change, Lucy Page of the University of Pittsburgh found that Democrats tried to recruit other Democrats and not Republicans, believing that contacting Republicans wouldn’t be effective. Partisan mistrust impeded Democrats’ willingness to communicate across the party line, Page said.
Exposure, Experience, Enforcement
Everyone has preferences and convictions when it comes to environmental and climate issues, but when do they form those beliefs and when is the best time to expose people to climate policies? Sometimes people reject a solid recommendation simply because it’s unfamiliar. But Guglielmo Zappalà of the University of California, Berkeley, examined the effect of the age of individuals when they’re introduced to environmental policy. He found that exposing people to climate policies when they’re between age 18 and 25, or during their “formative age” and “impressionable years,” increases the likelihood they’ll agree with those policies when they’re older. So while young adults might learn about a policy now and even oppose it, they may come around to support it later.
Likewise, within a congressional election, voters’ direct experience with extreme weather events and green job prospects make them more likely to support a Democrat, said Francesco Trebbi of UC Berkeley. Examining precinct-level voting data, Trebbi also found that extreme climate events push congressional candidate platforms toward more pro-environment positions.
Regarding enforcement of environmental laws, a strong federal regulator can give heft to its state-level counterpart. States are usually the primary regulator. But the mere threat of scrutiny by a strong federal Environmental Protection Agency wielding large penalties helps states with enforcement and compliance, said Jenna Anders of UC Berkeley. She examined data on Superfund cleanups and violations of the Clean Air Act and found that a stronger EPA was correlated with higher state penalties. State regulators, Anders said, in effect are able to say, “Bargain with us; you don’t want the EPA involved.”
