Compensating for the Climate: Unemployment Insurance and Climate Change Votes
| Published date | 01 February 2020 |
| Date | 01 February 2020 |
| Author | Daniel Yuichi Kono |
| DOI | 10.1177/0032321719836066 |
| Subject Matter | Articles |
836066PSX0010.1177/0032321719836066Political StudiesKono
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Political Studies
2020, Vol. 68(1) 167 –186
Compensating for the
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Insurance and Climate
Change Votes
Daniel Yuichi Kono
Abstract
Global climate change is a pressing political issue, yet some governments have done more to
address it than others. Building on the “compensation hypothesis” from the international trade
literature, I argue that legislators are more willing to support carbon restrictions when workers
in their districts are protected by generous unemployment insurance. I test this hypothesis with
an analysis of Congressional climate change votes. I find that higher carbon-intensive employment
makes legislators less likely to vote for carbon restrictions, but this effect is weaker where
unemployment benefits are high. I also find that generous unemployment benefits make legislators
more likely to vote for carbon restrictions but only where carbon-intensive employment is high.
My results imply that generous unemployment insurance can help governments to pass stronger
climate change legislation. More broadly, they indicate that struggles over the welfare state have
important consequences for other policy domains.
Keywords
climate change, compensation hypothesis, environmental politics, welfare state, social spending
Accepted: 14 February 2019
Global climate change is arguably the preeminent policy issue of our time. If carbon
emissions continue unabated, the consequences are likely to include rising sea levels,
melting snowpacks and glaciers, species extinctions, desertification, and crop failures
(Intergovernmental Panel on Climate Change (IPCC), 2014). In response to these threats,
a growing number of governments have pledged to reduce national carbon emissions. To
date, however, actual policy responses have varied greatly: some countries, such as
Finland, have mandated deeper emission cuts than have others, such as the United States
(Nachmany et al., 2015). Such variation forces us to ask why some governments have
moved more aggressively than others to combat climate change.
Department of Political Science, University of California, Davis, CA, USA
Corresponding author:
Daniel Yuichi Kono, Department of Political Science, University of California, Davis, 1 Shields Ave, Davis,
CA 95616, USA.
Email: dykono@ucdavis.edu
168
Political Studies 68(1)
The answer to this question is complex, since climate policy reflects many factors,
including public opinion (Hughes and Urpelainen, 2015; Steves and Teytelboym, 2013),
the size and political influence of the carbon-intensive sector (Hughes and Urpelainen,
2015; Steves and Teytelboym, 2013; Ward and Cao, 2012), international policy diffusion
(Fankhauser et al., 2016), and domestic regime type (Bättig and Bernauer, 2009;
Neumayer, 2002; Von Stein, 2008), to name just a few.1 This article highlights another
factor that contributes to variation in climate policy: the size and generosity of the wel-
fare state.
Theoretically, there are good reasons to think a generous welfare state might facilitate
ambitious climate policies. By design, carbon restrictions reduce output and employment
in carbon-intensive industries. Not surprisingly, affected workers often oppose such poli-
cies. Generous welfare spending—on unemployment benefits, health care, adjustment
assistance, and so on—may cushion this blow and reduce resistance to climate action. A
similar “compensation hypothesis” has received strong support in the area of interna-
tional trade, with numerous studies showing that generous social spending facilitates
trade liberalization (Adserà and Boix, 2002; Cameron, 1978; Hays et al., 2005; Kono,
2011; Mayda et al., 2007; Rickard, 2015; Rodrik, 1998; Walter, 2010). However, in the
climate arena, the evidence is more mixed. Although Kerret and Shvartzvald (2012) find
that generous social-welfare policies are associated with lower greenhouse gas emissions,
Bernauer and Böhmelt (2013) show that this result is not robust to measures of actual
climate policy. A key problem, as Bernauer and Böhmelt (2013: 11993) note, is that extant
studies employ composite measures of both climate and social policy that obscure as
much as they reveal: “more disaggregated analyses are needed, since studying the effects
on highly aggregated environmental performance measures tend to obfuscate rather than
clarify the welfare state-environment relationship.”
This article responds to this need with a micro-level study of welfare spending and
legislative climate-change votes. Specifically, it examines how district unemployment
benefits affect legislators’ incentives to support climate-change legislation. I investigate
this question by analyzing roll-call votes on the American Clean Energy and Security Act
of 2009—to date, the United States’ sole legislative effort to introduce broad-based car-
bon restrictions. My analysis reveals, first, that legislators from districts with high car-
bon-intensive employment were less likely to vote for this bill. More importantly, it also
shows that generous unemployment benefits weakened this negative effect, suggesting
that such benefits reduced opposition from threatened workers. The climate-friendly
effects of unemployment insurance were not only statistically significant but also sub-
stantively important: my results suggest that sufficiently high benefits could ensure the
passage of climate legislation that would otherwise be unable to pass. Although my
empirical focus on the United States precludes sweeping conclusions about the welfare
state-environmental policy relationship, the micro-level results show clearly that a theo-
retically relevant form of social spending (unemployment insurance) affects an important
type of climate policy outcome (legislative votes) under certain conditions (when legisla-
tors confront high carbon-intensive employment). In so doing, they advance our knowl-
edge of the welfare state-environmental policy nexus while suggesting an important
agenda for future research.
Practically, my results suggest the value of linking climate action to worker compensa-
tion. There is of course a normative case for this linkage, highlighted by the “just transi-
tion” literature (Evans and Phelan, 2016; International Labor Organization (ILO), 2014;
Newell and Mulvaney, 2013). However, my results suggest that there is a practical
Kono
169
political case as well. As a special issue of the International Journal of Labor Research
notes (ILO, 2014: 175):
The imperatives to respond to both the [climate change] challenge as well as to “sell” the
transition politically create a rather unfamiliar political landscape: one where the necessity to
build broad political consensus to transcend political partisanship will be greater than ever. For
democratic governments, the way to achieve this will most likely involve reaching out to social
partners and civil society to discuss the stakes upfront, anticipate the costs, and help to ensure
that the burden of the transition process is shared fairly. This is where the “just transition for all”
becomes so important in achieving a sustainable world.
Linking climate and compensation is not a panacea—especially when, as in the United
States, politicians who oppose climate action also oppose welfare spending. Nonetheless,
it is well understood that linking issues can expand the bargaining space, permitting com-
promises and coalitions that could not otherwise occur (Davis, 2004; McKibben, 2015;
Tollison and Willett, 1979). Left parties, which tend to support climate action, have often
struggled to reconcile support for green policies with a commitment to industrial workers.
If the latter perceive the left as excessively green and not sufficiently “red,” they may
abandon it in favor of other, more populist alternatives, as arguably happened in the 2016
US presidential election. By offering more labor-friendly policies—unemployment insur-
ance, active labor-market policies, educational opportunities, and other measures that
help workers adjust—left parties could potentially construct red-green coalitions condu-
cive to both labor and environmental protection. In fact, as The Economist (2019) recently
noted, the US Democratic Party’s “Green New Deal” might be viewed as an attempt to do
exactly this.
This article proceeds as follows. I first provide a brief review of quantitative research
on climate politics.2 Next, building on the literature on trade compensation, I develop
hypotheses linking unemployment insurance to climate-change votes. I then test these
hypotheses with an analysis of roll-call votes on the American Clean Energy and Security
Act of 2009. After presenting my results, I conclude by discussing their implications for
the study and practice of climate change politics.
Domestic Politics and Climate Change
Despite well-known obstacles to mitigating climate change (Bernauer, 2013), many gov-
ernments have adopted some form of climate legislation (Nachmany et al., 2015). Why
some have acted more ambitiously than others is a crucial question for scholars, policy-
makers, and environmentalists. Research on this question can be grouped, broadly, into
studies that examine policy outcomes and those that examine individual...
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