How do Competing Interest Groups Influence Environmental Policy? The Case of Renewable Electricity in Industrialized Democracies, 1989–2007
| Date | 01 December 2013 |
| Author | Johannes Urpelainen,Andrew Cheon |
| DOI | 10.1111/1467-9248.12006 |
| Published date | 01 December 2013 |
| Subject Matter | Article |
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P O L I T I C A L S T U D I E S : 2 0 1 3 VO L 6 1 , 8 7 4 – 8 9 7
doi: 10.1111/1467-9248.12006
How do Competing Interest Groups Influence
Environmental Policy? The Case of Renewable
Electricity in Industrialized Democracies,
1989–2007
Andrew Cheon and Johannes Urpelainen
Columbia University
In this article, we examine the effect of competing interest groups on environmental policy. We argue that the
supporters of environmental policy should be the most influential in the absence of opposition, while the opposition’s
importance is maximized when the supporter coalition is strong. This highlights an important asymmetry between
competing interest groups: supporters are decisive in the absence of opposition, while the opposition is only relevant
if the supporters are already strong.We test the argument against data on renewable electricity generation in nineteen
OECD countries, 1989–2007. Heavy industries have particularly strong incentives to oppose policies that support
renewables, because heavy industries’ profitability depends on inexpensive electricity. We find that the supporter
coalition has a positive effect on the growth of renewable electricity generation, but the positive effect diminishes with
the strength of manufacturing. Moreover, heavy industry has a negative effect on the growth of renewable electricity
generation and this effect increases with the strength of the supporter coalition.
Keywords: environmental policy; interest groups; political economy
Organized interest groups play an important role in environmental politics (Bernauer and
Caduff, 2004; Binder and Neumayer, 2005; Fredriksson et al., 2004). However, the extant
literature does not provide empirical evidence for the environmental effects of interest
group competition. In this article, we examine how competing interest groups influence
environmental outcomes. Building on previous research, we expect that the proponents
and opponents of environmental policy respond differently to political challenges. On the
one hand, the political importance of supporters will decrease as their opponents grow
stronger, because counter-mobilization undermines the effectiveness of supportive lob-
bying. On the other hand, the political activity level of the opposition will increase as the
supporters acquire power, because the opposition need not mobilize when support is
lackluster.
We test these hypotheses against quantitative data on renewable electricity generation in
nineteen Organisation for Economic Cooperation and Development (OECD) countries
for the period 1989–2007.We focus on industrialized democracies because their renewable
energy sectors have grown much faster than those in developing countries, and we begin
in 1989 because prior to that date the price of renewable electricity was too high for most
commercial applications. Using detailed sectoral data on energy-intensive manufacturing
industries to measure opposition to policies that promote renewable electricity generation
(due to higher electricity prices), we find that the growing political clout of renewable
electricity producers only maps on to increased future generation if the industry coalition
© 2013 The Authors. Political Studies © 2013 Political Studies Association
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is not too powerful. Similarly, the industry coalition only reduces growth in generation if
the renewable electricity producers are powerful enough so that counter-mobilization is
necessary in the first place. Interestingly, we also find that the countervailing effects have
occurred under left-wing governments.
Our empirical analysis contributes to political science in several ways. First, we provide
quantitative hypothesis tests for the importance of competing interest groups in environ-
mental policy. Although previous studies have documented the central importance of
interest groups in environmental politics, they have not tested hypotheses regarding their
countervailing effects on policy and outcomes (Aidt, 1998; Binder and Neumayer, 2005;
Fredriksson et al., 2004).
Second, we use detailed sectoral data to obtain an accurate measure of the theoretical
subject of interest, namely the economic importance and political clout of heavy industry.
Thus, we contribute to the empirical study of environmental politics.
Finally, our findings contribute to the study of path dependence in politics (Arthur, 1989;
Pierson, 2000). In the case of renewable energy, path dependencies exist in nations where
political opposition to renewables is weak. In nations with powerful heavy industries,
temporary increases in the size of the renewables supporter coalition have not produced
durable change.While path dependencies exist in environmental politics, their influence is
contingent on the constellation of domestic preferences.
Political Determinants of Environmental Policy
Environmental policy produces societal benefits if it reduces negative externalities, such as
air pollution (Baumol and Oates, 1988). If a government is to reduce these negative
externalities, it must enact regulations that are often costly. As Patrick Bernhagen (2008, p.
83) writes, industries often oppose environmental policies because they ‘require firms to
reduce emissions, increase recycling, pay more for energy, or switch to alternative, often
more expensive, fuels and inputs’. Thus, environmental policy is often politically contro-
versial. In what follows, we provide a concise review of previous research to situate our
argument in the extant literature.
Previous research has identified several political covariates of environmental policy and
outcomes. One line of inquiry focuses on political institutions. Some scholars have found
that democratic institutions often improve environmental quality (Bättig and Bernauer,
2009; Neumayer, 2002), while others report findings on the positive effect of corporatist
political structures on environmental outcomes (Scruggs, 2001).Yet others examine the role
of veto players and domestic political constraints (Perrin and Bernauer, 2010), and one set
of the literature examines the importance of bureaucratic quality for environmental policy
(Fredriksson et al., 2003).
Another set of influences can be found in partisan preferences. Generally, leftist parties
seem to have a stronger preference for environmental protection. Charles Shipan and
William Lowry (2001) report that in the United States partisanship has also become an
increasingly important influence on environmental policy in recent decades.Thomas Lyon
and Haitao Yin (2010) find that Democrats are more supportive of renewable portfolio
standards than Republicans. Scholars have also found evidence for the importance of
partisan preferences for European environmental policy (Neumayer, 2003).
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International factors are also important. Some scholars emphasize policy diffusion,
arguing that geographic proximity or shared membership of international organizations
produces similarity in environmental policy (Holzinger et al., 2008). These studies generally
find some evidence of policy diffusion. Others focus on the effects of environmental
treaties, such as the Kyoto Protocol (Schleich et al., 2001).While the effect of such treaties
is difficult to identify, it seems that at least some of them, such as the Montreal and Kyoto
Protocols, have influenced environmental policy in signatories (Barrett, 2003).
For present purposes, scholarship on interest groups in environmental policy is particu-
larly important.Theoretical studies indicate that environmental policy has divergent effects
on the pay-offs of different interest groups, with environmentalists expecting to benefit the
most and heavy industry worrying about losses (Aidt, 1998; Bernauer and Caduff, 2004;
Keohane et al., 1998). Empirical evidence can also be found. Environmental interests seem
to reduce air pollution in industrialized countries (Binder and Neumayer, 2005), while
industry groups have often undermined environmental policy (Markussen and Svendsen,
2005). Ion Bogdan Vasi (2009) documents the positive influence of the environmental
movement on wind energy growth across several industrialized countries.
We contribute to this literature by investigating how competing interest groups produce
countervailing effects on environmental policy and outcomes, and by using the case of
renewable electricity generation to test the resulting hypotheses.While several studies have
recognized the importance of different interest groups, the countervailing effects of com-
peting interest groups have drawn little attention in the empirical literature.
Theory and Hypotheses
In this section, we develop a theory of when and how competing interest groups are able
to influence environmental policy.The theory generates several empirically testable hypoth-
eses, which we test against data on renewable electricity generation in industrialized
countries.
Competing Interest Groups
The hypotheses we examine are based on the notion that the supporters of environmental
– or some other – policy form a supporter coalition to pursue their interest.This approach
is inspired by the ‘pluralist’ view of political processes (Dahl, 1961;Truman, 1951). Accord-
ing...
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