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FRIHUMSAM-Fri hum og sam

Climate Politics During Recessions: Examining Drivers of a Green Economic Recovery

Alternative title: Klimapolitikk i nedgangstider: Sentrale faktorer bak grønn fornyet vekst

Awarded: NOK 12.0 mill.

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2021 - 2026


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Current emissions reductions are a far cry from fulfilling the Paris agreement goals, which require net-zero climate emissions by 2050. Moreover, the Covid-19 pandemic and the ensuing economic downturn might cause states to give less priority to decarbonization. CLIMREC will map the conditions under which states invest in decarbonization even while in an economic recession. Research suggests recessions induce individuals and governments alike to prioritize renewed economic growth over climate. However, recessions also provide a potential for green growth. For example, governments could stimulate the economy through investments in emissions-free infrastructure (e.g., railways), electrification of road transport (charging stations), imposing strict requirements on new buildings’ energy efficiency, and more renewable energy. CLIMREC will map the extent to which climate is prioritized in major emitters’ efforts to rebuild their economies in the aftermath of Covid-19. CLIMREC fills both an empirical and a theoretical void in the climate policy literature. The project will combine comparative studies of all G20 countries’ economic stimulus packages with detailed studies of eight economies across a range of GDP levels (Canada, China, Germany, India, Mexico, South-Korea, the United Kingdom, and the United States). We conjecture that two factors are particularly helpful for explaining why some countries’ stimulus packages prioritize climate stronger than do those of other countries. The first is the relative strength of different domestic interest groups. The second is the extent to which the countries’ political system admits influence from interest groups. We expect that giving priority to decarbonization in stimulus packages to be least likely in countries with (1) relatively open access for interest groups to political processes and (2) strong organized interests in the oil, natural gas, or coal sectors.

Meeting the Paris Agreement’s goals requires net zero GHG emissions by 2050. Yet, current emissions reductions are inadequate and the Covid-19 pandemic and the ensuing economic downturn might detract policymakers from decarbonization efforts. What conditions lead governments to invest in decarbonization in an economic recession? Existing research shows that economic downturns often cause individuals and governments to prioritize growth over climate. Yet recessions also offer an opening for decarbonization through stimulus spending on infrastructure, transportation electrification, building efficiency, and clean energy technologies. CLIMREC will comprehensively analyze climate-related post-pandemic stimulus spending in G20 economies. We will identify the drivers of such spending by combining cross-national comparative analysis of spending packages with in-depth case studies of four advanced and four emerging economies. We expect that two factors determine whether and how governments use stimulus spending to invest in decarbonization: the relative strength of domestic economic interests and the permeability of the policymaking process to interest group influence. The unexpected and near-simultaneous onset of the recession globally enables us to consider green recovery efforts across both advanced and emerging economies and to examine the importance of pre-existing factors minimally influenced by the crisis itself. It also enables us to avoid endogeneity problems, as countries suffered the same external shock irrespective of pre-existing economic and political factors. CLIMREC fills both an empirical and a theoretical void in the literature on domestic climate politics. The unique nature of the current recession and the universal use of stimulus packages to aid economic recovery offers an opportunity to revisit debates about the trade-offs between environment and growth and allows us to build a cross-national explanation that addresses gaps in existing research.

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FRIHUMSAM-Fri hum og sam