A subnational carbon curse? Fossil fuel richness and carbon intensity among US states

Abstract

The “carbon curse” theory proposes that fossil fuel richness leads countries to have more carbon intensive development trajectories than they would otherwise. This article tests this theory at the subnational level through an analysis of the 50 US states. Drawing on energy and emissions data from US government sources, descriptive statistics and regression analyses show clear correlations between states’ production of coal, oil, and gas and higher carbon intensities. Evidence is also provided for four carbon curse mechanisms that drive this: extractive emissions, fuel-related crowding out, weaker incentives to invest in energy efficiency, and pressure to subsidize fuel consumption. These mechanisms highlight both new avenues of impact for supply-side climate policy and the difficulty of implementing it. Overall, this article makes the case for further attention to the carbon curse, which could serve as an important analytical bridge between supply and demand-side approaches to climate and energy policy. By demonstrating the likelihood of a subnational carbon curse, it also greatly extends the scope of its potential applicability. Countries that are not fossil fuel rich at a national level but have fuel rich subnational regions should also take heed.