Domestic renewable energy industries and national decarbonization policy

Abstract

Does the growth of renewable energy industries catalyze national decarbonization policy? The idea that stronger domestic renewable energy industries increase the political feasibility of stringent energy and climate policies aiming to phase out fossil fuels has been championed by proponents of policy sequencing and underpins the global pivot to green industrial policy. Yet, the conditions necessary for such an effect to materialize have not been fully spelled out and its empirical veracity not been systematically scrutinized. This paper contends that the willingness and ability of renewable energy industries to influence policy should be weaker for fossil fuel phaseout policies compared to green industrial policies because of more diffuse material interests, less access to policymaking, and stronger countermobilization. The first large-scale investigation of this relation using extensive time-series cross-sectional data provides no evidence of a systematic positive effect of renewable energy industry strength on carbon pricing or fossil fuel subsidy phaseouts. These findings challenge the widespread argument that the emergence of domestic low-carbon industries translates into more ambitious decarbonization policy. Scholars and policymakers should scrutinize the mechanisms and scope conditions underlying this assumed relationship.