Drivers of Carbon Price Adoption in Wealthy Democracies: International or Domestic Forces?

Abstract

Is carbon price adoption in wealthy democracies driven more by international or domestic forces? Event history analyses reveal that carbon price adoption is more likely in countries with less fossil fuel energy use (and, by proxy, less powerful fossil fuel business-elite actors) and with less encumbered democratic institutions (i.e., fewer institutional veto points). These findings are triangulated through cross-sectional comparisons and case studies. In short, wealthy democracies enact carbon prices according to the degree to which domestic actors or costs constrain or enable enactment and implementation. The author argues that the global free-rider problem, posed by nonbinding international climate agreements and lack of enforcement, and fossil fuel business-elite power undermine the force of international values and norms. World society scholarship should attend more to (1) whether international participation incurs substantial local costs or powerful stakeholder opposition and (2) whether the benefits of such participation are more domestically or globally distributed.