, Volume 14, Issue 1, pp 23-34
Date: 21 Aug 2011

How do electoral competition and special interests shape the stringency of renewable energy standards?

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Abstract

In this article, I provide a new political rationale for stringent renewable energy standards, such as portfolio requirements and feed-in tariffs. A game-theoretic analysis demonstrates that if a green politician (concerned about environmental quality) adopts a stringent renewable energy standard, thus creating artificial profits for the renewables industry, she can induce the industry to support her in elections. This political mobilization improves the green politician’s electoral fortunes, and thus increases the probability that the renewable energy standard will be implemented. In contrast to previous arguments for renewable energy standards, my argument applies even when the renewables industry is disorganized at the time of environmental policy formation.