THE LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE Low Carbon for the Long Term: Essays on the Comparative Political Economy of Climate Change Policy By Jared J. Finnegan A thesis submitted to the Department of Government of the London School of Economics and Political Science for the degree of Doctor of Philosophy. November 2019 London DECLARATION I certify that the thesis I have presented for examination for the PhD degree of the London School of Economics and Political Science is solely my own work. The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without my prior written consent. I warrant that this authorisation does not, to the best of my belief, infringe the rights of any third party. I declare that my thesis consists of approximately 69,000 words. 2 For our future 3 ACKNOWLEDGEMENTS This project has benefitted tremendously from the generous support of many individuals and institutions. Thank you first to my supervisors Kai Spiekermann, David Soskice, and Joachim Wehner. Thank you to Kai for his guidance, support, and patience ever since I was a masters student at the LSE in 2009. This project has changed considerably since its inception in 2014. Kai has been continually open and supportive of the direction I was heading in, even when it looked unclear. Thank you to David for taking me on as a doctoral student, his enthusiasm for my ideas and arguments, his unending wisdom and intellectual curiosity, and his insistence that I constantly orient my focus to the big questions of the day and what I might be able to say about them. I am also grateful for his practical guidance and advice regarding life in the profession. Thank you to Joachim for his patience as I sorted out my project, his openness to my ideas and approach, and for pushing me to keep my work focused on the story that I am trying to tell – the red line. I am deeply indebted to the Grantham Research Institute on Climate Change and the Environment at the LSE. I am grateful to the Grantham Foundation for the Protection of the Environment through the Grantham Research Institute on Climate Change and the Environment and from the UK's Economic and Social Research Council (ESRC) through the Centre for Climate Change Economics and Policy for funding my PhD studies. Beyond funding, the Grantham Research Institute served as my intellectual home during my time as a doctoral student. My thinking benefited enormously from countless conversations in seminars, kitchens, and corridors. It was a joy to be surrounded by scholars committed to a cause larger than themselves. What is more, I have developed many friendships. There are too many names to list. I am particularly grateful to the management team: Simon Dietz, Robert Falkner, Sam Fankhauser, and Ginny Pavey for their consistent encouragement, wisdom, support, feedback, and humor. Additionally, I thank Arlan Brucal, Marion Dumas, Roger Fouquet, Tobias Kruse, and Gregor Singer for their feedback on my work, particularly on the econometrics. A special thank you is due to Julius Andersson for his deep engagement with my ideas, his close friendship, and his humor. I owe a debt of gratitude to the wider LSE community, especially the Department of Government. In particular, I thank Cathy Boone for her consistent support of my intellectual development and her practical guidance about navigating the 4 profession. Thank you to Jonathan Hopkin for first introducing me to the field of comparative political economy, for always being open and willing to share incisive political insights, and for giving me the opportunity to teach. Thank you also to all the faculty and students who participated in the Comparative Politics and Comparative Political Economy (CP/CPE) Seminar series. I benefitted immensely from the intellectual exchanges in those rooms. Thank you to my fellow doctoral students in politics for their feedback, encouragement, commiseration, and friendship along the way, particularly Fergus Green, Takuya Onoda, Kaveh Pourvand, Jan Stuckatz, and Anahi Wiedenbrüg. I must also thank my teammates at the LSE Brazilian Jiu Jitsu club for helping me to take my mind off my dissertation, especially our instructor Edgelson Lua. I owe a very special debt of gratitude to Bob Keohane. He has been a constant source of intellectual inspiration, wisdom, and generosity. His deep engagement with my work has significantly improved its quality. What is more, I have benefited tremendously from being included in his ongoing research project on the comparative politics of climate change. I thank him for generously extending the invitation to me. Lastly, I thank him for the practical advice and wisdom he has shared with me about how to do good scholarship and how to navigate the profession. For part of my PhD studies I was a visiting student researcher at UC Berkeley. The experience afforded me contact with a range of scholars working in comparative political economy and on the environment. I am particularly grateful to David Vogel for his feedback on my ideas and, importantly, for agreeing to be my advisor, which made the visit possible. Thank you also to Jonas Meckling, Paul Pierson, and Steven Vogel for engaging with my ideas and sharing their valuable insights on political economy and climate change politics. In addition to those I have named, a number of scholars have generously provided written comments on my work throughout my PhD, whether as discussants at conferences or over email. They include Björn Bremer, Jessica Green, Lior Herman, and Matto Mildenberger. This thesis is much better as a result of their feedback. Portions of this thesis were written in a variety of public spaces, including Senate House Library in London, the Doe Memorial Library at UC Berkeley, the central Sonoma Country Public Library in Santa Rosa, California and the regional library in Rincon Valley, and the Southbank Centre in London. Public spaces matter. Thank you to all the dedicated staff that work to keep these places open and accessible to all. 5 I extend very special thanks to the friends who were with me along the way, offering support, laughs, and good company, especially Juliana Bidadanure, Alan Haimowitz, Tom Hunter, Toussaint Nothias, Kevin Rowe, and Inder Sood. Lastly, I offer my deepest gratitude to the family and partner that journeyed alongside and sustained me throughout. Thank you Mom, Dad, Alyson, Alex, Monica, Christie, Javier, Mia, Amelia, and Josephine, and thank you Samantha. It is unclear how I could have managed without your steadfast love and support. 6 ABSTRACT Long-term policy challenges – biodiversity loss, education and skills, infrastructure, and public debt – are everywhere, yet scholars are just beginning to examine their distinct political economy. In the context of these types of issues, politics is not only about who gets what, but who gets what and when. Climate change is the quintessential long-term policy problem. Why have some advanced capitalist democracies been more successful than others at addressing long-term problems like climate change? Surprisingly, political science has provided few answers to this substantively important question. This thesis tackles this question by focusing on the distributional politics of climate policy investment. It provides new arguments for how institutions and electoral incentives generate opportunities for governments to arrive at successful distributive bargains that impose short-term costs on social actors today for benefits that arrive in the future. Across countries, I show how electoral rules and interest group intermediation systematically structure the conditions needed for politicians to make long-term climate policy investments. Indeed, the complementarity between these institutions generate varieties of decarbonization, which push countries onto diverging policy trajectories. Building on these arguments, I look within countries over time and provide the first theoretical arguments and empirical evidence that links electoral competition to fossil fuel taxation. By influencing political risk, competition structures political incentives for imposing short-term costs on voters today for long-term benefits. It is only governments with a comfortable lead over rivals that can think past the next election to society’s long-run aggregate welfare. I find support for my arguments using new cross- national data on shadow carbon prices, original datasets of historical gasoline taxation across high-income democracies and US states, and a case study of fossil fuel tax policy decisions by the German Social Democratic-Green coalition government. Beyond shedding light on the politics of long-term policymaking in the case of climate change, the thesis points to crucial mechanisms that plausibly account for the differential ability of governments to tackle a wider range of long-term challenges. 7 TABLE OF CONTENTS Declaration 2 Acknowledgements 4 Abstract 7 List of Figures 9 List of Tables 11 Chapter 1: Introduction: The Comparative Political Economy of Climate Change Policy 13 Chapter 2: Institutions, Climate Change, and the Foundations of Long-term Policymaking 38 Chapter 3: Changing Prices in a Changing Climate: Electoral Competition and Fossil Fuel Taxation 94 Chapter 4: Energy Politics over the Long Run: Gasoline Taxes in US States since 1919 142 Chapter 5: Conclusion 207 Bibliography 223 8 LIST OF FIGURES Figure 2.1. Climate change policy stringency across countries 42 Figure 2.2. Possible distributional profiles of climate policy investment 45 Figure 2.3. Climate change policy investment across countries (avg.1995-2009) 58 Figure 2.4. Electoral rules and climate policy investment (with 95% CIs) (avg 1995-2009) 59 Figure 2.5. Electoral rules and distribution of costs (with 95% CIs) (avg 1995- 2009) 59 Figure 2.6. Electoral rules and distribution of policy costs 62 Figure 2.7. Concertation and climate policy investment (with 95% CIs) (avg 1995-2009) 63 Figure 2.8.