Firms’ Support for Climate Change Legislation: Industry Competition and the Emergence of Green Lobbies (Revise & Resubmit, International Organization)
Policies to mitigate global climate change entail significant economic costs. Yet a growing number of firms lobby actively in favor of regulation to mitigate carbon emissions. Why do firms support environmental policies that directly increase production costs? By imposing differential costs on market participants, policies designed to mitigate carbon emissions shift market share towards firms with low anticipated adjustment costs. I develop a model of climate change policy making in the presence of market competition and show how heterogeneity in adjustment costs induces a preference for regulation among low-cost firms. Reducing adjustment costs for high-cost firms may lead to worse regulatory outcomes by eroding political demand for regulation. I test these arguments using firm-level data on lobbying in the U.S. Congress and find strong support: firms anticipating high competitor adjustment costs are more likely to lobby in favor of climate change legislation.
Explaining Individual-Level Variation in the Salience of Climate Change
In the coming century average temperatures are predicted to increase by 2.5 to ten degrees Fahrenheit as a result of climate change. Yet citizens around the world vary in their perceptions of how serious the threat of rising temperatures actually is. I argue that variation in the perceived seriousness of climate change reflects the degree to which individuals internalize the welfare of others in society besides themselves. I describe two models of "other-regarding" preferences: inequity aversion and social welfare maximization. I test these arguments using data from the World Values Survey and instrumental variables drawn from theories of cultural evolution. I also explore behavioral implications of the theory using original data on climate-change related web searches. The empirical tests support the argument: individuals who exhibit high levels of other-regarding preferences are more likely to express serious concern - and seek out new information - about global warming.
The Politics of Participation in WTO Accession Negotiations
Why do members of the World Trade Organization participate in the accession negotiations of new member states? The Most Favored Nation principle ensures negotiated concessions are extended to all existing members independent of participation. Combined with asymmetries in participation costs, this implies strong incentives to free-ride. I argue widespread participation reflects far-sighted concern for the evolution of global trade rules and develop this logic in a game theoretic model of sequential negotiations. The design of accession commitments transmits information gathered in the course of negotiations to the broader membership. While politicization renders the information content of commitments uncertain, partial persuasion nevertheless implies the endogenous emergence of path dependence. I test implications of the argument for member participation using text analysis and newly-collected data on participation. I find strong support for the argument: members are more likely to participate when they anticipate that valuable precedents may result.