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The political economy of climate policy: Evidence from the American Clean Energy and Security Act

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Comprehensive national climate legislation remains elusive in the US. Linking district-level employment to roll-call behaviour in the 2009 House vote on the American Clean Energy and Security Act, this column shows that a higher share of carbon-intensive (‘brown’) establishments sharply lowers the probability of a ‘Yea’ vote. At the same time, district-level climate opinion boosts support for the Act and moderates the influence of brown industries, suggesting that public sentiment can constrain special interests when climate is a salient issue. Although conservative Democrats are less supportive of the bill, they are more responsive to local industry interests than liberals.

Robert Dahl (1961) famously stressed that formal political equality does not necessarily imply equal influence over policy. Climate change is a stark example. According to Gallup polls most Americans believe global warming is happening and support stronger action. Yet comprehensive national climate legislation remains elusive.

The American Clean Energy and Security Act (ACES) of 2009, also known as the Waxman–Markey Bill, was intended to change that. It combined emissions trading with regulatory standards and large-scale industrial policy. In principle, it promised to create new jobs in clean industries while raising the cost of carbon-intensive production. In practice, it split the Democratic Party. Almost all Republicans opposed the bill – only eight voted ‘Yea’. Among Democrats, 44 voted against. Understanding where those defections came from, and why, goes to the heart of who really governs climate policy in the US.

Business interests and the American Clean Energy and Security vote

In our paper (Frey and Llanos-Paredes 2025), we begin by relating the probability that a Democrat voted for ACES to the shares of green and brown establishments in their district (Figure 1), controlling for income, education, demographic composition, and so on. The results show a clear pattern: Democratic representatives from districts with a higher brown share were much less likely to support the bill (Figure 2). A one-percentage-point increase in the brown-establishment share reduced the probability of a ‘Yea’ vote by almost eight percentage points. Similarly, a higher share of brown establishments is also associated with a substantial decline in the League of Conservation Voters (LCV) score, which summarises a representative’s overall environmental voting record.

Figure 1 Brown and green establishment shares by Congressional district

(a) Brown industry shares

Figure 1(a) Brown industry shares
Figure 1(a) Brown industry shares

(b) Green industry shares

Figure 1(b) Green industry shares
Figure 1(b) Green industry shares
Note: Panel (a) shows the share of firms categorised as Brown at the Congressional District level. Panel (b) shows the share of firms categorised as Green at the same level of aggregation.

Figure 2 Vote for the ACES bill and business interests

Figure 2 Vote for the ACES bill and business interests
Figure 2 Vote for the ACES bill and business interests
Note: Panels (a) and (b) document the propensity of voting for the ACES bill by the Green (Brown) establishment shares in Democratic districts. Shades represent the 95% confidence level intervals for predictions from a linear probability model (LPM).

The role of green firms, on their own, is more muted. In many specifications, the green share is only weakly associated with support for ACES. What matters, we find, is the balance between the two – i.e. green minus brown. Where green establishments clearly outnumber brown ones, Democrats are more likely to vote for climate legislation and score higher on the LCV index. Where brown firms dominate, opposition to ACES becomes more likely.

This points to an asymmetry in the politics of decarbonisation. The presence of carbon-intensive industries exerts a strong drag on climate legislation. Green sectors do pull in the opposite direction, but their influence is most visible when they clearly dominate a district’s economic base.

Money talks, but jobs shout louder

The link between business interests and voting patterns could stem from either a larger number of jobs (and potential votes) supported by an industry, or the effectiveness of local firms in directly influencing politicians (Aklin 2023, Baumgartner et al. 2009, Bertrand et al. 2014, Bombardini 2008, Bombardini and Trebbi 2011, Snyder Jr 1990, Austen-Smith 1995, Meng and Rode 2019). To examine this, we incorporate donations from energy and extractive industries, from green firms, and from environmental activists and non-governmental organisations (NGOs). As one might expect, larger contributions from fossil-fuel and extractive industries are associated with a lower probability of supporting ACES, while donations from green interests and environmental groups correlate with greener voting records. However, once we control for the local mix of brown and green establishments, the independent effect of contributions is relatively small. The coefficients of brown and green shares remain large and robust, while those of campaign contributions shrink.

Next, we follow earlier work and classify districts as highly competitive when the incumbent’s previous margin of victory was less than two percentage points (Mian et al. 2010). In both safe and competitive seats, the shares of green and brown establishments matter for how Democrats voted. But when we interact these shares with an indicator for close races, the effects are considerably larger in marginal districts. When the seat is at risk, representatives become more sensitive to the structure of local employment. This suggests that the political geography of climate policy is shaped not only by where clean and brown industries are located, but also by where electoral competition is fiercest. Overall, this is consistent with the idea that campaign contributions mainly reward allies and buy access rather than reversing legislators’ basic incentives.

Public opinion as a counterweight

A natural question is whether public opinion can act as a counterweight to these business pressures. Indeed, the degree to which representatives face electoral incentives to respond to public opinion has been intensely debated (Gilens and Page 2014, Black 1948, Downs 1957, Mian et al. 2010, Bartels 2016). Using the Yale Climate Opinion Maps, we examine district-level attitudes regarding congressional action on global warming, funding for renewable-energy research, regulation of carbon dioxide, etc.

Across a range of measures, stronger pro-climate sentiment is associated with a higher probability that a Democrat supported the bill. More importantly, public opinion appears to constrain special interests. When we examine how opinion interacts with local industry composition, we find that pro-climate attitudes in brown-heavy districts significantly weaken the negative impact of brown firms on support for ACES. In districts where large shares of voters support climate action or favour renewable energy sources, representatives are less responsive to the pressure from carbon-intensive employers.

This suggests that public opinion can act as a democratic counterweight to special interests, but only when climate change is relevant to voters.

Ideology and the responsiveness of conservative Democrats

Of course, legislators do not respond only to firms and voters; ideology is another key predictor of roll-call behaviour (Ringquist and Dasse 2004, Poole and Rosenthal 1985, 1996, Lee et al. 2004, Kau and Rubin 1979, Rodrıguez-Pose et al. 2025). Using DW-Nominate scores, we find that more economically conservative Democrats are less likely to support ACES and have lower LCV scores, even after controlling for district characteristics, business interests, public opinion, and campaign contributions.

Yet ideological differences do not mean that legislators ignore local realities. Conservative Democrats are, as expected, less supportive of ACES on average. However, they are also more responsive to the local industrial structure than their liberal counterparts. In districts with a strong green presence, conservative Democrats are relatively likely to back ACES; in districts dominated by brown firms, they are particularly prone to oppose it. This implies that even ideologically sceptical legislators can support a pro-environmental agenda if the local economy is sufficiently aligned with the green transition.

A causal test using the shale-fracking boom

While the preceding evidence documents strong associations, testing whether business interests have a causal impact requires exogenous variation, which we obtain from the shale-fracking boom. Specifically, we construct a Bartik-style instrumental variable that interacts a county’s pre-2000 employment in oil and gas with the subsequent national growth in fracking-intensive sectors between 2000 and 2010.

Using this strategy, we find that a fracking-induced increase in the local brown share markedly reduces the probability that a Democrat supported the bill. This shows that the increase in local brown shares induced by the shale-fracking boom had a causal effect on the Democrats’ attitude towards ACES.

Lessons for contemporary climate policy

Our findings offer several lessons for today’s climate politics.

First, the geography of firms strongly shapes the politics of decarbonisation. Representatives respond strongly to who employs their constituents. Where brown firms dominate, climate legislation faces significant barriers; where green employers are numerous, it finds allies. Generating green jobs/firms in brown-dependent regions would then help to gain support for climate legislation.

Second, public engagement can discipline special interests. In districts where citizens clearly demanded stronger climate action, representatives became less sensitive to the preferences of fossil-fuel employers. This underscores the importance of maintaining high salience around climate change.

Third, campaign contributions are less decisive than the underlying structure of local industry. While fossil-fuel interests spend heavily on contributions, it is the presence of firms and jobs that seems to matter the most. For advocates of climate action, this suggests that the location of factories, research centres, and clean-energy infrastructure – and the jobs they bring – may be more important for building coalitions than trying to match opponents’ spending.

Finally, conservative votes are not out of reach. Conservative Democrats in 2009 were more responsive than liberals to changes in their local economic base, green industries included. As clean industries spread to new regions, they may make legislators who are otherwise opposed to environmental regulation more favourably disposed toward such policies.

Just as policy can redirect technological change, it can also reshape the political coalitions that govern climate policy. By steering green investment towards regions that currently rely on carbon-intensive industries, and by sustaining high public salience around the benefits of decarbonisation, it may be possible to build more durable majorities for ambitious climate action than were available in 2009. 

Source : VOXeu

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