The political economy of financing climate policy — Evidence from the solar PV subsidy programs

Olivier De Groote, Axel Gautier and Frank Verboven

Resource and Energy Economics, 2024, vol. 77, issue C

Abstract: We analyze the political impact of a generous solar panel subsidization program. Subsidies far exceeded their social benefit and were partly financed by new taxes on adopters and by electricity surcharges for all consumers. We use local panel data from Belgium and find a decrease in votes for government parties in municipalities with high adoption rates. This shows that the voters’ punishment for a costly policy exceeded the potential reward by adopters who received generous subsidies. Further analysis indicates that punishment mainly comes from non-adopters, who change their vote towards anti-establishment parties.

Keywords: Financing climate policy; Photovoltaic systems; Retrospective voting (search for similar items in EconPapers)
JEL-codes: C23 D72 H23 Q48 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: The political economy of financing climate policy – Evidence from the solar PV subsidy programs (2024)
Working Paper: The political economy of financing climate policy – Evidence from the solar PV subsidy programs (2024)
Working Paper: The political economic of financing climate policy: evidence from the solar PV subsidy programs (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:77:y:2024:i:c:s0928765524000125

DOI: 10.1016/j.reseneeco.2024.101436

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