A Theoretical Framework for the Analysis of the Political Economy of Climate Policy

Despite sharp declines in the costs of renewable energy sources and international commitments to reduce greenhouse gas emissions, many countries envisage a substantial ramp-up of fossil generation capacities, in particular coal-fired power plants. If all were built and ran until the end of their expected lifetime, resulting cumulative CO2-emissions would endanger the achievement of the ambitious climate targets under the UNFCCC Paris Agreement. Devising policies that facilitate a transition to low-carbon energy systems despite opposite trends in many countries requires a close understanding of the country-specific political economy of energy and climate policy formulation. For this reason, we develop a novel theoretical framework to analyze country-specific experiences and options and identify entry points that could bring about policy change. The framework builds on the central assumption that policies are implemented that best meet the objectives of those actors that have the greatest influence on policy decisions. It includes three basic elements. First, it aims at identifying the societal as well as political actors most relevant for the formulation of energy and climate policies. Second, it seeks to spell out these actors’ underlying objectives. Third, it assesses the context which determines how certain objectives matter for certain societal actors, how these societal actors influence political actors engaged in formal public policy formation, and how the interplay of different political actors’ interests results in the adoption of energy and climate policies. As it permits to formulate hypotheses regarding the underlying reasons for the implementation of energy and climate policy formulation, the framework is suited well for conducting country-level case studies. Moreover, by providing a common framework for such case studies it may serve as a basis for future cross-country comparisons, once a sufficiently large sample of case studies is available.