Explaining CO2 price adoption: The interaction between public opinion and advocacy coalition change

CO2 prices are considered one of the most effective but also one of the most controversial climate policy instruments facing political backlash from both voters and important interest groups (e.g., producers of CO2-intensive goods). Here, we focus on the puzzling case of CO2 price adoption in Germany. In 2019, the German government adopted a CO2 price in the transport and building sector despite any agreement in the governmental coalition treaty to do so. We use a mixed-method policy-process tracing approach to explain why this sudden policy change came about. Integrating public opinion research into the actor coalition framework (ACF), we are specifically interested in the role of interacting public opinion and advocacy coalition change in the policy process. Here, we test the argument that the sudden increase in the public salience of the climate change issue (mainly driven by the rise of the Fridays for Future movement) served as a shock to the policy subsystem and enabled policy entrepreneurs to shift the public discourse and actor beliefs towards the necessity of adopting CO2 prices in the transport and building sector. Methodologically, we contribute to the literature by combining qualitative process tracing with quantitative discourse network and quasi-experimental methods. We can build on a rich data set of elite network and public opinion surveys, media, and parliamentary discourse network data, and expert interviews. Specifically, we disentangle the endogenous relationship of elite actor and public opinion change by applying a novel approach of integrating quasi-experimental and network-based methods. We conduct a difference-in-difference analysis based on the trends of discourse network measures related to the CO2 price and similar climate policy instruments before and after the public opinion shock (e.g., by measuring the congruence of actors within a discourse coalition via network densities over time on CO2 prices and phase-out of fossil-fueled cars). In combination with our survey-based and interview evidence, this novel approach allows us to empirically disentangle the extent to which public opinion change led to changes in actor coalitions and vice versa. Overall, we hope that our mixed-method study makes several contributions: First, theoretically, by better integrating existing public opinion research in the ACF framework. Second, methodologically, by using a mixed-method approach that combines process-tracing, quasi-experimental and network-based methods. Third, practically, by explaining the sudden adoption of CO2 prices in one of the key global economies and international climate mitigation players.