De Groote, Olivier, Gautier, Axel and Verboven, Frank (2022) The political economy of financing climate policy – Evidence from the solar PV subsidy programs. TSE Working Paper, n. 22-1329, Toulouse

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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 to adopters and by electricity surcharges to 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 a potential reward by adopters who received the generous subsidies. Further analysis indicates that punishment mainly comes from non-adopters, who change their vote towards anti-establishment parties.

Item Type: Monograph (Working Paper)
Language: English
Date: April 2022
Place of Publication: Toulouse
Uncontrolled Keywords: financing climate policy, photovoltaic systems, retrospective voting, buying votes
JEL Classification: C23 - Models with Panel Data
D72 - Economic Models of Political Processes - Rent-Seeking, Elections, Legislatures, and Voting Behavior
H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Q48 - Government Policy
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 08 Apr 2022 08:14
Last Modified: 07 Mar 2024 10:29
OAI Identifier: oai:tse-fr.eu:126863
URI: https://publications.ut-capitole.fr/id/eprint/45141
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