It’s no secret that business interests have often stymied progress on climate policy. But this pattern raises the question: What is the source of business opposition to decarbonization policy?
Jonas Meckling, climate research lead at BESI and climate fellow at Harvard Business School’s Institute for Business in Global Society (BiGS), and Jared Finnegan, professor of public policy University College London, have long focused their research on revealing the murky political economic mechanisms behind real-world climate policy. In a new working paper, the two collaborate to uncover one major factor in climate policy opposition: exposure to what they call “impatient capital” (i.e., short term-minded investors).
The two hypothesized that greater exposure to impatient capital makes businesses less likely to support long-term decarbonization policies. They validated their hypothesis on a dataset containing U.S. firms and a measure of those firm’s original opposition to climate policy opposition. The test confirmed their intuition that the firms most exposed to short-term capital would oppose policy more than observably similar firms with long-term ownership.
“Compared to other countries, the United States has more short-term-oriented investors and that is one potential reason why the U.S. has failed for such a long time to enact serious climate policy,” Meckling told The BiGS Fix, the institute’s newsletter, in a recent write-up about the new working paper.
The American Political Science Association has made the pre-print article, tentatively titled “Fighting the Future: Short-Term Investors and Business Opposition to Climate Policy,” available to read and download as of July 21. You can check out Meckling and Finnegan’s working paper now on the APSA Preprints website.
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Jonas Meckling is a professor at the University of California, Berkeley, and a climate fellow at Harvard Business School. At UC Berkeley, he leads the Climate Policy Research Center at the Berkeley Economy and Society Initiative and the Energy and Environment Policy Lab. Meckling studies the politics of climate policy and the energy transition, with a focus on green industrial strategy. He received multiple awards for his research from the American Political Science Association. Previously, he was a visiting professor at Yale University, served as senior advisor to the German Minister for the Environment, was a research fFellow at Harvard Kennedy School, and worked at the European Commission.