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Cicerone 3-2004

Climate policy follows the money

Economically important and influential actors mean more for climate policy choices than do public opinion and pressure from environmental organizations.

The last ten years have shown that effective and integrated climate policy is very difficult to agree on and implement. In an issue area as complex as climate, politicians depend on assessments, reports and other background material when they make decisions. A recent dissertation from CICERO shows that the spotlight is on costs when climate policy is formed in Norway, Germany and the United States. Reports and research that were emphasized in the political decision-making process focus heavily on the costs that climate measures will incur.

In Norway in the 1990s, for example, emphasis was put on reports that indicated that domestic climate measures would be more costly than measures carried out through international cooperation. Germany, on the other hand, was open to reducing greenhouse gases by using energy-savings and other no-regrets measures as a result of assessment reports; such measures provide benefits in addition to reducing greenhouse gases and can thus act as a fail-safe with respect to uncertain climate changes. In the United States, the policymaking process was so focused on the economic consequences of climate measures that the USA eventually withdrew from the international climate regime.

Lobby groups

The relative importance of costs compared to environmental considerations when climate policy decisions are made is related to the balance of power between institutions and interest groups. One thing that these three countries have in common is the decisive role played by reports on how costs are distributed among various social groups. If economically important actors risk being affected negatively, it is difficult to introduce climate measures. The pressure to base political decisions on economic considerations is therefore increased by influential lobby groups.

In Norway, interest groups such as the Federation of Norwegian Process Industries (PIL), the Confederation of Business and Industry (NHO), and the Norwegian Federation of Trade Unions (LO) have substantial influence. In Germany, powerful groups include Bundesverband der Deutschen Industrie (the Federation of German Industries, BDI) and IG Metall, while in the United States, the oil industry (e.g., Exxon) and the Global Climate Coalition (GCC) have had considerable power. These groups have argued that they should not have to suffer costly climate measures because it would affect their international competitiveness and cost many workers their jobs. In all three countries, economically important and influential actors mean more for climate policy choices than either public opinion or pressure from environmental organizations.

Who has a voice?

There are nevertheless degrees of difference between the countries, and the way political bodies and state institutions are organized and interact is decisive for which interests and social groups have the greatest influence. This has manifested in clear differences in these countries’ choices of climate policy. The pluralist political system in the United States allows direct voter influence on politicians in the Senate and the House of Representatives, also between elections. In Norway and Germany, interaction between voters and politicians is largely regulated through formalized channels, for instance in hearings. This means that in the United States, lobbying by economically powerful interest groups has more direct access than in Norway and Germany,and this is fortified by the fact that American politicians are not as tightly bound to party programs. In climate policy, this has been crucial for how ambitious and integrated climate policies the legislative majority have been able to implement.

In Norway and Germany, some climate measures have been introduced, such as carbon taxes in Norway and so-called voluntary agreements in Germany. In comparison, the US Congress has carried out a more uncompromising policy, where economic considerations have clearly taken precedence over climate measures. It has introduced some political programs where industries can choose to reduce their emissions on a voluntary basis in return for a reward such as tax exemption. Under both Clinton and Bush, a clear goal has been to protect important economic sectors from negative effects of climate policy.

Power struggle

The same interest groups have influence also in the governmental research and reporting process carried out by the ministries. The power struggle between environmental interests and sector interests is played out in the struggle over control of the issue areas and resources between the various ministries. Often the ministries that have the greatest impact in the research and reporting process are those that represent key economic sectors, such as the oil industry in Norway. This affects the assessments and advice that reaches the politicians in the legislature. The president’s or prime minister’s personal leadership and willingness to place climate high on the agenda can nevertheless lead to climate measures being introduced – as was the case for Brundtland (Norway) and Kohl (Germany) in the early 1990s.

Very difficult

Cost considerations, the distribution of costs among various interest groups, and the demands from the general public and environmental movements thus explain some of the background for why the countries choose different political instruments in their climate policy. Norway has chosen to combine carbon taxes, voluntary agreements, and a domestic emissions trading system from 2005; the United States has opted for tax relief and other forms of voluntary participation; and Germany has chosen a combination of regulations, voluntary agreements, and participation in the EU emissions trading system from 2005. The willingness to reduce greenhouse gases is determined by power struggles between interest groups, dependence on international solutions, and consideration of the domestic economy. An environmentally effective and integrated climate policy is thus very difficult to push through.

  • Bang, Guri (2004): Sources of influence in climate change policymaking: A comparative analysis of Norway, Germany and the United States. PhD dissertation 43/04, Department of Political Science, University of Oslo.

Last updated: 21.09.2004

CLIMATE THUG: Environmental organizations present the award for Norway’s greatest climate thug in downtown Oslo. Such demonstrations have little impact on the formation of Norwegian climate policy, according to a recent PhD dissertation from CICERO. (photo: Nature and Youth)CLIMATE THUG: Environmental organizations present the award for Norway’s greatest climate thug in downtown Oslo. Such demonstrations have little impact on the formation of Norwegian climate policy, according to a recent PhD dissertation from CICERO. (photo: Nature and Youth)
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