Study quantifies the effects of political lobbying on climate policy

A new first-of-its-kind study puts a number on how political lobbyists can change the course of climate policy.

Study quantifies the effects of political lobbying on climate policy
Photo credit: Annie Spratt on Unsplash
  • The new study uses a statistical analysis based on exhaustive lobbying records.
  • The results show that lobbying by firms expected to lose money as a result of legislation was significantly more effective in the case of the American Clean Energy and Security Act.
  • The study's authors suggest their results can help lawmakers pass better regulations in the future.

How much power do lobbyists wield when it comes to enacting climate change policy? A first-of-its-kind study, published in the journal Nature Climate Change, explores that question by focusing on one prominent example from recent history.

In 2009, American lawmakers had the chance to pass what would've been among the most comprehensive climate change regulation to date: the American Clean Energy and Security Act, also known as the Waxman-Markey bill. The bill was based on a cap-and-trade system in which the government would've issued a set number of permits to companies that allowed them to produce emissions. These companies, in turn, would've been able to buy and sell these permits among one another.

The bill passed in the House but never made it to the Senate floor, setting the tone for climate change regulation in the U.S. in the following decade. Why did it fail? For one, climate change regulation often doesn't pass because of weak incentives: Why should one jurisdiction suffer the costs of regulation when it can benefit from the reductions of others? Beyond that, how much of a role did lobbying play in the process?

Using a statistical analysis based on lobbying records, the authors found that lobbying lowered the probability of the Waxman-Markey bill passing by 13 percent (55 to 42 percent), resulting in an estimated social cost of $60 billion. According to the researchers of the study, two general findings emerged:

"First, we find that firms that are expected to lose are more effective at lobbying to lower the policy's chances than firms that are expected to gain are at lobbying to raise the policy's chances. Second, regardless of whether a firm gains or loses, there are diminishing returns to lobbying."

The authors weren't quite sure why lobbying from oppositional firms proved to be more effective. But they said their results suggest that "subtle design changes to market-based climate policies can alleviate political opposition and increase chances of adoption," as study author Kyle Meng, an economist and UC Santa Barbara professor, told UC Santa Barbara's The Current.

The Waxman-Markey bill, for example, would've issued free permits to some firms. If regulators had identified the firms expected to lose from the bill, and then made an effort to issue free permits to those same companies, the likely result would've been less oppositional lobbying.

"Our findings also provide a glimmer of hope by paving a path toward more politically robust climate policies," Meng said.

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Volcanoes to power bitcoin mining in El Salvador

The first nation to make bitcoin legal tender will use geothermal energy to mine it.

Credit: Aaron Thomas via Unsplash
Technology & Innovation

This article was originally published on our sister site, Freethink.

In June 2021, El Salvador became the first nation in the world to make bitcoin legal tender. Soon after, President Nayib Bukele instructed a state-owned power company to provide bitcoin mining facilities with cheap, clean energy — harnessed from the country's volcanoes.

The challenge: Bitcoin is a cryptocurrency, a digital form of money and a payment system. Crypto has several advantages over physical dollars and cents — it's incredibly difficult to counterfeit, and transactions are more secure — but it also has a major downside.

Crypto transactions are recorded and new coins are added into circulation through a process called mining.

Crypto mining involves computers solving incredibly difficult mathematical puzzles. It is also incredibly energy-intensive — Cambridge University researchers estimate that bitcoin mining alone consumes more electricity every year than Argentina.

Most of that electricity is generated by carbon-emitting fossil fuels. As it stands, bitcoin mining produces an estimated 36.95 megatons of CO2 annually.

A world first: On June 9, El Salvador became the first nation to make bitcoin legal tender, meaning businesses have to accept it as payment and citizens can use it to pay taxes.

Less than a day later, Bukele tweeted that he'd instructed a state-owned geothermal electric company to put together a plan to provide bitcoin mining facilities with "very cheap, 100% clean, 100% renewable, 0 emissions energy."

Geothermal electricity is produced by capturing heat from the Earth itself. In El Salvador, that heat comes from volcanoes, and an estimated two-thirds of their energy potential is currently untapped.

Why it matters: El Salvador's decision to make bitcoin legal tender could be a win for both the crypto and the nation itself.

"(W)hat it does for bitcoin is further legitimizes its status as a potential reserve asset for sovereign and super sovereign entities," Greg King, CEO of crypto asset management firm Osprey Funds, told CBS News of the legislation.

Meanwhile, El Salvador is one of the poorest nations in North America, and bitcoin miners — the people who own and operate the computers doing the mining — receive bitcoins as a reward for their efforts.

"This is going to evolve fast!"

If El Salvador begins operating bitcoin mining facilities powered by clean, cheap geothermal energy, it could become a global hub for mining — and receive a much-needed economic boost in the process.

The next steps: It remains to be seen whether Salvadorans will fully embrace bitcoin — which is notoriously volatile — or continue business-as-usual with the nation's other legal tender, the U.S. dollar.

Only time will tell if Bukele's plan for volcano-powered bitcoin mining facilities comes to fruition, too — but based on the speed of things so far, we won't have to wait long to find out.

Less than three hours after tweeting about the idea, Bukele followed up with another tweet claiming that the nation's geothermal energy company had already dug a new well and was designing a "mining hub" around it.

"This is going to evolve fast!" the president promised.

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Sponsored by Pfizer
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