Developing and testing a positive theory of instrument choice: Renewable Energy Policy in the fifty American states
Open Access
- Author:
- Ciocirlan, Cristina Elena
- Graduate Program:
- Public Administration
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- October 09, 2006
- Committee Members:
- Beverly Ann Cigler, Committee Chair/Co-Chair
Jeremy Plant, Committee Member
Nihal Bayraktar, Committee Member
Steven Ames Peterson, Committee Member - Keywords:
- instrument choice
innovation and diffusion
renewable energy policy
legislative professionalism
comparative state
policy formulation - Abstract:
- The environmental economics literature consistently suggests that properly designed and implemented economic incentives are superior to command-and-control regulation in reducing pollution. Economic incentives, such as green taxes, cap-and-trade programs, tax incentives, are able to reduce pollution in a cost-effective manner, provide flexibility to industry and stimulate innovation in cleaner technologies. In the past few decades, both federal and state governments have shown increased use of economic incentives in environmental policy. Some states have embraced them in an active manner, while others have failed to do so. This research uses a three-step analysis. First, it asks why some states employ more economic incentives than others to stimulate consumption of renewable energy by the residential, commercial and industrial sectors. Second, it asks why some states employ stronger incentives than others. And third, it asks why certain states employ certain instruments, such as electricity surcharges, cap-and-trade programs, tax incentives or grants, while others do not. The first two analyses were conducted using factor analysis and multiple regression analysis, while the third analysis employed logistic regression models to analyze the data. Data for all three analyses were obtained from a combination of primary and secondary sources. To address these questions, a theory of instrument choice at the state level, which includes both internal and external determinants of policy-making, was developed and tested. The state level of analysis was chosen. States have proven to be pioneers in designing policies to address greenhouse gases (see, for instance, the recent cap-and-trade legislation passed in California). The theory was operationalized with the help of four models: needs/responsiveness, interest group influence, professionalism/capacity and innovation-and-diffusion. The needs/responsiveness model suggests that states tend to choose more and stronger economic incentives when they are more dependent on conventional sources of energy, such as coal, oil and gas or when they have the potential to produce renewable energy. The interest group influence model suggests that instrument choice is ultimately a political decision, most likely to benefit some groups more than others. The professionalism/capacity model posits that states with more professional legislatures, with legislators who make more use of policy analysis, with more capacity to generate nonpartisan policy research and with larger agencies tend to employ more and stronger instruments to stimulate renewable energy consumption and production. And last, the innovation-and-diffusion model suggests that states with a proven innovation record in climate change tend to employ more and stronger economic incentives than states without such record. Also, this model explains states’ instrument choice decisions as a function of the choices made by their neighbors.