STAKEHOLDER PARTICIPATION AND STATE CLIMATE CHANGE POLICIES
By Elena Maggioni, Hal Nelson and Daniel A. Mazmanian Environment & Sustainablity, WP-November 2009-1
Stakeholder participation and state climate change policies Elena Maggionia, Hal Nelsonb, Daniel A. Mazmaniana a
b
School of Policy Planning and Development, University of Southern California, Claremont Graduate University
Paper to be submitted to, Journal of Public Administration Research and Theory http://www.oxfordjournals.org/our_journals/jopart/for_authors/ms_preparation.html
Corresponding author: Elena Maggioni
[email protected] School of Policy, Planning and Development, University of Southern California, Ralph and Goldy Lewis Hall 201 Los Angeles, CA 90089-0626
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Abstract Structured processes of stakeholder involvement in policy design are becoming ever more pervasive in the climate change policy arena. This has become particularly noteworthy in recent years as many states governors have convened diverse stakeholders to participate in climate change advisory commissions to design comprehensive plans that address issues related to green house gasses emission mitigation, with regard to energy supply, transportation and land use, energy demand and agriculture. These processes provide an information rich, substantively important, and timely opportunity to systematically test different propositions about the quality and content of stakeholder processes. We analyze the composition of the stakeholder groups in 16 states, which we then use to predict stringency of greenhouse gas (GHG) reductions in the energy sector using multivariate regression. Looking across the climate change processes, one of the more interesting findings is that there is a disproportionate presence of representatives of the energy sector. We test important questions about the policy prescriptions of the stakeholder processes and their role in the deliberative and policy formulation process across the states. That is, has such extensive representation by one of the economic sectors most responsible for GHG emissions significantly affected the policy output, or has the economic relevance of the energy sector been offset or counter-balanced by other of the participating interests and/or the political orientation of the chief executive? Finally, what do these experiences suggest about the collaborative context and structure and the quality of deliberation on stakeholder participation processes?
Key words: climate change, stakeholders, participation, state policies
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Stakeholder participation and state climate change policies
Introduction A wide number of states have designed policy instruments to address future climate change forcing green house gas (GHG) emissions and have done so involving a large number of stakeholders. In virtually every instance, the challenge has been to devise policies that maximize GHG reductions while minimizing costs to the state’s economy. The predominant focus of analysis of this phenomenon has been oriented at understanding the contribution of state measures to the general United States GHG reduction strategy and the relationship between state and Federal initiatives (Rabe, 2004; Litz, 2008, Lutsey & Sterling, 2008, Rabe, 2008a, Rabe, 2008b; Rabe & Betsil, 2009). Far less attention has been given to the actual content of the state policies and to how participation processes affect the final policy designs proposed. These processes, however, provide an information rich, substantively important, and timely opportunity to systematically test the emerging propositions about stakeholder processes articulated by Sabatier (2005), Lubell (2008) and Sabatier and Weible (2009). Policy processes that include public participation are well grounded theoretically in the literature as a pragmatic response to the crisis of administrative rationalism (Dryzek, 2005) and to the decline of public confidence in government and the deliberative process (Rowe & Frewer, 2004, Hajer, 1995, Hajer & Wagenaar, 2003). Especially in the field of environmental policy, where problems are highly controversial and value laden, different forms of public involvement and consultation have been used in agenda-setting and policy formulation as well as in conflict resolution for many years. However, whether they are effective in terms of improving the policy output, of reducing conflict and fostering smoother implementation is still not well understood.
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Lubell et al. (2009) argue that to fully understand these processes collaborative partnerships’ outputs need to be assessed on multiple levels. It is important to evaluate whether these partnerships increase social capital and shared understanding among the participant. At the same time it is crucial to consider the quality of the actual plan or policy design they generate and finally it is essential to examine whether collaboration among stakeholders and public officials in designing policy improves the chances of easier policy implementation and a more effective monitoring of the policy outcomes.
Stakeholder processes to design state strategies to address climate change While the U.S. was one of the leaders in the international effort to address global climate change, one of the main supporters of the Framework for Climate Change in 1993, and one of the drafters of the Kyoto protocol in 1997, until the summer of 2009 the Congress and the executive had consistently rejected any effort to regulate GHG emissions. In this vacuum of national policy leadership, states and local authorities are promoting a wide range of strategic and regulatory actions. States have set future GHG emission targets, designed climate action plans, established renewable energy standards, promoted the use of renewable sources, regulated fuel standards for motor-vehicles, implemented GHG inventories, signed regional initiatives to set up CO2 markets and actually launched carbon trading schemes (Litz, 2008). Cities, on their part, have set their own GHG emission reduction targets and joined programs such as the U.S. Conference of Mayors Climate Protection Agreement, or the Cities for Climate Protection (CCP) campaign that binds them to the goal of estimating their GHG emissions (Brown, 2008). States, in particular, have the legal authority to regulate sectors of the economy responsible for significant portions of GHG emissions such as energy production and distribution, products and buildings energy efficiency, transportation and land use (Rabe & Betsil, 2008). They have the 4
resources to design regulation and incentives to change behavior on a large scale and are likely to influence policies at national level. As a consequence, their actions are highly relevant and will have meaningful effects over the overall GHG emissions in the US. Initiating an attempt at reducing GHG emissions is a complex task. States are well aware that all the activities that produce GHG emissions, such as energy generation and transportation, are traditionally associated with economic growth and that to launch carbon mitigation activities requires a comprehensive vision of the future and strong and effective political will. Part of that vision has been that by taking action early a state can position itself as a leader in developing the knowledge, capacity and reputation for being receptive to the emerging “green economy”, can rank as a technology leader in energy demand side management and have provide its energy sector a head start in the conversion to renewable power. In moving toward this goal, the strategy that the great majority of states have adopted has been to involve a wide number of stakeholders in the design of comprehensive GHG emission reduction plans that foretell much about the government’s actions into the future. Climate change planning processes have been non committal in that they have been initiated without commitments by state legislatures and chief executives to adopt the plans. Nonetheless, they have been initiated in most cases by the governor with the implicit intention to act, and have involved a wide range of representatives of stakeholders, especially from the energy sector, local environmental organizations, civil society leaders, and government regulators. The representatives were typically nominated by the governor to form a climate change advisory committee, which was then subdivided into five thematic working groups that address issues of energy supply, transportation and land use, energy demand (residential, industrial and commercial), agriculture, forestry, and waste management, as well as cross cutting issues group. The working groups were steered and
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facilitated by external consultants, met regularly for about six months and analyzed different policy options to reduce GHG emissions. Stakeholders typically started with a catalog of policy options that other states had adopted, prioritized them, and then voted to adopt a list of approximately ten policy options in each sector. The policy design, target, affected parties, and implementation schedules of each option were then heavily modified by the groups and by the advisory committee. The groups produced a draft proposal that was examined and approved by the overall advisory committee in a series of meetings. At the end of the process the committee delivered a comprehensive policy proposal, with an array of specific recommendations for consideration by the governor and the legislature. The processes, while similar in their focus on climate change, have been far from uniform in the committee makeup, and recommendations. They have taken place in a wide variety of different political settings, with different histories, cultures, economic structures and experiences in participation processes. Important for our research, they have been sufficiently homogeneous to justify a meaningful comparison and enable useful generalizations that can advance our understanding of the dynamics of the “consensus over adversarial” participatory stakeholder policy formulation processes.
Stakeholder Participatory processes: a definition Policy formulation processes that include significant levels of stakeholder participation are well understood in the theoretical literature as a pragmatic response to the crisis of administrative rationalism (Dryzek, 2005) and to the decline of public confidence in the traditional legislative and executive policy formulation process (Rowe & Frewer, 2004, Hajer, 1995, Hajer & Wagenaar, 2003).
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In practice, the more passive “inform and comments” approach to participation is still the official approach of the majority of federal and state agencies, but many of them have taken a much more proactive stance and involve citizens both directly and through interest representatives (in specific, representatives of the public, business, and nonprofit sectors) “in formulating policies, in making and implementing decisions, and sometimes in enforcement” (Dietz & Stern 2008: 40). Due to a number of different interpretation, we define the participation process as the “organized processes adopted by elected officials, government agencies or other public-or private-sector organizations to engage the public in environmental assessment, planning, decision making, management, monitoring or evaluation” (Dietz & Stern, 2008, p.11), to supplement the traditional policy formulation functions of government.
Expectations and pitfalls of stakeholder participation In the last thirty years the sphere of policymaking has expanded outside the traditional boundaries of public investments and standard settings and now includes a wide array of problems that are highly charged with values and ethical questions (Hajer, 2005). In this process three pillars of traditional decision making in the environmental domain are being challenged. The growth of an organized civil society questions the authority of democratically elected institutions; classical scientific expertise is being undermined by the growing awareness that more knowledge implies more uncertainty, and traditional geographic hierarchies of decision making arenas are being questioned by the shifting scale of environmental problems. In this context, technocratic solutions and top down policies have become inadequate. As a response, public participation is expected to improve policy content, to potentially facilitate implementation practices, and to legitimize decisions (Hajer & Wagenaar, 2003).
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Supporters of participatory processes claim that they contribute to improve social capital, promote democracy, reduce conflict, develop accountability and advance fairness and justice (Callahan, 2007). At the same time, critics have dismissed participation as inefficient, timeconsuming, costly, politically naïve, unrealistic, disruptive and lacking broad representation (Coglianese, 1997; Delli Carpini et al., 2004; Irvin & Stansbury, 2004; Dietz & Stern, 2008; Newing & Frish, 2009). Expected benefits of stakeholder participation processes Stakeholder involvement advocates ascribe a host of positive normative attributes to the process (Fiorino, 1990; Dietz & Stern, 2008; Renn & Schweitzer, 2009). Renn & Schweitzer (2009) unbundle the array of expectations associated with public involvement in environmental decision making and couple them to the normative rationale that supports them. They argue that actual participation processes are not the result of a unitary vision of the policy process; they are rather the product of a mix of different sets of expectations that derive from different theoretical approaches. The neoliberal approach frames social interactions as an exchange of resources (Renn & Schweitzer, 2009: 177) and drives the assumption that participation is the tool for finding one or more decision options that optimizes the payoff for each stakeholder. The deliberative approach focuses on the need of establishing a shared set of values to legitimize the decision making process and rises the expectation that all the relevant arguments in the discussion are included in the process, regardless their popularity with the participants. The emancipator model frames participation as the tool to make the less privileged heard and to empower them to represent their own interests and values. The anthropological approach assumes that each citizen is capable of moral judgment and that the goal the participatory process is to provide with choices mainly based on common sense through the involvement of citizens 8
that do not have stakes in the decision. The post modern concept attributes to stakeholders’ participation the objective of soliciting information and opinions from social subjects that are usually excluded and frames participation processes as critical science practice, a source of conflict, knowledge and power. Finally the functionalist approach focuses on the role of participation as a tool to collect all the important information, avoid political paralysis and secure smooth implementation of the decision making process. Expectations about the benefits of stakeholder processes results are strongly supported also for instrumental reasons (Fiorino 1990; Dietz & Stern 2008). In fact, there is increasing awareness that government does not have an answer for every question and that scientific uncertainty undermines citizens’ trust in government’s decisions. Engaging representative stakeholders is therefore utilized to enrich the knowledge that supports the decision making process through local expertise; to enhance decisions legitimacy and to build institutional capacity. In fact, stakeholders’ participation processes have the potential of integrating expert science with non expert, locally based knowledge, especially when contingent valuation and public values are concerned (Rauschmayer & Wittmer 2006). It is argued that participation “provides a mechanism for obtaining the consent of the governed in more specific ways than are possible with elections” (Dietz & Stern, 2008: 50) and also have the side effect of reducing litigation and adversarial confrontations. Finally, a denser relationship with the public, based on consistent opportunities for meeting and sharing concerns, is likely to build trust and credibility to facilitate policy implementation and revision processes. The negative side of stakeholder participation When integrated in a formal decision making process, stakeholders’ participation becomes a bureaucratic procedure and, as such, is exposed to a number of drawbacks that many 9
authors have described (Coglianese, 1997; Delli Carpini et al., 2004; Irvin & Stansbury, 2004; Dietz & Stern, 2008; Newing & Frish, 2009). Participation processes can be manipulated by the organizations that promote them. They can ignore the results of the process or guide the selection process to reach a predetermined outcome. Participatory processes can be initiated simply to meet administrative requirements, to symbolically appease interested citizens and groups, and to deter litigation (Dietz & Stern, 2008). Finally, the processes can backfire by exacerbating differences, further entrenching preexisting positions, and rendering agreement even more difficult (Sunstein 2001). Furthermore, participation can be costly in terms of administrative time and money, and the commitment of citizens’ to remain engaged in the decision making process (Irvin & Stansbury, 2004) is highly improbable. Also, outcomes may be hijacked by a vocal group of individuals that represents a minority view, or by powerful stakeholders as the process may be monopolized by wealthier groups that have the resources and time to attend the meetings consistently (Delli Carpini et. al. 2004; Dietz & Stern 2008).
Methodological issues in evaluating stakeholder processes In the field of environmental policy, where issues can be highly controversial and solutions value laden, different forms of stakeholder involvement and consultation have been employed for many years, however, which is more effective in terms of identifying the optimal outcomes is not well established. The most recent assessments of the literature on effectiveness point out that empirical research is fraught with methodological disagreements and interpretations of outcomes (Rowe & Frewer 2000, 2004; Dukes 2004, Delli Carpini et al. 2004, and Halvorsen 2006).
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These issues notwithstanding, there is an overall agreement on the fact that participation processes should be evaluated across five dimensions: (a) the context and the characteristics of the problem; (b) the available resources; (c) what happens during the process; (d) the decision produced and its consequences and (e) the consequences of the participation process on the participants (Burgess & Clark, 2006; Dietz & Stern, 2008, Lubell et al., 2008). The relevance of the five dimensions will vary depending on whether the decisions being made are about individual projects or broad issues, such as fashioning a comprehensive plan for watershed management, negotiated rule making, or when dealing with governance over common pool resources. When individual projects are at stake success can be measured in the ability of reconciling differences. Success is much harder to gauge when broader issues are concerned. Lubell et al. (2008) emphasize that in these situations it is necessary to evaluate the process, decisions, and consequences, in a single integrated assessment. There is also appreciation that what works in one situation does not necessarily work in another (Burgess & Clark, 2006; Rowe & Frower, 2004). Webler and Tuler (2002: 180) emphasize the need to ”better understand how factors such as (a) the typology of the decision problem, (b) the history of the conflict, (c) the personalities involved, and (d) the constellation of involved interests influencing the performance of the participation technique all come into play in shaping a process and its outcomes”. Lubell et al. (2008) claim that the characteristics of the subjects involved and the consensus rules established at the beginning of the process are crucial
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to understanding the internal dynamics that lead to final decisions. Dietz & Stern (2008) add that the history of past confrontations among the participants to the process can be fatal. Finally, a frequently asked question in the research is whether participatory processes foster a shared understanding of a problem (Gwartney et al. 2002; Sabatier et al. 2005; Lubell et al. 2008), and whether the participants involved feel empowered and contribute all at the same level (Dukes, 2004).
Empirical analysis of climate change stakeholder processes In appreciation of the above range of considerations and research questions and in order to achieve a systematic understanding of how stakeholder participation processes have affected the Climate Change Action Plans designed by the states, we employ the following strategy. First we assemble a comprehensive data base with information from available cases of climate change policy where a written plan resulted or is in progress. In order to understand who was sitting at the table, we build a database of the individuals that participate in the climate action teams and in the workgroups and code them according to the sector and the interest they represent. The analysis of this database provides a first understanding of the interests represented in the climate change discussion. Then, we single out the plans that have comparable methods of estimating future GHG emissions and reductions; we code the contents of each climate change action plan and summarize the estimated GHG emission reduction targets that would result from the plan implementation for each sector. Next, we test several hypotheses about the extent and mitigation aggressiveness of the policies. Finally, we reflect on the implications and on further research questions.
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Stakeholders’ characteristics The information reported in the following section is related to stakeholders’ participation processes that took place or are currently taking place in 27 states (Appendix 1). Some of them produced climate change action plans and some of them are still in progress. They include a wide variety of cases. Most of them (19) have been promoted by Democrat governors and legislatures, but many have been initiated by Republican administrations. The stakeholders in the technical work groups and advisory committees, when viewed in aggregate, involve 2,149 representatives of different organizations. In this group, the interests of the energy sector are very well represented. About 24% of the stakeholders are directly involved in the generation, transmission and distribution of energy, about 20% represent the interests of energy users, such as the transportation industry, real estate development, and other economic sectors. Only about 21% stand in for environmental and consumer protection, which suggests that the focus of the process is to determine policies that are compatible with the state economic system, and that the environmental component has a much lesser role. The concentration of energy supply stakeholders presents a high degree of variation across the states, where Rhode Island and Utah present the highest quote of energy sector representatives and Maine and Maryland the lowest (Fig. 1).
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It is interesting to observe that a number of participants do not stand for any sectoral interests, rather they represent community wide or institutional preferences. These are representatives of local governments (cities and counties), policy entrepreneurs that have influenced state policy and are included in the process as “wise men”, partners in law firms with expertise in mediating environmental conflicts, but also individuals that play a relevant role in the community, such as pastors or members of local churches.
Table 1 – Participants and main interest Frequency
Percent
Energy Consumers’ and environment protection Non specific Research Economy Transportation and land use Agriculture Water and Waste Other Total Source: State Climate Action Plans
24.0 21.5 14.0 11.3 10.5 9.5 6.5 2.5 0.4 100.0
The distribution of participants per sector reveals how the presence of the business sector has strongly influenced the process. The relative majority of the participants (33.4%) comes from private companies, while representatives of state agencies constitute 22.6% of the individuals involved and members of NGOs only 16%. This phenomenon reflects the fact that governors who appoint the members of the stakeholder groups are well aware that the business community is highly suspicious of any attempt to curb GHG emissions and that any GHG mitigation initiative needs the business community’s input and support.
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Also note that representatives of the Federal Government are almost totally absent from the processes, and that, while local governments have been involved to a larger extent, their presence is not very prominent either (10.2%). Finally, the analysis of sectoral representation reveals that the academic community is represented, possibly more than past experience would suggest, albeit as a somewhat marginal player. About 10% of the people involved in the stakeholders’ processes come from local universities.
Table 2 - Participants by sector Sector Business State Government NGO Local Government Academic Other Federal Government PPP Native Tribes Other institution Total Source: Climate Action Plans
Percent 33.5 22.6 16.0 10.2 9.5 2.9 1.9 1.6 1.1 .8 100.0
In order to understand how climate change mitigation policies are influenced by the participants to the stakeholders’ processes it is important to analyze the composition of the dominant group involved: the representatives of organizations involved in energy supply. The energy sector is certainly most likely to be affected by GHG mitigation policies and standards, usually plays a very relevant role in the local economy, and in many states has a well established relationship with regulators, generates much of the data used by the working groups, and its opinions play an important role in state energy policy. As noted, 24% of the stakeholders represent energy generation, distribution, and transmission. An overwhelming majority (63.8%) 16
comes from the business sector while much more modest is the number of federal and state regulators (15.4%) and of not for profit organizations (11.3%). The latter are mainly unions and advocates for renewable energy, while the stakeholders of the business sector represented both “traditional” energy supply components, electricity companies, fuel companies and mining firms, but also a rich entrepreneurial world that includes renewable energy companies and private consultants focused on energy efficiency.
Table 3 – Participants of the energy supply by institutional sector Sector Private State Government NGO Local Government PPP Native Tribes Federal Government Other Total Source: Climate Action Plans
Percent 63.8 15.1 11.3 5.2 2.9 0.8 0.4 0.4 100.0
The policies and the estimates of their aggregate results The analysis of how different sectors of the civil society are represented in the climate change mitigation deliberation process provides the foundation for a deeper scrutiny of whether specific interest groups have influenced the final policy design. In sixteen states of the twenty-seven initially considered, the stakeholder process has been conducted using comparable methods and data, producing comparable policy documents. Therefore the second part of the study is based on this subset of cases. The stakeholder meetings produced policy documents that included estimates of past (1990), current, and future GHG emissions and recommendations on measures to mitigate them chosen among a wide portfolio of 17
alternatives. These recommendations are clustered in five groups that reflect the theme of the stakeholders’ working groups. •
Energy supply (ES), that include renewable portfolio standards, incentives for cogeneration, increase electricity generation through hydropower, nuclear energy, GHG cap and trade schemes, improved emissions performance standards for new and existing generation facilities and many others.
•
Transportation and land use (TLU), that include fuels carbon content standards, vehicle fuel efficiency standards, market based incentives to reduce VMT, low rolling tires requirements for vehicles, measures to reduce idling and to integrate freight, transit systems improvements, smart growth oriented developments and other measures.
•
Residential, Commercial and Industrial uses (RCI), represents the demand side of energy, that include incentives for energy efficiency for households, businesses and industrial facilities, more stringent building codes, green procurement and energy efficiency measures for the public administration and others.
•
Agriculture, waste and forestry (AWF) that include conservation tillage, conversion of agricultural land to forest for carbon sequestration, protection and restoration of existing forests, waste and manure management, biogas capture, biodiesel production and other measures.
•
Cross cutting issues (CC), such as education, GHG reporting and registries and others. Each working group was presented a baseline GHG emissions forecast through 2020 for
their sector that included business-as-usual activities. Each group then developed a number of mitigation policies based on state GHG mitigation supplies and cost estimates. Each subcommittee met roughly 10 or more times to develop each policy’s goals, scope, coverage,
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implementation schedule, and to identify data sources for the technical analysis. In most cases, the members of the full committee appointed by the governor met a half dozen times to vote each policy option up or down. The members usually also sat on the several of subcommittee working groups. Typically, consultants provided working groups and full committee facilitation services as well as performing the cost effectiveness evaluations of the policy options. Adding the estimates of GHG emission included in the sixteen Climate Change Action Plans that have a comparable structure, the distribution of GHG emissions in different sectors at 2020 is reported in the following table.
Table 4 – GHG emission in 2020 Sector
MMtCO2e
% of 2020 Emissions
Energy supply Transportation and Land Use Agriculture Waste and Forestry* Residential Industrial and Commercial Total Source: state Climate Action Plans
984 764 232 623
38 29 9 24
Reductions Identified from Policy Options (% of Sector Emissions) 37 20 121* 43
2,604
100
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* Agriculture, waste and forestry reductions include carbon sinks and forestry management actions aimed at offsetting CO2 emissions Of importance to note, each state the stakeholders’ working groups have chosen different policy mixes in each sector, and therefore is wide variation across the country. Alaska, Arizona, Montana, North Carolina and New Mexico rely heavily on GHG reductions of the energy supply sector, in Maryland and Vermont stakeholders estimate that they can reduce GHG emissions related to urban development more than in the other states. Arkansas and Florida focus on carbon
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sequestration and on the potential of agriculture and forestry, Michigan, Pennsylvania and South Carolina count on energy efficiency in the residential, industrial and commercial sector (Fig. 2).
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Fig. 2 – GHG emission reduction in 2020 by sector and state (%)
Residential, commercial and industrial
Energy supply 0.0
20.0
40.0
60.0
80.0
0.0
100.0
Alaska Arizona Arkansas Colorado Florida Iowa Maryland Michigan Minnesota Montana New Mexico North Carolina Pennsylvania South Carolina Vermont Washington
Alaska Arizona Arkansas Colorado Florida Iowa Maryland Michigan Minnesota Montana New Mexico North Carolina Pennsylvania South Carolina Vermont Washington
Average
Average
20.0
40.0
40.0
60.0
80.0
100.0
60.0
80.0
100.0
Agriculture, forestry and waste
Transportation and land use 0.0
20.0
60.0
80.0
0.0
100.0
Alaska Arizona Arkansas Colorado Florida Iowa Maryland Michigan Minnesota Montana New Mexico North Carolina Pennsylvania South Carolina Vermont Washington
Alaska Arizona Arkansas Colorado Florida Iowa Maryland Michigan Minnesota Montana New Mexico North Carolina Pennsylvania South Carolina Vermont Washington
Average
Average
20.0
40.0
Source: State GHG mitigation plans
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Research questions and hypotheses The rich literature about participation processes and the most recent empirical findings about their effectiveness raise four basic questions. •
What contexts are conducive to the formation of collaborative process?
•
Is the participation process captured by the powerful interest group like the energy industry?
•
In contrast, does the participation process reduce the influence of powerful and organized interests?
•
Does the local political orientation influence the final outcome of GHG mitigation policies? Considering the fact that about 24% of the stakeholders involved in the states GHG
policy formulation processes come from the energy sector and about 64% of the participants represent the business community, in this paper we concentrate on the elements of climate change policy designs that will most directly affect the energy supply sector. Inspired by the previous findings about participation processes and from case studies and the experience at different levels and in other policy arenas, with our data we are able to test empirically and systematically the following hypothesis. H1 The greater the energy industry stakeholder representation the less aggressive CO2e emissions reductions for the energy supply sector.
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On the other hand, based on the notion that participation processes not always reflect power relationships that shape the economic structure, it is relevant to test the possibility that the participation process is in fact irrelevant and that the policy design is instead correlated with the economic forces active in society. The alternative hypothesis is the following. •
H2 The more economically important the energy sector is to a state’s economy, the less aggressive are the state’s CO2e emissions reductions. Also it is appropriate to take into account the fact that the understanding of climate
change has been for years a very ideological and divisive issue, where partisan politics has often prevailed over scientific research and fact based inquiry, therefore we thought it important to test how political partisanship might affect policy design and whether a more conservative governor would chose stakeholders that are more defensive of the interests of the energy industry. •
H3 States with Republican governors are more likely to formulate less aggressive CO2e reduction policies for the energy sector Dependent and independent variables To test the effects of the participation process on the policies aimed at the energy supply
sector, in this analysis the dependent variable is the percentage of GHG emission reduction of the energy sector over estimated emissions of the energy supply sector in a business as usual (BAU) scenario. To represent the strength of the interests of the energy sector involved in the participation processes, one of the independent variables is the percentage of stakeholder of the energy sector over the total number of stakeholders involved in the process. The expectation is that a higher
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proportion of energy supply stakeholders predicts less stringent GHG mitigation measures for the sector. The data for this comes from the state climate action plans. The average growth of state GDP in the last 10 years is the second independent variable. We expect that faster growing economies are less inclined to reduce electricity’s GHG emissions. Source is Bureau of Economic Analysis – BEA, Regional Economic Accounts (http://www.bea.gov/regional/spi/). To represent the relevance of the energy sector in the state economy, we used the average percentage of state GDP produced by utilities over the total GDP of the state an additional dependent variable, with the expectation that a higher percentage of GDP produced by local utilities is correlated with smaller GHG emission reductions requested to the energy sector. Source is Bureau of Economic Analysis – BEA, Regional Economic Accounts (http://www.bea.gov/regional/spi/). The political affiliation of the governor has been used as a proxy of the political ideology of the executive who appointed the stakeholder groups. The expectation is that republican governors nominate climate change action teams that are more favorable to the energy industry and democratic governors appoint stakeholders that are more likely to design restrictive policies. The source of this data is the National Governors Association (http://www.nga.org/portal/site/nga/menuitem.216dbea7c618ef3f8a278110501010a0/) Data, Results and discussion Montana and Iowa are not included in the data set for the purpose of this analysis because they are outliers that would skew the regression results. A sample size of 16 states is very small for multivariate regression, and is highly sensitive to the effects of outliers. Leverage statistics indicated that the residual from Iowa’s predicted value for energy sector reductions was two 24
standard deviations above its predicted value, primarily due to the large renewable resources in the state. For this reason we dropped Iowa from the sample. In Montana, the percentage of GDP produced by utilities is more than two standard deviations from the mean of out group of states. We dropped Montana from the sample as an outlier as well. Table 5 – Descriptive statistics
Percent energy supply reductions Percent energy stakeholders Yearly GDP growth 1997 - 2007 Average % GDP in utilities (1997 – 2007) Party of governor
Mean
Std. Deviation
Min.
Max.
39.1
32.0
5.4
109.5
23.4
5.1
15.5
33.3
2.9
1.3
0.6
5.7
1.9
.6
1.0
2.7
0.5
.5
0
1
The sample mean of GHG emissions reductions from the energy sector is 39.1%, but there is a high variability between the 5.4% of Washington, where the energy is mostly produced by hydroelectric plants and the 109.5% of Maryland that counts on renewable energy to curb the emissions mainly related to electricity imported from out of state. To the extreme variability of planned cuts to the emissions of the energy supply corresponds less variability in the rate of participation of stakeholders of the energy sector to climate action commissions and workgroups, that ranges from 15.5% in Maryland where representative of the academic sector and of the civil society were more numerous to 33.3% in Pennsylvania. The distribution of the average yearly growth of state GDP between 1997 and 2007 reflects different rates of growth in different parts of the country: lower rates in Michigan and Pennsylvania and the highest in Arizona (Tab. 5). The correlation matrix is reported in Table 6 and the low correlations between the independent variables mitigate the risks of multicollinearity in the regression model.
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Table 6 – Correlation matrix
Percent energy supply reductions Percent Energy stakeholders Average GDP growth 1997 2007 Average Percent GDP in utilities 1997 - 2007 Executive party
Percent Energy stakeholders
Average GDP growth 1997 2007
Average Percent GDP in utilities 1997 2007
-.521 .391
-.550
.413
.120
-.132
.008
.428
-.195
.069
Table 7 – OLS Regression results: Dependent variable of state energy sector GHG emissions reductions Independent variables
t-statistic
P < |z|
-3.692
-2.120
