Explaining the Adoption of Climate Change Policies in Local Government
Richard C. Feiock & Nathan Francis & Tony Kassekert Askew School of Public Administration and Policy Florida State University Tallahassee FL 32306-2250
[email protected]
Paper prepared for the Pathways to Low Carbon Cities Workshop, Hong Kong, China, December 13-14, 2010. This project was supported by IBM Center for the Business of Government and the National Science Foundation under grant SES-0943427.
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Explaining Adoption of Climate Change Policies in Local Government In many countries, it is cities rather than the national government that has taken the lead role in reducing greenhouse gas emissions. Urban areas are significant contributors to climate change and are also particularly vulnerable to its effects. By some estimates, more than threefourths of global carbon emissions come from cities. Although the territory covered by municipal governments accounts for only a tiny portion of the United States’ total land area, almost two-thirds of the American people, over 175 million, reside in cities. In addition, municipal governments have tools to directly address energy efficiency, conservation, and carbon emissions through their well-established role in regulating land use and development. Collectively, local governments can contribute meaningfully to U.S. climate change mitigation by reducing emissions within their well-accepted domains of authority and responsibility. City governments in particular have an array of powers and functions that make them well-suited to play a lead role in climate protection and energy management. Local governments in the U.S. and around the globe are increasingly active in promoting energy efficiency and sustainability both in their governmental operations and in the wider community. The U.S. Conference of Mayors recently announced that over 1,000 cities have signed their Climate Protection Agreement promising to substantially increase energy efficiency and reduce GHG emissions. The International Council for Local Environmental Initiatives (ICLEI) has an initiative with over 1,200 municipalities worldwide agreeing to measure and report carbon reduction. Considering the obvious importance and dramatically increased reliance on local governments to handle energy and climate issues, we know little about what factors account for local adoption of sustainability programs. We begin to fill this lacuna by addressing three questions:
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1) What factors explain variation in the adoption and policy commitment of cities to climate protection? 2) How are actions directed to sustainability in governmental operations different than actions directed to climate sustainability in the larger community? 3) How do the political institutions and structure arrangements of local government affect the adoptions of various sustainability policies?
Local Sustainability Policy Much of the previous work on energy and climate policy innovation has studied states and nations rather than local governments. State level studies in the U.S have tested explanations based on regional diffusion versus the internal determinants and report strong support for the proposition that internal factors shape their policy (Matisoff 2008. Lyon and Yin (2009) model policy adoption based on air quality, renewable energy interests, unemployment rates and they find renewable energy, restructured electricity markets and economic development matter for the adoption of state renewable portfolio standards. Most prior work at the local level focuses on policy adoption rather than specific actions and commitments. Decisions to join ICLEI, USCM or other organizations as well as factors affecting motivations and benefits of doing so have also received attention (Zahran, et al. 2008; Feiock et al, 2009). Recent work has begun to investigate commitments to climate protection (Krause 2009, Sharp and Dailey 2010). Wang (2009) found that California cities climate actions were influenced by political preference, environmentalism and fiscal capacity. Krause (2009) measured the commitment levels of the climate commitment of the Indiana cities by developing a climate protection index. Feiock, Kassekert, Berry and Yi (2009) estimated the effects of climate actions of neighboring jurisdictions, and the career incentives of local officials 2
on the adoption of climate policies in Florida cities. While these studies advanced the literature their generalizability is limited because their sample frame is limited to a single state and the results are unconfirmed in a national setting. Only recently has systematic study of city government’s role been undertaken on a national basis. The path breaking work of Portney and his colleagues (Portney 2003; Portney, Berry, Farrington, and Bond 2009; Portney and Berry 2010) investigates how the involvement of various groups shape the types of sustainability initiatives that cities engage in. Krause (2010) makes an important contribution to this discussion by identifying how state level factors influence city level climate policy. In one of the most cited studies, Zahran et al. (2008) account for local sustainability efforts based on climate change risk, climate change stress, and civic capacity. Unfortunately, local government institutions are not included in this analysis. The political market approach reviewed in the next section addresses this limitation by focusing on how needs and group demands for environmental public goods are shaped by political institutions (Lubell, Feiock and Ramirez, 2005; 2009; Feiock Lubell and Lee 2010). Recent work has begun to apply this approach to local energy sustainability and climate protection efforts (Lubell, Feiock and Handy 2009; Ramirez de la Cruz, 2009; Feiock, Kassekert, Berry, and Yi 2009; Sharp, Daley and Lynch 2010; Francis and Feiock 2010). The literature has also begun to grapple with the question of what energy sustainability means at the local government level (Kousky and Schneider, 2003; Wheeler, 2008; Zeemering, 2009). Energy sustainability has become a buzz word and thus means something different to various stakeholders. Francis and Feiock (2010) identify four dimensions to sustainable energy management: 1) efficiency and cost savings from reduced consumption; 2) conservation and environmental sustainability; 3) production from internal or renewable sources; 4) mitigation of global warming. 3
Targeting Governmental vs. Community for Sustainability Policy One important factor that has not been given attention in defining local sustainability policy is the sector to which energy sustainability policy is directed. Climate policies may be directed in-house to increase energy efficiency and reduce emissions of local government operations, or directed outward to promote or restrict actions of non-governmental actors in the larger community. While there is some variation in the approach taken by municipal governments they are interrelated. Many cities appear to initially focus on behaviors and practices within the government itself (Francis and Feiock 2010). Because the economic and political benefits, and thus the interested stakeholders may be vastly different across these sectors, previous research that combines them together may not adequately capture the political dynamics. This project directly addresses this issue by differentiating sustainability efforts directed to local government operations from those directed to the community at large. This paper investigates how the policy commitments of local governments for environmental and energy sustainability are shaped by development politics and institutional incentives. We use the lens of the political market to conceptualize policy change as the outcome of an exchange between government policy suppliers and interest group policy demanders. Political institutions structure these exchange relationships and the distribution of policy benefits across different types of interest groups and polices. In this paper we examine both sustainability policies directed to local government operations and those directed to behavior in the wider community to identify how strong mayor government influences responsiveness to policy demand and supply. We also account for geographic resource disparities, regional collaboration efforts, economic health, and environmental conditions. We
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find that interaction effects are an indispensible component of understanding how energy policy is mediated by political institutions.
The Political Market for Sustainable Energy Policy The market metaphor is frequently employed in the policy literature, but the application of equilibrium models is much less common. Our framework takes an equilibrium approach by considering the interaction of policy supply and demand. We start from a property rights approach. Property rights theories argue that institutions emerge in response to scarcity and changes in relative prices (Libecap 1989; Alchian and Demsetz 1973; North 1990). The political market conceptualizes policy change in a similar manner as the result of a dynamic contracting process between the suppliers and demanders of change in a society (Alston 1996; Libecap 1989). The political market framework conceptualizes policy as the outcome of exchange between government policy supplies and interest group policy demanders. On the supply side, political institutions structure this exchange relationship by determining the transaction costs of searching for mutually beneficial agreements, bargaining over outcomes, and monitoring and enforcing. Institutions also affect the resulting distribution of policy benefits across different types of interest groups because the influence of specific community interests and organized groups is conditional on the structure of political institutions Feiock, Lubell and Lee 2010). In its simplest form the "political market" focuses on the exchange between elected officials and constituents or interest groups. Local government officials supply units of effective support for polices in exchange for instrumental political resources from groups that benefit from those policies. Policy outcomes reflect the relative political powers of the demanders, and the willingness of government authorities to supply favorable policies to various interests 5
(Alston 1996). Thus, the political market supplements existing work by simultaneously considering policy demand, governmental policy supply, and equilibrium policy outcomes under different institutional arrangements.
Policy Demands Demand for property rights is generated by the potential efficiency gains of internalizing externalities (Alchian and Demsetz 1973). This line of argument is frequently used for common-pool resources because the lack of property rights leads to over-exploitation and conflict. Eggertsson (1990) calls these approaches “naïve” because they only consider the gains from economic efficiency and do not address political aspects of property rights such as distributional conflict among groups and interests in society or collective action problems involved with articulating demand. Eggertsson (1990) uses the term “interest group theories of property rights” to describe more sophisticated accounts of institutional change that explicitly take into account the efforts of private interests to secure favorable outcomes in the political arena. Interest group demands are driven by the local economic changes described by the property rights perspective, such as land scarcity. In return for political resources, elected officials will alter institutional rules that affect the utility of different social interests. Some interests are better at organizing for collective action than others, and therefore better able to articulate policy preferences and participate in political decision-making (Riker 1982; Eggertsson 1990). At the local level demands for policy change come from diverse groups, including individuals and businesses, development and environmental interests, and neighborhood and homeowner associations each with its own demand function. Since additional support beyond that necessary to achieve supply of the desired policy is of less value, there is a decreasing 6
marginal willingness to pay for the local government officials policy support. The medium of exchange is instrumental political resources that can support re¬election such as monetary and other contributions, political endorsements etc. The literature has specifically focused on the role of business and development interests in this market. Interest groups compete in the local arena to capture the benefits and avoid the costs of governmental decisions. These private actors organize their efforts to mold local government local environmental land use and development decisions (Denzau and Weingast 1982). Growth machine accounts argue that real estate and building interests use their political power to affect the costs and benefits of growth by influencing regulations and land use decisions (Molotch 1976; Logan and Molotch 1987). Land use and growth decisions generate winners and losers and so environmental policy becomes the object of political exchange, particularly when it has strong distributive implications (Vogel and Swanson 1989; Feiock 1994; Clingermayer 2004).
Governmental Supply Political transactions are characterized by public officials’ effort to deliver durable benefits to supporters. Frant (1996) argues that this type of exchange is characterized by high power incentives--the public sector equivalent of profit in market transactions (Williamson 1985). In this case, electoral support and other political resources are exchanged for the private benefits that result from a policy. Opportunities for government officials to gain electoral support through these political exchanges are limited by several types of transaction costs. In the U.S. there are two dominant forms of city government. In council manager systems a manager appointed by the local government legislative body is responsible for administrative functions. In mayor council systems, a strong mayor is responsible for these tasks. These structures diverge in terms of motivations, incentives and constraints. The literature 7
demonstrates that mayor council systems promote greater responsiveness to community demands. Council manager systems promote efficiency and innovation in government operations. Tavares et al. (2007) examine the interactive effects of district based election systems on local growth management decisions but did not examine differences in form of government. Building from this foundation, we investigate form of government influences the adoption of sustainability programs targeted to government or to the community. A substantial literature investigates differences in policy preferences and motivations among mayors and city managers. Managers’ career interests and professional norms are aligned with the promotion of efficiency and enhancing the local tax base. Elected executives are sensitive to how policy supply influences electoral support. Mayors are to cast as more supportive of neighborhood and environmental consistencies and less attentive to governmental efficiency (Clingermayer and Feiock 2001; Lubell et al. 2005). Understanding the regional context in which supply occurs is also important to undertaking the motivations of local policy makers. Free rider problems are diminished to the extent that there are county-wide or regional collaboration efforts to deal with energy and climate issues. Since each elected official supplies units of policy support, the individual officials supply functions combine to yield an aggregate supply function at the level of the local government. A competitive equilibrium is given by the intersection between the aggregate policy-support supply function and the aggregation of relevant demands. Levels of policy support by individual local government officials are thus equivalent to the amounts they are willing to provide at the competitive equilibrium "price," i.e. the points of intersection of their supply functions with the demand they face. Aggregate support is simply the sum of their individual levels of effective support. The policy outcome thus depends upon the relative degrees of support generated for various policy alternatives. Different types of political 8
institutions favor different types of interests, thus, local officials vary greatly in the effectiveness of the support they can supply for a given policy.
Data and Methods The majority of the data for this analysis are derived from a national sample of cities in the U.S. The sample frame included 1,100 municipalities with populations over 20,000 residents. The survey was conducted in summer of 2010 with an initial web based survey and a follow up mail survey. City managers and CAO’s were the initial contacts for the survey. A 57% response rate was obtained with 624 surveys, with 610 of the surveys having usable information.
Additional data concerning governmental forms was supplied by the National
League of Cities and the ICMA. Several demographic variables, i.e. population, were taken from the U.S. Census Bureau. Two dependent variables were developed for this analysis based on a survey question asking: Which of the following energy/climate related issues does your jurisdiction officially address (e.g., through regulation or policies) as it relates to government facilities and operations; and the community at large? (select all that apply). Each policy enacted is measured by and combined into two additive indices. The index components are: Green buildings Retro-fitting existing buildings for energy efficiency Alternative transportation systems Technology innovation/ demonstration projects Energy efficient devices (appliances, lighting, etc.) Energy efficiency systems (building controls etc. Inventory of greenhouse gas emissions Renewable energy Smart grid/net metering Alternative fuels Incorporating energy use in land use decisions Provide information about efficiency to employees/residents
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The first index measures sustainability policy targeted to government operations and has a Cronbach’s alpha of .79 and the second measures sustainability efforts targeted to the larger community and has a Cronbach’s alpha of .71. On the supply side, we include indicators of local government structure and organization. The form of government structure is coded 1 for strong mayor-council government and 0 for city manager-council government. Because city managers are more efficiency oriented, we expect council manager government to be related to sustainability in governmental operations more than the community. Administrative organization for sustainability is measured as a dummy indicator if whether the city has a separate energy office. Separate energy offices are anticipated to increase adoption in of climate innovation in government and especially the community. Advancing energy priorities may be difficult in cities where a central department is not responsible for developing, articulating, and implementing plans. Finally, we include an indicator of whether a city is located in a metropolitan area or not. Cities that located in metropolitan areas respond to competition from surrounding governments and also have opportunities for collaboration and policy learning that are expected to enhance climate innovation. We next include demand side measures that capture preferences related to sustainability. We include measures of population racial heterogeneity (proportion of population non-hispanic white) and per-capita income. These community characteristics have been linked to environmental protection in previous research (Lubell et al. 2005). Support for sustainability goals by several key stakeholders collected in the survey. The opposition/support from these groups is measured with a five point scale ranging from strongly opposed to strongly supportive for the general public, the chamber of commerce and environmental organizations. We expect citizens to be an important factor in both community and governmental models. We expect 10
environmental groups to be supportive of energy change in both dependent variables. We expect business interests as represented by the local chamber of commerce to be opposed to new standards and regulatory requirements for energy sustainability initiatives. Thus support from the business community may be especially important for sustainability in the community.
Table 1 OLS Estimates of Sustainability Efforts in Government and the Community Sustainability in Government Predictor
Estimate
Sustainability in the Community
t
Estimate
t
Mayor – Council
-.887**
-1.97
1.085**
2.55
Separate Energy Office
1.34**
3.50
.592
1.82
Metropolitan Area
.177
.22
-.514
-.75
Population (log)
.619**
1.99
.496*
1.88
Population density
.146
.61
.707**
3.24
PCPI
.000
.29
.011
.87
Non-Hispanic white
.326
.22
.061
.78
Public Support
.878**
1.98
.885**
2.00
Chamber of Commerce
.445
1.32
1.033**
2.87
Environmental Orgs
.170
.49
1.57
.45
R2 .37
* P < .1 ** p < .05
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R2 .38
Results The results of the OLS estimation of sustainability in governmental operations and in the larger community are presented in Table 1. The results provide support for our political market explanation and for a number of our specific hypotheses. Two of our central findings - that different factors explain sustainability in government and the community, and that form of government has different effects - have potentially important implications for both advancing the political market approach to local policy and for our understanding of local energy sustainability. The existing literature has combined together sustainability programs directed to government and the community rather than differentiate them. Our findings suggest that these are two fundamentally different approaches. The factors that explain sustainability in government operations are substantially different than those that explain community wide efforts. Form of government has differing effects as discussed below. Having a separate energy office is related to more policy actions in government and the community. Location in a metropolitan area did not influence either approach to sustainability. The demand side factors also diverge with the exception of public support for sustainability which increased policy actions in both government and the community. None of the specific group demands and support influenced sustainability in governmental operations. On the other hand, we found that business interests were influential in sustainability efforts directed to the community. Where business was more supportive of sustainability, local governments directed more policies to reducing carbon emissions in residences and commercial operations. Where business is less supportive of sustainability goals, less policy efforts were directed to the community. The fact that business support was important for community based policies but not governmental operations may reflect their less direct stake in governmental 12
operations which are less likely to impose restrictions or costs on private sector actors. In addition, community based sustainability was promoted more in dense urbanized communities perhaps reflecting economies in scale where there is more concentrated population. We also report strong evidence confirming our expectations about form of government. It has long been believed that council-manager governments with professionally trained public managers are more efficiency oriented and insulated from political pressure. Thus managers are more likely to promote policies to reduce operational costs in the public sector and are less likely to accommodate special interest group demands than mayors seeking political support. Despite the general acceptance of this conventional wisdom, empirical evidence to support the predicted differences in policy has been extremely hard to come by. Most studies have found no direct effect of form of government on expenditures or policy after controlling for community characteristics. The effect of local institutions has been indirect working to amplify or reduce supplier or demander preferences. Thus the role of institutions is to moderate supply and demand influences rather than directly influence policy decisions (Lubell et al. 2009). In contrast we report evidence that form of government is an important direct influence on the approach that communities take to sustainability. It is not just the magnitude of the effect that is different, the sign actually reverses. Mayor-council government has a significant negative effect on sustainability directed to governmental operations and a significant positive effect on community based efforts.
Discussion: Climate Protection and Public Management Local governments are investing resources to promote energy efficiency and to address climate change at a growing rate.
From a manager’s perspective, this makes sense both
economically and environmentally. As discussed above, energy efficiency and greenhouse gas 13
reduction efforts can be targeted to the community at large or to local government operations. A basic and traditional local government approach to energy programs encompasses efforts to reduce energy costs by carrying out governmental programs in a more energy efficient manner and using energy efficient building equipment and vehicles. This approach is noncontroversial and likely to face little political resistance.
Unlike other types of environmental policies,
energy efficiency and greenhouse gas reduction efforts can produce direct cost savings in government operations and for citizens. Many of the changes that local governments can make to reduce emissions through their internal operations produce cost savings using existing technology. Taken together, they can yield significant reductions. For example, governmental operations for the City of Los Angeles account for nearly seventeen million metric tons of CO2, which is almost a third of the carbon output from the community. Climate protection programs can also produce “co-benefits” by enhancing and facilitating the operation and performance of other local policies and programs. Moreover, investments in energy efficiency improvements often have relatively short payback periods. Thus the financial benefits from achieving energy efficiency can counteract the collective action problems associated with climate protection and undercut the argument that environmental and economic development concerns are in conflict. Of course, potential cost savings can vary and financial constraints may make investments in energy efficiency difficult no matter how prudent.
The pursuit of an
environmental agenda can be a costly endeavour with high up-front costs and savings that may not be apparent for several years. Thus some municipal policy makers may be reluctant to pursue programs that may divert resources from other policy priorities. A second and complimentary strategy targets businesses and residents in the community seeking to shape constituents’ energy use and behaviors. Several domains of primarily local 14
authority such as planning and zoning, waste management, building codes and building inspection and enforcement provide key mechanisms to reduce community energy consumption by encouraging or incentivizing residents to use more energy efficient buildings and technologies and to reduce vehicle miles traveled.
For example, local governments have
powers to regulate building construction and renovation through their authority to define land uses, approve new development, and enforce building codes. Green building programs, efficiency standards, and building code changes rely on well-developed technologies that are cost-effective.
A number of locales have adopted green building programs that create
incentives or mandates (or both) to improve the environmental performance in governmental, residential, and commercial construction and retrofitting projects. And since reductions in energy use are built into the physical environment, new construction or rehabilitation of existing building stocks creates permanent savings. The enormous attention now being given to energy and climate change policy at all levels of government leads to legitimate concern that local government initiatives in the community may be little more than symbolic actions designed to appeal to environmental constituencies and conform to popular policy trends and expectations. Undoubtedly this is true in some cases. For example, a recent evaluation of the implementation of climate protection programs in Florida cities that had signed on to the United States Conference of Mayors’ (USCM)
climate protection agreement found that over 10 percent of the cities listed as
participants had yet to pass a non-binding resolution affirming the agreement, much less Energy Sustainability Begins at Home (In-House) The old adage that charity begins at home has a parallel in local sustainability efforts. Sustainable energy management is sometimes revolutionary, producing bold and dramatic shifts in local policy. More often sustainability follows an evolutionary path beginning with the 15
implementation of energy efficiency measures in government operations (Francis and Feiock 2011). There are virtues to this incremental process.
Grounding sustainable energy
management in efficiency, cost savings helps builds support for sustainable energy policy in the larger community. Energy savings in government operations represent low hanging fruit in that significant energy and greenhouse gas reductions are possible often with only modest cost. Reductions in energy consumption translate directly into costs savings for taxpayers. These costs savings then provide mechanisms to overcome political or ideological opposition to sustainability initiatives in government and the community. Once the credibility and effectiveness of in-house efforts are established, the next step is to build on this momentum to extend efforts to reduce energy consumption and carbon emissions in the community at large. The result is that commitments are more permanent rather than a passing fad and energy programs are less subject to shifts or reversals when new leaders or new parties prevail in local elections.
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