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Corporate lobbying for environmental protection

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  • Felix Grey

    (Faculty of Economics, University of Cambridge)

Abstract

Much of the time, firms lobby against environmental protection, but there are major exceptions to this rule. DuPont, the leading ozone polluter in the 1980s, lobbied for a complete ban of its product. In 2015, in the run up to the Paris Agreement, Europe's six largest oil and gas companies lobbied for a global carbon price. This kind of political support is often pivotal for governments trying to protect the environment. I offer an explanation for this phenomenon, suggesting firms behave as they do in order to steal market share from their rivals. I develop a simple model in which a polluting firm makes a clean technology investment and then lobbies successfully for strong environmental protection, since this will shift market share away from its rival who has not made the clean investment. The key result is that there are situations where it is only because of firms' lobbying that environmental protection is achieved, and this raises welfare.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Felix Grey, 2017. "Corporate lobbying for environmental protection," Working Papers EPRG 1714, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1714
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    2. van den Bergh, Jeroen, 2023. "Climate policy versus growth concerns: Suggestions for economic research and communication," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
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    4. Dolphin, Geoffroy & Pahle, Michael & Burtraw, Dallas & Kosch, Mirjam, 2022. "A Net-Zero Target Compels a Backwards Induction Approach to Climate Policy," RFF Working Paper Series 22-18, Resources for the Future.
    5. Jie Ouyang & Kezhong Zhang & Bo Wen & Yuanping Lu, 2020. "Top-Down and Bottom-Up Approaches to Environmental Governance in China: Evidence from the River Chief System (RCS)," IJERPH, MDPI, vol. 17(19), pages 1-23, September.
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    7. Trinks, Arjan & Mulder, Machiel & Scholtens, Bert, 2020. "An Efficiency Perspective on Carbon Emissions and Financial Performance," Ecological Economics, Elsevier, vol. 175(C).
    8. Dapeng Cai & Jie Li, 2020. "Pollution for Sale: Firms’ Characteristics and Lobbying Outcome," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 539-564, November.
    9. Gustav Engström & Johan Gars & Niko Jaakkola & Therese Lindahl & Daniel Spiro & Arthur A. van Benthem, 2020. "What Policies Address Both the Coronavirus Crisis and the Climate Crisis?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 789-810, August.
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    More about this item

    Keywords

    lobbying; environmental policy; political economics;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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