Does Populism Hinder the Green Transition?

This paper examines whether populist prime ministers hinder the green transition in the EU and increase greenhouse gas (GHG) emissions. Using a panel of 230 NUTS2 regions over 1995–2022, we find evidence of environmental consequences of populist rule. We employ static and dynamic difference-in-differences (DiD) estimators, inverse probability weighting (IPW) adjustments and a heterogeneity-robust estimator. Our baseline static estimates find that populist prime ministers are associated with a 2.2–4.3% increase in regional GHG emissions, a result that withstands robustness checks. Dynamic event-study specifications show no evidence of pre-existing trends, while post-treatment effects emerge immediately after the populist transition and persist over multiple years. Once treatment-effect heterogeneity and switching treatments are fully accounted for, each additional year of populist rule raises regional emissions by around 9% over a period of 6.4 years. Heterogeneity analysis shows that this is driven entirely by right-wing populist prime ministers, while left- and center-wing populist leaders do not have statistically significant environmental impact. Analysis of mediating channels suggests that the emission-increasing effect operates primarily through short-run institutional deterioration and a temporary boost in regional GDP per capita, rather than through direct changes in the energy mix or energy intensity.