Political  leadership  is  unsteady

Climate change and energy policy have become wedge issues in the political debate between Democrats and Republicans. They assume contrary positions in order to activate their electorate resulting in a highly polarised situation: Both claim that their energy policy follows an ‘all of the above’ approach, which means that they aim to foster all domestic energy sources (Coley and Hess, 2012, Littlefield, 2013). However, they emphasise different technologies. While most Democrats favour renewables, Republicans in general oppose them and favour fossil fuels. A key reason is that many Republicans to this date doubt climate science and support climate deniers (McCright and Dunlap, 2011a). The candidates for the presidential election in 2012 demonstrated this polarisation: Barack Obama (Democrat) believes in climate change science and aims to implement measures to mitigate it including various measures for renewable energies, whereas Mitt Romney (Republican) questioned whether climate change is human-made and opposed federal instruments to foster renewable

76 The European Union counted as an entity and not as separate member states is ahead of China and the United States with 235 gigawatts installed capacity.

Governing the Transition to a Green Economy 179 energies (Center for Climate and Energy Solutions, 2012a). Political consensus that

mitigating climate change and transitioning towards a green economy are worthwhile currently does not exist. Historically, such a consensus has been the exception – it existed, for example, in the late 1980s, early 1990s (Roberts, 2012). Hence, changing political majorities have often abruptly stopped measures to fight climate change and support clean energy alternatives. In an international context, this diverging position on renewable energy and climate change of key political actors in an industrialised setting is rather unique.

The US political agenda is influenced by a variety of stakeholders and renewable energy is a constant struggle between environmental action groups and fossil fuel industry. While current market leaders have so far closely controlled the public agenda, the natural gas revolution might open up a pathway for renewable energies. Renewable energies entered the US policy arena as an answer to the oil crises in the 1970s (Carley, 2011, Laird and Stefes, 2009, Schmalensee, 2011). Then-president Carter’s (Democrat) first major policy initiative after he was elected in 1977 was to pursue comprehensive energy policy. His reply to limited world supplies of fossil fuels, skyrocketing prices and fuel shortages was to focus on domestic energy sources such as renewable energy. A first result was the creation of the Department of Energy, which gave lobby groups a target to support renewable energy (Laird and Stefes, 2009). While strong lobbying by the energy industry prohibited far-reaching changes, renewable energy sources gained a prominent role within this window of opportunity (Hirsh, 1999). This turned the United States into an early international front runner. However, a problem of this top-down approach was that changing political majorities could easily overturn it. Furthermore, by the time renewable energy technologies were not as mature as they are today creating unrealistic expectations about their potential. In particular the lack of a lasting political consensus proved to be a hindrance when Ronald Reagan (Republican) with his anti-interventionist agenda was elected president in 1981. Energy policy became highly politicised.

During his presidency that lasted until 1989 Reagan took the issue off the political agenda and stopped many of the implemented support measures (Laird and Stefes, 2009). This affected R&D funding, staff size at the Department of Energy and fiscal incentives to deploy renewable energy technologies. Hence, this lack of political leadership during the 1980s is a key reason why renewable energies did not assume a bigger role in the US electricity mix following the oil crises. After Reagan’s presidency, combined with another external shock, the first Gulf War that triggered fears of another energy crisis, the issue became politically

relevant again (Laird and Stefes, 2009). Under President George Bush (Republican) the

‘Energy Policy Act of 1992’ was passed including time-limited tax credits for wind energy that largely explain the strong growth of this technology. While political consensus pushed forward support policies, it was too weak to ensure lasting political change that could overcome strong carbon lock-in effects (Laird and Stefes, 2009).

Bill Clinton’s election in 1992 coincided with environmental politics and in particular climate change becoming a prominent international policy issue as a result of the 1992 Rio Earth Summit. What at first seemed positive, strengthened the political polarisation as conservative Republicans mobilised against a “threat to the spread of neoliberal economic policies worldwide“ (McCright and Dunlap, 2011b: 158). Nonetheless, international activities gained traction throughout the 1990s supported by the Clinton administration, in particular Vice President Al Gore. However, Congress failed to ratify the Kyoto Protocol after Republicans gained the majority in 1994 as a political consensus opposed US climate action without limiting the scope for GHG emissions from developing nations (in particular China) at the same time (McCright and Dunlap, 2011b). As a result of the Republicans strengthening throughout the late 1990s, George W. Bush, Jr. became president in 2001.

The opposition from the fossil fuel lobby against the green transition is traditionally very strong. With the Bush, Jr. administration it had the ear of the White House since it was closely linked to the fossil fuel industry and climate change deniers (McCright and Dunlap, 2011a).

The industry is currently making very high profits, more than 80 billion USD (61 billion EUR) in 2012 by three major companies (Süddeutsche.de, 2013). It is little surprising that they influence the election cycles in order to protect their interests. Together with energy and manufacturing companies they have founded research institutes and other public organs that target the official media and shield Republican opposition to climate change legislation (McCright and Dunlap, 2011a). Hence, climate change denial is not limited to elected politicians, but includes the entire conservative movement, including its media outlets, think tanks and support groups.

The environmental and renewable energy movement has mostly been incapable to overcome this opposition as they depended on external shocks. As a result, the role in the public debate when measured by public hearing and media coverage has declined since the 1970s (Laird and Stefes, 2009). Hence, the incumbents have largely succeeded in controlling the policy agenda by putting energy security and independence high on the agenda. However, renewable energy is not discussed as the predominant solution to these challenges (Bang, 2010). The

Governing the Transition to a Green Economy 181 fossil fuel lobby has shifted the focus to other clean energy alternatives such as nuclear and

clean coal, which would not mark a significant break with the status quo. However, both technologies potentially emit considerably less GHG emissions than existing technologies (Bang, 2010).

Renewable energies re-entered the decision agenda during the 2008 Presidential campaign, which marked the rare exception that candidates of both major parties – Barack Obama for the Democrats and John McCain for the Republicans – were in favour of mitigating climate change and nurturing renewable energies. This created the strongest public support to act on these issues yet (Brulle et al., 2012). As a result, when Obama became president in 2009, he aimed to pass comprehensive climate and energy legislation and cut-off the direct influence of the fossil fuel industry. It shifted its strategies towards weakening planned legislation and reducing the emphasis on climate change denial. This took place during a time of bipartisan agreement, strong support from the civil society and a positive public opinion on the need to mitigate climate and foster renewable energies (Brulle et al., 2012). However, this support could not ensure the passage of the ‘American Clean Energy and Security Act’, which included an ETS as well as a federal renewable portfolio standard (RPS) (Palmer et al., 2011).⁷⁷ Two reasons explain this failure. First, during Obama’s first term, the public perception of green issues changed dramatically as the financial crisis weakened the economy and job situation. As a result of the deteriorating economic situation the legislative efforts failed since climate policy was branded as economically harmful. Furthermore, with the emergence of the right-wing Tea Party inside the Republican party the public debate on climate change underwent “asymmetrical polarization” – supporters of action cannot gain politically because they radicalise the opposition (Roberts, 2012). In this situation, proponents of renewable energy avoid the topic because they would feed their opponents rather than strengthen their own position. Nonetheless, Obama used the fiscal stimulus after the 2008 financial crisis for massive investments in green technologies. As a result, the capacity of renewables (excluding hydropower) has almost doubled – although on a low level – during his first term in office (Sullivan, 2012). The second reasons for many environmentalists that climate legislation failed is that Obama did not invest enough political capital. The New York Times concludes that “Mr. Obama, who originally ran as a champion of solar and wind power, has presided over the nation’s greatest fossil fuel boom since the discovery of

77 Such a standard, sometimes referred to as renewable energy standard, requires that a certain amount of the overall electricity production stems from renewable sources. The exact design and definition differs according to the context and legislation language.

Alaska’s giant Prudhoe Bay field more than four decades ago” (Krauss, 2012). Lizza (2010) argues that he invested his political capital rather in health care than renewable energy.

This lack of emphasis on the topic reflected during the Presidential debates in 2012 when climate change was not explicitly discussed for the first time since 1988 (Gillis, 2012). At the same time, the natural gas boom shifted the energy discussion from renewable energies to a cheaper domestic alternative. The low-cost, sufficient domestic availability and positive GHG emissions balance compared to coal are key arguments in fostering a perception that natural gas cannot coexist with renewable energies. However, recently, the argument that natural gas in combination with renewable energies can enter the low-carbon energy era has gained popularity. For this scenario to become reality, renewable energies need to become cost-competitive with other conventional fuels in order to compete with coal rather than with natural gas (Channell et al., 2012). Hence, President Obama put the issues back on the agenda with a prominent call for US leadership on renewable energy in his second inauguration address (Obama, 2013a). He wants to achieve progress with measures at his disposal, such as executive orders, that do not require congressional support. For example, he signed for the first time a bilateral accord with China that includes GHG emissions reduction targets (Landler, 2014). The negotiations took place on the highest political level demonstrating the importance that the White House attributed to the issue.