Assets and allies: The cross-Representations of energy companies in industry associations and climate policy

Abstract

Energy policy in the United States is often understood as a competition between renewable energy and fossil fuel interests. In this paper, we show that energy companies and utilities often own both fossil fuel and renewable assets and this ownership leads to firm membership in both fossil fuel and renewable energy industry associations, a situation we call cross-representation. Examining energy policy in Texas, a state that combines fossil fuel and renewable energy incentives into the same programs, shows a striking pattern of collaboration between renewable energy and fossil fuel industry associations. Proposed legislation that would remove renewable energy from these programs was met by stiff resistance from fossil fuel and renewable energy interests. These findings suggest that the diversification of fossil fuel companies has led to a moderation of climate policy among these interest groups with groups on both sides supporting energy subsidies. This diversification can lead to broad support for renewable energy, although the Texas case also offers a cautionary tale of how these programs can lead to rent-seeking. Policy makers need to balance building broad support for economic development programs that also properly target industries and firms that will make new investments that serve economic development goals.