The US Political Economy of Climate Change: Impacts of the “Fracking” Boom on State-Level Climate Policies

Abstract In the face of the intensifying global climate crisis, the US has failed to implement comprehensive policies to mitigate greenhouse gas emissions. During the 2000s, the shale oil and gas extraction (i.e., “fracking”) revolution highlighted the American energy economy. Is the fracking boom partially to blame for US lagging on climate policy? Political economy theory suggests that economic resources are primary drivers of policy outcomes. In this paper, I originally evaluate that claim in the context of the American states, the governments most powerful to mitigate emissions while the federal government faces gridlock. I first introduce an original measure of one state-level climate policy: adoption of the low-emission vehicle (LEV) policy from 1991 to 2015. I then frame the US fracking boom of the mid-to-late 2000s as a natural experiment, employing a difference-in-difference design to compare the effects of fracking on two climate policies across the American states – LEV and renewable electricity policy. Results yield evidence of a causal impact of the fracking boom on state LEV adoption and more suggestive evidence of an impact on renewable electricity mandates. I conclude by arguing that efforts to evaluate the influence of business on policy should account for “structural power” mechanisms.