Project 2a –  “Political Economics of Climate Finance”

Project staff: Caterina Gennaioli

The paper “The political economy of passing climate change legislation: Evidence from a survey” (Fankhauser, Gennaioli and Collins) has been published in Global Environmental Change. This paper studies the domestic drivers of climate change legislation which defines the national regulatory framework for climate finance.

We have started data collection for two new projects on climate legislation adoption.

One paper aims to analyse in detail the diffusion of climate legislation adoption across countries, focusing on peer effects. In particular using network analysis and detailed data on international environmental agreements, we will study whether countries tend to follow their peers in adopting climate change legislation.

The second paper will study the relation between political campaigns and climate legislation adoption. The aim of the paper is to analyse whether the amount of political campaign in favour of environmental/climate change policy during elections is correlated with the number of climate change laws adopted in the following legislature. In particular, we are interested in distinguishing between the behaviour of center-right vs left leaning political parties. In order to detect a causal effect of political campaigns we will exploit the variation in pro-environment political campaigning induced by exogenous shocks, namely natural disasters happened elsewhere (in geographically -or culturally- close countries).


In addition a third paper will study the institutional aspects of renewable energy investments in Brazil. We are now finishing collecting the data and we have already started to run some preliminary analysis. The idea of the paper is to analyse the misallocation of wind energy projects in Brazil. We measure “misallocation” using a sophisticated technique which allows us to first produce a map with the optimal locations of wind farms and the associated energy potential. Second, we compare the optimal locations with the actual locations of wind energy projects. The paper aims to explain misallocation by looking at variation in corruption and bureaucratic inefficiency across Brazilian municipalities.