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Risk and advantage in a changing climate : business preferences for climate change policy instruments in Canada

University of British Columbia

How do major business associations and firms determine their preferences for public policy instruments? This dissertation examines the puzzling case of business preferences for climate change policy instruments in Canada in which businesses supported a carbon price over cheaper voluntary policy instruments. It presents the findings of a qualitative study that included 13 major industrial associations (representing chemicals, gas refiners, petroleum producers, natural gas, forestry, mining, steel, vehicle manufacturers, electricity, aluminum, cement, railways and the chief executives) and 17 firms in the cement, oil and gas, and forestry industries. The study found that, in 2008 and 2009, participating firms and associations were strongly in favour of a carbon price – either a cap-and-trade program or carbon tax – despite the higher costs entailed by these policy instruments for industry when compared to voluntary programs. Moreover, Canadian corporations and business associations shifted their policy instrument preferences almost en masse away from voluntary agreements and subsidies to carbon pricing around the same time in 2006-2007. What explains variation in business preferences for climate change policy instruments in Canada over time and between organizations? This dissertation creates a model of business preferences for climate change policy instruments based on the findings of interviews with firm and association executives, as well as government and environmental NGO officials and consultants working in the environmental policy field. In particular, the model suggests that business officials determine climate change policy preferences by weighing risks to capital investments and external investor concern against the competitive advantages entailed by each policy instrument. As these assessments require predictions about an uncertain future, they are strongly influenced by expectations about future government policy choices. These expectations are in turn influenced by the political context, particularly public opinion, and previous experience with a policy instrument. The model, developed inductively from interview data, is validated in the dissertation using new data from the same case and methods such as process-tracing and falsifiable tests. The model is found to offer a good explanation of business preferences for climate change policy instruments in Canada, and may be generalizable to other areas of public policy.

Text

2012-05-29

Attribution-NonCommercial-NoDerivs 3.0 Unported

http://hdl.handle.net/2429/42421

Political Science

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/3.0/