The Political Sustainability of Carbon Control Policies in an Evolutionary Economics Setting

Steven C. Isley

ResearchPublished Sep 29, 2014

This work represents a first attempt at analyzing the long term coevolution of market structures, technological change and government institutions. An empirical analysis of the U.S. electric power sector was conducted to validate the Grossman and Helpman (1994) "Protection for Sale" framework for use in modeling the interaction between the government and market actors. An agent based model with endogenous technological change was then used to explore how lobbying affects different carbon control policies as they evolve over time. In the empirical analysis, many electric power companies were found to benefit greatly from high carbon prices and can be expected to lobbying for such policies. In fact, in many situations the total near-term profit of the electric power industry increases with a price on carbon. The model was able to correctly identify nine of the top twelve contributing firms based on PAC contributions.

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Document Details

  • Copyright: RAND Corporation
  • Availability: Web-Only
  • Year: 2014
  • Pages: 182
  • Document Number: RGSD-331

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Isley, Steven C., The Political Sustainability of Carbon Control Policies in an Evolutionary Economics Setting. Santa Monica, CA: RAND Corporation, 2014. https://www.rand.org/pubs/rgs_dissertations/RGSD331.html.
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This document was submitted as a dissertation in May 2014 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Robert Lempert (Chair), Steven W. Popper, and Ted Parson.

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