The New Politics of (Energy) Market Entry

70 Pages Posted: 18 Mar 2019

See all articles by David B. Spence

David B. Spence

University of Texas at Austin - School of Law; University of Texas at Austin – McCombs School of Business – Department of Business, Government & Society; University of Texas at Austin - Kay Bailey Hutchison Center for Energy, Law & Business

Date Written: February 24, 2019

Abstract

The modern regulatory state is a creature of 20th century politics, and the New Deal consensus that dominated thinking about the relationship between government regulation and the market for most of that century. That regime exists now in a very different political environment, one in which parties and voters are more ideologically polarized and digitally connected than at any time in the modern regulatory era. This article examines the influence of this new politics on one such 20th century regulatory system -- the regulation of energy market entry -- through the lens of nongovernmental organizations (NGOs) that participate in energy infrastructure siting conflicts. The analysis is built around a data set comprising information about more than 400 nongovernmental organizations (NGOs) whose missions include active opposition to one or more of nine different types of energy projects between 2000 and 2017, including various types of fossil fuel infrastructure, renewable energy facilities, and smart grid technology. The focus is on the tactics each NGO uses to oppose energy projects, and the issue arguments advanced by each NGO to oppose those projects. The results are consistent with the notion that ideological polarization and digital communication are affecting the nature of siting conflicts over energy infrastructure. NGOs devote the lion’s share of their efforts not to inside strategies like formal lobbying, but rather to mobilizing the broader public to lobby decision-makers, and organize those mobilization efforts focus overwhelmingly around environmental and health risk issues. This holds true not only for dirty energy projects like coal-fired power plants whose health and environmental risks are well-known; but for clean energy projects like wind farms as well.

From NGOs’ point of view, this form of mass mobilization is efficient: digital communication tools enable NGOs to transmit messages almost costlessly, and to target audiences that are particularly receptive to their messaging. NGOs may prefer risk-based appeals because they resonate. We find that local NGOs in particular tend to make more hyperbolic risk claims than national NGOs. If local NGOs need to build a broader base of support for their cause in order to improve the probability of victory, this approach is rational. The article explores some of the implications of this increasingly fraught regulatory environment. To be sure, the regulatory process grants agencies plenty of autonomy, and regulators continue to be responsible for balancing energy security, affordability and environmental performance concerns in making siting decisions. However, the new politics of energy market entry holds out the possibility that the use of sophisticated digital communication tools to exploit risk perception biases (to more effectively amplify perceived risk) could slow efforts to green the energy supply and produce siting decisions that have other economically and environmentally counterproductive consequences.

Suggested Citation

Spence, David B., The New Politics of (Energy) Market Entry (February 24, 2019). Available at SSRN: https://ssrn.com/abstract=3342486 or http://dx.doi.org/10.2139/ssrn.3342486

David B. Spence (Contact Author)

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

University of Texas at Austin – McCombs School of Business – Department of Business, Government & Society ( email )

2110 Speedway, B6000
CA 5.202
Austin, TX 78705
United States
512-471-0778 (Phone)
512-343-0535 (Fax)

HOME PAGE: https://law.utexas.edu/faculty/dspence/

University of Texas at Austin - Kay Bailey Hutchison Center for Energy, Law & Business ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
54
Abstract Views
451
rank
349,587
PlumX Metrics