Deindustrialization, Decarbonization and Climate Investment: A Green Bullet for a Rusty Belt?
Working Paper
Abstract: Green industrial policy (GIP) is an increasingly common intervention to ease costs from the ecological transition. It is unclear, however, if governments benefit from its provision. I argue that GIP, rather than tackling decarbonization only, is electorally efficacious when addressing deindustrialization writ large. This broader conceptualization provides insights on where it will win the incumbent votes: in places with increased deindustrialization risk arising from both globalization and decarbonization. Varied benefits due to compositional differences in local industry and emissions mean GIP is more likely to win votes in these doubly-pressured places, but not elsewhere. I test this argument with geo-located investment data from the Inflation Reduction Act, leveraging identifying variation in investment status in November 2024 in a difference-in-differences framework. While GIP’s average impact is null, doubly-pressured communities and individuals shifted 2-3 p.p. towards the Democrats following investment. A case study of Michigan provides evidence of material and symbolic benefits.
Recommended citation: Pike, Ryan. (2026). Deindustrialization, Decarbonization and Climate Investment: A Green Bullet for a Rusty Belt? Working Paper.
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