Deindustrialization, Decarbonization and Climate Investment: A Green Bullet for a Rusty Belt?
Working Paper, 2025
Abstract: Green industrial policy (GIP) has become a common tool in post-industrial economies to both proceed with the green transition and serve as a redress for economic dislocation due to globalization. Existing literature on climate investment and its electoral impacts focuses on fossil fuel communities, leaving unclear its consequences beyond this niche. I broaden the theoretical scope of GIP, by considering how it can be both ex ante insurance against further climate-induced deindustrialization while simultaneously being ex post compensation for economic erosion due to globalization. This synergy suggests it will be particularly effective in cross-pressured communities, those with substantial emissions and having suffered import competition. Leveraging geo-located investment data from the Inflation Reduction Act, I find that on average investment has no electoral effect. However, in these cross-pressured communities, investment is associated with between 2.5 - 4.5% decreases in the shift towards the Republican Party in 2024.
Recommended citation: Pike, Ryan. (2024). Deindustrialization, Decarbonization and Climate Investment: A Green Bullet for a Rusty Belt? Working Paper.
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