Why Paying Households, Not Firms, Increases Voter Support for Germany's Energy Transition

🔎 What This Study Looks At

Transitioning away from carbon-intensive to renewable energy is a key lever for mitigating climate change. Governments have adopted interventionist policies that both promote the transition and shield producers and consumers from its costs. This study examines how that enhanced role for the state affects public opinion about environmental reforms.

📊 Evidence From a 2021 German Election Survey Experiment

A survey containing multiple experiments fielded during the 2021 federal election in Germany is used to test how compensation design influences support. The experimental treatments varied:

• Whether compensation targeted households or firms
• Whether compensation had a progressive design

Outcomes measured included support for electoral candidates running on a pro-energy transition platform and support for climate policy plans, as well as respondents' beliefs about the state's role in markets and their assessments of compensation's effectiveness and appropriateness.

✅ Key Findings

• Compensation policies that target households rather than firms increase support for pro-energy-transition candidates and for climate policy plans.
• Progressive compensation designs further increase that support.
• Beliefs in state intervention have emerged as an important cleavage in the German mass public: these beliefs shape how people judge the effectiveness and appropriateness of compensation measures.

⚖️ Why It Matters

Who receives compensation and how transfers are structured—together with public beliefs about the state's role—shape political support for the energy transition. The results show that policy design and underlying attitudes toward state intervention are central to the political feasibility of environmental reforms.