Sectors, Pollution, and Trade: How Industrial Interests Shape Domestic Positions on Global Climate Agreements

It is usually assumed that the cost of abating pollution is the main deterrent of domestic support for international climate cooperation. In particular, it is argued that, due to the burden of pollution abatement, businesses commonly constrain governments, which then take less cooperative positions on global climate agreements. I suggest that this argument needs further qualification: pollution-related costs rarely have unconditional effects on preferences for global climate agreements. Instead, a sector’s pollution level is more likely to influence preferences for climate cooperation if mediated by its trade exposure. If pollution is high, firms in high-trade sectors may be less able to absorb climate regulation, and hence they should be more sensitive to climate cooperation. If pollution is low, firms in high-trade sectors may support climate cooperation, because by being more efficient they are more capable of adjusting to regulation. These dynamics should then affect governmental positions on global climate politics. I test my sectoral argument with original data from business statements and national communications at the United Nations climate negotiations. In line with my argument, I find that businesses in trade open sectors are more likely to oppose climate agreement as their sector’s emissions increase. I also find that in countries where high-emission sectors are open to trade governments have low preferences for climate cooperation. The findings have implications for the domestic politics of environmental agreements and the distributive politics of global public good provision.