Energy Policy http://doi.org/kfm (2013)

Companies are able to exercise power to influence climate change policies. An understanding of the factors that drive business support for, or opposition to, climate policy is therefore critical for the design of instruments that facilitate sustainable institutional change.

Steven Sarasini of the Chalmers University of Technology, Sweden, interviewed thirty-three representatives of electricity producers, industrial associations and lobby organizations from different locations in Sweden. Respondents were asked about the strengths and weaknesses of the European emissions trading and the Swedish electricity certificate schemes, and how and why they participated in the development of these schemes. He found that companies use political influence to protect their financial interests and, when the risk of losses is severe, they exert their power to disrupt regulative institutions. However, respondents' appraisals of policy instruments were based on a set of shared criteria — cost efficiency, effectiveness and equity — that remain critical even when they face financial risks. Climate policies must therefore match those criteria to avoid political opposition from business.