Norway. 1 The size of the green energy sector in captured countries can differ widely, e.g. compare Russia, USA and Norway. The third type of country I refer to as the moderates . These countries may have average or even strong public support for SDG transformations. However, their governments are moderately captured by strategic losers, i.e. compensation pack- ages can only succeed in buying partial reform. In the case of decarbonization, countries with a large fossil-fuel sector that have made some notable efforts in developing green energy are likely to qualify as moderates. A leading example of such a country is Germany. POLITICAL FEASIBILITY I now outline four hypotheses concerning the political feasibility of compensation strategies for dealing with strategic losers in the differently stylized countries. A short motivation in support of each hypothesis is given. Table 1 summarizes the main hypotheses presented in this section: 1 See, e.g. IRENA (2019).
DAVID HORAN : COMPENSATION STRATEGIES TO ENACT NEW GOVERNANCE FRAMEWORKS FOR SDG TRANSFORMATIONS PUBLIC SECTOR ECONOMICS 43 (4) 375-400 (2019) 388 T ABLE 1 Hypothesized compensation strategies for enacting new governance frameworks Stylized country State capture Public support Hypothesized strategy Level of implementation Possible examples Progressive Weak Majority will Big bang National, subnational Spain, New York Moderate Moderate Majority will Optimal sequencing National, subnational Germany California Captured Strong Moderate Divide-and- rule (internal) Subnational U.S.A. (NY, California) Captured Strong Strong Divide-and- rule (external) Import jurisdictions Norway (EU) Hypothesis 1 : If there is weak state capture and a majority will for reform, then a big bang governance reform strategy is likely to be politically feasible in progres- sive countries. This hypothesis is motivated by recent examples such as the Green New Deals of Spain and New York, California’s Renewable Portfolio Standards, Iceland’s Cli- mate Action Plan 2018-2030, among others, as well as the pioneering roles some countries played in climate and energy policies, e.g. Denmark, Sweden, Finland (CPUC, 2017; Sovacool, 2017). 2 These examples suggest: there are administra- tions willing to lead on decarbonization and fuller (political and social) reforms could be feasible with appropriately designed compensation packages to broaden acceptance for such reforms. Hypothesis 2 : If there is moderate state capture and a majority will for reform, then optimal sequencing of governance reforms is likely to be politically feasible in moderate countries. The German experience with Energiewende , its Coal Exit Commission and gov- ernment support for clean energy investments suggests there are countries where an optimal sequencing of governance reforms that aim to gradually phase out the fossil-fuel sector may be politically feasible, despite significant capture of the state by these interests. In such contexts, better designed compensation packages could be important for improving the effectiveness of existing reforms and broad- ening support for future reforms.