Who Pays for Environmental Policy? Business Power and the Design of State-Level Climate Policies*

To what extent and through which means do private actors shape public policy? Research into these questions has been complicated by actors’ tendency to obscure or misrepresent their policy preferences and by the difficulty of operationalizing policy substance. This theory-building study uses qualitative methods and triangulation of multiple sources of evidence to mitigate these challenges. Confronted with puzzling patterns of variation in the design of state-level climate and renewable energy policies, I show how a two-dimensional framework attentive to the economically motivated preferences of business actors explains policy design. Drawing on policy texts, archival documents, and 111 policy-focused interviews, I find business preferences were fragmented, but that a single type of private actor, investor-owned utilities, ultimately prevailed in achieving their preferences in every case. I theorize the sources of their unmatched influence, and find that their distinctiveness is precisely what makes them powerful. My findings have implications for the study of business power and understanding obstacles to equitable climate policymaking.