Big Oil and Climate Regulation. Business as Usual or a Changing Business?

Global Environmental Politics, published online 31.08.2020, 23 pp. DOI: 10.1162/glep_a_00565

There is a long and continuing debate in the literature on corporate political power about whether businesses that advocate public-interest regulation do so for strategic political reasons or because they anticipate economic gains. Previous research on Big Oil’s strategies in climate politics has largely converged on the first view, arguing that global majors feign support for moderate carbon pricing largely to prevent the adoption of more drastic and costly policies. In contrast, this article argues that Big Oil’s growing stake in natural gas expansion is its economic motive for supporting favorably designed carbon pricing. The article finds that policy, technology, and energy market changes have paved the way for a shift toward natural gas and that a moderate carbon price, by triggering coal-to-gas switching, supports the realization of a gray transition in which “Big Gas” can expand its market share at the expense of coal and become a major bridge fuel next to renewables. Our findings underscore the importance of studying the competitive rivalry that underpins evolving industry demands for climate policy and regulation.

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