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Kennard and Schnakenberg (KS) raise three concerns regarding Aklin and Mildenberger ("Prisoners of the Wrong Dilemma: Why Distributive Conflict, Not Collective Action, Characterizes the Politics of Climate Change," Global Environmental Politics 20 (4): 4–27). In this response, we delineate where we agree and where we disagree with KS. We then consider whether the model presented by KS changes our assessment that free-riding concerns are not currently the binding constraint on global climate politics. We conclude with a refined statement of our original claim. [ABSTRACT FROM AUTHOR]

Exchange‐rate policies are cornerstones of the world economy. They also have fundamental welfare and distributional consequences on nations, firms, and individuals. How do individuals internalize these consequences? We challenge the conventional wisdom on the source of mass preferences and argue that many individuals understand currency policies through the lens of inflation. Specifically, we argue that people who are concerned about inflation are more likely to support a fixed exchange rate regime and are more likely to oppose depreciation. We present observational and experimental evidence across middle‐income (Argentina and Serbia) and developed (United Kingdom) countries to support our argument. Further tests suggest that fears over purchasing power—instead of debt or savings considerations—drive inflation concerns. [ABSTRACT FROM AUTHOR]

We examine unequal outcomes in the implementation of India's national rural electrification program in Uttar Pradesh. We ask two questions: (1) to what extent did Dalits, the lowest group in India's caste hierarchy, receive less attention when the state electrified rural communities? (2) Was BSP, the state's Dalit party, able to reduce this inequality? Using data from a hundred thousand villages, we provide robust evidence for unequal outcomes. Villages inhabited solely by Dalits were 20 percentage points less likely to be covered by the program than villages without any Dalits. Moreover, a regression discontinuity analysis shows that the electoral success of BSP failed to reduce such differences. These results highlight the magnitude and persistence of caste inequality in the implementation of democratic public policy, despite political representation. [ABSTRACT FROM AUTHOR]

Climate change policy is generally modeled as a global collective action problem structured by free-riding concerns. Drawing on quantitative data, archival work, and elite interviews, we review empirical support for this model and find that the evidence for its claims is weak relative to the theory's pervasive influence. We find, first, that the strongest collective action claims appear empirically unsubstantiated in many important climate politics cases. Second, collective action claims--whether in their strongest or in more nuanced versions--appear observationally equivalent to alternative theories focused on distributive conflict within countries. We argue that extant patterns of climate policy making can be explained without invoking free-riding. Governments implement climate policies regardless of what other countries do, and they do so whether a climate treaty dealing with freeriding has been in place or not. Without an empirically grounded model for global climate policy making, institutional and political responses to climate change may ineffectively target the wrong policy-making dilemma. We urge scholars to redouble their efforts to analyze the empirical linkages between domestic and international factors shaping climate policy making in an effort to empirically ground theories of global climate politics. Such analysis is, in turn, the topic of this issue's special section. [ABSTRACT FROM AUTHOR]

International carbon markets are an appealing and increasingly popular tool to regulate carbon emissions. By putting a price on carbon, carbon markets reshape incentives faced by firms and reduce the value of emissions. How effective are carbon markets? Observers have tended to infer their effectiveness from market prices. The general belief is that a carbon market needs a high price in order to reduce emissions. As a result, many observers remain skeptical of initiatives such as the European Union Emissions Trading System (EU ETS), whose price remained low (compared to the social cost of carbon). In this paper, we assess whether the EU ETS reduced CO2 emissions despite low prices. We motivate our study by documenting that a carbon market can be effective if it is a credible institution that can plausibly become more stringent in the future. In such a case, firms might cut emissions even though market prices are low. In fact, low prices can be a signal that the demand for carbon permits weakens. Thus, low prices are compatible with successful carbon markets. To assess whether the EU ETS reduced carbon emissions even as permits were cheap, we estimate counterfactual carbon emissions using an original sectoral emissions dataset. We find that the EU ETS saved about 1.2 billion tons of CO2 between 2008 and 2016 (3.8%) relative to a world without carbon markets, or almost half of what EU governments promised to reduce under their Kyoto Protocol commitments. Emission reductions in sectors covered under the EU ETS were higher. [ABSTRACT FROM AUTHOR]

Do international lenders of last resort create financial instability by generating moral hazard? The evidence is thin and plagued with measurement error. We use the number of American troops hosted by third countries to measure the strength of American commitment to ensuring the countries' economic health. We test several hypotheses against a dataset covering about sixty-eight countries between 1960 and 2009. Using evidence from fixed-effects and instrumental-variable models, we find that increasing the number of US troops by one standard deviation above the mean raises the probability of a financial crisis in the host country by up to 13 percentage points. We also investigate the channels through which moral hazard materializes. Countries with more US troops conduct more expansionary fiscal and monetary policies, implement riskier financial regulations, and receive more capital, especially from US banks. While many scholars of international relations view the American overseas military presence as a source of stability, we identify an underexplored mechanism by which it generates instability. [ABSTRACT FROM AUTHOR]

Climate change mitigation relies increasingly on clean technologies such as renewable energy. Despite widespread success, further deployment of renewables has been met with resistance from voters and governments in several countries. How resilient is the renewable energy industry to adverse political events? I use the unexpected election of Donald Trump in the 2016 U.S. presidential race to study this question. As a vocal critic of renewables and a supporter of fossil fuels, his election is a plausible negative shock to the renewable energy sector. I examine stock market data to gauge the reaction of investors. I find that renewable energy stocks were adversely affected by the election. Overall, they experienced a cumulative abnormal loss in share values of about 6 percent on average over the twenty days that followed the election. However, I find that the negative effect is concentrated among non-U.S. firms. U.S. firms, on average, emerged unscathed. Non-U.S. companies, on the other hand, lost over 14 percent of their value in the aftermath of the election. This suggests that markets are more concerned by increasing obstacles to international business than a decrease of federal support for renewables. [ABSTRACT FROM AUTHOR]

International carbon markets are an appealing and increasingly popular tool to regulate carbon emissions. By putting a price on carbon, carbon markets reshape incentives faced by firms and reduce the value of emissions. How effective are carbon markets? Observers have tended to infer their effectiveness from market prices. The general belief is that a carbon market needs a high price in order to reduce emissions. As a result, many observers remain skeptical of initiatives such as the European Union Emissions Trading System (EU ETS), whose price remained low (compared to the social cost of carbon). In this paper, we assess whether the EU ETS reduced [Formula: see text] emissions despite low prices. We motivate our study by documenting that a carbon market can be effective if it is a credible institution that can plausibly become more stringent in the future. In such a case, firms might cut emissions even though market prices are low. In fact, low prices can be a signal that the demand for carbon permits weakens. Thus, low prices are compatible with successful carbon markets. To assess whether the EU ETS reduced carbon emissions even as permits were cheap, we estimate counterfactual carbon emissions using an original sectoral emissions dataset. We find that the EU ETS saved about 1.2 billion tons of [Formula: see text] between 2008 and 2016 (3.8%) relative to a world without carbon markets, or almost half of what EU governments promised to reduce under their Kyoto Protocol commitments. Emission reductions in sectors covered under the EU ETS were higher., Competing Interests: The authors declare no competing interest., (Copyright © 2020 the Author(s). Published by PNAS.)

This article assesses the socioeconomic effects of solar microgrids. The lack of access to electricity is a major obstacle to the socioeconomic development of more than a billion people. Off-grid solar technologies hold potential as an affordable and clean solution to satisfy basic electricity needs. We conducted a randomized field experiment in India to estimate the causal effect of off-grid solar power on electricity access and broader socioeconomic development of 1281 rural households. Within a year, electrification rates in the treatment group increased by 29 to 36 percentage points. Daily hours of access to electricity increased only by 0.99 to 1.42 hours, and the confidence intervals are wide. Kerosene expenditure on the black market decreased by 47 to 49 rupees per month. Despite these strong electrification and expenditure effects, we found no systematic evidence for changes in savings, spending, business creation, time spent working or studying, or other broader indicators of socioeconomic development.