Building Eco-Wealth: How Climate Subsidies Shape Support for the Greens

How do climate subsidies affect support for Green parties? Lately, climate policieshave shifted from distributing costs through carbon pricing to offering benefits viasubsidies. Research shows that policies imposing concentrated costs provoke electoralbacklash. However, what happens when the benefits of climate policies are concentratedand the costs are diffuse? This study examines how climate subsidies for rooftopsolar panels influence political behavior in Germany. I argue that solar panel investmentsallow homeowners to self-insure by increasing their ecological wealth, improvingtheir perception of the economic benefits of the energy transition, and strengtheningsupport for ambitious climate policies. Using difference-in-differences designs, Ishow that homeowners are more likely to support the Greens after purchasing solarpanels. This self-insurance function of climate subsidies suggests that material incentivescan provide a distinct source of support for fast-tracking the climate transition,albeit at the cost of benefiting wealthy homeowners.