Compensation, Beliefs in State Intervention, and Support for the Energy Transition

Transitioning away from carbon-intensive to renewable energy sources is one key lever through which countries can mitigate climate change. Governments have implemented interventionist policies that simultaneously seek to promote a transition to greener energy sources and shield producers and consumers from the costs of this change. We examine the impact of this enhanced role of the state on public opinion about environmental reforms. Using data from a survey containing multiple experiments fielded during the 2021 federal election in Germany, we show that policies of compensation that target households rather than firms and that have a progressive design increase support for electoral candidates who run on a pro-energy transition platform and for climate policy plans. We also show that beliefs in state intervention in the market have emerged as an important cleavage within the German mass public concerning environmental reforms because they shape assessments of the effectiveness and appropriateness of compensation.