Compensation, Horizontal Diffusion, and Bottom‐Up Pathways: State Climate Policies in the United States and Australia

ABSTRACT Recent years have seen growing interest in subnational governments as arenas of climate governance, but limited systematic research exists on the extent, conditions, or pathways through which subnational climate policies can influence, or compensate for deficits in, national policies. This article addresses this gap by examining options for states to influence climate policy in the United States and Australia, two countries where federal governments have made limited progress in developing national climate policies. As an analytical framework, it conceives a typology of state government approaches to climate policy that distinguishes among compensating, horizontal diffusion, and bottom‐up pathways. It then uses the typology to analyze a selection of six policy areas with large potential effects on greenhouse gas emissions in which states have acted: renewable energy and carbon pricing (United States and Australia); transportation (United States); and climate change acts (Australia). Evidence from the policy case studies reveals that numerous factors have influenced the impact of state climate policies on policy adoption by other states and by the federal government: renewable energy resources; the size of costs and degree of business acceptance; the extent of co‐benefits; election results; the degree of bipartisan support; partisan alignments; individual leadership by government officials; and state government authority and state‐federal coordinative institutions. The article concludes with insights for state policymakers on how policy design and the utilization of windows of opportunity can enhance the influence and impact of state climate policies in federal systems.