Governments aiming to curb greenhouse gas emissions have several policy instruments at their disposal. This thesis explores why some governments rely more heavily on technology supports, such as renewables subsidies and feed-in-tariffs, over GHG taxes and emissions standards for the curbing of greenhouse gas emissions. While distributive effects and political salience are no doubt factors in instrument choice, it is important to pinpoint the conditions which operationalize those factors. The conditions which exacerbate the effects of interest group dynamics are veto points in the legislature presented by fractionalization and a narrow majority. This thesis argues governments will adopt more technology support to satisfy the demand for environmental policy over other instruments during periods of high fractionalization or low majority seat share because this instrument provides unique coalitional possibility and a higher level of consensus in the legislature. Brown industry, or high-emitters, are generally cost-bearers of policy and therefore strongly oppose any instruments which are meant to reduce emissions. The salience of greenhouse gas taxes leaves little room for interest group influence which declines with rising voter information. Technology supports on the other hand confer obvious and direct benefits to the green industry, increasing green lobbying activities which can counteract the influence of the brown industry. As such, governments will substitute subsidies and feed-in-tariff for punitive measures such as taxes and standards when fractionalization and low seat shares make achieving legislative majority difficult. This proposition is tested on data from European Union member countries from 1996 to 2020 using dynamic panel data models. Autoregressive models help to control for the path-dependency of environmental policy and to gauge the relative changes in policy levels experienced within each country. The results confirm that increasing fractionalization is correlated with increasing levels of technology support while lowering levels of emissions standards. Increasing margin of majority was observed to correlate with lower technology support and higher emissions standards. A short within-case study of the formation of the Green Investment Bank in the United Kingdom is also conducted to confirm the causal mechanism within the theory.
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