Unrequited Love: Estimating the Electoral Effect of a Place-based Green Subsidy with a 2D Regression Discontinuity Design

Can targeted tax credits designed to stimulate renewable energy development in areas vulnerable to economic decline shift voters’ support? While advocates argue that economic gains from such incentives can realign political preferences by altering local communities' cost-benefit calculations, competing mechanisms such as disruptions to these communities and ideological resistance may offset these effects or even trigger backlash. Focusing on the Energy Community Tax Credit Bonus (ECTCB) under the 2022 Inflation Reduction Act, I use a two-dimensional regression discontinuity (2DRD) design to estimate its impact on the Democratic share of the two-party vote in the 2024 presidential election. The analysis suggests a small negative effect (point estimate: −0.0039; 95% confidence interval: [−0.0078, −0.0002]). These findings contribute new causal evidence to the debate on the electoral effects of place-based climate policies. This paper also makes methodological contributions by improving a recently proposed 2DRD estimator with bagging and the delta bootstrap. Through Monte Carlo simulations, I show the refined estimator exhibits less bias and greater efficiency than common alternatives.