The political climate trap

Josse Delfgaauw and Otto Swank

Journal of Environmental Economics and Management, 2024, vol. 124, issue C

Abstract: We develop a simple political-economic model of a climate trap. We apply our model to gasoline taxes, which vary dramatically across countries. Externalities cannot fully account for this. Our model shows that group interests, resulting from the composition of a country’s car fleet, can explain differences in gasoline taxes even among countries with identical fundamentals. Endogenous car ownership can yield multiple equilibria. This can lead to a political climate trap, where a low gasoline tax reflects the views of a majority, but another majority would benefit from transitioning to a high-tax equilibrium with fewer emissions.

Keywords: Median voter; Gasoline taxes; Multiple equilibria (search for similar items in EconPapers)
JEL-codes: D62 D72 H23 Q58 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0095069624000093
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:124:y:2024:i:c:s0095069624000093

DOI: 10.1016/j.jeem.2024.102935

Access Statistics for this article

Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

More articles in Journal of Environmental Economics and Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().