The Political Economics of Green Transitions: Optimal Intertemporal Policy Response

Lorenz Dögnitz, Théo Konc and Linus Mattauch

No 47, Berlin School of Economics Discussion Papers from Berlin School of Economics

Abstract: Besley and Persson (2023) pioneer a political economy model of a green transition with changing preferences. Here we solve for the optimal policy intervention and find that the optimal tax on the polluting good starts high and is subsequently declining, to support the transition in preferences. We quantify the welfare loss of ignoring preference changes.

Keywords: Endogenous preferences; green transition; carbon tax; political economics; intertemporal optimisation (search for similar items in EconPapers)
JEL-codes: D62 H23 Q54 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024-09-03
New Economics Papers: this item is included in nep-ene and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:bdp:dpaper:0047

DOI: 10.48462/opus4-5596

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