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Manufacturing doubt

Yann Bramoullé () and Caroline Orset ()

Journal of Environmental Economics and Management, 2018, vol. 90, issue C, 119-133

Abstract: In their efforts to affect regulations, firms have developed specific strategies to exploit scientific uncertainty. They have manufactured doubt by hiring and funding dissenting scientists, by producing and publicizing favorable scientific findings and by generally concealing their involvement in biased research. We propose a new model to study the interplay between scientific uncertainty, firms' miscommunication and public policies. The government is benevolent but populist, and maximizes social welfare as perceived by citizens. The industry can produce costly reports showing that its activity is not harmful. Citizens are unaware of the industry's miscommunication. We first characterize the industry's optimal miscommunication policy. The industry notably ceases miscommunicating abruptly when scientists' belief reaches a critical threshold. We identify a natural condition under which miscommunication is stronger under a tax on emissions than under command and control. We then analyze research funding. A populist government may support research to enable firms to falsely reassure citizens. Establishing an independent research agency helps limit the welfare losses induced by populist policies.

Keywords: Environmental policy instruments; Populist policies; Research funding; Scientific uncertainty (search for similar items in EconPapers)
JEL-codes: D01 D72 D83 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Manufacturing Doubt (2018) Downloads
Working Paper: Manufacturing Doubt (2015) Downloads
Working Paper: Manufacturing doubt (2015) Downloads
Working Paper: Manufacturing Doubt (2015)
Working Paper: Manufacturing Doubt (2015) Downloads
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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

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