Optimal timing of environmental policy under partial information

Pablo Garcia Sanchez

No 180, BCL working papers from Central Bank of Luxembourg

Abstract: I explore the optimal timing of environmental policy when the stock of natural capital is unobserved and can only be imperfectly measured. I present two key insights. First, noisy signals about the natural capital stock blur the inference process, thereby easing the conditions under which policy adoption becomes optimal. Second, the interaction be tween natural capital stock volatility and the inference process gives rise to new effects that are absent under perfect information. Specifically, the impact of increased volatility on the conditions for optimal policy adoption varies depending on the information set. My work contributes to both the environmental policy timing literature and the field of resource man agement under incomplete information.

Keywords: Natural capital; Partial information; Optimal stopping. (search for similar items in EconPapers)
JEL-codes: E20 Q50 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024-01
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bcl.lu/en/publications/Working-papers/180/BCLWP180.pdf (application/pdf)

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:bcl:bclwop:bclwp180

Access Statistics for this paper

More papers in BCL working papers from Central Bank of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by ().