Announcing Climate Policy: Can a Green Paradox Arise without Scarcity?

Sjak Smulders (), Yacov Tsur and Amos Zemel

No 3307, CESifo Working Paper Series from CESifo

Abstract: Unintended consequences of a pre-announced climate policy have been studied in a variety of situations. We show that early announcement of a carbon tax gives rise to a “Green-Paradox,” in that it increases polluting emissions in the interim period (between announcement and actual implementation), irrespective of the scarcity of fossil fuels. The phenomenon holds both when the announced implementation date is taken as a credible threat and when households are skeptical about the (political) will or capability of the government to implement the policy as announced. The paradoxical outcome is driven by consumption-saving tradeoffs facing households who seek to smooth consumption over time.

Keywords: climate policy; carbon tax; green paradox; uncertainty (search for similar items in EconPapers)
JEL-codes: Q43 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp3307.pdf (application/pdf)

Related works:
Journal Article: Announcing climate policy: Can a green paradox arise without scarcity? (2012)
Working Paper: Announcing climate policy: Can a green paradox arise without scarcity? (2010)
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:ces:ceswps:_3307

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().