Green cultural transition, environmental taxes, and collective lobbying by social groups of citizens

Donatella Gatti and Julien Vauday

No 2023.03, Working Papers from FAERE - French Association of Environmental and Resource Economists

Abstract: While environmental values are spreading among societies, they hardly lead to effective political actions. This may be due to an overestimation of the sharing of those values among people, or to a lack of political power of environmentalists vis-Ã -vis materialist citizens. We propose a theoretical model to investigate these two channels, based on a setup a la Grossman and Helpman (1994), in which lobby is a strategy available to social groups, in order to influence the government on environmental taxes. Because societies have being historically marked by materialist habits, citizens sharing those habits face lower costs when getting organized. By considering endogenous lobby formation a la Mitra (1999), we show that, in order for environmental and materialist lobbies to coexist, the society must be mixed enough. Based on a dynamic framework a la Besley and Persson (2023), we investigate how social values change over time. Whenever lobbying by materialists prevails, a unique social equilibrium exists, featuring a stable hegemony by materialist values. If environmentalists get organized too, a second social equilibrium emerges, that is locally stable and more favorable to them. However, the threshold might be very high, above which the cultural transition effectively takes off. By calibrating the model, we study counter-acting forces allowing to improve the odds of the environmental transition, such as cultural mutations, social-signaling, and lowering organizational costs. Finally, we provide policy implications.

Keywords: Collective lobby; Environmentalism; Carbon tax; Environmental policy; Social change (search for similar items in EconPapers)
JEL-codes: A13 D71 D72 H23 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2023-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-mic
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http://faere.fr/pub/WorkingPapers/Gatti_Vauday_FAERE_WP2023.03.pdf First version, 2023 (application/pdf)

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Working Paper: Green cultural transition, environmental taxes, and collective lobbying by social groups of citizens (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:fae:wpaper:2023.03

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