Strategic choice of stock pollution: Why conservatives (appear to) turn green
No 66, MEP Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)
The public management of stock pollutants is an intertemporal problem; today's optimal choice takes the behavior of future governments into account. If a government expects a successor with different environmental preferences - for instance, if Conservatives expect green successors - it must choose strategically. I model this interaction in a two-period game in which the government of each period chooses consumption as a flow variable that adds to a stock of pollution. In this setting, I analyze how the prospect of losing political power changes the incumbent's policy choice. It is shown that both the prospect of a more conservative or of a greener successor reduce present consumption. This implies that losing power in the future makes a conservative government choose a compromise policy today - which may explain why in some countries, conservative governments seem to adopt green policies. By contrast, the expected loss of power makes a green government choose a policy that appears as a radicalization of their position.
Keywords: Stock Pollution; Political Economy of Environmental Policy; Time Inconsistency; Strategic choice of stock variables; Sequential Game; Partisan Politicians; Ideological Preferences; Green Parties (search for similar items in EconPapers)
JEL-codes: C72 D72 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-ene, nep-env, nep-ger and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:66
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