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Strategic choice of stock pollution: Why conservatives (appear to) turn green

Achim Voß

No 66, MEP Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)

Abstract: 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)
Date: 2014
New Economics Papers: this item is included in nep-cdm, nep-ene, nep-env, nep-ger and nep-pol
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