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Uncertain Climate Policy and the Green Paradox

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  • Smulders, Sjak
  • Tsur, Yacov
  • Zemel, Amos

Abstract

Unintended consequences of announcing a climate policy well in advance of its implementation have been studied in a variety of situations. We show that a phenomenon akin to the so-called “Green- Paradox” holds also when the policy implementation date is uncertain. Governments are compelled, by international and domestic pressure, to demonstrate an intention to reduce greenhouse gas emissions. Taking actual steps, such as imposing a carbon tax on fossil energy, is a different matter altogether and depends on a host of political considerations. As a result, economic agents often consider the policy implementation date to be uncertain. We show that in the interim period between the policy announcement and its actual implementation the emission of green-house gases increases vis-`a-vis business-as-usual.

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File URL: http://purl.umn.edu/93129
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Bibliographic Info

Paper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 93129.

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Date of creation: 2010
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Handle: RePEc:ags:huaedp:93129

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Postal: Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100
Phone: 08-9481230
Fax: 08-9466267
Web page: http://departments.agri.huji.ac.il/economics/indexe.html
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Keywords: Climate policy; carbon tax; uncertainty; green paradox; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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  1. Corrado Di Maria & Sjak Smulders & Edwin van der Werf, 2008. "Absolute Abundance and Relative Scarcity: Announced Policy, Resource Extraction, and Carbon Emissions," Working Papers 2008.92, Fondazione Eni Enrico Mattei.
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Cited by:
  1. Frederick van der Ploeg, 2012. "Resource Wars and Confiscation Risk," OxCarre Working Papers 097, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  2. Darko Jus & Volker Meier, 2012. "Announcing is Bad, Delaying is Worse: Another Pitfall in Well-Intended Climate Policy," CESifo Working Paper Series 3844, CESifo Group Munich.
  3. Frederick van der Ploeg, 2013. "Cumulative Carbon Emissions and the Green Paradox," OxCarre Working Papers 110, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

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