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The political economics of green transitions

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  • Besley, Timothy
  • Persson, Torsten

Abstract

Reducing the emissions of greenhouse gases may be almost impossible without a green transition - a substantial transformation of consumption and production patterns. To study such transitions, we propose a dynamic model, which differs from the common approach in economics in two ways. First, consumption patterns reflect not just changing prices and taxes, but changing values. Transitions of values and technologies create a dynamic complementarity that can help or hinder a green transition. Second, and unlike fictitious social planners, policy makers in democratic societies cannot commit to future policy paths, as they are subject to regular elections. We show that market failures and government failures can interact to prevent a welfare-increasing green transition from materializing or make an ongoing green transition too slow.

Suggested Citation

  • Besley, Timothy & Persson, Torsten, 2023. "The political economics of green transitions," LSE Research Online Documents on Economics 117946, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:117946
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    File URL: http://eprints.lse.ac.uk/117946/
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    References listed on IDEAS

    as
    1. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, vol. 42(3), pages 427-460, July.
    2. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
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    Cited by:

    1. Donatella Gatti & Julien Vauday, 2023. "Environmental transition through social change and lobbying by citizens," Working Papers hal-04158754, HAL.
    2. Yasmine van der Straten & Enrico Perotti & Frederick van der Ploeg & Rick van der Ploeg, 2024. "Political Economy of Climate Change Adaptation - Loss of Habitat and Rising Inequality," CESifo Working Paper Series 10961, CESifo.
    3. Fangzhi Wang & Hua Liao & Richard S. J. Tol & Changjing Ji, 2023. "Endogenous preference for non-market goods in carbon abatement decision," Papers 2312.11010, arXiv.org.
    4. Donatella Gatti & Julien Vauday, 2023. "Green cultural transition, environmental taxes, and collective lobbying by social groups of citizens," Post-Print hal-04189019, HAL.
    5. Josse Delfgaauw & Otto Swank, 2023. "The Gasoline Climate Trap," Tinbergen Institute Discussion Papers 23-025/VII, Tinbergen Institute.

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    More about this item

    Keywords

    693402; 2015-00253; OUP deal;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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