IDEAS home Printed from https://ideas.repec.org/p/fce/doctra/1531.html
   My bibliography  Save this paper

Preventing environmental disasters : market based vs command and control policies

Author

Listed:
  • Francesco Lamperti

    (Institute of Economics, Scuola Superiore Sant'Anna)

  • Mauro Napoletano

    (OFCE Sciences Po and Skema Businnes School)

  • Andrea Roventini

    (Institute of Economics, Scuola Superiore Sant'Anna)

Abstract

The aper compares the e?ects of market-based and command-and-control climate policies on the direction of technical change and the prevention of environmental disasters. Drawing on the model proposed in Acemoglu et al. (2012, American Economic Review), we show that market-based policies (carbon taxes and subsidies towards clean sectors) exhibit bounded win- dow of opportunities: delays in their implementation make them completely ine?ective both in redirecting technical change and in avoiding environmental catastrophes. On the contrary, we ?nd that command-and-control interventions guarantee policy e?ectiveness irrespectively on the timing of their introduction. As command-and-control policies are always able to direct technical change toward "green" technologies and to prevent climate disasters, they constitute a valuable alternative to market-based interventions

Suggested Citation

  • Francesco Lamperti & Mauro Napoletano & Andrea Roventini, 2015. "Preventing environmental disasters : market based vs command and control policies," Documents de Travail de l'OFCE 2015-31, Observatoire Francais des Conjonctures Economiques (OFCE).
    • Handle: RePEc:fce:doctra:1531
    as

    Download full text from publisher

    File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2015-31.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Li, Zhe & Sun, Jianfei, 2015. "Emission taxes and standards in a general equilibrium with entry and exit," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 34-60.
    2. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801.
    3. Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William Kerr, 2016. "Transition to Clean Technology," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 52-104.
    4. Joseph S. Shapiro & Reed Walker, 2018. "Why Is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade," American Economic Review, American Economic Association, vol. 108(12), pages 3814-3854, December.
    5. repec:zbw:bofrdp:2015_026 is not listed on IDEAS
    6. repec:zbw:bofrdp:urn:nbn:fi:bof-201512101465 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marco Raberto & Bulent Ozel & Linda Ponta & Andrea Teglio & Silvano Cincotti, 2019. "From financial instability to green finance: the role of banking and credit market regulation in the Eurace model," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 429-465, March.
    2. Jongmin Yu & Seokjong Ryu, 2018. "Optimal Design of a Politically Feasible Environmental Regulation," Korean Economic Review, Korean Economic Association, vol. 34, pages 75-99.
    3. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2018. "Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model," Ecological Economics, Elsevier, vol. 150(C), pages 315-339.
    4. Stanislao Gualdi & Antoine Mandel, 2019. "Endogenous growth in production networks," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 91-117, March.
    5. Monasterolo, Irene & Raberto, Marco, 2018. "The EIRIN Flow-of-funds Behavioural Model of Green Fiscal Policies and Green Sovereign Bonds," Ecological Economics, Elsevier, vol. 144(C), pages 228-243.
    6. repec:hal:spmain:info:hdl:2441/4hs7liq1f49gh9chdf7r17gam6 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lamperti, Francesco & Napoletano, Mauro & Roventini, Andrea, 2020. "Green Transitions And The Prevention Of Environmental Disasters: Market-Based Vs. Command-And-Control Policies," Macroeconomic Dynamics, Cambridge University Press, vol. 24(7), pages 1861-1880, October.
    2. repec:hal:spmain:info:hdl:2441/14g286e42n8bl9is6h16b18kes is not listed on IDEAS
    3. repec:hal:spmain:info:hdl:2441/7sphp94klp8558f8pgpqbb6ubt is not listed on IDEAS
    4. Li, Haoyang & Wu, Nan, 2022. "Emission pricing, emission rebound, and the coverage scope of incomplete regulations," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    5. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And then he wasn't a she : Climate change and green transitions in an agent-based integrated assessment model," Working Papers hal-03443464, HAL.
    6. Philippe Aghion & Antoine Dechezleprêtre & David Hémous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 1-51.
    7. Derek Lemoine, 2024. "Innovation-Led Transitions in Energy Supply," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(1), pages 29-65, January.
    8. Martinsson, Gustav & Sajtos, László & Strömberg, Per & Thomann, Christian, 2022. "Carbon Pricing and Firm-Level CO2 Abatement: Evidence from a Quarter of a Century-Long Panel," Misum Working Paper Series 2022-10, Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum).
    9. Jussi Lintunen & Lauri Vilmi, 2021. "Optimal Emission Prices Over the Business Cycles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(1), pages 135-167, September.
    10. World Bank Group, 2018. "Strategic Use of Climate Finance to Maximize Climate Action," World Bank Publications - Reports 30475, The World Bank Group.
    11. Hartmut Egger & Udo Kreickemeier & Philipp M. Richter, 2021. "Environmental Policy and Firm Selection in the Open Economy," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(4), pages 655-690.
    12. Ted Temzelides & Borghan Narajabad & Bernardino Adao, 2016. "Renewable Technology Adoption and the Macroeconomy," 2016 Meeting Papers 6, Society for Economic Dynamics.
    13. Amigues, Jean-Pierre & Moreaux, Michel, 2016. "Pollution Abatement v.s. Energy Efficiency Improvements," TSE Working Papers 16-626, Toulouse School of Economics (TSE).
    14. Kaitila, Ville, 2023. "Labour Productivity and Development of Carbon Competitiveness: Industry-Level Evidence from Europe," ETLA Reports 139, The Research Institute of the Finnish Economy.
    15. Alex Schmitt, 2018. "Optimal Carbon Pricing and Income Taxation Without Commitment," ifo Working Paper Series 274, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    16. Amigues, Jean-Pierre & Moreaux, Michel, 2019. "Energy Conversion Rate Improvements, Pollution Abatement Efforts and Energy Mix: The Transition toward the Green Economy under a Pollution Stock Constraint," TSE Working Papers 19-994, Toulouse School of Economics (TSE).
    17. Andersen, Dana C., 2018. "Accounting for loss of variety and factor reallocations in the welfare cost of regulations," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 69-94.
    18. repec:hal:spmain:info:hdl:2441/5vt1fet9fq9o5pkgj2qh2vn1cm is not listed on IDEAS
    19. Lamperti, F. & Dosi, G. & Napoletano, M. & Roventini, A. & Sapio, A., 2020. "Climate change and green transitions in an agent-based integrated assessment model," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    20. Frederick Ploeg & Armon Rezai, 2019. "Simple Rules for Climate Policy and Integrated Assessment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 77-108, January.
    21. Amigues, Jean-Pierre & Moreaux, Michel, 2018. "Competing Land Uses and Fossil Fuel, Optimal Energy Conversion Rates During the Transition Toward a Green Economy Under a Pollution Stock Constraint," TSE Working Papers 18-981, Toulouse School of Economics (TSE).
    22. Bernardino Adão & Borghan Narajabad, 2021. "Scrapping, Renewable Technology Adoption, and Growth," Working Papers w202111, Banco de Portugal, Economics and Research Department.
    23. Haichao Fan & Joshua S. Graff Zivin & Zonglai Kou & Xueyue Liu & Huanhuan Wang, 2019. "Going Green in China: Firms’ Responses to Stricter Environmental Regulations," NBER Working Papers 26540, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Environmental Policy; Command and Control; Carbon Taxes; Disasters;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fce:doctra:1531. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Francesco Saraceno (email available below). General contact details of provider: https://edirc.repec.org/data/ofcspfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.