Strategic choice of stock pollution: Why conservatives (appear to) turn green
AbstractThe 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. --
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Bibliographic InfoPaper provided by Center of Applied Economic Research Münster (CAWM), University of Münster in its series CAWM Discussion Papers with number 66.
Date of creation: 2014
Date of revision:
Stock Pollution; Political Economy of Environmental Policy; Time Inconsistency; Strategic choice of stock variables; Sequential Game; Partisan Politicians; Ideological Preferences; Green Parties;
Find related papers by JEL classification:
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-CDM-2014-04-11 (Collective Decision-Making)
- NEP-ENE-2014-04-11 (Energy Economics)
- NEP-ENV-2014-04-11 (Environmental Economics)
- NEP-GER-2014-04-11 (German Papers)
- NEP-POL-2014-04-11 (Positive Political Economics)
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