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Climate Change, Population Ageing and Public Spending: Evidence on Individual Preferences

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  • Andor, Mark A.
  • Schmidt, Christoph M.
  • Sommer, Stephan

Abstract

Economic theory as well as empirical research suggest that elderly people prefer public spending on policies yielding short-term benefits. This might be bad news for policies aimed at combating climate change: while the unavoidable costs of these policies arise today, the expected benefits occur in the distant future. Drawing on data from over 12,000 households and using the ordered logit and the generalized ordered logit model, we analyze whether attitudes towards climate change and climate policies as well as public spending preferences differ with respect to age. Our estimates show that elderly people are less concerned about climate change, but more concerned about other global challenges. Furthermore, they are less likely to support climate-friendly policies, such as the subsidization of renewables, allocate less public resources to and have lower willingness-to-pay for environmental policies. Thus, our results suggest that the ongoing demographic change in industrialized countries may undermine climate policies.

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  • Andor, Mark A. & Schmidt, Christoph M. & Sommer, Stephan, 2018. "Climate Change, Population Ageing and Public Spending: Evidence on Individual Preferences," Ecological Economics, Elsevier, vol. 151(C), pages 173-183.
    • Handle: RePEc:eee:ecolec:v:151:y:2018:i:c:p:173-183
    DOI: 10.1016/j.ecolecon.2018.05.003
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    Cited by:

    1. Knollenborg, Leonard & Sommer, Stephan, 2021. "Diverging beliefs on climate change and climate policy in Germany: The role of political orientations," Ruhr Economic Papers 909, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Baiardi, Donatella & Morana, Claudio, 2021. "Climate change awareness: Empirical evidence for the European Union," Energy Economics, Elsevier, vol. 96(C).
    3. Seojeong Oh & Benjamin M. Gramig, 2023. "Valuing Ecosystem Services and Downstream Water Quality Improvement in the U.S. Corn Belt," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(3), pages 823-872, August.
    4. Carstensen, Laura L. & Reynolds, Megan E., 2023. "Age differences in preferences through the lens of socioemotional selectivity theory," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    5. Tian Xiong & Kaan Celebi & Paul J. J. Welfens, 2022. "OECD countries’ twin long-run challenge: The impact of aging dynamics and increasing natural disasters on savings ratios," International Economics and Economic Policy, Springer, vol. 19(4), pages 741-759, October.
    6. Leonard Knollenborg & Stephan Sommer, 2023. "Diverging Beliefs on Climate Change and Climate Policy: The Role of Political Orientation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 1031-1049, April.
    7. Leonardo Becchetti & Gianluigi Conzo, 2022. "Preferences for climate change-related fiscal policies in European countries: drivers and seasonal effects," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 1083-1113, October.
    8. Donatella Baiardi, 2021. "What do you think about climate change?," Working Paper series 21-16, Rimini Centre for Economic Analysis.
    9. Sommer, Stephan & Mattauch, Linus & Pahle, Michael, 2022. "Supporting carbon taxes: The role of fairness," Ecological Economics, Elsevier, vol. 195(C).
    10. Donatella Baiardi, 2021. "What do you think about climate change?," Working Papers 477, University of Milano-Bicocca, Department of Economics, revised Aug 2021.
    11. Maria Cotofan & Karlygash Kuralbayeva & Konstantinos Matakos, 2024. "Global warming cools voters down: How climate concerns affect policy preferences," CEP Discussion Papers dp1991, Centre for Economic Performance, LSE.
    12. Donglan Zha & Pan Liu & Hui Shi, 2022. "Does population aging aggravate air pollution in China?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(2), pages 1-14, February.
    13. Baskaran, Thushyanthan & Hessami, Zohal & Schirner, Sebastian, 2024. "Young versus Old Politicians in Local Politics," IZA Discussion Papers 17009, Institute of Labor Economics (IZA).
    14. Rauscher, Michael, 2019. "Demographic change and climate change," Thuenen-Series of Applied Economic Theory 160, University of Rostock, Institute of Economics.

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    More about this item

    Keywords

    Demographics; Attitudes; Survey; Generalized ordered logit analysis;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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