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Announcing is Bad, Delaying is Worse: Another Pitfall in Well-intended Climate Policy

Author

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  • Jus Darko
  • Meier Volker

    (Center for Economic Studies, University of Munich, Schackstr. 4, 80539 Munich, Germany)

Abstract

It is frequently observed that the implementation of green policies is delayed compared to the initial announcement. Considering a setting with a representative monopolist extracting a nonrenewable resource, we demonstrate that announcing a green policy, but then delaying its implementation, is associated with a larger cumulative extraction at any point in time than announcing a late implementation of this policy at the outset.

Suggested Citation

  • Jus Darko & Meier Volker, 2015. "Announcing is Bad, Delaying is Worse: Another Pitfall in Well-intended Climate Policy," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(3), pages 286-297, June.
    • Handle: RePEc:jns:jbstat:v:235:y:2015:i:3:p:286-297
    DOI: 10.1515/jbnst-2015-0304
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    Cited by:

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    More about this item

    Keywords

    Climate policy; carbon taxation; Kyoto protocol; optimal control;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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