IDEAS home Printed from https://ideas.repec.org/p/bdp/dpaper/0047.html

The Political Economics of Green Transitions: Optimal Intertemporal Policy Response

Author

Listed:
  • Lorenz Dögnitz
  • Théo Konc
  • Linus Mattauch

Abstract

Besley and Persson (2023) pioneer a political economy model of a green transition with changing preferences. Here we solve for the optimal policy intervention and find that the optimal tax on the polluting good starts high and is subsequently declining, to support the transition in preferences. We quantify the welfare loss of ignoring preference changes.

Suggested Citation

  • Lorenz Dögnitz & Théo Konc & Linus Mattauch, 2024. "The Political Economics of Green Transitions: Optimal Intertemporal Policy Response," Berlin School of Economics Discussion Papers 0047, Berlin School of Economics.
    • Handle: RePEc:bdp:dpaper:0047
    DOI: 10.48462/opus4-5596
    as

    Download full text from publisher

    File URL: https://opus4.kobv.de/opus4-hsog/files/5596/BSoE_DP_0047.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.48462/opus4-5596?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Emeline Bezin, 2019. "The economics of Green consumption, cultural transmission and sustainable technological change," PSE-Ecole d'économie de Paris (Postprint) halshs-02087970, HAL.
    2. Christopher Severen & Arthur A. van Benthem, 2022. "Formative Experiences and the Price of Gasoline," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 256-284, April.
    3. Timothy Besley & Torsten Persson, 2023. "The Political Economics of Green Transitions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(3), pages 1863-1906.
    4. Bezin, Emeline, 2019. "The economics of green consumption, cultural transmission and sustainable technological change," Journal of Economic Theory, Elsevier, vol. 181(C), pages 497-546.
    5. G. Grosjean & W. Acworth & C. Flachsland & R. Marschinski, 2016. "After monetary policy, climate policy: is delegation the key to EU ETS reform?," Climate Policy, Taylor & Francis Journals, vol. 16(1), pages 1-25, January.
    6. Inge van den Bijgaart, 2018. "Too Slow a Change? Deep Habits, Consumption Shifts and Transitory Tax Policy," CESifo Working Paper Series 6958, CESifo.
    7. Konc, Théo & Savin, Ivan & van den Bergh, Jeroen C.J.M., 2021. "The social multiplier of environmental policy: Application to carbon taxation," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    8. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    9. Mattauch, Linus & Creutzig, Felix & Edenhofer, Ottmar, 2015. "Avoiding carbon lock-in: Policy options for advancing structural change," Economic Modelling, Elsevier, vol. 50(C), pages 49-63.
    10. Linus Mattauch & Sugandha Srivastav, 2023. "Principles of decarbonization politics," Nature Climate Change, Nature, vol. 13(6), pages 503-504, June.
    Full references (including those not matched with items 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. Mattauch, Linus & Hepburn, Cameron & Spuler, Fiona & Stern, Nicholas, 2022. "The economics of climate change with endogenous preferences," Resource and Energy Economics, Elsevier, vol. 69(C).
    2. Massimiliano Carlo Pietro Rizzati & Emanuele Ciola & Enrico Turco & Davide Bazzana & Sergio Vergalli, 2025. "Beyond Green Preferences: Demand-side and Supply-side Drivers in the Low-Carbon Transition," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(5), pages 1239-1295, May.
    3. Fabio Landini & Davide Lunardon & Alberto Marzucchi, 2025. "Green Jobs and Meaningful Work," SEEDS Working Papers 0625, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jul 2025.
    4. Rizzati, Massimiliano & Ciola, Emanuele & Turco, Enrico & Bazzana, Davide & Vergalli, Sergio, "undated". "Beyond Green Preferences: Alternative Pathways to Net-Zero Emissions in the MATRIX model," FEEM Working Papers 339796, Fondazione Eni Enrico Mattei (FEEM).
    5. Delfgaauw, Josse & Swank, Otto, 2024. "The political climate trap," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    6. Ravi Vora & Guglielmo Zappala, 2025. "Endogenous Green Preferences," CESifo Working Paper Series 11857, CESifo.
    7. Landini, Fabio & Lunardon, Davide & Marzucchi, Alberto, 2025. "Green Jobs and Meaningful Work," GLO Discussion Paper Series 1639, Global Labor Organization (GLO).
    8. Eugénie Joltreau, 2022. "Extended Producer Responsibility, Packaging Waste Reduction and Eco-design," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(3), pages 527-578, November.
    9. Donatella Gatti & Julien Vauday, 2024. "AI Diffusion, Disasters, Environmental and Social Change," Working Papers hal-04604374, HAL.
    10. Ara Jo & Alena Miftakhova, 2022. "How Constant is Constant Elasticity of Substitution? Endogenous Substitution between Clean and Dirty Energy," CER-ETH Economics working paper series 22/369, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    11. Fries, Steven, 2023. "Sequencing decarbonization policies to manage their macroeconomic impacts," INET Oxford Working Papers 2023-26, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    12. Liwen Chen & Bobby Chung & Guanghua Wang, 2022. "Stay-at-Home Peer Mothers and Gender Norms: Short-run Effects on Educational Outcomes," Working Papers 2022-039, Human Capital and Economic Opportunity Working Group.
    13. Isaak Mengesha & Debraj Roy, 2025. "Carbon pricing drives critical transition to green growth," Nature Communications, Nature, vol. 16(1), pages 1-19, December.
    14. Jo, Ara & Miftakhova, Alena, 2024. "How constant is constant elasticity of substitution? Endogenous substitution between clean and dirty energy," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    15. Chen, Liwen & Chung, Bobby W. & Wang, Guanghua, 2025. "Composition of peer mothers and gender norms: Class randomization and short-run effects," Journal of Economic Behavior & Organization, Elsevier, vol. 234(C).
    16. Jinyan Peng & Kai Li & Yingpeng Gao, 2022. "How the Internet Affects China’s Green Consumption Development: Empirical Research Based on Baidu Index Data," Sustainability, MDPI, vol. 15(1), pages 1-16, December.
    17. Fangzhi Wang & Hua Liao & Richard S. J. Tol & Changjing Ji, 2024. "Endogenous Preference for Nonmarket Goods in Carbon Abatement Decisions," Decision Analysis, INFORMS, vol. 21(4), pages 235-251, December.
    18. Fenske, James & Gupta, Bishnupriya & Mukhopadhyay, Anwesh, 2025. "Colonial Persistence," CAGE Online Working Paper Series 752, Competitive Advantage in the Global Economy (CAGE).
    19. Óscar Afonso & Liliana Fonseca & Manuela Magalhães & Paulo B. Vasconcelos, 2021. "Directed technical change and environmental quality," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(1), pages 71-97, January.
    20. Lennox, James A. & Witajewski-Baltvilks, Jan, 2017. "Directed technical change with capital-embodied technologies: Implications for climate policy," Energy Economics, Elsevier, vol. 67(C), pages 400-409.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    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:bdp:dpaper:0047. 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: Christian Reiter (email available below). General contact details of provider: https://edirc.repec.org/data/bdpemde.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.