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

Listed author(s):
  • Darko Jus
  • Volker Meier

    ()

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 non-renewable 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.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-06/cesifo1_wp3844.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3844.

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Date of creation: 2012
Handle: RePEc:ces:ceswps:_3844
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  1. Michael Hoel & Svenn Jensen, 2010. "Cutting Costs of Catching Carbon - Intertemporal Effects under Imperfect Climate Policy," CESifo Working Paper Series 3284, CESifo Group Munich.
  2. Thomas Eichner & Rüdiger Pethig, 2009. "Carbon leakage, the green paradox and perfect future markets," Volkswirtschaftliche Diskussionsbeiträge 136-09, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
  3. Hoel, Michael, 2010. "Climate Change and Carbon Tax Expectations," Memorandum 04/2010, Oslo University, Department of Economics.
  4. Hoel, Michael, 2011. "The Green Paradox and Greenhouse Gas Reducing Investments," International Review of Environmental and Resource Economics, now publishers, vol. 5(4), pages 353-379, September.
  5. Smulders, Sjak & Tsur, Yacov & Zemel, Amos, 2012. "Announcing climate policy: Can a green paradox arise without scarcity?," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 364-376.
  6. Sinn, Hans-Werner, 2008. "Public policies against global warming: A supply side approach," Munich Reprints in Economics 19638, University of Munich, Department of Economics.
  7. Peter W. Kennedy, 2002. "Optimal early action on greenhouse gas emissions," Canadian Journal of Economics, Canadian Economics Association, vol. 35(1), pages 16-35, February.
  8. Corrado Di Maria & Ian Lange & Edwin van der Werf, 2012. "Should We Be Worried About the Green Paradox? Announcement Effects of the Acid Rain Program," Working Papers 2012.49, Fondazione Eni Enrico Mattei.
  9. Corrado Di Maria & Sjak Smulders & Edwin van der Werf, 2008. "Absolute Abundance and Relative Scarcity: Announced Policy, Resource Extraction, and Carbon Emissions," Working Papers 2008.92, Fondazione Eni Enrico Mattei.
  10. Long, Ngo Van & Sinn, Hans-Werner, 1985. "Surprise Price Shifts, Tax Changes and the Supply Behaviour of Resource Extracting Firms," Australian Economic Papers, Wiley Blackwell, vol. 24(45), pages 278-289, December.
  11. van der Werf, Edwin & Di Maria, Corrado, 2012. "Imperfect Environmental Policy and Polluting Emissions: The Green Paradox and Beyond," International Review of Environmental and Resource Economics, now publishers, vol. 6(2), pages 153-194, March.
  12. Smulders, Sjak & Tsur, Yacov & Zemel, Amos, 2010. "Uncertain Climate Policy and the Green Paradox," Discussion Papers 93129, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  13. Di Maria, Corrado & Smulders, Sjak & van der Werf, Edwin, 2012. "Absolute abundance and relative scarcity: Environmental policy with implementation lags," Ecological Economics, Elsevier, vol. 74(C), pages 104-119.
  14. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
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