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Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach

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  • Thomas Aronsson
  • Ronnie Schöb

Abstract

Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these issues in a simple model of tax policy to combat climate change and elaborates on the consequences for optimal climate policies and argues from a normative point of view that psychological adaptation needs to be taken into account by a pure welfarist government, which aims at internalizing an intertemporal externality.

Suggested Citation

  • Thomas Aronsson & Ronnie Schöb, 2014. "Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach," CESifo Working Paper Series 4795, CESifo.
    • Handle: RePEc:ces:ceswps:_4795
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    References listed on IDEAS

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    Cited by:

    1. Thomas Aronsson & Ronnie Schöb, 2022. "Habit formation and the pareto-efficient provision of public goods," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(3), pages 669-681, October.
    2. Joe F. Bozeman & Rayne Bozeman & Thomas L. Theis, 2020. "Overcoming climate change adaptation barriers: A study on food–energy–water impacts of the average American diet by demographic group," Journal of Industrial Ecology, Yale University, vol. 24(2), pages 383-399, April.
    3. Kanzola, Anna-Maria & Papaioannou, Konstantina & Petrakis, Panagiotis E., 2023. "Environmental behavioral perceptions under uncertainty of alternative economic futures," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    4. Stephan Hügel & Anna R. Davies, 2020. "Public participation, engagement, and climate change adaptation: A review of the research literature," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 11(4), July.

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    More about this item

    Keywords

    behavioral environmental economics; climate change; intertemporal externalities; adaptation; sensitization; taxation;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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