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Democratic Climate Policies with Overlapping Generations

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  • Arnaud Goussebaïle

    (CER-ETH – Center of Economic Research at ETH Zurich, Zuerichbergstrasse 18 8092 Zurich, Switzerland)

Abstract

An extensive climate policy literature provides various recommendations, but they are not supported democratically since the models employed consider either infinitely-lived individuals or normative social objectives (or both). In contrast, the present paper provides policy recommendations that are able to go through democratic processes. I develop an overlapping generation model with political process micro-foundations. I analyze how democratic policies, which are directly and indirectly related to climate change, differ from standard recommended policies. The novel politico-economic formula derived for the interest rate highlights that individual pure time preference, individual altruism toward descendants, and young generation political power are key determinants of democratic climate policy ambition.

Suggested Citation

  • Arnaud Goussebaïle, 2022. "Democratic Climate Policies with Overlapping Generations," CER-ETH Economics working paper series 22/374, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:22-374
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    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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