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Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach

Author

Listed:
  • Aronsson, Thomas

    (Department of Economics, Umeå School of Business and Economics)

  • Schöb, Ronnie

    (School of Business and Economics)

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

  • Aronsson, Thomas & Schöb, Ronnie, 2014. "Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach," Umeå Economic Studies 885, Umeå University, Department of Economics.
  • Handle: RePEc:hhs:umnees:0885
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    References listed on IDEAS

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    Cited by:

    1. 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.

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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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