Preventing environmental disasters : Market based vs command and control policies
The paper compares the effects of market-based and command-and-control climate policies on the direction of technical change and the prevention of environmental disasters. Drawing on the model proposed in Acemoglu et al. (2012, American Economic Review), we show that market-based policies (carbon taxes and subsidies towards clean sectors) exhibit bounded window of opportunities: delays in their implementation make them completely ineective both in redirecting technical change and in avoiding environmental catastrophes. On the contrary, we find that command-and-control interventions guarantee policy efeffectiveness irrespectively on the timing of their introduction. As command-and-control policies are always able to direct technical change toward “green” technologies and to prevent climate disasters, they constitute a valuable alternative to market-based interventions.
References listed on IDEAS
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- Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William Kerr, 2016.
"Transition to Clean Technology,"
Journal of Political Economy,
University of Chicago Press, vol. 124(1), pages 52-104.
- Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William Kerr, 2014. "Transition to Clean Technology," NBER Working Papers 20743, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William R. Kerr, 2014. "Transition to Clean Technology," Harvard Business School Working Papers 15-045, Harvard Business School.
- Acemoglu, Daron & Akcigit, Ufuk & Hanley, Douglas & Kerr, William R., 2015. "Transition to clean technology," Research Discussion Papers 26/2015, Bank of Finland.
- Daron Acemoglu & Ufuk Akcigit & Douglas Hanley & William Kerr, 2014. "Transition to Clean Technology," PIER Working Paper Archive 14-044, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- repec:bof:bofrdp:urn:nbn:fi:bof-201512101465 is not listed on IDEAS Full references (including those not matched with items on IDEAS)