IDEAS home Printed from https://ideas.repec.org/p/tiu/tiucen/a2362a52-35cf-4e23-90c9-5ba024f19391.html
   My bibliography  Save this paper

Climate Policy Commitment Devices

Author

Listed:
  • Dengler, Sebastian

    (Tilburg University, Center For Economic Research)

  • Gerlagh, Reyer

    (Tilburg University, Center For Economic Research)

  • Trautmann, Stefan T.

    (Tilburg University, Center For Economic Research)

  • van de Kuilen, Gijs

    (Tilburg University, Center For Economic Research)

Abstract

We develop a dynamic resource extraction game that mimics the global multi-generation planning problem for climate change and fossil fuel extraction. We implement the game under different conditions in the laboratory. Compared to a ‘libertarian’ baseline condition, we find that policy interventions that provide a costly commitment device or reduce climate threshold uncertainty reduce resource extraction. We also study two conditions to assess the underlying social preferences and the viability of ecological dictatorship. Our results suggest that climate-change policies that focus on investments that lock the economy into carbon-free energy sources provide an important commitment device in the intertemporal cooperation problem.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Dengler, Sebastian & Gerlagh, Reyer & Trautmann, Stefan T. & van de Kuilen, Gijs, 2017. "Climate Policy Commitment Devices," Discussion Paper 2017-036, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:a2362a52-35cf-4e23-90c9-5ba024f19391
    as

    Download full text from publisher

    File URL: https://pure.uvt.nl/ws/portalfiles/portal/18235248/2017_036.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Katerina Sherstyuk & Nori Tarui & Majah-Leah V. Ravago & Tatsuyoshi Saijo, 2016. "Intergenerational Games with Dynamic Externalities and Climate Change Experiments," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 247-281.
    2. Matthias Sutter & Stefan Haigner & Martin G. Kocher, 2010. "Choosing the Carrot or the Stick? Endogenous Institutional Choice in Social Dilemma Situations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1540-1566.
    3. Scott Barrett & Astrid Dannenberg, 2017. "Tipping Versus Cooperating to Supply a Public Good," Journal of the European Economic Association, European Economic Association, vol. 15(4), pages 910-941.
    4. Matthias Schmidt & Alexander Lorenz & Hermann Held & Elmar Kriegler, 2011. "Climate targets under uncertainty: challenges and remedies," Climatic Change, Springer, vol. 104(3), pages 783-791, February.
    5. Thomas Covert & Michael Greenstone & Christopher R. Knittel, 2016. "Will We Ever Stop Using Fossil Fuels?," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 117-138, Winter.
    6. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 360-394, August.
    7. Smith, Vernon L, 1976. "Experimental Economics: Induced Value Theory," American Economic Review, American Economic Association, vol. 66(2), pages 274-279, May.
    8. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    9. Timo Goeschl & Daniel Heyen & Juan Moreno-Cruz, 2013. "The Intergenerational Transfer of Solar Radiation Management Capabilities and Atmospheric Carbon Stocks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(1), pages 85-104, September.
    10. Jordi Brandts & Gary Charness, 2011. "The strategy versus the direct-response method: a first survey of experimental comparisons," Experimental Economics, Springer;Economic Science Association, vol. 14(3), pages 375-398, September.
    11. Holtsmark, Katinka & Midttømme, Kristoffer, 2021. "The dynamics of linking permit markets," Journal of Public Economics, Elsevier, vol. 198(C).
    12. Reyer Gerlagh & Thomas Michielsen, 2015. "Moving targets—cost-effective climate policy under scientific uncertainty," Climatic Change, Springer, vol. 132(4), pages 519-529, October.
    13. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    14. Budescu, David V. & Suleiman, Ramzi & Rapoport, Amnon, 1995. "Positional Order and Group Size Effects in Resource Dilemmas with Uncertain Resources," Organizational Behavior and Human Decision Processes, Elsevier, vol. 61(3), pages 225-238, March.
    15. Calzolari, Giacomo & Casari, Marco & Ghidoni, Riccardo, 2018. "Carbon is forever: A climate change experiment on cooperation," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 169-184.
    16. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
    17. van der Ploeg, Frederick, 2016. "Second-best carbon taxation in the global economy: The Green Paradox and carbon leakage revisited," Journal of Environmental Economics and Management, Elsevier, vol. 78(C), pages 85-105.
    18. Larry Karp, 2017. "Provision of a Public Good with Multiple Dynasties," Economic Journal, Royal Economic Society, vol. 127(607), pages 2641-2664, December.
    19. Graciela Chichilnisky, 1996. "An axiomatic approach to sustainable development," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 13(2), pages 231-257, April.
    20. Delf Neubersch & Hermann Held & Alexander Otto, 2014. "Operationalizing climate targets under learning: An application of cost-risk analysis," Climatic Change, Springer, vol. 126(3), pages 305-318, October.
    21. Astrid Dannenberg & Andreas Löschel & Gabriele Paolacci & Christiane Reif & Alessandro Tavoni, 2015. "On the Provision of Public Goods with Probabilistic and Ambiguous Thresholds," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(3), pages 365-383, July.
    22. Barrett, Scott, 2013. "Climate treaties and approaching catastrophes," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 235-250.
    23. repec:awi:wpaper:540 is not listed on IDEAS
    24. Michielsen, Thomas O., 2014. "Brown backstops versus the green paradox," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 87-110.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Helena Fornwagner & Oliver P. Hauser, 2022. "Climate Action for (My) Children," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(1), pages 95-130, January.
    2. Riccardo Ghidoni & Anna Lou Abatayo & Valentina Bosetti & Marco Casari & Massimo Tavoni, 2023. "Governing Climate Geoengineering: Side Payments Are Not Enough," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(5), pages 1149-1177.
    3. Dolphin, Geoffroy & Pahle, Michael & Burtraw, Dallas & Kosch, Mirjam, 2022. "A Net-Zero Target Compels a Backwards Induction Approach to Climate Policy," RFF Working Paper Series 22-18, Resources for the Future.
    4. Sanjit Dhami & Narges Hajimoladarvish & Pavan Mamidi, 2023. "Climate Change Risk, and Human Behavior: Theory and Evidence," CESifo Working Paper Series 10678, CESifo.
    5. Chiappinelli, Olga & May, Nils, 2022. "Too good to be true? Time-inconsistent renewable energy policies," Energy Economics, Elsevier, vol. 112(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yu-Hsuan Lin, 2018. "How social preferences influence the stability of a climate coalition," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(2), pages 151-166.
    2. Riccardo Ghidoni & Anna Lou Abatayo & Valentina Bosetti & Marco Casari & Massimo Tavoni, 2023. "Governing Climate Geoengineering: Side Payments Are Not Enough," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(5), pages 1149-1177.
    3. Casari, Marco & Tavoni, Alessandro, 2024. "Climate clubs in the laboratory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).
    4. Christian Feige & Karl-Martin Ehrhart & Jan Krämer, 2018. "Climate Negotiations in the Lab: A Threshold Public Goods Game with Heterogeneous Contributions Costs and Non-binding Voting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 343-362, June.
    5. Ilona Reindl, 2022. "Wealth and Vulnerability to Climate Change: An Experimental Study on Burden Sharing among Heterogeneous Agents," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 791-823, August.
    6. Astrid Dannenberg & Carlo Gallier, 2020. "The choice of institutions to solve cooperation problems: a survey of experimental research," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 716-749, September.
    7. Ghidoni, Riccardo & Calzolari, Giacomo & Casari, Marco, 2017. "Climate change: Behavioral responses from extreme events and delayed damages," Energy Economics, Elsevier, vol. 68(S1), pages 103-115.
    8. Pevnitskaya, Svetlana & Ryvkin, Dmitry, 2022. "The effect of access to clean technology on pollution reduction: An experiment," Games and Economic Behavior, Elsevier, vol. 136(C), pages 117-141.
    9. Valentina Bosetti & Melanie Heugues & Alessandro Tavoni, 2017. "Luring others into climate action: coalition formation games with threshold and spillover effects," Oxford Economic Papers, Oxford University Press, vol. 69(2), pages 410-431.
    10. Guilfoos, Todd & Miao, Haoran & Trandafir, Simona & Uchida, Emi, 2019. "Social learning and communication with threshold uncertainty," Resource and Energy Economics, Elsevier, vol. 55(C), pages 81-101.
    11. Heyen, Daniel, 2015. "Strategic Conflicts on the Horizon: R&D Incentives for Environmental Technologies," Working Papers 0584, University of Heidelberg, Department of Economics.
    12. Konstantin Chatziathanasiou & Svenja Hippel & Michael Kurschilgen, 2020. "Do rights to resistance discipline the elites? An experiment on the threat of overthrow," Munich Papers in Political Economy 08, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.
    13. Casoria, Fortuna & Ciccone, Alice, 2021. "Do upfront investments increase cooperation? A laboratory experiment," European Economic Review, Elsevier, vol. 140(C).
    14. Gallier, Carlo, 2020. "Democracy and compliance in public goods games," European Economic Review, Elsevier, vol. 121(C).
    15. Astrid Dannenberg & Andreas Lange & Bodo Sturm, 2010. "On the Formation of Coalitions to Provide Public Goods - Experimental Evidence from the Lab," NBER Working Papers 15967, National Bureau of Economic Research, Inc.
    16. Buchholz Wolfgang & Heindl Peter, 2015. "Ökonomische Herausforderungen des Klimawandels," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(4), pages 324-350, December.
    17. Eliasson, Jonas & Proost, Stef, 2015. "Is sustainable transport policy sustainable?," Transport Policy, Elsevier, vol. 37(C), pages 92-100.
    18. Mark Schopf, 2024. "Self-Enforcing International Environmental Agreements and Altruistic Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(9), pages 2309-2359, September.
    19. Nikos Nikiforakis & Helen Mitchell, 2014. "Mixing the carrots with the sticks: third party punishment and reward," Experimental Economics, Springer;Economic Science Association, vol. 17(1), pages 1-23, March.
    20. Scott Barrett & Astrid Dannenberg, 2016. "An experimental investigation into ‘pledge and review’ in climate negotiations," Climatic Change, Springer, vol. 138(1), pages 339-351, September.

    More about this item

    Keywords

    climate policy instruments; intertemporal cooperation; climate game; experiments;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D99 - Microeconomics - - Micro-Based Behavioral Economics - - - Other
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tiu:tiucen:a2362a52-35cf-4e23-90c9-5ba024f19391. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Richard Broekman (email available below). General contact details of provider: http://center.uvt.nl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.