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dc.contributor.authorUlph, David Tregear
dc.contributor.authorUlph, Alistair
dc.identifier.citationUlph , D T & Ulph , A 2011 ' Optimal climate change policies when governments cannot commit ' School of Economics & Finance Discussion Paper , no. 1104 , University of St Andrews .en
dc.identifier.otherPURE: 106595531
dc.identifier.otherPURE UUID: c1fa6681-70b0-4ab8-a63d-e5b9f437c350
dc.identifier.otherORCID: /0000-0003-3171-1270/work/59464528
dc.description.abstractWe analyse the optimal design of climate change policies when a government wants to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the relevant carbon taxes (or other environmental policies) that would incentivise such investment by firms will be set in the future. We assume that the current government cannot commit to long-term carbon taxes, and so both it and the private sector face the possibility that the government in power in the future may give different (relative) weight to environmental damage costs. We show that this lack of commitment has a significant asymmetric effect: it increases the incentive of the current government to have the investment undertaken, but reduces the incentive of the private sector to invest. Consequently the current government may need to use additional policy instruments – such as R&D subsidies – to stimulate the required investment.
dc.publisherUniversity of St Andrews
dc.relation.ispartofseriesSchool of Economics & Finance Discussion Paperen
dc.rights(c) the authoren
dc.subjectClimate Changeen
dc.subjectEmissions Taxesen
dc.subjectimpact on R&Den
dc.subjectTiming and commitmenten
dc.subjectHD Industries. Land use. Laboren
dc.subjectHC Economic History and Conditionsen
dc.titleOptimal climate change policies when governments cannot commiten
dc.typeWorking or discussion paperen
dc.contributor.institutionUniversity of St Andrews.School of Economics and Financeen

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