Does the Adverse Announcement Effect of Climate Policy Matter? - A Dynamic General Equilibrium Analysis

Arbeitspapier

We consider a carbon emissions tax announced today, but implemented after a known time-lag. Before implementation, the announcement induces higher emissions than without intervention. In welfare terms, this adverse announcement effect could more than outweigh the gain after tax implementation. We quantify a ‘critical lag’ such that a shorter (longer) implementation lag is a welfare gain (loss) over nointervention. We identify resource scarcity as the main driver for a short critical lag. The model is a global Ramsey Model extended by an exhaustible carbon resource and linked to a climate model.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Working Paper Series ; No. 16/254

Classification and Topics

• Classification: Wirtschaft ; Macroeconomics: Consumption; Saving; Wealth ; Business Fluctuations; Cycles ; International Business Cycles ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation
• Subject: Climate Policy ; Announcement Effect ; Dynamic General Equilibrium ; Non-renewable Resource ; Backstop ; Green Paradox ; Welfare Evaluation ; Klimapolitik ; Ökosteuer ; Ankündigungseffekt ; Erschöpfbare Ressourcen ; Wohlfahrtsanalyse ; Dynamisches Gleichgewicht ; Optimale Besteuerung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Riekhof, Marie-Catherine ; Bröcker, Johannes
• Event: Veröffentlichung
• (who): ETH Zurich, CER-ETH - Center of Economic Research
• (where): Zurich
• (when): 2016

Further information

• DOI: doi:10.3929/ethz-a-010687980
• Handle: http://hdl.handle.net/10419/171697
• Last update: 10.03.2025, 11:42 AM CET