Climate Policy Commitment Devices

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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.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages33
Volume2017-036
Publication statusPublished - 8 Sep 2017

Publication series

NameCentER Discussion Paper
Volume2017-036

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environmental policy
baseline conditions
climate change
resource
fossil fuel
viability
carbon
climate
policy
economy
laboratory
planning
co-operation
energy source

Keywords

  • climate policy instruments
  • intertemporal cooperation
  • climate game
  • experiments

Cite this

Dengler, S., Gerlagh, R., Trautmann, S., & van de Kuilen, G. (2017). Climate Policy Commitment Devices. (CentER Discussion Paper; Vol. 2017-036). Tilburg: CentER, Center for Economic Research.
Dengler, Sebastian ; Gerlagh, Reyer ; Trautmann, Stefan ; van de Kuilen, Gijs. / Climate Policy Commitment Devices. Tilburg : CentER, Center for Economic Research, 2017. (CentER Discussion Paper).
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Dengler, S, Gerlagh, R, Trautmann, S & van de Kuilen, G 2017 'Climate Policy Commitment Devices' CentER Discussion Paper, vol. 2017-036, CentER, Center for Economic Research, Tilburg.

Climate Policy Commitment Devices. / Dengler, Sebastian; Gerlagh, Reyer; Trautmann, Stefan; van de Kuilen, Gijs.

Tilburg : CentER, Center for Economic Research, 2017. (CentER Discussion Paper; Vol. 2017-036).

Research output: Working paperDiscussion paperOther research output

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T1 - Climate Policy Commitment Devices

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AU - van de Kuilen, Gijs

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N2 - 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.

AB - 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.

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KW - intertemporal cooperation

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KW - experiments

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Dengler S, Gerlagh R, Trautmann S, van de Kuilen G. Climate Policy Commitment Devices. Tilburg: CentER, Center for Economic Research. 2017 Sep 8. (CentER Discussion Paper).