Uncertain climate policy and the green paradox

Sjak A. Smulders, Y. Tsur, A. Zemel

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review


Unintended consequences of announcing a climate policy well in advance of its implementation have been studied in a variety of situations. We show that a phenomenon akin to the so-called “Green-Paradox” holds also when the policy implementation date is uncertain. Governments are compelled, by international and domestic pressure, to demonstrate an intention to reduce greenhouse gas emissions. Taking actual steps, such as imposing a carbon tax on fossil energy, is a different matter altogether and depends on a host of political considerations. As a result, economic agents often consider the policy implementation date to be uncertain. We show that in the interim period between the policy announcement and its actual implementation the emission of green-house gases increases vis-à-vis business-as-usual.
Original languageEnglish
Title of host publicationDynamic Optimization in Environmental Economics
EditorsE. Moser, W. Semmler, G. Tragler, V. Veliov
Place of PublicationHeidelberg
PublisherSpringer Verlag
ISBN (Print)9783642540851
Publication statusPublished - 2014

Publication series

NameDynamic Modeling and Econometrics in Economics and Finance


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