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The Political Economics of Green Transitions: Optimal Intertemporal Policy Response

Authors

Dögnitz,  Lorenz
External Organizations;

/persons/resource/konc

Konc,  Theo
Potsdam Institute for Climate Impact Research;

/persons/resource/Linus.Mattauch

Mattauch,  Linus
Potsdam Institute for Climate Impact Research;

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Fulltext (public)

31602.pdf
(Publisher version), 974KB

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Citation

Dögnitz, L., Konc, T., Mattauch, L. (2024): The Political Economics of Green Transitions: Optimal Intertemporal Policy Response, (Berlin School of Economics Discussion Papers ; 47), Berlin : Berlin School of Economics, 37 p.
https://doi.org/10.48462/opus4-5596


Cite as: https://publications.pik-potsdam.de/pubman/item/item_31602
Abstract
Besley and Persson (2023) pioneer a political economy model of a green transition with changing preferences. Here we solve for the optimal policy intervention and find that the optimal tax on the polluting good starts high and is subsequently declining, to support the transition in preferences. We quantify the welfare loss of ignoring preference changes.