The Political Economics of Green Transitions: Optimal Intertemporal Policy 
Response

Dögnitz, Lorenz; Konc, Theo; Mattauch, Linus

doi:10.48462/opus4-5596

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The Political Economics of Green Transitions: Optimal Intertemporal Policy Response

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Dögnitz, Lorenz
External Organizations;

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Konc, Theo
Potsdam Institute for Climate Impact Research;

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Mattauch, Linus
Potsdam Institute for Climate Impact Research;

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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

Zitierlink: https://publications.pik-potsdam.de/pubman/item/item_31602

Zusammenfassung

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.