The political economics of green transitions

Besley, Timothy and Persson, Torsten (2023) The political economics of green transitions. Quarterly Journal of Economics, 138 (3). 1863 - 1906. ISSN 0033-5533

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Abstract

Reducing the emissions of greenhouse gases may be almost impossible without a green transition - a substantial transformation of consumption and production patterns. To study such transitions, we propose a dynamic model, which differs from the common approach in economics in two ways. First, consumption patterns reflect not just changing prices and taxes, but changing values. Transitions of values and technologies create a dynamic complementarity that can help or hinder a green transition. Second, and unlike fictitious social planners, policy makers in democratic societies cannot commit to future policy paths, as they are subject to regular elections. We show that market failures and government failures can interact to prevent a welfare-increasing green transition from materializing or make an ongoing green transition too slow.

Item Type:	Article
Official URL:	https://academic.oup.com/qje
Additional Information:	© 2023 The Author(s).
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory J Political Science
JEL classification:	D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice; Clubs; Committees; Associations Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
Date Deposited:	18 Jan 2023 15:54
Last Modified:	29 Apr 2024 19:45
URI:	http://eprints.lse.ac.uk/id/eprint/117946

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