Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 11, 2020 erstellt
Beschreibung:
Climate targets are key for focusing global efforts to limit anthropogenic climate change. Yet, they induce a time-consistency problem in that current decision makers set (ambitious) targets and leave costly abatement to future generations. We develop a reduced-form climate-economy integrated assessment model, and compare naïve and sophisticated climate policies. We also differentiate between immediate and durable emission reduction measures. Our findings demonstrate that naïve decision makers consistently weaken climate stabilization targets, resulting in an equilibrium that misses the initial proposal. Sophisticated decision makers foresee the weakened outcome, and invest more in durable abatement measures in order to incentivize future decision makers to continue emission reduction efforts. Our results indicate that effective climate policy goes beyond the carbon price; it also involves strategic selection of abatement measures