Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach

20 Pages Posted: 4 Jun 2014

See all articles by Thomas Aronsson

Thomas Aronsson

University of Umea - Department of Economics; Uppsala University

Ronnie Schöb

affiliation not provided to SSRN

Date Written: May 3, 2014

Abstract

Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these issues in a simple model of tax policy to combat climate change and elaborates on the consequences for optimal climate policies and argues from a normative point of view that psychological adaptation needs to be taken into account by a pure welfarist government, which aims at internalizing an intertemporal externality.

Keywords: behavioral environmental economics, climate change, intertemporal externalities, adaptation, sensitization, taxation

JEL Classification: D03, D61, D91, H21

Suggested Citation

Aronsson, Thomas and Schöb, Ronnie, Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach (May 3, 2014). CESifo Working Paper Series No. 4795, Available at SSRN: https://ssrn.com/abstract=2445340

Thomas Aronsson

University of Umea - Department of Economics ( email )

Umeå University
Umea, SE - 90187
Sweden

Uppsala University

Box 513
Uppsala, 751 20
Sweden

Ronnie Schöb (Contact Author)

affiliation not provided to SSRN

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