Climate Policy Commitment Devices

38 Pages Posted: 19 Sep 2017  

Sebastian Dengler

Tilburg University, Tilburg Institute for Law, Technology, and Society (TILT); Tilburg University Department of Economics

Reyer Gerlagh

Tilburg University - Center and Faculty of Economics and Business Administration

Stefan Trautmann

Tilburg University

Gijs van de Kuilen

Tilburg University

Multiple version iconThere are 2 versions of this paper

Date Written: September 8, 2017

Abstract

We develop a dynamic resource extraction game that mimics the global multi-generation planning problem for climate change and fossil fuel extraction. We implement the game under different conditions in the laboratory. Compared to a ‘libertarian’ baseline condition, we find that policy interventions that provide a costly commitment device or reduce climate threshold uncertainty reduce resource extraction. We also study two conditions to assess the underlying social preferences and the viability of ecological dictatorship. Our results suggest that climate-change policies that focus on investments that lock the economy into carbon-free energy sources provide an important commitment device in the intertemporal cooperation problem.

Keywords: Climate Policy Instruments, Intertemporal Cooperation, Climate Game, Experiments

JEL Classification: C91, D62, D99, Q38,Q54

Suggested Citation

Dengler, Sebastian and Gerlagh, Reyer and Trautmann, Stefan and van de Kuilen, Gijs, Climate Policy Commitment Devices (September 8, 2017). FEEM Working Paper No. 49.2017. Available at SSRN: https://ssrn.com/abstract=3038715 or http://dx.doi.org/10.2139/ssrn.3038715

Sebastian Dengler

Tilburg University, Tilburg Institute for Law, Technology, and Society (TILT) ( email )

P.O.Box 90153
Prof. Cobbenhagenlaan 221
Tilburg, 5037
Netherlands

Tilburg University Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Reyer Gerlagh (Contact Author)

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Stefan Trautmann

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Gijs Van de Kuilen

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

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