The Political Economy of Embodied Technologies

The presumption of this paper is that some governments value the environment, but others do not. Assuming political uncertainty and capital-intensive technologies, this circumstance yields a political economic process that emphasizes the effect of using current policy to influence future outcomes. The result of the analysis suggests that the optimal dynamic tax is larger than the Pigovian tax and that a standard results in more employment and output and yields higher adoption rates, thus achieving a predetermined pollution target with a lower political economic cost than a tax – with policy outcomes being more resilient to political change.

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Conference Paper/ Presentation
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JEL Codes:
L5; O2; O3; Q2; Q3

 Record created 2017-04-01, last modified 2018-01-23

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