Climate Policy Commitment Devices

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.


Issue Date:
Sep 25 2017
Publication Type:
Working or Discussion Paper
Language:
English
Total Pages:
38
JEL Codes:
C91; D62; D99; Q38; Q54
Series Statement:
49.2017




 Record created 2017-09-25, last modified 2017-10-02

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