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Abstract
Unintended consequences of announcing a climate policy well in advance
of its implementation have been studied in a variety of situations.
We show that a phenomenon akin to the so-called “Green-
Paradox” holds also when the policy implementation date is uncertain.
Governments are compelled, by international and domestic pressure, to
demonstrate an intention to reduce greenhouse gas emissions. Taking
actual steps, such as imposing a carbon tax on fossil energy, is a different
matter altogether and depends on a host of political considerations.
As a result, economic agents often consider the policy implementation
date to be uncertain. We show that in the interim period between
the policy announcement and its actual implementation the emission of
green-house gases increases vis-`a-vis business-as-usual.