Abstract:
Reducing the emissions of greenhouse gases may be almost impossible without a green transition a substantial transformation of consumption and production patterns. To study such transitions, we propose a dynamic model, which differs in two ways from the common approach in economics. First, consumption patterns reflect not just changing prices and taxes, but changing values. Transitions of values and technologies create a dynamic complementarity that can help or hinder a green transition. Second, and unlike fictitious social planners, policymakers in democratic societies cannot commit to future policy paths, as they are subject to regular elections. We show that market failures and government failures can interact so as to prevent a welfare-increasing green transition from materializing, or make an ongoing green transition too slow.
The seminar will be held in room 1249 (12th floor) at Eilert Sundts Hus. The address is Moltke Moes vei 31.