Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148169
Authors: 
Lamperti, Francesco
Napoletano, Mauro
Roventini, Andrea
Year of Publication: 
2015
Series/Report no.: 
LEM Working Paper Series 2015/34
Abstract: 
The paper compares the effects of market-based and command-and-control climate policies on the direction of technical change and the prevention of environmental disasters. Drawing on the model proposed in Acemoglu et al. (2012, American Economic Review), we show that market-based policies (carbon taxes and subsidies towards clean sectors) exhibit bounded window of opportunities: delays in their implementation make them completely ineffective both in redirecting technical change and in avoiding environmental catastrophes. On the contrary, we find that command-and-control interventions guarantee policy effectiveness irrespectively on the timing of their introduction. As command-and-control policies are always able to direct technical change toward "green" technologies and to prevent climate disasters, they constitute a valuable alternative to market-based interventions.
Subjects: 
Environmental Policy
Command and Control
Carbon Taxes
Disasters
JEL: 
O33
O44
Q30
Q54
Q56
Q58
Document Type: 
Working Paper

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