Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264593 
Year of Publication: 
2022
Series/Report no.: 
Economics Working Paper Series No. 22/374
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
An extensive climate policy literature provides various recommendations, but they are not supported democratically since the models employed consider either infinitely-lived individuals or normative social objectives (or both). In contrast, the present paper provides policy recommendations that are able to go through democratic processes. I develop an overlapping generation model with political process micro-foundations. I analyze how democratic policies, which are directly and indirectly related to climate change, differ from standard recommended policies. The novel politico-economic formula derived for the interest rate highlights that individual pure time preference, individual altruism toward descendants, and young generation political power are key determinants of democratic climate policy ambition.
Subjects: 
Climate change
Discounting
Externality
Overlapping generations
Political economy
JEL: 
D6
D7
E6
Q5
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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