Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282503 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10815
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Transitioning the economy from one that relies on fossil fuels to one that emphasizes renewable energy sources will have important implications for the pattern of natural resource use. Such a transition depends on government policies. As elected politicians have an incentive to weigh the spatially heterogeneous costs and benefits on their constituents from taking political action, one might hope that particularly unusual climate events might provide an impetus to increased action. We undertake an analysis using a variety of data sources. We first investigate the stochastic process governing temperature anomalies allowing for "fat tails", which can arise either from a "jump" diffusion process or a time-varying volatility process. Using the parameter estimates from this first stage, combined with demographic and socio-economic variables, we analyze features promoting support for policies addressing climate change. Several of the parameter estimates that capture fat tails in temperature anomalies play a statistically important relation.
Subjects: 
climate policy
temperature anomalies
fat tails
politics
JEL: 
Q20
D80
L15
Document Type: 
Working Paper
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