Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282873 
Year of Publication: 
2023
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2023-060/VII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
IPCC (2022) documents a looming gap between climate goals and implemented policies and points to a lack of political commitment. We study policymakers' incentives to commit. A policymaker decides on a policy to encourage citizens to make investments and determines the degree of flexibility to change the policy after investments have been made. This adds redistributive concerns to the trade-off between commitment and flexibility. When a majority of citizens invest, redistributive concerns alleviate the time-inconsistency problem. When a minority of citizens invest, redistributive concerns aggravate the time-inconsistency problem. Then, the policymaker either commits too strongly or refrains from commitment altogether.
Subjects: 
commitment
flexibility
redistribution
median voter
climate
JEL: 
D72
D78
H23
Q52
Document Type: 
Working Paper

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