Are Climate Change Policies Politically Costly?

Author/Editor:

Davide Furceri ; Michael Ganslmeier ; Jonathan David Ostry

Publication Date:

June 4, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Are policies designed to avert climate change (Climate Change Policies, or CCPs) politically costly? Using data on governmental popular support and the OECD’s Environmental Stringency Index, we find that CCPs are not necessarily politically costly: policy design matters. First, only market-based CCPs (such as emission taxes) generate negative effects on popular support. Second, the effects are muted in countries where non-green (dirty) energy is a relatively small input into production. Third, political costs are not significant when CCPs are implemented during periods of low oil prices, generous social insurance and low inequality.

Series:

Working Paper No. 2021/156

Frequency:

regular

English

Publication Date:

June 4, 2021

ISBN/ISSN:

9781513578361/1018-5941

Stock No:

WPIEA2021156

Pages:

52

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