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Are Climate Change Policies Politically Costly?
Author:
Davide Furceri null

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Michael Ganslmeier
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Mr. Jonathan David Ostry
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 156
Language:
English
Publication Date:
04 Jun 2021
DOI:
https://doi.org/10.5089/9781513578361.001
ISBN:
9781513578361
ISSN:
1018-5941
Pages:
52
Keywords:
EPS change; policy design; Policy implication; popular support; baseline model; Climate change; Climate policy; Fuel prices; Environmental policy; Natural disasters; Global
Legal-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.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund