Are Climate Change Policies Politically Costly?

By Davide Furceri, Michael Ganslmeier, Jonathan David Ostry

June 4, 2021

Preview Citation

Format: Chicago

Davide Furceri, Michael Ganslmeier, and Jonathan David Ostry. Are Climate Change Policies Politically Costly?, (USA: International Monetary Fund, 2021) accessed October 31, 2024

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.

Subject: Climate change, Climate policy, Environment, Environmental policy, Fuel prices, Natural disasters, Prices

Keywords: Baseline model, Climate change, Climate policy, Environmental policy, EPS change, Fuel prices, Global, Natural disasters, Policy design, Policy implication, Popular support

Publication Details

Pages:

52
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/156
Stock No:

WPIEA2021156
ISBN:

9781513578361
ISSN:

1018-5941

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