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The time-inconsistency of alternative energy policy

Author

Listed:
  • Jacques Percebois

    (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique)

  • Agnès d' Artigues
  • Thierry Vignolo

Abstract

Time-inconsistency can arise when a government attempts to convince private sector to use a particular alternative energy (gas, green electricity...) rather than petroleum products. By introducing taxes and feed-in prices, a government would encourage firms and households to switch to an alternative energy rather than use petroleum products. However, even if a government is in favor of increasing alternative energy consumption, it can benefit from considerable financial resources resulting from petroleum product consumption. As a result of these conflicting issues, the private sector may not find the alternative energy policy credible, which prevents the government to implement a socially efficient policy

Suggested Citation

  • Jacques Percebois & Agnès d' Artigues & Thierry Vignolo, 2007. "The time-inconsistency of alternative energy policy," Post-Print hal-02872687, HAL.
    • Handle: RePEc:hal:journl:hal-02872687
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    Cited by:

    1. McGregor, Peter G. & Kim Swales, J. & Winning, Matthew A., 2012. "A review of the role and remit of the committee on climate change," Energy Policy, Elsevier, vol. 41(C), pages 466-473.

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