Attitudes Toward Climate Policies in a Macrodynamic Model of the Economy

In a recent article published in Ecological Economics, Guarini and Porcile (2016) expanded the Balance-of-Payments Constraint (BoPC) growth model in order to address the challenges posed by greenhouse gas emissions suggesting a way in which environmental variables can be included in the structure of this family of models. Building on their set up, we incorporate how people with di¤erent environmental attitudes or sentiments influence each other and contribute to the design of environmental policies. We detail the concept of transition probabilities for the agent's switching from pro- to anti-enviromental positions and vice-versa and discuss the macroeconomic results that follow. Numerical simulations allow us to investigate in more detail the implications of the validity of Porter's hypothesis as well as decoupling conditions.