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| Thierry Vignolo, Jacques Percebois and Agnes dArtigues |
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| ''The time-inconsistency of alternative energy policy'' |
| ( 2007, Vol. 1 No.1 ) |
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| 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. |
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| Keywords: Time-inconsistency Energy policy Tax expenditures |
JEL: A1 - General Economics: General Econ
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| Manuscript Received : Mar 15 2007 | | Manuscript Accepted : Mar 21 2007 |
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