Strategic Behavior and the Environment > Vol 9 > Issue 1-2

Ambitious Emissions Goal as a Strategic Preemption

Hiroaki Yamagami, Faculty of Economics, Seikei University, Japan, , Ryo Arawatari, Faculty of Economics, Doshisha University, Japan, , Takeo Hori, Department of Industrial Engineering and Economics, School of Engineering, Tokyo Institute of Technology, Japan,
Suggested Citation
Hiroaki Yamagami, Ryo Arawatari and Takeo Hori (2021), "Ambitious Emissions Goal as a Strategic Preemption", Strategic Behavior and the Environment: Vol. 9: No. 1-2, pp 145-174.

Publication Date: 19 Jul 2021
© 2021 H. Yamagami, R. Arawatari and T. Hori
Environmental economics,  Public economics,  Economic theory,  Game theory,  Public policy,  Regulation,  Climate change
JEL Codes: D72Q58
Ambitious emissions goallobbycarbon pricingquotarevenue refundrent-seeking


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We model a political game in which a policymaker pledges a domestic emissions goal to choose an instrument between carbon pricing and a quota approach. We show that, although the policymaker is presented with an emissions goal proposed from an international environmental agreement, she/he may pledge a more stringent goal than the proposed level. We define this stringent goal as an "ambitious emissions goal." We show that such a goal preempts the industry's lobby in the choice of an instrument. Finally, our model extensions show that the policymaker conditionally pledges the ambitious emissions goal, depending on how the emissions trading scheme is designed and how an instrument is chosen.