
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
Q42, 330, Time-inconsistency Energy policy Tax expenditures, Q48, Time inconsistency, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, E62, Alternative energy, Energy policy, jel: jel:A1
Q42, 330, Time-inconsistency Energy policy Tax expenditures, Q48, Time inconsistency, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, [SHS.ECO] Humanities and Social Sciences/Economics and Finance, E62, Alternative energy, Energy policy, jel: jel:A1
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