Essays on Political and Environmental Economics

This thesis presents three essays, where Chapter 1 is based on political economics, and Chapter 2 and 3 combines both political and environmental economics. Chapter 1 examines trust in the national parliament, using a model to understand factors impacting political decision-making. It starts with electoral competition where parties competes for votes. Once in power, the party receives two sets of information: the new state-probability (internal pressure) and lobbying proposals (external pressure). All these elements will shape the potential final implemented policy. Additionally, trust in national parliaments will be then determined based on the final policy's expected outcomes compared to electoral promises. Chapter 2 assesses the effectiveness of raising awareness about renewable energy as a climate change mitigation strategy. It employs a two-period model within the energy market, and the study explores various market conditions. Results indicate that when fossil fuel reserves are not fully depleted, increased green consumer preferences can enhance environmental well-being, but this effect weakens if it promotes new renewable energy use, potentially leading to the "weak Green Paradox." Additionally, low-cost renewable energy may extend emissions growth, causing a "strong Green Paradox." In scenarios with exhausted fossil fuel reserves, anticipation in extraction levels occurs increased green consumer preferences. The chapter examines the impact of market structures and other factors on environmental deterioration. Chapter 3 examines COP26, specifically the key debate centered on choosing between "Phase Down" or "Phase Out" strategies for unabated coal power. Using a three-stage agreement formation game, countries initially decide whether to join the coalition, influencing their pro-environmental commitment. In the second stage, signatories cooperate, while non-signatories make independent resource allocation decisions. In the final stage, countries individually determine energy production levels. Pro-environmental behavior motivates coalition participation. "Phase Down" strategies are more vulnerable with lower pro-environmental behavior, while higher levels effectively curb pollutant extraction.