Unilateral climate Policy and the Green Paradox: Extraction Costs matter

Gilbert Kollenbach

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: To analyze the effect of unilaterally tightened climate policies, we augment the two country model of Hoel (2011) with fossil fuel extraction costs. It turns out that a tighter climate policy of the country with the initially stricter policy causes neither a weak nor a strong green paradox if the fossil fuel stock is sufficiently small. In case of a tighter climate policy in the country with the initially laxer policy, a weak green paradox depends on the price-elasticity of energy demand.

JEL-codes: Q41 Q42 Q54 Q58 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-agr, nep-cta, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168245

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