A Synthetic Control Assessment of the Green Paradox: The Role of Climate Action Plans

Arne Steinkraus ()

German Economic Review, 2019, vol. 20, issue 4, e545-e570

Abstract: This paper extends the green paradox literature by providing empirical insights into its existence. To check the green paradox theory, I analyse the production of coal in four major coal‐producing US states that announced a greenhouse gas action plan. To form a statement on whether there is a treatment effect caused by the green policy, I employ Synthetic Control Methods to calculate counterfactual coal production trajectories. I find that Montana experienced a high and statistically significant increase in coal production that is supported by a set of validity indicators. However, there is no evidence for a paradox in Kentucky, Pennsylvania and Virginia.

Date: 2019
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German Economic Review is currently edited by Bernhard Felderer, Joseph F. Francois, Ivo Welch, Urs Schweizer and David E. Wildasin

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