Biofuels Subsidies and the Green Paradox

R. Quentin Grafton, Tom Kompas and Ngo Long

No 2960, CESifo Working Paper Series from CESifo

Abstract: This paper develops sufficient conditions under which the Weak Green Paradox may (and may not) hold in terms of subsidies for biofuel production such that the supply-side responses by fossil fuel producers may more than offset the substitution to biofuels. Analytical results are derived and numerical simulations show that, under a wide range of parameter values, biofuel subsidies will increase the rate of extraction of fossil fuels in the short and medium term, and possibly bring climate-change damages closer to the present.

Keywords: biofuels subsidies; the Green Paradox (search for similar items in EconPapers)
JEL-codes: Q30 Q42 Q54 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2960

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