Three Degrees of Green Paradox: The Weak, The Strong, and the Extreme Green Paradox

Marc Gronwald, Ngo Long and Luise Roepke
Authors registered in the RePEc Author Service: Luise Röpke

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: We show that a green paradox can be weak, or strong, or extreme. A weak green paradox arises when a green - intentioned policy measure worsens the quality of the environment at least in the near term. A strong green paradox outcome is obtained if the policy ends up causing greater cumulative environmental damages than under the business - as - usual scenario , though it may raise welfare , for example by adding productive green capacity. An extreme green paradox arises when aggregate welfare (net of environmental damages) falls as result of a poorly designed green - intentioned policy. We illustrate numerically the three degrees of green paradox using a model with a capacity - constrained green backstop technology in direct competition with fossil fuels.

Keywords: capacity constraints; green paradox; climate change; simultaneous resource use (search for similar items in EconPapers)
JEL-codes: H23 Q38 Q54 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2017
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:02-2017

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