Reassessing the Green Paradox

Mark Schopf and Hendrik Ritter

No 51, Working Papers CIE from Paderborn University, CIE Center for International Economics

Abstract: This paper deals with possible foreign reactions to domestic carbon demand reducing policies. It differentiates between demand side and supply side reactions as well as between intra- and intertemporal shifts of greenhouse gas emissions. In our model, we integrate increasing marginal physical extraction costs of fossil fuels into the general equilibrium carbon leakage model of Eichner & Pethig (2011). The results are as follows: The conditions for the emergence of the weak green paradox are similar but somewhat tighter than those derived by Eichner & Pethig (2011). Additionally, a strong green paradox can arise in our model under supplemental constraints. That means a “green" policy measure might not only lead to an acceleration of fossil fuel extraction but to an increase in the cumulative extraction.

Keywords: Natural Resources; Carbon Leakage; Green Paradox (search for similar items in EconPapers)
JEL-codes: Q31 Q32 Q54 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-05
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http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/ciepap/WP51.pdf (application/pdf)

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Working Paper: Unilateral Climate Policy: Harmful or even Disastrous? (2013)
Working Paper: Unilateral Climate Policy: Harmful or even Disastrous? (2013)
Working Paper: Reassessing the Green Paradox (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pdn:ciepap:51

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