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The Green Paradox and Greenhouse Gas Reducing Investments

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  • Hoel, Michael
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    Abstract

    If governments cannot commit to future carbon tax rates, investments in greenhouse gas mitigation will be based on uncertain and/or wrong predictions about these tax rates. Predictions about future carbon tax rates are also important for decisions made by owners of nonrenewable carbon resources. The effects of the size of expected future carbon taxes on near-term emissions and investments in substitutes for carbon energy depend significantly on how rapidly extraction costs increase with increasing total extraction. In addition, the time profile of the returns to investments in noncarbon substitutes is important for the effects on emissions and investments.

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    File URL: http://dx.doi.org/10.1561/101.00000046
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    Bibliographic Info

    Article provided by now publishers in its journal International Review of Environmental and Resource Economics.

    Volume (Year): 5 (2011)
    Issue (Month): 4 (September)
    Pages: 353-379

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    Handle: RePEc:now:jirere:101.00000046

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    Web page: http://www.nowpublishers.com/

    Related research

    Keywords: Climate change; Carbon tax; Green paradox; Commitment; Exhaustible resources;

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    Cited by:
    1. Benchekroun, Hassan & Ray Chaudhuri, Amrita, 2014. "Transboundary pollution and clean technologies," Resource and Energy Economics, Elsevier, vol. 36(2), pages 601-619.
    2. Grafton, R. Quentin & Kompas, Tom & Long, Ngo Van & To, Hang, 2014. "US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox," Energy Policy, Elsevier, vol. 68(C), pages 550-555.
    3. Frederick van der Ploeg, 2013. "Cumulative Carbon Emissions and the Green Paradox," OxCarre Working Papers 110, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    4. Ngo Van Long & Frank Staehler, 2014. "General Equilibrium Effects of Green Technological Progress," CIRANO Working Papers 2014s-16, CIRANO.
    5. Michael Hoel, 2013. "Supply Side Climate Policy and the Green Paradox," CESifo Working Paper Series 4094, CESifo Group Munich.
    6. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo Group Munich.
    7. Hoel, Michael, 2013. "Supply Side Climate Policy and the Green Paradox," Memorandum 03/2013, Oslo University, Department of Economics.
    8. Michael Hoel, 2011. "The Supply Side of CO 2 with Country Heterogeneity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(4), pages 846-865, December.

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