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Unintended Detrimental Effects of Environmental Policy: The Green Paradox and Beyond

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  • Edwin van der Werf
  • Corrado Di Maria

Abstract

Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large literature has emerged showing under what conditions this so-called ‘Green Paradox’ may occur. We review this literature and identify the key mechanisms behind these paradoxical policy outcomes and highlight avenues for future research.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2011/wp-cesifo-2011-05/cesifo1_wp3466.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3466.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3466

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Related research

Keywords: climate policy; green paradox; non-renewable resources; scarcity; carbon tax; announcement effects; implementation lag; carbon leakage; backstop technology;

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References

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  1. Michael Hoel, 2011. "The Supply Side of CO2 with Country Heterogeneity," CESifo Working Paper Series 3393, CESifo Group Munich.
  2. Thomas Eichner & Rüdiger Pethig, 2011. "Carbon Leakage, The Green Paradox, And Perfect Future Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(3), pages 767-805, 08.
  3. Frederick Van der Ploeg & Cees A. Withagen, 2010. "Is There Really a Green Paradox?," CESifo Working Paper Series 2963, CESifo Group Munich.
  4. Böhringer, Christoph & Fischer, Carolyn & Rosendahl, Knut Einar, 2010. "The Global Effects of Subglobal Climate Policies," Discussion Papers dp-10-48, Resources For the Future.
  5. Di Maria, C. & Werf, E.H. van der, 2005. "Carbon Leakage Revisited: Unilateral Climate Policy with Directed Technical Change," Discussion Paper 2005-68, Tilburg University, Center for Economic Research.
  6. Babiker, Mustafa H., 2001. "Subglobal climate-change actions and carbon leakage: the implication of international capital flows," Energy Economics, Elsevier, vol. 23(2), pages 121-139, March.
  7. Michael Hoel & Svenn Jensen, 2010. "Cutting Costs of Catching Carbon - Intertemporal Effects under Imperfect Climate Policy," CESifo Working Paper Series 3284, CESifo Group Munich.
  8. Corrado Di Maria & Sjak Smulders & Edwin van der Werf, 2008. "Absolute Abundance and Relative Scarcity: Announced Policy, Resource Extraction, and Carbon Emissions," Working Papers 2008.92, Fondazione Eni Enrico Mattei.
  9. Michael Hoel, 2010. "Climate Change and Carbon Tax Expectations," CESifo Working Paper Series 2966, CESifo Group Munich.
  10. Michael Hoel, 2010. "Is there a Green Paradox?," CESifo Working Paper Series 3168, CESifo Group Munich.
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Citations

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Cited by:
  1. Kalkuhl, Matthias & Brecha, Robert J., 2013. "The carbon rent economics of climate policy," Energy Economics, Elsevier, vol. 39(C), pages 89-99.
  2. Marc Gronwald & Ngo Van Long & Luise Röpke, 2013. "Simultaneous Supplies of Dirty and Green Fuels with Capacity Constraint: Is there a Green Paradox?," CESifo Working Paper Series 4360, CESifo Group Munich.
  3. Ines Österle, 2012. "Fossil Fuel Extraction and Climate Policy: A Review of the Green Paradox with Endogenous Resource Exploration," Working Papers 2012.13, Fondazione Eni Enrico Mattei.

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