Global Warming and Endogenous Technological Change: Revisiting the Green Paradox
AbstractHow to control and limit climate change caused by a growing use of fossil fuels are among the most pressing policy challenges facing the world today. The green paradox argues that carbon taxes can exacerbate global warming problem because firms have the incentive to bring forward the sale of fossil fuels. This paper shows that when technological progress allows the extraction costs of fossil fuels to be reduced over time, and a positive R&D subsidy is paid, a growing carbon tax reveals a welfare maximizing policy.
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Bibliographic InfoPaper provided by Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford in its series OxCarre Working Papers with number 068.
Date of creation: 2012
Date of revision:
Global warming; carbon taxes; technological change;
Other versions of this item:
- Luca Spinesi, 2012. "Global Warming and Endogenous Technological Change: Revisiting the Green Paradox," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 51(4), pages 545-559, April.
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
- NEP-ENE-2012-06-25 (Energy Economics)
- NEP-ENV-2012-06-25 (Environmental Economics)
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