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Carbon leakage, the green paradox and perfect future markets

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Author Info
Thomas Eichner
Rüdiger Pethig ()

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Abstract

Policies of lowering carbon demand may aggravate rather than alleviate climate change (green paradox). In a two-period three-country general equilibrium model with finite endowment of fossil fuel one country enforces an emissions cap in the first or second period. When that cap is tightened the extent of carbon leakage depends on the interaction of various parameters and elasticities. Conditions for the green paradox are specified. All determinants of carbon leakage resulting from tightening the first-period cap work in opposite direction when the second-period cap is tightened. Tightening the second-period cap does not necessarily lead to the green paradox.

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Publisher Info
Paper provided by Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht in its series Volkswirtschaftliche Diskussionsbeitraege with number 136-09.

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Length: 28 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:sie:siegen:136-09

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Web page: http://www.uni-siegen.de/fb5/vwl/research/diskussionsbeitraege/

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Related research
Keywords: carbon leakage; green paradox; emissions cap;

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Find related papers by JEL classification:
H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  3. Jota ISHIKAWA & Toshihiro OKUBO, 2008. "Greenhouse-gas Emission Controls and International Carbon Leakage through Trade Liberalization," Discussion Paper Series 231, Research Institute for Economics & Business Administration, Kobe University. [Downloadable!]
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  4. Babiker, Mustafa H., 2005. "Climate change policy, market structure, and carbon leakage," Journal of International Economics, Elsevier, vol. 65(2), pages 421-445, March. [Downloadable!] (restricted)
  5. Rubio, Santiago J. & Escriche, Luisa, 2001. "Strategic pigouvian taxation, stock externalities and polluting non-renewable resources," Journal of Public Economics, Elsevier, vol. 79(2), pages 297-313, February. [Downloadable!] (restricted)
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  6. Sergey V. Paltsev, 2001. "The Kyoto Protocol: Regional and Sectoral Contributions to the Carbon Leakage," The Energy Journal, International Association for Energy Economics, vol. 22(4), pages 53-80.
  7. Hans-Werner Sinn, 2007. "Public Policies against Global Warming," NBER Working Papers 13454, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Felder Stefan & Rutherford Thomas F., 1993. "Unilateral CO2 Reductions and Carbon Leakage: The Consequences of International Trade in Oil and Basic Materials," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 162-176, September. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Henk Folmer, 2009. "OPEC versus Kyoto by Henk Folmer," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 10(3), pages 23-29, October. [Downloadable!]
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