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Global Warming and Endogenous Technological Change: Revisiting the Green Paradox

Listed author(s):
  • Luca Spinesi

    ()

How 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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File URL: http://hdl.handle.net/10.1007/s10640-011-9511-9
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Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 51 (2012)
Issue (Month): 4 (April)
Pages: 545-559

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Handle: RePEc:kap:enreec:v:51:y:2012:i:4:p:545-559
DOI: 10.1007/s10640-011-9511-9
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  1. William Brock & M. Taylor, 2010. "The Green Solow model," Journal of Economic Growth, Springer, vol. 15(2), pages 127-153, June.
  2. Frederick Van der Ploeg & Cees A. Withagen, 2010. "Is There Really a Green Paradox?," CESifo Working Paper Series 2963, CESifo Group Munich.
  3. Jakob Madsen, 2008. "Semi-endogenous versus Schumpeterian growth models: testing the knowledge production function using international data," Journal of Economic Growth, Springer, vol. 13(1), pages 1-26, March.
  4. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  5. Charles I. Jones, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 495-525.
  6. Nicholas Bloom & Rachel Griffith & John Van Reenen, 2007. "Do R&D Tax Credits Work? Evidence from a Panel of Countries 1979-1997," Discussion Papers 07-020, Stanford Institute for Economic Policy Research.
  7. Peretto, Pietro F., 1996. "Technological Change and Population Growth," Working Papers 96-28, Duke University, Department of Economics.
  8. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, vol. 88(5), pages 1290-1310, December.
  9. Sinn, Hans-Werner, 2008. "Public policies against global warming: A supply side approach," Munich Reprints in Economics 19638, University of Munich, Department of Economics.
  10. Cozzi Guido, 2007. "The Arrow Effect under Competitive R&D," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-20, January.
  11. Gerlagh, R. & Kverndokk, S. & Rosendahl, K.E., 2009. "Optimal timing of climate change policy : Interaction between carbon taxes and innovation externalities," Other publications TiSEM 4312dde8-f323-4ee2-9764-a, Tilburg University, School of Economics and Management.
  12. Jon Strand, 2007. "Technology Treaties and Fossil-Fuels Extraction," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 129-142.
  13. Michele Boldrin & David K Levine, 2002. "The Case Against Intellectual Property," Levine's Working Paper Archive 618897000000000003, David K. Levine.
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