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Global Warming and Endogenous Technological Change: Revisiting the Green Paradox

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  • Luca Spinesi

Abstract

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.

Suggested Citation

  • Luca Spinesi, 2011. "Global Warming and Endogenous Technological Change: Revisiting the Green Paradox," OxCarre Working Papers 068, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    • Handle: RePEc:oxf:oxcrwp:068
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    Cited by:

    1. Johannes Pfeiffer, 2017. "Fossil Resources and Climate Change – The Green Paradox and Resource Market Power Revisited in General Equilibrium," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 77.
    2. Hongfeng Zhang & Miao Liu & Yixiang Wang & Xiangjiang Ding & Yueting Li, 2023. "Spatio-Temporal Evolution and Action Path of Environmental Governance on Carbon Emissions: A Case Study of Urban Agglomerations in the Yellow River Basin," Sustainability, MDPI, vol. 15(19), pages 1-20, September.
    3. Adolfo Maza & José Villaverde & María Hierro, 2015. "Non- $$\hbox {CO}_2$$ CO 2 Generating Energy Shares in the World: Cross-Country Differences and Polarization," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(3), pages 319-343, July.

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    Keywords

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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