IDEAS home Printed from https://ideas.repec.org/p/pdn/dispap/28.html
   My bibliography  Save this paper

Unilateral Supply Side Policies and the Green Paradox

Author

Listed:
  • Mark Schopf

    (University of Paderborn)

Abstract

This paper deals with possible foreign reactions to unilateral carbon supply reducing policies. It differentiates between demand and supply side reactions as well as between intra- and intertemporal shifts of greenhouse gas emissions. Ritter & Schopf (2014) integrate stock-dependent marginal physical extraction costs into Eichner & Pethig’s (2011) general equilibrium carbon leakage model. Using this model, we change the policy instrument from an emissions trading scheme to a deposit preserving system. The results are as follows: Under similar conditions than those derived by Ritter & Schopf (2014), the weak green paradox and the strong green paradox arise. In case of acting today, these conditions are tightened due to the energy market channel of carbon leakage. In case of acting tomorrow, the change in the physical user cost of extraction additionally influences the effectiveness of the carbon supply reducing policies. In both cases, it can be more effective to preserve the deposits with the lowest marginal physical extraction costs first.

Suggested Citation

  • Mark Schopf, 2016. "Unilateral Supply Side Policies and the Green Paradox," Working Papers Dissertations 28, Paderborn University, Faculty of Business Administration and Economics.
    • Handle: RePEc:pdn:dispap:28
    as

    Download full text from publisher

    File URL: http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP28.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bohm Peter, 1993. "Incomplete International Cooperation to Reduce CO2 Emissions: Alternative Policies," Journal of Environmental Economics and Management, Elsevier, vol. 24(3), pages 258-271, May.
    2. van der Meijden, Gerard & van der Ploeg, Frederick & Withagen, Cees, 2015. "International capital markets, oil producers and the Green Paradox," European Economic Review, Elsevier, vol. 76(C), pages 275-297.
    3. van der Ploeg, Frederick, 2016. "Second-best carbon taxation in the global economy: The Green Paradox and carbon leakage revisited," Journal of Environmental Economics and Management, Elsevier, vol. 78(C), pages 85-105.
    4. Philipp M. Richter & Roman Mendelevitch & Frank Jotzo, 2015. "Market Power Rents and Climate Change Mitigation: A Rationale for Coal Taxes?," Discussion Papers of DIW Berlin 1471, DIW Berlin, German Institute for Economic Research.
    5. Nachtigall, Daniel & Rübbelke, Dirk, 2016. "The green paradox and learning-by-doing in the renewable energy sector," Resource and Energy Economics, Elsevier, vol. 43(C), pages 74-92.
    6. Taran Fæhn & Cathrine Hagem & Lars Lindholt & Ståle Mæland & Knut Einar Rosendahl, 2017. "Climate Policies in a Fossil Fuel Producing Country: Demand versus Supply Side Policies," The Energy Journal, , vol. 38(1), pages 77-102, January.
    7. 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, August.
    8. Cathrine Hagem & Halvor Briseid Storrøsten, 2019. "Supply‐ versus Demand‐Side Policies in the Presence of Carbon Leakage and the Green Paradox," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 379-406, January.
    9. Hendrik Ritter & Mark Schopf, 2014. "Unilateral Climate Policy: Harmful or Even Disastrous?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(1), pages 155-178, May.
    10. Ritter, Hendrik & Runkel, Marco & Zimmermann, Karl, 2019. "Environmental Effects of Capital Income Taxation - A New Double Dividend?," EconStor Preprints 195172, ZBW - Leibniz Information Centre for Economics.
    11. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(4), pages 360-394, August.
    12. Mendelevitch, Roman & Richter, Phillip & Jotzo, Frank, 2015. "Market Power Rents and Climate Change Mitigation: A Rationale for Coal Export Taxes?," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112896, Verein für Socialpolitik / German Economic Association.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    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. Thomas Eichner & Gilbert Kollenbach & Mark Schopf, 2021. "Buying versus Leasing Fuel Deposits for Preservation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(1), pages 110-143, January.
    3. Akkaya Sahin & Bakkal Ufuk, 2020. "Carbon Leakage Along with the Green Paradox Against Carbon Abatement? A Review Based on Carbon Tax," Folia Oeconomica Stetinensia, Sciendo, vol. 20(1), pages 25-44, June.
    4. Kollenbach, Gilbert & Schopf, Mark, 2022. "Unilaterally optimal climate policy and the green paradox," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    5. Okullo, Samuel J. & Reynès, Frédéric & Hofkes, Marjan W., 2021. "(Bio-)Fuel mandating and the green paradox," Energy Economics, Elsevier, vol. 95(C).
    6. Sen, Suphi & von Schickfus, Marie-Theres, 2020. "Climate policy, stranded assets, and investors’ expectations," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    7. Habla, Wolfgang, 2018. "Climate policy under factor mobility: A (differentiated) case for capital taxation," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 100-124.
    8. Partha Sen, 2016. "Unilateral Emission Cuts and Carbon Leakages in a Dynamic North–South Trade Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(1), pages 131-152, May.
    9. Nachtigall, Daniel & Rübbelke, Dirk, 2016. "The green paradox and learning-by-doing in the renewable energy sector," Resource and Energy Economics, Elsevier, vol. 43(C), pages 74-92.
    10. Marz, Waldemar & Pfeiffer, Johannes, 2020. "Petrodollar recycling, oil monopoly, and carbon taxes," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    11. Lin, Boqiang & Zhao, Hengsong, 2023. "Evaluating current effects of upcoming EU Carbon Border Adjustment Mechanism: Evidence from China's futures market," Energy Policy, Elsevier, vol. 177(C).
    12. van der Meijden, Gerard & van der Ploeg, Frederick & Withagen, Cees, 2015. "International capital markets, oil producers and the Green Paradox," European Economic Review, Elsevier, vol. 76(C), pages 275-297.
    13. Suphi Sen & Marie-Theres von Schickfus, 2017. "Will Assets be Stranded or Bailed Out? Expectations of Investors in the Face of Climate Policy," ifo Working Paper Series 238, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    14. Michael Lazarus & Harro van Asselt, 2018. "Fossil fuel supply and climate policy: exploring the road less taken," Climatic Change, Springer, vol. 150(1), pages 1-13, September.
    15. Stefano Bosi & David Desmarchelier, 2016. "Are the Laffer curve and the Green Paradox mutually exclusive?," Working Papers hal-04141602, HAL.
    16. Julien Daubanes & Pierre Lasserre, 2019. "The supply of non-renewable resources," Canadian Journal of Economics, Canadian Economics Association, vol. 52(3), pages 1084-1111, August.
    17. Malik Curuk & Suphi Sen, 2023. "Climate Policy and Resource Extraction with Variable Markups and Imperfect Substitutes," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(4), pages 1091-1120.
    18. Julien Xavier Daubanes & Fanny Henriet & Katheline Schubert, 2017. "More Gas, Less Coal, and Less CO2? Unilateral CO2 Reduction Policy with More than One Carbon Energy Source," IFRO Working Paper 2017/09, University of Copenhagen, Department of Food and Resource Economics.
    19. Cathrine Hagem & Halvor Briseid Storrøsten, 2019. "Supply‐ versus Demand‐Side Policies in the Presence of Carbon Leakage and the Green Paradox," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 379-406, January.
    20. Corrado Di Maria & Sjak Smulders & Edwin Werf, 2017. "Climate Policy with Tied Hands: Optimal Resource Taxation Under Implementation Lags," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 537-551, March.

    More about this item

    Keywords

    Carbon Leakage; Green Paradox; General Equilibrium Model;
    All these keywords.

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • 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 and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pdn:dispap:28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: WP-WiWi-Info (email available below). General contact details of provider: https://edirc.repec.org/data/fwpadde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.