One of the most pressing policy challenges facing the world today concerns how to mitigate global warming while improving people’s well-being. The green paradox argues that increasing taxes on CO2 emissions exacerbates global warming in the present because firms have the incentive to bring forward the extraction and sale of fossil fuels. This paper shows that whenever technological progress allows the extraction costs of fossil fuels to be reduced over time and a positive R&D subsidy is paid, a growing tax on CO2 emissions reveals a welfare maximizing policy.

Spinesi, L. (2012). Global Warming and Endogenous Technological Change: Revisiting the Green Paradox. ENVIRONMENTAL & RESOURCE ECONOMICS, 51, 545-559 [10.1007/s10640-011-9511-9].

Global Warming and Endogenous Technological Change: Revisiting the Green Paradox

SPINESI, LUCA
2012-01-01

Abstract

One of the most pressing policy challenges facing the world today concerns how to mitigate global warming while improving people’s well-being. The green paradox argues that increasing taxes on CO2 emissions exacerbates global warming in the present because firms have the incentive to bring forward the extraction and sale of fossil fuels. This paper shows that whenever technological progress allows the extraction costs of fossil fuels to be reduced over time and a positive R&D subsidy is paid, a growing tax on CO2 emissions reveals a welfare maximizing policy.
2012
Spinesi, L. (2012). Global Warming and Endogenous Technological Change: Revisiting the Green Paradox. ENVIRONMENTAL & RESOURCE ECONOMICS, 51, 545-559 [10.1007/s10640-011-9511-9].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11590/152776
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