Is Green Paradox really a probable outcome of climate policies?

Thumbnail Image

Files

hse_ethesis_14763.pdf (747.62 KB)

URL

Journal Title

Journal ISSN

Volume Title

School of Business | Master's thesis
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.

Authors

Date

2016

Department

Taloustieteen laitos
Department of Economics

Major/Subject

Kansantaloustiede
Economics

Mcode

Degree programme

Language

en

Pages

90

Series

Abstract

Climate change has induced economists to extend traditional Hotelling frameworks to study the effects of carbon taxes on the resource extraction path of carbon resource and derive crucial policy implications. Of particular relevance to the literature of economics of climate change is Sinn(2008) who introduces the green paradox as a possible outcome of climate policies today. As resource owners are confronted with in time increasing carbon taxes, and as owners include rising taxes into their maximization problem, the result is rather a faster than a slower extraction of the fossil fuel resource. That is because an in time rising tax imposes a threat on future profits of extraction, and the resource owner will come to the logical conclusion that shifting extraction to the presence increases his expected total revenues. Accordingly, the main purpose of this thesis is to uncover whether we should focus on subsidizing renewal energy resources such as solar energy and wind power, or will that only result in increased fossil fuel extraction and emissions.In other words, the goal is to reveal whether the green paradox exists as Sinn(2008) claims.

Description

Keywords

green paradox, climate policies, climate change, climate economics

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-201801181121

Collections

[gradu] Kauppakorkeakoulu / BIZ