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Memorandum, Department of Economics, University of Oslo >
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http://hdl.handle.net/10419/47288
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| Title: | | Is there a green paradox?  |
| Authors: | | Hoel, Michael |
| Issue Date: | | 2010 |
| Series/Report no.: | | Memorandum // Department of Economics, University of Oslo 2010,13 |
| Abstract: | | A sufficiently rapidly rising carbon tax may increase near-term emissions compared with the case of no carbon tax. Even so, such a carbon tax path may reduce total costs related to climate change, since the tax may reduce total carbon extraction. A government cannot commit to a specific carbon tax rate in the distant future. For reasonable assumptions about expectation formation, a higher present carbon tax will reduce near-term carbon emissions. Moreover, whatever the expectations about future tax rates are, near-term emissions will decline for a sufficiently high carbon tax. However, if the nearterm tax rate for some reason is set below its optimal level, increased concern for the climate may change taxes in a manner that increases near-term emissions. |
| Subjects: | | Climate change exhaustible resources green paradox carbon tax |
| JEL: | | Q31 Q38 Q41 Q48 Q54 Q58 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Memorandum, Department of Economics, University of Oslo
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