Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123112
Authors: 
Marz, Waldemar
Pfeiffer, Johannes
Year of Publication: 
2015
Series/Report no.: 
Ifo Working Paper 204
Abstract: 
We analyze the effects of an announced future carbon tax increase on the extraction behaviorof a monopolistic supplier of a scarce fossil energy resource like oil in a two country, two periodgeneral equilibrium model with symmetric and homothetic preferences and no extractioncosts. Based on the monopolist’s strategic consideration of the interplay between the resourceand the capital market, and especially of the effects of the extraction decision on the returnon petrodollar financed capital investments we identify and analyze a new channel for thereversal of the green paradox, a major concern regarding carbon taxation. We employ a numericalsimulation and a sensitivity analysis with regard to the model parameters to evaluatethe prevalence of such a reversal of the green paradox and find that it robustly arises undera wide range of reasonable parameter settings.
Subjects: 
green paradox
monopoly
fossil energy resources
general equilibrium
capital market
JEL: 
D90
H20
Q31
Q38
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.