Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93448
Authors: 
Long, Ngo Van
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4639
Abstract: 
This paper explains how, in the context of incomplete coordination among all countries, unilateral policies that might at first sight seem pro-green could actually turn out to harm the global environment. The free-riding motives and the difficulty of reaching an effective international environmental agreement are reviewed. As a first step, the various channels that lead to carbon leakage in static models of open economies are identified, and some simulation results are reported. This is complemented by a review of the possibility of green paradox outcomes in dynamic open-economy models with an exhaustible resource exploited by far-sighted firms. It is shown that border tax adjustments can lead to a green paradox outcome. Directions for future research are suggested.
Subjects: 
green paradox
climate change
carbon leakage
JEL: 
Q54
Q42
Q30
Document Type: 
Working Paper

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