Ploeg, Rick Van der; Meijden, Gerard van der; Withagen, Cees - Department of Economics, Oxford University - 2014
In partial equilibrium a rapidly rising carbon tax encourages oil producers to extract fossil fuels more quickly …, giving rise to the Green Paradox. General equilibrium analysis for a closed economy shows that a rapidly rising carbon tax … a future carbon tax. Taking exploration costs into account, we show that the effect of both policy instruments on …