We consider environmental regulation in a context where firms invest in abatement technology under conditions of uncertainty about subsequent abatement cost, but can subsequently adjust output in the light of true marginal abatement cost. Where an emission tax is the only available instrument,...

The focus of the green paradox literature has been either on demand-side climate policies or on effects of technological changes. The present paper addresses the question of whether there also might be some kind of green paradox related to supply-side policies, i.e. policies that per-manently...

We study a dynamic model with two competing durable goods; one dirty, the other clean. Due to network effects a consumer who adopts the dirty good today will increase the incentive future consumers have to adopt the dirty good. Thus, a consumer who chooses the dirty good, in a sense causes more...

We borrow standard assumptions from the non-renewable-resource-taxation and from the directed-technical-change literatures, to take a full account of the incentives to perform R&D activities in a dirty-resource sector and in a clean-resource-substitute sector. We show that a gradual rise in the...

This paper contributes to the green paradox literature by using a resource extraction framework with heterogeneous energy sources. A key feature of the model is a capacity constrained green backstop resource, which implies the simultaneous use of the expensive backstop resource and the cheaper...

The paper considers a climate change growth model with three R&D sectors dedicated to energy, backstop and CCS (Carbon Capture and Storage) efficiency. First, we characterize the set of decentralized equilibria: A particular equilibrium is associated to each vector of public tools which includes...

In our analytical general equilibrium model where two polluting inputs can be substitutes or complements in production, we study the effects of a tax on one pollutant in two cases: one where both pollutants face taxes and the second where the other pollutant is subject to a permit policy. In...

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...

We analyze a model where firms chose a production technology which, together with some random event, determines the final emission level. We consider the coexistence of two alternative technologies: a "clean" technology, and a "dirty" technology. The environmental regulation is based on taxes...