Under which conditions unilateral tightening of climate policy causes a weak or strong green paradox or even decreases social welfare has recently been studied by Hoel (2011). Hoel assumes that the costs of extracting fossil fuel are linear in output. We extend his model by allowing for...

Campbell (1980) and following authors have disussed a limited resoure extration capacity as an augmentation of the well-known Hotelling model. We integrate a limited extraction capacity and related investments in the endogenous growth model of Tsur & Zemel (2005) to study its effect on economic...