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Three Degrees of Green Paradox: The Weak, The Strong, and the Extreme Green Paradox

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  • Marc GRONWALD
  • Ngo Van LONG
  • Luise ROEPKE

Abstract

We show that a green paradox can be weak, or strong, or extreme. A weak green paradox arises when a green - intentioned policy measure worsens the quality of the environment at least in the near term. A strong green paradox outcome is obtained if the policy ends up causing greater cumulative environmental damages than under the business - as - usual scenario , though it may raise welfare , for example by adding productive green capacity. An extreme green paradox arises when aggregate welfare (net of environmental damages) falls as result of a poorly designed green - intentioned policy. We illustrate numerically the three degrees of green paradox using a model with a capacity - constrained green backstop technology in direct competition with fossil fuels.

Suggested Citation

  • Marc GRONWALD & Ngo Van LONG & Luise ROEPKE, 2017. "Three Degrees of Green Paradox: The Weak, The Strong, and the Extreme Green Paradox," Cahiers de recherche 02-2017, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    • Handle: RePEc:mtl:montec:02-2017
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    capacity constraints; green paradox; climate change; simultaneous resource use;
    All these keywords.

    JEL classification:

    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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