The green paradox in open economies
"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 environ...
| Main Author: | |
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| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Munich
2014
CESifo |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19110371124919385539-The-green-paradox-in-open-econ.htm |
| Summary: | "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." |
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| Physical Description: | 27 p. Digital |