Abstract:
The focus of the green paradox literature has been either on demandside 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 permanently remove some of the carbon resources. The conclusion is that there will no green paradox if supply-side climate policies are aimed at high-cost carbon reserves. If instead low-cost reserves are removed, the possibility that both early and total emissions increase cannot be ruled out. Hence, "wrong" supply-side climate policies may give a supply-side green paradox.