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Green Threats to Restrict Coal Creates Incentive to Extract More Coal Now



(Wang, p. 1146) The last chapter of the book advances the supply-side analysis and presents the "Green Paradox," that "(t)he mere announcement of intentions to fight global warming made the world warm even faster" ([Sinn, p. ] 189). The key insight is that demand-reduction measures affect carbon supply through pressure on future prices. Since the existing "green" policies almost always involve increasing stringency and widening coverage over time, the increasing downward price pressure therefore induces resource owners to expedite extraction and thereby exacerbates the climate problem.


For the full review, see:

Wang, Tao. "The Green Paradox: A Supply-Side Approach to Global Warming." Journal of Economic Literature 50, no. 4 (Dec. 2012): 1145-46.

(Note: bracketed information added.)


The book under review is:

Sinn, Hans-Werner. The Green Paradox: A Supply-Side Approach to Global Warming. Cambridge and London: MIT Press, 2012.






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