@article{Osterle:283231,
      recid = {283231},
      author = {Osterle, Ines},
      title = {The Green Paradox and the importance of endogenous  resource exploration},
      journal = {Australian Journal of Agricultural and Resource Economics},
      address = {2016-01},
      number = {428-2019-518},
      year = {2016},
      abstract = {It has been proposed that climate policies aimed at  reducing greenhouse gas emissions from fossil fuel use may  actually worsen the problem of global warming. Such a Green  Paradox could occur if fossil fuel resource owners exploit  their resources more rapidly due to the expectation of  stricter climate policies in the future. This article shows  that the emergence of the Green Paradox is less plausible  if exploration activities are taken into account. An  extraction model that incorporates exploration investments  finds that an increasing cash flow tax is effective in dealing  with climate change depending upon the specific formulation  of the tax scheme. For example, the higher the initial tax  level, the more effective is the tax scheme in mitigating  climate change and hence a Green Paradox can be avoided. A  very low growth rate is also beneficial for the climate as  it leads to a small temporal redistribution of extraction  to earlier periods. A very high growth rate leads to faster  extraction; however, it also coincides with a significant  decrease in total emissions that is inconsistent with a  Green Paradox.},
      url = {http://ageconsearch.umn.edu/record/283231},
      doi = {https://doi.org/10.22004/ag.econ.283231},
}