Venice Summer Institute 2012: The Theory and Empirics of the Green Paradox

The interrelation between economics and the environment has posed a number of difficult challenges in the course of history. Climate change is universally considered to be probably the biggest challenge faced so far. A vast and diverse literature on the economics of climate change has developed. In designing climate policies, most economists have focused until recently on the demand-side of fossil fuel markets. The efficiency of climate policies, however, also depends critically on supply-side reactions, which have largely been ignored. Interest in the role of supply rose considerably after the publication in 2008 of Hans-Werner Sinn’s work on the Green Paradox. The concept of the Green Paradox entails that some of the policy instruments that have been favoured by economists, and implemented by some governments, might be counterproductive in the sense that they bring the supply of fossil fuels forward instead of postponing it.
Since Sinn’s initial publication, the theoretical literature on the Green Paradox has grown considerably. The purpose of this workshop is to further contribute to this theoretical work but also to the empirical and numerical analyses in the field. We will therefore especially invite contributions dealing with
•the theoretical analysis of supply reactions to climate policy,
•new approaches to climate policy design,
•numerical analysis of the Green Paradox,
•empirical relevance of supply-side reactions.