This article examines the possible adverse effects of well-intended climate policies. A weak Green Paradox arises if the announcement of a future carbon tax or a sufficiently fast rising carbon tax encourages fossil fuel owners to extract reserves more aggressively, thus exacerbating global...

The optimal reaction to a productivity shock which becomes more imminent with global warming is to price carbon (proportional to the marginal hazard of a catastrophe) to curb the risk of climate change, but also to accumulate precautionary capital to facilitate smoothing of consumption and curb...

A rapidly rising carbon tax leads to faster extraction of fossil fuels and accelerates global warming. We analyze how general equilibrium effects operating through the international capital market affect this Green Paradox. In a two-region, two-period world with identical homothetic preferences...

A classroom model of global warming, fossil fuel depletion and the optimal carbon tax is formulated and calibrated. It features iso-elastic fossil fuel demand, stock-dependent fossil fuel extraction costs, an exogenous interest rate and no decay of the atmospheric stock of carbon. The optimal...

Optimal climate policy should act in a precautionary fashion to deal with tipping points that occur at some future random moment. The optimal carbon tax should include an additional component on top of the conventional present discounted value of marginal global warming damages. This component...

We show how a monopolistic owner of oil reserves responds to a carbon-free substitute becoming available at some uncertain point in the future if demand is isoelaastic and variable extraction costs are zero but upfron exploration investment costs have to be made. Not the arrival of this...

Resource wars can be modeled with two-way regime switch uncertainty and contest success functions. Fighting is more intense if the plitical system is less cohesive, fighting technology is well developed, oil reserves are high and the wage is low. More government stability intensifies resource...

I explain the recent peak and subsequent collapse in oil prices by strategic interaction between a limit-pricing oil cartel and an importer producing substitutes to oil, with productin costs falling with R&D investment. The model is consistent with reported narratives of the oil price collapse....

We use variation in oil output among Brazilian municipalities to investigate the effects of resource windfalls. We find muted effects of oil through market channels: offshore oil has no effect on municipal non-oil GDP or its composition, while onshore oil has only modest effects on non-oil GDP...

We introduce learning into a Hotelling model of a non-renewable resource market. Bycombining learning and scarcity we add signi?cantly to the dynamics implied by learning and substantially enhance the volatility of commodity prices. In our learning model we show how a self con?rming equilibrium...