For any emission trading system (ETS) with quantity-based endogenous supply of allowances, there exists a negative demand shock, e.g. induced by abatement policy, that increases aggregate supply and thus cumulative emissions. We prove this green paradox for a general model and then apply it to...

We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on informational constraints. We identify the most...

This study estimates the impact of carbon pricing on international trade in equipment used in the combustion of fossil fuels during the period 1995--2021. Using detailed data on bilateral trade combined with data on domestic carbon prices, we find that carbon pricing policies are associated with...