In lecture 9 the Professor presents some of her latest papers, the first being about Hotelling, Emissions Leakage, and Climate Policy Alternatives. The professor starts by presenting the hotelling model, discussing the effects of lowering the backstop cost and The Green Paradox, which she calls as a “depressing constraint to the literature” since technology innovation and green policies (according to the Green Paradox) might accelerate emissions as the nonrenewable resource market response might be to accelerate extraction and emissions while the price is still favorable.
The second paper is titled; Limits to Limiting Greenhouse Gases: Intertemporal Leakage, Spatial Leakage and Negative Leakage, discussing the alarming fact that in order to limit temperature increase to 2 degrees we have a given amount of carbon (a "carbon budget") we can release and the Professor shows that by only counting burning the existing oil resources we would pass that budget, so there is no way of exhausting fossil fuel reserves if we aim to keep the climate goals.
She discusses different aspects of carbon leakage. Both space and time aspects, for example if only some countries imply policies to decrease emissions (increasing the carbon price), parts of the emissions are likely to move to countries where the carbon is cheaper.
So are there ways to get around the green paradox?