ABSTRACT
This chapter begins by introducing Hans-Werner Sinn’s original green paradox concerns and his resultant Hotelling-based carbon tax green paradox models. It provides a review of several dominant classes of green paradox models and demonstrates their common reliance on the Hotelling models of exhaustible resources or on the closely related Dasgupta Heal models of exhaustible resources with backstop energy resources. The United Nations Framework Convention on Climate Change is the leading international regulatory effort to reduce the threats and hazards from anthropogenic climate change. Sinn explored the problem of anthropogenic climate change as a result of market failure. Sinn developed economic models to demonstrate that carbon taxes could drive fossil fuel resource owners, under certain conditions, to produce larger quantities earlier in time; he demonstrated these models with both a cash flow carbon tax and an “ad valorem sales tax on extraction.”
