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This paper presents the first empirical test of the green paradox hypothesis, according to which well-intended but imperfectly implemented environmental policies may lead to detrimental outcomes due to supply side responses.
I have concerns about the supply side responses to smog as well.
Secondary data analysis is also important for informing future field experiments by uncovering behavioral anomalies and quantifying supply side responses to policy changes.
To supply side?
The question now is how long it will take for that demand to grow strong enough to elicit the desired supply-side response.
A supply-side response is to attempt to convince would-be free riders that if they do not contribute, they will not receive the good, not through exclusion but because the good will not be provided at all.
Two major unknowns face Oil & Gas: a plummeting north American active horizontal rig count; and significant price pressure....This downturn appears to have been caused by higher supply at least as much as by lower demand; and so far supply-side response does not appear to be shrinking the production surplus.
The impressive simulated supply-side response to the House plan is due to its dramatic improvement in incentives to invest in the U.S. and the fact that the supply of global capital is highly elastic.
A more logical, economically productive (and revenue-effective) response would be the supply-side response: cut the sales tax as much as possible so it doesnt make that much difference which sellers are liable for revenue collections.
Unless the answers to the last two questions are strongly positive, vouchers of the size that the federal government can offer are extremely unlikely to stimulate a major supply-side response.
Apparently, these preferences did not stimulate an adequate supply-side response.
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