The Green Paradox: A Supply-Side Approach to Global Warming  
Hans-Werner Sinn
The MIT Press
The Earth is getting warmer. Yet, as Hans-Werner Sinn points out in this                 provocative book, the dominant policy approach--which aims to curb consumption of                 fossil energy--has been ineffective. Despite policy makers' efforts to promote                 alternative energy, impose emission controls on cars, and enforce tough                 energy-efficiency standards for buildings, the relentlessly rising curve of CO2                 output does not show the slightest downward turn. Some proposed solutions are                 downright harmful: cultivating crops to make biofuels not only contributes to global                 warming but also uses resources that should be devoted to feeding the world's                 hungry. In The Green Paradox, Sinn proposes a new, more pragmatic                 approach based not on regulating the demand for fossil fuels but on controlling the                 supply. The owners of carbon resources, Sinn explains, are pre-empting future                 regulation by accelerating the production of fossil energy while they can. This is                 the "Green Paradox": expected future reduction in carbon consumption has                 the effect of accelerating climate change. Sinn suggests a supply-side solution:                 inducing the owners of carbon resources to leave more of their wealth underground.                 He proposes the swift introduction of a "Super-Kyoto" system--gathering                 all consumer countries into a cartel by means of a worldwide, coordinated                 cap-and-trade system supported by the levying of source taxes on capital income--to                 spoil the resource owners' appetite for financial assets.Only if                 we can shift our focus from local demand to worldwide supply policies for reducing                 carbon emissions, Sinn argues, will we have a chance of staving off climate                 disaster.