A Synthetic Control Assessment of the Green Paradox The Role of Climate Action Plans
This paper extends the green paradox literature by providing empirical insights into its existence. To check the green paradox theory, I analyse the production of coal in four major coal-producing US states that announced a greenhouse gas action plan. To form a statement on whether there is a treatment effect caused by the green policy, I employ Synthetic Control Methods to calculate counterfactual coal production trajectories. I find that Montana experienced a high and statistically significant increase in coal production that is supported by a set of validity indicators. However, there is no evidence for a paradox in Kentucky, Pennsylvania and Virginia.