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We study an economy in which a final good is produced by two sectors. One uses a non-renewable and polluting resource, the other a renewable and clean resource. A specific type of research is associated with each sector. The public authorities levy a carbon tax and simultaneously subsidise both research sectors. We study the impact of such a policy scheme on the rate of resource extraction and emissions. In the clean sector, the research subsidy and the carbon tax have opposite effects. If the tax creates a green paradox, the subsidy moderates it; if the tax slows resource extraction, then the subsidy generates a green paradox.