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Does Increased Extraction of Natural Gas Reduce Carbon Emissions?

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  • Finn Aune
  • Rolf Golombek
  • Sverre Kittelsen

Abstract

Without an international climate agreement, extraction of more natural gas could reduce emissions of CO 2 as more “clean” natural gas may drive out “dirty” coal and oil. Using a computable equilibrium model for the Western European electricity and natural gas markets, we examine whether increased extraction of natural gas in Norway reduces global emissions of CO 2 . We find that both in the short run and in the long run total emissions are reduced if the additional quantity of natural gas is used in gas power production in Norway. If instead the additional quantity is exported directly, total emissions increase both in the short run and in the long run. However, if modest CO 2 -taxes are imposed, increased extraction of natural gas will reduce CO 2 emissions also when the additional natural gas is exported directed. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Finn Aune & Rolf Golombek & Sverre Kittelsen, 2004. "Does Increased Extraction of Natural Gas Reduce Carbon Emissions?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(4), pages 379-400, December.
    • Handle: RePEc:kap:enreec:v:29:y:2004:i:4:p:379-400
    DOI: 10.1007/s10640-004-9456-3
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    More about this item

    Keywords

    carbon emissions; electricity; energy markets; equilibrium modelling; natural gas;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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