Climate policies as a hedge against the uncertainty on future oil supply
AbstractDespite the inextricable link between oil scarcity and climate change, the interplay between these two issues is paradoxically an underworked area. This article uses a global energy-economy model to address the link between future oil supply and climate change and assesses in a common framework both the costs of climate policies and oil scarcity. It shows that, in the context of a limited and uncertain amount of ultimately recoverable oil resources, climate policies reduce the world vulnerability to peak oil. Climate policies, therefore, appear as a hedging strategy against the uncertainty on oil resources, in addition to their main aim of avoiding dangerous climate change. This co-benefit is estimated at the net present value of US$11,500 billion. Eventually, reducing the risk of future economic losses due to oil scarcity may appear as a significant side-benefit of climate policies to many decision-makers.
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Bibliographic InfoPaper provided by HAL in its series Post-Print with number hal-00667118.
Date of creation: 25 Jun 2010
Date of revision:
Publication status: Published, Climatic Change, 2010, 101, 3-4, 663-668
Note: View the original document on HAL open archive server: http://hal-enpc.archives-ouvertes.fr/hal-00667118
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Climate policies; peak oil; hedge; cost; uncertainty.;
Other versions of this item:
- Julie Rozenberg & Stéphane Hallegatte & Adrien Vogt-Schilb & Olivier Sassi & Céline Guivarch & Henri Waisman & Jean Charles Hourcade, 2010. "Climate policies as a hedge against the uncertainty on future oil supply," CIRED Working Papers hal-00866449, HAL.
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