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Does Increased Extraction of Natural Gas Reduce Carbon Emissions?

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Author Info
Aune, Finn Roar () (Statistics Norway)
Golombek, Rolf () (The Ragnar Frisch Centre for Economic Research)
Kittelsen, Sverre A. C. () (The Ragnar Frisch Centre for Economic Research)

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Abstract

Without an international climate agreement, extraction of more natural gas could reduce emissions of CO2 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 CO2. 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 CO2-taxes are imposed, increased extraction of natural gas will reduce CO2 emissions also when the additional natural gas is exported directed.

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File URL: http://www.oekonomi.uio.no/memo/memopdf/memo3403.pdf
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Publisher Info
Paper provided by Oslo University, Department of Economics in its series Memorandum with number 34/2003.

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Length: 40 pages
Date of creation: 04 Oct 2003
Date of revision:
Handle: RePEc:hhs:osloec:2003_034

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Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
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Web page: http://www.oekonomi.uio.no/indexe.html
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Related research
Keywords: natural gas; carbon; emissions; Norway; envirnoment; CO2;

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Find related papers by 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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References listed on IDEAS
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  1. Chakravorty, Ujjayant & Roumasset, James & Tse, Kinping, 1997. "Endogenous Substitution among Energy Resources and Global Warming," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1201-34, December.
  2. Hoel, Michael & Kverndokk, Snorre, 1996. "Depletion of fossil fuels and the impacts of global warming," Resource and Energy Economics, Elsevier, vol. 18(2), pages 115-136, June. [Downloadable!] (restricted)
    Other versions:
  3. Golombek, Rolf & Hagem, Cathrine & Hoel, Michael, 1995. "Efficient incomplete international climate agreements," Resource and Energy Economics, Elsevier, vol. 17(1), pages 25-46, May. [Downloadable!] (restricted)
  4. Berg, Elin & Kverndokk, Snorre & Rosendahl, Knut Einar, 2002. "Oil Exploration under Climate Treaties," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 493-516, November. [Downloadable!] (restricted)
  5. Aune,F.R. & Golombek,R. & Kittelsen,S.A.C. & ..., 2001. "Liberalising the energy markets of Western Europe : a computable equilibrium model approach," Memorandum 14/2001, Oslo University, Department of Economics. [Downloadable!]
    Other versions:
  6. Felder Stefan & Rutherford Thomas F., 1993. "Unilateral CO2 Reductions and Carbon Leakage: The Consequences of International Trade in Oil and Basic Materials," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 162-176, September. [Downloadable!] (restricted)
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