IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v37y2009i11p4797-4808.html
   My bibliography  Save this article

Oil and natural gas prices and greenhouse gas emission mitigation

Author

Listed:
  • van Ruijven, Bas
  • van Vuuren, Detlef P.

Abstract

The hikes in hydrocarbon prices during the last years have lead to concern about investment choices in the energy system and uncertainty about the costs for mitigation of greenhouse gas emissions. On the one hand, high prices of oil and natural gas increase the use of coal; on the other hand, the cost difference between fossil-based energy and non-carbon energy options decreases. We use the global energy model TIMER to explore the energy system impacts of exogenously forced low, medium and high hydrocarbon price scenarios, with and without climate policy. We find that without climate policy high hydrocarbon prices drive electricity production from natural gas to coal. In the transport sector, high hydrocarbon prices lead to the introduction of alternative fuels, especially biofuels and coal-based hydrogen. This leads to increased emissions of CO2. With climate policy, high hydrocarbon prices cause a shift in electricity production from a dominant position of natural gas with carbon capture and sequestration (CCS) to coal-with-CCS, nuclear and wind. In the transport sector, the introduction of hydrogen opens up the possibility of CCS, leading to a higher mitigation potential at the same costs. In a more dynamic simulation of carbon price and oil price interaction the effects might be dampened somewhat.

Suggested Citation

  • van Ruijven, Bas & van Vuuren, Detlef P., 2009. "Oil and natural gas prices and greenhouse gas emission mitigation," Energy Policy, Elsevier, vol. 37(11), pages 4797-4808, November.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4797-4808
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(09)00454-6
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rout, Ullash K. & Akimoto, Keigo & Sano, Fuminori & Oda, Junichiro & Homma, Takashi & Tomoda, Toshimasa, 2008. "Impact assessment of the increase in fossil fuel prices on the global energy system, with and without CO2 concentration stabilization," Energy Policy, Elsevier, vol. 36(9), pages 3477-3484, September.
    2. van Vuuren, Detlef P. & Hoogwijk, Monique & Barker, Terry & Riahi, Keywan & Boeters, Stefan & Chateau, Jean & Scrieciu, Serban & van Vliet, Jasper & Masui, Toshihiko & Blok, Kornelis & Blomen, Eliane , 2009. "Comparison of top-down and bottom-up estimates of sectoral and regional greenhouse gas emission reduction potentials," Energy Policy, Elsevier, vol. 37(12), pages 5125-5139, December.
    3. Kaufmann, Robert K. & Shiers, Laura D., 2008. "Alternatives to conventional crude oil: When, how quickly, and market driven?," Ecological Economics, Elsevier, vol. 67(3), pages 405-411, October.
    4. Meng, Q.Y. & Bentley, R.W., 2008. "Global oil peaking: Responding to the case for ‘abundant supplies of oil’," Energy, Elsevier, vol. 33(8), pages 1179-1184.
    5. Vielle, Marc & Viguier, Laurent, 2007. "On the climate change effects of high oil prices," Energy Policy, Elsevier, vol. 35(2), pages 844-849, February.
    6. Tsatskin, Alexander & Balaban, Oded, 2008. "Peak oil in the light of oil formation theories," Energy Policy, Elsevier, vol. 36(6), pages 1826-1828, June.
    7. Roberto F. Aguilera & Roderick G. Eggert & Gustavo Lagos C.C. & John E. Tilton, 2009. "Depletion and the Future Availability of Petroleum Resources," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 141-174.
    8. Bernabe, Araceli & Martina, Esteban & Alvarez-Ramirez, Jose & Ibarra-Valdez, Carlos, 2004. "A multi-model approach for describing crude oil price dynamics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 338(3), pages 567-584.
    9. Wirl, Franz, 2008. "Why do oil prices jump (or fall)?," Energy Policy, Elsevier, vol. 36(3), pages 1029-1043, March.
    10. Sue Wing, Ian, 2008. "Explaining the declining energy intensity of the U.S. economy," Resource and Energy Economics, Elsevier, vol. 30(1), pages 21-49, January.
    11. Dermot Gately & Hiliard G. Huntington, 2002. "The Asymmetric Effects of Changes in Price and Income on Energy and Oil Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 19-55.
    12. de Castro, Carlos & Miguel, Luis Javier & Mediavilla, Margarita, 2009. "The role of non conventional oil in the attenuation of peak oil," Energy Policy, Elsevier, vol. 37(5), pages 1825-1833, May.
    13. van Ruijven, Bas & Hari, Lakshmikanth & van Vuuren, Detlef P. & de Vries, Bert, 2008. "The potential role of hydrogen energy in India and Western Europe," Energy Policy, Elsevier, vol. 36(5), pages 1649-1665, May.
    14. Kjärstad, Jan & Johnsson, Filip, 2009. "Resources and future supply of oil," Energy Policy, Elsevier, vol. 37(2), pages 441-464, February.
    15. Kerschner, Christian & Hubacek, Klaus, 2009. "Assessing the suitability of input–output analysis for enhancing our understanding of potential economic effects of Peak Oil," Energy, Elsevier, vol. 34(3), pages 284-290.
    16. Dahl, Carol & Duggan, Thomas E., 1998. "Survey of price elasticities from economic exploration models of US oil and gas supply," Journal of Energy Finance & Development, Elsevier, vol. 3(2), pages 129-169.
    17. Zhao, Lin & Feng, Lianyong & Hall, Charles A.S., 2009. "Is peakoilism coming?," Energy Policy, Elsevier, vol. 37(6), pages 2136-2138, June.
    18. Szklo, Alexandre & Schaeffer, Roberto, 2006. "Alternative energy sources or integrated alternative energy systems? Oil as a modern lance of Peleus for the energy transition," Energy, Elsevier, vol. 31(14), pages 2513-2522.
    19. Krey, Volker & Martinsen, Dag & Wagner, Hermann-Josef, 2007. "Effects of stochastic energy prices on long-term energy-economic scenarios," Energy, Elsevier, vol. 32(12), pages 2340-2349.
    20. van Vuuren, Detlef P. & de Vries, Bert & Eickhout, Bas & Kram, Tom, 2004. "Responses to technology and taxes in a simulated world," Energy Economics, Elsevier, vol. 26(4), pages 579-601, July.
    21. D. P. van Vuuren & H.J.M. de Vries, 2001. "Mitigation scenarios in a world oriented at sustainable development: the role of technology, efficiency and timing," Climate Policy, Taylor & Francis Journals, vol. 1(2), pages 189-210, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. António Marques & José Fuinhas & José Manso, 2011. "A Quantile Approach to Identify Factors Promoting Renewable Energy in European Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(3), pages 351-366, July.
    2. Yuan, Jiahai & Xu, Yan & Kang, Junjie & Zhang, Xingping & Hu, Zheng, 2014. "Nonlinear integrated resource strategic planning model and case study in China's power sector planning," Energy, Elsevier, vol. 67(C), pages 27-40.
    3. Simoes, Sofia & Fortes, Patrícia & Seixas, Júlia & Huppes, Gjalt, 2015. "Assessing effects of exogenous assumptions in GHG emissions forecasts – a 2020 scenario study for Portugal using the Times energy technology model," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 221-235.
    4. Alfredo M. Pereira & Rui M. Pereira, 2017. "Reducing carbon emissions in Portugal: the relative roles of fossil fuel prices, energy efficiency, and carbon taxation," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 60(10), pages 1825-1852, October.
    5. Pereira, Alfredo M. & Pereira, Rui M., 2014. "On the environmental, economic and budgetary impacts of fossil fuel prices: A dynamic general equilibrium analysis of the Portuguese case," Energy Economics, Elsevier, vol. 42(C), pages 248-261.
    6. Marques, António C. & Fuinhas, José A. & Pires Manso, J.R., 2010. "Motivations driving renewable energy in European countries: A panel data approach," Energy Policy, Elsevier, vol. 38(11), pages 6877-6885, November.
    7. Mohammad, Masita & Kandaramath Hari, Thushara & Yaakob, Zahira & Chandra Sharma, Yogesh & Sopian, Kamaruzzaman, 2013. "Overview on the production of paraffin based-biofuels via catalytic hydrodeoxygenation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 121-132.
    8. Grant Allan & Igor Eromenko & Peter McGregor & Kim Swales, 2010. "The regional electricity generation mix in Scotland: A portfolio selection approach," Working Papers 1010, University of Strathclyde Business School, Department of Economics.
    9. repec:eee:renene:v:113:y:2017:i:c:p:52-63 is not listed on IDEAS
    10. Aguirre, Mariana & Ibikunle, Gbenga, 2014. "Determinants of renewable energy growth: A global sample analysis," Energy Policy, Elsevier, vol. 69(C), pages 374-384.
    11. Girod, Bastien & van Vuuren, Detlef P. & Deetman, Sebastiaan, 2012. "Global travel within the 2°C climate target," Energy Policy, Elsevier, vol. 45(C), pages 152-166.
    12. Matthew Moerschbaecher & John W. Day, 2010. "The Greenhouse Gas Inventory of Louisiana State University: A Case Study of the Energy Requirements of Public Higher Education in the United States," Sustainability, MDPI, Open Access Journal, vol. 2(7), pages 1-18, July.
    13. Marques, António Cardoso & Fuinhas, José Alberto, 2012. "Are public policies towards renewables successful? Evidence from European countries," Renewable Energy, Elsevier, vol. 44(C), pages 109-118.
    14. repec:eee:energy:v:140:y:2017:i:p1:p:1276-1291 is not listed on IDEAS
    15. Marques, António Cardoso & Fuinhas, José Alberto, 2011. "Drivers promoting renewable energy: A dynamic panel approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(3), pages 1601-1608, April.
    16. Biresselioglu, Mehmet Efe & Kilinc, Dilara & Onater-Isberk, Esra & Yelkenci, Tezer, 2016. "Estimating the political, economic and environmental factors’ impact on the installed wind capacity development: A system GMM approach," Renewable Energy, Elsevier, vol. 96(PA), pages 636-644.
    17. Pang, Rui-zhi & Deng, Zhong-qi & Chiu, Yung-ho, 2015. "Pareto improvement through a reallocation of carbon emission quotas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 419-430.
    18. Nema, Pragya & Nema, Sameer & Roy, Priyanka, 2012. "An overview of global climate changing in current scenario and mitigation action," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 2329-2336.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:11:p:4797-4808. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/enpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.