CO2 emission mitigation and fossil fuel markets: Dynamic and international aspects of climate policies
This paper explores a multi-model scenario ensemble to assess the impacts of idealized and non-idealized climate change stabilization policies on fossil fuel markets. Under idealized conditions climate policies significantly reduce coal use in the short- and long-term. Reductions in oil and gas use are much smaller, particularly until 2030, but revenues decrease much more because oil and gas prices are higher than coal prices. A first deviation from optimal transition pathways is delayed action that relaxes global emission targets until 2030 in accordance with the Copenhagen pledges. Fossil fuel markets revert back to the no-policy case: though coal use increases strongest, revenue gains are higher for oil and gas. To balance the carbon budget over the 21st century, the long-term reallocation of fossil fuels is significantly largerâ€”twice and moreâ€”than the short-term distortion. This amplifying effect results from coal lock-in and inter-fuel substitution effects to balance the full-century carbon budget. The second deviation from the optimal transition pathway relaxes the global participation assumption. The result here is less clear-cut across models, as we find carbon leakage effects ranging from positive to negative because trade and substitution patterns of coal, oil, and gas differ across models. In summary, distortions of fossil fuel markets resulting from relaxed short-term global emission targets are more important and less uncertain than the issue of carbon leakage from early mover action.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 90 (2015)
Issue (Month): PA ()
|Contact details of provider:|| Web page: http://www.sciencedirect.com/science/journal/00401625|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Grubb, Michael, 2001. "Who's afraid of atmospheric stabilisation? Making the link between energy resources and climate change," Energy Policy, Elsevier, vol. 29(11), pages 837-845, September.
- Böhringer, Christoph & Balistreri, Edward J. & Rutherford, Thomas F., 2012. "The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)," Energy Economics, Elsevier, vol. 34(S2), pages 97-110.
- Böhringer, Christoph & Lange, Andreas & Rutherford, Thomas F., 2014.
"Optimal emission pricing in the presence of international spillovers: Decomposing leakage and terms-of-trade motives,"
Journal of Public Economics,
Elsevier, vol. 110(C), pages 101-111.
- Christoph Böhringer & Andreas Lange & Thomas F. Rutherford, 2010. "Optimal Emission Pricing in the Presence of International Spillovers: Decomposing Leakage and Terms-of-Trade Motives," NBER Working Papers 15899, National Bureau of Economic Research, Inc.
- Christoph Böhringer & Andreas Lange & Thomas F. Rutherford, 2012. "Optimal Emission Pricing in the Presence of International Spillovers: Decomposing Leakage and Terms-of-Trade Motives," Working Papers V-347-12, University of Oldenburg, Department of Economics, revised Jun 2012.
- Kathy Baylis & Don Fullerton & Daniel H. Karney, 2013. "Leakage, Welfare, and Cost-Effectiveness of Carbon Policy," American Economic Review, American Economic Association, vol. 103(3), pages 332-337, May.
- Kathy Baylis & Don Fullerton & Dan Karney, 2013. "Leakage, Welfare, and Cost-Effectiveness of Carbon Policy," CESifo Working Paper Series 4101, CESifo Group Munich.
- Kathy Baylis & Don Fullerton & Daniel H. Karney, 2013. "Leakage, Welfare, and Cost-Effectiveness of Carbon Policy," NBER Working Papers 18898, National Bureau of Economic Research, Inc.
- Paroussos, Leonidas & Fragkos, Panagiotis & Capros, Pantelis & Fragkiadakis, Kostas, 2015. "Assessment of carbon leakage through the industry channel: The EU perspective," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 204-219.
- Kriegler, Elmar & Riahi, Keywan & Bauer, Nico & Schwanitz, Valeria Jana & Petermann, Nils & Bosetti, Valentina & Marcucci, Adriana & Otto, Sander & Paroussos, Leonidas & Rao, Shilpa & Arroyo CurrÃ¡s, , 2015. "Making or breaking climate targets: The AMPERE study on staged accession scenarios for climate policy," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 24-44.
- Jared C. Carbone, 2013. "Linking Numerical and Analytical Models of Carbon Leakage," American Economic Review, American Economic Association, vol. 103(3), pages 326-331, May.
- Hoel Michael, 1994. "Efficient Climate Policy in the Presence of Free Riders," Journal of Environmental Economics and Management, Elsevier, vol. 27(3), pages 259-274, November.
- Hoel, M., 1993. "Efficient Climate Policy in the Presence of Free Riders," Memorandum 04/1993, Oslo University, Department of Economics.
- Jean-Marc Burniaux & Joaquim Oliveira Martins, 2000. "Carbon Emission Leakages: A General Equilibrium View," OECD Economics Department Working Papers 242, OECD Publishing.
- Riahi, Keywan & Kriegler, Elmar & Johnson, Nils & Bertram, Christoph & den Elzen, Michel & Eom, Jiyong & Schaeffer, Michiel & Edmonds, Jae & Isaac, Morna & Krey, Volker & Longden, Thomas & Luderer, Gu, 2015. "Locked into Copenhagen pledges â€” Implications of short-term emission targets for the cost and feasibility of long-term climate goals," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 8-23.
- Keywan Riahi & Elmar Kriegler & Nils Johnson & Christoph Bertram & Michel Den Elzen & Jiyong Eom & Michiel Schaeffer & Jae Edmonds & Morna Isaac & Volker Krey & Thomas Longden & Gunnar Luderer & Aurél, 2015. "Locked into Copenhagen pledges -- Implications of short-term emission targets for the cost and feasibility of long-term climate goals," Post-Print halshs-00962366, HAL.
- Niven Winchester & Sebastian Rausch, 2013. "A Numerical Investigation of the Potential for Negative Emissions Leakage," American Economic Review, American Economic Association, vol. 103(3), pages 320-325, May.
- Bertram, Christoph & Johnson, Nils & Luderer, Gunnar & Riahi, Keywan & Isaac, Morna & Eom, Jiyong, 2015. "Carbon lock-in through capital stock inertia associated with weak near-term climate policies," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 62-72.
- Arroyo-CurrÃ¡s, TabarÃ© & Bauer, Nico & Kriegler, Elmar & Schwanitz, Valeria Jana & Luderer, Gunnar & Aboumahboub, Tino & Giannousakis, Anastasis & Hilaire, JÃ©rÃ´me, 2015. "Carbon leakage in a fragmented climate regime: The dynamic response of global energy markets," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 192-203. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:90:y:2015:i:pa:p:243-256. 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)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.