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Stabilization of CO 2 concentrations: mitigation scenarios using the Petro model

Author

Listed:
  • Snorre Kverndokk

    ()

  • Lars Lindholt

    ()

  • Knut Rosendahl

    ()

Abstract

How to stabilize the CO 2 concentration in the atmosphere depends crucially on baseline assumptions of future economic growth, energy demand and supply technologies, etc. In this paper we investigate how different assumptions about the future affect the necessary global policy measures to reach specific concentration targets for CO 2 . This is done by constructing two contrasting baseline scenarios within an intertemporal model of fossil fuel markets. We find that the appropriate CO 2 emission and concentration paths for a given concentration target are very dependent on the baseline. Moreover, the impact on oil wealth for OPEC and other oil producers of stabilizing CO 2 concentrations depends significantly both on the baseline and on whether the target is reached through carbon taxes or autonomous technological change in carbon-free energy sources. Carbon leakage through changes in international fossil fuel prices is found to be negligible and possibly negative. Copyright Springer Japan 2000

Suggested Citation

  • Snorre Kverndokk & Lars Lindholt & Knut Rosendahl, 2000. "Stabilization of CO 2 concentrations: mitigation scenarios using the Petro model," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 3(2), pages 195-224, June.
  • Handle: RePEc:spr:envpol:v:3:y:2000:i:2:p:195-224
    DOI: 10.1007/BF03354037
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    References listed on IDEAS

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    1. Vivek Tulpule & Stephen Brown & Jaekyu Lim & Cain Polidano & Horn Pant & Brian S. Fisher, 1999. "The Kyoto Protocol: An Economic Analysis Using GTEM," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 257-285.
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    5. Warwick J. McKibbin & Martin T. Ross & Robert Shackleton & Peter J. Wilcoxen, 1999. "Emissions Trading, Capital Flows and the Kyoto Protocol," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 287-333.
    6. Elin Berg & Snorre Kverndokk & Knut Einar Rosendahl, 1999. "Optimal Oil Exploration under Climate Treaties," Discussion Papers 245, Statistics Norway, Research Department.
    7. Geoffrey Heal, 1976. "The Relationship Between Price and Extraction Cost for a Resource with a Backstop Technology," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 371-378, Autumn.
    8. Salant, Stephen W, 1976. "Exhaustible Resources and Industrial Structure: A Nash-Cournot Approach to the World Oil Market," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1079-1093, October.
    9. Elin Berg & Snorre Kverndokk & Knut Einar Rosendahl, 1997. "Market Power, International CO2 Taxation and Oil Wealth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 33-71.
    10. Bernstein, Paul M. & Montgomery, W. David & Rutherford, Thomas F., 1999. "Global impacts of the Kyoto agreement: results from the MS-MRT model," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 375-413, August.
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    Citations

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    Cited by:

    1. Rosendahl, Knut Einar, 2004. "Cost-effective environmental policy: implications of induced technological change," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 1099-1121, November.
    2. Lars Lindholt, 2005. "Beyond Kyoto: backstop technologies and endogenous prices on CO2 permits and fossil fuels," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 2019-2036.
    3. Chakravorty, Ujjayant & Magne, Bertrand & Moreaux, Michel, 2006. "A Hotelling model with a ceiling on the stock of pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2875-2904, December.
    4. Snorre Kverndokk & Knut Rosendahl & Thomas Rutherford, 2004. "Climate Policies and Induced Technological Change: Which to Choose, the Carrot or the Stick?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(1), pages 21-41, January.
    5. Chakravorty, Ujjayant & Magné, Bertrand & Moreaux, Michel, 2003. "From Coal to Clean Energy : Hotelling with a Limit on the Stock of Externalities," IDEI Working Papers 229, Institut d'Économie Industrielle (IDEI), Toulouse.
    6. Amundsen, Eirik Schrøder & Bergman, Lars, 2005. "International Redistribution of Resource Rents: An alternative perspective on the Kyoto process," Working Papers in Economics 08/05, University of Bergen, Department of Economics.
    7. Amundsen, Eirik S. & Bergman, Lars, 2005. "International Redistribution of Resource Rents: An alternative perspective on the Kyoto process," MPRA Paper 10624, University Library of Munich, Germany.
    8. Kverndokk,S. & Rosendahl,E., 2000. "CO2 mitigation costs and ancillary benefits in the Nordic countries, the UK and Ireland : a survey," Memorandum 34/2000, Oslo University, Department of Economics.
    9. Tsuneyuki Morita & Nebos̆ja Nakićenović & John Robinson, 2000. "Overview of mitigation scenarios for global climate stabilization based on new IPCC emission scenarios (SRES)," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 3(2), pages 65-88, June.

    More about this item

    Keywords

    CO 2 concentration; Carbon taxes; Exhaustible resources; Petroleum wealth; Carbon leakage;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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