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Title: CO2 emissions mitigation and fossil fuel markets: Dynamic and international aspects of climate policies

Abstract

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 and decrease with mitigation. A first deviation from the optimal transition pathway relaxes global emission targets until 2030, in accordance with the Copenhagen pledges and regionally-specific low-carbon technology targets. 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 larger - twice and more - than the short-term distortion. This amplifying effect results from coal lock-in and inter-fuel substitution effects. 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 leakage and substitution patterns of coal, oil, and gas differ. In summary, distortions of fossil fuelmore » 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.« less

Authors:
; ; ; ; ; ; ; ; ; ; ; ;
Publication Date:
Research Org.:
Pacific Northwest National Laboratory (PNNL), Richland, WA (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
1188869
Report Number(s):
PNNL-SA-97770
KP1703030
DOE Contract Number:  
AC05-76RL01830
Resource Type:
Journal Article
Journal Name:
Technological Forecasting and Social Change, 90(A):243–256
Additional Journal Information:
Journal Name: Technological Forecasting and Social Change, 90(A):243–256
Country of Publication:
United States
Language:
English

Citation Formats

Bauer, Nico, Bosetti, Valentina, Hamdi-Cherif, Meriem, Kitous, Alban, McCollum, David, Mejean, Aurelie, Rao, Shilpa, Turton, Hal, Paroussos, Leonidas, Ashina, Shuichi, Calvin, Katherine V., Wada, Kenichi, and Van Vuuren, Detlef. CO2 emissions mitigation and fossil fuel markets: Dynamic and international aspects of climate policies. United States: N. p., 2015. Web. doi:10.1016/j.techfore.2013.09.009.
Bauer, Nico, Bosetti, Valentina, Hamdi-Cherif, Meriem, Kitous, Alban, McCollum, David, Mejean, Aurelie, Rao, Shilpa, Turton, Hal, Paroussos, Leonidas, Ashina, Shuichi, Calvin, Katherine V., Wada, Kenichi, & Van Vuuren, Detlef. CO2 emissions mitigation and fossil fuel markets: Dynamic and international aspects of climate policies. United States. https://doi.org/10.1016/j.techfore.2013.09.009
Bauer, Nico, Bosetti, Valentina, Hamdi-Cherif, Meriem, Kitous, Alban, McCollum, David, Mejean, Aurelie, Rao, Shilpa, Turton, Hal, Paroussos, Leonidas, Ashina, Shuichi, Calvin, Katherine V., Wada, Kenichi, and Van Vuuren, Detlef. 2015. "CO2 emissions mitigation and fossil fuel markets: Dynamic and international aspects of climate policies". United States. https://doi.org/10.1016/j.techfore.2013.09.009.
@article{osti_1188869,
title = {CO2 emissions mitigation and fossil fuel markets: Dynamic and international aspects of climate policies},
author = {Bauer, Nico and Bosetti, Valentina and Hamdi-Cherif, Meriem and Kitous, Alban and McCollum, David and Mejean, Aurelie and Rao, Shilpa and Turton, Hal and Paroussos, Leonidas and Ashina, Shuichi and Calvin, Katherine V. and Wada, Kenichi and Van Vuuren, Detlef},
abstractNote = {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 and decrease with mitigation. A first deviation from the optimal transition pathway relaxes global emission targets until 2030, in accordance with the Copenhagen pledges and regionally-specific low-carbon technology targets. 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 larger - twice and more - than the short-term distortion. This amplifying effect results from coal lock-in and inter-fuel substitution effects. 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 leakage and substitution patterns of coal, oil, and gas differ. 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.},
doi = {10.1016/j.techfore.2013.09.009},
url = {https://www.osti.gov/biblio/1188869}, journal = {Technological Forecasting and Social Change, 90(A):243–256},
number = ,
volume = ,
place = {United States},
year = {Thu Jan 01 00:00:00 EST 2015},
month = {Thu Jan 01 00:00:00 EST 2015}
}

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Works referencing / citing this record:

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Divestment prevails over the green paradox when anticipating strong future climate policies
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Fossil-fueled development (SSP5): An energy and resource intensive scenario for the 21st century
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Carbon leakage in a fragmented climate regime: The dynamic response of global energy markets
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