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 »
- 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}
}
Works referenced in this record:
Who's afraid of atmospheric stabilisation? Making the link between energy resources and climate change
journal, September 2001
- Grubb, Michael
- Energy Policy, Vol. 29, Issue 11
The emissions gap between the Copenhagen pledges and the 2°C climate goal: Options for closing and risks that could widen the gap
journal, May 2011
- den Elzen, Michel G. J.; Hof, Andries F.; Roelfsema, Mark
- Global Environmental Change, Vol. 21, Issue 2
Economic and environmental choices in the stabilization of atmospheric CO2 concentrations
journal, January 1996
- Wigley, T. M. L.; Richels, R.; Edmonds, J. A.
- Nature, Vol. 379, Issue 6562
International climate policy architectures: Overview of the EMF 22 International Scenarios
journal, December 2009
- Clarke, Leon; Edmonds, Jae; Krey, Volker
- Energy Economics, Vol. 31
Mitigation implications of midcentury targets that preserve long-term climate policy options
journal, January 2010
- O'Neill, B. C.; Riahi, K.; Keppo, I.
- Proceedings of the National Academy of Sciences, Vol. 107, Issue 3
Global fossil energy markets and climate change mitigation – an analysis with REMIND
journal, October 2013
- Bauer, Nico; Mouratiadou, Ioanna; Luderer, Gunnar
- Climatic Change, Vol. 136, Issue 1
Making or breaking climate targets: The AMPERE study on staged accession scenarios for climate policy
journal, January 2015
- Kriegler, Elmar; Riahi, Keywan; Bauer, Nico
- Technological Forecasting and Social Change, Vol. 90
Efficient Climate Policy in the Presence of Free Riders
journal, November 1994
- Hoel, Michael
- Journal of Environmental Economics and Management, Vol. 27, Issue 3
The role of border carbon adjustment in unilateral climate policy: Overview of an Energy Modeling Forum study (EMF 29)
journal, December 2012
- Böhringer, Christoph; Balistreri, Edward J.; Rutherford, Thomas F.
- Energy Economics, Vol. 34
Leakage, Welfare, and Cost-Effectiveness of Carbon Policy
journal, May 2013
- Baylis, Kathy; Fullerton, Don; Karney, Daniel H.
- American Economic Review, Vol. 103, Issue 3
Linking Numerical and Analytical Models of Carbon Leakage
journal, May 2013
- Carbone, Jared C.
- American Economic Review, Vol. 103, Issue 3
A Numerical Investigation of the Potential for Negative Emissions Leakage
journal, May 2013
- Winchester, Niven; Rausch, Sebastian
- American Economic Review, Vol. 103, Issue 3
Locked into Copenhagen pledges — Implications of short-term emission targets for the cost and feasibility of long-term climate goals
journal, January 2015
- Riahi, Keywan; Kriegler, Elmar; Johnson, Nils
- Technological Forecasting and Social Change, Vol. 90
Carbon lock-in through capital stock inertia associated with weak near-term climate policies
journal, January 2015
- Bertram, Christoph; Johnson, Nils; Luderer, Gunnar
- Technological Forecasting and Social Change, Vol. 90
Assessment of carbon leakage through the industry channel: The EU perspective
journal, January 2015
- Paroussos, Leonidas; Fragkos, Panagiotis; Capros, Pantelis
- Technological Forecasting and Social Change, Vol. 90
Carbon leakage in a fragmented climate regime: The dynamic response of global energy markets
journal, January 2015
- Arroyo-Currás, Tabaré; Bauer, Nico; Kriegler, Elmar
- Technological Forecasting and Social Change, Vol. 90
Assessment of carbon leakage through the industry channel: The EU perspective
journal, January 2015
- Paroussos, Leonidas; Fragkos, Panagiotis; Capros, Pantelis
- Technological Forecasting and Social Change, Vol. 90
Economic and environmental choices in the stabilization of atmospheric CO2 concentrations
journal, January 1996
- Wigley, T. M. L.; Richels, R.; Edmonds, J. A.
- Nature, Vol. 379, Issue 6562
Works referencing / citing this record:
Simple Rules for Climate Policy and Integrated Assessment
journal, August 2018
- van der Ploeg, Frederick; Rezai, Armon
- Environmental and Resource Economics, Vol. 72, Issue 1
Divestment prevails over the green paradox when anticipating strong future climate policies
journal, January 2018
- Bauer, Nico; McGlade, Christophe; Hilaire, Jérôme
- Nature Climate Change, Vol. 8, Issue 2
Macroeconomic impact of stranded fossil fuel assets
journal, June 2018
- Mercure, J. -F.; Pollitt, H.; Viñuales, J. E.
- Nature Climate Change, Vol. 8, Issue 7
The safe carbon budget
journal, January 2018
- van der Ploeg, Frederick
- Climatic Change, Vol. 147, Issue 1-2
How to win public support for a global carbon tax
journal, January 2019
- Carattini, Stefano; Kallbekken, Steffen; Orlov, Anton
- Nature, Vol. 565, Issue 7739
Wind Power Ramp Events Prediction with Hybrid Machine Learning Regression Techniques and Reanalysis Data
journal, November 2017
- Cornejo-Bueno, Laura; Cuadra, Lucas; Jiménez-Fernández, Silvia
- Energies, Vol. 10, Issue 11
Fossil fuel supply and climate policy: exploring the road less taken
journal, August 2018
- Lazarus, Michael; van Asselt, Harro
- Climatic Change, Vol. 150, Issue 1-2
Addressing multiple externalities from electricity generation: a case for EU renewable energy policy beyond 2020?
journal, October 2018
- Lehmann, Paul; Sijm, Jos; Gawel, Erik
- Environmental Economics and Policy Studies, Vol. 21, Issue 2
Bridging analytical approaches for low-carbon transitions
journal, May 2016
- Geels, Frank W.; Berkhout, Frans; van Vuuren, Detlef P.
- Nature Climate Change, Vol. 6, Issue 6
A framework for identifying cross-border impacts of climate change on the energy sector
journal, July 2018
- Groundstroem, Fanny; Juhola, Sirkku
- Environment Systems and Decisions, Vol. 39, Issue 1
Simple Rules for Climate Policy and Integrated Assessment
journal, January 2018
- van der Ploeg, Frederick; Rezai, Armon
- SSRN Electronic Journal
Fossil-fueled development (SSP5): An energy and resource intensive scenario for the 21st century
journal, January 2017
- Kriegler, Elmar; Bauer, Nico; Popp, Alexander
- Global Environmental Change, Vol. 42
Carbon leakage in a fragmented climate regime: The dynamic response of global energy markets
journal, January 2015
- Arroyo-Currás, Tabaré; Bauer, Nico; Kriegler, Elmar
- Technological Forecasting and Social Change, Vol. 90
Introduction to the AMPERE model intercomparison studies on the economics of climate stabilization
journal, January 2015
- Kriegler, Elmar; Riahi, Keywan; Bosetti, Valentina
- Technological Forecasting and Social Change, Vol. 90
New Hybrid Neuro-Evolutionary Algorithms for Renewable Energy and Facilities Management Problems
preprint, January 2018
- Cornejo-Bueno, L.
- arXiv