OPEC, unconventional oil and climate change - On the importance of the order of extraction
| Autor: | Hassan Benchekroun, Cees Withagen, Gerard van der Meijden |
|---|---|
| Přispěvatelé: | Tinbergen Institute, Spatial Economics, Amsterdam Sustainability Institute, Network Institute |
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
Economics and Econometrics
Natural resource economics media_common.quotation_subject Climate change Management Monitoring Policy and Law Order (exchange) 0502 economics and business Economics SDG 13 - Climate Action Deadweight loss Market power 050207 economics Non-renewable resource media_common Herfindahl rule 05 social sciences Unconventional oil 13. Climate action Oil reserves Climate policy 8. Economic growth Cartel-fringe 050202 agricultural economics & policy Welfare |
| Zdroj: | Benchekroun, H, van der Meijden, G & Withagen, C 2020, ' OPEC, unconventional oil and climate change-On the importance of the order of extraction ', Journal of Environmental Economics and Management, vol. 104, 102384, pp. 1-9 . https://doi.org/10.1016/j.jeem.2020.102384 Journal of Environmental Economics and Management, 104:102384, 1-9. Academic Press Inc. |
| ISSN: | 1096-0449 0095-0696 |
| DOI: | 10.1016/j.jeem.2020.102384 |
| Popis: | We show that OPEC's market power contributes to climate change by enabling producers of relatively expensive and dirty oil to start producing before OPEC reserves are depleted. We examine the importance of this extraction sequence effect by calibrating and simulating a cartel-fringe model of the global oil market. While welfare net of climate damage under the cartel-fringe equilibrium can be significantly lower than under a first-best outcome, almost the entire welfare loss is due to the sequence effect of OPEC's market power. In our benchmark calibration, the cost of the sequence effect amounts to 15 trillion US$, which corresponds to 97 percent of the welfare loss. Moreover, we find that an increase in non-OPEC oil reserves decreases global welfare. In a counterfactual world without non-OPEC oil, global welfare would be 13 trillion US$ higher, 10 trillion US$ of which is due to lower climate damages. |
| Databáze: | OpenAIRE |
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