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Is Abundant Natural Gas a Bridge to a Low-carbon Future or a Dead-end?

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  • Kenneth Gillingham and Pei Huang

Abstract

A fierce debate rages on whether abundant natural gas is a bridge to a low-carbon future or a hindrance to long-term decarbonization. This paper uses a detailed energy-economic market equilibrium model to study the effects of an upper bound case of natural gas availability. We show that a market-driven abundant natural gas supply can provide substantial reductions in air pollution but does not considerably reduce CO2 emissions in the longer-term, especially relative to a moderate carbon price. However, we quantify large welfare benefits from abundant natural gas. The spatial disaggregation of our results allows for a clear picture of the distributional impacts of abundant natural gas under different carbon price scenarios, illustrating welfare gains by most regions regardless of whether there is carbon pricing, but substantial heterogeneity in the welfare gains.

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  • Kenneth Gillingham and Pei Huang, 2019. "Is Abundant Natural Gas a Bridge to a Low-carbon Future or a Dead-end?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    • Handle: RePEc:aen:journl:ej40-2-huang
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    1. Lion Hirth, 2015. "The Optimal Share of Variable Renewables: How the Variability of Wind and Solar Power affects their Welfare-optimal Deployment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
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    Cited by:

    1. Gillingham, Kenneth & Huang, Pei, 2021. "Racial disparities in the health effects from air pollution: Evidence from ports," ZEW Discussion Papers 21-058, ZEW - Leibniz Centre for European Economic Research.
    2. Woollacott, Jared, 2020. "A bridge too far? The role of natural gas electricity generation in US climate policy," Energy Policy, Elsevier, vol. 147(C).
    3. Guo, Jiaqi & Long, Shaobo & Luo, Weijie, 2022. "Nonlinear effects of climate policy uncertainty and financial speculation on the global prices of oil and gas," International Review of Financial Analysis, Elsevier, vol. 83(C).
    4. John E. T. Bistline & David T. Young, 2022. "The role of natural gas in reaching net-zero emissions in the electric sector," Nature Communications, Nature, vol. 13(1), pages 1-11, December.
    5. Çalcı, Baturay & Leibowicz, Benjamin D. & Bard, Jonathan F. & Jayadev, Gopika G., 2024. "A bilevel approach to multi-period natural gas pricing and investment in gas-consuming infrastructure," Energy, Elsevier, vol. 303(C).
    6. Raymond Li & Chi-Keung Woo & Asher Tishler & Jay Zarnikau, 2022. "Price Responsiveness of Residential Demand for Natural Gas in the United States," Energies, MDPI, vol. 15(12), pages 1-22, June.
    7. Cisneros-Pineda, Alfredo & Aadland, David & Tschirhart, John, 2020. "Impacts of cattle, hunting, and natural gas development in a rangeland ecosystem," Ecological Modelling, Elsevier, vol. 431(C).
    8. Li, Raymond & Woo, Chi-Keung & Tishler, Asher & Zarnikau, Jay, 2022. "How price responsive is industrial demand for natural gas in the United States?," Utilities Policy, Elsevier, vol. 74(C).
    9. Brown, Marilyn A. & Li, Yufei & Soni, Anmol, 2020. "Are all jobs created equal? Regional employment impacts of a U.S. carbon tax," Applied Energy, Elsevier, vol. 262(C).
    10. Kenneth Gillingham & Marten Ovaere & Stephanie Weber, 2021. "Carbon Policy and the Emissions Implications of Electric Vehicles," CESifo Working Paper Series 8974, CESifo.
    11. Li, Raymond & Woo, Chi-Keung & Tishler, Asher & Zarnikau, Jay, 2022. "Price responsiveness of commercial demand for natural gas in the US," Energy, Elsevier, vol. 256(C).
    12. Wiktor Hebda, 2021. "The North-South Gas Corridor in the Context of Poland’s Gas Transmission System—A Perfect Opportunity to Diversify Gas Resources," Energies, MDPI, vol. 14(21), pages 1-21, November.
    13. Paul Wolfram & Stephanie Weber & Kenneth Gillingham & Edgar G. Hertwich, 2021. "Pricing indirect emissions accelerates low—carbon transition of US light vehicle sector," Nature Communications, Nature, vol. 12(1), pages 1-8, December.
    14. Filipe M. Quintino & Edgar C. Fernandes, 2021. "Numerical Investigation of the Impact of H 2 Enrichment on Lean Biogas/Air Flames: An Analytical Modelling Approach," Energies, MDPI, vol. 14(2), pages 1-17, January.
    15. Christa D. Court & Randall W. Jackson & Amanda J. Harker Steele & Gavin Pickenpaugh & Peter Jarosi & Justin Adder & Charles Zelek, 2022. "Extending Macroeconomic Impacts Forecasting for NEMS," The Energy Journal, , vol. 43(4), pages 251-272, May.
    16. Grzegorz Zych & Jakub Bronicki & Marzena Czarnecka & Grzegorz Kinelski & Jacek Kamiński, 2023. "The Cost of Using Gas as a Transition Fuel in the Transition to Low-Carbon Energy: The Case Study of Poland and Selected European Countries," Energies, MDPI, vol. 16(2), pages 1-13, January.
    17. Kaixin Huang & Matthew J. Eckelman, 2022. "Appending material flows to the National Energy Modeling System (NEMS) for projecting the physical economy of the United States," Journal of Industrial Ecology, Yale University, vol. 26(1), pages 294-308, February.
    18. Prest, Brian C., 2020. "Supply-Side Reforms to Oil and Gas Production on Federal Lands: Modeling the Implications for Climate Emissions, Revenues, and Production Shifts," RFF Working Paper Series 20-16, Resources for the Future.

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