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Climate policies as a hedge against the uncertainty on future oil supply

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Listed:
  • Rozenberg, Julie
  • Hallegatte, Stephane
  • Vogt-Schilb, Adrien
  • Sassi, Olivier
  • Guivarch, Celine
  • Waisman, Henri
  • Hourcade, Jean-Charles

Abstract

Despite the inextricable link between oil scarcity and climate change, the interplay between these two issues is paradoxically an underworked area. This article uses a global energy-economy model to address the link between future oil supply and climate change and assesses in a common framework both the costs of climate policies and oil scarcity. It shows that, in the context of a limited and uncertain amount of ultimately recoverable oil resources, climate policies reduce the world vulnerability to peak oil. Climate policies, therefore, appear as a hedging strategy against the uncertainty on oil resources, in addition to their main aim of avoiding dangerous climate change. This co-benefit is estimated at the net present value of US$11,500 billion. Eventually, reducing the risk of future economic losses due to oil scarcity may appear as a significant side-benefit of climate policies to many decision-makers.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Rozenberg, Julie & Hallegatte, Stephane & Vogt-Schilb, Adrien & Sassi, Olivier & Guivarch, Celine & Waisman, Henri & Hourcade, Jean-Charles, 2011. "Climate policies as a hedge against the uncertainty on future oil supply," Conference papers 332057, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332057
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    References listed on IDEAS

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