In absence of joint global climate action, several jurisdictions unilaterally restrict their domestic demand for fossil fuels. Another policy option for fossil fuel producing countries, not much analysed, is to reduce own supply of fossil fuels. We explore analytically and numerically how domestic demand and supply side policies affect global emissions, contingent on market behaviour. Next, in the case of Norway, we find the cost-effective combination of the two types of policies.Our numerical results indicate that given a care for global emissions, and a desire for domestic action, about 2/3 of the emission reductions should come through supply side measures.
AlhajjiA.HuettnerD. (2000). “OPEC and World Crude Oil Markets From 1973 to 1994: Cartel, Oligopoly, or Competitive?” The Energy Journal21(3): 31-60. http://dx.doi.org/10.5547/ISSN0195-6574-EJ-Vol21-No3-2.
2.
AskariH.KricheneN. (2010). “An oil demand and supply model incorporating monetary policy.” Energy35:20132021. http://dx.doi.org/10.1016Zj.energy.2010.01.017.
3.
BohringerC.FischerC.RosendahlK.E. (2010). “The Global Effects of Subglobal Climate Policies.” The B.E. Journal of Economic Analysis&Policy 10(2), (Symposium) Article13. http://dx.doi.org/10.2139/ssrn.1694104.
4.
BohringerC.ByeB.FahnT.RosendahlK. E. (2012a). “Alternative designs for tariffs on embodied carbon - a global cost-effectiveness analysis.” Energy Economics34 (Suppl. 2): 143-153. http://dx.doi.org/10.1016/j.eneco.2012.08.020.
5.
BohringerC.CarboneJ.C.RutherfordT.F. (2012b). “Unilateral climate policy design: Efficiency and equity implications of alternative instruments to reduce carbon leakage.” Energy Economics34 (Suppl. 2): 208-217. http://dx.doi.org/10.1016/j.eneco.2012.09.011.
6.
BP (2013). “BP Statistical Review of World Energy 2013.” London: BP.
7.
BronsM.NijkampP.PelsE.RietveldP. (2008). “A meta-analysis of the price elasticity of gasoline demand. A SUR approach.” Energy Economics30(5): 2105-2122. http://dx.doi.org/10.1016/j.eneco.2007.08.004.
8.
Climate Cure 2020 (2010). “Tiltak og virkemidler for a na norske klimamal mot 2020.“ Klima- og forurensningsdirektoratet, Norges vassdrags- og energidirektorat, Oljedirektoratet, Statistisk sentralbyra, Statens vegvesen. Rapport TA2590.
9.
DahlC. (2006). “Survey of Econometric Energy Demand Elasticities; Progress Report.” August2006, Unpublished report.
10.
DahlC. (2012). “Measuring global gasoline and diesel price and income elasticities.” Energy Policy41: 2-13. http://dx.doi.org/10.1016/j.enpol.2010.11.055.
11.
DahlC.DugganT.E. (1998). “Survey of Price Elasticities from Economic Exploration Models of US Oil and Gas Supply.” Journal of Energy Finance &Development3(2): 129-169. http://dx.doi.org/10.1016/S1085-7443(99)80072-6.
12.
EllisJ. (2010). “The Effects of Fossil-Fuel Subsidy Reform: A review of modelling and empirical studies.” International Institute for Sustainable Development (IISD), March2010. http://ssrn.com/abstract=1572397.LISHED ONLINE: 10 AUGUST 2014 | http://dx.doi.org/10.2139/ssrn.1572397.
13.
EricksonP.LazarusM. (2014). “Impact of the Keystone XL pipeline on global oil markets and greenhouse gas emissions.” Nature Climate Change4: 778-781. DOI: 10.1038/NCLIMATE2335. http://dx.doi.org/10.1038/ncli-mate2335.
14.
FarzinY.H. (2001). “The impact of oil prices on additions to US proven reserves.” Resource and Energy Economics23(3):271-291. http://dx.doi.org/10.1016/S0928-7655(01)00040-9.
15.
Forager Funds (2013). “Norwegian Hypocrisy on Global Warming.” https://www.foragerfunds.com/bristlemouth/norwegian-hypocrisy-global-warming.
16.
FournierJ.KoskeI.WannerI. ZippererV. (2013). “The Price of Oil - Will it Start Rising Again?” OECD Economics Department Working Papers, No. 1031, OECD Publishing. http://dx.doi.org/10.1787/5k49q186vxnp-en.
17.
FahnTIsaksenE. (2016). “Diffusion of climate technologies in the presence of commitment problems.” The Energy Journal.37(2): 155-180. http://dx.doi.org/10.5547/01956574.37.2.tfae.
18.
FahnT.HagemC.LindholtL.MalandS.RosendahlK. E. (2013). “Climate policies in a fossil fuel producing country- demand versus supply side policies.” Discussion paper 747, Statistics Norway.
19.
GolombekR.HagemC.HoelM. (1995). “Efficient incomplete international climate agreements.” Resource and Energy Economics17(1): 25-46. http://dx.doi.org/10.1016/0928-7655(94)00022-C.
20.
Greenpeace (2014). “Frozen in Time: Coal Mining at the Heart of Climate Change.” http://www.greenpeace.org/africa/en/News/Blog/frozen-in-time-coal-mining-at-the-heart-of-cl/blog/37006/.
21.
GriffinJ.M. (1985). “OPEC behavior: a test of alternative hypotheses.” American Economic Review75: 954-963.
22.
HagemC. (1994). “Cost-effective climate policy in a small country.” Energy Journal15(4): 119-139. http://dx.doi.org/10.5547/ISSN0195-6574-EJ-Vol15-No4-6.
23.
HansenP.V.LindholtL. (2008). “The Market Power of OPEC 1973-2001.” Applied Economics40(22): 2939-2959. http://dx.doi.org/10.1080/00036840600972480.
24.
HarstadB. (2012). “Buy Coal! A Case for Supply side Environmental Policy.” Journal of Political Economy120(1): 77115. http://dx.doi.org/10.1086/665405.
25.
HoelM. (1994). “Efficient Climate Policy in the Presence of Free Riders.” Journal of Environmental Economics and Management27(3): 259-274. http://dx.doi.org/10.1006/jeem.1994.1038.
26.
HoelM. (1996). “Should a carbon tax be differentiated across sectors?” Journal of Public Economics59(1): 17-32. http://dx.doi.org/10.1016/0047-2727(94)01490-6.
27.
HoelM. (2013). “Supply side climate policy and the green Paradox.” CREE Working Paper 2/2013.
28.
HotellingH. (1931). “The economics of exhaustible resources.” The Journal of Political Economy39: 137-175. http://dx.doi.org/10.1086/254195.
29.
International Energy Agency (IEA) (2007). “World Energy Outlook 2006.” International Energy Agency, Paris.
30.
KricheneN. (2002). “World crude oil and natural gas: a demand and supply model.” Energy Economics24: 557-576. http://dx.doi.org/10.1016/S0140-9883(02)00061-0.
31.
MarkusenJ. R.MoreyE. R.OlewilerN. D. (1993). “Environmental Policy when Market Structure and Plant Locations Are Endogenous.” Journal of Environmental Economics and Management24(1): 69-86. http://dx.doi.org/10.1006/jeem.1993.1005.
32.
MarkusenJ. R.MoreyE. R.OlewilerN. (1995). “Competition in regional environmental policies when plant locations are endogenous.” Journal of Public Economics56(1): 55-77. http://dx.doi.org/10.1016/0047-2727(94)01419-0.
33.
Ministry of Finance (2012). “Skatter, avgifter og toll 2013.” http://www.regjeringen.no/nb/dep/fin/dok/regpubl/prop/2012-2013/prop-1-ls-20122013/11/9/2.html?id= 702766.
34.
Ministry of Petroleum and Energy (2011). “An industry for the future - Norway's petroleum activities.” Meld. St. 28 (20102011) Report to the Storting (white paper). http://www.regjeringen.no/upload/0ED/Petroleumsmeldingen_2011/0verset-telseZ2011-06_White-paper-on-petro-activities.pdf.
35.
Ministry of Petroleum and Energy (2013). “Facts 2013 (Faktaheftet 2013).” The Norwegian Petroleum Sector. http://npd.no/Global/Engelsk/3-Publications/Facts/Facts2013/FACTS_2013.pdf.
36.
MohnK.OsmundsenP. (2008). “Exploration economics in a regulated petroleum province: the case of the Norwegian Continental Shelf.” Energy Economics30: 303-320. http://dx.doi.org/10.1016/j.eneco.2006.10.011.
37.
OGP (2012). “Environmental performance indicators. 2011 data.” Report No. 2011e, October2012, International Association of Oil &Gas Producers. http://www.ogp.org.uk/publications/environment-committee/environmental-performance-indicators/environmental-performance-indicators-2011-data/.
38.
OsmundsenP.RosendahlK.E.SkjerpenT. (2015). ”Understanding rig rate formation in the Gulf of Mexico.” Forthcoming in Energy Economics. DOI: 10.1016/j.eneco.2015.03.001. http://dx.doi.org/10.1016Zj.eneco.2015.03.001.
39.
OsterleI. (2012). “Fossil Fuel Extraction and Climate Policy: A Review of the Green Paradox with Endogenous Resource Exploration.” FEEM Working Paper Series 13.2012. http://dx.doi.org/10.2139/ssrn.2030090.
40.
RamcharranH. (2002). “Oil production responses to price changes: an empirical application of the competitive model to OPEC and non-OPEC countries.” Energy Economics24: 97-106. http://dx.doi.org/10.1016/S0140-9883(01)00091-3.
41.
RauscherM. (1997). International Trade, Factor Movements, and the Environment. Oxford: Oxford University Press.
42.
RinglundG. B.RosendahlK. E.SkjerpenT. (2008). “Does oilrig activity react to oil price changes? An empirical investigation.” Energy Economics30: 371-96. http://dx.doi.org/10.1016/j.eneco.2007.06.002.
43.
Rystad (2013). “Petroleum production under the two degree scenario (2DS).” Report for The Ministry of the Environment. http://www.regjeringen.no/pages/38425303/2013_Rys-tad_Energy_Climate_report_NorwegianMinistry_of_the_environment.pdf.
SinnH.-W. (2008). “Public policies against global warming: a supply side approach.” International Tax and Public Finance15(4): 360-394. http://dx.doi.org/10.1007/s10797-008-9082-z.
46.
SmithJ. (2005). “Inscrutable OPEC? Behavioral tests of the cartel hypothesis.” The Energy Journal26(1): 51-82. http://dx.doi.org/10.5547/ISSN0195-6574-EJ-Vol26-No1-3.
47.
The Economist (2009). “Norway and the environment - Binge and purge.” http://www.economist.com/node/12970769.
48.
The Norwegian Oil Company (2012). “Konsekvensutredning for Ivar Aasen.” (Impact study for Ivar Aasen (in Norwegian).
49.
TolR.S.J. (2014). “Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets.” Energies7: 6886-6896. http://dx.doi.org/10.3390/en7116886.
50.
VenablesA. J. (2011). “Depletion and development: Natural resource supply with endogenous field opening.” CESifo working paper: Resource and Environment Economics, No. 3608. http://hdl.handle.net/10419/52473.
51.
World Bank (2008). “Climate Change and the World Bank Group: Phase I: An Evaluation of World Bank Win-Win Energy Policy Reforms.” World Bank: Washington, DC.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
