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

Julie Rozenberg (), Stephane Hallegatte (), Adrien Vogt-Schilb, Olivier Sassi, Céline Guivarch, Henri Waisman and Jean-Charles Hourcade
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Olivier Sassi: CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique
Henri Waisman: CIRED - Centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique

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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.

Keywords: Climate policies; peak oil; hedge; cost; uncertainty; politiques climatiques; pic pétrolier; protection; coût; incertitude (search for similar items in EconPapers)
Date: 2010-04
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00866449
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