Benchekroun, Hassan
[VerfasserIn]
;
van der Meijden, Gerard
[Sonstige Person, Familie und Körperschaft];
Withagen, Cees
[Sonstige Person, Familie und Körperschaft]
OPEC, Shale Oil, and Global Warming - On the Importance of the Order of Extraction
Erschienen in:Tinbergen Institute Discussion Paper 2017-104/VIII
Umfang:
1 Online-Ressource (50 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.3064713
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 31, 2017 erstellt
Beschreibung:
We show that OPEC's market power contributes to global warming by enabling producers of relatively expensive and dirty oil to start producing before OPEC reserves are depleted. We fully characterize the equilibrium of a cartel-fringe model and use a calibration to examine the importance of this extraction sequence effect. While welfare under the cartel-fringe equilibrium can be significantly lower than under a first-best outcome, almost all of this welfare loss is due to the sequence effect. Moreover, the recent boom in shale oil reserves may reduce social welfare and renewables subsidies can increase the carbon content of current extraction