Navigation Links
Emissions pricing revenues could overcompensate profit losses of fossil fuel owners
Date:11/5/2013

Yet the instrument of pricing global CO2 emissions could generate a revenue of 32 trillion US dollars over the 21st century, exceeding by far the 12 trillion US dollars reduction of fossil fuel owners' profits, according to a study now published by scientists of the Potsdam Institute for Climate Impact Research. The analysis of the interference of CO2 emission pricing with fossil fuel markets adds key information to the debate on macro-economic effects of climate change mitigation.

"Implementing ambitious climate targets would certainly scale down fossil fuel consumption, so with reduced demand their prices would drop," says Nico Bauer, lead-author of the study. "The resulting profit loss would be overcompensated by revenues from auctioning emissions permits or taxing CO2, which are two of the possible instruments of climate policy." They would set strong incentives to reduce greenhouse-gases. The present study for the first time - provides a full characterization of the fossil fuel markets and the impacts of climate policies. "We were surprised to find that in fact revenues from emissions pricing were found to be at least twice as high than the profit losses we estimate for the owners of fossil fuels."

"There might be many appetites for the money"

Still, this holds at the global level only. On the national level, things look different, the scientists point out. Fossil fuel income depends on natural endowments, which are not distributed equally across the world. The distribution of revenues from emissions pricing depends on how climate policies are implemented on a national and international level. "Moreover, revenues from pricing carbon cannot be simply seen as a compensatory fund for the loss of income from fossil fuels," says Bauer. "This is because climate policy results in higher energy prices for households and companies, which lead to a rather small reduction of economic output. So there might be many appetites for the money raised from CO2 pricing."

"We know that fossil fuel owners will lose out on profits, but the big question is who will benefit from the new revenues generated by climate policy? It will fall to policy makers and society at large to decide this," adds Elmar Kriegler, project leader and co-author of the study. "It would be interesting to ask for the effect of using the revenues from carbon pricing to finance infrastructure investments in developing countries."

Different effects on coal and oil

Under the scenario of climate policy, coal consumption is reduced much stronger than oil and gas consumption. A large share of the coal reserve would never be used, while the use of oil and gas would still exceed their conventional reserves leaving underground only the vast amounts of unconventional oil and gas resources. However, since coal is plentiful and relatively easy to substitute by other forms of energy, like renewables for power generation, the profit losses from reduced coal use are much smaller than for oil and gas. The highest profit losses occur in the oil market. Oil is relatively scarce and hard to substitute, for instance in the transport sector. So there normally is a lot of money to be made and hence a lot of money to be lost in the case of effective greenhouse-gas reductions.


'/>"/>

Contact: PIK Press Office
press@pik-potsdam.de
49-331-288-2507
Potsdam Institute for Climate Impact Research (PIK)
Source:Eurekalert

Related biology news :

1. Wayne State receives grant to reduce emissions of toxins by power plants into Great Lakes
2. Sediment trapped behind dams makes them hot spots for greenhouse gas emissions
3. 21 percent of homes account for 50 percent of greenhouse gas emissions
4. Research on geological storage of CO2 to reduce greenhouse gas emissions
5. Living biofilters could reduce greenhouse gas emissions
6. Forest and soil carbon is important but does not offset fossil fuel emissions
7. New logistics services that will cut energy consumption and CO2 emissions
8. Nitrogen has key role in estimating CO2 emissions from land use change
9. Methane emissions from natural gas local distribution focus of new study
10. New emissions standards would fuel shift from coal to natural gas
11. Petroleum use, greenhouse gas emissions of automobiles could drop 80 percent by 2050
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:4/11/2017)... , Apr. 11, 2017 Research and ... Market 2017-2021" report to their offering. ... The global eye tracking market to grow at a ... report, Global Eye Tracking Market 2017-2021, has been prepared based on ... covers the market landscape and its growth prospects over the coming ...
(Date:4/5/2017)... , April 5, 2017  The Allen Institute for ... Cell Explorer: a one-of-a-kind portal and dynamic digital window ... imaging data, the first application of deep learning to ... stem cell lines and a growing suite of powerful ... for these and future publicly available resources created and ...
(Date:4/3/2017)... 3, 2017  Data captured by IsoCode, ... detected a statistically significant association between the ... treatment and objective response of cancer patients ... predict whether cancer patients will respond to ... well as to improve both pre-infusion potency testing ...
Breaking Biology News(10 mins):
(Date:10/12/2017)... (PRWEB) , ... October 12, 2017 , ... ... Sciences today announced the three Winners and six Finalists of the 2017 Blavatnik ... annually by the Blavatnik Family Foundation and administered by the New York Academy ...
(Date:10/12/2017)... ... October 12, 2017 , ... ... launched Rosalind™, the first-ever genomics analysis platform specifically designed for life science ... in honor of pioneering researcher Rosalind Franklin, who made a major contribution ...
(Date:10/11/2017)... ... 2017 , ... Proscia Inc ., a data solutions ... “Pathology is going digital. Is your lab ready?” with Dr. Nicolas Cacciabeve, Managing ... how Proscia improves lab economics and realizes an increase in diagnostic confidence.* ...
(Date:10/11/2017)... ... 11, 2017 , ... Singh Biotechnology today announced that the ... its novel anti-STAT3 (Signal Transducer and Activator of Transcription 3) B VHH13 single ... the cell membrane and bind intracellular STAT3 and inhibit its function. Dysregulation of ...
Breaking Biology Technology: