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ID: 126592

Monetary compensations in climate policy through the lens of a : the case of oil-exporting countries / Waisman, Henri; Rozenberg, Julie; Hourcade, Jean Charles

Waisman, Henri	Journal Article
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2013.

Summary/Abstract

This paper investigates the compensations that major oil producers have claimed for since the Kyoto Protocol in order to alleviate the adverse impacts of climate policy on their economies. The amount of these adverse impacts is assessed through a general equilibrium model which endogenizes both the reduction of oil exportation revenues under international climate policy and the macroeconomic effect of carbon pricing on Middle-East's economy. We show that compensating the drop of exportation revenues does not offset GDP and welfare losses because of the time profile of the general equilibrium effects. When considering instead compensation based on GDP losses, the effectiveness of monetary transfers proves to be drastically limited by general equilibrium effects in opened economies. The main channels of this efficiency gap are investigated and its magnitude proves to be conditional upon strategic and policy choices of the Middle-East. This leads us to suggest that other means than direct monetary compensating transfers should be discussed to engage the Middle-East in climate policies.

Key Words

Climate Policy ; Monetary Transfers ; Oil Exporters

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ID: 115174

Peak Oil profiles through the lens of a general equilibrium ass / Waisman, Henri; Rozenberg, Julie; Sassi, Olivier; Hourcade, Jean-Charles

Waisman, Henri	Journal Article
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Publication

2012.

Summary/Abstract

This paper disentangles the interactions between oil production profiles, the dynamics of oil prices and growth trends. We do so through a general equilibrium model in which Peak Oil endogenously emerges from the interplay between the geological, technical, macroeconomic and geopolitical determinants of supply and demand under non-perfect expectations. We analyze the macroeconomic effects of oil production profiles and demonstrate that Peak Oil dates that differ only slightly may lead to very different time profiles of oil prices, exportation flows and economic activity. We investigate Middle-East's trade-off between different pricing trajectories in function of two alternative objectives (maximisation of oil revenues or households' welfare) and assess its impact on OECD growth trajectories. A sensitivity analysis highlights the respective roles of the amount of resources, inertia on the deployment of non conventional oil and short-term oil price dynamics on Peak Oil dates and long-term oil prices. It also examines the effects of these assumptions on OECD growth and Middle-East strategic tradeoffs.

Key Words

Oil Revenues ; General Equilibrium ; Peak Oil

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