Climate Policies in a Fossil Fuel Producing Country - Demand Versus Supply Side Policies

35 Pages Posted: 19 Dec 2014

See all articles by Taran Faehn

Taran Faehn

Statistics Norway - Research Department

Cathrine Hagem

Center for International Climate and Environmental Research (CICERO)

Lars Lindholt

Statistics Norway - Research Department

Stale Maeland

Statistics Norway

Knut Einar Rosendahl

Norwegian University of Life Sciences; Statistics Norway - Research Department

Date Written: December 18, 2014

Abstract

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 explored, 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 results indicate that given a care for global emissions, and a desire for domestic action, a majority of emission reductions should come through supply side measures.

Keywords: climate policies, carbon leakages, oil extraction, supply side climate policies, demand side climate policies

JEL Classification: H230, Q410, Q540

Suggested Citation

Faehn, Taran and Hagem, Cathrine and Lindholt, Lars and Maeland, Stale and Rosendahl, Knut Einar, Climate Policies in a Fossil Fuel Producing Country - Demand Versus Supply Side Policies (December 18, 2014). CESifo Working Paper Series No. 5105. Available at SSRN: https://ssrn.com/abstract=2540052

Taran Faehn

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

Cathrine Hagem (Contact Author)

Center for International Climate and Environmental Research (CICERO) ( email )

P.O. Box 1129 Blindern
Oslo, N-0317
Norway

Lars Lindholt

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

Stale Maeland

Statistics Norway ( email )

N-0033 Oslo
Norway

Knut Einar Rosendahl

Norwegian University of Life Sciences ( email )

PO Box 5033
NO-1432 Aas
Norway
+47 64966117 (Phone)

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway
+47 21094954 (Phone)
+47 21094963 (Fax)

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