43 Pages Posted: 2 Jun 2017
Date Written: May 2017
Recent technological developments and past technology transitions suggest that the worldcould be on the verge of a profound shift in transportation technology. The return of the electriccar and its adoption, like that of the motor vehicle in place of horses in early 20th century,could cut oil consumption substantially in the coming decades. Our analysis suggests that oilas the main fuel for transportation could have a much shorter life span left than commonlyassumed. In the fast adoption scenario, oil prices could converge to the level of coal prices,about $15 per barrel in 2015 prices by the early 2040s. In this possible future, oil could becomethe new coal.
Keywords: oil price, energy transition, electric vehicle, renewable energy, Global Commodity Crises, General, Technological Change: Choices and Consequences
JEL Classification: Q02, Q40, O33
Suggested Citation: Suggested Citation
Cherif, Reda and Hasanov, Fuad and Pande, Aditya, Riding the Energy Transition: Oil Beyond 2040 (May 2017). IMF Working Paper No. 17/120. Available at SSRN: https://ssrn.com/abstract=2978681