Quantifying uncertainties influencing the long-term impacts of oil prices on energy markets and carbon emissions

McCollum DL, Jewell J, Krey V, Bazilian M, Fay M, & Riahi K (2016). Quantifying uncertainties influencing the long-term impacts of oil prices on energy markets and carbon emissions. Nature Energy 1: e16077. DOI:10.1038/nenergy.2016.77.

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Project: Advanced Model Development and Validation for Improved Analysis of Costs and Impacts of Mitigation Policies (ADVANCE, FP7 308329)

Abstract

Oil prices have fluctuated remarkably in recent years. Previous studies have analysed the impacts of future oil prices on the energy system and greenhouse gas emissions, but none have quantitatively assessed how the broader, energy-system-wide impacts of diverging oil price futures depend on a suite of critical uncertainties. Here we use the MESSAGE integrated assessment model to study several factors potentially influencing this interaction, thereby shedding light on which future unknowns hold the most importance. We find that sustained low or high oil prices could have a major impact on the global energy system over the next several decades; and depending on how the fuel substitution dynamics play out, the carbon dioxide consequences could be significant (for example, between 5 and 20% of the budget for staying below the internationally agreed 2 ∘C target). Whether or not oil and gas prices decouple going forward is found to be the biggest uncertainty.

Item Type: Article
Uncontrolled Keywords: Climate-change mitigation, Decision making, Energy modelling, Fossil fuels
Research Programs: Energy (ENE)
Depositing User: Michaela Rossini
Date Deposited: 14 Jun 2016 06:30
Last Modified: 27 Jan 2017 09:33
URI: http://pure.iiasa.ac.at/13293

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