Environmental and Resource Economics

, Volume 29, Issue 4, pp 379–400 | Cite as

Does Increased Extraction of Natural Gas Reduce Carbon Emissions?

  • Finn Roar Aune
  • Rolf Golombek
  • Sverre A. C. Kittelsen
Article
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Abstract

Without an international climate agreement, extraction of more natural gas could reduce emissions of CO2 as more “clean” natural gas may drive out “dirty” coal and oil. Using a computable equilibrium model for the Western European electricity and natural gas markets, we examine whether increased extraction of natural gas in Norway reduces global emissions of CO2. We find that both in the short run and in the long run total emissions are reduced if the additional quantity of natural gas is used in gas power production in Norway. If instead the additional quantity is exported directly, total emissions increase both in the short run and in the long run. However, if modest CO2-taxes are imposed, increased extraction of natural gas will reduce CO2 emissions also when the additional natural gas is exported directed.

Keywords

carbon emissions electricity energy markets equilibrium modelling natural gas 

Abbreviations

D58

Q38, Q48

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Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  • Finn Roar Aune
    • 1
  • Rolf Golombek
    • 2
  • Sverre A. C. Kittelsen
    • 2
  1. 1.Statistics NorwayOsloNorway
  2. 2.Frisch CentreOsloNorway

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