We analyze the effects of an announced future carbon tax increase on the extraction behavior of a monopolistic supplier of a scarce fossil energy resource like oil in a two country, two period general equilibrium model with symmetric and homothetic preferences and no extraction costs. Based on...

A rapidly rising carbon tax leads to faster extraction of fossil fuels and accelerates global warming. We analyze how general equilibrium effects operating through the international capital market affect this Green Paradox. In a two-region, two-period world with identical homothetic preferences...

By making use of coefficients of cooperation [8] in a global oil model where OPEC producers are the dominant players and non-OPEC is the competitive fringe, we ask whether OPEC producers have strong incentives for imperfect collusion. First, assuming that OPEC members withhold supply only when...

Two oil price shocks changed the pattern of cheap oil. The first was the Arab embargo on oil exports in 1973. Oil prices rose five fold. In 1978, the second was the fall of Shah Iran. Prices soared to $80-$100 a barrel in today‘s prices. In 1960, OPEC was established and since then it has been...

While until the mid-1990s the Organization of the Petroleum Exporting Countries played a key role in oil pricing, during recent decades, rapid economic growth in developing economies has boosted the demand for oil, making oil prices vulnerable to a wider range of factors.We examine the impacts...

We show that OPEC's market power contributes to climate change by enabling producers of relatively expensive and dirty oil to start producing before OPEC reserves are depleted. We examine the importance of this extraction sequence effect by calibrating and simulating a cartel-fringe model of the...

This paper presents a simple macroeconomic model of the oil market. The model incorporates features of oil supply such as depletion, endogenous oil exploration and extraction, as well as features of oil demand such as the secular increase in demand from emerging-market economies, usage...

We investigate the relationships between different types of OPEC announcements and term structure variables (level, slope and curvature) for WTI crude oil futures. We find that agreements to increase (decrease) production are positively (negatively) associated with changes in oil price levels in...

We show that OPEC's market power contributes to global warming by enabling producers of relatively expensive and dirty oil to start producing before OPEC reserves are depleted. We fully characterize the equilibrium of a cartel-fringe model and use a calibration to examine the importance of this...

This paper uses inventory data from financial accounts to explore whether companies involved in the physical oil market were speculating in the run-up to 2008. Using quarterly inventory data over the period 1990Q4 to 2012Q1 and a sample of 15 of the largest listed oil companies in the world, we...