A Metamodel of the Oil Game under Climate Treaties
A climate treaty like the one which should replace the Kyoto Protocol after 2012, may have important impacts on the oil, gas and coal markets. The full impact of such a treaty will not be felt before 2030. In this paper one uses a computable general equilibrium model as a simulator of the world economy to obtain a description of the demand laws for oil, gas and coal in a period centered in 2030. One then uses a hierarchical game a la Stackelberg where OPEC is a price fixing leader and a competitive fringe replies competitively according to a supply-demand equilibrium for the three competitive energy forms, oil, gas and coal. This permits one to assess the possible power of OPEC to counteract the effect of a world tax on carbon content. One shows the possible effect on oil price. OPEC wealth or market share, and global emissions reduction achieved for different tax levels.
computable general equilibrium model oil price climate change negotiations hierarchical game model statitical emulation