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GTAP Resource #3294

"The Role of Natural Gas under Carbon Emissions Constraint"
by Paltsev, Sergey, Henry Jacoby and John Reilly

Recent increases in natural gas reserve estimates and advances in shale gas technology make natural gas a fuel with good prospects to serve a bridge to a low-carbon world. We incorporate a sub-module of gas resource development and depletion of four gas categories (conventional resources, shale gas, tight gas, and coal bed methane) into the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy. While we update the reserve estimates for all regions, in this paper we focus on the results for the U.S. energy system and global natural gas trade. The role of natural gas is explored in the context of several policy assumptions: a reference case with no mitigation policy and scenarios of emission targets of 50 percent greenhouse gas emissions relative to 2000 levels and regulatory approach to emissions mitigation.

We found that over the next 20-40 years natural gas can play a substantial role in meeting the climate policy goals and there are substantial reserves to support a development of the gas-oriented energy system. While the share of natural gas increases in the electricity sector substantially as a result of the policy, the overall share of natural gas is not increasing as dramatically in the economy as a whole. We also explore the implications of a longer term emissions target for technology development. The long-term viability of the gas is questionable if the analysis is extended beyond 2050 in scenarios that require stabilization of GHG concentrations. The gas use would eventually become problematic as very low levels of CO2 emissions are allowable. The outcome of the model simulations then became very dependent on the assumptions about the costs of renewables, advanced nuclear technology, and carbon capture and storage (CCS), and we perform a sensitivity analysis regarding these costs.

Resource Details (Export Citation) GTAP Keywords
Category: 2010 Conference Paper
Status: Published
By/In: Presented at the 13th Annual Conference on Global Economic Analysis, Penang, Malaysia
Date: 2010
Created: Paltsev, S. (4/14/2010)
Updated: Paltsev, S. (7/12/2010)
Visits: 1,868
- Climate change policy
- North America

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