The Manipulation of Carbon Emission Programs by Foreign Oil Producers

Event Sponsor: 
LANS Informal Seminar
Start Date: 
Jan 28 2009 - 3:00pm to 4:00pm
Building 221 Conference Room A261
Argonne National Laboratory
Todd Munson
Speaker(s) Title: 

Carbon emission programs are designed to reduce greenhouse gas emissions by implementing either a carbon tax or a cap-and-trade program. In this talk, we discuss the extent to which a foreign oil producer, such as OPEC, can manipulate cap-and-trade programs by cutting production, resulting in a collapse of some carbon emission markets. This possible manipulation needs to be understood in an international setting with trade among developing countries that have no regulation and other countries that each have their own independent carbon emission program. We analyze a leader-follower computable general equilibrium model to understand this issue that results in mathematical programs with equilibrium constraints that need to be solved. Numerical results providing insights into the possible manipulation of carbon emission programs by foreign oil producers are provided.

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