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The writer is a professor of Lobel de David in Business and Sustainability and Professor of Political Economy at Stanford University
Recently I served as an expert witness in the Court. A question that is asked: how will the production of natural gas contribute to climate change?
This question is also relevant to those in charge of formulating European policies. The demand for natural gas is expected to explode in the coming decades. The United Kingdom plans to increase its import of gas and, while the EU plans to prohibit new Russian gas contracts using commercial law, Austria argues that the block should remain open to resume Russian imports.
But the answer is not obvious. Certainly, the world must reduce its dependence on energy sources responsible for greenhouse gases. These include coal, oil and gas. Much of the fossil fuel still to discover must remain on the ground so if we want to meet the temperature objective of 2nd internationally cordado (not say the 1.5C objective of the 2015 Paris Agreement). Instead, we must develop the ability to produce energy from renewable energies.
That will take time, however. Meanwhile, the gas has been recognized as a transition energy source because it contains half of the carbon per unit of energy produced compared to coal. As different energy sources compete, they replace each other. More gas will spread to coal.
Regardless of its relevance, the response to how much this gas contributes to long -term climate change has remained incomplete.
In an upcoming article, Katinka Holtsmark of the University of Oslo and discovered what we refer to as “the gas trap.” This is the following. In the short term, gas will exceed coal. The ability to produce energy with renewable energies has been developing for some time. Therefore, for any given capacity to produce renewable energies, it is tempting to increase gas production to replace coal, due to urgent concerns about climate change.
But the long -term consequence of this is more emissions, no less. Investments in renewable energies will fall as soon as you anticipate that we will use gas to overcome coal. The greater production of natural gas reduces our willingness to pay additional energy sources, reducing the prices of renewable energy and other energy sectors.
Therefore, the short -term strategy well intentional to overcome coal failures. Ultimately, it is counterproductive.
Our findings verify that the gas trap is realistic and quantitatively important when it comes to the European energy market. More gas reduces total short -term emissions. However, when we take into account the fall in the investment of renewable energy, total emissions end up being higher.
Therefore, a country with climatic concurcer would benefit from committing in advance to produce less gas. Suppose, say, that Norway’s policy reflects that the social cost of carbon is € 107 per ton of COâ‚‚ equivalents (OECD statements). Suppose, then, future policies will reflect a cost equal to € 205 per ton of COâ‚‚ equivalents (as the Norwegian government has announced that it will). With that increase, we estimate that Norway would benefit from reducing gas production by 10 percent, if it could compromise in advance, encouraging investments in renewable energies. If not, it ends up increasing gas production by 9 percent.
The disability of pre-compromise would contribute to 19-38 percent more gas that exports from Norway to Europe. Emissions increase in similar quantities because, in the long term, gas replaces renewable energy.
How can this problem be solved? One response is to increase direct investments in renewable energies. Another is to regulate upstream activities related to the search and exploration of oil and gas. This would not have to happen if countries could compromise lower amounts. But, when Outcompete Coal is encouraged, it is necessary to join the hands limiting the future capacity. In this way, investments in renewable energy will remain profitable.
A third of the solution can be to limit the ability to trade and transport gas. Export and import terminals for LNG survive for years, thus discouragement of renewable energy investments. This should be considered together with security concerns before Europe analyzes whether to restrict or restrict Russian gas imports.
These policy measures are more important in the short term. In the long run, multiple gas producers could commit to supply treaties that limit the amount of extraction. Such treaties should not replace the Paris Agreement, but it could help avoid gas trap.
