Abstract
We investigate the impact of climate policies on Canada’s oil sands industry, the largest of its kind in the world. Deriving petroleum products such as gasoline and diesel from oils sands involves significant amounts of energy, and that contributes to a high level of CO2 emissions. We apply the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy, augmented to include detail on the oil sands production processes, including the possibility of carbon capture and storage (CCS). We find: (1) without climate policy, annual Canadian bitumen production increases almost 4-fold from 2010 to 2050; (2) with climate policies implemented in developed countries, Canadian bitumen production drops by 32% to 68% from the reference 4-fold increase, depending on the viability of large-scale CCS implementation, and bitumen upgrading capacity moves to the developing countries; (3) with climate policies implemented worldwide, the Canadian bitumen production is significantly reduced even with CCS technology, which lowers CO2 emissions at an added cost. This is mainly because upgrading bitumen abroad is no longer economic with the global climate policies.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.