Séminaire GREDEG - Katheline Schubert (Université Paris 1)

"Is Shale Gas a Good Bridge to Renewables? An Application to Europe"
Quand ? Le 03-03-2016,
de 14:00 à 15:30
Où ? Salle Picasso
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Katheline Schubert

(Université Paris 1, Paris School of Economics)


Jeudi 3 mars 2016 


RésuméThis paper explores whether climate policy justifies developing more shale gas and addresses the question of a potential arbitrage between shale gas development and the transition to clean energy. We construct a Hotelling-like model where electricity may be produced by three perfectly substitutable sources: an abundant dirty resource (coal), a non-renewable less polluting resource (shale gas), and an abundant clean resource (solar). The resources differ by their carbon contents and their unit costs. Shale gas extraction’s technology (fracking) generates local damages. Fixed costs must be paid to increase the quantity of shale gas extracted and to bring forward the arrival date of the clean resource. Climate policy takes the form of a ceiling on atmospheric carbon concentration. We show that, at the first best, a more stringent climate policy does not always go together with an increase of the quantity of shale gas extracted. Compared to a second best with a moratorium on fracking, shale gas extraction most often leads to postpone the development of the clean resource, but not always. Also, imposing a financial constraint on energy expenditures may lead to an over-investment in shale gas and to postpone the switch to the clean substitute. We calibrate the model for Europe and determine whether shale gas should be extracted and in which amount, depending on the magnitude of the local damage, the effect of a moratorium on extraction, and the potential extra amount of shale gas developed because of a financial constraint.

Télécharger le papier : ici

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