EMF Publications

EMF OP 44 Some Implications of Increased Cooperation in World Oil Conservation

Occasional Paper

Stephen P. A. Brown
Hillard G. Huntington - Stanford University

Published by
Stanford University; Federal Reserve Bank of Dallas Economic Review, Second Quarter, 1998, 1996

In this article, Stephen Brown and Hillard Huntington combine recent studies of world oil markets and the nascent literature on damage estimates from carbon dioxide (CO2) emissions to derive cost and benefit curves for the reduction of these emissions through cooperative programs of oil conservation. Their analysis shows that the desirability of extending cooperation in global energy conservation policies is essentially an empirical issue rather than a conceptual one. The current evidence suggests that over the next two decades, the Organization for Economic Cooperation and Development will have an incentive to reduce its oil consumption and the associated CO2 emissions by more than is optimal from a world perspective. During this period, extending cooperation to the oil-importing developing countries may push oil conservation too far.

Reprinted in Federal Reserve Bank of Dallas, Economic Review, Second Quarter, 1998