Climate Change Mitigation and OPEC Economies

Declaration In accordance with the Regulations for Higher Degrees by Research, I hereby declare that the whole thesis now submitted for the candidature of Doctor of Philosophy is a result of my own research and independent work except where reference is made to published literature. I also hereby certify that the work embodied in this thesis has not already been submitted in any substance for any degree and is not being concurrently submitted in candidature for any degree from any other institute of higher learning. I am responsible for any errors and omission present in the thesis. Abstract This thesis focuses on the relationship between the Organisation of Petroleum Exporting Countries (OPEC) economies and global climate change mitigation policies with a view to determining the energy exports demand security risks of OPEC member states. The successful implementation of a universally adopted climate regime has been marred with controversies as different interest gro ups have raised their concerns about all the options presented so far. OPEC as the major crude oil exporting group in the world has been in the forefront of these debates and negotiations. OPEC's major concern is the envisaged adverse impacts of the industrialised countries carbon reductions on its members ' economies. Several studies have shown that when industrialised countries adopt carbon dioxide emissions reduction policies in line with the United Nations Framework Convention on Climate Change, such as carbon taxes and energy efficiency strategies, OPEC's net price of crude oil decreases at the same time as a reduction in the quantity of crude oil products sold. OPEC believes that such climate change policy-induced fall in crude oil exports revenues would have a significant negative effect on its members' economies. With the limitations related to the assumptions of the existing energy economy models on the impacts of climate change mitigation policies on OPEC's economies (Barnett et al, 2004), this study opts for a risk based model. This model quantifies the energy exports demand security risks of 4 OPEC members with special interest on crude oil. This study also investigates the effects of carbon reduction policies on crude oil prices vis-à-vis the impacts of crude oil prices on OPEC's economies. To address these three main issues, this thesis adopts a three-prong approach. The first paper addresses the impacts of climate change mitigation on crude oil prices using a dynamic panel model. Results from the e stimated dynamic panel model …