Greenhouse gas Emission Control Strategies GECS

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Greenhouse gas Emission Control Strategies
(GECS)
By N. Kouvaritakis and L. Paroussos ICCS-NTUA
Grenoble, 22 23 February 2001
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Depletable Resources Module

• There are two key parameters for the model the
  rate of extraction r from proven reserves and d
  the rate of discovery of new reserves
• Potential Supply is a function of r and proven
  reserves
• New Reserves is a function of d and
  yet-to-find-reserves

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Depletable Resources Module

• The motion equation for reserves is
• RESt RESt-1 NRESt-1 - Xt-1.
• Assuming that potential Output equals Actual
  Output and by iterating n times forward the above
  equation we get the depletion profile of the
  producer which is

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Depletable Resources Module

• A price decline might induce the producers to
  keep the reserves on the ground. Thus the
  producers wont always be on their depletion
  profile. Actual Output will be less than
  Potential Output and the motion equation becomes

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Depletable Resources Module

• Change in prices are reflected in the intensity
  of the rate of discovery. This is done through a
  simple Price elastic model

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Price Sensitive Discovery rate and
Yet-To-Find-Reserves
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Depletable Resources Module

• This formulation of price will induce producers
  to increase the rate of conversion so as to
  increase the level of discoveries, if the price
  goes up
• PPt is the equilibrium product price, and PGDP
  is the GDP deflator. Pref, Phi, Plow, dlow and
  dhi are constants set or calibrated to coincide
  with consensus projections

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Reserves and Supply Potential in the Natural Gas
Sector
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Depletable Resources Module

• The actual level of reserves is dependent on the
  production path which is not known with certainty
• Production is assumed to grow linearly between
  two periods hence the definition of the G
  parameter
• If there is no observed growth the multiplicative
  factor on output is simply the number of
  intermediate years
• Actual reserves cannot fall below minimum reserves