Agenda

01 Dec 2021 12:15

Valerio Dotti - Incentive Schemes to Eliminate Natural Gas Flaring & Venting

Meeting Room 1 (San Giobbe Economics Campus) + Live streaming (ZOOM)

Valerio Dotti, Department of Economics, Ca' Foscari University of Venice

Abstract: Oil wells extract large quantities of associated gases. They are flared and vented for economic, operational, and safety reasons. All over the world, regulation discourages both practices due to their negative economic, environmental, and health effects. We show that the current legislation backfires due to a hidden substitution effect. Namely, producers intentionally vent a fraction of gas, which they would flare in absence of regulation. Since carbon dioxide has a smaller global warming potential than methane, even a small substitution effect could accelerate climate change. To defuse the substitution effect, we propose an original tax scheme, which eliminates both practices without affecting the consumers’ income. We estimate its environmental outcome analyzing the behavior of 4,336 United States onshore oil & gas fields over the time interval 2012-2020. According to our calculations, the proposed tax scheme would avoid the waste of 61 billion cubic meters of gas per year (6.4% of annual production) while reducing greenhouse gas emissions by 106 million metric tons of carbon dioxide equivalent per year (2.1% of United States emissions).

The seminar can be attended also remotely, connecting to ZOOM: https://unive.zoom.us/j/83272031819 - Meeting ID 832 7203 1819

Language

The event will be held in English

Organized by

Department of Economics (InSeminars)

Link

https://unive.zoom.us/j/83272031819

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