The impact of climate policies on energy markets and the price of carbon

Based on simulations of the POLES model, this paper aims to analyse the interactions between policies to stabilize greenhouse gas concentrations in the atmosphere and the fundamentals of the world oil market. The « carbon value » is the modelling device that reflects the relative harshness of climate policies. It represents the signal that triggers socially responsible investments addressing the climate challenge, ie greenhouse gas abatement investments. We compare a Reference energy scenario and a scenario of emission reductions by a factor four in industrialized countries by 2050. The results show that very ambitious climate policies allow both to mitigate climate change and to manage the depletion of world oil resources. JEL classification : Q58, Q41