by Gabriel Chan, John M. Reilly, Sergey Paltsev and Y.-H. Henry Chen
- We investigate the effects of implementing CO2 emissions reduction policies on Canada’s oil sands industry, the largest of its kind in the world. We apply the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy, augmented to include detail on the oil sands production processes, including the possibility of carbon capture and storage (CCS). We find: (1) without climate policy annual Canadian bitumen production increases over 6-fold from 2005 to 2050; (2) with CO2 emissions caps implemented in developed countries, Canadian bitumen production drops by nearly 65% from the reference 6-fold increase and bitumen upgrading capacity moves to the developing countries; (3) with CO2 emissions caps implemented worldwide, the Canadian bitumen production becomes essentially non-viable even with CCS technology, at least through our 2050 horizon.
Chan, G., J.M. Reilly, S. Paltsev and Y.-H. Chen (2010). "Canada’s Bitumen Industry Under CO2 Constraints." MIT Joint Program Report Series, Report 183, Jan 2010.
