Sectoral greenhouse gas offsets can provide the same incentives for emissions reductions as a carbon tax or a cap-and-trade program, with a focus on rewards rather than costs. This paper develops a pilot analysis of such offsets using relatively transparent quantitative methods to estimate a business-as-usual (BAU) emissions path for the gas and basic petrochemical subsidiary of Mexico’s national oil company, Pemex. This BAU path, in turn, may be used as a basis for monetizing emissions reductions via bilateral or international offset transactions, with potentially low transaction costs. Overall, the analysis finds that a 10 percent emissions reduction below baseline would yield about US$40 million in additional revenue over a 13-year period for this Pemex subsidiary at a price of US$10 per ton of carbon dioxide (CO2). Larger emissions reductions, higher offset prices, or expansion to other, larger company units could generate correspondingly higher revenues.
Sectoral Offsets in the Mexican Oil and Gas Industry: Developing a Credible Baseline via Econometric Methods
Mexico’s national oil company serves as a case study to demonstrate that substantial potential exists to use sectoral offsets to achieve cost-effective emissions reductions. But developing a viable baseline against which to credit reductions is key.
Working Paper by Richard D. Morgenstern, Alexander Egorenkov, and Daniel Velez-Lopez — Aug. 20, 2015Download
Richard D. Morgenstern
Journal Article — May 15, 2019
The Unconventional Oil Supply Boom: Aggregate Price Response from Microdata
An analysis of the price responsiveness of US conventional and unconventional oil supply across three key stages of oil production: drilling, completion, and production.
Press Release — May 8, 2019
RFF Assesses a New Climate Bill that Sets a Clean Energy Standard
Issue Brief — May 8, 2019
Projected Effects of the Clean Energy Standard Act of 2019
RFF researchers modeled the effects of Sen. Tina Smith and Rep. Ben Ray Luján's Clean Energy Standard Act of 2019, which would require retail electricity suppliers to sell an increasing amount of clean energy over time.