Despite the inextricable link between oil scarcity and climate change,
the interplay between these two issues is paradoxically an underworked area. This Climatic Change Letter uses a global energy-economy model to address the link between future oil supply and climate change and assesses in a common framework both the costs of climate policies and oil scarcity.
It shows that, in the context of a limited and uncertain amount of ultimately recoverable oil resources, climate policies reduce the world vulnerability to peak oil. Climate policies, therefore, appear as a hedging strategy against the uncertainty on oil resources, in addition to their main aim of avoiding dangerous climate change. This co-bene-fit is estimated at the net present value of US$11,500 billion. Eventually, reducing the risk of future economic losses due to oil scarcity may appear as a significant side-bene-fit of climate policies to many decision-makers.