Title page
Contents
Abstract 2
1. Introduction 4
2. Scenarios and Data 9
2.1. Energy Transition Scenario 9
2.2. Data 10
3. Econometric Model 11
3.1. Identification 12
3.2. Structural scenario analysis 15
3.3. Estimation and Inference 17
4. Empirical Results 20
4.1. Price Scenarios 20
4.2. Plausibility 24
5. Oil Market Shares 26
6. Can We Come Up With Price Scenarios Until 2050? 29
7. Robustness 32
7.1. Inventories and Expectational Demand Shocks 32
7.2. Alternative Economic Activity Indicators 35
7.3. Higher Elasticity Bound 36
7.4. Annual data 36
8. Conclusion 37
References 39
Appendices 42
A. Structural Scenario Analysis 42
B. Impulse Responses 45
C. Robustness 53
Table 1. Sign restrictions on impact effects 13
Table 2. Scenario Plausibility Statistics 25
Table 3. Sign restrictions on impact effects 34
Figure 1. Global Oil Output Scenarios 10
Figure 2. Oil prices in the supply and demand-side driven net-zero emissions scenario 22
Figure 3. Oil prices in the net-zero emissions scenario with equally important supply and demand side policies 23
Figure 4. Oil prices in the supply and demand-side driven stated policy scenarios 23
Figure 5. Market shares 2023 vs 2030 in the demand driven net-zero scenario 28
Figure 6. Oil revenues in the different net-zero emissions scenarios. Median estimates and 40% HPD credible sets. Oil revenues are calculated as quantity times price 29
Figure 7. Global Oil Output Scenarios Until 2050 30
Figure 8. Supply and demand-side driven scenarios until 2050 32
Table C.1. Sensitivity 61
Table C.2. Estimated elasticities in the different scenarios 62
Table C.3. Oil market share under demand-side policies, Net-Zero scenario, 2030 63
Table C.4. Oil market share under demand-side policies, Net-Zero scenario, 2030 64
Table C.5. Oil market share under demand-side policies, Net-Zero scenario, 2050 65
Table C.6. Oil market share under demand-side policies, STEP scenario, 2030 66
Table C.7. Oil market share under demand-side policies, STEP scenario, 2050 67
Table C.8. Market shares in 2023 68
Figure B.1. Impulse Responses for the Demand-Side Driven Scenario 45
Figure B.2. Impulse Responses for the Supply-Side Driven Scenario 46
Figure B.3. Impulse Responses for the Equally Supply- and Demand-Side Driven Scenario 47
Figure B.4. Impulse Responses for the Demand-Side Driven Scenario in the 4-Variables Model with Expectational and Contemporaneous Oil-Specific Demand Shocks 48
Figure B.5. Impulse Responses for the Demand-Side Driven Scenario Including the Global Economic Activity Index from Kilian (2009) 49
Figure B.6. Impulse Responses for the Supply-Side Driven Scenario Including the Global Economic Activity Index from Kilian (2009) 50
Figure B.7. Impulse Responses for the Demand-Side Driven Scenario in the Model Using Annual Data 51
Figure B.8. Impulse Responses for the Supply-Side Driven Scenario in the Model Using Annual Data 52
Figure C.1. Oil price scenarios in the model including inventories and differentiating between contemporaneous and expectational oil-specific demand shocks 53
Figure C.2. Oil price scenarios in the model including inventories. Sign restrictions as in Kilian and Murphy (2014) 54
Figure C.3. Oil price scenarios in the net-zero emissions scenario model including the global economic activity index from Kilian (2009) 55
Figure C.4. Oil Price Scenarios in the stated policy scenario from the model including the global economic activity index from Kilian (2009) 56
Figure C.5. Oil Price Scenarios in the stated policy scenario from the model including the global economic conditions index from Baumeister et al. (2022) 57
Figure C.6. Oil price scenarios in the model specifying an upper bound on the impact supply elasticity of 0.3 58
Figure C.7. Oil price scenarios in the model using annual data and global industrial production 59
Figure C.8. Point-wise means of the shock series (in standard deviations) over the scenario horizon in the net-zero emissions scenario 60
Figure C.9. Point-wise means of the shock series (in standard deviations) over the scenario horizon in the stated policy scenario 60