May 01, 2022 09:00:00

Will carbon dioxide emissions decrease as crude oil prices rise?

Crude oil prices have continued to rise since 2021, and in March 2022, crude oil futures prices reached

their highest level since 2008 due to Russia's invasion of Ukraine and the delay in Iran's nuclear talks . Since then, crude oil prices have remained high, affecting people's lives as gasoline prices and electricity prices rise. In connection with such a rise in crude oil prices, an economist who is a visiting lecturer at the Australian National University asked the question, 'Does the rise in crude oil prices reduce carbon dioxide emissions because people refrain from related spending?' Peter Martin explains.

As petrol prices rise, will carbon emissions come down?
https://theconversation.com/as-petrol-prices-rise-will-carbon-emissions-come-down-178024

In Australia, from the 1970s to the early 1980s, gasoline was refined from petroleum produced domestically, but at the time of writing the article, gasoline and crude oil were relied on for import. As a result, as in the world, Australia is experiencing a sharp rise in gasoline prices due to rising crude oil prices, and in Sydney and Melbourne, the gasoline price was 1.2 Australian dollars (about 110 yen) per liter at the beginning of 2021. It rose to A $ 1.6 in early 2022 and reached A $ 2.2 in March 2022.

A nearly 80% increase in prices in just 14 months could be a big blow to households, and people could move towards reducing gasoline usage. For example, a (PDF file) study by Shuhei Nishitateno of Kwansei Gakuin University and Paul Burke of the Australian National University estimates that 'for every 10% increase in gasoline prices, usage decreases by 3%.' It has been.

Applying this estimate to Australia, where gasoline prices have skyrocketed by nearly 80%, there should be a reduction in gasoline usage at levels that affect greenhouse gas emissions across Australia, but at the time of writing, that was not the case. Not awake. Regarding this reason, Martin said that he was affected by the blockade of the city and working from home due to the pandemic of the new coronavirus infection (COVID-19), and that 'it will take time for price increases to make a difference.' I'm pointing out.

For example, even if the price of gasoline rises temporarily, it is impossible for people to change their behavior immediately. Of course, there may be a temporary reaction such as 'Do not fill up with gasoline', but in the short term, you have no choice but to buy gasoline as before. In order for people to change their behavior, it is necessary to recognize that prices will continue to be high.

According to the calculation by Nishitateno et al., 'If the gasoline price rises by 10%, the average fuel consumption of new cars will rise by 2%.' If the gasoline price continues to be high, the demand for fuel-efficient cars will increase. It has been suggested. Of course, the 2% figure is an average, and some people switch to completely electric cars, hybrid cars, and compact cars.

In fact, when gasoline prices rose in the 1970s, the demand for smaller cars in Australia increased, resulting in the decline of the Australian automobile industry. On the other hand, when the gasoline price plummeted from 2008 to 2009, people bought an

SUV that used more gasoline.

Martin pointed out that if gasoline prices remain high and do not return to their original prices, people will use less cars or replace them with electric cars to reduce their gasoline usage. 'This is a strange but welcome, perhaps the only welcome, as a by-product of the Ukrainian war,' he said, adding that rising gasoline prices are accelerating the path to emission reductions and energy self-sufficiency. I showed the view that it will be done.