REDUCING OIL DEPENDENCE WITHOUT TRIGGERING A GLOBAL CRISIS

Introduction

Three facts underscore the importance of the debate about the future of oil: oil is a finite resource; oil is one of the major anthropogenic sources of carbon dioxide; and the world economy is heavily dependent on oil, especially in the transportation sector.

The most important questions are: How do we balance depletion, the environment, and economic growth – remembering that “we” includes human beings in oil-exporting countries as well as those in oil-consuming countries?  Will the transition to new energy sources be seamless and easy, for oil-exporters as well as for oil-importers?  How will oil-producing countries react to the non-market based efforts of oil-consuming countries to reduce their dependence on oil? Should oil-producing and oil-consuming countries cooperate to make the transition to new energy sources as painless as possible for all parties? Will these efforts at cooperation succeed in the long run if they are not market-based efforts?