Fossil fuels and climate policy.

Summary This thesis studies the interactions between C02 emissions regulation and fossil fuel extraction. It addresses various questions: what is the optimal pathway for the extraction of these fuels? What is the optimal carbon tax to implement? When to deploy carbon capture and sequestration (CCS) or renewable technologies? What are the effects of optimal carbon taxation on the profits of fossil fuel producers? In the five chapters of this thesis, we explore Hotelling-style models of resource extraction, following Chakravorty et al. (2006b). The basic model is modified according to the questions posed, and changes concern the environmental constraint (a cap on C02 concentration and/or a damage function), the availability of CCS technology and its scope, the lifetime of non-polluting energy infrastructure, the natural dilution of C02 in the atmosphere (constant, proportional to the stock, or negligible), and the existence of several polluting resources. The first part studies the optimal use and deployment of CCS and renewable energies when a cap on C02 concentration is introduced. The second part deals with the optimal taxation of carbon and the use of CCS when marginal damages increase with the C02 stock and a cap is introduced. The last part studies how the owners of a polluting exhaustible resource (oil, gas) can benefit from carbon taxation if this resource is (or will be) in competition with a more polluting resource.