1. - Oslo Centre of Research on Environmentally friendly Energy Carbon leakage via the oil market (some slides are in Norwegian, but should be understandable) For use in course 4925, autumn 2015 By Michael Hoel

2. Reduced demand of oil

4. Reduced supply of oil

6. Oil as a non-renewable resource with extraction costs increasing with accumulated extraction (A) Reduced demand in one country does not affect A * : Long-run carbon leakage is 100% Reduced supply in any country shifts cost and price curve upwards; A * is reduced Long-run carbon leakage is 0