Does production cut make OPEC green?
When I heard the news this morning that OPEC will cut its production by 1.5 million barrels per day next month, I thought they made a good decision. Such a cut should slow down the rapid decline in oil prices without making prices shoot back up to record territory. While they made the cut to maximize oligopolist profits, I was interested in the consequences of such an action. I felt that a $65+ oil price per barrel is crucial to keep consumers from flocking back to over-sized, inefficient vehicles and to keep renewable energy competitive with its fossil fuel counterparts. I then realized this logic begs the question: does the production cut make OPEC’s action green? Let’s start by looking at the immediate effect of the action itself… • Withholding 1.5 million barrels of oil from the market daily prevents ~150 million tons of carbon dioxide in combustion emissions on an annual basis. In other words, OPEC seems to have in one fell swoop cut global emissions by .6% (equivalent to 3% of US
