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Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Please note that all times are shown in the time zone of the conference. The current conference time is: 24th Aug 2026, 01:52:40am WEST

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Daily Overview

Session

Fossil Fuel Energy Resource Markets
Location: D-104
Session Chair: Aart de Zeeuw, Tilburg University

Presentation 1

Leadership and Commitment in Oil Markets: Market Power Meets Climate Policy

Hassan Benchekroun², Simon Elgersma⁴, Gerard van der Meijden^1,3, Cees Withagen^1,3

1: Vrije Universiteit Amsterdam; 2: McGill University; 3: Tinbergen Institute; 4: Rijksuniversiteit Groningen

Discussant: Aart de Zeeuw (Tilburg University)

We examine how leadership and commitment in oil markets affect climate damages, welfare, and the effectiveness of climate policy. Using a cartel–fringe model with renewables and climate damages, we compare Nash–Cournot, open-loop von Stackelberg, and feedback von Stackelberg equilibria. Our results show that leadership changes extraction patterns: when the cartel acts as a von Stackelberg leader, relatively more polluting extraction by the fringe is postponed, reducing climate damages relative to Nash–Cournot. However, the absence of commitment in feedback equilibria limits these gains and can even increase damages with respect to Nash-Cournot. We quantify these welfare losses and decompose them into a conservation and sequence effect. We show both for carbon taxes and renewable subsidies that small policy changes can trigger abrupt shifts in extraction regimes, causing large jumps in welfare and climate damages. Marginal changes in climate policies can have qualitatively different impacts on climate damages than non-marginal changes. These findings highlight that a von Stackelberg type of leadership can either amplify or reduce climate damages, and that policy design must account for discontinuous responses.