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Journal of Energy
Volume 2014, Article ID 514029, 9 pages
Research Article

Does Climate Change Mitigation Activity Affect Crude Oil Prices? Evidence from Dynamic Panel Model

Economics Division, University of Stirling, Cottrell Building, Stirling FK9 4LA, UK

Received 3 August 2014; Revised 31 October 2014; Accepted 23 November 2014; Published 11 December 2014

Academic Editor: Jin-Li Hu

Copyright © 2014 Jude C. Dike. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This paper empirically investigates how climate change mitigation affects crude oil prices while using carbon intensity as the indicator for climate change mitigation. The relationship between crude oil prices and carbon intensity is estimated using an Arellano and Bond GMM dynamic panel model. This study undertakes a regional-level analysis because of the geographical similarities among the countries in a region. Regions considered for the study are Africa, Asia and Oceania, Central and South America, the EU, the Middle East, and North America. Results show that there is a positive relationship between crude oil prices and carbon intensity, and a 1% change in carbon intensity is expected to cause about 1.6% change in crude oil prices in the short run and 8.4% change in crude oil prices in the long run while the speed of adjustment is 19%.