Will OPEC lose from the Kyoto Protocol?

A range of energy-economy models forecast losses to members of the Organisation of Petroleum Exporting Countries (OPEC) should the Kyoto Protocol come into force. These forecasts are a powerful influence in the United Nations Framework Convention on Climate Change negotiations. They are used by OPEC to advance the agenda on the impacts of response measures, covertly arguing for compensation for lost oil revenues arising from implementation of the Protocol. This paper discusses this issue, and explores the key assumptions of these models and their uncertainties. Assumptions about carbon leakage, future availability of oil reserves, substitution, innovation, and capital turnover are considered. The paper suggests that losses will not affect OPEC countries equally, and that these losses are not likely to be as substantial as the models forecast. A range of policy measures are proposed to lessen any impact the Protocol may have on OPEC.