Given the multiple lines of evidence demonstrating that humanity is causing the climate to change in potentially dangerous ways, climate change has to be part of medium- to long-term planning for almost everybody, and part of the policy development processes of government. At the same time, there is a plausible case that global production of oil will peak at some point in the relatively near future, with potentially important economic, political, and geopolitical effects.
How will these two phenomena interact? I can think of lots of possibilities. These are not ranked in any way, and are not equally plausible.
1) Worries about peak oil prove premature or overblown. Liquid fuels stay cheap for the foreseable future, causing more climate change than there would have been in a scenario where they became more costly.
2) Natural reserves of petroleum cannot keep pace with rising demand, initially driving liquid fuel prices through the roof. Some combination of biofuels and coal-to-liquids (CTL) technology counteracts that, also worsening climate change. (Coal-to-liquids and fuels like palm oil grown in rainforest have huge climate impact per unit of energy)
3) Peak oil proves serious, and biofuel and CTL alternatives prove very costly. This has potentially large social and economic consequences, but makes climate change mitigation easier. For many people, the world gets a whole lot smaller.
4) Climate change occurs much more quickly than expected, perhaps because of major positive feedbacks like melting permafrost or burning rainforest. Governments sense their increased vulnerability and abandon attempts to cooperate internationally, seeking to make themselves as robust as possible in the face of the chaos ahead.
5) Climate change occurs much more quickly than expected, perhaps because of major positive feedbacks like melting permafrost or burning rainforest. Governments finally get the picture and introduce harsh policies restricting fossil fuel production domestically. Powerful states now profoundly concerned about climate change (the US, EU, China, Japan, etc) force petrostates like Canada and Kuwait to shut down production.
6) Not only does oil production peak, but so does gas and coal production. Dealing with climate change becomes much easier politically, given that there is no longer any real alternatives to switching to renewables and nuclear as principal sources of energy.
7) Peak oil proves serious, but cellulosic and algae-based biofuels finally emerge as commercially viable alternatives.
Personally, I think peak oil is a much less serious problem than climate change. For one thing, it is just the sort of phenomenon that markets deal with relatively automatically – something gets scarce and people find ways to use less, while developing alternatives. For another, it doesn’t include the same dangerous lag times. It is quite possible that we could emit enough to cause catastrophic warming, but only see concrete proof of that decades later. Peak oil, by contrast, seems likely to unfold with fewer surprises. Finally, there aren’t really any positive natural feedbacks that would further constrain the availability of oil, as it began to get scarce (though falling energy return on investment (EROI) is an issue). By contrast, warming is likely to beget more warming as ice vanishes, forests dry out an burn, permafrost and methane clathrates melt, etc.
Surely there are many other possibilities, aside from those listed above. Please post some below, and comment on those listed above. How do the different possible scenarios effect how we ought to be hedging our bets, both climatically and in terms of energy sources?