New study outlines principles for a managed phase-out of fossil fuels
A new scientific study published in Climate Policy entitled, “Equity, Climate Justice and Fossil Fuel Extraction: Principles for a managed phase out” comes at a pivotal moment as governments face unprecedented recovery efforts from the combined COVID-19 and oil market collapse crises, amid the growing climate emergency.
There is widespread recognition that we must restrict fossil fuel supply in order to limit global warming. The key questions are where and by how much. This paper is one of the first efforts to answer these questions. The authors look at challenges to phasing out oil, gas, and coal production in different national contexts, and find that wealthy, diversified economies are best positioned to lead in a necessary just transition and phase out of fossil fuel production.
The authors articulate principles for transparent pathways forward as today’s top oil-producing countries clash to coordinate urgent production cuts due to COVID-19’s dramatic drop in demand, and as differences emerge between Saudi Arabia and Russia over how to restrain rising US shale oil output. Meanwhile, U.S. President Trump’s push to save American shale oil companies faces growing skepticism from Congress and Wall Street who have increased their commitments to stop financing fossil fuels.
The paper builds on the messages from the recent Production Gap Report which found that the fossil fuel industry is planning to produce, by 2030, 50% more fossil fuels than consistent with a 2C goal and 120% more than a 1.5C goal.
It comes on the heels of the World Economic Forum’s 2020 Global Risk Report, where CEOs ranked “climate action failure” as a greater global risk than weapons of mass destruction, and amid calls for renewed international cooperation to enable an equitable global transition away from fossil fuels and towards clean, low-carbon and energy efficient economies, including through a Fossil Fuel Non-Proliferation Treaty.
The paper’s topline messages are that there is an urgent need for an equitable and just phase out of fossil fuel production in order to limit global warming to 1.5C, as laid out in the Paris Agreement.
Governments must act to phase out production through a just transition, and it will be easier for some producing countries than others:
- Wealthy fossil fuel producers with more diversified economies and more financial and technological resources are best positioned for rapid action;
- Poorer, less diversified producers will face a much more difficult and costly effort.
Wealthy producers well-positioned to begin a phase out include: Canada, UK, US, and Norway. These producers are currently not doing nearly enough, and in many cases continue to expand production.
International cooperation to support a just transition in poorer, less-diversified economies will be critical. Policy principles outlined in the paper include:
- Phase down global extraction consistent with 1.5°C
- Enable a just transition for workers and communities
- Curb extraction consistent with environmental justice
- Reduce extraction fastest where social costs of transition are least
- Share transition costs fairly
As it pertains to the current crisis:
- A managed phase out of fossil fuel production should be a pillar of a Just Recovery;
- Recent events have been a case study foreshadowing the coming economic chaos of the unmanaged decline of the oil and gas sectors, laying bare the critical importance of government action to manage a phase out with a just transition;
- Governments should not grant the fossil fuel sector unconditional subsidies and bailouts. Instead, governments should support workers and communities and use recovery efforts to shift capital to safe, clean, and renewable energy systems.
Responding to the paper’s release:
Victor Menotti, Senior Fellow, Oakland Institute:
“Oil markets are now giving us only a glimpse of the future chaos our world faces if we don’t soon start a fair yet fast process for peacefully phasing-out oil production. The only larger risk we face is an accelerating catastrophe from climate action failure if we don’t get governments going on it ASAP; the Kartha-Muttit paper kick-starts the conversation by proposing clear principles for a pathway forward. Ideas such as this and the Fossil Fuel Non-Proliferation Treaty are signs of a climate movement that is getting more serious about ending the Era of Fossil Fuels.”
Peri Dias, spokesperson for 350.org Latin America, based in La Paz, Bolivia:
“The UN science report last year shows that we are on track to produce 120% more fossil fuels than is compatible with climate goals. This new study shows how we can close that gap by planning and preparing for the end of coal, oil, and gas. A country like Bolivia is identified as needing international support in order to do so. This is a key part of the picture if we’re to realise our climate goals and make sure the cost is not paid by communities and workers. Confronting the Covid pandemic and recession means thinking about the economy we’re building for the future – it cannot be one that ignores the right to health nor one that fails to plan for the end of coal, oil and gas in every corner of our world.”
Mohamed Adow, Director, PowerShift Africa, based in Nairobi, Kenya:
“The current chaotic global economy is an example of what happens when nature forces a hard stop to business as usual. Climate change threatens a similar change but currently countries are not acting fast enough to ensure this transition is well managed. The Paris Agreement means there is no long term future for fossil fuels so countries need to start making the transition to cleaner, more sustainable forms of development. The post-coronavirus recovery packages are an opportunity to radically reshape national economies. Governments should use this moment to make that switch.”
Rachel Rose Jackson, Director of Climate Research and Policy, Corporate Accountability:
“This research demonstrates that not only is an immediate phase out of oil, coal and gas necessary, but that fairness in that process is key if we have any chance of avoiding total climate action failure. It also drives home the absurdity of countries like the U.S. seeking to bailout dirty industries to the tune of billions, instead of financing an equitable shift toward a system that protects the health of people and the planet. It is vital that equity is central in energy transformation policies and that those that have stood in its way are held accountable. The path to a better world should be in part financed through holding polluting industries that continue to undermine climate action liable for the damage they have knowingly caused. Now is the moment to make this fair transition possible by heeding the call of hundreds of organizations and hundreds of thousands of people around the world to make Big Polluters pay.”
Dipti Bhatnagar, International Program Coordinator for Climate Justice and Energy, Friends of the Earth International, based in Maputo, Mozambique:
“Fossil fuel extraction has wreaked havoc on workers and communities for too long: polluting their bodies, air, water and lands, destroying biodiversity, and contributing to climate catastrophe. With oil prices at an all time low due to the COVID-19 crisis, this important study reminds us why fossil fuel extraction will not bring development to our countries in the Global South, but benefit only corporations and elites. Never have the concepts of justice and equity been more important, as we call for a much-needed fossil fuel phase-out, and demand that those who have benefited most from dirty energy take on the biggest role in paying for a just transition. Climate change, COVID-19, economic crisis: the inter-related crises we face now are a wake up call for system change.”
Meena Raman, Third World Network:
“The trillions of dollars being generated by rich industrial countries to rescue their economies in response to the 2008 financial crisis and the post-Covid stimulus packages, shows that if there is political will, there is additional finance available for developing countries to enable their just transition towards low-carbon pathways, moving away from fossil fuels in meeting their sustainable development needs. The developed countries should stop giving excuses that there is a lack of money if we are to save the planet and the poor.”