New blog for the SUS-POL site from Freddie Daley and Marcel Llavero Pasquina exploring the potential paradoxes and policy implications of paying the owners of fossil fuel reserves to forgo extraction.
They identify three major paradoxes:
1️⃣ Paying states to forgo extraction may introduce perverse incentives to discover and extract fossil fuels. For instance, if the premise of payment is on the basis of proved, probable, and possible fossil fuel reserves, fossil fuel exploration would likely increase.
2️⃣ Reinforces the power dynamics of resource ownership, whereby reserves are effectively ‘held ransom’ by the owners, who accrue greater bargaining power as humanity moves into an increasingly carbon-constrained world. If payments dry up, owners can threaten extraction.
3️⃣ Institutionalising a framework whereby the owners of reserves are compensated could entrench climate injustice by rewarding those that have benefited the most from fossil fuel extraction to date. For instance, the top seven proprietors of carbon bombs are China, the USA, Russia, Saudi Arabia, Australia, Canada, and Qatar.
The authors argue that these paradoxes and practical implications highlight the contested nature of supply-side climate policies and their multifaceted vulnerabilities in an increasingly polarised world. But these paradoxes should not - in any way - detract from the urgent endeavour of co-creating just, equitable and global solutions to keeping reserves safely in the ground and ending the age of fossil fuels.
https://lnkd.in/e3bxhTnS