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Decarbonisation and World Poverty: A Just Transition for Fossil Fuel Exporting Countries?

Chris Armstrong (2020)

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The paper seeks to address equity considerations between developing and developed states in light of the increasing focus on supply-side policies and evidence that the majority of fossil fuels are unburnable. It sets out moral arguments on how to determine which fossil fuel reserves should continue to be burned. Specifically, it recognises the significant adverse impacts fossil fuel extraction bans would have on certain developing countries, including the loss of future economic development from those unused fossil fuel reserves. It therefore considers whether equity considerations require recognition of or compensation for the sacrifice developing countries make to their development potential by leaving fossil fuel reserves unburned.  

First, it considers the argument that developing countries should be aided on the basis that their expectations to develop using fossil fuel reserves has been thwarted. However, the paper outlines numerous practical and moral issues with this framing of the issue. First, such a claim would require evidence of international authorities encouraging development through fossil fuel use akin to the evidence required to establish a legitimate expectation claim. However, it is unclear that this has occurred. Second, legitimate expectations arguments must be consistent with justice – it cannot be the case that an expectation should be respected where it results in harm to others. Thirdly, calculating compensation for such loss of expectations is rife with difficulties. 

The paper then considers the question of equity under the framework of a right to development, which it suggests is supported more broadly in international law, albeit with limitations, e.g. sustainability and justice. The paper provides nuance to the right to development by understanding it as a right to bring citizens out of poverty and disadvantage (as opposed to unbridled development). The paper suggests this right sits alongside a duty of wealthy countries to help poorer countries exercise their right. Thus, the paper argues that poor countries that have a right to development should not have to bear the costs of avoiding dangerous climate change when doing so impedes their ability to exercise that right.  

The paper suggests those poorer countries that have fossil fuel reserves ought to receive international assistance. It also considers who should provide that assistance, recognising the contribution of those who have extracted “disproportionate quantities” of fossil fuels from the 1980s to the current situation whereby poorer countries must now forego use of their fossil fuel reserves. It also recognises the more general duty on those who have contributed to global poverty - and therefore the inability to utilise existing reserves - to help raise all countries out of such poverty. The exception to these duties is where such duties fall on the poor. 

The paper canvasses solutions to the equity problem, having ruled out the appropriateness of ‘compensation’ under a legitimate expectations framework. First, it considers a ban on all wealthy countries from extracting fossil fuels to allow poorer countries to utilise their reserves and benefit from that utilisation. However, it highlights numerous issues with this approach including the need to only extract remaining fossil fuels where it is least damaging to do so; where other negative externalities are avoided; and where it is cheapest to do so, meaning such a proposal might be “too blunt”, even if it has merit. It also considers a proposal for wealthy countries to send poor countries money to offset the loss of income from those reserves, and to use “debt-for-non-extraction" swaps whereby debt is forgiven in exchange for ceasing fossil fuel activities. However, it will be difficult to calculate what each country should receive. The paper ultimately prefers structural reform that would remove trade barriers and allow poorer countries to gain competitive access to more markets, would involve transfer of technology, and would generally support the right to development of all poor countries, not just those with fossil fuel assets. 

The paper is useful for supporting the argument that certain countries have a moral obligation to take the lead in climate mitigation. It also acknowledges the importance for fossil fuel reserves to remain mostly unburned in all countries, including poorer ones, because of the limited remaining global carbon budget. 

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