Equitable, effective, and feasible approaches for a prospective fossil fuel transition

This paper canvasses 28 approaches to leaving fossil fuels underground (‘LFFU’) from literature on LFFU policies, and evaluates them based on posited criteria of “effectiveness, equitability, feasibility”. The paper considers LFFU policies as those with the “explicit” objective of tackling climate change that “may directly or indirectly diminish fossil fuel production or consumption”. Its cost-effectiveness criterion considers the monetary and non-monetary costs of an approach. Equitability concerns winners and losers of each approach, including in relation to stranded assets. Feasibility assesses any potential resistance to the policy. 

The 28 approaches discussed in the paper constituted: economic approaches (e.g. fossil fuel production/extraction taxes, Border Adjustment Taxes, tradeable production quotas and subsidies); regulatory approaches (e.g. efficiency standards, environmental impact assessments, and bans and moratoria), and ‘other’ approaches (e.g. litigation, finance swaps, and divestment, blockages). 

In relation to bans and moratoria specifically, the paper recognises such measures as environmentally effective and cost-effective, although recognises that such measures may be less feasible than others given the opportunity costs to governments and corporate actors. In relation to effective environmental impact assessments, the paper notes information must be full and transparent and should be accompanied by a “rigid upper cap” on fossil fuel production. 

After evaluating each measure against the three criteria, the paper concludes that twelve of 28 approaches are environmentally effective, and are predominantly regulatory approaches and supply-side approaches. It suggests that each approach is subject to complications such as carbon leakage and green paradoxes, reinforcing the need for global, coordinated efforts, suggesting a supply-side treaty is needed.

The paper supports supply-side policies, in particular bans on fossil fuel projects, as being a particularly effective LFFU policy measure based on the paper’s criteria. This supports a decision to reject a fossil fuel project on legitimate policy grounds, as the paper indicates it may be more effective than other demand-side or economic supply-side policies at achieving climate mitigation ends.