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Equity, climate justice and fossil fuel extraction: principles for a managed phase out

Greg Muttitt and Sivan Kartha (2020

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The paper sets out five key principles to equitably manage a just transition away from fossil fuel extraction. The paper is set against the backdrop of a carbon budget where supply side policies must be enacted to ensure fossil fuels are not extracted to the extent that their extraction and combustion cause emissions that exceed that carbon budget. Equity considerations inform which reserves should be used and which should be left untouched. 

The paper outlines numerous considerations at play in relation to equity, including that the costs and benefits of fossil fuel production, and of policies to limit it, will be experienced by different people, creating “winners and losers”. It notes the role fossil fuels play in ensuring security of energy supply, economic development, and job creation. It also considers the disadvantages to fossil fuel extraction including the “resource curse” where lack of democracy, conflict and corruption surround extraction-rich countries and often lead to negative health effects on local communities.  

The paper canvasses three approaches to achieving equity that have been proposed previously, finding some serious faults with each. For example, the idea that the cheapest/most profitable sources should have priority to be extracted. However, leaving the market to determine who should extract ignores numerous externalities including social costs. Similarly, leaving the remaining carbon budget to poor countries can also be problematic because the benefits of these assets do not necessarily reach the poorest communities, and their partial development may later result in stranded assets. Finally, the paper notes that the differentiated mitigation effort approach in the international climate regime that applies to demand-side policies, does not translate easily to extraction/supply policies, because the demand-side approach does not account for the added consideration of an economy’s reliance on extraction activities in its approach to differentiation. Thus, the paper outlines five key guiding principles to inform equitable phase out of fossil fuels: 

  1. Prioritise efforts to limit warming to 1.5°C, taking into account the manner in which transition is implemented and resources devoted to it. 
  2. Just transition for workers/communities e.g. new jobs with fair pay, protecting workers’ rights, democratic engagement with stakeholders. 
  3. Curb extraction consistent with environmental justice and human rights, i.e. prioritise ending extraction where communities suffer more harm rather than the benefits of extraction. 
  4. Reduce extraction fastest where social costs of transition are minimal e.g. where a country has a low dependence on fossil fuel and high capacity to transition. 
  5. Share transition costs fairly, according to the ability to bear those costs e.g. through flows of international support. 

This paper advocates a differentiated approach to supply-side policies, reinforcing the need for wealthier countries to take the lead, but also recognising the role for all countries to eventually implement policies to meet climate goals. This article presents the moral justification for certain countries to be afforded more time to transition away from fossil fuel extraction than others, aiding an argument that a fossil fuel project in a high-income country should be rejected, even if demand would be met overseas.  

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