From oil as welfare to oil as risk? Norwegian petroleum resource governance and climate policy

Bang, Guri; Lahn, Bård

doi:10.1080/14693062.2019.1692774

Cited by 49 publications

(29 citation statements)

References 24 publications

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“…Most major fossil fuel producing nations suffer from the problem of 'carbon entanglement', where dependence on fossil fuels generates a vested interest in bringing fossil fuels to market, making it both politically and economically challenging to step away from production (Gurría, 2013). This is evident in the Norwegian case, highlighted by Bang and Lahn (2020), where oil and gas has provided a major source of welfare funding for the state. Through prudent management of oil and gas revenues, Norwegian oil wealth has translated into prosperity and long-term security for its citizens.…”

Section: Barriers To Enacting Supply-side Policymentioning

confidence: 99%

“…Curran (2020) provides a powerful description of how this operates in Australia, where the coal industry holds sway over aspects of decision making in both the financial sector and the political system. As Curran highlightsand as reflected in several papers in this issue and beyond (see for example: Bang & Lahn, 2020;Graham et al, 2019;Stokes, 2020;Strambo & González Espinosa, 2020)close networks between fossil fuel industry actors, financiers, and political elites have helped the industry perpetuate fossil fuel dependence, hindering the clean energy transition. Reducing the influence of these vested interests on climate policy remains a significant task.…”

Section: Barriers To Enacting Supply-side Policymentioning

confidence: 99%

“…In Colombia, for instance, Strambo and González Espinosa (2020) illustrate that the government itself often perpetuates the idea that fossil fuelled development is both inevitable and necessary for economic growth. This is echoed in the Norwegian case, where the industry has successfully propagated the idea that oil is an indispensable source of welfare for the country (Bang & Lahn, 2020). This narrative about the importance of fossil fuel production for economic growth is rarely challenged; its dominance helps explain why many countries continue to subsidize and support the industry past the point where it clearly makes more economic sense to look to alternative sources of energy.…”

Section: Barriers To Enacting Supply-side Policymentioning

confidence: 99%

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Curbing fossil fuel supply to achieve climate goals

et al. 2020

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Section: Barriers To Enacting Supply-side Policymentioning

confidence: 99%

Section: Barriers To Enacting Supply-side Policymentioning

confidence: 99%

Section: Barriers To Enacting Supply-side Policymentioning

confidence: 99%

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Curbing fossil fuel supply to achieve climate goals

et al. 2020

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“…Oil and gas companies represent a substantial risk to the 2°C target because of their ability and intent to continue to explore for new fossil fuel sources (Heede & Oreskes, 2016). Previous studies have investigated overall climate risk (Carleton & Hsiang, 2016), issues related to governance (Gaulin & Le Billon, 2020;Newell & Simms, 2019;Piggot et al, 2018), the relationship between firms' operations and their contribution to climate change (Bang & Lahn, 2019;Heede, 2014;Hsiang et al, 2017), and bank sensitivity to losses from fossil fuel companies (Battiston et al, 2017). Given that financial investors are important players in shaping transformative change, it is crucial to account for their role in this respect as well (Crona et al, 2018;Steffen et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

The financial impact of fossil fuel divestment

Plantinga

Scholtens

2020

Climate Policy

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The fossil fuel divestment movement tries to increase awareness about the need for climate action and heralds divestment from fossil fuel producers as a means to combat climate change. Financial investors are increasingly showing interest in the nonfinancial impact of companies they invest in, i.e. responsible investing. However, they also want to be assured of sufficient returns and limited risks to support the living costs of their ultimate beneficiaries. In this context, we investigate the impact of divestment and the transition of the energy system on investment performance. We rely on an international sample of almost seven thousand companies and study a period of forty years. Further, we investigate scenarios with very different pathways to the transition of the energy system. We find that the investment performance of portfolios that exclude fossil fuel production companies does not significantly differ in terms of risk and return from unrestricted portfolios. This finding holds even under market conditions that would benefit the fossil fuel industry. We conclude that divesting from fossil fuel production does not result in financial harm to investors, even when fossil fuels continue to play a dominant role in the energy mix for some time. Key policy insights. Financing the exploration and exploitation of fossil fuel resources is increasingly being regarded as controversial, leading to divestment from this industry.. Fossil fuel divestment does not seem to significantly harm financial investors and is not at odds with the fiduciary duty of institutional investors. This paves the way for more extensive initiatives to promote fossil fuel divestment.. A smooth energy transition will most likely erode the profitability of fossil fuel firms and their ability to invest. Therefore, governments cannot rely on the fossil fuel industry to finance the energy transition.

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“…There is a strong case that new approaches are needed. Among these, restricting fossil fuel extraction may have both economic and political advantages compared to conventional end-of-pipe approaches (Green & Denniss, 2018), contrary to policy makers' tendency to treat energy and climate policymaking separately (Bang & Lahn, 2019).…”

Section: A Rapid Phase Out Of Fossil Fuelsmentioning

confidence: 99%

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

Muttitt¹,

Kartha

2020

Climate Policy

112

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Equity issues have long been debated within international climate politics, focused on fairly distributing reductions in territorial emissions and fossil fuel consumption. There is a growing recognition among scholars and policymakers that curbing fossil fuel supply (as well as demand) can be a valuable part of the climate policy toolbox; this raises the question of where and how the tool should be applied. This paper explores how to equitably manage the social dimensions of a rapid transition away from fossil fuel extraction. Fossil fuel extraction leads to benefits for some people (such as extraction workers) and harms for others (such as pollution-affected communities). A transition must respect and uphold the rights of both groups, while also staying within climate limits, as climate impacts will fall most heavily on the world's poor. This paper begins by reviewing how extraction affects economies and communities and the different transitional challenges they face. Based on that review, it then examines three common equity approacheseconomic efficiency, meeting development needs, and effort-sharing. Drawing lessons from the strengths and weaknesses of these approaches, the paper proposes five principles as a basis for equitably curbing fossil fuel extraction within climate limits:(1) Phase out global extraction at pace consistent with limiting warming to 1.5°C;(2) Enable a just transition for workers and communities;(3) Curb extraction consistent with environmental justice; (4) Reduce extraction fastest where doing so will have the least social costs;(5) Share transition costs fairly, according to ability to bear those costs. Key policy insights:. Fossil fuel extraction is unlikely to be a viable path to development because the Paris Agreement goals require most fossil fuel use to be ended within a generation; . Extraction should be phased out fastest in diversified, wealthier economies that can better absorb the transitional impacts; . Governments of extracting countries should enact ambitious industrial policy to diversify their economies, alongside economic and employment policies to enable a just transition; . The costs of a just transition should be borne by those most able to bear it: poorer countries can reasonably demand financial support.

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From oil as welfare to oil as risk? Norwegian petroleum resource governance and climate policy

Cited by 49 publications

References 24 publications

Curbing fossil fuel supply to achieve climate goals

Curbing fossil fuel supply to achieve climate goals

The financial impact of fossil fuel divestment

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

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