Whose carbon is burnable? Equity considerations in the allocation of a “right to extract”

Abstract

Carbon emissions-and hence fossil fuel combustion-must decline rapidly if warming is to be held below 1.5 or 2°C. Yet fossil fuels are so deeply entrenched in the broader economy that a rapid transition poses the challenge of significant transitional disruption. Fossil fuels must be phased out even as access to energy services for basic needs and for economic development expands, particularly in developing countries. Nations, communities, and workers that are economically dependent on fossil fuel extraction will need to find a new foundation for livelihoods and revenue. These challenges are surmountable. In principle, societies could undertake a decarbonization transition in which they anticipate the transitional disruption, and cooperate and contribute fairly to minimize and alleviate it. Indeed, if societies do not work to avoid that disruption, a decarbonization transition may not be possible at all. Too many people may conclude they will suffer undue hardship, and thus undermine the political consensus required to undertake an ambitious transition. The principles and framework laid out here are offered as a contribution to understanding the nature of the potential impacts of a transition, principles for equitably sharing the costs of avoiding them, and guidance for prioritizing which fossil resources can still be extracted.

The Impact of Divestment Announcements on the Share Price of Fossil Fuel Stocks

“…Though lower share prices increase the costs of financial capital [95], the effect on the exploration of new fossil fuel resources [34] is still unclear. Furthermore, the impact of divestment on fossil fuel extraction in different parts of the world should be analyzed to address equity considerations regarding fossil fuel extraction [96].…”

Coal and climate change

“…So coal emerges as a particular paradox, because it “both enables contemporary patterns of development and yet, by producing climate change, threatens that development” (Goodman et al, , p. 180). This means that positioning oneself against coal—particularly from the rich countries—“can easily be portrayed as to be pro‐poverty or even racist, the obsession of the Western environmentalist happy to kick away the ladder to levels of economic prosperity that they themselves enjoy” (Tyfield, , p. 69; see also Kartha, Caney, Dubash, & Muttitt, ). It is no surprise that this ‘equity’ rationale has consistently underpinned both domestic climate politics in coal‐dependent developing countries such as India (Dubash, , ), and been explicitly deployed in international fora, such as by Prime Minister Narendra Modi in his remarks at the opening of COP21 in Paris in November 2015…”

An equitable redistribution of unburnable carbon

“…For example, the Lofoten Declaration on the Managed Decline of Fossil Fuels states that developed countries have a responsibility and moral obligation to take the lead 14 . Kartha et al argue that an equitable approach would minimise economic disruption, supporting economic diversification and ensuring the provision of energy services and investment in job creation, and be based on a fair distribution of costs 13 . Muttitt and Kartha go on to set out a set of principles to apply to an equitable transition away from fossil fuel production 15 .…”

“…Caney 11 and Kartha et al 12 argue that policies that result in the stranding of fossil resources for some countries and not others will inescapably give rise to issues of equity. Kartha et al argue that leaving the question of who may extract to markets risks leaving the least-able carrying the greatest burden, and that countries cannot be expected to constrain fossil fuel production unless this is part of a broader effort by the international community to reduce production 13 . Common to each is a focus on the perceived opportunity cost incurred by developing countries that forgo fossil fuel production, particularly the revenues, fuel flows and employment that fossil fuel development can in theory provide.…”