Guest post: Five ways the Paris Agreement can address oversupply of fossil fuels

Michael Lazarus is a senior scientist and US Center director at the Stockholm Environment Institute (SEI), based in Seattle. Harro van Asselt is a senior research fellow in the SEI Oxford Centre and a professor of climate law and policy东芬兰大学的法学院。l。azarus and van Asselt are co-leaders of theSEI Initiative on Fossil Fuels and Climate Change.

TheWorld Energy Outlook 2016, released last week, is just one among an increasing line of studies showing how nations need to slow and, ultimately, phase out investment in new fossil fuel supply infrastructure – from oil fields and pipelines to coal mines – if they are serious about keeping warming to 2C or less.

At the same time,Norway is making licenses availablefor offshore drilling in the Arctic.New pipelines from the Canadian oil sandswould enable the export greater amounts of highly polluting oil. The Australian government hasapproved large new coal minesto supply the Asian market. These types of investments only make economic sense in a future with 4–5C of warming.

While these and other governments have adoptednationally determined contributions(NDCs) under theParis Agreementthat promise to reduce their own territorial emissions, their plans are silent on slowing the production and export of fossil fuels. “Fossil fuels” still seem to betaboo wordsat the UN climate talks.

Yet as evidenced by the packed room and intense discussion at aside-event we co-hostedat the马拉喀什气候变化会议, there is growing recognition that the oversupply of fossil fuels is an urgent problem. And although the Marrakech talks skirted the topic, the Paris Agreement does offer opportunities tolimit future fossil fuel production. Here are five ways to do so:

First, governments can use the agreement’s overarching goal to keep warming “well below 2C” as the basis for a “climate test” to be applied to major new permit requests or proposed investments in fossil fuel infrastructure. Are these projects consistent with a 2C pathway, or will they make it harder to reach by making fossil fuels cheaper and creating new vested interests in continued production?

We have thetoolsandtechniquesfor such a test, and some US government agencies have even begun using them – most notably in the review of the proposed Keystone XL pipeline and theprogrammatic Environmental Impact Statement processfor the federal coal leasing program.

Oilsands plant and tailings pond, Fort McMurray, Alberta, Canada. Video via skylightpictures/Creatas Video+/Getty Images.

At the international level, a similar test could be applied as part of the “facilitative dialogue” to be held in 2018, and the five-yearly “global stocktakes” starting in 2023. Countries could be asked to report on existing and planned fossil fuel production, so the parties can assess whether, as a whole, this is in line with global climate goals.

Second, parties to the Paris Agreement can incorporate trajectories for fossil fuel production and investment as they prepare low-emissiondevelopment strategiesto 2050, as called for in the agreement. For example, studies suggest that to stay below 2C, the US would need to cut aggregate fossil fuel production by40–60%from current levels by 2040.

Third, parties can integrate fossil fuel production phase-out targets, as well as policies and measures to constrain investment in fossil fuel supply, into their next round of NDCs. A good start would be to pledge to removethe tens of billions of dollars in direct taxpayer subsidiesfor fossil fuel exploration and extraction.

A forthcoming paper from theStockholm Environment InstituteandEarthTrackshows that in the US, in particular, production subsidies can spur otherwise uneconomic investment, lead to significant added emissions, and also transfer taxpayer resources to company profits.

Other potential measures to consider are moratoria on new coal mines, such as those thatChinaandIndonesiahave already enacted (on a temporary basis), orcoal export taxesandroyalty increasesthat others have suggested. Although countries’ own domestic emissions may not be significantly affected by such measures, NDCs could indicate the global emissions benefits provided by reducing fossil fuel supply.

Fourth, to further encourage supply-side action, parties should support the adoption of new emissions accounting approaches that make it easier for countries to measure and claim credit for supply-side actions. One possible approach isextraction-based accounting, a very simple way to calculate and track the emissions associated with the fossil fuels produced in a given country. This would be a valuable complement (though not alternative) to the territorial accounting used to date.

A fifth, crucial step that governments can take is to actively support a “just transition” to a low-carbon economy for communities (and countries) that now depend on fossil fuel production. As Samantha Smith, director of theJust Transition Centre, stressed at another side-event we co-hosted, this requires close engagement with communities to build trust and plan together for a different future, backed by strong investment.

On an international level, it is important to recognize that countries with fossil fuel resources havenot benefited equallyfrom extraction activities to date, nor will they be affected equally by future production constraints. Some countries are counting on fossil fuel revenue to fund basic development. They may need additional international finance to support a low-carbon transition.

The“response measures” trackof the climate negotiations has the mandate to address these concerns. While in the past it has been used by petro-states as a vehicle for obstructing the negotiations, it is increasingly starting to focus on the need for economic diversification and just and orderly transitions, particularly in developing countries.

The Marrakech talks may not have tackled the gap between global climate goals and fossil fuel production, but individual governments don’t need to wait to show leadership.