How to keep unburnable fossil fuel reserves in the soil
In this new article published in Energy Policy, Dr Lorenzo Pellegrini et al discuss possible institutional mechanisms to identify specific fossil fuel reserves to be left untouched and the financial mechanisms for raising and distributing funds to compensate the right-holders for forgoing extraction.
The authors identify four main points in their article:
- ‘Unburnable fossil fuel’ reserves are the elephant in the room of climate negotiations.
- An institutional mechanism to identify unburnable fuels is needed.
- An auction -based instrument can determine unburnable fossil fuel reserves.
- Several mechanisms can compensate right-holders over unburnable reserves.
The elephant in the room on mitigating greenhouse gas emissions
The authors present an auction mechanism to determine the fossil fuel reserves to be kept untapped – those whose extraction would generate the least rents, ensuring cost efficiency. The auctions could be complemented by other provisions to reap collateral benefits of avoided extraction, for example by prioritizing reserves that coincide with outstanding socio-environmental values that are likely to be disrupted by the extraction of fossil fuels. They also discuss how to raise funds, for example through a fossil fuel producers-based tax, to finance the mechanism compensating right-holders and ensuring commitment.
Read the full article: Institutional mechanisms to keep unburnable fossil fuel reserves in the soil