Institutional mechanisms to keep unburnable fossil fuel reserves in the soil

• DOI: 10.1016/j.enpol.2020.112029
• Publication Date: 2020-11-21T00:40:45Z
• Authors: Lorenzo Pellegrini; Murat Arsel; Martí Orta-Martínez; Carlos F. Mena; Gorka Muñoa
• Keywords: 0301 basic medicine; Economic Implications of Climate Change Policies; Economics and Econometrics; ISS-PE; Economics; Discrete Choice Models in Economics and Health Care; Social Sciences; Greenhouse gas; 7. Clean energy; ISS-DE; 12. Responsible consumption; 03 medical and health sciences; Engineering; Natural resource economics; Market economy; 11. Sustainability; SDG 13 - Climate Action; Business; Carbon Pricing; Waste management; Biology; Global and Planetary Change; Ecology; Economic rent; Paleontology; Fossil fuel; Economics, Econometrics and Finance; Petroleum; 13. Climate action; FOS: Biological sciences; Global Methane Emissions and Impacts; Environmental Science; Physical Sciences; Oil reserves; Collateral; Finance

To limit the probable increase in global mean temperature to 2 °C, about 80%, 50% and 30% of existing coal, gas oil reserves, respectively, would need remain under soil. While concept 'unburnable fuels' has become prominent, there been little discussion on institutional mechanisms identify specific fossil fuel reserves be left untouched financial for raising distributing funds compensate right-holders forgoing extraction. We present an auction mechanism determine kept untapped – those whose extraction generate least rents, ensuring cost efficiency. The auctions could complemented by other provisions reap collateral benefits avoided extraction, example prioritizing that coincide with outstanding socio-environmental values are likely disrupted fuels. also discuss how raise funds, through a producers-based tax, finance compensating commitment. effective identification unburnable development accompanying funding seems elephant room climate negotiations we aim at contributing overdue supply-side interventions mitigate greenhouse emissions.