Fossil fuels – coal, oil, and gas – are the single largest contributor to greenhouse gas emissions. Yet governments around the globe are on track to produce 120 per cent more than is compatible with the goals of the Paris Agreement. If those stocks are to be kept in the ground, an alternative approach is necessary.
The climate emergency is a “code red” threat to the world. But the main approach to climate policy – regulating end-use emissions through taxes and emissions trading – does not get to the source of the problem. The Paris Agreement does not even mention the F word: fossil fuels. The text from COP26 in Glasgow only refers limply to “inefficient fossil fuel subsidies” and a coal “phase down” rather than “phase out”. Enter a new approach: supply-side policy to limit the production and extraction of fossil fuels in the first place. The idea for a fossil fuel treaty surfaced on the 50th anniversary of the Treaty on the Non-Proliferation of Nuclear Weapons in 2018. In view of the clear need to leave a large proportion of the world’s remaining fossil fuels unburned, the treaty’s three-pillar structure of non-proliferation, disarmament, and peaceful use provides a fair basis to work from: agree not to increase fossil fuel extraction (non-proliferation); agree a fair phase-out of existing infrastructures and investments (disarmament); and build an alternative low-carbon pathway (a just transition away from fossil fuels).
First proposed in the pages of The Guardian, the idea for a Fossil Fuel Non-Proliferation Treaty was quickly followed by a letter of support from activists such as Bill McKibben, Naomi Klein, British Green MP Caroline Lucas, and the heads of major NGOs such as Greenpeace and Friends of the Earth. From there, a global campaign developed, headed initially by Canadian activist Tzeporah Berman, which has now spawned a worldwide network of supporters and activists.
Writing a fossil fuel treaty
What the treaty would look like has since been elaborated on further. The starting point would be a global registry of fossil fuel reserves. This registry would act as a precursor to phased and sequenced commitments not to expand the extraction of new fossil fuels and then to accelerate the phase-out of existing investments and infrastructures. A “first movers club” (already in motion) could move ahead with unilateral and then minilateral agreements to leave fossil fuels in the ground, encouraging others to join over time and providing incentives to do so. Importantly, such commitments could also be included under the nationally determined contributions (NDCs) that governments are already obliged to make under the Paris Agreement by quantifying the emissions saved by leaving carbon unburned. A new fossil fuel treaty, most likely under the umbrella of the United Nations, would complement the Paris climate regime by addressing the neglected supply side of climate policy and orchestrating a transparent and fair multilateral phase-out of fossil fuels which is not dealt with by current accords.
The goals and timeframes of the agreement would need to be guided by an international scientific assessment of the percentages of each fossil fuel that need to remain in the ground in line with commitments to keep warming below 1.5 degrees. Given uneven endowments among countries, a calculation of their financial value would have to be made in order to determine what degree of sacrifice each country is making for the common good and allocate commitments equitably. Negotiations towards a treaty would necessarily link across different fossil fuels based on these respective reserves. Some countries would leave more coal, oil, or gas in the ground depending on their reserves’ locations and value, as well as other countries’ targets.
Commitments would employ differentiated timetables for first halting and then phasing out fossil fuel production by countries. The allocation and sequencing of the phase-out would be determined by set criteria and principles. First, the costs of action should be borne disproportionately by those who have the greatest ability to pay, defined by per capita income levels, and that are best placed to redirect finance, production, and technology towards lower-carbon alternatives. Second, the greatest emitters of greenhouse gases generated by the direct burning of their own fossil fuel reserves should act first. Third, cumulative emissions should be assessed in order to take adequate account of historical responsibility and the use of fossil fuels to date.
A process based on rationality and solidarity
For reasons of historical responsibility and equity, richer, primarily OECD countries and the Russian Federation would need to move furthest and fastest. Many of the world’s largest and most powerful private fossil fuel companies are based in OECD countries. To ensure compliance and avoid emissions simply being moved from one place to another, fossil fuel assets held overseas by a country’s domestic companies would be subject to supply-side commitments. A second tier of “next mover” countries would be large non- OECD emitters such as China, India, Brazil, and Indonesia, all of whom belong to the top 10 global emitters who together account for nearly three-quarters of global emissions.
Support would then have to be provided to poorer developing countries with reserves of fossil fuels to fund the shift to renewable energy. According to the International Monetary Fund, global fossil fuel subsidies reached 10 million US dollars a minute in 2020. Redirecting these staggering sums in combination with public and private finance in the form of aid, export credits, and investments would fund low-carbon energy pathways. A global transition fund could support this under the umbrella of the treaty. As with other environmental
agreements, inducements such as exclusive market access could be provided to encourage parties to join, as well as disincentives in the form of border-tax adjustments on imports from countries not part of the treaty. This is something that the European Union has put forward as a climate policy lever: its proposed carbon border adjustment mechanism would apply import tariffs to goods entering the EU amounting to the EU carbon taxes applicable to equivalent production.
Why would fossil fuel producers sign up to such a treaty? The phasing out of fossil fuels is inevitable and already underway (albeit not progressing rapidly enough); such a multilateral initiative would coordinate the process more equitably. Orderly oversight with reporting and compliance measures can deter freeriding among major producers. Any treaty with this level of ambition will of course run up against opposition from some of the most powerful states and corporations in the global economy. Their power was again on display in Glasgow, as the final texts were watered down to allow for further loopholes and delay. But the costs of renewables are falling, and pressure from activists and the wider public is growing. Meanwhile, investors fear that their investments in fossil fuels will end up stranded. The writing is on the wall.
Several countries have already shown progressive leadership in leaving fossil fuels in the ground. The first attempt at a supply-side climate policy was adopted by Ecuador in its attempt to prevent oil extraction with its Yasuní-ITT Initiative. In 2007, the country’s government announced that it would not drill for oil in Yasuni National Park, a highly biodiverse Amazonian rainforest that is home to uncontacted Indigenous peoples, in return for compensation from donors. The landmark decision was unfortunately reversed in 2013 after sufficient funds failed to materialise, and in 2016 it was confirmed that drilling had begun.
This failed attempt was, however, followed by the announcement of bans on oil, gas, or coal exploration or extraction by a series of global “first movers”. Prominent members of this group include Denmark, France, and Spain, alongside Belize, Costa Rica, and New Zealand. France announced the phase-out of oil and gas exploration and production in December 2017. Belize then followed with a moratorium on all offshore oil activity. Denmark ended onshore oil and gas exploration in February 2018 and announced its oil and gas phase-out in 2020. New Zealand banned new offshore oil exploration licences in April 2018, as did Ireland in September 2019.
Former major coal producers such as the UK, Spain, and Germany have introduced phase-out policies, and some countries, such as Denmark, have moved rapidly from being major investors in oil and gas to leaders in renewables. This is captured most clearly in the reinvention of DONG (Danish Oil and Natural Gas) as Ørsted, now the world’s largest developer of offshore wind power. These countries are charting new terrain in climate policy that, if more widely adopted and developed into a global governance norm, could influence major producers.
Numerous European countries also belong to the Powering Past Coal Alliance, which aims to secure commitments from governments and the private sector to phase out existing unabated coal power and encourage a global moratorium on the construction of new unabated coal-fired power plants. Forty-one national governments, as well as cities and regions, businesses, and organisations, have signed up. Denmark is also a founding member of the Beyond Oil and Gas Alliance that aims to encourage first-mover countries to go beyond both oil and gas. In Glasgow, France, Greenland, Ireland, Sweden, and Wales joined the alliance with New Zealand and Portugal as associate members. There is the potential for others to follow in their footsteps. Beyond Europe, 20 nationally elected officials from Africa, Asia, Latin America, and the Pacific region launched a Parliamentarians’ Call for a Fossil Fuel Free Future calling for a global transition away from coal, oil, and gas. These include representatives from fossil-fuel-dependent countries such as Colombia, Indonesia, Malaysia, Rwanda, and the Philippines.
Drawing on a fossil fuel cuts database, researchers from the University of British Columbia found that between 1988 and 2017, 1302 initiatives were implemented in 106 countries across seven major types of supply-side approaches.6 But while the number of initiatives has grown rapidly over the past decade, their adoption is highly uneven, underscoring the need for a multilateral framework to advance a more universal approach. Indeed, Pacific Island leaders have issued the Suva Declaration within the United Nations Framework Convention on Climate Change calling on parties to initiate moratoria on fossil fuels, especially coal mining. Support for a Fossil Fuel Non-Proliferation Treaty has also been forthcoming from senior figures such as former Irish president Mary Robinson and over 100 former Nobel laureates. Even US Vice-President Kamala Harris has called for “a first-ever global negotiation of the cooperative managed decline of fossil fuel production.”
It is not just governments that are moving in this direction. Campaigns are increasingly aimed at phasing out fossil fuel finance deployed by multilateral development banks and bilateral donors, and governments’ use of export finance. Moves from the European Investment Bank to align with the Paris Agreement and commitments from the World Bank to withdraw financing from fossil fuels show these are having an effect. The Lofoten Declaration for a managed decline of fossil fuel production, drawn up in August 2017 and now signed by over 600 organisations in more than 70 countries from all over the world, puts this question front and centre.
Sub-state action might also have an important role to play. SAFE Cities is a growing network of cities, counties, and other communities (55 to date) that “Stand Against Fossil Fuel Expansion”, while a number of key cities including Vancouver, Barcelona, Toronto, Sydney, and Los Angeles have endorsed the call for a treaty to limit fossil fuels. There are also moratoria on fracking in place in hundreds of subnational jurisdictions, including in France, Germany, Ireland, and the United Kingdom.
Investors and corporations are also increasingly subject to divestment campaigns, boycotts, and shareholder pressure to withdraw support for new fossil fuel investments. Even ExxonMobil, long one of the most stalwart opponents of climate action, was defeated in a May 2021 shareholder vote by an activist investment firm demanding that the company accelerate its transition to clean energy.
Enter the European Union?
The EU has both a duty and a responsibility to advance a fossil fuel treaty, as well as the means to do so. As members of the UN Security Council, France and the UK have a key role to play. As the birthplace of the industrial revolution and home to the powerful and globally connected City of London, the United Kingdom has a particularly significant responsibility.
Greens across Europe would be obvious backers of such a proposal. The Green candidate for the French presidency, Yannick Jadot, along with other leading French Greens, recently called for just such a non-proliferation treaty. The likely presence of Germany’s Green Party in government following the September 2021 federal elections provides another potential avenue for support. In Britain, Caroline Lucas MP has called for a Fossil Fuel Non-Proliferation Bill. Cross-party alliances will be critical to the success of the bill, and there are supporters to be found among the ranks of Liberal Democrat, Labour, and Conservative MPs.
The campaign for a Fossil Fuel Non-Proliferation Treaty embodies key principles of Green foreign policy: peaceful disarmament, dealing with the root causes of ecological devastation by holding polluters to account, and a belief in internationalism and multilateralism. By channelling a growing tide of social pressure and non-violent direct action into global political action, this movement also helps to democratise and energise global governance, making it more responsive to citizen demands and directing it towards social and environmental protection rather than merely upholding an unsustainable global economy.
EU frameworks for delivering a just transition will also be critical to ensure that the rapid shift away from fossil fuels is minimally disruptive to workers, and that adequate retraining, compensation, and regional redevelopment programmes are in place. Their convening power can also make sure that trade unions and business associations are part of the discussion. There are important lessons to be learned from the transition away from coal in Germany, the Netherlands, and the UK. The EU can also use its power as an attractive trading and economic bloc and provider of aid and technical assistance to support lower carbon pathways overseas. It can use its presence at the United Nations, the World Bank, the World Trade Organization, and other fora to pressure for coordinated efforts to phase out fossil fuels and end privileged support for fossil fuel interests in agreements like the Energy Charter Treaty. If the EU really wants to live up to its claim to climate leadership, it should throw its weight behind the growing chorus calling for a treaty targeting the main cause of the climate crisis: the over-use of fossil fuels.
PROFESSOR PETER NEWELL
University of Sussex
Peter Newell is a former ISRF Political Economy Research Fellow 2018-2019. He is also a Professor of International Relations at the University of Sussex. His latest book is Power Shift: The Global Political Economy of Energy Transitions (2021).