Presentation short abstract

Fossil fuels must stay underground. Changing course requires fossil fuel-producing countries to forgo substantial rents. We sketch the political economy of fossil fuel supply phase-out matching feasibility with justice, emphasizing the role of compensation and long-term commitments.

Presentation long abstract

The king is naked and after 30 years of attempts to establish an effective global climate policy regime, the ‘world leaders’ have started to acknowledge that fossil fuels must stay underground to make any conspicuous progress towards greenhouse gas emissions reduction. The fact that most fossil fuel reserves are ‘unburnable’ is the corollary of the relationship between the remaining carbon budget and the emissions embedded in existing fossil fuel reserves. Nevertheless, companies and countries are planning to extract quantities of fossil fuels well above those compatible with the 1.5oC, and even 2oC, global warming targets. Changing course will have vast implications for the global economy and require that fossil fuel-producing countries forgo substantial rents – the extranormal profits associated with fossil fuels. Focusing on rents, we discuss the political economy of fossil fuel supply phase-out strategies and how to match feasibility with justice, emphasizing the role of compensation and long-term commitments.