Pathways to an International Agreement - Specialized Research AI at MIT

Pathways to an International Agreement
to Leave Fossil Fuels in the Ground

(cid:129)
Harro van Asselt and Peter Newell*

Abstract

To achieve the Paris Agreement’s temperature goal, fossil fuel production needs to
undergo a managed decline. While some frontrunner countries have already begun to
adopt policies and measures restricting fossil fuel supply, an outstanding question is
how international cooperation in support of a managed decline of fossil fuel production
could take shape. This article explores two possible pathways—one following a club
model and the other more akin to a multilateral environmental agreement. Speciﬁcally,
the article discusses the participants in an international agreement; the forum through
which cooperation will take place; the modalities, principles, and procedures underpin-
ning the agreement; and the incentives to induce cooperation. The article concludes that
the most likely scenario at this juncture is the emergence of club arrangements covering
particular fossil fuel sources and groups of actors that, over time, give rise to growing calls
for a more coordinated and multilateral response.

Fossil fuels—coal, oil, and gas—are the single largest contributor to greenhouse
gas emissions. Further fossil fuel production may therefore jeopardize the
achievement of the long-term temperature goal of the Paris Agreement to keep
global warming well below 2°C and pursue efforts to stay below 1.5°C (Inter-
national Energy Agency 2021; Stockholm Environment Institute et al. 2021;
Welsby et al. 2021). Remarkably, however, recognition of the need to reduce
fossil fuel production is entirely absent in the treaties and decisions that form
the basis of the international climate regime (Piggot et al. 2018). This is the
rationale for governance proposals to address the supply of fossil fuels and
not just the greenhouse gases they emit when burned.

Acknowledging the linkages between fossil fuel production and climate
change, a growing number of countries have adopted measures restricting fossil
fuel supply, including moratoria, extraction taxes, and reforms of fossil fuel pro-
ducer subsidies (Carter and McKenzie 2020; Erickson et al. 2018; Gaulin and Le

* We are grateful for the comments received from the reviewers, special issue guest editors, and
Fergus Green. Harro van Asselt acknowledges support from the European Union’s Horizon
2020 Research and Innovation Programme under grant agreement 101003866 (NDC
ASPECTS).

Global Environmental Politics 22:4, November 2022, https://doi.org/10.1162/glep_a_00674
© 2022 by the Massachusetts Institute of Technology. Published under a Creative Commons Attribution 4.0
International (CC BY 4.0) license.

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Harro van Asselt and Peter Newell

(cid:129) 29

Billon 2020; Lazarus and van Asselt 2018). While such supply-side measures
can complement demand-oriented climate policies (Green and Denniss
2018), their effectiveness would be strengthened by international cooperation.
International cooperation can help build trust that other countries are taking
action (Piggot et al. 2020). Absent international coordination, constraining sup-
ply from some countries can increase economic incentives for others to increase
production (Le Billon and Kristoffersen 2019). Moreover, from the perspective
of climate justice, “leaving the allocation of ‘who may extract?’ to market forces
risks placing the greatest burden of transition on those least able to carry it”
(Kartha et al. 2018, 119) and fails to address the structural inequities in market
access and imbalances of power that allow incumbent fossil fuel industries to
beneﬁt from fossil fuel subsidies and other forms of government support.
Addressing these issues, international institutions can help by setting overall
goals; putting in place mechanisms to strengthen transparency and accountabil-
ity; offering capacity-building, ﬁnancial, and technological support; and dissem-
inating information, allowing for learning across countries (Rayner 2021).

Several proposals have been put forward for international cooperation to
facilitate the winding down of fossil fuel production, including a Fossil Fuel
Non-Proliferation Treaty (Newell and Simms 2020), a Coal Elimination Treaty
(Burke and Fishel 2020), a supply-side climate treaty that would incorporate
supply-side nationally determined contributions (NDCs) (Asheim et al.
2019), and using existing avenues with the United Nations Framework Conven-
tion on Climate Change (UNFCCC) (Piggot et al. 2018). Moreover, in the
run-up to the Glasgow Climate Summit in November 2021, ﬁrst steps toward
international cooperation were taken in the form of the launch of the Beyond Oil
and Gas Alliance (BOGA), an initiative by the governments of Costa Rica and
Denmark that seeks to align oil and gas production with the Paris Agreement.

These proposals and developments raise several important questions,
including what an international agreement on winding down fossil fuel produc-
tion would look like and how international cooperation on this issue can be
fostered. Exploring two idealized pathways—a club arrangement and a treaty
modeled after a multilateral environmental agreement (MEA)—this article ana-
lyzes these questions, addressing, ﬁrst, the participants in an international agree-
ment; second, the forum through which cooperation will take place; third, the
modalities (i.e., ways of working), principles, and procedures underpinning the
agreement; and fourth, the incentives to induce cooperation. By doing so, we
elucidate the various options and trade-offs in the design of an international
supply-side agreement and sketch the political dynamics that may facilitate or
hinder the adoption of such an agreement.

Theoretically, we draw on and contribute to scholarship on club arrange-
ments (Eckersley 2012; Falkner et al. 2022; Green 2017; Hovi et al. 2019) and
transnational climate change governance (Bulkeley et al. 2014) when consider-
ing a club on fossil fuel supply and the broader literature on international
regime design when analyzing the potential content of a supply-side treaty,

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30 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

generating insights about the ways in which club arrangements can preﬁgure
and prepare the ground for multilateral agreements. We also draw on, and con-
tribute to, the growing body of scholarship on supply-side climate policy and to
practical thinking about the form such policies might take at the international
level. Methodologically, our approach is to draw on historical parallels from
existing club arrangements and MEAs and insights from associated literatures
while being attentive to the peculiar politics of governing fossil fuel extraction.

The Wider Politics of an International Agreement on
Fossil Fuel Production

The emergence of any international agreement on fossil fuel supply will likely
be the result of a conﬂuence of political and economic factors favoring more
ambitious action and a new approach to the issue. Any supply-side agreement
will need to harness and engage with these drivers of change and potentially
incorporate them within its processes and mechanisms.

Economically, this includes changes in the price and availability of alter-
natives to fossil fuels, particularly renewable energy technologies such as wind
and solar—whose prices have fallen dramatically in recent years. For many
countries, further investments in a fossil-based infrastructure could lock in a
higher-cost fossil energy path and lead to stranded assets and decreased compet-
itiveness in a global energy market moving in the opposite direction (Van de
Graaf 2018). The desirability of a move away from fossil fuels is underscored
by a growing realization on the part of key ﬁnancial actors, such as sovereign
wealth and pension funds, that investments in fossil fuels may become stranded
(Semieniuk et al. 2022). A key role for an international agreement on fossil fuel
supply will be to support the accelerated diffusion of renewable technologies
and ﬁnancial support necessary to transition away from fossil fuels. Steering
ﬁnance away from fossil fuels is a task any club or MEA would have to share
with international economic institutions, including multilateral development
banks. Concerted pressure from each, particularly withdrawing ﬁnancial support
to fossil fuels, could drive states to join a new initiative.

Socially, momentum is likely to come from resistance to new fossil fuel
infrastructure by social movements and pressure groups. In North America,
Indigenous groups have played a key part in struggles, for example, over the
Keystone XL and Dakota Access pipelines (Gilio-Whitaker 2019; Indigenous
Environment Network 2021). This resistance coexists with more “insider” advo-
cacy around speciﬁc proposals for new fossil fuel projects (Carter and McKenzie
2020; Piggot 2018). Temper et al. (2020) ﬁnd, for example, that more than a
quarter of fossil fuel projects encountering social resistance have been canceled,
suspended, or delayed. Campaigns are also increasingly aimed at phasing out
public ﬁnance for fossil fuels. Recent moves by the European Investment Bank
to end lending for fossil fuels and commitments from the World Bank and a
growing number of export credit agencies suggest that these are having an effect.

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Harro van Asselt and Peter Newell

(cid:129) 31

Cities are also lending their support to supply-side policies. SAFE Cities is a
growing network of subnational authorities that Stand Against Fossil Fuel
Expansion, and several cities, including London, Los Angeles, Paris, and Sydney,
have endorsed the idea of a Fossil Fuel Non-Proliferation Treaty.

Civil society pressure will be vital both to securing a club arrangement and
then exerting pressure on other states to join, and to launching negotiations on
a multilateral treaty. Active participation in either forum will be key to the
accountability and, ultimately, the effectiveness of supply-side commitments.
Informal monitoring and veriﬁcation of commitments and national-level advo-
cacy to drive the level of ambition beyond ﬁrst movers will be crucial to broad-
ening and deepening international cooperation.

Another source of pressure comes from the recent waves of litigation tar-
geted at fossil fuel producers. Litigation has emerged against individual fossil
fuel projects (e.g., coal mines in Australia), against individual fossil fuel compa-
nies (e.g., Shell in the Netherlands), and against “carbon majors” as a whole (in
the Philippines) (Setzer and Higham 2021). Litigation may enhance pressure on
states and corporations to demonstrate their commitment to tackling climate
change by joining a club arrangement, which might constitute an attractive
short-term strategy for many, or to ultimately support a multilateral effort,
which would ensure that the costs and beneﬁts of supply-side cooperation are
more evenly shared rather than borne by actors targeted by litigation.

This combination of pressures will be key to socializing the need for
supply-side policies and building support for anti-fossil fuel norms (Green
2018a). Nongovernmental organizations (NGOs) have a major role to play in
this regard, just as they have done in the context of earlier campaigns, for
instance, to ban land mines and whaling (Epstein 2008; Rutherford 2000).
Targeting major state and private fossil fuel producers through litigation and
activism and amplifying economic signals—including by bringing about reduc-
tions in fossil fuel demand—will be crucial to bringing pressure to bear on
countries and regions that would be reluctant to join a club arrangement and
might otherwise play a laggard role in an MEA. They will also be important to
circumscribing space for fossil fuel expansion beyond the reach of either a club
arrangement or a new treaty.

Set against these developments, however, are several powerful states and
industry actors vigorously opposed to any suggestion that production should be
limited by international law or through a club arrangement. The power of these
incumbents and their ability to stall more ambitious climate action should not
be underestimated (Depledge 2008; Newell and Paterson 1998). Incumbents
may, for example, invoke international investment agreements to challenge or
prevent fossil fuel phaseout policies or the participation of states in any inter-
national agreement (Tienhaara et al. 2022). Power is unevenly distributed
between international institutions within and beyond the regime complexes
on energy and climate change, and we can anticipate signiﬁcant contention
around any international agreement that limits production from international

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32 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

economic institutions. A club arrangement might be thought to be less threat-
ening in this sense by virtue of its soft-law nature and therefore more likely to
gain traction in the short term. But ultimately, to be effective, strong induce-
ments for cooperation and disincentives for noncompliance will be required
such that questions of “whose rules rule” cannot be entirely avoided.

Two Models for an International Supply-Side Agreement

Two broad, idealized models for an international agreement on fossil fuel sup-
ply can be identiﬁed: ﬁrst, a club model, in which a subset of states (and other
actors) forms a coalition and crafts a non–legally binding international agree-
ment to address fossil fuel production in the same way that states are cooperat-
ing to phase out coal-ﬁred power through the Powering Past Coal Alliance
(PPCA); and second, an MEA model, which would follow the more traditional
structure of a multilateral environmental regime built on a legally binding
treaty, with broad membership and supporting institutional arrangements.

Two caveats are necessary. First, these idealized models are based on
assumptions that may not necessarily hold true in practice. For instance, clubs
can—at least in economic theory—be based on legally binding arrangements
and be accompanied by an enforcement mechanism (e.g., Nordhaus 2015).
Conversely, participation in MEAs can be limited, at least at their inception.
In what follows, we therefore seek to indicate where existing or proposed clubs
or treaties align or diverge from these models. Second, although the models are
presented separately, they may well be related, as a club arrangement could
form a building block toward a global regime.

The Club Model

The club model means that an international agreement on fossil fuel supply
would be pursued among a subset of like-minded countries. Compared to a
multilateral negotiation process, a club approach offers a means for ﬁrst-mover
countries to proceed with a degree of ﬂexibility in terms of the legal form and
procedures to be followed, reducing the complexity of negotiations ( Victor
2006, 2015).

In terms of participation, a club could involve a small but growing group
of “ﬁrst movers”—that is, countries that have already committed to phasing
down fossil fuel production. Several countries have adopted such supply-side
policies. For instance, oil and gas moratoria have been announced by France
(December 2017), Belize (December 2017), Denmark (February 2018), New
Zealand (April 2018), and Ireland (September 2019). Already we see a ﬁrst-
movers approach emerging in relation to fossil fuels and climate change, specif-
ically for coal-ﬁred power (PPCA) and oil and gas production (BOGA).

A club approach could also engage climate-vulnerable countries that are at
particular risk if other countries continue to produce fossil fuels. Although

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(cid:129) 33

climate-vulnerable countries hardly produce fossil fuels of their own, they can
add important moral weight to any initiative (de Águeda Corneloup and Mol
2014) and, in the case of the Paciﬁc islands, exert pressure at the regional level
(Morgan 2017), both diplomatically and otherwise (e.g., blocking the transpor-
tation of fossil fuels through territorial waters). Some small island states (e.g.,
Fiji, Vanuatu) are already members of the PPCA. Moreover, at the Paciﬁc Islands
Development Forum’s Leaders’ Summit in 2015, Paciﬁc island nations called for
“a new global dialogue on the implementation of an international moratorium
on the development and expansion of fossil fuel extracting industries … as an
urgent step towards decarbonising the global economy” (Paciﬁc Islands Devel-
opment Forum 2015, para. 19(g)).

The club model could easily bring subnational and nonstate actors—such
as cities, regions, NGOs, and businesses—into the fold. Involving subnational
and nonstate actors can help move an international coalition on fossil fuel sup-
ply forward, particularly where federal governments are unwilling to do so (cf.
Hale 2018). The involvement of nonstate and subnational actors would extend
cooperation to “fossil-free zones,” where all kinds of actors commit to making
their own contributions to making the world free of fossil fuels (Green 2018c).
For instance, the club could include corporations that have moved beyond fossil
fuels or set agreed timelines and reporting procedures for their phaseout, fol-
lowing the example of companies that have adopted “science-based targets”
(Walenta 2018). The involvement of nonstate actors can also bolster transpar-
ency in the negotiations and help ensure public accountability (key to ensuring
that public pressure leads to the ratcheting up of commitments). The PPCA
includes a variety of subnational and nonstate actors (including subnational
authorities from countries that are not members, as well as businesses and
investors). BOGA’s initial members also include subnational authorities (e.g.,
California), and nonstate actors can participate in the alliance as “friends of
BOGA” (see later).

States and other actors could pursue the creation of a fossil fuel supply
club through existing forums or the creation of a new one. In terms of existing
forums, the United Nations Environment Programme—which has supported
the Production Gap Reports—has played a key role in the development of coop-
erative initiatives that clearly seek to support the goals of the international cli-
mate regime, for instance, by cofounding and administratively supporting the
Climate and Clean Air Coalition on short-lived climate pollutants (Unger
et al. 2020), which also happens to address methane emissions from the oil
and gas sector. The PPCA and BOGA are examples of states creating a dedicated
new institution. Each has a small secretariat hosted by NGOs (E3G and
Pembina Institute for the PPCA; the International Institute for Sustainable
Development for BOGA).

Given the ﬂexibility in terms of membership, a club can specify commit-
ments for both states and nonstate actors, for instance, a broad commitment to
phase out fossil fuels by a given date. Such commitments could be differentiated

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34 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

by club members. For example, BOGA distinguishes between “core members”
(authorities committing to end new oil and gas production and setting a
“Paris-aligned date for ending oil and gas production”), “associate members”
(authorities that have taken supply-side measures, such as ending public ﬁnance
for oil and gas exploration abroad), and “friends of BOGA” (authorities and
nonstate actors that have signed the BOGA declaration, which calls for “a
socially just and equitable global transition to align oil and gas production with
the objectives of the Paris Agreement”) (Beyond Oil and Gas Alliance, n.d.).

Following the examples of the PPCA and BOGA would mean that club
commitments are unlikely to be shaped in the form of legally binding obliga-
tions. Even so, informal commitments to restrict fossil fuel supply can help
entrench a social norm to wind down fossil fuel production (Green 2018a,
2018b). Indeed, the PPCA shows how a few countries, in this case, the United
Kingdom and Canada, can rapidly “internationalize” a new idea, in this case,
phasing out unabated coal-ﬁred power (Blondeel et al. 2020). The Alliance grew
from 27 members since its beginning in 2017 to 165 members by late 2021 and
has come to attract important coal regions as members, such as Germany and
North Macedonia.

Although clubs can generally be characterized by limited institutionaliza-
tion, it is possible to put in place mechanisms to track progress (e.g., regular
reports by members, or independent reviews), thereby exerting some inﬂuence
on domestic policy making (Friedrich 2013). Furthermore, a club can enable
action “on the ground” by establishing speciﬁc work streams or specialized
initiatives or by hosting regular meetings. In the context of a supply-side club,
speciﬁc activities could include carrying out studies on how to align fossil fuel
production with climate goals, collecting data on fossil fuel production (Green
and Kuch 2022), fostering stakeholder dialogue and sharing best practices (e.g.,
on planning for a just transition), and facilitating clean technology cooperation.
Although rare in the case of transnational climate governance, such activities
may also extend to standard setting (Bulkeley et al. 2014). For instance, mirror-
ing the PPCA, ﬁnancial institutions joining a supply-side club could be required
to commit to divesting assets from fossil fuels.

A key open question is whether and how such a club should grow to bring
on board “reluctant” countries (Hovi et al. 2019), which in this case means
major fossil fuel producers. The PPCA and BOGA examples show that this
may be challenging, as the costs of phaseout and capacity to bear these costs
are crucial determinants of membership. For the PPCA, with certain notable
exceptions (e.g., Germany), “countries pledge to phase out coal only when
potential stranded assets, employment losses, regional impacts and other costs
are low” (Jewell et al. 2019, 596). Moreover, a phaseout is “more likely to be
pursued by independent and transparent governments in wealthy countries,
which have the capacity to bear substantial political, social and economic costs”
(596). This suggests that ﬁrst movers would need to consist of, or otherwise be
joined by, wealthier countries. Another factor that may help or hinder the

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Harro van Asselt and Peter Newell

(cid:129) 35

growth of a club arrangement is its scope. A more limited scope may make it
easier for states to participate (Busby and Urpelainen 2020). For instance, the
PPCA excludes coal mining from its scope, focusing solely on coal-ﬁred power
production, which enables countries willing to phase out the latter, but not the
former, to join.

To induce participation, club theory further suggests that a coalition
would need to provide for excludable member beneﬁts or impose sanctions
on nonmembers (Keohane and Victor 2016). In the context of international
cooperation on restricting fossil fuel production, the (mitigation) beneﬁts gen-
erally accrue to the global community. Nevertheless, it may be possible to agree
on other beneﬁts linked to an agreement, for instance, through sharing mitiga-
tion technologies. Moreover, even the positive reputational effects of belonging
to a ﬁrst-mover supply-side club could be considered tangible beneﬁts (Green
2017). Sanctions for nonparticipants are harder to envisage in the context of a
supply-side club, though members could decide to introduce trade measures
targeting third-country fossil fuel exports following the logic of border adjust-
ments on imports of carbon-intensive products (e.g., steel) from countries not
subject to carbon constraints, for which there is already some support. Doing so
would likely need to be based on a legally binding arrangement and turn the
club into what Falkner et al. (2022) term a “transformational club” (see also
Nordhaus 2015). In addition to providing for club beneﬁts or sanctions against
nonparticipants, a supply-side club could try to expand through members
promising to deepen their commitments on the condition of new members
joining (Hovi et al. 2019). Such ﬂexibility may be particularly important to
ensure that “reluctant” fossil fuel–producing states are not “locked out” by
ambitious commitments made by the “enthusiastic” countries at the club’s
inception.

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The MEA Model

Bringing together a large number of countries to cooperate on the managed
decline of fossil fuel production could also follow the model of existing MEAs.
The features that set this idealized model apart from the club model are a greater
number of participants; an agreement in the form of a legally binding supply-
side treaty (Burke and Fishel 2020; Newell and Simms 2020); and a high degree
of institutionalization, including a decision-making body and dedicated
secretariat.

A legally binding treaty generally signals a strong commitment, as for most
states it requires ratiﬁcation at the domestic level, usually involving parliaments.
Moreover, even in the absence of an enforcement mechanism, legally binding
obligations may exert a “compliance pull,” for instance, by making noncompli-
ance less attractive due to the reputational damage caused. Last, treaties are more
easily enforceable in domestic legal orders (Bodansky 2015; Friedrich 2013). The
intergovernmental nature of a treaty would mean that nation-states are the

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36 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

primary participants, though a treaty—following the example of the Paris
Agreement—could still create space for nonstate and subnational actors to
contribute.

Common elements in most MEAs include a speciﬁcation of the overall
objective and key principles underpinning the treaty, (substantive and pro-
cedural) obligations for parties, institutional arrangements, mechanisms for
reporting and review as well as promoting compliance, and ﬁnancial and
technical assistance.

In terms of the treaty objective, this could be explicitly linked to the Paris
Agreement, for instance, restricting any fossil fuel production that is inconsistent
with the temperature goal of the Paris Agreement. The treaty could also aim to
halt the development and expansion of (new) fossil fuel projects and infrastruc-
ture, without any reference to international climate change treaties, acknowledg-
ing the broader sustainable development beneﬁts around health, improved
access to energy, and reduced conﬂict associated with moves away from fossil
fuel extraction. If the goal of a treaty is to phase out fossil fuel production to
achieve climate goals, this would require setting a “burnable carbon” budget
that would provide the baseline and parameters for speciﬁc obligations to con-
strain production (cf. Calverley and Anderson 2022). One issue to be resolved
would be whether such baselines would be founded on existing reserves or
current levels of production, a judgment that has differential implications
for state-owned enterprises as opposed to private investors (Le Billon and
Kristoffersen 2019).

Given uneven endowments of fossil fuels between countries, different his-
torical responsibility for emissions from fossil fuels to date, and unequal capac-
ity for transitioning away from fossil fuels, shared underlying principles would
be required to guide the setting of commitments (van Asselt 2021). Some of
these principles already underpin the UNFCCC, and their acceptance by more
than 197 states strengthens the argument also to apply them in the context of a
supply-side agreement. A key principle in this regard is that of “common but
differentiated responsibilities and respective capabilities.” This principle can
inform the sequencing of commitments linked to a mixture of fuel source, levels
of development, current emissions, and past use of fossil fuels. In terms of fuel
source, some scholars have proposed the elimination of coal (Burke and Fishel
2020; Collier and Venables 2014), but to be effective, oil and gas would also
need to be included. In terms of levels of development, other MEAs have
employed time lags on commitments, such as the Montreal Protocol, where
developing countries have a “grace period” for implementing phaseout mea-
sures. However, while such types of differential treatment may account for
the circumstances in fossil fuel–dependent developing countries, they may also
unnecessarily delay the transition toward cleaner energy in these countries.

The rationale for the sequencing is further underpinned by the “polluter
pays” principle. In the context of a supply-side agreement, Kartha et al. (2018,
122) suggest that this would extend to an “extractor pays principle,” whereby in

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Harro van Asselt and Peter Newell

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the context of a limited overall “extraction budget” for keeping warming below
the Paris temperature goal, a “greater obligation to curb extraction, and to pro-
vide support to others who must curb extraction, should be borne by those who
have been responsible for the extraction of fossil fuels in the past.” In other
words, justice principles suggest that the ﬁrst countries to abandon fossil fuel
extraction should be the wealthiest states with the largest carbon-intensive fossil
fuel reserves from which they have beneﬁted historically (Muttitt and Kartha
2020). A qualiﬁcation to this general principle might be that it “only applies
to people once a certain standard of living is reached,” or on the ﬂip side, “with
greater capacity come greater ethical obligations to contribute to the global
transition” (Kartha et al. 2018, 123). The process of prioritizing cuts as part of
securing agreement around sequencing might also consider criteria such as carbon
intensity, production costs, affordability, developmental efﬁciency (of fossil fuel
rents), and support for climate action (Le Billon and Kristoffersen 2019).

Other relevant principles include those on the prevention of harm and
that of nonregression, with Article 3 of the Paris Agreement calling for “progres-
sion over time” to lock countries into ratcheting up ambition. The preamble of
the Paris Agreement also calls on parties to “consider their respective obligations
on human rights,” many of which are compromised or directly violated by the
expansion of fossil fuels (Savaresi and McVey 2020). Another principle high-
lighted by the Paris Agreement is that of a “just transition,” which underlines
the importance of minimizing negative social and economic impacts for fossil
fuel–dependent workers and communities, while creating alternative job oppor-
tunities and providing social protection (International Labour Organization
2015).

Concerning the speciﬁc obligations a treaty would set, several options
exist. The proposal for a Fossil Fuel Non-Proliferation Treaty translates the three
pillars of the Nuclear Non-Proliferation Treaty to the fossil fuel context as fol-
lows: ﬁrst, “nonproliferation”—limits on new production and extraction of fos-
sil fuels; second, “disarmament”—a managed decline of existing reserves and
infrastructures; and third, “peaceful use”—support for non–fossil fuel develop-
ment, among others, through a dedicated ﬁnancial mechanism (Newell and
Simms 2020). The latter could include speciﬁc obligations for states to plan
for a just transition away from fossil fuel production. Under the proposal for
a Coal Elimination Treaty, states agree on a speciﬁc target date for the phaseout
of coal, following the Montreal Protocol on ozone depletion, which speciﬁes
dates for the phaseout of harmful chemical substances (Burke and Fishel
2020). Another model would be for a treaty to oblige states to (regularly)
submit supply-side pledges, following the example of the Paris Agreement’s
NDCs (Asheim et al. 2019).

In terms of institutional arrangements, following standard practice in
MEAs, a decision-making body (e.g., Conference of the Parties) to the agree-
ment would meet regularly to review progress and advance cooperation. The
voting and decision-making procedures for a supply-side agreement could take

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38 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

several forms, from consensus to majority voting. An entirely consensus-based
model would almost certainly hinder meaningful progress if laggards were
effectively given a veto over proposals to expand and deepen commitments to
production limits. Any new architecture might also require a dedicated scientiﬁc
body to update negotiations based on the latest scientiﬁc thinking regarding
available carbon budgets and their implications for fossil fuel–related commit-
ments. Any institution would need to have ﬂexibility built into its design to
revise agreed production limits considering the latest scientiﬁc evidence from
the Intergovernmental Panel on Climate Change and to revise country commit-
ments based on changing energy proﬁles and the availability of alternative
technologies.

To incentivize participation and promote implementation and compli-
ance, many MEAs incorporate a system for reporting and review. The regular
reporting of reliable and comparable data in support of the agreement can help
track progress toward overall goals and encourage reciprocal actions by other
states (Chayes and Chayes 1995). Moreover, reporting can help government
ofﬁcials and other stakeholders better assess whether fossil fuel production
plans are aligned with the Paris Agreement, as well as the extent of economic
(e.g., stranding) risks associated with such plans and projects (Stockholm
Environment Institute et al. 2021). To ensure that government reports are
credible, reports could undergo independent reviews, for instance, by
experts—a common practice under the UNFCCC and many other MEAs—or
by other governments, following the practice of “voluntary peer reviews” of
fossil fuel subsidies by G20 countries (Aldy 2017).

To the extent governments are unwilling or unable to comply with their
commitments, the treaty could provide for a mechanism to promote implemen-
tation and compliance. In many MEAs, states have opted for a facilitative model
of such a mechanism, focusing on “soft” measures that could support states in
returning to compliance (e.g., ﬁnancial support or capacity building) (Doelle
2021). For developing countries participating in a supply-side treaty, such a
model may make it more attractive to participate. However, for those states that
do sign up but are unwilling to comply, some “sticks” in the form of enforce-
ment measures may also be necessary. In principle, as Asheim et al. (2019, 327)
suggest, a treaty to limit fossil fuel supply is “relatively easier to enforce because
there are considerably fewer major producers than consumers of fossil fuels, and
it is feasible to monitor—in particular, from reservoirs pledged to remain unde-
pleted.” Aside from trade measures (e.g., restricting fossil fuel imports), such
measures could also be in the form of withdrawal of beneﬁts (e.g., barring a
state from accessing ﬁnancial support) or public shaming leading to reputa-
tional costs. Linking back to the differential treatment outlined earlier, states
that have low capacities and a high dependence on fossil fuels could be
exempted from such enforcement measures (Muttitt and Kartha 2020).

Another way of inducing cooperation is through a ﬁnancial mechanism.
Along with its trade measures against nonparties, one of the main ways

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Harro van Asselt and Peter Newell

(cid:129) 39

through which the Montreal Protocol attracted participation was its innovative
Multilateral Fund (Barrett 2003). Following this example, Newell and Simms
(2020) propose a “Global Transition Fund” to support developing countries.
Speciﬁcally, the fund would provide support for alternative energy pathways
both to avoid lock-in and to meet the costs of changing direction by redirecting
ﬁnancial support for fossil fuels (Newell and Simms 2020).

Some have argued that ﬁnancial support for moving away from fossil
fuels could come in the form of compensation for leaving fossil fuels in the
ground, for instance, through “climate easements” compensating for revenues
forgone (Snyder and Ruyle 2020). In this vein, in the climate negotiations in
2011 and drawing on its Yasuní-ITT initiative, Ecuador put forward the concept
of “net avoided emissions” as a voluntary mechanism to offer incentives to leave
fossil fuels in the ground (Köhler and Michaelowa 2014). However, the design
of such a compensation mechanism would be fraught with challenges,
including calculating the environmental beneﬁts, estimating the economic
losses incurred from forgoing exploitation of reserves, ensuring that fossil fuels
remain untouched over time, and avoiding perverse incentives (Köhler and
Michaelowa 2014; MacIntosh and Constable 2017; Pellegrini et al. 2021). While
ﬁnancial assistance to less developed countries that are highly dependent on
fossil fuel production would be important, as Newell and Simms (2020,
1050) point out, there is “a ﬁne line between compensation and what other
countries perceive to be extortion.” Any ﬁnancial mechanism that is linked to
the value of fossil fuel reserves would need to be accompanied by independent
veriﬁcation to ensure that environmental beneﬁts are credible and ﬁnancial
support provided is proportionate. In addition to ﬁnancial support, incentives
for developing countries to participate could be in the form of provisions on
technology transfer and technical assistance in planning for a just transition.

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Assessing the Models

There are pros and cons and trade-offs to consider in assessing the two idealized
models. Criteria for such an assessment might include, ﬁrst, the relative speed of
reaching agreements; second, the level of regulatory ambition and degree of
potential participation of actors and sectors; and third, the equity concerns
involved (Biermann et al. 2009), because these cover key issues regarding
effectiveness, inclusiveness, and fairness.

First, regarding speed, it will be easier to pursue supply-side policies
through a smaller club arrangement in the ﬁrst instance, one not weighed down
by the requirement to reach agreement between potentially hundreds of states
that would also need to ratify any deal. While treaties can be slow to negotiate,
much depends on the initial scope and ambition of multilateral negotiations.
Moreover, there are exceptions, as illustrated by the Nuclear Non-Proliferation
Treaty, which was concluded in less than three years.

40 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

Second, turning to potential effectiveness, greater participation, with all
else being equal, strengthens the environmental effectiveness of an agreement
(Stavins et al. 2014). Likewise, covering all (major) fossil fuel producers and
thereby preventing leakage effects would strengthen the effectiveness of an inter-
national supply-side agreement. Much will thus depend on the extent to which
major fossil fuel producers can be persuaded to join an international regime
that obliges them to relinquish fossil fuel reserves. On the one hand, such pro-
ducers might be attracted to a non–legally binding club arrangement with less
enforceability. On the other hand, a club faces free-riding risks, and ﬁnancial
support for the transition would likely only be available within the context of
a multilateral endeavor. A multilateral approach could also help to address the
prospect of the “green paradox” (Sinn 2012): the concern that countries might
race to extract resources that could become “stranded,” hence driving up fossil
fuel production in the short term. More probable, however, is that credible
attempts to restrict supply will induce expectations of high fossil fuel prices
and stimulate investment in low-carbon alternatives as well as reducing con-
sumption of fossil fuels worldwide. This then becomes a key argument for
ensuring the global coverage of a fossil treaty over time (Newell and Simms
2020). When proposing bans and restrictions, as would be required for
supply-side policies, treaties are often also preferred to club arrangements, as
evidenced by agreements on land mines, tobacco control, and ozone-depleting
substances, where monitoring and enforcement are essential parts of interna-
tional cooperation. With a club arrangement, there is less pressure for laggards
to join ﬁrst movers and less scope for using privileged market access as an
inducement to cooperate (as with the Montreal Protocol). Pressure to join, raise
ambition, and comply with the agreement’s goals and commitments will
depend on high levels of participation from nonstate and subnational actors,
which might include their own commitments to phase out fossil fuels. There
is scope for nonstate and subnational actors to be actively involved in both a
club and an MEA, though provisions for formal participation are often clearer in
the latter and more dependent on the whims of states in the former.

Third, regarding the management and resolution of complex equity issues
such as historical responsibility and uneven access to alternatives energy
sources, an MEA should be better placed to deal with differentiation concerns
framed around key principles, such as “common but differentiated responsibil-
ity and respective capabilities” and “just transition,” and addressed through
ﬁnancial arrangements that exist in many MEAs. It could draw on existing pre-
cedents and formulations of equity principles to account for historical inequities
and uneven capacity to transition in the present. Clubs may raise both substan-
tive and procedural equity concerns. Substantive equity concerns could arise if
club beneﬁts primarily accrue to developed countries or if certain measures
taken by club members—for example, trade restrictions—disproportionately
impact countries in the Global South. Procedural equity concerns may arise
if decisions by club members exclude countries that are affected by those

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Harro van Asselt and Peter Newell

(cid:129) 41

decisions, resulting in what Eckersley (2012) terms “exclusive minilateralism.”
Having said that, the equity implications of any international agreement on
winding down fossil fuel production depend, ﬁrst and foremost, on which
countries participate in such an agreement.

As noted earlier, though we have introduced and assessed the club and
MEA idealized models as distinct pathways, depending on their design, they
may resemble each other in terms of participation, legal form, and level of insti-
tutionalization. Moreover, a club could both broaden, that is, grow in terms of
number of participants, and deepen, that is, grow in terms of its legal and insti-
tutional strength. Likewise, an MEA can start small and attract parties over time.
As noted previously, a growing number of states and subnational authorities
(such as cities) are adopting supply-side policies, and there is increasing interest
in potential institutional venues to consolidate and expand these commitments.
We have witnessed the formation of club arrangements through the PPCA and
BOGA. As mechanisms to establish principles, agree on soft targets, and set
norms in train, such clubs undertake important political work in preparing
the ground for deeper and wider forms of international cooperation.

Conclusions

While the number of supply-side policies adopted is growing, their adoption
across the world remains highly uneven, underscoring the need for international
cooperation. There are many potential forms that an international agreement to
keep fossil fuels in the ground could take and multiple routes to achieving it. It
is possible to envisage a coalition of ﬁrst movers forming a club arrangement
that expands over time as more states feel emboldened to join, faced both by
growing pressure to do so and the enhanced viability of development pathways
beyond fossil fuels. The global energy economy is not static, and institutional
mechanisms will need to be ﬂexibly designed to respond to the changing real-
ities of countries’ energy and emissions proﬁles, which in turn impinge upon
the commitments that might be expected of them. The fact that the climate
regime that thus far has failed to place limits on the production of fossil fuels
and the Paris Agreement does not even mention them underscores the impor-
tance and urgency of an international governance response that seeks to fairly
leave the majority of remaining fossil fuels in the ground.

The most likely scenario at this juncture is the emergence of club arrange-
ments covering particular fossil fuel sources and groups of actors that, over time,
give rise to growing calls for a more coordinated and multilateral response.
While a club arrangement is more likely in the near term, to adequately address
the range of issues we have discussed in this article, we believe a multilateral
treaty would be required to effectively coordinate supply-side policy responses
to the climate crisis. Such a pathway is unlikely to be linear and is far from
guaranteed in a world facing multiple crises and demands on policy makers’
attention and resources. Opposition to further and more ambitious supply-side

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42 (cid:129) International Agreement to Leave Fossil Fuels in the Ground

policies will also be ﬁerce. There will always be nonparticipants and violations
and strong opposition to proposals to restrict the supply of what remain highly
proﬁtable sources of energy. Yet the initial lack of engagement or resistance of
major fossil fuel producers is not an argument for abandoning this endeavor.
Rather, one of its core functions is to articulate the will of the international
community to generate irreversible momentum to accelerate the transition away
from fossil fuels and socialize the idea of limits on production. The latest
scientiﬁc reports have underscored, once again, the imperative of acting now to
radically decarbonize the global economy, which of necessity implies limiting
fossil fuel production.

Harro van Asselt is a professor of climate law and policy with the Centre for
Climate Change, Energy, and Environmental Law (CCEEL) at the University
of Eastern Finland Law School. He is also a visiting researcher with the Coper-
nicus Institute of Sustainable Development at Utrecht University and an afﬁli-
ated researcher with the Stockholm Environment Institute. He is the editor of
the Review of European, Comparative, and International Environmental Law and
coeditor of Governing Climate Change and The Politics of Fossil Fuel Subsidies and
Their Reform (both 2018). His work has appeared in journals including Nature,
Science, Nature Climate Change, American Journal of International Law, Regulation
and Governance, Climatic Change, and Climate Policy.

Peter Newell is a professor of international relations at the University of Sussex
and co-founder and research director of the Rapid Transition Alliance. He also
sits on the board of directors of Greenpeace UK. His recent research focuses on
the political economy of low-carbon energy transitions. He has worked at the
universities of Sussex, Oxford, Warwick, and East Anglia in the United Kingdom
and at FLACSO Argentina. His single- and co-authored books include Climate for
Change, Governing Climate Change, Globalization and the Environment, Climate
Capitalism, Transnational Climate Change Governance, Global Green Politics, and
Power Shift: The Global Political Economy of Energy Transitions.

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