The Supply Side of Climate Policies: - Ricerca sull'intelligenza artificiale specializzata al MIT

The Supply Side of Climate Policies:
Keeping Unburnable Fossil Fuels
in the Ground

(cid:129)
Lorenzo Pellegrini and Murat Arsel*

Astratto

As the urgency of responding to climate change and the insufﬁciency of current demand-
side policies to mitigate greenhouse gas emissions become clearer, supply-side initiatives
are beginning to gain prominence and acceptance globally. Policies such as moratoria
and compensation for leaving fossil fuels unextracted in exchange for ﬁnancial compen-
sation of rights owners are likely to be effective and complementary to existing policies. UN
number of unknowns remain regarding the operationalization of supply-side policies,
such as how to establish a binding international agreement and how to raise and allocate
ﬁnancial compensation for nonextraction. Nevertheless, the need for supply-side policies
only emphasizes the importance of imaginative and bold initiatives within the current
conjuncture of global environmental politics.

The idea of a “supply-side” approach to climate change mitigation has long
been hiding in plain sight. Supply-side climate policies aim at mitigating green-
house gas emissions through the reduction of fossil fuel supply and comple-
ment demand policies that reduce the consumption of fossil fuels. Infatti, In
oil-rich developing countries, such as Ecuador, there were calls for a moratorium
on exploration and extraction already in the 1990s. Nevertheless, the over-
whelming majority of existing policies focus solely on diminishing the demand
of fossil fuels. Yet, as the Cambridge economist Dennis Robertson had once
argued, “highbrow opinion is like a hunted hare; if you stand in the same place,
or nearly the same place, it can be relied upon to come round to you in a circle”
(Harcourt 1991, 366). Infatti, the idea of using supply-side initiatives has
recently gained prominence and respectability.

Today, supply-side approaches to climate change mitigation are ubiqui-
tous. From the Economist to the Wall Street Journal, the idea that policies to

* We are grateful to Harro van Asselt for his insightful and timely comments on the proposal for
this special issue and to the editors of Global Environmental Politics and managing editor Susan
Altman for their support.

Global Environmental Politics 22:4, novembre 2022, https://doi.org/10.1162/glep_a_00691
© 2022 by the Massachusetts Institute of Technology

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

2 (cid:129)

The Supply Side of Climate Policies

respond to human-induced climate change might render fossil fuel reserves
“stranded assets” is squarely in the mainstream of global economic and energy
policy debates. Much of this discussion seems more concerned with the impli-
cations of actively stranding fossil fuels in the ground for the ﬁnancial standing
of the rights owners rather than for the necessity to minimize catastrophic eco-
logical changes. Even the usually rather conservative International Energy
Agency has recognized that limiting the increase in global temperature to
1.5° would require that “no new oil and gas ﬁelds” and “no new coal mines
or mine extensions” be greenlighted beyond those already committed to by
2021 (International Energy Agency 2021). Nor are supply-side initiatives and
compensation of rights holders only in the domain of policy debates. Their
arrival at the center of climate change discussions is perhaps best illustrated
by their prominence in the widely popular science ﬁction novel Ministry for
the Future. Capturing the emerging zeitgeist, United Nations secretary-general
Antonio Guterres tweeted in April 2022 that “climate activists are sometimes
depicted as dangerous radicals. But the truly dangerous radicals are the countries
that are increasing the production of fossil fuels. Investing in new fossil fuels
infrastructure is moral and economic madness” (United Nations 2022).

Nevertheless, there remains much work to be done in terms of under-
standing the conditions, challenges, and opportunities promised by supply-side
climate policies. The contributions to this special issue push debates around
supply-side initiatives further by investigating some key conundrums underpin-
ning the design, operationalization, and implementation of supply-side climate
policies. Speciﬁcally, outstanding questions regarding their design, institutiona-
lization, and legitimization need to be answered before they can be expected to
be operationalized. To begin with, van Asselt and Newell tackle the question of
which form international agreements should take to lead to effective commit-
ments to keep fossil fuels underground, considering alternatively a club arrange-
ment and a multilateral environmental agreement. A related issue is the objective
of such agreements; Green and Kuch consider the alternatives of focusing on
reserve conservation, production management, and limits to infrastructure con-
struction. As limiting extraction of fossil fuels implies that rights holders over
fossil fuel stocks will have to forgo their rights to extract, Orta-Martínez and
his colleagues explore and provide an estimate of the ﬁnancial resources that
would be needed to compensate rights holders of unburnable oil and gas
reserves globally. Gard-Murray proposes an approach to generate the funding
necessary to compensate developing countries for the fossil fuel reserves that
cannot be extracted by way of loans whose repayment schedule will depend
on the future wealth of the debtor country—an “income-adjusted guarantee.”
Numerous initiatives to leave fossil fuel reserves unextracted have already been
implemented in several countries, and Lujala et al. investigate the determinants
of these initiatives. Also looking at past experience, but with a focus on the
absence of substantial initiatives to keep fossil fuels under the ground, running
in the face of the commitment to abate greenhouse gas emissions, Harrison and

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

Lorenzo Pellegrini and Murat Arsel

(cid:129) 3

Bang examine the way Norway and Canada accommodate their climate com-
mitments with their positions as fossil fuel exporters.

In the rest of this introductory piece, we provide a brief overview of the
process through which the unassailable logic of reducing the supply of fossil
fuels percolated upward, from the Global South to the Global North, from
the local to the global, and from environmental social movements to govern-
mental cabinets and corporate boardrooms. We then further unpack the eco-
nomic logic that long made it seem that changes in demand would necessarily
be the precondition for the drop in supply. Before discussing the contributions
of the articles in the collection further, this introduction discusses the political
economy implications of supply-side initiatives, not just in terms of the rela-
tionship between developed and developing countries but also the dynamic
between marginalized communities and nonstate actors, on one side, E
nation-states, on the other. We conclude with a brief discussion of remaining
challenges.

The Momentum of Supply-Side Climate Policies

Supply-side climate policies have long been neglected by both policy makers
negotiating international agreements to abate greenhouse gas emissions and
academics studying climate change. Infatti, the ﬁrst actors promoting initiatives
to leave fossil fuels in the soil through various instruments and with various
degrees of success are grassroots movements across the globe—supply-side cli-
mate policies are an instance of the many sustainability concepts coined by
environmental justice organizations (Martinez-Alier et al. 2014). The slogan
“Leave oil in the soil” was created in 2007 by Nigerian activist Nnimmo Bassey
(founder and longtime executive director of Environmental Rights Action), who
formulated a concrete policy proposal on unburnable oil in 2009 (Temper et al.
2013, 41). Also thanks to the organization Oilwatch, founded by social move-
ments from Ecuador and Nigeria, the idea traveled back and forth between the
countries through Acción Ecológica, an Ecuadorian environmental justice orga-
nization. The Yasuní-ITT initiative became the ﬁrst proposal to have a large-scale
extraction moratorium promoted by a national government; President Rafael
Correa asked the international community to partially compensate the Ecuador-
ian state for keeping the reserves under the Yasuní-ITT park in the Ecuadorian
Amazon (Arsel 2012; Espinosa 2013; Pellegrini et al. 2014). While the initiative
did not ﬂourish, it was an innovative proposal to solve the tension between con-
tributing to global public goods (conservation of a biodiversity hot spot and
mitigation of greenhouse gas emissions) and satisfying the need for generating
revenues from natural resources for the state. The initiative of preserving speciﬁc
oil reserves underground in a biodiversity hot spot inhabited also by Indigenous
people in voluntary isolation offered a great opportunity to reap substantial col-
lateral beneﬁts of a climate policy initiative. The lukewarm reception that the
initiative received internationally (in contrast to its strong domestic support)

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

4 (cid:129)

The Supply Side of Climate Policies

was likely a function of the prevailing political contexts and its groundbreaking
character, especially its strong equity component that sought to establish a pre-
cedent for the compensation of countries forgoing economic opportunities to
provide global goods.

It is perhaps not surprising that locations where the socioenvironmental
liabilities generated by fossil fuel extraction are most obvious, such as Nigeria
and Ecuador, were the ones that experienced the rise of environmental justice
mobilizing to stop extraction. In the meantime, the idea of enacting policies to
decrease fossil fuel extraction has become more and more acceptable and even
obvious. This morphosis is underpinned by the glaring contradiction between
the projected extraction of fossil fuels (and investments thereof ) and the
remaining carbon budget associated with the increase in temperature that are
embedded in commitments to limit the global long-term increase in average
global temperatures to 1.5°C, or 2°C if compared to preindustrial times (Inter-
governmental Panel on Climate Change [IPCC] 2022).

Most recently, an important role in unveiling the hypocrisy of current
commitments to climate objectives and present and projected greenhouse gas
emissions has been played by Greta Thunberg and the movement Fridays for
Future. The movement began in August 2018 as a school strike of a pupil
who protested the dire consequences of climate change for her generation
and demonstrated consistently in front of the Swedish parliament against inac-
tion on the climate. Speciﬁcally, on the topic of supply-side climate policies,
Thunberg has taken advantage of her popularity to show that the emperor
has no clothes and with striking clarity reiterated on several occasions the slogan
“Keep fossil fuels in the ground.”

If belatedly, the International Energy Agency has reached the same conclu-
sions in its road map toward net zero emissions by 2050. A coalition of diverse
actors (including social movements, intellectuals, scientists, individuals, E
local governments) has promoted and endorsed a proposal to establish a “Fossil
Fuel Non-Proliferation Treaty” (Newell and Simms 2019). Inoltre, at the
international level, the Beyond Oil and Gas Alliance (BOGA), with Costa Rica
and Denmark as founding members, is promoting initiatives to set a date for the
phaseout of oil and gas extraction.1 The Lofoten Declaration, originating in a
meeting at the eponymous Norwegian islands—a site where social movements
have managed to halt fossil fuel extraction projects—and written by academics,
analysts, and activists, calls for a managed decline in fossil fuel extraction.2 The
message resonates in the letter written by 101 Nobel Prize winners urging global
leaders to “end the expansions of fossil fuel production; phase out current pro-
duction; and invest in renewable energy” (Fossil Fuel Non-Proliferation Treaty
2021). In terms of concrete policies, countries are unilaterally enacting (partial)
moratoria on fossil fuel projects, with Spain standing out for having enacted a

1. Beyond Oil and Gas Alliance, https://beyondoilandgasalliance.com/, last accessed October 18,

2022.

2. Lofoten Declaration, https://www.lofotendeclaration.org/, last accessed October 18, 2022.

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

Lorenzo Pellegrini and Murat Arsel

(cid:129) 5

moratorium on licensing of new oil and gas exploration and extraction projects
(Higham and Koehl 2021; Tudela 2020).

Eventually, the issue of limiting fossil fuel extraction reached also the
boardrooms of leading energy companies, in particular because of shareholder
activism and legal mobilization to force companies to act in line with interna-
tional agreements, such as the Paris Agreement. Most famously, a Dutch court
has ruled that Royal Dutch Shell’s climate strategy is not sufﬁciently concrete
and that the company needs to cut its emissions by 45 per cento, if compared
A 2019 emissions, by 2030 (Raval 2021). These are consequential emission
cuts that pushed the company to grudgingly announce plans to reduce emis-
sions while appealing to the higher court against the ruling. Climate litigation
has been ballooning as part of a broader trend toward the judicialization of
environmental policies, the movement to halt corporate impunity, and increas-
ing public concern over climate change. Major oil companies (such as Chevron,
ConocoPhillips, and Shell) have started to disclose regularly climate lawsuits as
a potential material risk (Economist 2022; Pellegrini et al. 2020). Inoltre, law-
suits have also been started against governments based on the commitments
they made in international climate agreements (including the Paris Agreement,
although it is nonbinding), intergenerational justice, and the risks generated by
climate change (Raval 2021). The Dutch and German governments have been
forced, through independent court cases, to revise and reduce their emissions
targets, while a number of cases are currently being litigated. There are also
intersections between activist and corporate strategies, Per esempio, when the
threat of legal action contributes to divestment decisions. This is the case of
the activist mobilization that threatened the Dutch pension fund ABP—one
of the largest in the world—with legal action for continuing to invest in under-
performing fossil fuel interests. The mobilization made a decisive contribution
to the fund decision to divest from fossil fuels, making a dramatic U-turn on its
previous investment decisions (FD 2022).

As this section demonstrates, supply-side climate policies moved from the
fringes, where they were ridiculed as extremist and unrealistic, to become com-
monsensical and even obvious. This trajectory is not particular to these policies
and is in fact shared by many other genuinely innovative ideas.

The Grounds for Supply-Side Climate Policies

In principle, supply- and demand-side climate policies are equivalent: both have
the potential, independently from each other, to limit greenhouse gas emissions
if effectively implemented at the global scale. Tuttavia, pursuing supply and
demand policies simultaneously would create complementarities and synergies
(Lazarus and van Asselt 2018; Pellegrini et al. 2021). These policies pursued
together would serve to strengthen and signal commitments to greenhouse
gas emissions mitigation, act as an insurance (in case one set of policies fails,
the other might still produce effects), and work on different political economy

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

6 (cid:129)

The Supply Side of Climate Policies

dynamics (with respect to countries involved, the possibility to galvanize civil
society initiatives, and prospects to disarticulate oil interests). Inoltre, Essi
would address some of the weaknesses of demand-side policies—the problems
of intercountry and intertemporal leakage. Now, we turn to and expand on
these motivations for adopting both supply- and demand-side policies.

The credibility of commitments to abate emissions is critical for economic
agents because it drives the incentive structure and the response of stakeholders,
including the fossil fuel industry. Projected emissions from existing and
currently planned fossil fuel infrastructure will exceed the emission pathways
limiting global warming to 1.5°C, making effective climate policy conducive
to stranded assets (IPCC 2022, 19). To comply with the less ambitious goal
of limiting global warming to 2°C, no new investment in fossil fuel infrastruc-
ture should be planned. A stronger commitment to climate policy would signal
that further investments in exploration, production, transportation, and trans-
formation of fossil fuels will become stranded assets and part of the current
investment might have to be written off.

The political economy of demand and supply policies is quite distinct, E
given the need to coordinate multifarious actors to achieve scale—for demand
policies, almost all large emitting countries, and for supply policies, almost all
large producers—these policies rest on different pathways to reach agreements
and different likelihoods of success in mitigating greenhouse gas emissions.
Apart from state actors, the political economic dynamic can also play out differ-
ently for civil society, and supply-side policies could provide an international
platform to galvanize civil society initiatives opposing the construction of fossil
fuel infrastructure at the local and global levels. These policies can also
strengthen the international norms with respect to emissions by pairing the stig-
matization of emissions associated with the consumption of fossil fuels (ad esempio
the case of “ﬂight shaming” and the denunciation of other forms of conspicuous
consumption, such as the use of private jets and space tourism) and the supply
of fossil fuels, ultimately providing additional motivation for the opposition to
fossil fuel projects (Verde 2018). Finalmente, fossil fuel interests (most notably
stati, which in most jurisdictions are the rights holders over subsoil resources,
and fossil fuel companies) will also be differentiated vis-à-vis supply-side cli-
mate policies, undermining their capabilities to lobby against and obstruct
supply-side climate policies. Holders of rights over fossil fuels could beneﬁt
from constraints on the global supply of fossil fuels that would make their com-
modities scarcer and hence pricier, or if these policies would be voluntary and
coupled with compensation, they could receive payment in exchange for
renouncing their own extraction rights (Pellegrini et al. 2021).

Effective demand-side climate policies could give rise to intertemporal and
intercountry leakage. Intertemporal leakage, or the “green paradox,” is a situa-
tion where fossil fuel producers act in anticipation of a global decline in the
demand for fossil fuels. Since the decreased demand drives the value of reserves
down, producers would attempt to increase and anticipate the extraction of

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

Lorenzo Pellegrini and Murat Arsel

(cid:129) 7

fossil fuels (Sinn 2009). Intercountry leakage is the effect associated with
demand interventions that marginally depress prices of fossil fuels, leading to
increased consumption by the countries that are not enacting effective policies
to decrease the demand for fossil fuels. Thus policies that decrease demand in
some countries would, in parte, move consumption to other locations. Supply-
side policies would generate precisely converse effects, decreasing the supply
and hence increasing the prices of fossil fuels. Demand and supply policies
enacted together would moderate the effects of the green paradox and leakages.

Environmental Justice and Supply-Side Policies

The question of compensation looms large in the discussion on how to leave
fossil fuels in the soil. Infatti, the establishment of an effective compensation
scheme for (some of the) resource owners would be crucial to the operationa-
lization of supply-side initiatives. How the massively large sum required could
be raised is a question that is beginning to be addressed in the literature (per esempio.,
Gard-Murray, this issue; Orta-Martínez et al., this issue) together with method-
ologies for allocating and distributing funds (per esempio., Pellegrini et al. 2021). IL
issue of compensation raises the question of whether all countries—regardless
of their overall international standing (per esempio., Saudi Arabia, an immensely wealthy
kingdom with a ghastly human rights record)—should be eligible for compen-
sation. This is an issue that can be subject to a compromise based on political
feasibility, which is continually shifting given the increasing awareness of the
impacts of climate change and the continuing efforts of entrenched fossil fuel
interests to continue with business as usual. While acknowledging the tensions
between justice and realpolitik, this section focuses on aspects of environmental
justice, especially within the context of state–society and North–South
relationships.

There is, for instance, a potential mismatch between historical responsibil-
ity for bringing about climate change (which is largely concentrated on
advanced, industrialized economies) and the ability to cope with the socioeco-
nomic implications emerging from the restriction of the supply of fossil fuel
resources. In the short term, one dimension of this would be experienced in
the potential rise of fuel prices, which will have a disproportionate impact on
poorer nations as well as those that are net importers of energy. In the medium
to longer term, transition away from fossil fuels will, on one hand, create
growth opportunities for countries that can produce the technology behind
renewable energy generation. On the other, the rush to renewable energies will
likely generate new conﬂicts between corporations and states versus local com-
munities, as already demonstrated in the cases of wind power (Dunlap and Arce
2022), micro-hydro power generation (Akbulut et al. 2018), and solar power
(Rignall 2016).

Supply-side initiatives limiting fossil fuel extraction would likely diminish,
though not necessarily eliminate, resource curse outcomes. This is because of

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

8 (cid:129)

The Supply Side of Climate Policies

the materiality of fossil fuel extraction, which results in a political economic
infrastructure that props up extractivism—oil corporations, ministries of natural
resources, and so on. Their declined power would translate to their diminished
ability to shape national politics and policy making. Tuttavia, the inﬂux of
resource rents from compensation for nonextraction would remain unchanged
or could in certain cases be increased, potentially recreating the socioeconomic
dynamics underpinning the resource curse. At the very local level, fossil fuel
extraction is associated with resource curse effects, but also with the creation
of direct and indirect employment. To the extent that the halting of negative
environmental impacts associated with extractive industries might in certain
contexts enable the development of alternative sectors, such as ecotourism, Questo
is likely to be true only in very speciﬁc cases. Generalmente, a history of fossil fuel
extraction is likely to create dependency dynamics and to foreclose development
alternatives (Arsel et al. 2019). The absence of effective strategies toward a just
transition can have detrimental effects on vulnerable portions of the popula-
zione, especially in terms of employment opportunities ( Wang and Lo 2022).
Revenues generated through compensation mechanisms for nonextraction
could provide the necessary funding for employment and community-level
interventions, as well as covering the costs associated with the transition to
renewables. A corollary of this argument is that the potentially negative impacts
of transitioning toward nonextraction would therefore be signiﬁcantly easier to
avoid in countries (or regions) where extraction has not gained a strong foot-
hold. In other words, the possibility of implementing a supply-side solution
would be greater in areas where extraction is not yet dominant in terms of polit-
ical economy relationships.

Another issue that has so far received very little attention is the impact of
compensation for nonextraction on state–society relationships. The point-
source nature of fossil fuels means that their extraction gives the relationship
between state and society a particular type of spatial dynamic. For extraction
to be possible (either directly by the state or by private corporations), the state
would require some presence in the area, both infrastructurally and administra-
tively. This is required not only for functional purposes—to ensure that extrac-
tion and transport of resources can be carried out safely and predictively—but
also to build the necessary political legitimacy with local communities. In other
parole, the process of extraction creates a concrete link between the state and
local communities. Even if subsoil resources are most often owned by the state
itself, local communities can still leverage the fact of their territories being on
top of these resources to make certain claims on the state. These demands are
often unmet or only partially met, and the spectrum of acceptable demands is
effectively policed by nation-states, who can resort to the use of violence if local
demands are seen as excessive (per esempio., the Nigerian state cracking down on Ogoni
activists; Agbonifo 2018). Nevertheless, the necessity to ensure the steady ﬂow
of revenue accruing from extraction creates a stable if uneven relationship
between the state and local communities. Transitioning toward an order in

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

Lorenzo Pellegrini and Murat Arsel

(cid:129) 9

which nation-states are paid not to extract would likely weaken this link substan-
tially. Although the state would still be compensated for natural resource wealth
within the territorial boundaries of particular social groups, the act of nonextrac-
tion would take away the leverage of local communities. As such, the state’s
imperative to create and maintain legitimacy and compensate communities in
resource-rich areas would be weakened.

Finalmente, it is important to acknowledge the potential problem associated
with implementing a successful supply-side initiative. If such a success were
to halt human-induced climate change, this could happen within the dominant
political economy structure of global capitalism. Whereas climate change is
arguably the most urgent and most catastrophic environmental effect of
global capitalism, it is far from the only one. Infatti, even within the context
of climate change mitigation, elimination of fossil fuels is already being
associated with the rise of other processes of environmental degradation,
including the massively increased production of metals and minerals, ad esempio
copper and lithium. The same forces of overconsumption and ever-expanding
accumulation that have resulted in the problem of climate change would
remain in place and continue to create global environmental degradation in
other ways. Just as importantly, while the impacts of climate change are expe-
rienced in deeply unequal and unjust ways (with marginalized communities
who have the least responsibility for the creation of the problem paying the
highest costs) and therefore can be improved by a global supply-side solution,
other forms of inequality—especially, but not only, economic—would remain
intact. It is therefore important that climate change mitigation efforts be
accompanied by broader efforts to create an overall just and sustainable global
economy.

Contributions to the Special Issue

One of the most important approaches to supply-side mitigation involves the
compensation of rights owners of fossil fuels that remain unextracted. Before
the feasibility of and mechanisms for compensation are debated, it would be
important to have at least a preliminary estimate of the ﬁnancial resources
required. The forum by Martí Orta-Martínez and colleagues, “Unburnable Fossil
Fuels and Climate Finance: Compensation for Rights Holders,” tackles this chal-
lenge, calculating that US$ 5.4 trillion would be necessary to compensate the
rights owners of existing oil and gas reserves. Recognizing the vastness of this
sum, they also consider the feasibility of raising the necessary funds and argue,
after John Maynard Keynes, that “anything we can do, we can afford.”

The article by Harro van Asselt and Peter Newell, “Pathways to an Interna-
tional Agreement to Leave Fossil Fuels in the Ground,” is broadly concerned
with the institutional arrangements that can help translate the notion that sup-
ply of fossil fuels needs to be restricted into concrete reality. Their article sees
various economic, social, and legal dynamics, such as price and availability of

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

10 (cid:129) The Supply Side of Climate Policies

renewables, action by social movements, and environmental litigation, converg-
ing to prepare the ground for international action. They consider two “idealized
pathways”: a club arrangement, as partly illustrated by the BOGA, and a multi-
lateral environmental agreement. While both approaches have their strengths
and weaknesses, the authors argue that in the short term, a club arrangement
would be more likely but, in the longer term, it should evolve into a multilateral
environmental treaty to achieve the necessary degree of efﬁcacy to leave sufﬁ-
cient quantities of fossil fuels in the soil.

Any supply-side approach to international greenhouse gas mitigation
would require an appropriate measuring/monitoring, reporting, and veriﬁcation
framework. In their article, “Counting Carbon or Counting Coal? Anchoring Cli-
mate Governance in Fossil Fuel–Based Accountability Frameworks,” Fergus
Green and Declan Kuch argue that the currently dominant carbon-based
accountability framework is not ﬁt for the task at hand. They consider three dif-
ferent alternatives that can be the basis of a fossil fuel–based accountability
framework: reserves, production, and infrastructure. Anchoring governance
mechanisms in reserves, they argue, is too risky, as their volume can be manip-
ulated. Invece, given their relative transparency, they argue that production and
infrastructure data would be more productive and help hold nation-states
accountable.

There are a number of existing suggestions in the literature on how the
ﬁnancial resources necessary for compensation can be mobilized. In “De-risking
Decarbonization: Accelerating Fossil Fuel Retirement by Shifting Costs to Future
Winners,” Alexander Gard-Murray develops a novel and provocative approach.
Noting that rich countries of today are not willing to produce the funds neces-
sary for international and intergenerational transfers, his model suggests that
fossil fuel–rich developing countries can be encouraged to leave their resources
unextracted with the help of loans whose repayment would be contingent on
future wealth. This “income-adjusted guarantee” mechanism, argues Gard-
Murray, could provide a realistic way to bridge the existing gap between rich
country ﬁnancing and the need to leave fossil fuel reserves untapped in a way
that can respond to questions regarding the legitimacy and fairness associated
with such a mechanism.

The ﬁnal two articles of the special issue are located on an empirical ter-
rain, exploring the conditions and structures that shape nation-states’ behavior
with respect to supply-side initiatives. In “Determinants of Fossil Fuel Produc-
tion Cuts and Implications for an International Supply-Side Agreement,” Päivi
Lujala, Philippe Le Billon, and Nicolas Gaulin analyze data for 124 countries
with fossil fuel reserves for 2016–2019 to identify factors inﬂuencing national
decisions to leave fossil fuels underground. They show that dependence on
fossil fuel revenues is inversely correlated with the likelihood of constraining
extraction but that reserves and production do not have a meaningful inﬂuence.
Inoltre, they ﬁnd that whereas rich countries are more likely to resort to
supply-side initiatives, membership in OPEC diminishes the likelihood of

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

Lorenzo Pellegrini and Murat Arsel

(cid:129) 11

moratoria on extraction. Finalmente, indebtedness and recent experience with armed
conﬂict make it unlikely that supply-side initiatives will be enacted.

In “Supply-Side Climate Policies in Major Oil-Producing Countries:
Norway’s and Canada’s Struggles to Align Climate Leadership with Fossil Fuel
Extraction,” Kathryn Harrison and Guri Bang explore the ways in which these
two countries reconcile their leadership in reducing domestic greenhouse gas
emissions with their status as major fossil fuel exporters. They show that suc-
cesses of social movements have largely been in terms of limiting the expansion
of extraction, while the reduction of production remains unlikely in either coun-
try. As Norway and Canada have been successful in translating their fossil fuel
wealth into overall prosperity, citizens in both countries are reluctant to aban-
don fossil fuel exports. They show that the arguments that unilateral production
restrictions are ineffective, that the exports of these countries are cleaner than
their alternatives, and that the revenues from exports are necessary to ﬁnance
domestic efforts to reduce greenhouse gases are powerful in continuing these
countries’ patterns of fossil fuel extraction.

Conclusions

Any discussion of climate change politics and policies needs to depart from two
concrete facts. Primo, climate change is no longer a future threat but one that is
already causing extensive and unpredictable damage to ecosystem health and
human welfare across the planet. Secondo, existing demand-side approaches to
carbon mitigation have been insufﬁcient at best, and greenhouse gas emissions
are on course to further exacerbate climate change. Within this context, IL
growing prominence of supply-side initiatives is a welcome development.
Nevertheless, it is also crucial to recognize that the novelty of such policies
brings with it uncertainties and challenges. The failure to address these could
potentially not only hamper efforts to mitigate climate change but also exacer-
bate existing inequalities and injustices and create novel social conﬂicts (Arsel
2022). To avoid both the ecological impacts of climate change and the socio-
economic impacts they will engender, there is therefore an urgent need for the
type of bold and imaginative policy responses represented by supply-side
restrictions like moratoria and compensation mechanisms.

Lorenzo Pellegrini’s research interests include the socioenvironmental impact
of extractive industries, environmental justice, climate change, impact evalua-
zione, istituzioni, and corruption. Recent publications include articles on the
Texaco/Chevron case, the resource curse, the global extractive imperative, E
conservation and conﬂict in DRC. Professor Pellegrini has led and participated
in a number of research projects in collaboration with researchers and social
movements in the Global South. He teaches courses on research methodology,
development economics, development theory, sustainable development, E
ecological economics.

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

12 (cid:129) The Supply Side of Climate Policies

Murat Arsel is a professor of political economy at the International Institute of
Social Studies, Erasmus University Rotterdam. The overall focus of his research
is the relationship between capitalism, natura, and society, with a particular
focus on conﬂicts over environment and development. He is currently working
on several different strands of research, including unburnable fuels, infrastruc-
ture and authoritarian developmentalism, and climate conﬂicts in cities at the
front lines of sea level rise, such as Jakarta and Miami.

Riferimenti
Agbonifo, J. 2018. Environment and Conﬂict: Place and the Logic of Collective Action in the
Niger Delta. London, UK: Routledge. https://doi.org/10.4324/9781315579962

Akbulut, B., F. Adaman, and M. Arsel. 2018. Troubled Waters of Hegemony: Consent and
Contestation in Turkey’s Hydropower Landscapes. In Water, Technology and the
Nation-State, edited by F. Menga and E. Swyngedouw, 96–114. New York, NY:
Routledge. https://doi.org/10.4324/9781315192321-7

Arsel, M. 2012. Between “Marx and Markets”? The State, the “Left Turn” and Nature in
Ecuador. Tijdschrift voor Economische en Sociale Geograﬁe 103 (2): 150–163. https://
doi.org/10.1111/j.1467-9663.2012.00709.x

Arsel, M. 2022. Climate Change and Class Conﬂict in the Anthropocene: Sink or Swim
Together? Journal of Peasant Studies, agosto 25. https://doi.org/10.1080/03066150
.2022.2113390

Arsel, M., l. Pellegrini, and C. Mena. 2019. Maria’s Paradox and the Misery of Missing
Development Alternatives in the Ecuadorian Amazon. In Immiserizing Growth:
When Growth Fails the Poor, edited by P. Shaffer, R. Kanbur, and R. Sandbrook,
203–225. Oxford, UK: Oxford University Press. https://doi.org/10.1093/oso
/9780198832317.003.0009

Dunlap, A., and M. C. Arce. 2022. ‘Murderous energy’ in Oaxaca, Mexico: Wind Factories,
Territorial Struggle and Social Warfare. The Journal of Peasant Studies 49 (2):
455–480. https://doi.org/10.1080/03066150.2020.1862090

Economist. 2022. Lawsuits Aimed at Greenhouse-Gas Emissions Are a Growing Trend.

April 23.

Espinosa, C. 2013. The Riddle of Leaving the Oil in the Soil: Ecuador’s Yasuní-ITT Project
from a Discourse Perspective. Forest Policy and Economics 36: 27–36. https://doi.org
/10.1016/j.forpol.2012.07.012

FD. 2022. Milieudefensie maakt “hitlist” van 30 bedrijven bekend: Van ABN Amro tot
Yara. Gennaio 13. Available at: https://fd.nl/bedrijfsleven/1426977/milieudefensie
-maakt-hitlist-van-30-bedrijven-bekend-van-abn-amro-tot-yara, last accessed Octo-
ber 18, 2022.

Fossil Fuel Non-Proliferation Treaty. 2021. 101 Nobel Laureates Call for a Phase Out of
Fossil Fuels. Available at: https://fossilfueltreaty.org/nobel-letter, last accessed
ottobre 18, 2022.

Verde, F. 2018. Anti–Fossil Fuel Norms. Climatic Change 150 (1–2): 103–116. https://doi

.org/10.1007/s10584-017-2134-6

Harcourt, G. C. 1991. Marshall’s Principles as Seen at Cambridge Through the Eyes of
Gerald Shove, Dennis Robertson and Joan Robinson. Quaderni di Storia dell’Econo-
mia Politica 9 (2/3): 355–372.

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

Lorenzo Pellegrini and Murat Arsel

(cid:129) 13

Higham, C., e A. Koehl. 2021. Domestic Limits to Fossil Fuel Production and Expan-
sion in the G20. Grantham Research Institute on Climate Change and the Environ-
ment. Available at: https://www.lse.ac.uk/granthaminstitute/news/domestic-limits
-to-fossil-fuel-production-and-expansion-in-the-g20/, last accessed October 18,
2022.

Intergovernmental Panel on Climate Change. 2022. AR6 Climate Change 2022: Mitigation
of Climate Change. Available at: https://www.ipcc.ch/report/sixth-assessment-report
-working-group-3/, last accessed October 18, 2022.

International Energy Agency. 2021. Net Zero by 2050: A Roadmap for the Global Energy
Sector. Available at: https://www.iea.org/reports/net-zero-by-2050, last accessed
ottobre 18, 2022. https://doi.org/10.1787/c8328405-en

Lazarus, M., and H. van Asselt. 2018. Fossil Fuel Supply and Climate Policy: Exploring
the Road Less Taken. Climatic Change 150: 1–13. https://doi.org/10.1007/s10584
-018-2266-3

Martinez-Alier, J., IO. Anguelovski, P. Bond, D. Del Bene, and F. Demaria. 2014. Between
Activism and Science: Grassroots Concepts for Sustainability Coined by Environ-
mental Justice Organizations. Journal of Political Ecology 21 (1): 19–60. https://doi
.org/10.2458/v21i1.21124

Newell, P., e A. Simms. 2019. Towards a Fossil Fuel Non-Proliferation Treaty. Climate
Policy 20 (8): 1043–1054. https://doi.org/10.1080/14693062.2019.1636759
Pellegrini, L., M. Arsel, F. Falconí-Benítez, and R. Muradian. 2014. The Demise of a New
Conservation and Development Policy? Exploring the Tensions of the Yasuní ITT
Initiative. Extractive Industries and Society 1: 284–291. https://doi.org/10.1016/j.exis
.2014.05.001

Pellegrini, L., M. Arsel, M. Orta-Martínez, and C. F. Mena. 2020. International Investment
Agreements, Human Rights and Environmental Justice: The Texaco/Chevron
Case from the Ecuadorian Amazon. Journal of International Economic Law 23 (2):
455–468. https://doi.org/10.1093/jiel/jgaa016

Pellegrini, L., M. Arsel, M. Orta-Martínez, C. F. Mena, and G. Muñoa. 2021. Institutional
Mechanisms to Keep Unburnable Fossil Fuel Reserves in the Soil. Energy Policy 149:
112029. https://doi.org/10.1016/j.enpol.2020.112029

Raval, UN. 2021. Shell Case Puts Spotlight on Energy Groups’ Role in Climate Change.

Financial Times, Gennaio 11.

Rignall, K. E. 2016. Solar Power, State Power, and the Politics of Energy Transition in
Pre-Saharan Morocco. Environment and Planning A: Economy and Space 48 (3):
540–557. https://doi.org/10.1177/0308518X15619176

Sinn, H. W. 2009. The Green Paradox. Munich, Germany: CESifo Forum, Institute for

Economic Research at the University of Munich.

Temper, L., IO. Yánez, K. Sharife, G. Ojo, J. Martinez-Alier, M. C. Cana, K. Cornelissen, H.
Lerkelund, M. Louw, and E. Martínez. 2013. Towards a Post-Oil Civilization:
Yasunization and Other Initiatives to Leave Fossil Fuels in the Soil. Report 6. Envi-
ronmental Justice Organizations, Liabilities and Trade. https://doi.org/10.4000
/eces.1231

Tudela, F. 2020. Obstacles and Opportunities for Moratoria on Oil and Gas Exploration
or Extraction in Latin America and the Caribbean. Climate Policy 20 (8): 922–930.
https://doi.org/10.1080/14693062.2020.1760772

United Nations. 2022. Secretary-General Warns of Climate Emergency, Calling Intergov-
ernmental Panel’s Report “a File of Shame,” While Saying Leaders “Are Lying,"

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3

14 (cid:129) The Supply Side of Climate Policies

Fuelling Flames. Available at: https://press.un.org/en/2022/sgsm21228.doc.htm,
last accessed October 18, 2022.

Wang, X., and K. Lo. 2022. Political Economy of Just Transition: Disparate Impact of
Coal Mine Closure on State-Owned and Private Coal Workers in Inner Mongolia,
China. Energy Research and Social Science 90: 102585. https://doi.org/10.1016/j.erss
.2022.102585

D
o
w
N
o
UN
D
e
D

F
R
o
M
H

T
T

:
/
/

D
io
R
e
C
T
.

io
T
.

e
D
tu
G
e
P
UN
R
T
io
C
e
–
P
D

F
/

2
2
4
1
2
0
5
8
3
9
2
G
e
P
_
UN
_
0
0
6
9
1
P
D

B
sì
G
tu
e
S
T

o
N
0
7
S
e
P
e
M
B
e
R
2
0
2
3
Scarica il pdf