To Lower Emissions Climate Coalitions Should Start Buying Fossil Fuel Rights & Not Use Them

Coal mining in Mongolia.

Back in 2009, during the heady days of COP15, when it seemed for a brief instant that we might have a global climate agreement, Friends of the Earth's Nnimmo Bassey was fond of addressing crowds and reporters with the ever-quotable sentence, "Leave the coal in the hole." He'd then go on to have equally quotable remarks about not using other fossil fuels (though apparently less memorable, because I can't now...).

Now, over two years later, in more somber times, when few people don't acknowledge that a global climate deal that will actually do anything to stop warming is far off, a new study has been published that, in its way, says something similar.

Global climate groups are overlooking an effective way to limit the amount of fossil fuels that get extracted from the Earth, burned, and further climate change, rapidly approaching a point of no return: Buy up fossil fuel extraction rights and then not exercise those rights.

A new paper from Northwestern University's Kellogg School of Management says that climate campaigners could take a supply-side approach to fossil fuels.

Study author Bard Harstad:

One of the biggest challenges for multi-national climate agreements is the role of non-participating countries. If a climate coalition reduces demand for fossil fuel, the world price of oil goes down and non-participating countries find it profitable to consume and pollute more. Similarly, if the coalition seeks to reduce the supply or extraction of fossil fuels, the world price increases and these countries find it optimal to supply more.

This, both of the demand side and the supply side the result is carbon leakage, which is an increase in pollution abroad relative to the emission reduction at home. To limit carbon leakage, the coalition may set up tariffs or other border measures, but this will distort trade.

In my analysis, I show that by letting coalition countries buy extraction rights in third countries and preserve rather than exploit the fuel deposits climate coalitions can circumvent the traditional problems of a demand-side policy. (Science Daily)

Harstad suggests that marginal deposits, those that are harder to extract, get targeted by this buy and don't use strategy. Not a bad idea, considering that from an emissions perspective these likely require more energy to extract and have higher life-cycle emissions than easier-to-extract reserves.

It's all quite compelling in theory. Not using fossil fuels is obviously the way to go to not emit greenhouse gases. Increasing the price of them puts renewable energy sources in a better position in terms of price. Though to be fair, prices for them (particularly solar) are falling, already to the point of parity with fossil fuels in some places. It also makes an end run around having to get everyone of board for a global climate deal. But I'm really not convinced it would work in practice (though an analogous approach certainly has worked for preserving forests and other resource rich places).

Let's just look at what happened when an individual tried to do just this in the United States. Tim DeChristopher bid on federal leases for oil and gas exploration rights in Utah, with the intent of taking those exploration blocks off the market. DeChristopher is now serving a two year jail sentence.

On the face of it, Tim was convicted of misrepresenting himself in the auction, but I have to believe that if the auction was about something other than energy, while a fine may have been imposed, no jail term would have imposed. Tim likely would have been able to pay for the items he won (he did raise the money to do so) instead of being prevented by the Feds. The trial wasn't about the actions themselves. It was about preserving the system. It was about power.

Harstad isn't talking about individuals here though. He's talking about climate coalitions, saying that multi-national companies already trade extraction rights and climate coalitions should get in on the act.

The trouble still remains.

Energy hasn't been and certainly still isn't like other commodities or resources. Right or wrong, extraction rights aren't like other rights in practice. We're energy addicts and addicts will do all sorts of self-destructive, irrational, things if the addiction is bad enough and the effects of withdrawal seem too painful.

I almost guarantee that once it was known that rights were being bought up with the intent of not exploiting them the whole thing would come crashing down around itself—if it ever got to the point of implementation in the first place on an international scale, remembering that what's proposed here is that this take place in countries outside of some emissions reduction program.

Two parties will step in to prevent it, either physically or legally or both. Multinational corporations and nations alike, each seeing lost revenue from taxes and/or sales, will prevent large-scale buying up of rights with the intent to not exploit them. If it doesn't already exist, legal language will be introduced to the effect that if the purchaser of extraction rights doesn't exercise those rights within a given time frame then they lose those rights.

Then there is the fact that those nations opposed to global climate action are (the United States and Canada aside) not going to submit to any restrictions on the right to extract resources within their borders any more readily than they are to submit to legally-binding emissions cuts.

India wouldn't do that. China wouldn't do that. For both it'd be seen as unfair restraints on development and sovereignty—if only in both cases in principal as both nations have decent climate and energy policy as it is, opposition being chest puffing as much as anything else.

Only the most cash-strapped yet resource-rich nations in Africa might go for this—and then unfortunately endemic corruption means that resource rights poaching could hit levels similar to elephant and rhino poaching, with equally poor ability to respond to the poaching.

I like the idea of this. I really do. It has a certain visceral activist appeal. I just don't see this approach being any easier to actually implement than some sort of demand-side response, though carbon taxation, carbon caps, fee-and-dividend or any other financial approach. Pushing for societal-scale changes in consciousness so that using fossil fuels becomes effectively taboo—we leave the coal in the hole because taking it would unthinkable ethically to do otherwise—has a better chance of succeeding in the time scale in which we need to act to prevent dangerous climate change.

To Lower Emissions Climate Coalitions Should Start Buying Fossil Fuel Rights & Not Use Them
Are we overlooking an effective means to lower emissions, keeping fossil fuels in the ground? A new study says yes. Would it be allowed to work though?

Related Content on