Climate policy and fossil fuels: a supply-side perspective.

Abstract

Avoiding catastrophic effects of climate change requires a rapid and radical reduction in the use of fossil fuels. The policy that would best guarantee this would be a successful global agreement on sufficient planned reductions in the supply of these fuels. This article reviews some proposals in this regard, although so far international agreements have not adopted this supply-side approach. It also considers the potential impacts of other supply-side actions such as social movements trying to stop fossil fuel extraction or transport projects and calls for disinvestment in fossil fuels.
The most frequent climate change policies have been from the demand side. The heterogeneity and common characteristics of these policies are reviewed and their effects are discussed from the point of view of how they may affect the supply of fossil fuels. The concept of "green paradox" has been used to virtually negate the possibility of success of any climate change policy (except global fossil fuel rationing): policies that become stronger in intensity and extent would lead fossil fuel owners not to delay but to advance extraction. Without denying the possibility of some such decisions, the article concludes that the effect of climate change policies on reducing investment in fossil fuel extraction (and advancing installations closures) will almost certainly be more significant.