ArticlePDF Available

Cutting with both arms of the scissors: the economic and political case for restrictive supply-side climate policies



Proponents of climate change mitigation face difficult choices about which types of policy instrument(s) to pursue. The literature on the comparative evaluation of climate policy instruments has focused overwhelmingly on economic analyses of instruments aimed at restricting demand for greenhouse gas emissions (especially carbon taxes and cap-and-trade schemes) and, to some extent, on instruments that support the supply of or demand for substitutes for emissions-intensive goods, such as renewable energy. Evaluation of instruments aimed at restricting the upstream supply of commodities or products whose downstream consumption causes greenhouse gas emissions—such as fossil fuels—has largely been neglected in this literature. Moreover, analyses that compare policy instruments using both economic and political (e.g. political “feasibility” and “feedback”) criteria are rare. This article aims to help bridge both of these gaps. Specifically, the article demonstrates that restrictive supply-side policy instruments (targeting fossil fuels) have numerous characteristic economic and political advantages over otherwise similar restrictive demand-side instruments (targeting greenhouse gases). Economic advantages include low administrative and transaction costs, higher abatement certainty (due to the relative ease of monitoring, reporting and verification), comprehensive within-sector coverage, some advantageous price/efficiency effects, the mitigation of infrastructure “lock-in” risks, and mitigation of the “green paradox”. Political advantages include the superior potential to mobilise public support for supply-side policies, the conduciveness of supply-side policies to international policy cooperation, and the potential to bring different segments of the fossil fuel industry into a coalition supportive of such policies. In light of these attributes, restrictive supply-side policies squarely belong in the climate policy “toolkit”.
Cutting with both arms of the scissors: the economic
and political case for restrictive supply-side climate policies
Fergus Green
&Richard Denniss
Received: 20 April 2017 / Accepted: 16 February 2018 / Published online: 12 March 2018
#The Author(s) 2018
Abstract Proponents of climate change mitigation face difficult choices about which
types of policy instrument(s) to pursue. The literature on the comparative evaluation
of climate policy instruments has focused overwhelmingly on economic analyses of
instruments aimed at restricting demand for greenhouse gas emissions (especially
carbon taxes and cap-and-trade schemes) and, to some extent, on instruments that
support the supply of or demand for substitutes for emissions-intensive goods, such as
renewable energy. Evaluation of instruments aimed at restricting the upstream supply
of commodities or products whose downstream consumption causes greenhouse gas
emissionssuch as fossil fuelshas largely been neglected in this literature. More-
over, analyses that compare policy instruments using both economic and political (e.g.
political Bfeasibility^and Bfeedback^) criteria are rare. This article aims to help bridge
both of these gaps. Specifically, the article demonstrates that restrictive supply-side
policy instruments (targeting fossil fuels) have numerous characteristic economic and
political advantages over otherwise similar restrictive demand-side instruments
(targeting greenhouse gases). Economic advantages include low administrative and
transaction costs, higher abatement certainty (due to the relative ease of monitoring,
reporting and verification), comprehensive within-sector coverage, some advantageous
price/efficiency effects, the mitigation of infrastructure Block-in^risks, and mitigation
of the Bgreen paradox^. Political advantages include the superior potential to mobilise
public support for supply-side policies, the conduciveness of supply-side policies to
international policy cooperation, and the potential to bring different segments of the
fossil fuel industry into a coalition supportive of such policies. In light of these attributes,
restrictive supply-side policies squarely belong in the climate policy Btoolkit^.
Climatic Change (2018) 150:7387
This article is part of a Special Issue on Fossil Fuel Supply and Climate Policyedited by Harro van Asselt and
Michael Lazarus.
*Fergus Green
London School of Economics and Political Science, London, UK
The Australia Institute, Canberra, Australia
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
We might as reasonably dispute whether it is the upper or the under blade of a pair of
scissors that cuts a piece of paper, as whether value is governed by utility [demand] or
cost of production [supply].
Alfred Marshall, Principles of Economics (1890, bk. III, 28)
1 Introduction
Proponents of climate change mitigation face difficult choices about which policy
instrument(s) to pursue. The climate policy Btoolkit^is large, and many competing
criteria, both normative and political, are relevant to the choice (Goulder and Parry
2008, 152). Economists and policymakers have focused overwhelmingly on compar-
isons among policy instruments that aim to restrict demand for greenhouse gases,
particularly cap-and-trade schemes and carbon taxes, as these are seen to perform
better than alternatives against economistsfavoured criteria of Beconomic efficiency^
and its close relative, Bcost-effectiveness^, when tested using simple economic models
(ibid). There has also been considerable scholarly attention paid to policies that
support the supply of or demand for substitutes of energy-intensive or emissions-
intensive goods, such as renewable energy (Somanathan et al. 2014, sec. 15.6) (see
unshaded quadrants of Table 1,below).
But the comparative literature on climate policy instrument choice has been remark-
ably silent on instruments that aim to restrict the supply of commodities and products
whose downstream consumption produces greenhouse gas emissions (Brestrictive supply-
side climate policies^), of which measures to restrict fossil fuel energy supply are the
most relevant (see shaded quadrant of Table 1). For example, in Goulder and Parrys
Btoolkit of environmental instruments^not one restrictive supply-side policy is men-
tioned (Goulder and Parry 2008, 152). Nor is any mentioned in the chapter on BNational
and Sub-national Policies and Institutions^of the IPCCs Working Group III
(Somanathan et al. 2014).
The seminal work of Sinn on the economics of supply-side
climate policy (Sinn 2008;Sinn2012), and more recent economic analysis of particular
supply-side climate policy proposals (for useful summaries, see Lazarus et al. 2015 and
Collins and Mendelevitch 2015), have not been systematically incorporated into the
climate policy Btoolkit^. Nor have such policies been widely championed by
policymakers: as Lazarus et al. surmise, Bdespite the increased attention, supply-side
climate policies have yet to take hold in most of the world^(Lazarus et al. 2015,3).
This relative neglect by the mainstream climate policy community is prima facie surprising
since, as we show in Section 2, restrictive supply-side policies are sound in economic theory
and widely used in a range of other policy domains. The primary contribution of this article,
however, lies in Sections 3and 4, which demonstrate, respectively, the main economic
(efficiency and effectiveness) and political (feasibility and Bfeedback^) advantages of restric-
tive supply-side climate policies.
While the economic analysis of climate policy instruments has a long pedigree, many
readers may be less familiar with political science concepts and frameworks for analysing
Intertemporal leakage is mentioned on page 1163, but only as a factor to be taken into consideration in the
design of carbon pricing.
74 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
climate policy instruments. Political analysis of generic policy instruments and design
features matters for two reasons. First, not all policy instruments and design features may
be immediately politically feasible to enact in a given context (and those that are feasible
may be far from Boptimal^: Jenkins 2014). Systematic attention to the characteristic
political effects of alternative policy instruments can inform judgements about their
relative feasibility in a particular context. Second, it is not only the case that the feasibility
of a given climate policy instrument and design choice is affected by (past/present)
politics: climate policies themselves, by (re-)allocating resources, creating institutions,
incentivising investments and influencing culture, also affect patterns of politics and
power relations in subtle but crucial ways, in turn shaping what becomes feasible in the
future (Cook 2010); climate policy choices, in other words, create Bfeedback effects^
(Jordan and Matt 2014). Yet, in the comparative literature on climate policy instrument
choice, if political feasibility is considered at all it is often treated in a Bstatic^way that
ignores the potential for relevant instruments to generate such feedback effects
(Urpelainen 2013, 110, 120). A secondary contribution of this article (specifically
Section 4) is the application of a framework developed by the authors for the comparative
evaluation of the political dimensions of climate policy instruments. This framework,
which draws on the extensive literature on the politics of climate policy, can, we suggest,
usefully be employed more generally in comparative climate policy instrument evaluation.
Throughout the discussion, we focus on policies aimed at restricting the supply of
fossil fuelsundoubtedly the most important class of restrictive supply-side policies. A
useful typology of such policies is provided by Lazarus et al. (2015, 10, Table 1), but
our intention is to control for differences between generic instrument types (e.g.
Bcommand and control regulation^,Bmarket mechanism^etc.), focusing instead on the
marginal benefits of (restrictive) instruments that target the supply side relative to those
that target the demand side. The comparison is not intended to show that supply-side
instruments are all things considered superior to demand-side instruments. The economic
attributes of the latter have, as noted earlier, already been extensively established. Rather,
our more modest aim is to establish the distinctive economic and political benefits of
supply-side instruments with a view to these taking their rightful place in the climate policy
toolkit alongside the other kinds of policies listed in Table 1. Our hope is that, with these
benefits in mind, the potential for supply-side instruments to act as economic and political
complements or substitutes for demand-side instruments in a given context can be evaluated
on a case-by-case basis.
Tab le 1 The climate policy toolkit
Restrictive supply-side climate policies
(e.g. FF subsidy reduction; FF supply tax; FF
production quotas; FF supply ban/moratorium)
Restrictive demand-side climate policies
(e.g. carbon tax; carbon cap-and trade; mandatory
CO2emissions standards)
Supportive supply-side climate policies
(e.g. direct government provision of low-carbon
infrastructure; R&D subsidies; renewable
energy feed-in-tariffs)
Supportive demand-side climate policies
(e.g. government procurement policies; consumer
subsidies for energy-efficient or low-emitting
Notes: FF = fossil fuels. Shaded area represents the focus of this article; unshaded areas are those typically
analysed in the comparative literature on climate policy instruments.
Climatic Change (2018) 150:7387 75
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
The scope of our analysis is limited in three significant ways. First, in the interests of
simplicity, we consider the economic and political cases separately from one another, and
in isolation from other climate and non-climate policy instruments. Second, we consider
only generic, typical benefits of supply-side policies; the magnitude of the effects we
analyse is likely to vary cross-contextually (e.g. cross-nationally). Third, we mostly
consider the three fossil fuel types (coal, oil and gas) together, abstracting from differ-
ences between them. We consider in Section 5various research directions that could
build upon our analysis to address these limitations.
2 The value and ubiquity of supply-side policies in other domains
A negative externality is said to exist when the production or consumption of a product
imposes costs on a party that is not involved in the sale or purchase of that product. Under
such circumstances, the market price will be lower, and the quantity supplied higher, than
the social optimal levels. To address negative externalities, economists typically recom-
mend a range of policy options drawn from all quadrants of Table 1, and covering
instruments ranging from so-called Bcommand and control^regulation to Bmarket mech-
anisms^to information/behaviour change campaigns. Significantly, many countries rely
on complicated and evolving combinations of these measures, wherein restrictive supply-
side policies play an important role complementing demand-side policies.
Policies to control tobacco smoking in Australia provide an instructive example.
The policy mix includes prohibitions on producing tobacco without a license, selling
tobacco without a license, selling tobacco to children, tobacco advertising, tobacco
sponsorship, and smoking cigarettes in confined public spaces. It also includes heavy
taxation of tobacco consumption, hard-hitting public information campaigns, Bplain
packaging^laws, mandatory health warnings on cigarette packages, and the
subsidisation of certain substitutes for cigarettes such as nicotine patches. Far from
being derided as an inefficient mire of Bred tape^,Australias tobacco regulatory
environment is lauded as a global model of effective public health policy, with the
country seen as an early mover in innovative regulation in the sector (Chapman and
Wak efi el d 2001). The combination of a wide range of policies, rather than an
optimalpolicy, is, moreover, endorsed in the World Health Organisation Framework
Convention on Tobacco Control, which states that Btobacco controlmeans a range of
supply, demand and harm reduction strategies that aim to improve the health of a
population by eliminating or reducing their consumption of tobacco products and their
exposure to tobacco smoke^(article 1(d)).
Restrictive supply-side policies have also played an important role in efforts to
reduce negative environmental pollution externalities, including chlorofluorocarbons
(Haas 1992), asbestos (Kameda et al. 2014), and lead in petroleum products
(Needleman 2000).
Given the widespread use of restrictive supply-side policies in other policy do-
mains, their relative neglect in the climate policy domain seems anomalous. In the
following sections, we argue that restrictive supply-side climate policies targeting
fossil fuels (hereaftersimplyreferredtoasBsupply-side policies^) indeed have
distinctive economic and political benefits, in view of which this neglect is
76 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
3 The economic benefits of supply-side policies
3.1 Low administrative and transaction costs, higher certainty of abatement
outcomes, and comprehensive within-sector coverage
Policy instruments vary in the administrative and transaction costs they entail. The
administrative and transaction costs of demand-side climate instruments are often
considerable. Both carbon taxes and cap-and-trade schemes require detailed and com-
plex rules, procedures and regulatory institutions for the monitoring, reporting and
verification (MRV) of greenhouse gas emissions at facility/installation level (e.g. power
plants, steel mills), often across hundreds or even thousands of facilities/installations
(Helm 2005,212).
The complexity of facility-level greenhouse gas MRV reduces the efficiency of such
instruments in three ways. First, the imposition of non-trivial transaction and adminis-
trative costs itself reduces efficiency. Second, information about greenhouse gas emis-
sions at facility/installation level is strongly asymmetrical in favour of regulated
entities, making it difficult for policymakers to avoid the deliberate Bgaming^and the
inadvertent underreporting of emissions, both of which can reduce the actual (as
opposed to reported) environmental outcomes of carbon pricing schemes (Bellassen
et al. 2015;Kuch2015). Third, due to administrative and transaction costs, liability in
actual demand-side schemes is inevitably limited to large emittersthosewhoseemis-
sions exceed a legally-specified thresholdnecessarily rendering scheme coverage
incomplete, which further reduces efficiency (Bellassen et al. 2015).
Supply-side policies, by contrast, are likely to have relatively low administrative and
transaction costs. First, they target a relatively small number of large, easily identifiable
projects operated by administratively competent firms upstream in the fossil fuel supply
chain. Second, the commodities to be accounted for (especially coal and oil) are not
only much easier to monitor/measure than greenhouse gases, but they are typically
already measured by firms for existing administrative purposes such as resource tax
liability assessment and compliance with local environmental license conditions. For
these reasons, total (and average-per-firm) MRV costs, MRV-related uncertainties in
abatement outcomes, and the degree of information asymmetry are all likely to be
lower than for similar demand-side instruments (Kerr and Duscha 2014,59699).
Third, supply-side policies automatically achieve very high levels of coverage because
all downstream consumers (subject to any constraints in cost pass-through) face higher
prices for fossil fuel inputs and are thus encouraged to reduce those inputs (ibid, 597).
3.2 Price and efficiency effects
Restricting the supply of a product, all else equal, increases the market price of that product.
Restricting fossil fuel supply will thus raise the absolute and relative price of products that
use fossil fuels as inputs. To the extent that higher prices discourage consumption (the
premise on which restrictive demand-side policies such as carbon pricing is based), the
higher fossil fuel prices will cause a reduction in the quantity consumed.
The further significance of these points for the choice of optimal policy instrument is discussed in Section 3.2.
Climatic Change (2018) 150:7387 77
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
In theory, the creation of technology- and pollutant-neutral policy instruments, such as a
cap-and-trade scheme with universal coverage of greenhouse gases, sectors and facilities,
allows for Bleast cost abatement^as profit-maximising agents search for the optimal combi-
nation of supply- and demand-side responses across all abatement channels (e.g. investment in
renewable energy, sequestration in forests, or reduced passenger car use) (Goulder and Parry
2008,15459). However, in order to reduce the administrative and MRV costs (discussed
above) and overcome political constraints (discussed in Section 4) real-world carbon price
schemes inevitably are not universal in their coverage of sectors and facilities. This reduces the
theoretical efficiency benefits of market-based demand-side schemes because it precludes the
use of particular abatement channels (Denniss 2008). Consequently, the efficiency difference
between a real-world carbon price and a restriction in the supply of fossil fuels will be smaller
in practice than in theory.
In a world where optimal climate policy is not achievable, it would be beneficial to
augment demand-side policies with supply-side policies. The main reason for this is
that when demand-side policies succeed in reducing emissions in one country the
decrease in demand for fossil fuels can result in lower prices being paid for fossil
fuels in other countries (where the relevant market is international). While in a first-best
world of global carbon pricing such an effect would not be possible, no such global
policy is likely to arise anytime soon, and at present the climate and energy policies of
large energy users such as the USA, China and India have significant ability to
influence the world prices for each type of fossil fuel. Price reductions that accompany
a decrease in demand can slow the global pace of industrial transformation toward low-
carbon production. For goods that do not generate negative externalities, the slowing of
industrialtransformationcausedbysuchprice falls is advantageous as it helps maxi-
mise the utilisation of existing capital and labour. But when the objective of demand-
side policy is to accelerate industrial transformation, restrictive supply-side policy has
an important role to play in limiting countervailing price effects. The combination of
supply-side and demand-side policies will thus hasten the industrial transformation
required to meet climate mitigation objectives.
3.3 Avoiding infrastructure lock-in
When production processes require a large, upfront investment in fixed costs, such as
the construction of a port, pipeline or coalmine, future production will take place even
when the market price of the resultant product is lower than the long-run opportunity
cost of production. This is because rational producers will ignore Bsunk costs^and
continue to produce as long as the market price is sufficient to cover the marginal cost
(but not the average cost) of production. This is known as Block-in^(see generally Seto
et al. 2016, 42930; see Erickson et al. 2015 on lock-in from fossil fuel supply
infrastructure specifically). (Even if the price of the product is sufficiently low as to
prevent the asset owner from repaying debts associated with the fixed costs, the
bankruptcy of the owner will not prevent subsequent owners of the fixed asset from
producing, so long as the market price covers the marginal cost of production.)
When future policy is uncertain, a rational investor might be willing to make a large
upfront investment in fixed production capacity (for example building a new coalmine)
if they assess the short-term value of the profits that can be earned under current policy
settings to be greater than the long-term (risk-adjusted) cost of detrimental policy
78 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
change. However, if a rational investor significantly underestimates the probability of
policy change (such as the timing and extent of a future carbon price), then, even after
the original rational (but mistaken) investor loses their financial capital, the market
price of the relevant fossil fuel would still be lower than would have otherwise been
the case had the investor accurately assessed the probability of policy change. The
temporary inability of an investor to assess future policy risk can thus have a durable
impact on the market.
Under such circumstances, policymakers can use restrictive supply-side policies both to
send a clear signal to investors about the path of future policy and, in turn, to avoid
inefficiently high levels of investment in the production capacity for goods of which
policymakers are determined to reduce consumption in the future.
3.4 Mitigating the green paradox
The risk of future policy change to the current value of a resourcefor example, the risk
of a future carbon price reducing the current value of coal resourcescan induce
resource owners to bring forward their extraction of that resource, thereby reducing its
market price, causing an increase in its consumption (a phenomenon dubbed Bthe Green
Paradox^by Sinn 2008,2012).
Supply-side policies can be a straightforward means to
mitigate the impact of the Green Paradox (Sinn 2008,2012).
4 The political benefits of supply-side policies
4.1 Greater potential to mobilise public support for policy
Choice of policy instrument and associated design features can affect public support for
climate policies (see Drews and van den Bergh 2015). Empirical and experimental
evidence shows that, holding constant non-policy-related factors, public support for
restrictive climate policies depends on (i) the perceived benefits of the policy, (ii) the
perceived personal and public costs of the policy, and (iii) the perceived distributional
fairness of the policy (ibid, 86063). Perceptions of benefits and costs are also
influenced by peoples perceptions of the effectiveness of the policy, which are in turn
affected by their understanding of the causal mechanisms by which the policy is
supposed to achieve its objectives (ibid).
Scholars have identified various reasons, related to these factors, why people tend to
prefer certain kinds of climate policy instruments over others (e.g. command and control
regulation over market-based instruments) (Jenkins 2014; Karplus 2011;Rabe2010) and,
within a given class of policy instrument, certain design features (e.g. explicit
earmarking of revenue from market-based instruments) (Drews and van den Bergh
2015, 863; Rabe and Borick 2012). What has not been analysed is the effect on public
support resulting from whether the instrument targets the supply side or the demand side
The circumstances in which this phenomenon might cause increased emissions are discussed in van der Ploeg
and Withagen (2012) and Edenhofer and Kalkuhl (2011).
While Pigouvian taxes are the preferred theoretical solution to this problem and various other market failures,
when the difficulties of designing and implementing optimal tax policies are taken into account, supply-side
policies are likely to be a preferable Bsecond-best^option.
Climatic Change (2018) 150:7387 79
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
(controlling for instrument type and relevant design features such as, where applicable,
revenue allocation).
We argue that, on each of the abovementioned three factors, supply-side policies are
generally likely to attract higher public support than demand-side policies, all else equal.
4.1.1 Higher perceived benefits of supply-side policy
The first reason supply-side policies are likely to receive stronger public support is because
they foreground (render salient) benefits that people value more.
Demand-side instruments (e.g. carbon pricing; carbon efficiency standards) typically
focus on greenhouse gas abatement per se. But this is a weakly valued benefit. A
common conclusion from climate-related public opinion research is that climate science
is poorly understood and concern about the problem, though widespread, is shallow, i.e.
it tends to be a low-salience, low-priority concern and individuals have a low
Bwillingness to pay^for solutions (Ansolabehere and Konisky 2014; Guber 2003;
Jenkins 2014,47072; van der Linden et al. 2015). This is unsurprising: the climate
benefits of mitigation policies are diffused widely across time and space; they dispro-
portionately accrue (and are perceived accrue) to future generations and people in other
countries; and their magnitude is uncertain, meaning they are likely to be strongly
discounted by voters (van der Linden et al. 2015). The weak valuation of climate benefits
may also be linked to the perceived ineffectiveness of unilateral domestic climate
policies in tackling global climate change (Drews and van den Bergh 2015, 86061).
In any case, insofar as they foreground climate benefits, demand-side instruments face
major challenges in attracting strong public support (Jenkins 2014, 475; Rabe and Borick
2012). This challenge is often magnified in public debates about such policies: in their
public-facing campaigns to discredit such policies, opposing interest groups can easily
exploit the publics weak valuation of climate benefits and doubts about the policys
effectiveness, as exemplified by case studies of carbon pricing debates in Australia
(Chubb 2014), Canada (Harrison 2012) and the US (Skocpol 2013).
By contrast, supply-side instruments typically target fossil fuels per se. Survey
evidence suggests that people more readily link co-costs/co-benefits (environmental,
health, security, social, economic) to specific energy sources than to the more abstract
concepts of Bcarbon^/Bclimate^(e.g., Ansolabehere and Konisky 2014); and fossil
fuels are well-understood commodities that many people more readily associate with a
range of higher-priority, more localised and more immediate negative (non-climate)
impacts, resulting in negative attitudes toward fossil fuels, especially coal (see Green
2018, section 3.1.1 and references there cited). These features give supply-side
policies considerable advantages in attracting public support for climate policy. Rel-
atively high public support for fossil fuel severance (resource extraction) taxes, even
in climate-ambivalent, tax-averse north-American states and provinces (Rabe and
Borick 2012,37779), provides circumstantial empirical support for these arguments.
The foregrounding of a wider and more valued set of benefits is also likely to make
it easier for proponents of supply-side policies to Bmobilise^the public to participate
actively in (consciously or incidentally) pro-climate-policy political action (Bomberg
2012) because this: enables proposals to be framed in ways that are more resonant with
voters and more resilient to counter-attack by opposing interest groups; facilitates
alliance-building among diverse groups with wide-ranging concerns about fossil fuels;
80 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
and facilitates network-building among groups at different advocacy- and policy-
relevant scales (Green 2018). These are, additionally, positive feedback effects that
increase the likelihood of stronger climate policies in the future (ibid).
4.1.2 Possible higher perceived distributional fairness and lower perceived costs
of supply-side policies
The higher they perceive the costs of a climate policy to be (to themselves and to
society more broadly), the less likely people are to support it, all else equal (Drews and
van den Bergh 2015,86162). But the perceived fairness of the distribution of those
costs across society also affects voter support for climate policies (ibid, 862). Survey
evidence (Cai et al. 2010) and case studies from carbon pricing attempts in Australia
(Chubb 2014) and Canada (Harrison 2012) suggest that people are more likely to
support a climate policy where they perceive that the incidence of the policyscosts
will likely lie with polluting industries.
From the case studies just cited, it appears, further, that people tend to perceive
that energy consumers will bear the incidence of costs imposed under carbon pricing
instruments, which contributes to the weak public support for such policies. Undoubt-
edly, part of the perception is attributable to the policy instruments analysed in those
case studies being Bprice^instruments, which foreground the price that consumers
must pay on salient household consumption items like electricity and gasoline, making
them less popular than Bcommand and control^instruments that Bhide the costs^of
regulation (Jenkins 2014; Karplus 2011; Keohane et al. 1998;Rabe2010;Rabeand
Borick 2012). However, we hypothesise that part of the opposition to carbon prices is
explained by the fact that the instruments are demand-side instruments. In a relevant
supply chain, the formal incidence of demand-side instruments generally lies with, or
close to, the end consumers. So too in the case of demand-side climate policies
applicable to the energy sector: the formal incidence, or liability, typically lies with
owners (or operators) of electricity generation facilities and petroleum distributors.
The fact that consumers regularly buy electricity and gasoline, we suggest, makes
consumers more readily perceive that the costs will be passed onto them. If this
hypothesis is correct, it follows that people are more likely to perceive the incidence
of supply-side policies to lie with fossil fuel producers, since the latter are more
remote from consumers in relevant supply chains. Accordingly, we would expect that
people would perceive the costs to themselves of supply-side policies to be lower, or
the distribution of the costs to be fairer, or bothand thus support for such policies
to be higher. The stronger preferences for fossil fuel severance taxes than for demand-
side energy taxes in North America is again consistent with this hypothesis, though
research designed to test this hypothesis is needed, and would be a valuable subject
of future research.
Additionally, insofar as (the public perceives that) the fossil fuels mined or extracted
in the relevant jurisdiction (e.g. country A) will be exported to another jurisdiction (e.g.
country B), the effects of price increases on consumer surpluswhich may well be
largewill be felt in country B, not country A. Accordingly, voters in country Aare
likely to perceive that the personal costs of supply-side policies will be low (subject to
concerns about production leakage), implying stronger public support for supply-side
policy in country A(see also Rabe and Borick 2012, 37779).
Climatic Change (2018) 150:7387 81
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
4.2 Different potential to mobilise fossil fuel industry support for policy
A major political barrier to the enactment of (ambitious) restrictive climate policies (Table 1, row 1)
in the energy sector is the political mobilisation of industries that stand to lose from such policies.
Fossil fuel producers are especially politically influential: they are characteristically well organised,
capital-intensive, and own highly specific assets (Hughes and Lipscy 2013, 459); and they often
have deep ties to the states in which they operate (Newell and Paterson 1998). Environmental
nongovernmental organisations and green industries typically form coalitions supportive of climate
policy, but these are typically weak compared with the power of the opposing coalition (Meckling
et al. 2015). The political feasibility of climate policy improves when, all else equal, members of
the opposing coalition are induced to switch from opposition to support.
Policy can be crafted so as to divide otherwise-opposed fossil fuel companies and recruit some
of them to the supporting coalition. Here, two standard policy design features are most relevant.
First, fossil fuel companies can be divided along Btemporal^(incumbent vs new entrant) lines by
using instruments that restrict new entrants. Bans/moratoria are particularly well-suited to this
task, since precluding new entrants is the raison detre of such a policy. Second, fossil fuel
companies can be divided along Bsub-industry^(e.g. coal vs. petroleum) lines by applying the
policy only to one or some sub-industries. Rational fossil fuel producers perceiving a risk of a
tightening carbon budget constraint will support policies that require emissions reductions from
other sectors, including other fossil fuel sub-industries, but which exclude their own sector.
While both restrictive demand-side and restrictive supply-side policies can be designed to
have one or both of these features, the relative political feasibility of such demand-side vs
supply-side schemes is likely to vary from case to case. In a given context (e.g. country Aat
time t), the industry structure (e.g. market concentration), industry size, and demand outlook
for the products of (particular kinds of) fossil fuel suppliers relative to (particular kinds of)
industrial fossil fuel consumers may be more conducive to policies targeting suppliers of a
fossil fuel than consumers of that fuel (and these are all likely to vary systematically across fuel
types). In other contexts, of course, the opposite may hold. For example, where some of a
countrys fossil fuel production is exported, fossil fuel producers in that country are likely to
prefer demand-side over supply-side policies, other things equal (cf. Harrison 2015,39).
Given the high political value of strengthening the supportive coalition relative to the
opposing coalition, considerations concerning the potential to win over fossil fuel (sub-)in-
dustries to supporting coalitions should be of great interest to policymakers. In light of the
different coalitional implications they are likely to have in a given context, inclusion of supply-
side policies in the policy toolkit (alongside demand-side policies) will expand the option set
of policymakers confronted by powerful industries.
4.3 Greater potential to induce, sustain and escalate international policy cooperation
over time
So far, we have focused on the effect of instrument choice at the domestic level. But of
course, domestic climate policies both influence and are influenced by actors, institutions
This is the converse implication of the point made at the end of Section 4.1.2: supply-side policies affecting the
exports of Country Areduce consumer surplus in the importing Country B, but they reduce producer surplus in
Country A(relative to an equivalent demand-side measure in Country Athat does not affect emissions embodied
in exports).
82 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
and ideas at the international level, and those emerging from within other countries. One
relevant criterion of instrument choice, then, is the conduciveness of a policy instrument to
international cooperation or transnational policy diffusion (cf. Hepburn 2006,235),which
can be specified as the extent to which a policy instrument can be expected to induce,
sustain or escalate international policy cooperation or transnational policy diffusion.
Serious attempts at strong forms of policy linkage and harmonisation using demand-side carbon
pricing instruments have been all-but-abandoned in the design of the Paris Agreement. Moreover,
the significance of uniform territorial emissions accounting has been much diminished in the move
away from a regulatory regime focused on technical compliance (as with the Kyoto Protocol) to a
facilitative regime focused on mobilising political pressure to raise countriesambition, along
multiple dimensions, over time (as with the Paris Agreement) (see the Electronic Supplementary
Material in Green 2018). These political realities of the new regime have opened the space for new
forms of instrument-specific international cooperation. There are two features of supply-side policies
that make them potentially more conducive to international cooperation and/or policy diffusion.
First, if price elasticities of demand for a fossil fuel are high relative to supply elasticities for
that fuel, supply-side policies will result in less international carbon leakage than demand-side
policies (Lazarus et al. 2015,1415). Collier and Venables argue that, at least for coal, long-
run elasticities of demand are likely to exceed those of supply because the many substitution
possibilities available on the demand-side (other fossil fuels, renewables) Bhave no analogue
on the supply side; producing less coal has no technological link to having a greater supply of
oil, gas, or renewables^(Collier and Venables 2015,49798). Ultimately, determining the
relative supply vs demand elasticities for each fuel type is an empirical matter that lies beyond
the scope of this paper, and for some fuels the relative elasticities may vary from market to
But to the extent that supply elasticities are lower than demand elasticities, unilateral
domestic supply-side policies would be more effective at reducing global emissions than their
demand-side equivalents. That effect would be desirable on its own, but it would also help to
build international cooperation: the emergence of international cooperation on fossil fuels is
likely to be contingent on a coalition of early-movers taking unilateral steps to limit or reduce
fossil fuel supply (i.e. Bleading by example^and then persuading or incentivising other states
to adopt similar restrictions: Green 2018); low international leakage rates associated with
supply-side policies would encourage the necessary unilateral action.
The second feature is the relative ease with which supply-side policies can be monitored
and verified (see Section 3.1). Were states to commit internationally to implement supply-side
policies, the ease of MRV would mean third states (and other third-party agents, such as
nongovernmental organisations) could readily verify compliance with those international
commitments (Collier and Venables 2015, 501, 5067; Kerr and Duscha 2014, 599). This
matters greatly for international cooperation because when states know that compliance can
easily be verified by third parties, they are more likely to comply (Chayes and Chayes 1991,
32021). Moreover, mutually verified compliance builds trust among states, which encourages
states to escalate their commitments over time as repeated cycles of reciprocal action-and-
verification build their confidence in the integrity of a cooperative regime (Bell et al. 2012;
Victor 2011). This kind of gradual escalation strategy has proved successful in other interna-
tional policy domains where reliable and timely verification was feasible and emphasised (Bell
Lazarus et al. (2015, 15), reviewing the empirical literature, find that elasticities of supply usedin studies of coal
markets vary depending on the region, while elasticities of similar magnitudes for demand and supply have been
used in analyses of oil markets.
Climatic Change (2018) 150:7387 83
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
et al. 2012;Victor2011). Since the Paris Agreements success is predicated on statesgradual
escalation of their commitments over time, commitments to implement supply-side policies
offer major advantages as a Bcurrency^of international climate cooperation (e.g. as key
measures in countriesNationally Determined Contributions
). By contrast, attempts to build
international cooperation using demand-side instruments are beset by seemingly interminable,
trust-sapping arguments about accounting rules and verification mechanisms for greenhouse
gas emissions (see, e.g., Kuch 2015).
5 Conclusion
To our knowledge, this article is the first attempt to integrate and synthesise the economic and
political attributes of restrictive supply-side climate policies. The article has argued that such
policies (i) can overcome a number of climate-related economic inefficiencies that are
unaddressed, or caused, by demand-side policies; and (ii) have a number of political advan-
tages over demand-side policies. In view of their potential economic and political benefits, we
conclude that the neglect of restrictive supply-side climate policies in policy discussions and in
the comparative academic literature on policy instrument choice is unwarranted.
This article has also contributed to that literature by applying a framework for evaluating
the political attributes of generic policy instruments and design features. In doing so, the article
also responds to the loudening call (e.g. Fahey and Pralle 2016;Jenkins2014,469)for
politically pragmatic climate mitigation policy advice that eschews the depoliticised and
Bfirst-best^economic methodology adopted in much of the literature on climate policy
instruments. This articles insights about the political attributes of restrictive supply-side
policies relative to demand-side policies can usefully be combined with existing findings
about the political attributes of different instrument-types (market-based mechanisms vs.
Bcommand and control^regulation; price vs. quantity instruments) and design features (e.g.
revenue allocation strategies, where applicable). Such a combination, for example, suggests an
especially strong political case for using quantity-based Bcommand and control^regulation to
ban or restrict the supply of coal by new entrants, i.e. a ban/moratorium on new coalmines. It
also suggests that supply-side market mechanisms have some distinctive political advantages
over similar demand-side instruments.
Future work could fruitfully extend our analysis in three directions.
First, we have been largely silent on the ways in which, and degrees to which, the generic
political benefits of supply-side climate policies might vary across different contexts (e.g.
cross-nationally). Future research on the prospects for supply-side policies in specific coun-
tries/regions, and comparative analysis, would be valuable.
Second, we have only minimally discussed the extent to which the relative strengths of
supply-side policies vary among fossil fuel-types. Some of the benefits discussed are likely to
apply especially strongly to coal, though may apply less strongly to oil and gas. Future research
could valuably explore the relative significance of our arguments for the different fossil fuel types.
Third, we have not considered interactions between climate policy instruments. At the very
least, future economic analysis of instrument interaction should take into account the efficiency
considerations raised in Section 3of this article. Even more useful, however, is the emerging
For details on how countries could include supply-side policies in their Nationally Determined Contributions,
84 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
literature on policy instrument interactions that Bendogenises^political constraints. An insight
from recent literature on policy feedback effects is that overcoming political constraints to
ambitious climate mitigation is best done by sequencing policies in such a way as to engineer
feedback effects that expand the politically feasible set of climate policies over time (see esp.
Jordan and Matt 2014;Mecklingetal.2015;Urpelainen2013). Our analysis suggests that
supply-side policies are likely to have considerable positive feedback effects, such as the
potential to mobilise supportive political constituencies domestically and to foster cooperation
internationally (see Section 4). If this is correct, then supply-side policies would be prime
candidates to be adopted relatively early in the sequence of policies in a countrys
decarbonisation pathway. Further examination of these issues would be of great value.
While we hope that policymakers and reformers take these insights about sequencing
seriously, we recognise that climate politics is contested, messy and fluid; making progress
will require creativity, agility and pragmatic opportunism whenever, and wherever, a Bpolicy
window^(Kingdon 2014) opens. Some windows will be more amenable to one type of
instrument than to another. Politically successful reformers and interest groups recognise the
variety of instruments that can contribute, in different ways, to their desired long-term goal;
they draw from the policy toolkit the tool that best suits the political circumstances. The public
health/anti-tobacco movement, discussed in Section 2, offers an instructive model in this
regard. In our experience, the climate policy community has for too long been excessively
narrow in its preference for certain kinds of policy instruments (carbon taxes, cap-and trade),
largely ignoring the characteristics of such instruments that affect their political feasibility and
feedback effects. At the very least, then, we hope we have shown that supply-side policies
should be in the toolkit, ready to be wielded when circumstances favour.
Better, we think, to cut with both arms of the scissors.
Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International
License (, which permits unrestricted use, distribution, and repro-
duction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a
link to the Creative Commons license, and indicate if changes were made.
Ansolabehere S, Konisky DM (2014) Cheap and clean: how Americans think about energy in the age of global
warming. MIT Press, Cambridge
Bell RG, Ziegler MS, Blechman B (2012) Building international climate cooperation: lessons from the weapons
and trade regimes for achieving international climate goals. World Resources Institute, Washington, DC
Bellassen V et al (2015) Monitoring, reporting and verifying emissions in the climate economy. Nat Clim Chang
Bomberg E (2012) Mind the (mobilization) gap: comparing climate activism in the United States and European
Union. Rev Policy Res 29(3):408430
Cai B, Cameron TA, Gerdes GR (2010) Distributional preferences and the incidence of costs and benefits in
climate change policy. Environ Resour Econ 46(4):429458
Chapman S, Wakefield M (2001) Tobacco control advocacy in Australia: reflections on 30 years of progress.
Health Educ Behav 28(3):274289
Chayes A, Chayes AH (1991) Compliance without enforcement: state behavior under regulatory treaties. Negot J
Chubb P (2014) Power failure. Black Inc., Melbourne
Collier P, Venables AJ (2015) Closing coal: economic and moral incentives. Oxf Rev Econ Policy 30(3):492512
Collins K, Mendelevitch R (2015) Leaving coal unburned: options for demand-side and supply-side
policies. DIW, Berlin
Climatic Change (2018) 150:7387 85
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Cook BJ (2010) Arenas of power in climate change policymaking. Policy Stud J 38(3):465486
Denniss R (2008) Fixing the floor in the ETS: the role of energy efficiency in reducing Australiasemissions.The
Australia Institute, Canberra.
Drews S, van den Bergh CJM (2015) What explains public support for climate policies? A review of empirical
and experimental studies. Clim Pol 16(7):855876
Edenhofer O, Kalkuhl M (2011) When do increasing carbon taxes accelerate global warming? A note on the
green paradox. Energy Policy 39:22082212
Erickson P, Lazarus M, Tempest K (2015) Carbon lock-in from fossil fuel supply infrastructure. Stockholm
Environment Institute, Seattle
Fahey BK, Pralle SB (2016) Governing complexity: recent developments in environmental politics and policy.
Policy Stud J 44:S28S49
Goulder LH, Parry IWH (2008) Instrument choice in environmental policy. Rev Environ Econ Policy 2(2):152174
Green F (2018) Anti-fossil fuel norms. Climatic Change. 007/s10584-017-2134-6
Guber DL (2003) The grassroots of a green revolution: polling America on the environment. MIT
Press, Cambridge
Haas PM (1992) Banning chlorofluorocarbons. Int Organ 46(1):187224
Harrison K (2012) A tale of two taxes: the fate of environmental tax reform in Canada. Rev Policy Res
Harrison K (2015) International carbon trade and domestic climate politics. Glob Environ Polit 15(3):2748
Helm D (2005) Economic instruments and environmental policy. Econ Soc Rev 36(3):205228
Hepburn C (2006) Regulation by prices, quantities, or both: a review of instrument choice. Oxf Rev Econ Policy
Hughes L, Lipscy PY (2013) The politics of energy. Annu Rev Polit Sci 16:449469
Jenkins JD (2014) Political economy constraints on carbon pricing policies: what are the implications for
economic efficiency, environmental efficacy, and climate policy design? Energy Policy 69:467477
Jordan A, Matt E (2014) Designing policies that intentionally stick: policy feedback in a changing climate. Policy
Sci 47(3):227247
Kameda T et al (2014) Asbestos: use, bans and disease burden in Europe. Bull World Health Organ 92(11):790797
Karplus VJ (2011) Climate and energy policy for U.S. passenger vehicles: a technology-rich economic modeling and
policy analysis. PhD dissertation. MIT.
Keohane NO, Revesz RL, Stavins RN (1998) The choice of regulatory instruments in environmental policy. Harv
Environ Law Rev 22(2):313367
Kerr S, Duscha V (2014) Going to the source: using an upstream point of regulation for energy in a national
Chinese emissions trading system. Energy Environ 25(3):593612
Kingdon JW (2014) Agendas, alternatives and public policies, 2nd edn. Pearson, Harlow
Kuch D (2015) The rise and fall of carbon emissions trading. Palgrave Macmillan, Basingstoke
Lazarus M, Erickson P, Tempest K (2015) Supply-side climate policy: the road less taken. Stockholm
Environment Institute, Seattle
Marshall A (1890) Principles of economics. MacMillan & Co, London
Meckling J, Kelsey N, Biber E, Zysman J (2015) Winning coalitions for climate policy. Science
Needleman HL (2000) The removal of lead from gasoline: historical and personal reflections. Environ Res Sect
Newell P, Paterson M (1998) A climate for business: global warming, the state and capital. Rev Int Polit Econ
Piggot G, Erickson P, Lazarus M, van Asselt H (2017) Addressing fossil fuel production under the UNFCCC:
Paris and beyond. Stockholm Environment Institute, Working Paper 2017-09
Rabe BG (2010) The aversion to direct cost imposition: selecting climate policy tools in the United States.
Governance 23(4):583608
Rabe BG, Borick CP (2012) Carbontaxation and policy labeling: experience from American states and Canadian
provinces. Rev Policy Res 29(3):358382
Seto KC et al (2016) Carbon lock-in: types, causes, and policy implications. Annu Rev Environ Resour
Sinn HW (2008) Public policies against global warming: a supply side approach. Int Tax Public Finance 15(4):
Sinn HW (2012) The green paradox: a supply-side approach to global warming. MIT Press, Chicago
Skocpol T (2013) Naming the problem: what it will take to counter extremism and engage Americans in the fight
against global warming.
Somanathan E, Sterner T, Sugiyama T (2014) National and sub-national policies and institutions. In: Edenhofer
O et al (eds) Climate change 2014: mitigation of climate change. Contribution of working group III to the
86 Climatic Change (2018) 150:7387
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
fifth assessment report of the intergovernmental panel on climate change. Cambridge University Press,
Cambridge, pp 11411206
Urpelainen J (2013) A model of dynamic climate governance: dream big, win small. Int Environ Agreements
Polit Law and Econ 13(2):107125
van der Linden S, Maibach E, Leiserowitz A (2015) Improving public engagement with climate change: five
best practiceinsights from psychological science. Perspect Psychol Sci 10(6):758763
van der Ploeg F, Withagen C (2012) Is there really a Green Paradox? J Environ Econ Manag 64(3):342363
Victor DG (2011) Global warming gridlock: creating more effective strategies for protecting the planet.
Cambridge University Press, New York
Climatic Change (2018) 150:7387 87
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
Terms and Conditions
Springer Nature journal content, brought to you courtesy of Springer Nature Customer Service Center
GmbH (“Springer Nature”).
Springer Nature supports a reasonable amount of sharing of research papers by authors, subscribers
and authorised users (“Users”), for small-scale personal, non-commercial use provided that all
copyright, trade and service marks and other proprietary notices are maintained. By accessing,
sharing, receiving or otherwise using the Springer Nature journal content you agree to these terms of
use (“Terms”). For these purposes, Springer Nature considers academic use (by researchers and
students) to be non-commercial.
These Terms are supplementary and will apply in addition to any applicable website terms and
conditions, a relevant site licence or a personal subscription. These Terms will prevail over any
conflict or ambiguity with regards to the relevant terms, a site licence or a personal subscription (to
the extent of the conflict or ambiguity only). For Creative Commons-licensed articles, the terms of
the Creative Commons license used will apply.
We collect and use personal data to provide access to the Springer Nature journal content. We may
also use these personal data internally within ResearchGate and Springer Nature and as agreed share
it, in an anonymised way, for purposes of tracking, analysis and reporting. We will not otherwise
disclose your personal data outside the ResearchGate or the Springer Nature group of companies
unless we have your permission as detailed in the Privacy Policy.
While Users may use the Springer Nature journal content for small scale, personal non-commercial
use, it is important to note that Users may not:
use such content for the purpose of providing other users with access on a regular or large scale
basis or as a means to circumvent access control;
use such content where to do so would be considered a criminal or statutory offence in any
jurisdiction, or gives rise to civil liability, or is otherwise unlawful;
falsely or misleadingly imply or suggest endorsement, approval , sponsorship, or association
unless explicitly agreed to by Springer Nature in writing;
use bots or other automated methods to access the content or redirect messages
override any security feature or exclusionary protocol; or
share the content in order to create substitute for Springer Nature products or services or a
systematic database of Springer Nature journal content.
In line with the restriction against commercial use, Springer Nature does not permit the creation of a
product or service that creates revenue, royalties, rent or income from our content or its inclusion as
part of a paid for service or for other commercial gain. Springer Nature journal content cannot be
used for inter-library loans and librarians may not upload Springer Nature journal content on a large
scale into their, or any other, institutional repository.
These terms of use are reviewed regularly and may be amended at any time. Springer Nature is not
obligated to publish any information or content on this website and may remove it or features or
functionality at our sole discretion, at any time with or without notice. Springer Nature may revoke
this licence to you at any time and remove access to any copies of the Springer Nature journal content
which have been saved.
To the fullest extent permitted by law, Springer Nature makes no warranties, representations or
guarantees to Users, either express or implied with respect to the Springer nature journal content and
all parties disclaim and waive any implied warranties or warranties imposed by law, including
merchantability or fitness for any particular purpose.
Please note that these rights do not automatically extend to content, data or other material published
by Springer Nature that may be licensed from third parties.
If you would like to use or distribute our Springer Nature journal content to a wider audience or on a
regular basis or in any other manner not expressly permitted by these Terms, please contact Springer
Nature at
... Supply-side constraints are increasingly seen as a necessary complement to demand-side measures, notably to reduce investments into fossil fuel production and their market availability (Bauer et al. 2018;Erickson et al. 2018;Lazarus and van Asselt 2018;Sinn 2012). As Collier and Venables (2014) suggest, supply-side approaches have the advantage of focusing on a sector with a relatively limited number of actors (producing countries, especially exporters, and companies) and existing coordination mechanisms (e.g., Organization of Petroleum Exporting Countries [OPEC]) (see also Green and Denniss 2018). ...
Full-text available
Fossil fuel producers have a major role to play in curbing greenhouse gas emissions through supply-side initiatives. Yet, no study has systematically assessed the determinants of efforts to constrain fossil fuel production for climate purposes. To contribute to climate change mitigation efforts, this article develops a conceptual framework for factors potentially affecting country-level initiatives to keep fossil fuels in the ground. Using data for 124 countries with fossil fuel reserves for 2006–2019 and multivariate Poisson regression analysis, we identify factors influencing the use of such constraints by national governments. Results show that although dependence on fossil fuel rents reduces the likelihood of constraint measures, the size of fossil fuel reserves or production does not impact it. Richer countries are also more likely to use constraints. Organization of Petroleum Exporting Countries membership constitutes a barrier to having moratoria on fossil fuel extraction. These results can help identify potential members for new fossil fuel supply-side initiatives and coalitions.
... and practice. However, with climate activists increasingly targeting fossil fuel projects and companies over the last decade (Ayling & Gunningham, 2017;Piggot, 2018) and a burgeoning literature on "supply-side climate policy" emerging in recent years (e.g., Asheim et al., 2019;Carter & McKenzie, 2020;Erickson et al., 2018;Gaulin & Le Billon, 2020;Green & Denniss, 2018;Lazarus & van Asselt, 2018;van Asselt, 2021), appetite for directly targeting fossil fuels is now also mounting within policy circles. This growing attention was clearly visible in the run-up to and at the Glasgow Climate Conference (COP26) held in November 2021. ...
Full-text available
Notwithstanding the clear contribution of fossil fuel production and consumption to global greenhouse gas emissions, fossil fuels have remained largely outside the focus of the international regime established by the United Nations Framework Convention on Climate Change. The 2021 Glasgow Climate Change Conference (COP26) marked an important change, however, with fossil fuels featuring prominently in the intergovernmental negotiations as well as on the side‐lines of the conference. Here we discuss these developments as a site for contestations around “anti‐fossil fuel norms.” We argue that anti‐fossil fuel norms are increasingly being adopted and institutionalized. However, ongoing contestation among proponents and opponents of measures to tackle fossil fuels raises important questions over the specific content of emerging norms, the role of the fossil fuel industry in climate governance, the extent to which these norms “fit” with their broader normative context, and the conditions of North–South cooperation in which such norms are to be implemented. This article is categorized under: Policy and Governance > International Policy Framework Policy and Governance > Private Governance of Climate Change
... Although it greatly improves our understanding of emissions linkages throughout the global economy, consumption-based accounting (or any single accounting approach used in isolation) fails to account for other important considerations, and leakage may still occur, for example due to dynamics between fossil fuel supply and demand, or between sectors when policies pursue emissions reductions that seek to reduce emissions by reducing energy demand or structural economic changes, respectively. Carbon leakage from isolated demand-side approaches has been discussed, with supply-side policy advocates calling for an integrated approach that aims to curtail energy demand and fossil fuel production in tandem, in order to reduce leakage effects 42 , and leakage effects caused by renewable energy adoption explored, where it has been found that intermittent renewables have not displaced any fossil fuel electricity sources over the last fifty years, and all non-fossil fuel energy sources have displaced at most a quarter of what they have added to global energy production and consumption 68 . Emissions leakage between industries during structural changes has not yet been investigated. ...
Full-text available
In this dissertation, I bring together a broad area of research in climate science and policy, ethics, ecological economics, political economy, and environmental sciences. I aim to cut through complexity and present clear conclusions that follow from decades of scholarship that has not yet made the impression on policymakers or the public that it deserves. This dissertation comprises three papers: 1) a critical overview of fair shares and decarbonization scenarios, and a way to reconcile what should be done with what experts think can be done (with a Canadian case study); 2) a framework for climate testing proposed fossil fuel infrastructure that can be used to evaluate an individual project's compatibility with global or domestic emissions reduction targets (with a case study of Canadian gas); and 3) an analysis of the potential for a shift towards services to mitigate GHG emissions and other environmental impacts. The results of paper 1 show that under a relatively ambitious but still insufficient decarbonization program, Canada is projected to accrue an emissions debt of 6 to 52 GtCO2e by 2050, which could be valued at $0.8 trillion to $6.5 trillion using the best estimate for the social cost of carbon dioxide. Paper 2 concludes current plans to extract Canadian gas are unequivocally at odds with national and global climate efforts, and that even climate action in line with an inequitable share of ~2–3°C of warming necessitates an immediate and rapid phase out of gas extraction within years. Papers 1 and 2 contribute policy tools needed for Canada and similar wealthy fossil fuel producing nations to do their fair share of a global energy transition, even when a domestic energy transition is limited by political or technological constraints. Paper 3 shows that when counting household consumption of people as part of the sectors that employ them, supposedly ‘clean’ sectors like services are just as harmful as ‘dirty’ ones. This exposes the limited potential to reduce environmental impacts by growing the service sector, refuting claims made by advocates of green growth via an explosion of the knowledge economy. These findings may be used to inform policymaking, so that appropriate emphasis is placed on behavioural, technological, and structural changes to the economy. Together, realizations from this dissertation can be used to craft fair and practical policy for a just transition for Canada, through integrated domestic and foreign policy, which also could serve as a model for other affluent nations.
... To date, restrictive supply-side policies [30] are missing from the toolkit of policies against global warming. Energy production is caught on a path dependency on fossil fuels. ...
Achieving sustainability in respect to the natural environment necessitates a changing paradigm in climate’s governmentality, as to discipline complex modalities of techno-social agency that underlie the current climate crisis. From a transdisciplinary approach, the analysis recalls the science of climate change with the existing frame of international law (hard and soft law), analyzing the conditions for the accountability of organizations (Nations and corporations) in the production of anthropogenic emissions. Organizations are deciphered as complex techno-social systems of communication responding to reflexivity, feature that precludes them from understanding natural environment limitations. Reflexivity triggers carbon lock-in, a special form of path dependency at the base of the current schism between knowledge, intention, and actions. Reflexivity threatens long-term sustainability while endangering life and social systems. Artificial Intelligence can help overcome reflexivity, only if AI is restrained by an ethical approach constructed by the protection of human rights, the notion of environmental stewardship and the sustainability goals. Idealized ethical AI needs to take the form of hard law regulation.
There is political interest in the development of a low carbon economy. There are three supply-focused energy strategies that have been proposed (clean electricity, a switch from fossil fuels to bioequivalents, and carbon capture and storage) as a means to achieve Paris Agreement carbon targets. This paper uses the stock-flow-service nexus framework to highlight the role of materials and energy in the provision of the services offered within an economic system. We make the case that a low carbon economy cannot be achieved via energy policies alone, as emissions are a product of the interaction among energy and material flows, material stocks and the services they offer an end user. A literature review led to the identification of four complementary strategies. These are material circularity, product material efficiency, service sufficiency, and process resource efficiency. They encompass material efficiency and demand-side aspects of the resource use equation. The stock-flow-service nexus is then used to quantifiably assess the performance of all seven strategies with regard to carbon savings.
Shipping contributes roughly 2.8 % of global anthropogenic greenhouse gas (GHG) emissions, and this is projected to increase in the decades to come. The main regulator of the shipping industry, the International Maritime Organization (IMO), bears the responsibility for developing climate change regulation. Yet the IMO decarbonisation target remains only a 50 % reduction by 2050, and, while regulatory measures have been adopted, these mostly focus on increasing the energy efficiency of ships, not the reduction of total sector GHG emissions. The result is that carbon emissions from shipping continue to rise and are projected to increase by anything up to 50 % by 2050. While many studies are undertaken on the impact of efficiency regulations or the potential for market-based mechanisms, we argue in this piece that missing from this discussion is the potential for a target of full decarbonisation, in line with the IPCC recommendation, allied with a complete ban on the use of fossil fuels in shipping by 2050. This policy would provide certainty to the market and allow industry actors to undertake the transition in a level playing field. Without such a clear signal, carriers and shipowners will transition much more slowly to alternative fuels alongside continued long-term use of fossil fuels. We argue that this position should be actively considered and evaluated, with a tapered timeline to phase out the use of fossil fuels by this date. Instead of focusing research only on the marginal gains of partial policies, scholars and policymakers should prepare plans and evaluate scenarios linked to a clear goal of real zero by 2050.
Fossil fuel producers have a major role to play in curbing greenhouse gas emissions through supply-side initiatives. Yet, no study has systematically assessed the determinants of efforts to constrain fossil fuel production for climate purposes. This article develops a conceptual framework for factors potentially affecting country-level initiatives to keep fossil fuels in the ground. Using data for 124 countries with fossil fuel reserves for 2006–2019 and multivariate Poisson regression analysis, we identify factors influencing the use of such constraints by national governments. Results show that although dependence on fossil fuel rents reduces the likelihood of constraint measures, the size of fossil fuel reserves or production does not impact the likelihood. Richer countries are also more likely to use constraints. Organization of Petroleum Exporting Countries membership constitutes a barrier to having moratoria on fossil fuel extraction. These results can help identify potential members for new fossil fuel supply-side initiatives and coalitions.
This article considers the puzzle of Norway and Canada, two countries that have adopted ambitious Paris Agreement targets yet are also major fossil fuel exporters. To date, both countries have taken full advantage of the international convention that assigns responsibility only for emissions within a country’s borders. However, climate activists, First Nations, and green politicians increasingly have challenged fossil fuel production via campaigns centered on issues salient to voters in nonproducing regions: opposing new exploration licenses in Norway and pipelines in Canada. While supply-side campaigns have sometimes succeeded in ending expansion, neither country has seriously entertained restricting current production. We attribute these outcomes to continued public support for fossil fuel–driven prosperity; institutions that assign responsibility for production and climate to different government agencies; and the success of counternarratives that unilateral supply restrictions are futile, prosperity from petroleum exports will fund domestic clean-energy transitions, and gas exports advance global climate action.
Coal-to-gas switching in the power sector, as happening in the U.S., has been a key driver of near-term greenhouse gas emissions reductions. Can this success be replicated around the world? Here, we explore the limits of a global, plant-level, coal-to-gas transition arising from pipeline availability constraints. Globally, only 43% of coal capacity is within 14 km of a nearby pipeline, the median distance for recent coal-to-gas conversions. Furthermore, plant-to-pipeline distance distributions vary widely-only 30% of coal capacity in India is within 14 km of a nearby pipeline. Most global coal fleets are in the intermediate space of balancing two competing interests-having a young coal fleet with high "avoided" emissions potential through coal-to-gas switching but without access to low-cost gas resources. A global stocktake based on coal fleet age, pipeline access, and natural gas supply security suggests that a coal-to-gas transition in the power sector is unlikely to be a universal climate solution.
Full-text available
Historically, climate governance initiatives and associated scholarship have all but ignored the potential for “global moral norms” to bring about changes in the political conditions for global climate mitigation. This is surprising, since global moral norms are widely employed—as both a mode of governance and an analytical framework—in other domains of global governance, from international security to human rights. However, recent national-level fossil fuel divestments, moratoria on new coal mines and bans on gas fracking, among other developments, suggest the promise of global moral norms prohibiting fossil fuel-related activities, which this article terms “anti-fossil fuel norms” (AFFNs). The article interprets recent examples of such activities in the light of international relations theory on moral norms to provide a general framework for understanding how AFFNs originate, spread and affect states. Specifically, the article argues that there are: (i) influential agents that are originating, and likely to continue to originate, AFFNs; and (ii) international and domestic mechanisms by which AFFNs are likely to spread widely among states and have a significant causal effect on the identity-related considerations or rational calculations of states in the direction of limiting or reducing the production or consumption of fossil fuels. The article also shows that, because they spread and affect state behaviour through mechanisms of “international socialization” and domestic “political mobilization”, AFFNs cohere with and build upon the new paradigm of global climate governance crystallized in the Paris Agreement. AFFNs, the article concludes, represent a promising new frontier in climate governance.
Full-text available
Existing technologies, institutions, and behavioral norms together act to constrain the rate and magnitude of carbon emissions reductions in the coming decades. The inertia of carbon emissions due to such mutually reinforcing physical, economic, and social constraints is referred to as carbon lock-in. Carbon lock-in is a special case of path dependency, which is common in the evolution of complex systems. However, carbon lock-in is particularly prone to entrenchment given the large capital costs, long infrastructure lifetimes, and interrelationships between the socioeconomic and technical systems involved. Further, the urgency of efforts to avoid dangerous climate change exacerbates the liability of even small lock-in risks. Although carbon lock-in has been recognized for years, efforts to characterize the types and causes of carbon lock-in, or to quantitatively assess and evaluate its policy implications, have been limited and scattered across a number of different disciplines. This systematic review of the literature synthesizes what is known about the types and causes of carbon lock-in, including the scale, magnitude, and longevity of the effects, and policy implications. We identify three main types of carbon lock-in and describe how they coevolve: (a) infrastructure and technological, (b) institutional, and (c) behavioral. Although each type of lock-in has its own set of processes, all three are tightly intertwined and contribute to the inertia of carbon emissions.Weoutline the conditions, opportunities, and strategies for fostering transitions toward less-carbon-intensive emissions trajectories. We conclude by proposing a carbon lock-in research agenda that can help bridge the gaps between science, knowledge, and policy making. Expected final online publication date for the Annual Review of Environment and Resources Volume 41 is October 17, 2016. Please see for revised estimates.
Full-text available
Despite being one of the most important societal challenges of the 21st century, public engagement with climate change currently remains low in the United States. Mounting evidence from across the behavioral sciences has found that most people regard climate change as a nonurgent and psychologically distant risk-spatially, temporally, and socially-which has led to deferred public decision making about mitigation and adaptation responses. In this article, we advance five simple but important "best practice" insights from psychological science that can help governments improve public policymaking about climate change. Particularly, instead of a future, distant, global, nonpersonal, and analytical risk that is often framed as an overt loss for society, we argue that policymakers should (a) emphasize climate change as a present, local, and personal risk; (b) facilitate more affective and experiential engagement; (c) leverage relevant social group norms; (d) frame policy solutions in terms of what can be gained from immediate action; and (e) appeal to intrinsically valued long-term environmental goals and outcomes. With practical examples we illustrate how these key psychological principles can be applied to support societal engagement and climate change policymaking.
Full-text available
Technical Report
Reducing fossil fuel combustion is a top priority for climate policy. For decades, policy-makers and international agreements have sought to achieve this goal through energy efficiency, low-carbon technology, carbon pricing, and other measures designed to reduce demand for fossil fuels. Focusing on the point of combustion makes intuitive sense, but efforts have yet to put fossil fuel use on a trajectory consistent with keeping global warming below 2°C. Recognizing this shortcoming, policy-makers, researchers and activists have begun to look at the potential for policies and actions aimed at limiting fossil fuel supply. However, options for supply-side climate policies and how they might complement or replace more traditional demand side policies remain poorly understood. This paper explores reasons why supply-side policies have not been pursued and why they deserve more attention. It provides a typology of supply-side policies and frameworks for assessing their effectiveness, efficiency, and feasibility. It finds that supply-side policies, such as removal of producer subsidies, compensation of resource owners for leaving fuels “unburned”, or outright restrictions on resource development, could bring important benefits. Such policies could allow for greater emission reductions at the same (or lower) cost than demand-side policies alone. They could also help to reduce carbon lock-in effects, making it easier for lower-carbon alternatives to compete with fossil fuels. Many questions related to feasibility and effectiveness remain. Further research and policy development can help address these questions and explore how a new supply-side policy “toolkit” might complement demand-side approaches.
1. The Rise Of Emissions Trading As A Market Mechanism And The Promise Of ' 'Civilized Markets ' ' 2. Marketizing Civil Regulation: Acid Rain Regulation As The Experimental Bridge To Carbon Markets 3. Governing Carbon Emissions: NSW GGAS 4. The Technopolitics Of National Carbon Accounts 5. ' 'Economists In The Wild ' ': Clean Development And The Global Politics Of Carbon Offsets 6. The Paradox Of Measurable Counterfactuals And The Fall Of Emissions Trading 7. Beyond 8%: Resituating Emissions Trading
Global warming is one of today's greatest challenges. The science of climate change leaves no doubt that policies to cut emissions are overdue. Yet, after twenty years of international talks and treaties, the world is now in gridlock about how best to do this. David Victor argues that such gridlock has arisen because international talks have drifted away from the reality of what countries are willing and able to implement at home. Most of the lessons that policy makers have drawn from the history of other international environmental problems won't actually work on the problem of global warming. Victor argues that a radical rethinking of global warming policy is required and shows how to make international law on global warming more effective. This book provides a roadmap to a lower carbon future based on encouraging bottom-up initiatives at national, regional and global levels, leveraging national self-interest rather than wishful thinking.
Using a large sample of articles and books published between 2012 and 2015, this review shows the recent trends in environmental politics and policy scholarship. Environmental policy scholarship has embraced the concept of governance to explain the variety of actors and institutions that surround environmental problems and solutions. Scholars in the past three years used theories and methods to capture these governing dynamics in far-reaching and complicated issues like climate change. This article discusses recent patterns in the literature and demonstrates that new methods, recent theoretical focuses, and even the environmental issues covered by scholars reflect the field's acknowledgement that scholars can and should account for complexity in their work. However, the literature has neglected certain regions and processes, such as the developing world and policy feedback processes, leaving significant gaps in our understanding.