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

Fossil fuels - coal, oil, and gas - are the single largest contributor to greenhouse gas emissions. To achieve the long-term temperature goals set by the 2015 Paris Agreement, fossil fuel production cannot continue to proceed unabated. Limits need to be set on expansion and a process agreed for managing decline of existing investments and infrastructures. Acknowledging the linkages between fossil fuel production and climate change, a growing number of countries have begun to take measures to restrict fossil fuel supply, including moratoria, extraction taxes and reforms of fossil fuel producer subsidies. While such supply-side measures can offer an important complement to traditional, demand-oriented climate policies, their effectiveness would be strengthened by international cooperation. International cooperation can help build trust that other countries are taking action, avoid leakage effects, and ensure a fair and equitable transition away from fossil fuel production. International institutions can help by setting overall goals, putting in place mechanisms to strengthen transparency and accountability, offering capacity-building, financial, and technological support, and disseminating information, allowing for learning across countries.

However, there is a dearth of international governance arrangements focusing on the climate impacts of fossil fuel production, with the international climate regime only offering limited guidance to states and non-state actors. Nevertheless, with the launch of the Beyond Oil and Gas Alliance at the Glasgow Climate Conference in 2021, international cooperation on fossil fuel production is beginning to emerge. Academics and civil society organisations, in the meantime, are calling for a specific ‘fossil fuel non-proliferation treaty’ to complement the Paris Agreement.

An outstanding question is how international cooperation could evolve to bring about a managed decline of fossil fuel production. This paper explores two possible pathways – one following a club model, and the other more akin to a multilateral environmental agreement. Specifically, the paper discusses the participants in an international agreement, the forum through which cooperation will take place, the modalities, principles and procedures underpinning an agreement, and the incentives to induce cooperation. The paper concludes that the most likely scenario at this juncture is the emergence of club arrangements covering particular fossil fuel sources and groups of actors which, over time, can give rise to a more coordinated and multilateral response.