Most of the recent IEA “World Energy Outlook” sits behind a paywall I am not bothering to go through. But this important sentence in the freely available “executive summary” (on page 3) deserves some attention:
No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 °C goal, unless carbon capture and storage (CCS) technology is widely deployed.
That’s also what Bill McKibben says on his “Do the Math” tour right now, though his numbers call for an even bigger share of the treasure to get off limits. Actually it is irrelevant how fast the remaining allowance (565 gigatons according to McKibben) is used. The most important task is to make sure that the larger part of the reserves stays in the ground permanently.
Let’s say for the sake of argument that efforts to reduce emissions are successful and emissions go down to 10 billion tons a year world wide in 202o (not something I am expecting). That would be nice, but it would only delay global meltdown (as is in positive feedback loop leading to Venus syndrome) for a couple of decades.
Reducing emissions is a necessary step, but not a sufficient one. If at least two thirds of proven reserves need to stay right where they are (in the ground), eventually people need to decide which reserves are off limits. I don’t see this happening at all anywhere.
If anything, the Americans have developed “fracking” technology that extracts previously unreachable reserves. And fossil fuel companies are already looking at the Arctic, another area previously off limits.
Since at least two thirds of the reserves need to stay permanently in the ground (with the exception of use as raw material in the chemical industry), the task ahead seems to be rather large.
How could it ever be done? And how can the owners of those reserves be compensated?
Here is one idea. Buy the coal in some deposit in Mongolia not yet mined. Use public funds for that purpose, and put the deposit under the authority of a suitable international organization, while leaving the ownership to the sovereign state that has provided the funding. Maybe the new Green Climate Fund could serve in that function for the time being.
Then make a policy decision that the coal won’t be mined for the next thirty years. Finance the transaction with sovereign state bonds that run for thirty years. Once they are paid back, the asset is in public ownership.
There are two nice things about this. For one, the creditors of these bonds would get the coal resource as a security, so their investment would be more secure than in a state bond without such a background.
And two, fossil fuel prices are expected to go up in the future, especially if two thirds of the reserves are taken off the market permanently by such deals. That of course means that the countries providing the public funds are left with an asset that has gone up much in value.
Right now, I have no idea if any of this makes sense. But anyway, as long as burning fossil fuel is not illegal everywhere on the planet, there must be one way or other to take some of the resources completely out of the market. If two thirds of the stuff needs to stay in the ground, one needs to start thinking about how that is supposed to actually happen.
Update: Climatestate kindly reposted this here.