Turning out the light: criteria for determining the sequencing of countries phasing out oil extraction and the just transition implications

ABSTRACT

There is a pressing need to curb the extraction of fossil fuels, alongside their use and consumption, to remain within reach of the 1.5C global warming limit. Yet, a reduction in the supply of fossil fuels does not inherently indicate a just or equitable transition. A growing number of papers are proposing approaches and criteria for determining the allocation of remaining production of fossil fuels and the sequencing of countries phasing out extraction and production. With a focus on oil, this paper identifies, and reviews 15 criteria found in the literature for determining the sequencing of phase out of fossil fuel supply. These criteria are economic efficiency, wealth, dependence, development, historical responsibility, procedural justice, and variations within these approaches. In addition, this paper reviews the extent to which these criteria have been operationalized and discusses the just transition implications of pursuing a fossil fuel supply phase out based on the criteria and indicators identified. This review suggests that the sequencing of countries that phase out oil extraction differs depending on the criteria adopted but that there are gaps in the criteria identified and in their operationalization, with implications for how to usher in just transitions. This paper calls for a more holistic view of the equity implications of a global phase out, supported by further research broadening and deepening the scope of equity considerations.

Key policy insights

• Without policy interventions, market dynamics alone are unlikely to lead to a deliberately equitable distribution of the remaining extraction of oil in line with a 1.5C global warming goal.

• The sequencing of countries phasing out oil extraction differs depending on the criteria adopted and sequencing based on individual criteria can lead to ill-considered outcomes.

• There is a gap in the criteria and indicators needed to determine a sequencing of a global phase out that is aligned with a just transition, which hampers informed decision-making and a holistic assessment of circumstances across countries.

• Basing a phase out on an incomplete assessment of indicators poses a risk to just transition, particularly regarding development needs and procedural justice.

KEYWORDS:

• Just transition
• oil
• supply
• phase out