Fossil fuels will have to remain underground for global warming and accompanying climate change to be tamed. According to research, if we wish to achieve a max. of 2°C warming, 80% of the coal, 50% of the gas and 33% of the oil currently underground will have to stay there. And those numbers are considerably higher with a target of max. 1.5°C. The financial consequences of this would be particularly felt in the global south where most of the fossil fuel reserves are located. In addition, large investors such as pension funds and philanthropic institutions will be required to write-off resources and assets such as infrastructure, ships, jobs and shares. And the impacts will also be felt by, for example, small farmers who need fossil fuels to get their products to the market and those communities left behind in strongly polluted environments when fossil fuel companies leave.
Our research argues for accelerating climate-resilient change for inclusive developmentJoyeeta Gupta
The big question, as yet little examined, is exactly what roles all of these stakeholders can play in keeping fossil fuels underground and how they can be involved in sustainable and climate-resilient change. This question is central to Gupta’s research in her roles at the UvA as professor of Environment and Development in the Global South and faculty professor of Sustainability at the Faculty of Social and Behavourial Sciences. Gupta also holds a professorship on water law and policy at IHE-Delft Institute for Water Education.
Theory and policy instruments
Based on case studies and with the help of theory and methods from various disciplines, Gupta will:
- Explore the role of major investors in the fossil fuel industry, such as pension funds, philanthropic foundations, aid organisations, export credit agencies and development banks
- Show the impact of keeping fossil fuels underground in the global south, especially on developing countries that have invested heavily in the fossil fuel industry while at the same time being very vulnerable to the effects of climate change
- Develop theories and tools with which actors pursuing change (leaders, policy makers and social movements) can influence powerful stakeholders
- Formulate inclusive policy instruments that fairly distribute potential harm among stakeholders worldwide and thus accelerate the energy transformation process
Interactive Atlas and Stranded Asset Index
Two of the concrete deliverables that the research should yield are an Interactive Atlas and a so-called Stranded Asset Index. The atlas will map out the political, legal, social, financial, economic and geographic aspects of the fossil fuel industry, revealing the production and consumption of fossil fuels and the financial flows involved. The Stranded Asset Index will quantify national and regional exposure to risk from stranded assets and resources. This will assist in determining how to distribute the damage fairly (i.e. equitably) and efficiently.
‘COVID-19 stunned the growth of the fossil fuel sector and created conditions for climate-resilient change. But governments are now once again prioritising economic growth over environmental and social issues under the motto “Building Back Better”. Our research departs from this reformist mentality and explores the feasibility and implications of a transformative paradigm, in which climate-resilient change is accelerated and inclusiveness is prioritised,’ says Gupta.
The project - Climate Change, Financial Coherence and Leaving Fossil Fuels Underground in the Changing North-South Context (CLIFF) - will start later this year.