Counting carbon or counting coal? Anchoring climate governance in fossil fuel-based accountability frameworks

Produced as part of the Competitiveness in the low-carbon economy CCCEP research programme theme

For decades, the object of international climate governance has been greenhouse gases, standardised to tonnes of carbon dioxide-equivalent. The ongoing inadequacy of decarbonisation efforts based on this system has prompted calls to expand the scope of international climate governance to include restrictions on the supply of fossil fuels. Such initiatives could rely on accountability frameworks based on fossil fuel reserves, production or infrastructure, yet to date there has been little consideration of the different implications for climate governance of each of these options.

In this paper the authors analyse various existing schemes for the monitoring, reporting and verification (MRV) of fossil fuels to consider the potential benefits and drawbacks of each option as an object of climate governance. They identify serious risks from anchoring climate governance in fossil fuel reserves, given that the construction of reserves figures requires extensive expert and values-based judgements by professionals who are accountable only to profit-seeking firms in the fossil fuel industry.

The analysis points to the virtues of a hybrid fossil fuel-based accountability framework that accounts for infrastructure and production volumes, since infrastructure and production-related transactions are more readily observable and verifiable by parties with different interests from the fossil fuel producer. Crucially, this transparency would provide much-needed opportunities for democratic oversight of the data underpinning climate governance efforts, opening up new channels for holding states to account for their climate performance.

Key points for decision-makers

  • In the context of international climate governance, an accountability framework consists of: a set of norms by which responsibility for achieving the collective goal of mitigating climate change is allocated among states; a system of measurement/monitoring, reporting and verification (MRV) designed to yield factual information about states’ respective roles in causing climate change; and a set of institutions or practices for holding states to account for their non-compliance with the relevant norms.
  • Under the UN climate regime, accountability frameworks have standardly focused on greenhouse gases. Recent proposals to complement the UN regime with initiatives to limit and reduce the supply of fossil fuels would need to adopt an accountability framework that focuses on a different object of governance, namely fossil fuel reserves, production volumes, or infrastructure.
  • Fossil fuel reserves are social constructs that combine probabilistic expert judgements about the existence of geological resources with judgements about the commercial viability of those resources. The authors identify serious risks that profit-motivated firms in the fossil fuel industry could ‘game’ the system if supply-side climate governance were to be anchored in fossil fuel reserves. This is due to the extensive role for expert judgement that enters into the construction of reserves figures, and the exclusive control of reserves evaluation and classification practices by profit-seeking firms in the fossil fuel industry.
  • A further problem arises from the fact that climate governance – especially climate legislation – informs the very expert judgements that determine reserves figures in the first place.
  • Fossil fuel production volume data, in contrast, are broadly suitable for climate accountability and governance because they are relatively easily monitored and verified by downstream customers with an interest in accuracy. There is also potential for the collection of such data to be scaled globally. A drawback is that the activities and transactions that underpin production data are currently only transparent to actors with relatively narrow commercial interests, although their ready verifiability creates opportunities for expanded government oversight.
  • Fossil fuel infrastructure has various features that are conducive to MRV that yields high quality information. The principal benefit is that the infrastructure itself, and the practices surrounding it, are transparent to a wide range of observers, including civil society actors. This offers the benefit of mobilising public-spirited agents in the governance effort. A drawback is that fossil fuel infrastructure provides only a weak proxy of a country’s causal contribution to climate change.
  • A hybrid fossil fuel-based accountability framework that accounts for infrastructure and production volumes would lend itself to application in two international climate governance initiatives: a ban on new fossil fuel infrastructure/projects and expansions; and a managed and just phase-out of existing production.

Analysis by Fergus Green of the Grantham Research Institute and Declan Kuch of the Institute for Culture and Society at Western Sydney University.