Unexpected Effects of a Diminishing Carbon Budget – The Colombian Coal Resource Curse

Andrea Carolina Cardoso Diaz, Roman Mendelevitch, Kate Farell

The COP21 Paris agreement has brought about a clear commitment to reduce anthropogenic greenhouse gas (GHG) emissions to a level that will most likely  and striving for 1.5°C.According to McGlade and Ekins (2015) keep the increase of global mean temperature below 2°C requires refraining from using a large share of current fossil fuel reserves with 82%-88% of current coal reserves left unburned until 2050.

The limitation of coal exploitable coal resources opens up two important and interrelated questions: If the resources base is to be limited, how will this decision be made and what arguments will be considered in this decision process. And vis-versa, how will the then limited resources be allocated to currently excess demand, especially in emerging economies (cf. Steckel, Edenhofer, and Jakob 2015).

Current, market-based evaluation of coal is governed by extraction and transportation cost on the one hand, and the coal’s ability to supply energy services (i.e. its physical characteristics), on the other hand. Such standard economic consideration, would suggest that Colombia, with its high quality and low production cost coal reserves should be one of those countries that should continue coal production in a carbon-constrained world (Oei and Mendelevitch 2018). While such a valuation might be in line with reducing global externalities (e.g. maximal energy output per ton of CO2 emissions) it disregards disamenities (e.g. local pollution) for local population, flora and fauna. Thus there are also contradicting objectives of revenue generation for public budgets vs. conservation of natural resources and prevention of disamenities for local and national governments (cf. Tsani 2013; Söderholm and Svahn 2015; Betz et al. 2015)

In this paper, we detail the expected consequences of a diminishing carbon budget using the example of Colombia. Moreover, we suggest a more holistic evaluation of coal resources taking local, regional and global externalities into account (Cardoso 2015). This would include (biodiversity, population density, quality of coal, mining style, non-final list) and also consider path-dependencies, irreversibility and south to south shift in emissions.

Planning for after coal? Insights from Colombia and South Africa

Claudia Strambo

While policy-makers and businesses around the world increasingly anticipate fossil fuels production, especially coal, peaking in the next decade, there have been surprisingly few discussions on what this will mean for producing regions, especially in developing countries. Such transitions are nevertheless likely to have severe impacts on the economy and social relations of extractive areas. In fact, as coal mining is often portrayed as a key contributor to socioeconomic development, the idea of coal supply transitions is generating strong resistance from a broad range of actors, from mining companies and utilities to governments and trade unions.

This study explores to what extent coal exporting countries are preparing for a scenario in which coal production would decline much more rapidly than normally expected. Building on policy analysis and stakeholder consultations through semi-structured interviews and policy workshops, we examine how two key coal exporting countries, South Africa and Colombia, are addressing growing uncertainty in global coal markets, and what would be the development challenges and opportunities generated by a shift away from coal mining. We then identify which policy processes and existing institutions can best host debates on post-coal development and support the elaboration and implementation of plans, policies and investments that aim to navigate a supply-side coal transition in these two countries.

Defining unburnable carbon areas and sustainable transitions to fossil fuels development in the Ecuadorean Amazon Region

Daniele Codato, Massimo De Marchi, Carlos A. Larrea, Maria R. Murmis, Salvatore E. Pappalardo

Socio-environmental impacts of fossil fuel operations in different geographical contexts are widely recognised in scientific literature, together with the need to implement more effective politics to avoid or minimize these effects. However, extractive economies face structural constraints to reach equitable and sustainable development, making the transition from fossil fuel extraction more difficult.

Taking the Ecuadorian Amazon Region (RAE) as a paradigmatic case study, the article explores the feasibility of implementing a low emission development path based on spatial analysis, sparked by a compensation fund for keeping fossil fuels underground, to be invested in renewable energy, and coupled by a long term development policy to promote diversification towards activities with low environmental impact, such as eco-tourism and services based on biodiversity.

Thanks to the creation of a spatially-explicit database of available open source dataset, such as fossil fuel related features, ecological and environmental, social and economic data, we performed a GIS analysis and different spatial MCDA simulations highlighting the relationships between hydrocarbon operations and projects and high socio-ecological sensitive areas, in order to define and proposed potential unburnable carbon areas and investigated the feasible sustainable alternative actions toward a transition to fossil fuel.

Results showed that blocks that should stay unburnable are mainly located in the Center-Southern sector of RAE, where there is no report of reserves and the presence of oil infrastructures (wells, pipelines, oil station, etc.) is low; on the contrary, in the Northern sector, particularly along the “Auca” oil road system with a long history of oil exploitation and proven reserves, fossil fuel production could continue but only with best practices, due to the higher presence of recorded impacts (oil spilling, flares, etc.).

Results therefore introduce the discussion about politics and projects to keep fossil fuel underground and develop effective actions for a transition toward an “unburnable carbon world”. It is argued that in addition to national efforts, financial assistance should be sourced from the international community as compensation for foregoing the option of extracting fossil fuels and contributing to global mitigation efforts.

Obstacles and opportunities for moratoria on oil/ gas exploration or extraction in Latin America & the Caribbean

Fernando Tudela

Building on the few existing, successful cases of moratoria on oil and gas exploration or extraction in Costa Rica (moratorium recently extended to 2021), Mexico (Lacandon rainforest region, december 2016), Belize (offshore, December 2017), the paper reflects on the real obstacles and possible opportunities for a larger scale implementation of such bans in Latin America and the Caribbean. 

So far, the drivers of current moratorium experiences stem exclusively from environmental concerns, mainly related to the loss of biodiversity, not from climate change considerations. Some failed attempts to link environmental and climate issues, such as the Yasuni-ITT fiasco in Ecuador, represented a setback. The Paris Agreement, coming short of fostering fossil fuel supply strategies or carbon pricing policies, has yet to test its mettle as a game changer in that respect. The international implications of countermeasures such as the elimination of restrictions for fossil fuel exploration, extraction and use brought about by Trump´s Administration are still uncertain. On the other hand, the recent international evolution of costs and technologies related to non-fossil fuel approaches may unlock new pathways that favor the acceptance and expansion of moratoria.

A brief analysis is carried out on the main factors, both at the domestic and international level, that in one way or another influence the viability in the region of supply policies based on moratoria.

In this context, the paradox of countries that may be quite proactive in the climate change multilateral negotiations but are unable to consider large scale domestic restrictions in fossil fuel supply has to be fully explained. Download full paper PDF.