Full Title: The Road from Paris: Implications of COP21 for Fossil-Fuel Suppliers
Author(s): Joseph Caggiano
Publisher(s): Joseph Caggiano
Publication Date: January 1, 2016
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Description (excerpt):
The UN Framework Convention on Climate Change (FCCC) concluded its recent meeting in Paris with an Agreement on urgent actions to curtail rising global temperature and greenhouse gas emissions. 2 If carried out as envisioned in the periods 2020 – 2050 and 2050 – 2100, the Agreement will have enormous environmental and social effects. It will also shake the oil, gas, and coal industries to their foundations and transform their business models. In the U.S., the Paris Agreement will become, if ratified, the legitimizing framework for a national energy policy, based on climate dangers rather than supply concerns. Given the prospects, this paper sketches a scenario in which carbon-intensive fuel suppliers – oil, gas, but not coal — evolve from their current form into highly-regulated fuel utility businesses with significant accountability for climate-action success at regional and city levels. This model would largely replace familiar, integrated oil and gas companies with a new hybrid form. In an increasingly restrictive business environment, the fuel-utility model is a viable compromise between traditional business autonomy and worst-case divestment or stranded asset scenarios.