Phases of fossil fuel decline: Diagnostic framework for policy sequencing and feasible transition pathways in resource dependent regions

Abstract

Phasing out fossil fuels requires destabilizing incumbent regimes while protecting vulnerable groups negatively affected by fossil fuel decline. We argue that sequencing destabilization and just transition policies addresses three policy problems: phasing out fossil fuels, transforming affected industries, and ensuring socio-economic recovery in fossil resource-dependent regions. We identify the key mechanisms shaping the evolution of the three systems associated with these policy problems: (1) transformations of technological systems addressed by the socio-technical transitions literature; (2) responses of firms and industries addressed by the management and business literature; and (3) regional strategies for socio-economic recovery addressed by the regional geography and economics literatures. We then draw on Elinor Ostrom’s approach to synthesize these different bodies of knowledge into a diagnostic tool which enables scholars to identify the phase of decline for each system, across which the nature and importance of different risks to sustained fossil fuel decline varies. The main risk in the first phase is lock-in or persistence of status quo. In the second phase, the main risk is backlash from directly affected companies and workers. In the third phase the main risk is regional despondence. We illustrate our diagnostic tool with three empirical cases of phases of coal decline: South Africa (phase 1), the United States (phase 2), and the Netherlands (phase 3). Our review contributes to developing effective policy sequences for phasing out fossil fuels.

Exploring Enablers for an Ambitious Coal Phaseout

“…Overall, there have been many single or comparative case studies of coal phaseout (Diluiso et al, 2021;Markard et al, 2021;Oei et al, 2020;Rentier et al, 2019) but only a few studies including cases that would shed more light on generalizable patterns (Blondeel et al, 2020;Jewell et al, 2019;Steckel & Jakob, 2021;Vinichenko et al, 2021). This is not surprising, given that there are not very many cases where coal phaseout has been observed and, additionally, it is not very clear how countries in the different stages of coal phaseout (Nacke et al, 2022) should be compared. The concept of state capacity is also difficult to operationalize (Savoia & Sen, 2015) and many past analyses of technologies to date have used GDP per capita as a proxy for state capacity (Brutschin et al, 2021;Jewell et al, 2019).…”

Complex socio-technical transitions in fossil fuel country: considerations for direct air capture deployment in the U.S. Gulf Coast region

“…The Gulf Coast, home to more than 47% of the United States' petroleum re ning (EIA, 2023), is one of the regions most reliant on the fossil fuel industry, making it a priority for just transition research and policy. In regions economically dependent on the industry, like the Gulf Coast, fossil fuel extraction and processing provide employment, tax revenues, demand for local services, and in many cases serve as the primary source of economic stability and livelihood for communities (Snyder, 2018;Nacke et al, 2022;Schimpf et al, 2021). The fossil fuel industry has also embedded itself in the social fabric of these communities, creating dependency and a sense of identity tied to the industry (Cha, 2020;Haarstand & Wanvik, 2017).…”