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Time to Embrace Supply-Side Campaigns, Keep Fossils in the Ground, New Study Argues

It’s time to get past a consistent bias shared by analysts, politicians, and pundits across the political spectrum, veteran climate hawk David Roberts writes in a recent column for Vox: the curiously widespread aversion to restricting the supply of fossil fuels and leaving more climate-busting carbon in the ground.

“Policies that choke off fossil fuels at their origin—shutting down mines and wells; banning new ones; opting against new pipelines, refineries, and export terminals—have been embraced by climate activists, picking up steam with the Keystone pipeline protests and the recent direct action of the Valve Turners,” Roberts writes. “But they are looked upon with some disdain by the climate intelligentsia, who are united in their belief that such strategies are economically suboptimal and politically counterproductive.”

But now, economists Fergus Green of the London School of Economics and Richard Denniss of the Australia Institute have come up with what Roberts calls a “cogent argument that the activists are onto something—that restrictive supply-side (RSS) climate policies have unique economic and political benefits and deserve a place alongside carbon prices and renewable energy supports in the climate policy toolkit.”

Roberts opens the discussion by suggesting a two-by-two grid for characterizing that toolkit: supply-side policies that restrict fossil subsidies and supplies or support low-carbon infrastructure, and demand-side measures that price and regulate carbon or support and subsidize renewables and energy efficiency. Green and Denniss point out that the first of the four quadrants—supply-side restrictions on fossil fuel production—are almost always absent from climate policy discussions and analysis.

“On its face, this doesn’t make much sense,” Roberts notes. “In other areas of policy, demand- and supply-side policies are routinely mixed and considered mutually reinforcing.” Green and Denniss note that Australia’s world-acclaimed efforts to control smoking “are a wide-ranging mix of tactics. Supply is restricted through taxes, licencing requirements, and prohibitions on advertising and sponsorships. Demand is restricted through consumption taxes, public education campaigns, and warnings on packs.”

And crucially, successful tobacco control “was not the result of a single, clean instrument, an ‘optimal’ policy, but a portfolio approach. And it isn’t considered a muddle or a redundant mess, but a sensible way to approach a complex problem. And it has worked.”

Green and Denniss argue that RSS policies are easier than carbon prices to administer, cover the weaknesses in “least cost” demand-side policies, can avoid lock-in of new fossil infrastructure, and short-circuit the “green paradox”, in which increasingly stringent carbon prices motivate fossil developers to fast-track their projects while they might still be viable.

But the political benefits of restrictive supply-side policies are just as important, the two authors assert: it’s easier to mobilize public support around supply-side campaigns, RSS can divide fossil companies against each other, and the approach can also boost international cooperation to confront climate change.

Roberts sees the first of those three as the key argument.

“Where demand-side policies typically foreground carbon reductions, the benefits of which are widely spread in time and space, RSS policies target fossil fuel reductions, with a wider range of benefits [like] air and water pollution reductions, health improvements, and punishment for big fossil fuel companies, which are politically unpopular,” he writes. “This broader portfolio of benefits is more likely to mobilize public support.”

Green and Denniss add that supply-side campaigning “enables proposals to be framed in ways that are more resonant with voters and more resilient to counter-attack by opposing interest groups; facilitates alliance-building among diverse groups with wide-ranging concerns about fossil fuels; and facilitates network-building among groups at different advocacy- and policy-relevant scales,” all of which “build political strength for future battles,” Roberts notes.

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2 Comments To "Time to Embrace Supply-Side Campaigns, Keep Fossils in the Ground, New Study Argues"

#1 Comment By Laurie Parkinson On April 6, 2018 @ 1:38 PM

Great idea! Any ideas how to talk politicians, wed to big oil, into this?