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Limiting Climate Change by Fostering Net Avoided Emissions

Michel Köhler, Axel Michaelowa

Reducing Fossil Fuel Supply and Emissions from Fuel Exploitation

With the gap to the emissions path required to reach the 2°C target growing steadily as well as the need for substantial mitigation from 2020 onwards under the Durban Platform for Enhanced Action,1 efforts to reduce greenhouse gases must be scaled up. Unless low-carbon technologies are universally available and environmentally reliable, mitigation can only be successful if emission of greenhouse gases, in particular burning of fossil fuels, is reduced. This requires a voluntary limitation of economic activities that lead to greenhouse gas (GHG) emissions. The concept of Net Avoided Emissions (NAE) has been proposed to effectively incentivize avoidance of GHG intensive activities. Emission credits would be granted for the cessation of fossil fuel exploitation. However, the mechanism also faces critical elements that might jeopardize environmental integrity, additionality and permanence. This article identifies key challenges and provides recommendations on how to overcome these hurdles in order to increase international acceptability of NAE. We propose that credits should be discounted depending on the price elasticity of fuel demand. Classical emission reductions e.g. linked to the protection of vegetation on the surface above the fuel reservoir would be fully credited. In order to ensure environmental integrity by reducing the incentive to exploit the fossil fuel, credit revenues would be administered by a trust fund and have to be invested into activities that promote sustainable development, i.e. renewable energy and energy efficiency. Physical adulteration of the fuel in the reservoir could also be considered.


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