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New publication: From Riches to Rags? - Stranded Assets and the Governance Implications for the Fossil Fuel Sector

03.11.2017 | After years of stagnation, the successful climate conferences of Paris in 2015 and Marrakesh in 2016 have revived global climate governance. The agreements reached, in particular the global commitment to limiting the temperature increase to 1.5-2 degrees Celsius, will – provided that they are fully implemented – have strong implications for the fossil fuel sector. The era of fossil fuels such as oil, gas and coal as a source of energy will foreseeably (have to) end, more rapidly and comprehensively than many people currently realise.

Against this background, the sector programme Extractives and Development published the discussion paper From Riches to Rags? - Stranded Assets and the Governance Implications for the Fossil Fuel Sector, which looks into the subject of stranded assets in the fossil fuel sector. Stranded assets are assets that lose value, or generate new liabilities, before they reach the end of their (planned) economic life. In this paper, assets primarily refer to fossil fuel resources (oil, gas and coal) that need to stay in the ground because otherwise the 2-degree target would be jeopardised. The paper addresses the strong implications this might have for developing countries.

The climate challenge can only be tackled by embarking on a comprehensive transformation towards a decarbonised global economy as quickly as possible. The fossil fuel sector can contribute to this process. The discussion paper therefore proposes entry points for international cooperation.

The sector programme Extractives and Development supports government institutions in developing countries to establish their extractive sector to benefit sustainable development in the countries on behalf of the German Federal Ministry for Economic Cooperation and Development.

For further information, please contact Kim Schultze (kim.schultze@giz.de) and Tim Schlösser (tim.schloesser@giz.de).

 

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Comment by Kristian Lempa on November 7, 2017 at 15:37

The topic is very relevant in Germany. At the recent demonstrations alongside the COP23, 25.000 people were shouting: Keep it in the ground. But what about the jobs? We will need mid- to long-term strategies to keep it in the ground without cauisng unnecessary economic damage.

Comment by Juliane Weymann on November 7, 2017 at 11:46

Super interesting insights - is a very important perspective to discuss and makes us aware how careful we have to navigate in all our actions in order not to leave anyone behind.

Comment by Kristian Lempa on November 3, 2017 at 15:20

If you want to further discuss this exciting topic and other topics concerning the extractives and climate nexus, please meet us at the COP23 side event in Bonn (or online):

http://www.cop23-rawmaterials.com/

(registration code climex2017)

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