Fossil extraction bans and carbon taxes: Assessing their interplay through multiple models

Pietro Andreoni; Lara Aleluia Reis; Laurent Drouet; Olivier Dessens; Panagiotis Fragkos; Robert Pietzcker; Steve Pye; Renato Rodrigues; Massimo Tavoni

doi:10.1016/j.isci.2023.106377

Fossil extraction bans and carbon taxes: Assessing their interplay through multiple models

iScience. 2023 Mar 11;26(4):106377. doi: 10.1016/j.isci.2023.106377. eCollection 2023 Apr 21.

Authors

Affiliations

¹ RFF-CMCC European Institute for the Economics and the Environment, Centro Euro-Mediterraneo sui Cambiamenti Climatici, Milan, Italy.
² Politecnico di Milano, Milan, Italy.
³ UCL Energy Institute, University College London, London, UK.
⁴ E3 Modelling S.A., Panormou 70-72, Athens, Greece.
⁵ Potsdam Institute for Climate Impact Research (PIK), Potsdam, Germany.

Abstract

Given concerns about the ambition and effectiveness of current climate policies, a case has been made for the combination of demand side policies such as carbon pricing with supply side bans on fossil fuel extraction. However, little is known about their interplay in the context of climate stabilization strategies. Here, we present a multi-model assessment quantifying the effectiveness of supply side policies and their interactions with demand-side ones. We explore a variety of fossil fuel bans with four integrated assessment models and find that international supply side policies reduce carbon emissions but not at sufficient levels to stabilize temperature increase to well below 2°C. When combined with demand side policies, supply side policies reduce the required carbon price, dampen reliance on CO₂ removal technologies, and increase investment in renewable energy. The results indicate the opportunity to integrate fossil fuel bans alongside price-based policies when exploring pathways to reach ambitious mitigation targets.

Keywords: Energy Modeling; Energy Resources; Energy policy; Energy resources; Energy systems.