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.