The Four Ds of Oil’s Just Transition

If governments have a shot at limiting global warming to the 1.5°C target of the Paris Agreement, managing a global economic transition away from oil will be imperative. Such a shift will require cooperation among the financial and energy sectors, regulatory authorities, and energy industry workers. The economic stakes are high not only for oil asset owners but also for the millions of people living in oil-dependent countries.

While acting on a just transition away from oil is in everybody’s best interest, what are the levers for making it happen? In a new analysis, Victor Menotti makes the case that, by stabilizing prices and phasing out production, a fundamental policy framework can emerge to ensure an exit from oil and gas that is both fast and fair.

Menotti focuses on several policy fronts to advocate for a way forward that he terms the four Ds: debt management, disclosure of risks, demand reduction, and decline of oil production. A cooperative global approach on the four Ds can help governments break out of shortsighted policy traps, such as oil industry bailouts. The analysis also describes how the EU and China can take a leadership role in creating a climate coalition and what the United States can do to rebuild global trust in its commitment to mitigating climate change.

A fast and fair global transition away from oil is possible if stakeholders focus their cooperation on key policy priorities. Click the button below to read Menotti’s full analysis.

Also available in translation: Download in Spanish

This Analysis and New Insights is part of the Playbook for Paradigm Shift paper series, a collaborative effort of the Stanley Center for Peace and Security and E3G to develop bold ideas and practical solutions for faster climate action and a fairer economy out of this crisis.