Permission to Phase Out Fossil Fuel

COP28 ended (again) without a plan to stop digging.

Good. That gives me an occasion to write here again about Phase Out Profit.

That is the idea that fossil fuel companies should be the first in line to ask for a phase out plan.

They stand to make more money from higher prices. Prices will increase if supply declines.

Prices will increase more if supply decreases in a predictable and reliable way.

The UAE, which just hosted the COP, have a problem. What will they do once renewables price them out? What will they do once the oil reserves run out?

They need to transition away from fossil fuel anyway.

And while they are transitioning to something new, like selling solar power from their deserts, they can keep their incomes higher by producing less.

It is win win. The producers win from the higher prices.

The climate wins from getting less CO2 emissions.

So what is keeping the fossil fuel industry from reducing production?

Are they afraid of forming a cartel for the purpose?

If so, we should give them permission now.

Go ahead. Coordinate a move to lower production. I for one will not object. It is the right thing to do for reducing the damage from climate change, and the right thing to do for keeping selling fossil fuels, at much higher prices than without a reduction of supply.

Go ahead. Build some international organization of Oil Producing and Exporting Nations. Make it a very effective cartel with a plan of declining production as predictable and as credible and as effective as the plan for the decline of production of Bitcoins is.

Then watch how the price of oil goes up, and the climate activists praise your efforts to reduce emissions.