'Carbon Ask' Article Updated

June 20, 2018

#CarbonAsk GraphicGeorge Washington University's Trachtenberg School of Public Policy and Public Administration professor Peter Linquiti recently updated his 2016 article with Nathan Cogswell, MA-ENRP '16, "The Carbon Ask: effects of climate policy on the value of fossil fuel resources and the implications for technological innovation," published in the Journal of Environmental Studies and Sciences.

In the initial research, Linquiti and Cogswell found decarbonization of the world’s economy will have profound effects on what they call the “global fossil fuel enterprise.”  Because strong climate policies will reduce both the price of and the demand for oil, natural gas and coal, governments, investors, firms, workers and consumers will all face a reduction in their wealth (i.e, they will be on the receiving end of the “Carbon Ask”).

Linquiti and Cogswell take care to note that the benefits of strong climate policy almost certainly outweigh the costs, but argue that understanding the magnitude of the Carbon Ask is a prerequisite to making sense of the political and market dynamics that impede action to address climate change.
 
In a Summer 2018 update, Linquiti used virtually the same methodology as the earlier work, but incorporated new data produced by the International Energy Agency in 2017.
 
The new work suggests that the Carbon Ask is on the order of $233 trillion, or about three times global GDP.  Oil bears the largest share (73%) of the Ask with natural gas (19%) and coal (8%) comprising the balance.  In terms of lost value, oil and coal experience the biggest reduction in a policy-constrained world, earning only 20% of what they would have otherwise earned, while natural gas resources lose about 57% of their value.