SUS-POL Tracker Update: Q1, 2024

As part of the SUS-POL project based at the University of Sussex, we have conducted the first update of the SUS-POL Policy Tracker, an online open-source data tool that tracks and maps the implementation of supply-side climate policies around the world.

What is the SUS-POL Tracker?

Created in collaboration with the Fossil Fuel Treaty, the SUS-POL Tracker currently tracks and maps three broad categories of supply-side climate policies around the world based on available data:  

  • Bans, moratoria and limits: These policies include any policy at a national, regional or local level that actively seeks to legally prohibit, ban or limit the extraction and production of oil, gas and coal. Examples include the fracking ban in the Republic of Ireland introduced in 2017 or the government of New Zealand refusing to grant new permit licences for oil exploration. This category of supply-side policies includes both the introduction of legislation prohibiting the extraction and production of fossil fuels and the omission of granting new permits and licences for exploration and extraction.

  • Subsidy reform and removal: These policies include legislation and political pledges that seek to remove or phase-out government subsidies for fossil fuels. The policies can cover all specific fossil fuels, such as oil and gas, as well as specific types of fuels, like liquified gas that is often used for heating and cooking. At the moment, the tracker gathers both consumer subsidies (for example, a tax reduction on fuel for vehicles) and producer subsidies (for example, a tax break given to oil companies) to provide the most comprehensive overview of this area of climate policy.

  • Divestment: The policies and pledges include all initiatives that attempt to exert social, political, and economic pressure on the fossil fuel industry through the institutional and organisational divestment of assets including stocks, bonds, pensions and other financial instruments from companies involved in the extraction, production and sale of fossil fuels. 

Alongside these three ‘policy buckets’ the SUS-POL Tracker also includes the local councils, cities, states and countries that have endorsed the Fossil Fuel Non-Proliferation Treaty, a major initiative to secure a global fair phase out of fossil fuels, which now includes Colombia, the Pacific island nations of Tuvalu and the Solomon Islands, as well as megacities like London. 

What’s new?

As part of a quarterly update (Q1 2024 update), we have cleaned the existing data, added new sources for policies and pronounced initiatives, and added new policies within the three ‘policy buckets’ and those entities that have endorsed a Fossil Fuel Non-Proliferation Treaty. 

The result is an increase in the total number of policies and endorsements tracked and mapped, reaching a total of 1,924. This increase has been driven primarily by the growth in divestment pledges amongst non-state actors, such as universities, public pension funds and faith-based organisations. 

Among government actors, across state and federal levels, there has been a slowdown in activity on the supply-side across bans, moratoria, limits and reform and removal of fossil fuel subsidies, according to our data, although a limited number of new policies have been announced. This is despite the growing consensus that a rapid and managed phase out of fossil fuels is essential for achieving the goals of the Paris Agreement and the conclusion of the recent COP28 in the United Arab Emirates, where governments committed to ‘transitioning away from fossil fuels’. 

Why are supply-side initiatives potentially slowing down?

While singling out the definitive causes for this apparent slowdown is challenging, the geopolitical, economic and social context of the past two years can provide some explanation: 

1. Energy security concerns

The last four years have seen upheaval in global energy markets. From the structurally low oil and gas prices during the COVID19 pandemic, to the sudden surge in gas prices in the wake of Russia’s invasion of Ukraine, the commodity cycle has gone into overdrive.

As high fossil fuel prices have fuelled inflation and curtailed living standards across much of the world, governments have been quick to step in to ensure consistent supply, stabilise prices and protect citizens under the policy programme of energy security. According to the International Monetary Fund (IMF), fossil fuel subsidies hit an all time high in 2022, reaching the value of $7 trillion which is equivalent to $13 million per minute.  

Alongside mechanisms for producer and price support, governments have sought to expand domestic fossil fuel production and lock-in lengthy contracts with both established producer states, such as Qatar, and new producers like Senegal and Mozambique. The UK government has pushed ahead with increasing the frequency of licensing rounds in the North Sea. 

It is important to note that the energy security policy imperative has also driven record levels of investment into renewable energy generation. Across Europe, renewables hit record levels of generation and, as a result, electricity generation from fossil fuels fell to less than a third (33%) in 2023. According to the International Energy Agency (IEA), global investment into clean energy hit $1.7 trillion in 2023, with investment into solar overshadowing investment into oil production for the first time. 

Yet, the approach that governments appear to be taking in response to energy security concerns is two-pronged: scale up fossil fuel supply, while also scaling up renewable generation. As such, governments have taken limited steps to introduce restrictive measures on fossil fuel production, which is reflected in our data. 

2. Continued geopolitical uncertainty 

Wars continue to rage in Ukraine and occupied Palestine, with a very real risk that violence could spread and destabilise wider regions. Key shipping routes in the Red Sea and Panama have been disrupted by warfare and a protracted drought, which have added an additional layer of geopolitical uncertainty by disrupting both fossil fuel supply and key components for renewable generation. Alongside this, the Organization of Petroleum Exporting Countries (OPEC) has introduced production cuts to restrict supply to push up oil prices, which may be beginning to take effect.   

These growing uncertainties and risks have rippled through commodity prices and governments’ policy programmes. As such, policies that restrict production or forgo it altogether may have lost some of their political salience in the current context, despite their necessity. 

3. National electioneering

2024 is set to be a year of elections, including within some of the largest fossil fuel producers and consumers. Energy security, climate change and the cost of living will undoubtedly feature as major themes throughout these elections, as some political hopefuls push back on the green agenda while others seek to accelerate it. Incumbent governments fearing a poor performance at the ballot box may also water down or delay key climate commitments, or policies that seek to curtail fossil fuel production, over fears of whipping up political backlash in key geographies and demographics. 

In terms of supply-side climate policies, electioneering presents opportunities and potential challenges. For instance, in Britain, where the Labour Party looks to be set to form the next government, the policy of ending oil and gas licencing in the North Sea has been floated as a major thread of their climate policy programme. Elsewhere, such as in the USA, the re-election of Donald Trump could provoke both a federal-level rollback on climate policy and an acceleration of fossil fuel production, which has already reached record highs under President Joe Biden. It is unclear how these dynamics will play out, but the SUS-POL team is watching closely. 

Where next?

In the next update of the SUS-POL Tracker, scheduled for June 2024, we hope to expand our methodology to capture a greater variety of supply-side climate policies, mechanisms and instruments in order to better reflect the diversity of levers available to governments and non-governmental actors looking to restrict fossil fuel production, phase them out, and leave reserves safely in the ground. 

For feedback or suggestions about the SUS-POL Tracker, please get in touch with f.daley@sussex.ac.uk. 

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