Peer review of: An equitable redistribution of unburnable carbon (2020)

Reviewers' comments:
Reviewer #3 (Remarks to the Author):

This article examines the distributive implications of fossil-producing countries sharing the 
depleting market for fossils based on economic efficiency or equity in stringent climate 
stabilization scenarios. Past literature on equity has been dominated by mitigation cost-
sharing, until recently. The authors correctly point out that there has been growing 
attention to the issue of stranded fossil assets, including for developing economies that rely 
on fossils for supply and export. This article would be the first to quantitatively examine the 
financial implications of equity frameworks in distributing future fossil production. In this 
sense, the article is welcome.  
 
However, this article picks up on only one aspect of an equitable view of fossil extraction 
(how to allocate the remaining fossil production ‘budget’ – there are many others, as 
pointed out by the authors in their introduction (e.g. employment, diversification away from 
fossil dependence, stranded costs, etc). For a high-impact journal, the authors need to do a 
far more thorough analysis of this one aspect if they are to provide robust insights for 
policy. The authors choose a very limited set of scenarios from a much wider range of 
possibilities (as described below). A deeper exploration would potentially provide much 
deeper insights than what they currently put forth.  
 
1) I am not compelled by the artificial restriction to keep fossil production constant across 
the equity and cost-optimal scenarios. The authors’ argument is given in the Methods (“This 
is because we are interested in the impacts of redistribution, not the impact of tax on the 
absolute levels of production, which could reduce production in the absence of such 
constraints due to the higher costs of production arising from such a tax.”). I do not find this 
reasoning to be compelling. The authors seem to want a ‘ceteris paribus’ comparison, but 
global costs are changing anyway from this reallocation compared to the cost-optimal case. 
As the authors acknowledge, relaxing this restriction will reduce global costs (since fossils 
overall become less attractive), and reduce the efficiency/equity trade-off that the authors 
emphasize in their conclusion. This global cost reduction will impact the relevant developing 
countries’ finances, and therefore cannot be ignored.  If, hypothetically, cheap fossil 
production in the US but not elsewhere is standing in the way of a faster transition to 
renewables, that’s an important insight into how an energy transition would evolve. An 
examination of equity should be applied to as realistic a representation of such a transition 
as is possible in models.  
 
2) The results depend on the production cost curves assumed for the different countries. 
The authors (in the SI only) cite one article by McGlade, and another unfinished PhD for 
updates, but offer no information on these cost parameters in the main text, nor any 
discussion about the uncertainty in future costs of production in literature. The IAM 
community must have their own set of cost curves – which in modeling protocols hopefully 
are accessible. The authors ought to include a discussion on and defend these costs 
(focusing on how they differ across fossil producers across the world), preferably 
representing the modeling community, not just their own assumptions, so that they can 
present more robust results with uncertainty.  
 
3) There are many principles suggested in literature for how to allocate this scarce fossil 
production ‘budget’ – HDI is a good one, but not the only one. Another is GDP per capita, 
consistent with the Capacity principle, and consistent with the focus of this study on financial flows. Another is historical responsibility, which could be implemented as an 
inverse of historical cumulative production shares. These additional scenarios would provide 
a richer representation of equity. The latter seem more appropriate choices for this piece, 
since HDI differs from monetary measures due to the health and education components, 
whose progress has little to do with fossil production other than through the financial flows 
that those generate.  
  
4) Why look only at SSP2? I am guessing at least SSP1 and SSP5 will have a substantially 
different base of fossil production, and therefore different cost implications. SSP5 does not 
reach 1.5C but you can use other feasible stabilization scenarios.  
 

Reviewer #4 (Remarks to the Author): 

This paper discusses the consequences of redistribution of fossil production in the supply side to 
ensure the equitability between developed and developing countries. The topic of the paper is novel 
and it is relevant to the journal. The paper is well written and presented in a clear manner. The 
presented results show evident guidance for stakeholders and policymakers. 

The model used in this paper is called "TIAM-UCL", which is an integrated assessment model (IAM) 
based on TIMES. To better understand this model for non-experts in IAM, a brief description of the 
model would be needed, e.g., mathematic equations of the objective function and constraints. In 
addition, cost assumptions are crucial to the cost optimisation carried out in this paper, hence a cost 
assumptions table for key technologies is required. 

Two climate ambitions are investigated in this paper: 1.75 and 2 degrees of temperature increment. 
The corresponding carbon budgets are taken from the SR15 report. Unfortunately, a better-recognised 
and more interesting scenario of 1.5 is infeasible due to several factors, which compromises the 
significance of the conclusions. 

The mechanism for redistribution is by adding different levels of carbon taxes on production. However, 
the choices of carbon taxes for VHHD, HHD and LMHD seem a bit random, where those numbers 
(1.1^4, 0.9^4, 0.6, 0.1) need to be clarified.