Repository logo

Reframing incentives for climate policy action

Accepted version



Change log


A key aim of climate policy is to progressively substitute renewables and energy efficiency for fossil fuel use. The associated rapid depreciation and replacement of fossil fuel-related physical and natural capital will entail a profound reorganisation of industry value chains, international trade, and geopolitics. Here, we present evidence confirming that the transformation of energy systems is well under way, and we explore the economic and strategic implications of the emerging energy geography. We show specifically that, given the economic implications of the ongoing energy transformation, the framing of climate policy as economically detrimental to those pursuing it is a poor description of strategic incentives. Instead, a new climate policy incentives configuration emerges where fossil fuel importers are better off decarbonising, competitive fossil fuel exporters are better off flooding markets, and uncompetitive fossil fuel producers – rather than benefitting from ‘free-riding’ – suffer from their exposure to stranded assets and lack of investment in decarbonisation technologies.



40 Engineering, 4008 Electrical Engineering, 4017 Mechanical Engineering, 7 Affordable and Clean Energy

Journal Title

Nature Energy

Conference Name

Journal ISSN


Volume Title


Springer Science and Business Media LLC
NERC (via Open University) (AMS-724409 CLS-380-25)
Department for Business, Energy and Industrial Strategy (via University of Exeter) (BID114579)
Children's Investment Fund Foundation (via University of Exeter) (BID115362)
Engineering and Physical Sciences Research Council (EP/N002504/1)
Economic and Social Research Council (ES/N013174/1)
BEIS (UK Gov) and the Children Investment Fund Foundation (CIFF)
Is derived from: