Editing IPCC:AR6/WGIII/Chapter-13 (section)

==== 13.6.6.4 Value of Fossil Fuel Resources ====

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Fossil fuel resources are a significant source of exports, employment and government revenues for many countries. The value of these resources depends on demand for the fuel and competing supplies in the relevant international markets. Discoveries and new production technologies reduce the value of established resources. Mitigation policies that reduce the use of fossil fuels also reduce the value of these resources. A single policy in one country is unlikely to have a noticeable effect on the international price, but similar policies in multiple countries could adversely affect the value of the resources. For fossil fuel exporting countries, mitigation policies consistent with the Paris Agreement goals could result in greater costs from changes in fossil fuel prices due to lower international demand than domestic policy costs ( ''medium evidence'' , ''high agreement'' ) ( [[#Liu--2020|Liu et al. 2020]] ).

The impact on the value of established resources will be mitigated, to some extent, by the reduced incentive to explore for and develop new fossil fuel supplies. Nevertheless, efforts to lower global emissions will mean substantially less demand for fossil fuels, with the majority of current coal reserves and large shares of known gas and oil reserves needing to remain unused, with great diversity in impacts between different countries ( [[#McGlade--2015|McGlade and Ekins 2015]] ) (Chapters 3, 6, 15).

Estimates of the potential future loss in value differ greatly. There is uncertainty about remaining future fossil fuel use under different mitigation scenarios, as well as future fossil fuel prices depending on extraction costs, market structures and policies. Estimates of total cumulative fossil fuel revenue lost range between 5–67 trillion USD ( [[#Bauer--2015|Bauer et al. 2015]] ) with an estimate of the net present value of lost profit of around 10 trillion USD ( [[#Bauer--2016|Bauer et al. 2016]] ). Policies that constrain supply of fossil fuels in the context of mitigation objectives could limit financial losses to fossil fuel producers (Chapter 14).

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