ABSTRACT
How can international collaboration to effectively and inclusively leave fossil fuels underground be fostered? This chapter discusses the potential of public sector initiatives and institutional mechanisms that halt the supply of fossil fuels and the funding of fossil energy projects. Next to national policies, a transition in the role of public finance institutions is indispensable. The creation of mitigation alliances—an innovative global tool included in the Paris Agreement—offers great potential. The chapter reviews several supply-side approaches and experiences in the Global South, such as oil moratoria and the Yasuní–ITT Initiative in Latin America. After showing the important (negative) role of foreign public finance institutions in funding fossil fuel projects in countries like Ecuador and South Africa, the chapter explains how through setting up mitigation alliances they can start playing a positive role and support climate action and LFFU. A mitigation alliance can declare specific fossil fuel reserves unburnable and create compensation funds that invest in renewable energy, sustainable social development and conservation of forests and biodiversity in developing countries.
