Philanthropic Buy Out (LINGO Incentives)

Simply buying fossil fuel deposits for the purpose of non-extraction overcomes various dilemmas faced by climate coalitions such as over-extraction, excessive consumption, and underinvestment in green technologies by non-participating countries. Modeling efforts suggest that buying deposits, especially those costly to exploit, can prevent price fluctuations that would otherwise incentivize nonparticipants to consume or extract more. Several practical challenges still need to be overcome, such as contract incompleteness, bargaining failures, incentives for non-participants to search for new deposits, and geopolitical challenges.

EQX Biome, a U.S.-based carbon credits company, made a proposal to the Democratic Republic of Congo (DRC) to purchase 27 oil blocks to prevent drilling and instead turn them into conservation areas. This would generate revenue through REDD+ carbon credits. EQX Biome committed to a $400 million investment in conservation, projected to yield $6 billion over 20 years. Similarly, Flowcarbon and RedemptionDAO are bidding on oil and gas exploration blocks in the DRC with the goal of leaving it in the ground by generating revenue through carbon credits. They plan to raise $50 million through crowdfunding and partnerships to issue “avoided emissions” credits. However, the lack of a standardized method for trading these credits may delay the implementation of their plan.

In 2022, Australian billionaire Mike Cannon-Brookes offered to buy AGL Energy, Australia’s largest energy company. His primary goal was to close AGL’s coal-fired power plants by 2030 and shift to renewable energy.

Resources :

•  Harstad (2012) Buy Coal! A Case for Supply-Side Environmental Policy, Original Paper, February 2012
• The Guardian (2022) Mike Cannon-Brookes and Brookfield in bid to take over AGL and shut down coal plants earlier, Press Article, February 2022
• Financial Times (2022) DR Congo opens oil and gas auction round to carbon credit and crypto groups, Press Article, August 2022
• The Guardian (2023) US firm to bid to turn DRC oil permits in Virunga park into conservation projects, Press Article, March 2023