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Fossil-fuel companies have lobbied hard – and often successfully – against effective climate policies. But a recent report by the environmental research group CDP revealed that at least 29 major companies, including five major oil producers, are basing their internal planning on the assumption that such policies – specifically, a government-mandated carbon price – will be a reality as soon as 2020 . The question now is whether oil-producing countries' governments and citizens share this expectation.That is because, unlike news cycles (which are measured in days or weeks) or electoral politics (which play out over a period of months and years), extractive industries' investment timelines are typically 20-25 years.This means, for example, that one only has to posit significant carbon taxes in 2020 – two government transitions away from now in most Organization for Economic Cooperation and Development countries – for such taxes to affect returns over most of the lifetime of an investment decision made now. To remedy the situation, ongoing efforts to increase transparency should go beyond revenue flows – which are set to face new transparency requirements in the United States and the European Union – to include contracts. Once a contract is public, future carbon-pricing scenarios can be modeled to demonstrate that most governments will earn less than they expect and, more important, that many potential projects and new discoveries could become stranded assets.What are governments doing to prepare for a postoil future?
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