Fossil Production Plans, Subsidies Put Countries Far Beyond 1.5°C Paris Target

The world’s governments are on track to produce more than twice as much oil, gas, and coal as the amounts that would enable them to hold average global warming to 1.5°C, according to a first-ever production gap report produced by the United Nations Environment Programme and five senior environmental research NGOs.

“In aggregate, countries’ planned fossil fuel production by 2030 will lead to the emission of 39 billion tonnes (gigatonnes) of carbon dioxide (GtCO2),” the report states. “That is 13 GtCO2, or 53%, more than would be consistent with a 2.0°C pathway, and 21 GtCO2 (120%) more than would be consistent with a 1.5°C pathway. This gap widens significantly by 2040.”

The production gap is biggest for coal, the report states, with countries’ production plans exceeding a 2.0° pathway by 150% and a 1.5°C target by 280%, or 6.4 billion tonnes. “Oil and gas are also on track to exceed carbon budgets, as countries continue to invest in fossil fuel infrastructure that ‘locks in’ oil and gas use. The effects of this lock-in widen the production gap over time, until countries are producing 43% (36 million barrels per day) more oil and 47% (1,800 billion cubic metres) more gas by 2040 than would be consistent with a 2°C pathway.”

The report adds that “many countries appear to be banking on export markets to justify major increases in production (eg. the United States, Russia, and Canada), while others are seeking to limit or largely end imports through scaled-up production (eg. India and China). The net result could be significant over-investment, increasing the risk of stranded assets, workers, and communities, as well as locking in a higher emissions trajectory.”

“We’re in a deep hole—and we need to stop digging,” said Måns Nilsson, executive director of the Stockholm Environment Institute (SEI), which took part in the analysis. “Despite more than two decades of climate policy-making, fossil fuel production levels are higher than ever.”

With that in mind, the report calls for a two-pronged approach to get fossil emissions under control.

“Though most countries focus exclusively on the ‘demand side’—with policies that aim to boost renewable energy, energy efficiency, and other low-carbon technologies—some governments have also begun to enact ‘supply-side’ measures that aim to limit fossil fuel production,” it states. “A range of policy options can help governments align their fossil fuel development plans and policies with climate goals, including: economic instruments (such as subsidy reform); regulatory approaches (such as banning new extraction permits); government provision of goods and services (such as just transition plans); and measures to enhance information and transparency (such as national reporting of fossil fuel production and targets).”

The report cites Belize, Costa Rica, France, Denmark, and New Zealand as countries that have “enacted partial or total bans or moratoria on oil and gas exploration and extraction, while Germany and Spain are phasing out coal extraction.” It adds that “local governments, companies, investors, trade unions, and civil society organizations can also accelerate a transition away from fossil fuels, by mobilizing constituencies and shifting investment to lower-carbon options.”

But The Guardian points to the gap between supply-side initiatives so far and the scale of the climate crisis. “Scientists have warned that even the difference between 1.5°C and 2.0°C of heating will expose hundreds of millions of people to significantly higher risks of extreme heat waves, drought, floods, and poverty,” The paper notes. Yet “most of the action pledges made by countries under the Paris deal do not even mention changes to production.”

So far, “the continued expansion of fossil fuel production—and the widening of the global production gap—is underpinned by a combination of ambitious national plans, government subsidies to producers, and other forms of public finance,” the report warns. Governments “not only play central roles in the permitting of exploration and production; they also support the fossil fuel industry through direct investments, research and development funding, tax expenditures, and assumed liability and risk. Fossil fuel subsidies span all stages of the fossil fuel production process, from research, development, and exploration, to operations, transport, processing, marketing, decommissioning, and site remediation.”

The report drew strong support from some of the leading figures in the international climate community.

“Ensuring a liveable planet for future generations means getting serious about phasing out coal, oil and gas,” said Mission 2020 convenor and former UN climate secretary Christiana Figueres. “Countries such as Costa Rica, Spain, and New Zealand are already showing the way forward, with policies to constrain exploration and extraction,” and “others must now follow their lead. There is no time to waste.”

“This important report shows planned levels of coal, oil, and gas production are dangerously out of step with the goals of the Paris Agreement,” said London School of Economics climate specialist Lord Nicholas Stern.