For all their growing climate ambitions and net-zero commitments, key oil producing governments still plan to produce more than double the amount of fossil fuels in 2030 than what would be consistent with limiting global warming to 1.5 degrees Celsius, according to the 2021 Production Gap Report, by leading research institutes and the UN Environment Programme (UNEP).
The annual report, first launched two years ago, measures the gap between governments’ planned production of coal, oil, and gas and production levels consistent with meeting the global warming limitation targets included in the Paris Agreement.
Two years later, the 2021 report finds the production gap largely unchanged.
Over the next two decades, governments are collectively projecting an increase in global oil and gas production, and only a modest decrease in coal production. Combined, these plans and projections see total global fossil-fuels production increasing to at least 2040.
“The devastating impacts of climate change are here for all to see. There is still time to limit long-term warming to 1.5 degrees Celsius, but this window of opportunity is rapidly closing,” UNEP executive director Inger Andersen said.
“At COP26 and beyond, the world’s governments must step up, taking rapid and immediate steps to close the fossil-fuel production gap and ensure a just and equitable transition.”
The report provides country profiles for 15 major producer nations: Australia, Brazil, Canada, China, Germany, India, Indonesia, Mexico, Norway, Russia, Saudi Arabia, South Africa, the UAE, the UK and the US.
Country profiles show that most of these governments continue to provide significant policy support for fossil-fuel production.
What energy transition?
Of these nations, only the UK and Indonesia are forecast to produce less oil and gas in 2030 compared with 2019.
“Global coal, oil, and gas production must start declining immediately and steeply to be consistent with limiting long-term warming to 1.5 degrees Celsius,” said Ploy Achakulwisut, a lead author on the report and Stockholm Environment institute (SEI) scientist.
“However, governments continue to plan for and support levels of fossil-fuel production that are vastly in excess of what we can safely burn.”
The report finds that the world’s governments plan to produce some 110% more fossil fuels in 2030 than would be consistent with limiting warming to 1.5 degrees Celsius, and 45% more than consistent with 2 degrees Celsius. By 2040, this forecast production excess grows to 190% and 89%, respectively.
The production plans envisage 57% more oil, 71% more gas and around 240% more coal at the end of this decade than would be consistent with limiting global warming to 1.5 degrees Celsius.
Guterres calls for funding switch
“Recent announcements by the world’s largest economies to end international financing of coal are a much-needed step in phasing out fossil fuels. But, as this report starkly shows, there is still a long way to go to a clean-energy future,” UN Secretary General Antonio Guterres said.
“It is urgent that all remaining public financiers as well as private finance, including commercial banks and asset managers, switch their funding from coal to renewables to promote full decarbonisation of the power sector and access to renewable energy for all.”
The report found that countries have directed more than $300 billion in new funds towards fossil fuels activities since the beginning of the Covid-19 pandemic — more than they have towards clean energy.
On the other hand, international institutional finance for the production of fossil fuels has significantly decreased in recent years.
One-third of multilateral development banks and G20 development finance institutions have adopted policies that exclude fossil-fuels production activities from future finance.
“Early efforts from development finance institutions to cut international support for fossil fuel production are encouraging, but these changes need to be followed by concrete and ambitious fossil fuel exclusion policies to limit global warming to 1.5 degrees Celsius,” said Lucile Dufour, senior policy advisor, International Institute for Sustainable Development (IISD).
“Fossil-fuel producing nations must recognise their role and responsibility in closing the production gap and steering us towards a safe climate future,” added Mans Nilsson, executive director at SEI.
“As countries increasingly commit to net-zero emissions by mid-century, they also need to recognise the rapid reduction in fossil-fuel production that their climate targets will require.”
The report is produced by SEI, IISD, ODI, E3G and UNEP.
Simple but powerful truth
Costa Rica’s Minister for Environment and Energy, Andrea Meza said: “This report shows, once again, a simple but powerful truth: we need to stop pumping oil and gas from the ground if we are to meet the goals of the Paris Agreement. We must cut with both hands of the scissors, addressing demand and supply of fossil fuels simultaneously.
“That is why, together with Denmark, we are leading the creation of the Beyond Oil and Gas Alliance to put an end to the expansion of fossil-fuel extraction, plan a just transition for workers and start winding down existing production in a managed way."
Denmark has already taken the decision to cancel all future licensing rounds for oil and gas, and completely phase out our production by 2050,” noted Dan Jorgensen, the nation’s Minister for Climate, Energy and Utilities.
“With Costa Rica, we encourage all governments to undertake similar measures and join the Beyond Oil and Gas Alliance to promote a managed and just phase out of fossil fuel production,” Jorgensen said.
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