The report proposes different phase-out dates for oil and gas producing countries in line with the Paris Agreement’s goals and commitment to a fair transition. Taking into account countries’ differing levels of wealth, development and economic reliance on fossil fuels, it says the poorest nations should be given until 2050 to end production but will also need significant financial support to transition their economies.
The report, by Professor Kevin Anderson, a leading researcher at the Tyndall Centre for Climate Change Research, and Dr Dan Calverley, warns that there is no room for any nation to increase production, with all having to make significant cuts this decade. The richest, which produce over a third of the world’s oil and gas, must cut output by 74% by 2030; the poorest, which supply just one-ninth of global demand, must cut back by 14%.
Kevin Anderson, Professor of Energy and Climate Change at the University of Manchester, said: “Responding to the ongoing climate emergency requires a rapid shift away from a fossil fuel economy, but this must be done fairly.
“There are huge differences in the ability of countries to end oil and gas production, while maintaining vibrant economies and delivering a just transition for their citizens.
“We have developed a schedule for phasing out oil and gas production that – with sufficient support for developing countries – meets our very challenging climate commitments and does so in a fair way.
“The research was completed prior to Russia’s invasion of Ukraine. Our first thoughts are with the Ukrainian people and indeed with all of those caught up in the war. But the resulting high energy prices also remind us that oil and gas are volatile global commodities, and economies that depend on them will continue to face repeated shocks and disruption.
“The efficient and sensible use of energy combined with a rapid shift to renewables will increase energy security, build resilient economies, and help avoid the worst impacts of climate change.”
The report, commissioned by the International Institute for Sustainable Development, notes that some poorer nations are so reliant on fossil fuel revenues that rapidly removing this income could threaten their political stability. Countries like South Sudan, Congo-Brazzaville, and Gabon, despite being small producers, have little economic revenue apart from oil and gas production.
By contrast, it observes: “Wealthy nations that are major producers, typically remain wealthy even once the oil and gas revenue is removed.” Oil and gas revenue contribute 8% to US GDP but without it, the country’s GDP per head would still be around $60,000 – the second highest globally.
When countries signed the UN Paris Agreement, they agreed that wealthy nations should take bigger and faster steps to decarbonise their economies and also provide financial support to help poorer countries move away from fossil fuels. This principle has been applied to coal power generation, with the UN calling on wealthy OECD countries to phase out coal use by 2030 and the rest of the world by 2040.
The report, Phaseout Pathways for Fossil Fuel Production, applies similar principles to oil and gas. It quantifies how much future production is consistent with the Paris climate targets and what this implies for the 88 countries responsible for 99.97% of all oil and gas supply. It sets viable phase-out pathways for five different groups of countries based on their differing capacities to make a rapid and just transition away from fossil fuels.
For a 50% chance of limiting the global temperature rise to 1.5°C, it finds that:
• 19 Highest-Capacity countries, with average non-oil GDP per person (GDP/capita) of over $50,000, must end production by 2034, with a 74% cut by 2030. This group produces 35% of global oil and gas and includes the USA, UK, Norway, Canada, Australia and the United Arab Emirates.
• 14 High-Capacity countries, with average non-oil GDP/capita of nearly $28,000, must end production by 2039, with a 43% cut by 2030. They produce 30% of global oil and gas and include Saudi Arabia, Kuwait and Kazakhstan.
• 11 Medium-Capacity countries, with average non-oil GDP/capita of $17,000, must end production by 2043, with a 28% cut by 2030. They produce 11% of global oil and gas and include China, Brazil and Mexico.
• 19 Low-Capacity countries with average non-oil GDP/capita of $10,000, must end production by 2045, with an 18% cut by 2030. They produce 13% of global oil and gas and include Indonesia, Iran and Egypt.
• 25 Lowest-Capacity countries, with average non-oil GDP/capita of $3,600, must end production by 2050 with a 14% cut by 2030. They produce 11% of global oil and gas and include Iraq, Libya, Angola and South Sudan.
Dr Dan Calverley said: “There is very little room for manoeuvre if we want to limit warming to 1.5°C. Although this schedule gives poorer countries longer to phase out oil and gas production, they will be hit hard by the loss of income. An equitable transition will require substantial levels of financial assistance for poorer producers, so they can meet their development needs while they switch to low-carbon economies and deal with growing climate impacts.”
The proposed schedules for winding down oil and gas production depend on a rapid global phase-out of coal. The report notes that many poorer countries rely on domestic coal production for their energy needs: nearly three-quarters of all the world’s coal is produced and consumed in developing countries. However, to achieve 1.5°C without even tighter reductions on oil and gas, coal production must peak in developing countries by 2022 and end by 2040, while developed countries must phase out all coal production by 2030.