New Analysis—What IPCC energy pathways tell us about Paris-aligned policies and investments
A new report crunches the numbers on the latest Intergovernmental Panel on Climate Change (IPCC) data and concludes that the world must decrease global oil and gas production and consumption by 30% by 2030.
Published by the International Institute for Sustainable Development (IISD), this report zeroes in on the IPCC pathways that limit warming to 1.5°C. The results can point governments, companies, and investors toward the course of action needed to stave off the most catastrophic effects of climate change.
Production from already licensed oil and gas fields will release carbon emissions well beyond what is consistent with limiting global warming to 1.5°C. While the International Energy Agency’s (IEA) Net-Zero by 2050 report made headlines last year for saying that there should not be any new oil and gas exploration or development of new fields, the IPCC does not take a prescriptive approach. This has led to some banks using IPCC scenarios to justify continued financing of fossil fuel projects.
IISD’s Lighting the Path report uses the IPCC’s measure of feasible levels of carbon capture and removal technologies to show that, in reality, both IEA and IPCC scenarios are aligned: new oil and gas development and exploration must end immediately, and some fields will need to be retired early.
On April 4, 2022, the IPCC published the third installment of their Sixth Assessment Report, Climate Change 2022: Mitigation of Climate Change. This report, which covered ways to reduce greenhouse gas emissions, showed that current climate policies are not nearly enough and are likely to lead to a rise in temperature between 2.4°C and 3.5°C by 2100. It found that the world can still hope to avoid the worst impacts of climate change, but only by acting immediately to transition to a low-carbon economy.
To reach that conclusion, the IPCC paints a vivid picture of various possible futures for the energy system—some bright, some perilous—depending on which actions the world takes from now until 2050. IPCC reports project future climate outcomes based on different scenarios and discuss the implications of various options, but do not directly tell policy-makers what path to take.
The IPCC suggests that relying too much on unproven-at-scale technologies that capture and store fossil fuel emissions and remove carbon dioxide from the atmosphere is one of the greatest risks to staying below 1.5°C. On the other hand, of all the tools available, the IPCC finds that wind and solar technologies have the biggest potential to mitigate greenhouse gas emissions by 2030 at the lowest cost.
IISD’s Lighting the Path report analyzes the pathways that governments could follow to limit warming to 1.5°C without exceeding the levels of carbon capture and storage and carbon dioxide removal that the IPCC itself deems feasible and sustainable.
- Looking at feasible IPCC pathways that limit warming to 1.5°C, it is clear that no new oil and gas fields should be developed, no exploration should be conducted, and some fields will have to be retired before the end of their economic lifetime. Production from already licensed oil and gas fields will release carbon emissions well beyond what is consistent with the 1.5°C target. This is consistent with the findings of the IEA’s Net-Zero by 2050 report.
- To have a chance at achieving the goals of the Paris Agreement, the world must decrease global oil and gas production and consumption by 30% between now and 2030.
- The addition of new wind and solar energy needs to increase by an average of 18% and 19%, respectively, each year to 2030. Additional policies are needed to double the expected rate of wind and solar deployment by 2030 compared to what would be expected with current policies.
- There is an urgent need to plug the yearly USD 450 billion investment gap for wind and solar. More than USD 830 billion annually will need to be invested by 2030 to build out enough wind and solar energy to stay below 1.5°C. However, current policies are on track to deliver less than USD 380 billion/year by 2030.
- By 2030, the oil and gas industry is forecasted to increase its spending to nearly USD 600 billion on as-yet-undeveloped oil and gas fields, which are inconsistent with limiting warming to 1.5°C.
Quotes from the Authors
“IPCC 1.5°C pathways clearly illustrate the need to slash oil and gas production by 30% this decade to prevent dangerous emissions and avoid heavily relying on unproven technologies. Reaching net-zero emissions by mid-century would otherwise require relying on carbon capture and removal to a greater extent than the IPCC judges feasible.”
Olivier Bois von Kursk, IISD, lead author of Lighting the Path
“The pathways published by the IPCC give critical insights into the future of the energy system. Our new analysis of these pathways leaves no question as to what policy-makers and investors must urgently do to achieve the Paris goals: end oil and gas licensing, exploration, and development; implement new policies to enable massive build out of wind and solar power; and redirect investments from fossil fuels to renewables.”
Greg Muttitt, IISD, co-author of Lighting the Path