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Poor countries reliant on fossil fuel revenues need more time to end production  and financial support to do so

Rich countries must end oil and gas production by 2034 to keep the world on track for 1.5°C and give poorer nations longer to replace their income from fossil fuel production, finds a new report from a leading climate scientist at the University of Manchester released today.

It proposes different phaseout 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 USD 60,000 – the second highest globally.

A flagship report from the Intergovernmental Panel on Climate Change (IPCC) warned last month that failing to limit global warming to 1.5°C would have devastating global impacts. The UN Secretary-General Antόnio Guterres described it as “an atlas of human suffering and a damning indictment of failed climate leadership.” At current levels of emissions, the world will exceed 1.5°C as early as 2030 to 2035.

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 phaseout 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 USD 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 USD 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 USD 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 USD 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 USD 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.
  • See Notes to Editors for full table

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 report also offers a more ambitious scenario with a 67% chance of meeting 1.5°C. This would require the richest countries to end oil and gas production by 2031 and the poorest by 2042.

In a less ambitious scenario, with a 50% chance of meeting 1.7°C – reflecting “well below 2 degrees” – the richest countries would have to halve oil and gas production by 2035 and end it by 2045. The poorest countries would have until 2062 to phase out all production, but there would still be no room for additional oil and gas production.

Commenting on the report, Connie Hedegaard, former European Commissioner for Climate Action and Danish Minister for Climate and Energy, said: “While it is largely understood that there needs to be an urgent phaseout of coal production globally, this report illustrates only too clearly why there also needs to be a phaseout of oil and gas production. And it shows that the pace and end date of the wind-down needs to be rapid. This urgency has only been tragically underscored by recent geopolitical events, which have made it abundantly clear that there are numerous reasons why the world needs to get off its dependence on fossil fuels and accelerate the transition to clean energy.”

Saber H. Chowdhury, Member of the Bangladesh Parliament and Honorary President of the Inter-Parliamentary Union, said: “The science is conclusive – fossil fuels need to be phased out now and a fossil fuel-free future world realised soon. Wealthy nations have the means to transition fastest and have a moral duty to do this. At the same time, they have an obligation to support countries in the global south with finance and technology to assist them in transitioning to renewables to secure their energy needs.”

The analysis assesses countries’ capacity to fund a fair transition away from fossil-fuelled economies based on their “non-oil GDP per person” – GDP after revenue from oil and gas production is subtracted. This approach recognises that oil and gas revenue plays a much less important role in some countries’ economies – including some major producers – than in others.

It distributes the remaining global carbon budget between producer nations according to current levels of production and how far countries are above or below the average “capacity to fund a just transition.” Nations that are both poor and highly reliant on oil and gas revenue are given longer to phase out production than wealthier nations with more diverse economies.

The proposed schedules for winding down oil and gas production depend on a rapid global phaseout 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.

ENDS

For further information and to arrange interviews, please contact:

David Mason         [email protected]             +44 7799 072320
Maria Dolben        [email protected]             +44 7408 809839

Notes To Editors

About the Authors

Prof Kevin Anderson is Professor of Energy and Climate Change at the University of Manchester (UK), Uppsala University (Sweden) and the University of Bergen (Norway). Formerly the director of the Tyndall Centre for Climate Change Research, he engages widely with governments and remains research active with publications in Climate Policy, Nature and Science. Kevin has a decade of industrial experience in the petrochemical industry and is a chartered engineer and fellow of the Institution of Mechanical Engineers.
 
Dr Dan Calverley is an independent researcher who previously worked at the Tyndall Centre for Climate Change Research. He has a PhD in energy and climate change from the University of Manchester.

About the International Institute for Sustainable Development

The International Institute for Sustainable Development (IISD) is an award-winning independent think tank working to accelerate solutions for a stable climate, sustainable resource management, and fair economies. Our work inspires better decisions and sparks meaningful action to help people and the planet thrive. We shine a light on what can be achieved when governments, businesses, non-profits, and communities come together. 

Comment on the Report

Christiana Figueres, founding partner of Global Optimism and former Executive Secretary of the UN Framework Convention on Climate Change, said: “The recent IPCC report is a grim warning of the dangers of exceeding the 1.5°C limit. This new study is a timely reminder that all countries must phase out oil and gas production rapidly with wealthy countries going fastest, while also ensuring a just transition for workers and communities that rely on it. Additionally, wealthy countries can and must provide the support and resources less wealthy countries need to make the same transition.”

Lidy Nacpil, coordinator of the Asian People’s Movement on Debt and Development and co-coordinator of the Global Campaign to Demand Climate Justice, said: “The carbon budget has been largely depleted by the rich countries that have benefited most from fossil fuel extraction and is now much too small to allocate it fairly. A rapid, just and equitable phaseout of oil and gas is still possible, with the time frames suggested in this report, as long as rich countries provide substantial financial, technical, and political support, and cancel the debt.”

Oil and gas phaseout pathways in line with a 50% chance of limiting climate change to 1.5°C

  HIGHEST CAPACITY HIGH CAPACITY MEDIUM CAPACITY LOW CAPACITY LOWEST CAPACITY
Countries in group 19 14 11 19 25
Share of global oil and gas production 35% 30% 11% 13% 11%
Reduction by 2030 74% 43% 28% 18% 14%
Reduction by 2040 - - 89% 82% 66%
Oil and gas end date 2034 2039 2043 2045 2050
Countries (listed in order of capacity to phase out oil and gas Ireland, USA, Denmark, Netherlands, Austria, Qatar, Norway, Germany, Australia, France, UK, UAE, Canada, Bahrain, South Korea, Italy, Japan, New Zealand, Israel Estonia, Poland, Hungary, Romania, Croatia, Turkey, Kuwait, Chile, Saudi Arabia, Brunei, Kazakhstan, Malaysia, Russia, Argentina Mexico, Belarus, Oman, Serbia, Thailand, Suriname, China, Trinidad and Tobago, Colombia, Brazil, Albania Peru, Cuba, South Africa, Ukraine, Mongolia, Indonesia, Tunisia, Turkmenistan, Vietnam, Iran, Egypt, Ecuador, Philippines, Azerbaijan, Guatemala, Bolivia, Algeria, Gabon, Equatorial Guinea India, Uzbekistan, Libya, Venezuela, Ghana, Bangladesh, Ivory Coast, Pakistan, Nigeria, Myanmar, Iraq, Sudan, Angola, Cameroon, Papua New Guinea, Syria, Tanzania, Timor-Leste, Congo, Yemen, Chad, Mozambique, Niger, D.R. Congo, South Sudan