February 6, 2023 — IPCC pathways are underestimating how much developed countries must cut carbon emissions to limit warming to 1.5°C and how fast oil and gas should be phased out globally, according to a new study in the peer-reviewed journal Nature Climate Change [1]. 

These global pathways rely heavily on phasing out coal power as the primary way to cut emissions while putting less emphasis on the other two fossil fuels, oil and gas. They propose phasing out coal power at a pace that is unlikely to be socially feasible in major coal-dependent developing countries. 

The relative pace of phasing out coal, oil and gas was a central issue at the last two international climate summits [2], where coal consumers such as India and China objected to the disproportionate focus on coal by developed countries compared to oil and gas. 

This new research finds that in 1.5°C pathways [3], coal power would have to be phased out in India, China, and South Africa more than twice as fast as any power sector transition in the last 50 years, in any fuel and any country, relative to system size. This historical period includes rapid changes due to policies (such as responding to the 1970s oil price crisis) and political events (such as wars, sanctions and the collapse of the Soviet Union), suggesting that exceeding this pace of change may not be socially feasible. 

Recognizing different countries’ situations, the Powering Past Coal Alliance (PPCA), a coalition of governments and businesses, has proposed that developed countries phase out coal power generation by 2030 and developing countries by 2050 [4]. According to the new research, developing countries would still need to reduce their coal power generation by one third by 2030, including by closing the most polluting plants—a faster decline than those governments are currently planning. The research finds that this differentiated pace would put several countries at the limit of historical transitions, suggesting that it is difficult but feasible. 

The researchers found that in order to achieve a 1.5°C target with this PPCA pace of coal phase-out, developed countries must reduce carbon emissions roughly 50% faster than when these speed limits are neglected. They also found that global oil and gas use must be phased out faster—for example, United States oil production up to 2050 is 20% lower than in a default 1.5°C pathway. 

The study was conducted by climate researchers at the International Institute for Sustainable Development (IISD)[5] and University College London’s (UCL’s) Energy Institute[6]. 

Lead author Greg Muttitt, an energy expert at IISD, said:

Limiting climate change requires phasing out all three fossil fuels: coal, oil and gas. Our research finds that climate models and policy debates rely too much on winding down coal at a pace that may not be feasible for coal-dependent developing countries. Instead, we need a fairer and more realistic balance, and this means more emphasis on oil and gas phase-out and greater efforts by the Global North.

It is crucial to phase out coal use as quickly as possible, both to limit warming to 1.5°C and to avoid the health damage caused by air pollution. The problem is that many models propose phasing coal out faster than is likely to be possible in some countries. The danger is then that if all governments follow the models’ guidance in all other respects, we will still exceed 1.5°C if the coal part cannot be achieved.

 James Price, a climate and energy modeller at UCL, said:

It is critical that pathways to a 1.5°C future fairly distribute the efforts needed to get there, as this is likely to be a key prerequisite to reaching a global agreement to phase out all fossil fuels. Our study sets out just how important it is for models to map out a route to a 1.5°C future which better reflects the realities of the real world.

Media contacts: 

Greg Muttitt, Co-Lead, Sustainable Energy Supplies, IISD: [email protected], +44 7508 421 527 

Paulina Resich, Senior Communications Officer, IISD: [email protected], +41795406301 

Notes for editors: 

1: Greg Muttitt, James Price, Steve Pye, & Dan Welsby. (2023, February 6) Socio-political feasibility of coal power phase-out and its role in mitigation pathways, Nature Climate Change, 6. 

2: At COP 26 in Glasgow in 2021, India and China were accused of watering down text calling for a phase down of coal. At COP 27 in Sharm el Sheikh in 2022, India proposed broadening this to a phase-out of all fossil fuels, a proposal that was supported by over 80 countries before being blocked by several oil-producing countries. 

3: Integrated assessment models, which feature strongly in reports by the IPCC, mostly judge pathways based on the lowest economic cost at a global level and do not generally reflect social costs or the circumstances of different countries. 

4: The PPCA is a coalition of 48 national governments, 49 subnational governments, and 71 global organizations that was founded in 2017. Specifically, it proposes ending coal power generation by 2030 in countries that are members of the European Union or the Organisation for Economic Cooperation and Development (OECD) and by 2050 in other countries 

5: The UCL Energy Institute delivers world-leading learning, research, and policy support on the challenges of climate change and energy security. An earlier study in Nature by the same UCL team found that nearly 60% of both oil and fossil methane gas and almost 90% of coal must remain in the ground by 2050 in order to keep global warming below 1.5°C. 

6: IISD is an award-winning independent think tank working to fulfill a bold commitment: to create a world where people and the planet thrive. A recent report by IISD found that even before the coal feasibility issues are considered, 1.5C models leave no room for new oil and gas fields to be developed beyond those already in production. 

November 24, 2022, WINNIPEG—“Fish Forward” was launched at SMITH Restaurant today by provincial, national and international organizations who are working together to ensure that Manitoba lakes are sustainably fished, Manitoba fisheries are safeguarded for future generations, and Manitoba businesses are serving local fish that comes from increasingly sustainable sources.

Fish Forward encourages and supports Manitoba fisheries to achieve and maintain Marine Stewardship Council (MSC) eco-certification and connects them with industry partners such as restaurants, stores, fish buyers and food service providers who are seeking to source fish products from sustainable fisheries, an identified need in the marketplace.

Guests at the launch of Fish Forward were served MSC certified sustainable lake fish from the Cedar Lake Walleye and Northern Pike Fisheries in Chemawawin Cree Nation, that achieved MSC certification earlier this month.

“In 10 years, fisheries won’t be able to sell fish that isn’t eco-certified,” said Floyd George, President of the Cedar Lake Walleye and Northern Pike Fisheries. “Achieving MSC certification and working with Fish Forward helps us reach new buyers and make sure the fishing industry is alive and well for generations to come.”

Cedar Lake Fishery and Waterhen Lake in Skownan First Nation (the Métis communities of Mallard, Rock Ride and the Village of Waterhen) are now the only sources of MSC certified sustainable northern pike in the world.

“Skownan First Nation has always practiced sustainable fishing,” said Wesley Catcheway, President of Waterhen Lake Fishers in Skownan First Nation. “Eco-certification helps us to maintain the practices passed on from our elders, watch how much we catch and make sure we don’t hurt the lake.”

Waterhen Lake was the first freshwater fishery in Manitoba and Canada and the second in the world to achieve eco-certification in 2014. Waterhen Lake was recertified in 2020.

“This partnership was formed because the players saw gaps and challenges that were inhibiting Manitoba fisheries from embarking on eco-certification,” said Dimple Roy, Director of Water Management at International Institute of Sustainable Development (IISD). “Fish Forward is designed around the needs of fisheries, helping them navigate the process and providing supports along the way.”

“We urgently need solutions that will allow us to feed the world while protecting the planet and safeguarding livelihoods. Sustainable, aquatic foods hold incredible potential,” said Kurtis Hayne, Program Director of the MSC in Canada. “Partnerships like Fish Forward are instrumental in encouraging and rewarding both sustainable fishing and consumption.”

More information on Fish Forward is available on the partnership’s new website.

ABOUT FISH FORWARD

We see a future where our lakes are sustainably fished, our fisheries are safeguarded for future generations, and our local businesses are serving Manitoba fish that comes from increasingly sustainable sources.

Fish Forward is a partnership of provincial, national and international organizations working to ensure the sustainability of Manitoba’s fisheries.

The organizations leading Fish Forward are: Indigenous Services Canada, the Province of Manitoba, the Marine Stewardship Council and the International Institute for Sustainable Development.

Indigenous Services Canada’s support for Fish Forward is part of the broader Indigenous Inland Commercial Fisheries Initiative (IICFI). The IICFI brings together federal, provincial and Indigenous partners in Manitoba and Saskatchewan to sustain and grow the Indigenous commercial fishing industry. The IICFI is funded through the Indigenous Services Canada’s Strategic Partnerships Initiative program. 

-30-

For more information, please contact:

Sumeep Bath

Editorial & Communications Manager

IISD Experimental Lakes Area

[email protected]

October 24, 2022—Projected investments in new oil and gas fields by 2030, incompatible with limiting global warming to 1.5°C, could fully finance the wind and solar energy ramp-up required to stay within meet this target, finds a new report by the International Institute for Sustainable Development (IISD) released today.

The study, Navigating Energy Transitions: Mapping the Road to 1.5°C, finds that USD 570 billion will be spent on new oil and gas development and exploration every year by 2030. Shifting these finances to renewable energy could fully bridge the USD 450 billion annual investment gap for wind and solar deployment required to effectively displace oil and gas production in line with the 1.5°C limit that would reduce the worst impacts of climate change, experts found.

The report—which provides the first-ever comparison of a large number of climate and energy pathways to outline what is needed to limit global warming to 1.5°C—highlights that developing any new oil and gas fields would either push the world beyond the limit or create stranded assets. 

Redirecting financing from oil and gas toward renewables is therefore imperative to enable a shift in the energy sector and keep global temperature increases in check. 

“There is no shortage of available capital for the energy transition; the problem is rather that energy investment is going to the wrong places, massively funding new oil and gas fields instead of renewables,” said Olivier Bois von Kursk, Policy Advisor at IISD and lead author of the report. “Governments must enable environments for redirecting both public and private capital flows toward the clean energy transition.”

The International Energy Agency (IEA) has shown that there can be no new fossil fuel projects if the world is to stay within the 1.5°C limit on global warming. This conclusion has sparked pushback from some countries, banks, and the industry, who have called this approach “too narrow.” 

The IISD report shows that all major 1.5°C scenarios map a similar trajectory to the IEA’s. The pathways indicate that global oil and gas production must decrease by at least 65% between 2020 and 2050 and up to 99% when considering scenarios excluding all carbon sequestration technologies.

Europe can meet its energy demand without Russian gas within two years.
Europe’s dash for gas to replace Russian supplies is at odds with its commitments to fight climate change, argue the authors of the report. Even without Russian gas, Europe’s existing gas-importing capacities are, in fact, enough to meet the continent’s 1.5°C-compatible energy demand—as projected by the European Commission's REPowerEU plan—from 2024 onward. 

Adding new gas infrastructure in Europe is a false solution to address the short-term supply crunch, experts warn, because it will not be operational in time to help European citizens navigate the upcoming two winters. Instead, it would risk putting the 1.5°C goal even further out of reach or creating stranded assets for newly built infrastructure in Europe and in gas-exporting countries, such as Africa. 

Angela Picciariello, Senior Researcher at IISD and co-author of the report, said: “Beyond 2024, not only can Europe meet its energy needs without Russian gas supply, it must do so to align with 1.5°C pathways.” 

“The recent push for new oil and gas—in the United Kingdom, Italy, Germany, and elsewhere—is exactly the opposite of what countries should be doing to build a resilient energy supply system that will shield consumers from geopolitical risks and energy market fluctuations in the long term,” Picciariello said.

The answer to reducing Europe’s dependence on Russian gas lies in accelerating renewable energy, energy efficiency, and electrification, the authors of the report recommend.

Diala Hawila, Programme Officer at International Renewable Energy Agency (IRENA), said: "The report provides a very timely and comprehensive analysis of how the world can transition to a more sustainable, clean and resilient energy system. It shows the convergence of multiple scenarios towards the need for a comprehensive policy framework to ensure the transition benefits countries worldwide."

Media contacts
Olivier Bois von Kursk, Policy Advisor, IISD: [email protected]
Angela Picciariello, Senior Researcher, IISD: [email protected]
Aia Helena Brnic, Communications Officer, IISD: [email protected]
 

WINNIPEG, Sep 14, 2022—A new 5-year initiative to scale up natural infrastructure in Alberta, Saskatchewan, and Manitoba to ensure cleaner water and resilient communities launches tomorrow.

Natural Infrastructure for Water Solutions (NIWS), an initiative of the International Institute for Sustainable Development (IISD), aims to tackle the growing water challenges facing the Prairies through the power of natural infrastructure.

A virtual launch event on September 15, 2022, at 10:00 a.m. (CST) will explore the future of natural infrastructure and water management across the Prairies and feature remarks from Terry Duguid, M.P., Parliamentary Secretary to the Minister of Environment and Climate Change, and a panel discussion with experts.

Participants can still register here.

NIWS focuses on the need to make a stronger business case for natural infrastructure by demonstrating how impactful and cost-effective it can be. It will also encourage local municipalities to adopt more natural infrastructure projects, enable access to funding for those who want to implement natural infrastructure, and make sure natural infrastructure is supported and championed by all levels of government through policy.

“For us, thriving communities are places where people have access to clean, fresh water; can depend on reliable and sustainable infrastructure year-round; and are protected from the ever-increasing impacts of climate change,” said Richard Florizone, President and CEO, International Institute for Sustainable Development, who will announce the new initiative during the virtual launch tomorrow.

“And we have an answer: natural infrastructure—which involves planning and building with nature to meet our growing infrastructure needs.”

“That’s why—building on IISD’s strong legacy championing natural infrastructure solutions over multiple decades—NIWS brings together partners to look at ways in which natural infrastructure can help meet the water needs of local communities,” said Florizone.

Natural infrastructure is a way to plan and build with nature to meet our infrastructure needs.

It is managed to provide specific infrastructure benefits, with the potential for many other social and environmental benefits. There is increasing evidence that natural infrastructure can deliver much-needed water outcomes cost-efficiently while also providing areas for recreation and habitat to support wildlife, as well as improving the overall resilience of our communities.

Examples range from wetlands to stormwater parks to green roofs.

IISD's work on water and natural infrastructure is funded by multiple sources, including support for the NIWS initiative from the BHP Foundation.

-30-

For more information, or to arrange an interview with an expert about NIWS, please contact: Sumeep Bath,

Editorial and Communications Manager, IISD Experimental Lakes Area

[email protected]

September 13, 2022, New Delhi—Three of India’s biggest central state-owned enterprises—Coal India Limited (CIL), NTPC, and Indian Railways—can help the country reach its climate goals while seizing a share of the clean energy market and mitigating an estimated 22%–28% cash flow gap by 2050 as India gears itself towards net-zero, according to a new report by the International Institute for Sustainable Development (IISD).
 
The study, India's State-Owned Enterprises in Energy from 2020-2050: Identifying Evidence-Based Diversification Strategies, uses public sector undertakings (PSUs) in the coal sector to show how energy businesses can identify their future uncertainties while also identifying opportunities in the changing energy system.
 
“State-owned companies can be part of India’s clean energy future while continuing to bring revenues to the government, creating jobs, and supporting local communities,” says co-author of the report Balasubramanian Viswanathan, Policy Advisor at IISD. “Our evidence-based approach shows pathways for how this can be achieved.”
 
The study finds that between 2020 and 2050, under the net-zero-aligned pathway, CIL and Indian Railways could face a INR 415 billion (28%) and a INR 2,112 billion (22%) reduction in cash flow, respectively, while NTPC’s cash flow could drop by INR 404 billion (22%) compared with a business-as-usual scenario.
 
But taking a few concrete measures in the next few years to diversify their businesses can allow these firms—and other similar PSUs in India—to alleviate future uncertainty and avoid revenue gaps, argue the authors of the report.

Early Diversification

For instance, the study finds that it is critical for PSUs to create net-zero roadmaps with interim targets for the firm—which can become a guide for future decisions—and develop in-house estimates on the financial impact of the changing energy landscape.
 
They can also use their ability to raise capital at favourable rates to identify diversification strategies and become early adopters of clean energy technologies. To do so, firms should set clean energy targets in proportion to the potential scale and speed of the financial implications, and periodically increase the ambition of these targets, the experts recommend.
 
Furthermore, building strategic partnerships among PSUs to exchange expertise and investing in research and development can help PSUs build internal capacity in new and emerging clean energy technologies. Finally, making their ambitions toward achieving a clean energy transition public can send positive market signals that can further strengthen previously mentioned measures.
 
“As major employers in the conventional energy sector, PSUs are key actors in reaching India’s climate and energy targets, and they should involve other relevant stakeholders in the decision-making process,” says Viswanathan.
 
The authors of the report encourage all state-owned energy enterprises to adopt this approach to produce their own detailed internal assessments and an evidence-based strategy for transition into a clean energy business.

Media Contacts

Balasubramanian Viswanathan, Policy Advisor, IISD: [email protected]

Aia Helena Brnic, Communications Officer, IISD: [email protected]

July 7, 2022—As the global clean energy transition gathers pace, six emerging economies need to start adjusting their fiscal policies now to account for declining fossil fuel use—or risk a USD 278 billion gap in revenues by 2030, equivalent to the combined total government revenues of Indonesia and South Africa in 2019, according to a new report by the International Institute for Sustainable Development (IISD).

Titled Boom and Bust: The Fiscal Implications of Fossil Fuel Phase-Out in Six Large Emerging Economies, the report spotlights heavy dependence on fossil fuel revenues in Brazil, Russia, India, Indonesia, China, and South Africa (BRIICS). It argues that this economic reliance puts BRIICS countries at risk of experiencing a substantial revenue gap over the next few decades, as the world transitions from fossil fuel-based energy systems to cleaner energies to limit global warming to 1.5°C.

The study finds that by 2050, overall fossil fuel revenues in BRIICS countries could be as much as USD 570 billion lower than a business-as-usual scenario where governments fail to phase down fossil fuels enough to avoid the worst climate impacts. The widest gaps are expected to occur in India (USD 178 billion), China (USD 140 billion), and Russia (USD 134 billion).

The report finds that public revenues from fossil fuel production and consumption currently account for a staggering 34% of general government revenue in Russia, 18% in India, and 16% in Indonesia. The share stands at 8% in Brazil, 6% in South Africa, and 5% in China. This includes only direct, first-order, government financial revenues—fossil fuel dependence would be much larger if considering private incomes and flow-on effects in these economies.

But these revenues are not only unreliable and erratic—according to the authors, they are also undermined by the negative economic impacts of fossil fuel use, such as health costs due to air pollution and damage from climate change. In fact, IISD’s previous research has shown that in many of these countries—including India and South Africa—these externalities far exceed public fossil fuel revenues.
  
“To prevent devastating climate change, the world has to phase out the production and consumption of fossil fuels, which will inevitably erode related revenues. Emerging economies have an enormous opportunity to build more resilient and economically sustainable energy systems as they decarbonize—but they must plan ahead to avoid shortfalls in public revenues that could reverse progress on poverty eradication and economic development,” says Tara Laan, Senior Associate at IISD and lead author of the report.
 
This economic planning can be done in climate-positive and socially progressive ways, such as by removing subsidies from—and increasing taxes on—fossil fuels in ways that don’t hurt the poor—like export duties and windfall profits taxes, as imposed by India last week. The eventual fall in global energy prices will be an opportune time to impose carbon pricing, IISD experts say. Diversifying income streams—such as new targeted taxes in the energy and transport sectors—will also ensure that addiction to fossil fuel revenues does not become a barrier to reform. 
 
History has shown that even large reductions in fossil fuel revenues can be sustained by rapidly developing other economic sectors: in Indonesia, the government’s oil and gas revenues fell from 35% of total revenue in 2001 to 16% in 2019, while the country’s GDP growth and budget deficit remained largely unchanged.
 
“Surging energy prices and demand are generating huge revenues from fossil fuel production and consumption. These temporary, short-term windfall profits should be taxed to fund the energy transition, which, in turn, will boost energy supplies, create green jobs, contribute to economic growth, and ultimately, increase government revenues,” Laan says. “At the same time, governments must protect vulnerable consumers from high prices and support fossil fuel-dependent workers and communities in ways that don’t hinder the transition to cleaner energy.”

Note: Though the report does not directly assess the implications of these findings in light of Russia’s war in Ukraine, it provides further evidence that Russia’s fiscal system is highly vulnerable to changes in fossil fuel demand and supply.

Media Contacts

Tara Laan, Senior Associate, IISD: [email protected]
Aia Helena Brnic, Communications Officer, IISD: [email protected]
 

The COP 26 Statement on International Public Support for the Clean Energy Transition—the Glasgow Statement—requires signatories to end new direct overseas support for fossil fuels by the end of 2022 and fully prioritize their international public finance for a clean and just energy transition. But halfway through the year, only a handful of signatories have published new or updated policies that turn these pledges into action, new research shows. In addition, earlier this week, G7 leaders weakened a near-identical commitment adopted at the G7 ministerial in May, creating uncertainty for the Glasgow Statement initiative.

A new report from the International Institute for Sustainable Development (IISD), Oil Change International (OCI), and Tearfund warns of two major threats to implementing the Glasgow Statement on time: 

1. Some signatories have signalled their intention to allow continued large-scale overseas support to gas, despite their pledge. This risk has increased since the war in Ukraine as countries look to replace the Russian fossil fuel supply. Yet, this support is incompatible with the agreed 1.5°C global warming limit, and research shows that clean alternatives are better suited to serve energy security and clean development pathways. 
2. All international public finance institutions have yet to scale up substantially their clean energy support and target strategic subsectors, such as energy access, to catalyze a globally just energy transition and support energy security in a time of crisis. 

Successful implementation could mean a transformative boost for the energy transition. If signatories’ development finance institutions, export credit agencies, and government departments fully redirect their USD 28 billion a year in overseas public finance for oil and gas, they would more than double their international clean energy finance, from USD 18 billion a year to USD 46 billion, the report finds. By delivering on their commitments, the signatory countries also have an opportunity to encourage the G7 to follow through and avoid new gas investments. With the G7 on board, the potential impact would be even greater: a total of USD 39 billion in public finance could shift from fossil fuels to clean energy. 

Laurie van der Burg, Global Public Finance Co-Manager at OCI, said: 
“Shifting public finance out of fossil fuels and into clean energy is critical for energy security, climate, and development, and the Glasgow Statement has the potential to be truly transformative. This week’s G7 leaders’ statement that weakened a near-identical pledge cannot be allowed to derail signatories’ efforts to shift public finance out of fossil fuels and into clean energy. It is critical that governments stop Russian fossil fuel imports, but investing in new gas infrastructure is not a viable strategy—these projects take years to build and will not support energy security needs. Renewable energy and efficiency can be deployed faster, better serve development and energy access needs, and do not come with the stranded assets and financial stability risks of fossil gas. In today’s turbulent context, countries must stand firm in their commitment, stop dirty finance, shift it to clean, and pay their fair share of climate finance.”

Paul Cook, Head of Advocacy at Tearfund, said:
“For people in poverty around the world, how this USD 28 billion in energy finance is spent could mean the difference between life and death. Either the money goes to dirty fossil fuels and contributes to more drought and flooding, or it ushers in a clean energy transition and a safer, brighter future. Communities on the frontline of the climate crisis can’t afford any more delays.” 

The tools to implement the Glasgow commitments are already available, the report highlights. The best-in-class policies adopted by Denmark, the United Kingdom, Swedfund (Sweden), the Agence Française de Développement (France), and Financierings-Maatschappij voor Ontwikkelingslanden (the Netherlands) can serve as examples for other signatories as they undertake efforts to align their fossil fuel exclusion policies with the promises made in Glasgow. 

Lucile Dufour, Senior Policy Advisor at IISD, said:
“Today’s energy security and price crises only intensify the need for more secure and sustainable energy systems built on renewables and energy efficiency. Acting on the Glasgow Statement would kick that transition into high gear. COP 27 will be an accountability test for signatories: they should come prepared with new international public finance plans in line with the 1.5°C warming limit.”

For more information, please contact:

Charly Blais – [email protected] 
Nicole Rodel – [email protected] 
Sam Perriman – [email protected]

About the Statement on International Public Support for the Clean Energy Transition

The Glasgow Statement was launched at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 26) in Glasgow. Signatories aim to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022” and instead “prioritise our support fully towards the clean energy transition.” 

After a series of successful commitments to end finance for coal, this was the first international political commitment that also addresses international public finance for oil and gas. 

At the G7 Environment, Climate, and Energy Ministers meeting in May 2022, G7 members adopted a near-identical commitment. This means that in addition to the other G7 members, Japan has now also committed to ending direct international public finance to unabated fossil fuels by the end of 2022. The report does not include a policy analysis for Japan.

The Glasgow Statement was signed by 34 governments and five public finance institutions, including Agence Française de Développement (AFD), Albania, Banco de Desenvolvimento de Minas Gerais (BDMG), Belgium, Burkina Faso, Canada, Costa Rica, Denmark, the East African Development Bank (EADB), El Salvador, Ethiopia, the European Investment Bank (EIB), Fiji, Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), Finland, France, Gabon, The Gambia, Germany, The Holy See (Vatican City State), Iceland, Italy, Jordan, Mali, Marshall Islands, Moldova, the Netherlands, New Zealand, Portugal, Republic of Ireland, Slovenia, Spain, South Sudan, Sri Lanka, Sweden, Switzerland, the United Kingdom, the United States, and Zambia. The Holy See is not included in the high-income country analysis for this report. 

About OCI

Oil Change International (OCI) is a research, communications, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the ongoing transition to clean energy. Rooted in community solidarity and principled policy analysis, we work within larger movements to build a fossil-free future. Founded in 2005, Oil Change International now has a talented, experienced, and dedicated international team of 20, backed by hundreds of thousands of supporters. We are data driven and people powered.

About Tearfund

Tearfund is a Christian charity that partners with churches in more than 50 of the world’s poorest countries. We tackle poverty through sustainable development, responding to disasters and challenging injustice. We believe an end to extreme poverty is possible. Tearfund is also a member of the Disasters Emergency Committee. For more information about the work of Tearfund, please visit www.tearfund.org.

Jakarta, June 22, 2022—Energy support measures in Indonesia hit IDR 279 trillion in FY 2020, of which a staggering 88%—IDR 246 trillion—was allocated to fossil fuels, according to a new report from the International Institute for Sustainable Development (IISD) released today. 

The government provided at least IDR 74 trillion to support the oil and gas industry, IDR 112 trillion for fossil fuel-based electricity, and IDR 61 trillion for the coal sector, according to the study, titled Indonesia’s Energy Support Measures: An inventory of incentives impacting the energy transition. Indonesia’s incentives for fossil fuels were 117 times higher than support for renewable energy that received only IDR 2 trillion, representing less than 1% of the total support measures, while IDR 31 trillion went to biofuels and IDR 19 billion to electric vehicles.

The report warns that in the current context of high energy prices, these figures are expected to increase significantly in 2022 after the Indonesian parliament in May approved a government request for an additional IDR 350 trillion in energy subsidies, adding to the IDR 154 trillion already spent in the first quarter of the year.

The study—which covers incentives supporting different types of energy beyond those measures officially classified as “subsidies” in Indonesia’s accounts—puts a spotlight on the country’s overwhelming support for the fossil fuel sector in the period from 2016–2020, with 94% allocated on average per year to prop up oil and gas, coal, and fossil fuel-based electricity, and just 1% allocated to renewables. Experts warn that Indonesia’s disproportionate support for fossil fuels is slowing the energy transition, draining the public budget, accelerating climate change, and harming people’s health.

“Indonesia critically needs to shift support away from fossil fuels to clean energy to meet its climate and renewable energy targets, and decrease reliance on price-volatile fossil fuels,” says IISD’s Anissa Suharsono, lead author of the report. “These incentives represent an enormous cost to the public budget—particularly in the current context of high energy prices—and take a heavy toll on people’s health and the climate.”

The report, which explores the extent to which Indonesia’s current energy support measures reflect its goals to reach 23% of renewable energy by 2025 and net-zero emissions by 2060, highlights that current policies are undermining the country’s energy targets and environmental imperatives. The report’s authors provide concrete recommendations for the government to realign its incentives by reforming policies that benefit the fossil fuel sector and instead incentivizing investments in renewable energy.

In the midst of soaring energy prices and a cost-of-living crisis, targeting support to the poor and vulnerable becomes key to preserving scarce public resources. These should be used efficiently and serve to pave the way for a just transition away from fossil fuels, IISD experts recommend. 

To do that, the government could improve targeting for the two of the largest supports provided—the reimbursement to state-owned energy company Pertamina for below-market pricing of fuels, and the subsidy to the state electricity firm PLN to provide cheap power—which mostly benefit the wealthier segment of the population that consumes the largest share of fuel and electricity.

“Reforming policies that support fossil fuels and ensuring that lower-income groups receive targeted support to help face price increases will free up resources that can instead be invested in renewable energy, clean transportation, and sustainable infrastructure,” says study co-author Lourdes Sanchez of IISD. “That would ensure the poor are protected while allowing Indonesia to transition towards cleaner energy sources to build a sustainable energy system that is more resilient to global price shocks and provides affordable clean energy for all Indonesians.”

Media Contacts

Lourdes Sanchez, Senior Policy Advisor and Lead, Indonesia, IISD: [email protected]
Aia Helena Brnic, Communications Officer, IISD: [email protected]

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. 

Context

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. 

Key Findings

• 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

JUNE 7, WINNIPEG—The converging crises of biodiversity loss and climate change are rapidly intensifying the vulnerabilities of communities and ecosystems around the world. Launching today, the Nature for Climate Adaptation Initiative (NCAI) has one crucial goal: to help enable nature-based climate action that protects both livelihoods and biodiversity in the most vulnerable parts of the world.

Offering a wide range of resources, expert guidance, and accessible learning opportunities, this new project by the International Institute for Sustainable Development (IISD), with support from Global Affairs Canada, provides civil society organizations with the tools they need to enhance the implementation of nature-based climate solutions (NBCS) for adaptation that protect people of all genders and social groups. The NCAI will also feature an e-learning course on Ecosystem-based Adaptation—developed in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the International Union for Conservation of Nature (IUCN)—which will be launching in the coming months.  

“With careful implementation tailored to local contexts, nature-based climate solutions are highly effective and contribute to addressing societal challenges while enhancing biodiversity and ecosystem resilience,” says Veronica Lo, Senior Policy Advisor with IISD’s Resilience Program and lead for the NCAI. “Strengthening the knowledge and capacity of civil society is not only critical for scaling up the implementation of NBCS, it also helps mainstream Ecosystem-based Adaptation across different disciplines and sectors.”

The NCAI uses three pillars to ground its work. It is:

• Socially inclusive: Integrating principles of good governance and equity as well as considerations of Indigenous and local or Traditional Knowledge in NBCS implementation.
• Biodiversity positive: Scaling up the implementation of NBCS to enhance biodiversity and ecosystem resilience.
• Gender responsive: Ensuring that NBCS actively promote and enable gender equality.

“Women and girls in many parts of the world depend extensively on natural resources for their livelihoods and well-being. Nature-based climate solutions reflect this relationship, providing better protection and increased resilience in the face of climate change while also leveraging their unique insights and leadership in planning for and using these solutions,” says Harjit S. Sajjan, Minister of International Development and Minister responsible for the Pacific Economic Development Agency of Canada. 

“Canada’s support for the Nature for Climate Adaptation Initiative is one more way that we are helping to promote social inclusion and gender equality in climate action.”

******
Media contact: 

Alanna Evans, Communications Officer, IISD

[email protected]