Smokestack smoke

In the 2015 international Paris Climate Agreement, nearly every country [see editor’s note] agreed to try and limit global warming to no more than 2 degrees Celsius (3.6 degrees Fahrenheit) and preferably closer to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial temperatures. Achieving these goals will require dramatic changes, as the world has already warmed 1 degree Celsius (1.8 degrees Fahrenheit), and temperatures, fossil fuel consumption, and carbon pollution all are continuing to rise.

To determine how far off track emissions are with respect to the Paris goals, groups like the International Energy Agency and Climate Action Tracker evaluate each country’s climate policies. According to their analyses, were each country to follow through only with current policies, global temperatures would rise about 3 degrees Celsius (5.4 degrees Fahrenheit) above pre-industrial temperatures by the year 2100 – a level of warming that would result in severe and dangerous climate changes.

In addition, a new report produced by the United Nations Environment Programme, UNEP, and a coalition of research organizations takes a different approach: The report examines government plans for fossil fuel production and the amount of carbon pollution and global warming that would result if all these fuels were burned.

“Our collective failure to act early and hard on climate change means we now must deliver deep cuts to emissions”, UNEP Executive Director Inger Andersen said in a statement releasing the report. So urgent is the need for action, he said, that “every city, region, business and individual need(s) to act now”.

The resulting picture is indeed bleak – total carbon emissions between now and 2030 from global fossil fuel production plans are about 10% higher than those from the current climate policies that would put the world on track for 3 degrees Celsius warming by 2100. These fossil fuel plans present a difficult impediment to meeting the Paris climate goals.

The challenge, by the numbers

According to the newly released figures, to stay on track to meet the 2 degrees Celsius Paris target, the fossil fuel supply can release only about 350 billion more tons of carbon dioxide between now and 2030, and a total of 550 billion tons by 2040. For the 1.5 degrees Celsius target, the numbers are about 300 billion tons by 2030 and 450 billion tons by 2040.

Based on the analyses of current pledged climate policies, humans are currently on track to exceed the 2 degree path by 17% by 2030 and 36% by 2040. Those are policies that would instead send the world towards the 3 degrees Celsius warming scenario by 2100.

However, based on countries’ fossil fuel production plans, carbon pollution will be about 10% higher yet. Those plans translate to about 450 billion tons of carbon dioxide released between now and 2030, and nearly 850 billion tons by 2040. For the latter date, it’s an overshoot of the 2 degrees Paris carbon budgets by 50%, and 85% too much carbon to stay on the 1.5 degrees Celsius path.

In short, if countries follow through with their current fossil fuel production plans, the world will be on track to warm more than 3 degrees C (5.4 degrees F) by 2100, and meeting the Paris targets would become virtually impossible.

Achieving Paris goals means ‘stranding’ valuable assets

The Paris agreement includes “a global stocktake every five years” starting in 2023, at which point countries can ratchet up their climate goals and policies. Implementing such policies often is a political and economic challenge, and reducing planned fossil fuel production may be even more difficult.

According to a recent study published in the journal Energy Research & Social Science, for the world to meet the Paris 2 degrees Celsius target, more than 80% of all proven fossil fuel reserves must be left in the ground – by no means an easy choice in any capitalist system or democratic society. The reserves and some associated infrastructure would then become “stranded assets,” meaning that they no longer hold any value.

These goals are difficult to reconcile with the reality that, as the data document, many large countries plan to expand rather than reduce their fossil fuel production over the coming decades. In the United States, oil and gas production is projected to increase 30% above current levels by 2030. Chinese coal production currently accounts for 43% of the global total, has expanded the past two years, and is forecast to decline slowly after 2020 as the country’s natural gas production ramps up. India foresees more than a tripling of coal production by 2040. Australia, currently the world’s leading exporter of coal and the second-largest producer and exporter of liquid natural gas, has proposed opening new coal mines and ports in one of the world’s largest fossil fuel expansions. And in Canada, Prime Minister Justin Trudeau has described a Trans Mountain pipeline expansion transporting tar sands oil to coastal ports as being “of vital strategic interest to Canada.” The country’s oil and natural gas production are projected to increase 60% and 34%, respectively, between 2017 and 2040.

The new UNEP report calmly and briefly summarizes the challenges posed by these planned fossil fuel expansions:

Once built, this infrastructure is difficult to turn away from; it decreases fossil fuel prices, hooks consumers on fossil fuels, and deeply entangles many parts of society – including workers and communities – in a fossil fuel economy.

In other words, the more countries invest in expanding fossil fuel extraction infrastructure now, the costlier and more difficult it becomes down the road to strand the assets as needed to meet the Paris targets.

‘Supply-side’ policy solutions

Climate policies have tended to focus on reducing fossil fuel demand, for example by taxing carbon pollution, fostering alternative energy sources, and improving energy efficiency. To tackle the problem of excessive fossil fuel production, the report recommends several “supply-side” climate policies.

For example, while the leaders of the Group of Twenty (G20) countries with the world’s largest economies in 2009 committed to “phase out and rationalize, over the medium term, inefficient fossil fuel subsidies”, many governments have instead kept most of their fossil fuel production subsidies, and some have even introduced new ones. According to the International Monetary Fund, global fossil fuel subsidies amount to more than $5 trillion per year, accounting for 6.4% of the global gross domestic product (although only $500 billion of this total comes from direct subsidies, with the remainder resulting from a failure to price carbon pollution). Eliminating fossil fuel subsidies is one straightforward supply-side policy solution.

The new UNEP report notes that governments can also limit fossil fuel exploration, production, or export via moratoria, bans, or quotas: “The governments of Belize, Costa Rica, France, Denmark, and New Zealand, for instance, have all enacted partial or total bans or moratoria on oil and gas exploration and extraction.” And governments can prohibit development of, or limit permits for, specific resources and infrastructure like oil pipelines and coal terminals, or the use of certain technologies like hydraulic fracking.

State-controlled investment funds can divest from fossil fuel production companies, and policymakers could tax fossil fuel production. Most directly, governments can set targets to reduce rather than expand fossil fuel production, and restrict financing for fossil fuel supply projects through government-owned finance institutions.

Such policies are clearly politically and economically difficult to implement in light of the vast wealth and political influence of fossil fuel companies, and what many see as consumers’ virtual addiction to fossil fuels. However, there are many examples of countries already implementing such steps. Experts increasingly have come to agree that to have any chance of meeting the Paris climate targets, governments will have to recognize that trillions of dollars of fossil fuel assets will need to be stranded, and plans and policies undertaken accordingly.

Editor’s note: President Trump in early November 2019 announced that the U.S. plans to officially withdraw from the 2015 Paris Climate Agreement in November 2020. Democratic presidential candidates have each vowed to reverse that action if a Democrat is elected in the 2020 elections.

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