Its assessment of energy trends is far more responsible than the International Energy Agency’s
A United Nations Environment-led research coalition published a first-of-its-kind report on November 20, 2019 on The Production Gap. It measured the gap between planned fossil fuel production, climate targets of countries, and goals to limit warming by 1.5 degree Celsius and 2°C goals committed to under the Paris Agreement.
The new report presented a more responsible assessment of global energy trends and projections than last week’s severely criticised World Energy Outlook 2019 by the International Energy Agency (IEA). The Production Gap drew critical context from the Intergovernmental Panel on Climate Change’s (IPCC) work. It does this by highlighting:
The IPCC’s Global Warming of 1.5°C report published last year established that 66 per cent of coal fired electricity must shut down by 2030, with a complete shutdown needed by 2050 to stay under 1.5°C of warming.
It projected a near complete phase-out of all fossil fuel use by 2050, unless it is combined with carbon capture and storage technology. Even with such technology, the IPCC considered that natural gas use by 2050 would account for less than a tenth of electricity generation.
The new Production Gap report showed that countries are on track to produce 150 per cent more coal in 2030 than consistent with a 2°C pathway, and 280 per cent more than consistent with 1.5°C.
Oil production in 2030 was set to overshoot a 2°C-consistent pathway by 16 per cent and a 1.5°C-consistent pathway by 59 per cent. For gas, the overshoot figures were 14 per cent for 2°C and 70 per cent for 1.5°C.
This discrepancy was even more damning than the ‘emissions gap’ documented by previous UN Environment reports. That gap was between the cumulative effect of countries’ national climate targets, and the global level of ambition needed to stay within 1.5°C.
“With respect to fossil fuels, the production gap was even larger than the emissions gap,” according to the latest report.
Effectively, countries planned to increase production beyond levels consistent with their stated climate targets, which were not ambitious enough in the first place. There was a lack of joined-up thinking at the national level about climate policy and energy policy.
Decision makers sit on the fence this way to satisfy disparate domestic political interests —convenient, until the bill comes due.
Unlike the World Energy Outlook, which is content to highlight a ‘business-as-usual’ projection, the new report placed the risk of stranded investment front and centre.
It makes clear that “a production gap of this magnitude implies a risk of substantial over-investment in fossil fuel exploration, development, and infrastructure.”
Any further fossil investment after this point — especially in coal, and especially in the developed world — cannot expect bailouts or compensation when it is economically undercut by developments in climate policy.
Fossil fuel producers recognise this inevitability, which is why the messaging has shifted to ‘clean’ technologies other than renewables. The IPCC projects that, after reaching net zero emissions by 2050, the world has to proceed on a ‘net negative’ emissions trajectory for the rest of the century.
This requires significant enhancement of natural greenhouse gas sinks (such as forests), as well as some amount of carbon capture and storage technology.
This latter element (CCS technology) has been seized upon as a way to continue reliance on fossil fuels. The authors of the Production Gap report put such thinking on notice, stating that “we excluded scenarios that rely heavily on negative emissions or ‘carbon dioxide removal’ (CDR) technologies to meet temperature limits”.
To support their decision, they cite the “multiple feasibility and sustainability constraints” of such technology identified by the IPCC in its 1.5°C report.
While they do use projections which rely less heavily on such technology, they caution that these are subject to “a heavy caveat of uncertainty” and hence do pose significant risks.
“Negative emission options”, in their view, “may not ultimately prove technically or biophysically achievable or affordable”. CCS for power plants, the largest source of emissions, “has not yet been demonstrated.”
They reiterate the IPCC’s warning that “the large-scale deployment of CDR may involve unacceptable ecological and social impacts”, for example, “compet(ing) with food production or habitat areas for available land, with the potential for adverse impacts on biodiversity, food security, water resources, and human rights”.
This context — often missing from energy sector projections — is crucial to making policy decisions that not only reduce emissions, but ensure equity and justice to the most vulnerable.
Another climate ‘technology’ popular in the fossil industry is natural gas, which emits approximately half as much carbon dioxide as coal per unit of energy generated.
The spate of coal plant closures in the US has been driven by the availability of domestically ‘fracked’ gas. This has enhanced its reputation as a viable ‘transition fuel’ before the mainstreaming of renewables.
The Production Gap report highlights recent research showing that “increasing natural gas production and the resulting decrease in gas prices may […] lead to a net increase in global emissions and risk delaying the introduction of near-zero-emission energy systems” (emphasis ours). This is owing to the projected increase in gas production across countries.
Natural gas can be a useful transition fuel, if it is used by developing countries like India, who are only now mainstreaming energy access.
If countries which have relied on coal for centuries — which have the economic capacity to adopt renewables today — choose to participate in the gas ‘revolution’, natural gas’ role in an energy ‘transition’ is severely undermined.
Finally, the authors of this report engaged with the unfortunate fact that — despite climate policy having everything to do with fossil fuels — forums such as the United Nations Framework Convention on Climate Change stayed away from directly and transparently discussing fossil fuel production.
They were clear that “international cooperation plays an important role in catalysing supply-side policy” because it can “encourage countries to adopt more ambitious policies by offering assurances of collective action”.
“That collective action can”, in their view, “increase policy effectiveness”. Fossil fuels are traded internationally; hence “supply-side measures are more effective when countries adopt them together.”
The Paris Agreement has some avenues for such coordination — Article 6.8, for example, sets up a mechanism for “non-market cooperation”, but it has not been properly fleshed out.
While developed to address a very different type of existential threat, a non-proliferation approach could be useful in tackling the fossil fuel roots of climate change. With its pointed focus on supply, the Production Gap report could be the catalyst to amp up that discussion.
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