2021 Report
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Summary of Key Findings
As countries set net-zero emission targets, and increase their climate ambitions under the Paris Agreement, they have not explicitly recognized or planned for the rapid reduction in fossil fuel production that these targets will require. Rather, the world’s governments plan to produce more than twice the amount of fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C. The production gap has remained largely unchanged since our first analysis in 2019.
According to our assessment of recent national energy plans and projections, governments are in aggregate planning to produce around 110% more fossil fuels in 2030 than would be consistent with limiting global warming to 1.5°C, and 45% more than would be consistent with limiting warming to 2°C, on a global level. By 2040, this excess grows to 190% and 89%, respectively.
Global fossil fuel production must start declining immediately and steeply to be consistent with limiting long-term warming to 1.5°C.
However, governments are collectively projecting an increase in global oil and gas production, and only a modest decrease in coal production, over the next two decades. This leads to future production levels far above those consistent with limiting warming to 1.5°C or 2°C.
In 2030, governments’ production plans and projections would lead to around 240% more coal, 57% more oil, and 71% more gas than would be consistent with limiting global warming to 1.5°C.
G20 countries have directed around USD 300 billion in new funds towards fossil fuel activities since the beginning of the COVID-19 pandemic — more than they have toward clean energy.
In contrast, they have significantly decreased new international public finance for fossil fuel production in recent years; multilateral development banks (MDBs) and G20 development finance institutions (DFIs) holding a total of over USD 2 trillion in assets have adopted policies that exclude fossil fuel production activities from future finance.
This report details the government strategies, support, and plans for fossil fuel production in 15 major producer countries. Most major oil and gas producers are planning on increasing production out to 2030 or beyond, while several major coal producers are planning on continuing or increasing production.
This report provides country profiles for Australia, Brazil, Canada, China, Germany, India, Indonesia, Mexico, Norway, Russia, Saudi Arabia, South Africa, the United Arab Emirates, the United Kingdom, and the United States. The profiles summarize each country’s stated national climate ambitions; available information on government views, projections, and support for fossil fuel production; and emerging policies and discussions towards a managed and equitable wind-down of production.
These countries have announced GHG emission reduction targets through their NDCs and, in some cases, have set net-zero goals. However, few have assessed, at least publicly, whether their projected fossil fuel production is consistent with the goals of the Paris Agreement. This focus on emissions alone ignores their roles and responsibilities in producing the predominant source of these emissions.
Verifiable and comparable information on fossil fuel production and support — from both governments and companies — is essential to addressing the production gap. Governments should strengthen transparency by disclosing their production plans in their climate commitments under the Paris Agreement.
Credit: Kiara Worth, IISD
While existing transparency initiatives have shed some light on fossil fuel production, the available information is incomplete, inconsistent, and scattered. Addressing the production gap requires governments to be far more transparent in their plans and projections for oil, gas, and coal production.
Governments have already committed to reporting climate-related information as part of the Paris Agreement. This reporting currently focuses on emissions goals, but governments could also include production plans and projections — and how these plans align with climate goals — in their NDCs, their long-term, low-emissions development strategies (LT-LEDS), and their progress reports on implementing and achieving their NDCs.
Governments can also mandate that investor- and state-owned fossil fuel companies disclose their spending, project plans, emissions, and climate-related financial risks in a way that is consistent across countries.
Governments have a primary role to play in closing the production gap. In addition to strengthening measures to reduce the demand for fossil fuels, governments should also take actions to ensure a managed and equitable decline in production:
Phase out government support for fossil fuel production. Governments can end subsidies and other support for production, exclude fossil fuels from public finance, and direct greater support towards low-carbon development.
Leverage international cooperation to ensure a more effective and equitable global wind-down of production.