FOSSIL fuels aren’t mentioned in the world’s landmark deal for tackling catastrophic climate change. The 2015 Paris Agreement commits leaders to holding warming to 1.5°C above pre-industrial levels, or “well below” 2°C at the worst – but nowhere does it say how much oil, gas or coal must be left in the ground. This is convenient for world leaders, who are happy to talk about curbing fossil fuel demand, but desperate to continue business as usual when it comes to extraction – a disconnect that risks serious consequences for the planet’s thermostat.
Political aversion doesn’t change the facts. Staying under 2°C warming means huge chunks of fossil fuel reserves – the known amount that can be extracted in a profitable way – must remain unused. A estimated that four-fifths of coal, half of gas and a third of oil reserves globally must be left in the ground.
Despite such warnings, six years on from Paris and with the pivotal COP26 climate summit looming in November, governments are still struggling to reduce fossil fuel extraction.
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Take the UK. It has an internationally respected record on policies to curb demand, including an ambitious 2030 ban on new petrol and diesel car sales announced last November. But just a few months later, on 24 March, the UK government backed future permits to extract oil and gas in the North Sea, disappointing campaigners who had called for a ban. Ministers have previously justified continued extraction on the grounds the country still needs fossil fuels and, if it doesn’t produce them, another nation will.
Amount UK gas and oil firms will have to cut carbon emissions by 2025”
Nonetheless, in a sop to climate concerns, the UK government’s recent green light was coupled with carbon emissions targets for industry (see “Tiny tweaks are not enough“) and a pledge that new drilling would only be approved if it meets an as-yet-undefined “climate compatibility checkpoint”. Even so, a week later the UK government’s chief climate adviser, Chris Stark, branded the emissions targets unambitious.
Richard Folland, a former British diplomat now at UK think tank Carbon Tracker, was unsurprised the UK government stopped shy of blocking new oil and gas projects. “Where I think they’ve missed a trick is they could have announced a road map for a managed phase-out,” he says. The UK could have been bolder given its presidency of COP26, he says.
One country does stand out for its bold action on limiting supply, despite being the European Union’s biggest oil producer. In December 2020, Denmark declared it would allow no new oil and gas extraction, marking an end to a chapter that started with its first licences offered in 1972.
“Worrying about who has the most efficient oil platforms is frankly a distraction”
“It’s good for our climate profile, it’s good for jobs and it’s good for Danish industry, which will gain much more from doing this than being an oil-producing nation,” says Denmark’s climate envoy, Tomas Anker Christensen, who notes the country’s leadership on wind power.
A focus on green energy should attract investment and boost jobs in the sector, but why not keep drilling oil alongside increasing renewables? “For a small economy like the Danish one, the narrative, the clarity of purpose is stronger than if we do both,” says Christensen.
There is self-interest here alongside concern about unchecked fossil fuel extraction busting global climate targets. Denmark is home to the world’s top maker of wind turbines and hosts many of the facilities for Spanish-German firm Siemens Gamesa, one of the largest manufacturers.
Denmark’s state-owned energy company has also morphed from mostly producing hydrocarbons to being the world’s biggest offshore wind farm developer. It is now moving forward with a ££24.8 billion artificial island to connect mega wind farms in the North Sea, using some of the electricity to create hydrogen that it can export, as it did with oil and gas.
Christensen acknowledges not every country can easily ditch the extraction of fossil fuels, as it is a major source of tax income for some governments. “Every country has a different industrial profile. It’s really up to every nation how they go about this,” he says. Other countries have banned some types of new oil and gas extraction, but they tend to be smaller producers, including Costa Rica, New Zealand and France.
Bigger producers will follow, if Denmark has its way. The country is planning to show leadership by launching an alliance on ending oil and gas, akin to the UK’s Powering Past Coal Alliance. Christensen says it will show “how we can play a stronger role on the supply side”. Denmark is already talking to other governments with big oil and gas reserves, he says.
Non-proliferation treaty
Campaigners aren’t sitting idle either. Since 2018, Andrew Simms at the New Weather Institute and Peter Newell at the University of Sussex, both in the UK, have been calling for a fossil fuel non-proliferation treaty, modelled on treaties limiting nuclear weapons. As with those treaties, smaller producers may have an easier time signing on and meeting targets.
No country has signalled its support yet. However, Vancouver in Canada became the first city to endorse the idea of the treaty last year, followed by Barcelona. In the UK, the small town of Lewes recently passed a motion backing it. New York City and Los Angeles are considering endorsing it.
Such local support is symbolic, as licensing powers for oil and gas are usually reserved for national or state governments. But Simms says it still helps. “Merely having this conversation shifts people’s frames of mind – it means the default becomes that we should not be locking in more [fossil fuel] capacity and infrastructure,” he says. Christensen says Denmark hasn’t yet taken a stance. “There are many challenges with doing such a treaty, including getting countries to report what they have in terms of reserves. Large producers might be reluctant to sign on to it,” he says.
Pressure is coming to bear on fossil fuel extraction from another important direction: finance. The World Bank ended funding for oil and gas exploration in 2019. The European Investment Bank is going a step further and stopping funding for all energy projects that involve fossil fuels by the end of this year. Public funds are a small fraction of financing for oil and gas projects, but they reduce the risk for private investors, says Greg Muttitt at the International Institute for Sustainable Development.
Governments are acting on financing, too. One of Joe Biden’s first actions as US President was to order a review exploring shifting the country’s international investments away from “high-carbon” projects. And on 31 March, the UK ended government support for overseas fossil fuel projects, worth billions of pounds.
It will take much more effort like this to change the global picture, however. Current plans will see fossil fuel production rise 2 per cent a year to 2030, rather than the 6 per cent a year cuts needed to restrict global warming to 1.5°C, according to a 2020 UN report.
More momentum on staunching supply may come later this year, when Carbon Tracker launches a carbon registry, mapping potential carbon dioxide emissions in fossil fuel reserves around the world, down to the level of companies and projects. The registry will mean every time a government announces a new round of licensing for oil and gas extraction, it should instantly be clear how much “unburnable carbon” it is risking, says Mark Campanale at Carbon Tracker.
Without greater action on fossil fuel supply, the Paris Agreement alone won’t stem the climate crisis. “It’s an emissions reduction treaty, it’s not a supply-constraint treaty. That’s its fundamental problem,” says Campanale.
Tiny tweaks are not enough
In the 24 March deal between the UK government and the oil and gas industry, firms will have to make a 10 per cent cut to carbon emissions from their operations by 2025 and halve them by 2030. Running oil rigs off electricity from renewable sources and using hydrogen may both play a role.
However, the UK Climate Change Committee (CCC) said on 31 March that the targets are “significantly lower” than what it has called for. But given that only 1 per cent of the UK’s emissions from consumption are driven by fossil fuel production operations, is this the equivalent of fiddling while Rome burns?
David Joffe at the CCC thinks not. “One per cent is big enough to be worth worrying about. And if the UK can take a lead on this, other countries can follow suit, which can have a bigger overall international impact,” he says.
Others disagree. “To me it sounds like a very 1990s approach to climate change, when we were just starting out and thinking, ‘Where can we make incremental improvements,’ ” says Greg Muttitt at the International Institute for Sustainable Development. “It’s not about tweaking small amounts of emissions. Worrying about who has the most efficient oil platforms is frankly a distraction.”
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