At present, most global GHG emissions – over 75% – are from fossil fuels. By necessity, reaching net zero emissions therefore requires dramatic reductions in fossil fuel demand and supply.
Though fossil fuels have not been explicitly addressed by the UN Framework on Climate Change, a conversation has emerged about possible “supply-side” agreements on fossil fuels and climate change. For example, a number of countries, including Denmark, France, and New Zealand, have started taking measures to phase out their oil and gas production. In the United States, President Joe Biden has put a pause on new oil and gas leasing on federal lands and waters, while Vice President Kamala Harris has previously proposed a “first-ever global negotiation of the cooperative managed decline of fossil fuel production”.
This paper aims to contribute to this emerging discussion. The authors present a simple analysis on where fossil fuel extraction has happened historically, and where it will continue to occur and expand if current economic trends continue without new policy interventions. By employing some simple scenario analysis, the authors also demonstrate how the phase-out of fossil fuel production is likely to be inequitable among countries, if not actively and internationally managed.
- Based on current economic trends and without new policy interventions, the projected “baseline” trajectories of global fossil fuel production are vastly divergent from those that would be consistent with limiting warming to 1.5°C and well below 2°C. This discrepancy necessitates the alignment of future production with pathways consistent with the Paris Agreement’s temperature goals, and calls into question how countries might cooperate to manage such a decline.
- Today’s largest producers are expected to continue dominating the global share of production. Between 2019 and 2030, the largest increases in annual oil production by volume are projected to occur in the United States, followed by Brazil and Iran. The largest increases in annual gas production are projected to occur in the United States, followed by Canada and Saudi Arabia. Annual coal production is projected to increase in only one country: India.
- Over the next two decades, the trajectories of baseline oil and gas production in countries with the highest income level would exceed global pathways consistent with limiting warming to 1.5°C. The same is true for countries with the lowest level of fossil fuel revenue dependence. If not actively and internationally managed, a global wind-down of production in line with international climate goals could therefore be highly inequitable among countries.