UNEP's key finding of its 2023 Production Gap Report. Credit: UNEP

110% more fossil fuels planned in 2030 than 1.5C allows

While 17 of the 20 countries featured in a new report by UNEP have pledged to achieve net-zero emissions and many have launched initiatives to cut emissions from fossil fuel production activities, none have committed to reducing coal, oil, and gas production in line with limiting warming to 1.5C

The report, the 2023 Production Gap Report: “Phasing down or phasing up? Top fossil fuel producers plan even more extraction despite climate promises”, has been released early this month ahead of the UN Climate Change Conference, COP28, scheduled between Nov 30 to Dec 12 in Dubai, the United Arab Emirates. It finds that governments plan to produce around 110% more fossil fuels in 2030 than would be consistent with limiting warming to 1.5C, and 69% more than would be consistent with 2C.    

This comes despite 151 national governments having pledged to achieve net-zero emissions and the latest forecasts which suggest global coal, oil, and gas demand will peak this decade, even without new policies. When combined, government plans would lead to an increase in global coal production until 2030, and in global oil and gas production until at least 2050, creating an ever-widening fossil fuel production gap over time, the report noted.

The 2023 Production Gap Report is produced by Stockholm Environment Institute (SEI), Climate Analytics, E3G, International Institute for Sustainable Development (IISD) and the UN Environment Programme (UNEP). It assesses governments’ planned and projected production of coal, oil, and gas against global levels consistent with the Paris Agreement’s temperature goal. More than 80 researchers from over 30 countries contributed to the analysis and review, spanning numerous universities, think tanks, and other research organizations.

The report provides newly expanded country profiles for 20 major fossil-fuel-producing countries; be they Australia, Brazil, Canada, China, Colombia, Germany, India, Indonesia, Kazakhstan, Kuwait, Mexico, Nigeria, Norway, Qatar, the Russian Federation, Saudi Arabia, South Africa, the United Arab Emirates (COP28 host), the United Kingdom of Great Britain and Northern Ireland, and the United States of America. 

These profiles show that most of these governments continue to provide significant policy and financial support for fossil fuel production.

“We find that many governments are promoting fossil gas as an essential ‘transition’ fuel but with no apparent plans to transition away from it later,” says Ploy Achakulwisut, a lead author on the report and SEI scientist. “But science says we must start reducing global coal, oil, and gas production and use now, along with scaling up clean energy, reducing methane emissions from all sources, and other climate actions, to keep the 1.5°C goal alive.”   

Despite being the root cause of the climate crisis, fossil fuels have remained largely absent from international climate negotiations until recent years. At COP26 in late 2021, governments committed to accelerating efforts towards “the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies”, though they did not agree to address the production of all fossil fuels.  

l Credit: SEI

Angela Picciariello, Senior Researcher at IISD said despite governments around the world signing up to ambitious net zero targets, global coal, oil and gas production are all still increasing while planned reductions are nowhere near enough to avoid the worst effects of climate change. The world is already on track this decade to produce 460% more coal, 82% more gas, and 29% more oil than would be in line with the 1.5C warming target. 

“This widening gulf between governments’ rhetoric and their actions is not only undermining their authority but increasing the risk to us all. Ahead of COP28, governments must look to dramatically increase transparency about how they will hit emissions targets and bring in legally binding measures to support these aims,” said Ms. Picciariello.

Michael Lazarus, a lead author on the report and SEI US Centre Director said COP28 could be the pivotal moment where governments finally commit to the phase-out of all fossil fuels and acknowledge the role producers have to play in facilitating a managed and equitable transition. Governments with the greatest capacities to transition away from fossil fuel production bear the greatest responsibility to do so while providing finance and support to help other countries do the same, he added.

Inger Andersen, Executive Director of UNEP, said governments’ plans to expand fossil fuel production are undermining the energy transition needed to achieve net-zero emissions, throwing humanity’s future into question. Powering economies with clean and efficient energy is the only way to end energy poverty and bring down emissions at the same time, she said. 

“Starting at COP28, nations must unite behind a managed and equitable phase-out of coal, oil and gas_ to ease the turbulence ahead and benefit every person on this planet,” Ms Andersen remarked.   

UN Secretary-General António Guterres said governments are literally doubling down on fossil fuel production that spells double trouble for people and planet.

“We cannot address climate catastrophe without tackling its root cause: fossil fuel dependence. COP28 must send a clear signal that the fossil fuel age is out of gas — that its end is inevitable. We need credible commitments to ramp up renewables, phase out fossil fuels, and boost energy efficiency, while ensuring a just, equitable transition,” Mr Guterres pointed out.

The report suggests governments aim for a near total phase-out of coal production and use by 2040, and a combined reduction in oil and gas production and use by three-quarters by 2050 from 2020 levels, at a minimum, given risks and uncertainties of carbon capture and storage and carbon dioxide removal.

Governments with greater capacity to transition away from fossil fuels should aim for more ambitious reductions and help support the transition processes in countries with limited resources, the report noted. 

As cited by previous studies, July 2023 was the hottest month ever recorded, and most likely the hottest for the past 120,000 years. Across the globe, deadly heat waves, droughts, wildfires, storms, and floods are costing lives and livelihoods, making clear that human-induced climate change is here. Global carbon dioxide emissions — almost 90% of which come from fossil fuels — rose to record highs in 2021–2022.

A sign set up by the roadside in Ayutthaya province late last year warning passers-by to be mindful about the flood-affected victims staying overnight on the road. Photo: Sayan Chuenudomsavad

Adaptation gap

Alongside the Production Gap report, the Adaptation Gap report has also been released. 

The report, the Adaptation Gap Report 2023: Underfinanced. Underprepared; Inadequate investment and planning on climate adaptation leaves world exposed, finds that progress on climate adaptation is slowing on all fronts when it should be accelerating to catch up with rising climate change impacts and risks, and failure to enhance adaptation has huge implications for losses and damages.

The adaptation finance needs of developing countries are 10-18 times as big as international public finance flows – over 50 per cent higher than the previous range estimate. The growing gap results from rising adaptation needs and faltering adaptation finance, the report noted.

As a result of the growing adaptation finance needs and faltering flows, the current adaptation finance gap is now estimated to be US$194-366 billion per year. At the same time, adaptation planning and implementation appear to be plateauing. This failure to adapt has massive implications for losses and damages, particularly for the most vulnerable, the report further noted.

After a major update over previous years, the report finds that the funds required for adaptation in developing countries are higher – estimated to be in a plausible central range of US$215 billion to US$387 billion per year this decade.

The modelled costs of adaptation in developing countries are estimated at US$215 billion per year this decade and are projected to rise significantly by 2050. The adaptation finance needed to implement domestic adaptation priorities, based on extrapolation of costed Nationally Determined Contributions (NDCs) and National Adaptation Plans to all developing countries, is estimated at US$387 billion per year

Despite these needs, public multilateral and bilateral adaptation finance flows to developing countries declined by 15 per cent to US$21 billion in 2021. This dip comes despite pledges made at COP26 in Glasgow to deliver around US$40 billion per year in adaptation finance support by 2025 and sets a worrying precedent.

While five out of six countries have at least one national adaptation planning instrument, progress to reach full global coverage is slowing. And the number of adaptation actions supported through international climate funds has stagnated for the past decade.

Ambitious adaptation

Ambitious adaptation can enhance resilience, which is particularly important for low-income countries and disadvantaged groups and head off losses and damages.

The report points to a study indicating that the 55 most climate-vulnerable economies alone have experienced losses and damages of more than US$500 billion in the last two decades. These costs will rise steeply in the coming decades, particularly in the absence of forceful mitigation and adaptation.

Studies indicate that every billion invested in adaptation against coastal flooding leads to a US$14 billion reduction in economic damages. Meanwhile, US$16 billion per year invested in agriculture would prevent approximately 78 million people from starving or chronic hunger because of climate impacts.

However, neither the goal of doubling 2019 international finance flows to developing countries by 2025 nor a possible New Collective Quantified Goal for 2030 will significantly close the adaptation finance gap on their own and deliver such benefits, the report pointed out.

“The Adaptation Gap Report shows a growing divide between need and action when it comes to protecting people from climate extremes. Action to protect people and nature is more pressing than ever,” UN Secretary-General António Guterres said in his message on the report. “Lives and livelihoods are being lost and destroyed, with the vulnerable suffering the most. We are in an adaptation emergency. We must act like it. And take steps to close the adaptation gap, now.”

This report identifies seven ways to increase financing, including through domestic expenditure and international and private sector finance. Additional avenues include remittances, increasing and tailoring finance to small and medium enterprises, implementation of Article 2.1(c) of the Paris Agreement on shifting finance flows towards low-carbon and climate-resilient development pathways, and a reform of the global financial architecture, as proposed by the Bridgetown Initiative.

The new loss and damage fund will also be an important instrument to mobilize resources, but issues remain. The fund will need to move towards more innovative financing mechanisms to reach the necessary scale of investment, the report noted.

Source: UNEP