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IEA Urges World Leaders to Stop Investing in New Oil and Gas

The International Energy Agency presses this point just over two weeks before the COP26 climate summit in Glasgow.

Thick smoke rises due to fire breaks out at Pertamina's oil refinery at the Cilacap, Central Java province, Indonesia on June 12, 2021.

Just over two weeks out from the COP26 climate summit in Glasgow, the International Energy Agency on Wednesday delivered a straightforward and urgent message to world leaders: Fossil fuels must stay in the ground if planetary warming is to be limited to 1.5°C by the end of the century.

The IEA’s formal recognition of the 1.5°C target — the most ambitious aim of the Paris climate accord — was hailed as a “major shift” in the right direction for the influential agency, whose annual World Energy Outlook (WEO) report is often used as a resource by policymakers and businesses across the globe.

David Tong, Global Industry Campaign manager at Oil Change International, said Wednesday that the latest iteration of the WEO — while far from flawless in its projections and recommendations — “confirms that investment in new fossil fuel projects will undermine our chance to limit warming to 1.5ºC.”

“Today’s report is particularly remarkable because of the IEA’s history,” Tong added. “Big oil and gas companies like Shell and BP have relied on previous, less ambitious IEA scenarios to justify inadequate climate plans and pledges. That hiding place is now gone.”

The IEA’s report specifically finds that even if nations meet their current climate pledges, the world will see just 20% of the greenhouse gas emissions reductions necessary by 2030 to achieve net-zero emissions by 2050.

“Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade,” Fatih Birol, the IEA’s executive director, said in a statement. “Some 70% of that additional spending needs to happen in emerging and developing economies, where financing is scarce and capital remains up to seven times more expensive than in advanced economies.”

Pointing to the upcoming climate summit, the IEA’s report states that “making the 2020s the decade of massive clean energy deployment will require unambiguous direction from COP26.”

“For all the advances being made by renewables and electric mobility, 2021 is seeing a large rebound in coal and oil use,” the report notes. “Largely for this reason, it is also seeing the second‐largest annual increase in CO2 emissions in history.”

As part of its detailed analysis, the agency spotlights four measures that “can help to close the gap between today’s pledges and a 1.5 °C trajectory over the next ten years,” including:

  • A massive additional push for clean electrification that requires a doubling of solar [photovoltaics] and wind deployment relative to the [announced pledges scenarios]; a major expansion of other low-emissions generation, including the use of nuclear power where acceptable; a huge build-out of electricity infrastructure and all forms of system flexibility, including from hydropower; a rapid phase-out of coal; and a drive to expand electricity use for transport and heating;
  • A relentless focus on energy efficiency, together with measures to temper energy service demand through materials efficiency and behavioral change;
  • A broad drive to cut methane emissions from fossil fuel operations; and
  • A big boost to clean energy innovation.

“The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” said Birol. “Governments need to resolve this at COP26 by giving a clear and unmistakeable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense.”

Climate campaigners said that the IEA’s new report bolsters the agency’s May finding that countries worldwide must immediately stop approving new coal-fired power plants and oil and gas fields to avert the worst of the planetary emergency, which is already fueling deadly extreme weather across the globe. The IEA’s recommendation aligns with the United Nations’ recent warning that unless rapid and sweeping action is taken to cut emissions — particularly by rich nations most responsible for the climate crisis — the world will remain on a path to “catastrophic” heating.

The report comes as the Biden administration is facing backlash from green groups over its plan to resume oil and gas lease sales for public lands and waters, a decision that environmentalists say flies in the face of the White House’s pledge to treat the climate crisis as an “existential threat.”

“It is now beyond doubt that there is no need for further coal, oil, and gas exploration if we are to avoid the most dangerous impacts of climate change, which are already bringing greater hunger and poverty in some of the poorest parts of the world,” Lyndsay Walsh, Oxfam Great Britain’s policy adviser on climate change, said in a statement Wednesday.

While applauding the IEA for “moving towards a 1.5˚C global warming limit” and urging governments “to end new fossil fuel extraction,” May Boeve of 350.org warned that the agency’s net-zero roadmap “remains far below what is vitally needed.”

“With less than three weeks until COP26, this report is an important milestone that hopefully sends a message ahead of these important climate negotiations,” said Boeve. “But net-zero is not enough. Real climate leadership to reach 1.5˚C means funding a just transition, not fossil fuels.”

Kelly Trout, research co-director at Oil Change International, offered a similar reaction, saying in a statement that “the IEA’s analysis finds no justification for new oil and gas fields despite still containing some risky modeling choices that prolong pollution.”

“Governments that have relied on the WEO in the past to justify their energy investments have no credibility in ignoring the IEA’s guidance now, when it’s finally consistent with the 1.5°C limit they agreed to in Paris,” Trout added.

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