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    The Gap That Persists

    Stockholm (NordSIP) – On October 20, yet another alarming scientific report hit the news. The 2021 Production Gap Report, co-authored by the Stockholm Environment Institute (SEI), International Institute for Sustainable Development (IISD), ODI, E3G, and UNEP, was first launched in 2019. This year, more than 80 researchers contributed to the analysis and review, spanning numerous universities, think tanks and other research organisations, according to the press release. The main message conveyed by the authors is unequivocal: the currently planned fossil fuel production remains dangerously out of sync with the Paris Agreement limits.

    Tuning in to the launch webinar on October 21, NordSIP finds out more about the report’s findings and the conclusions that the concerned researchers are eager to communicate ahead of the upcoming COP26. Deftly moderated by the project’s Lead Press Officer, Annika Flensburg from Stockholm Environment Institute, the authors of the report’s various chapters explain briefly their methodology and present the results.

    The findings are depressing. According to Peter Erickson from SEI, the world’s governments plan to produce around 110% more fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C, and 45% more than compatible with 2°C. These production plans and projections would lead to about 240% more coal, 57% more oil, and 71% more gas in 2030 than would be consistent with limiting global warming to 1.5°C. “If carbon dioxide removal technologies fail to develop at a large scale, fossil fuel production would need to decline even more rapidly,” warns Erickson.

    The sad fact is that governments continue to commit more funds to fossil fuels than clean energy through their COVID-19 recovery plans. According to the report, since the adoption of the Paris Agreement, public finance institutions have spent at least USD 294 billion supporting fossil fuels overseas. Although governments have an opportunity to reduce production through their leverage in state-owned companies, current trends show an increase in support for fossil fuel production and infrastructure instead. “Early efforts from development finance institutions to cut international support for fossil fuel production are encouraging, but these changes need to be followed by concrete and ambitious fossil fuel exclusion policies to limit global warming to 1.5°C”, concludes Lucile Dufour, Senior Policy Advisor at IISD.

    A significant part of the report is dedicated to a detailed analysis of key countries’ fossil fuel production and policies. Miquel Muñoz Cabré from SEI explains how the data was collected and compiled. According to him, although these countries have announced various emission reduction targets through their nationally determined contributions and even set net-zero goals, few have assessed whether their projected fossil fuel production is compatible with limiting global warming to 1.5°C or well below 2°C. Moreover, most oil and gas producers plan to increase production out to 2030 or beyond, while several major coal producers are planning on continuing or increasing production.

    According to Harro van Asselt from the University of Eastern Finland, part of the solution should be more transparency. Verifiable and comparable information on fossil fuel production and support from governments and companies is essential to addressing the production gap. Existing transparency initiatives shed some light on fossil fuel production and its implications for meeting climate goals. Still, according to the report, they are incomplete, often inconsistent and scattered across various, mostly voluntary, government-driven and non-governmental efforts.

    At the end of the launch event, Andrea Guerrero García, the UN Secretary General’s Climate Action Team, sums up neatly the report, which she dubs “a wake-up call”. According to her, expanding fossil fuel production today is equivalent to increasing the production of floppy disks in the early 2000s. It is baffling, therefore, that both developed and developing countries seem to be doing it. “There is still time for governments to initiate the necessary discussion about a just transition,” she concludes on a slightly more positive note.

     

    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

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