Phaseout Pathways for Fossil Fuel Production Within Paris-compliant Carbon Budgets

This (non-peer reviewed) scholarly paper, funded by IISD, sets out to determine Paris-aligned phaseout pathways for oil and gas production in different countries. It uses the framing of “common but differentiated responsibilities and respective capabilities” (a key equity principle contained in international climate treaties), taking this to mean that developed countries must act first and fastest to mitigate emissions and must provide financial and other support to enable developing countries to mitigate climate change.  

The methodology starts by first identifying the carbon budget left for fossil fuels, once process emissions from cement have been netted off. Crucially, carbon dioxide removal (CDR) options are not considered, meaning that the carbon budget size cannot be increased, and the analysis assumes that carbon capture & storage (CCS) does not enable continued fossil fuel use. Next, a coal budget was determined, and subtracted from the carbon budget based on its current emission share. This leaves a remaining budget to be allocated between oil and gas. Allocation of this remaining budget was based on a measure of countries’ capacities to transition away from oil and gas production, based on the contribution of oil and gas to national GDP. 

The analysis finds that wealthy nations who produce a third of global oil and gas need to cut output by 74% by 2030 and end oil and gas production by 2034. This action can keep the world on track for 1.5°C and give poorer nations longer to replace their income from fossil fuel production. The poorest nations need to end production by 2050 to stay within the carbon budget. 

Given the lack of room to move in the budget, the paper finds that all countries need to begin a rapid and just phaseout of existing production, although as noted above the timing of such a phaseout is differentiated. The report also confirms findings from the other analyses by IEA and IISD that there is no opportunity for opening new fossil fuel production infrastructure of any kind. 

This report supports the proposition that complete phaseout is required under a set of 1.5°C pathways, under specific assumptions that avoid reliance on CCS/CDR. It highlights the rapid speed at which the phaseout must occur, based on a ‘required by science’ perspective, as opposed to other studies that account for political feasibility. It also highlights that even when phaseout schedules are differentiated on the basis of equity considerations, lower-income countries also need to phase out rapidly.