More than half of the world’s top fossil fuel producers will badly overshoot climate targets unless they ramp up their decarbonisation actions, according to a new tracking tool.
Without a serious course correction, 142 of the largest fossil fuel companies could exceed their collective production budgets for oil, gas, and coal by up to 42%, 53%, and 68% respectively by 2050, if their historical growth trends continue. All five of the biggest coal companies overshot their individual carbon budgets before 2021, and four of the five biggest oil companies are forecast to have overshot by 2025.
Published in Nature Climate Change, researchers – from the University of Queensland, INET Oxford and the Smith School of Enterprise and the Environment, Princeton University, and the Climate Accountability Institute – developed a new method to track fossil fuel producers’ compliance with the Paris Agreement using publicly available data.
“Phrases like ‘Paris aligned’ and ‘Paris compliant’ are being thrown around everywhere right now,” said Dr Saphira Rekker, assistant professor of sustainable finance at the University of Queensland and the study’s lead author. “But if we don’t have a robust and reliable way of assessing progress, those phrases don’t actually mean anything.”
“Phrases like ‘Paris aligned’ and ‘Paris compliant’ are being thrown around everywhere right now. But if we don’t have a robust and reliable way of assessing progress, those phrases don’t actually mean anything.” Dr Saphira Rekker, Assistant Professor of Sustainable Finance at the University of Queensland
The researchers’ new method expands on their original approach, that can be applied to a wider group of companies, and was demonstrated on the Paris compliance of utility and cement companies.
The 2023 study focusing on fossil fuel companies uses average growth data from 2010-2018 to predict the long-term trajectory of companies’ oil, gas and coal production, and compares this to a Paris-compliant production ‘budget’ to 2050.
Dr Matthew Ives, an INET Oxford economist, said the new method – based on absolute fossil fuel production – would make it more difficult for companies to get away with greenwashing.
“Some existing approaches have used metrics like carbon intensity that are misleading when a company’s production is growing and rely on difficult-to-source and often misleading data,” Dr Ives said. “Other approaches have enabled companies to choose their own starting point for tracking progress, allowing them to erase unflattering historical emissions.
“With our approach, anyone and everyone can evaluate fossil fuel companies for their Paris compliance – it’s much more objective.”
“With our approach, anyone and everyone can evaluate fossil fuel companies for their Paris compliance – it’s much more objective.” Dr Matthew Ives, Associate at INET Oxford
“We have got to get past the practice of simply announcing climate targets and moving on with business as usual,” said co-author Professor Chris Greig, Senior Research Scientist at Princeton’s Andlinger Center for Energy and the Environment. “When you announce a commitment, you really should have a credible plan to deliver. You must always be thinking about the future, even when it lies beyond the likely tenure of executives and directors.”
Dr Rekker said, “our tool gives executives and other stakeholders a sense of the transition and reputational risks they might face if they overshoot their production budgets and don’t course correct.
“It also provides a method for governments and civil society to hold these companies to account.”