Countries promised to ditch fossil fuels, but instead they’re booming

When nations at last year’s global climate conference historically agreed to transition away from coal, oil and gas, Australia’s climate minister predicted that the “age of fossil fuels will end.” Norway’s foreign minister lauded countries for at last tackling the climate crisis “head-on.” President Joe Biden said the deal put the world “one significant step closer” to its climate goals.

But one year later, these same wealthy countries are undercutting it, by scaling up exports and launching new fossil fuel projects that could last for decades. At the same time, major oil companies have weakened their climate pledges.

One think tank analysis chronicles how countries are on course for an “oil and gas exploration spree” in the wake of the pledge. Using industry data, it listed the United States, Norway and Australia, as well as China, among the 10 largest issuers of drilling permits in the past 12 months – and said huge blocks will come up for bidding over the next months. The United States is producing more oil than any country, ever – a trajectory that is set to accelerate with the election of Donald Trump, who referred to oil and gas as “liquid gold” in a victory speech.

Those moves fuel a sense among scientists and policy experts that the world has squandered a crucial year and raise questions about how effectively the U.N. talks can address this core part of planetary warming.

“This is not some midcentury goal. We have no time. And that is the piece that countries did not take seriously when they went home” from last year’s conference in Dubai, said Rachel Cleetus, the policy director with the climate and energy program at the Union of Concerned Scientists.

The world has only about five years left at current emissions levels before it exceeds the carbon budget that would keep temperature increases below 2.7 degrees Fahrenheit, a key goal of the Paris agreement, based on carbon budget figures in a recent U.N. emissions report.

Humanity could generate greenhouse gases at current levels for roughly another 22 years before breaking the budget for keeping temperatures below 3.6 degrees Fahrenheit.

As countries prepare for COP29 in Baku, Azerbaijan, global electricity demand is soaring faster than renewables come online, prolonging the opportunity for fossil fuels.

Earlier this year, the CEO of Saudi Aramco said the world should “abandon the fantasy” of an oil and gas phaseout. If Trump pulls the United States from the Paris agreement, and the U.N. Framework Convention on Climate Change altogether, it will set an example that countries that heavily contributed to driving up the Earth’s temperature can’t be depended upon to help solve it.

The agreement in Dubai marked the first time nations had ever specifically mentioned the use of fossil fuels, which account for about 90% of the planet-warming emissions pumped into the atmosphere. The deal called for “accelerating action in this critical decade,” a nod to science showing the world must curb emissions – right away – to limit global warming to well below 3.6 degrees Fahrenheit compared with preindustrial levels.

But under current policies, the world is on track to blow past this threshold – all as deadly and costly disasters, amplified by emissions, strike in one continent after the next.

Industry players say that they are playing a responsible role and have committed to significantly limiting emissions of methane, a potent greenhouse gas. They also note that they are providing a measure of geopolitical stability in meeting the high energy demand.

In Baku, the issue of fossil fuels will have a secondary place on the agenda. That is partly because of the cyclical nature of the talks and where only a few issues – this year, finance for vulnerable countries – can be prioritized in the consensus-based system. Host Azerbaijan, whose economy relies on oil and gas income, didn’t mention the fossil fuel transition in its opening letter for delegations.

But it also reflects a reality: Many of the obstacles to the energy transition cannot be resolved in international talks.

Politicians in most countries are reluctant to take on the influential fossil fuel lobby. Oil and gas remain highly profitable businesses – and even if the market dwindles, companies make competing claims to stay on as the last providers. Regulations and incentives can boost renewables, but for now, most major fossil fuel companies are investing just a sliver of their revenue into cleaner fuels and technologies.

“We’re dealing with companies that want to go on with oil and gas as long as possible,” said Mark van Baal, a Dutch activist investor who has pushed for greener policies in fossil fuel companies. “This is their comfort zone. This is how they got to the top of the pyramid.”

Van Baal cited Shell, the world’s fourth-largest oil and gas company, as one example. In 2021, the company had announced a series of groundbreaking emissions-reduction targets.

But this year, the company, under a new CEO, watered down an emissions-reduction target for 2030 and eliminated the target for 2035 – which had originally called for a 45% reduction in the carbon intensity of its productions.

The company says it plans to expand its production of liquefied natural gas, the least emissions-intensive fossil fuel, and keep oil production flat for the rest of the decade.

A Shell spokeswoman said that Shell is making “good progress on our climate targets” and supports the goals of the Paris agreement. Shell CEO Wael Sawan said that “while the world still relies on oil, we will supply it – but with lower emissions.”

Van Baal said that the policies of companies such as Shell amount to a bet “on the failure of Paris.”

Clean power did make some gains last year. In September, Britain – the birthplace of coal-fired power – shuttered its last coal plant. The country’s new prime minister, Keir Starmer, ruled out issuing new licenses for oil and gas drilling off the Scottish coast. And globally, according to the energy think tank Ember, strong uptake of solar and wind power drove the share of renewables in the global electricity mix above the 30% mark. Globally, investment in clean energy is twice the amount going to fossil fuels.

But the International Energy Agency says the boom in renewables won’t by itself squeeze space for oil, gas and coal quickly enough. In a 2023 report on how the world might reach carbon neutrality by 2050, the agency said that fossil fuels would have to flip from providing four-fifths of the global energy supply to less than one-fifth. The decline would be significant enough that, after 2023, the world would no longer need new large-scale oil and gas projects.

But these projects are taking off nonetheless.

The International Institute for Sustainable Development, which tracks oil and gas data, says that countries this year have issued permits that could emit more than 2 billion tons of carbon dioxide, if fully tapped. That figure – equal to about 3.5% of the world’s annual output – is part of a downward trend over the past decade.

But the institute says that there is a “massive surge” forthcoming, with countries planning over the next six months to issue licenses that could account – if fully tapped – for 15 billion tons of emissions. That’s roughly one-quarter of the global emissions output in a year.

“It’s a bid of a Damocles sword hanging over our head,” said Olivier Bois von Kursk, an IISD policy adviser.

He noted that Australia and the United States will be among the biggest issuers in the next bidding rounds. They are countries that have the wealth to transition away more quickly; leaders from poorer, more vulnerable nations have called on them to take on the leading role.

“These are net exporters that are claiming to be climate leaders while expanding their emissions,” he said. “I think it is absolutely indefensible at this point.”

António Guterres, the United Nations secretary general, said earlier this year that the largest emitters must lead in the phaseout and stop their expansion “immediately.”

“When governments sign new oil and gas licenses, they are signing away our future,” he said.