Antonio Guterres is continuing to warn of the devastating effects of climate disruption. In June 2023, the secretary general of the United Nations (UN) once again called on world leaders to take action. Tackling climate change "must start with the polluted heart of the climate crisis: the fossil fuel industry," he said, with a very clear message: "Financial institutions everywhere must end lending, underwriting and investments in coal anywhere – including new coal infrastructure, power plants and mines."

From a climate point of view, Guterres's call for an immediate end to fossil fuel expansion is based on mathematical reasoning. To keep global warming below 1.5°C by the end of the century compared with the pre-industrial era (the most ambitious objective of the Paris Agreement), the total amount of carbon dioxide (CO₂) in the atmosphere must not exceed a certain threshold. As emissions continue to rise, the carbon budget, in other words, the cumulative emissions that can still be released – a kind of small cake that has to be shared by mankind – is becoming ever smaller.

According to the latest synthesis report by the Intergovernmental Panel on Climate Change (IPCC), the carbon budget for a 50/50 chance of staying below 1.5°C is half a trillion tonnes of CO₂, equivalent to just 12 years of emissions at current rates. For 2°C, it would be 1.15 trillion tonnes, or 28 years of emissions.

However, IPCC scientists have shown that CO₂ emissions from existing fossil infrastructures, if operating as planned, far exceed the carbon budget for staying below 1.5°C, and are roughly equivalent to the budget for 2°C. This finding suggests that further oil and gas expansion is incompatible with compliance with the Paris Agreement. "Continued installation of unabated fossil fuel infrastructure will 'lock-in' GHG emissions," the IPCC said.

In theory, it might be possible to invest in new fossil fuel-fired infrastructure if, at the same time, existing facilities were shut down. In reality, however, this hypothesis is hardly credible. "It's much easier not to open a new facility than to close an existing field," said Olivier Bois von Kursk, policy advisor at the International Institute for Sustainable Development, an independent think tank that has analyzed around 100 transition scenarios. "Once capital has been invested in a project, companies will do everything to exploit it to the end. Workers' unions can also oppose a closure."

While the work of the IPCC shows why continued oil and gas expansion is not sufficient to meet climate commitments, it was the International Energy Agency (IEA) that forced this observation into the public debate and turned it into a policy recommendation. In May 2021, the organization stated for the first time that no investment in new oil or gas facilities, nor in new coal-fired power plants without carbon capture or storage solutions, should be made.

You have 50% of this article left to read. The rest is for subscribers only.