At the 28th United Nations (UN) Climate Summit in Dubai in December 2023 (COP28), all countries agreed to transition away from fossil fuels. This is essential to limit global warming effectively, given that energy accounts for three-quarters of global greenhouse gas emissions. Governments agreed that tripling renewable energy and doubling energy efficiency plays a key role in accelerating the energy transition, but remained vague on what this means in practice. 

Upcoming meetings of the Group of Seven (G7) on 13-15 June and Group of Twenty (G20) on 18-19 November can initiate concrete agreements on what a fossil fuel phase-out in “a just, orderly and equitable manner” means.

This can build momentum for countries to include fossil fuel phase-out commitments in their updated climate targets (NDCs) which are due by February 2025, well ahead of COP30 in Brazil in November 2025. As the debate on phasing out coal through a just transition is relatively advanced, the political attention can now focus on the oil and gas sector.

Together with Zero Carbon Analytics, Strategic Perspectives put together a policy briefing that includes scenarios, recommendations and reflections on targets for phasing out the extraction of oil and gas. Key findings include:

  • Feasible 1.5°C scenarios require oil and gas production to decline by 65% by 2050 compared to 2020 levels, but current projected production is set to rise by 260% and 210%, respectively, in this period. 
  • Countries and companies aiming to fully use their oil and gas resources chase diminishing returns and risk USD $1.4 trillion in stranded assets. By delaying a managed decline of fossil fuel production, countries are increasing the costs of achieving a just transition.
  • Most approaches to achieving a fossil fuel phase-out share significant commonalities around the principles of justice and alignment with the Paris Agreement and climate science. 
  • With USD $2.4 trillion green transition investment required annually through 2030 in emerging and developing economies (other than China), climate finance is the key enabler of phase-out planning.
The G7 and G20 can play a crucial leadership role by committing to:
  • Ending the licensing of new coal, gas and oil projects,
  • Setting clear end dates for coal, gas and oil use per sector,
  • Committing to phasing out coal by 2030 (G7) or 2035 (developing countries) and setting out how much supply and demand will be reduced for coal, gas and oil by 2035 in their upcoming NDCs,
  • Supporting other countries on their just and orderly transition away from fossil fuels, and
  • Phasing out fossil fuel subsidies as soon as possible, as agreed at COP28.