G20: Don’t Just End Coal; Add Deep Cuts For Oil & Gas Too

By Ronald Leung 24 August, 2021

Why the G20 call for ending coal but not oil & gas? CWR's Leung brings to light the motivations behind

AR6 must sound a death knell for fossil fuels as they = 85% of global CO2 emissions; producing 94% coal, 63% oil & 63% gas, G20 should take lead yet focus is only on coal
Self-interests is at play; richer G20 (i.e. G7) produce ~30% of oil & gas (US$2.1trn revenue) vs. poorer produces coal (US$791bn); but G7, in particular US, Aus & Ca, are richest + have highest CO2 per capita so surely they should do more
G20 needs to stop subsidising fossil fuels which 82% go to oil & gas - the same amount of $$ can provide 2x India's installed capacity! The fate of the world now lies in the hand of the G20 - deep cuts on ALL fossil fuels must happen now!

It’s “unequivocal” – human activities caused global warming. The latest IPCC AR6 report, “must sound a death knell for coal and fossil fuels, before they destroy our planet” said UN Secretary-General António Guterres.

Fossil fuels must end … fullstop, if we are going to have a chance of survival

Deep cuts in fossil fuel must be priority No.1 – they are responsible for 85% of global CO2 emissions – coal (33%), oil (29%) and gas (18%). Ending coal, oil and gas will take out 94% of all fossil fuel emissions – surely in the eleventh hour such aspirations are no brainers.

Ending coal, oil & gas will take out 94% of all fossil fuel emissions…

surely in the eleventh hour such aspirations are no brainer

The G20 must lead the way … but are they, if they are only ending coal?

UN Head Guterres also stressed that “There is no pathway to this goal [meeting the 1.5°C target] without the leadership of the G20”. A fair call as the G20 accounts for 85% of all global carbon emissions – at these levels, G20 actions to decarbonise dictates if and when we reach carbon neutrality – our world is in their hands … literally.

So how are they faring?

The G20’s current focus is on ending coal (fair as is responsible for a third of fossil fuel emissions). However, it failed to agree on the wording of the communique related to ending coal in last month’s climate and energy ministerial meeting. The reason behind this was because China and India were not on board, making them the climate villains in the eyes of many.

Why then is the G20 only ending coal? Where’s the call to end oil & gas?

But wait – isn’t Mr. Guterres saying AR6 “must sound a death knell for coal and fossil fuels? Why then is the G20 only ending coal? Where’s the call to end oil & gas? After all oil & gas together account for almost half of fossil fuel emissions? A closer look into the production of coal, oil and gas across the G20 countries is revealing …

Richer G20 countries produce oil & gas; poorer G20 produce coal …

Besides dominating 80% of global GDP, the G20 also dominates in fossil fuel production – together they produce 94% of global coal, 63% of global oil and 63% of global gas. Owning most of global production, a concerted G20 effort to decarbonise will significantly move the needle and get us closer to net-zero faster; and the faster the better given our shrinking carbon budget. So why isn’t this happening?

A breakdown of G20 coal, oil & gas production by individual countries reveals that self-interest is at play.

We can see why coal is an easy target…

…the richer G20 countries produce more oil & gas than coal

From the charts below, showing Top 5 G20 producers, we can see why coal is an easy target – the richer G20 countries produce more oil & gas than coal. China, India and Indonesia, three hugely populous developing countries, account for 67% of global coal production whereas, top oil and gas producers are mostly developed countries and their allies – the US, Canada, Australia and Saudi Arabia.

Renvenue from oil & gas production (US$2.1trn) are signifcantly larger than coal (US$791bn)

Given that revenues from oil & gas production are significantly larger than those from coal production – US$2.1 trillion for oil & gas vs US$791 billion for coal, it is not hard to see why it was easier to vilify coal-producing China & India.

The US, #1 global producer of oil & gas, can drive both G7 & G20 agendas to end oil & gas, but it is not…

This is not the first time developed countries act selfishly – the promise in 2009 by the G7 to provide US$100bn/yr climate finance to developing countries is still unfulfilled to this day.

The G7 could also fast track the carbon transition by tabling the ending of oil & gas alongside coal. But of course, they have not … the G7 produces only 8% of global coal compared to nearly a quarter of lucrative global oil and 29% of global gas.

G7 could fast track the carbon transition by tabling the ending of oil & gas alongside coal…

but they have not – the G7 produces only 8% of coal vs. ~1/4 of lucrative oil & 29% of gas

The latest decision by the US (the biggest oil & gas producer in the world) to oppose to all coal projects while make limited exceptions for oil and narrow support of natural gas in international financing decisions also provides evidence of such approach. With this attitude, it is difficult to see how deep cuts in fossil fuel emissions can be achieved by either the G7 or the G20 if the US is to stay in the driving seat.

Surely, richer G20 countries must set example – they can afford it + are they biggest per capita emitters!

Given the urgent warnings of IPCC AR6, this self-serving approach no longer makes sense – richer G20 countries should take lead in decarbonisation because they can better afford the upfront investment of energy transition. More importantly, they are the biggest per capita carbon polluters.

US, Aus & Ca are not only the richest but also have the highest carbon emissions per capita…

A closer look at per capita GDP & CO2 emissions of the of the Top 5 producing countries of coal, oil & gas (denoted by red bars in the chart below), reveals that the US, Australia and Canada are not only the richest but also have the highest carbon emissions per capita (in blue circle).

…shouldn’t they bear more responsibility in phasing out oil & gas?

Shouldn’t these 3 countries bear more responsibility in phasing out oil & gas as well as coal production before laying the blame on China, India and Indonesia who are poorer and have lower per capita emissions (in green circle)? BTW let’s not forget that these three countries have 3.1bn people, almost 40% of the world’s population.

To be clear, we are not saying that coal should be off the hook

To be clear, we are not saying that coal should be off the hook. China and India need to better demonstrate how they will phase out coal. But it is unfair to just focus on coal but turn a blind eye to oil and gas, or worse – investing more money in the sector.

G20 oil & gas subsidies could have provided 800+GW of solar power – 2x that of India’s installed capacity!

According to BNEF, the G20 provided a total of US$3.3 trillion of direct support for coal, oil & gas and fossil-fuelled power from 2015-19. The lion-share of these monies went to oil & gas – from 73% in 2015 to 82% in 2019 … meanwhile coal only received 4% in 2015 & 8% 2019.

We crunched some numbers and shockingly if the 2019 oil & gas subsidy (US$522bn) was instead invested in renewables, it could have built 373 Bhadla Solar Parks (the largest in the world) that could have provided 838GW installed capacity = 2x India’s! Imagine how much closer we could have been to Paris Agreement target if the G20 acted more decisively. Sigh.

US, Aus & Ca have been significantly boosting subsidies for the fossil fuel sector…

Worse still, the US, Australia, and Canada, have been significantly boosting subsidies for the fossil fuel sector said BNEF. So, if you were China and India, would you heed their call to end coal while they are promoting oil & gas so that your economic competitiveness and energy independence will be undercut by such hypocritic calls? I don’t think so.

For poorer countries to buy-into fast tracking decarbonisation, developed countries must set an example through deep cuts in oil and gas. Also, asks have to be realistic.

Can we really end coal or oil & gas? Need to rethink cement, steel, plastics, petrochems & fashion…

While many will defend against “end oil” by arguing that it has other uses such as plastics, petrochemicals and so, “end coal” is championed by many as if there are no obstacles. However, don’t forget that coal is not just used for generating electricity but also for making cement and steel.

The demand of cement & steel (which makes by coal) will likely surge to fend off climate extremes

Given the investment in infrastructure needed globally to shore up climate resilience to fend off climate extremes, the demand of these will likely surge which means more carbon emissions. The same goes for oil – fashion is frolicking in oil so oil is here to stay unless we ready to give up our addiction to athe-leisure.

So while end coal & end oil sounds catchy, we will have to also reinvent products which include them as feedstocks in their supply chain.

Carbon capture, utilisation & storage (CCUS) is essential yet bottlenecks are abound…

To deal with unavoidable emissions, many are banking on CCUS yet bottlenecks are paramount. Existing technologies are not good enough – Chevron admitted last month that its carbon capture project isn’t working half as well as it should. The chief representative of Environmental Defense Fund in Beijing also admitted that it will be hard for CCUS to commercialize due to its high upfront cost.

CCUS will 2x human’s water footprint…

And it uses a lot of water – a 2020 paper found that CCUS will doubled human’s water footprint if it is widely used to meet the 1.5°C target.

…while planting trees might raise food prices by 80% by 2050

Rely on planting trees to sequester carbon is also problematic. A recent report by Oxfam revealed that four of the world’s largest oil & gas corporations will already need to reforest an area 2x the size of UK to achieve net-zero by 2050. Over-relying on sequestration might also raise food prices by 80% by 2050, sending millions into hunger.

We need to strike a good balance by deep cutting ALL fossil fuels production and offsetting the small amount of remaining emission with CCUS. Investment and commercialisation in alternative clean fuel such as GREEN hydrogen could also help.

But BEWARE of greenwashing alternative – blue hydrogen, touted by the oil & gas sector as a solution. Sadly, a recent study has found that blue hydrogen (extracted from natural gas) creates up to 20% more emissions than just burning natural gas or coal. Surely, the oil & gas sector can do better than this?

And then there are also methane savings from oil & gas + IPCC says we must tackle methane…

According to the AR6, 32% of global anthropogenic methane (2007-2018) comes from the oil & gas sector and methane is responsible for 0.5°C of warming. So there will be extra gains from deep cuts in oil & gas! Surely, this is a no brainer.

We should absolutely heed IPCC’s call to attain “strong, rapid and sustained reductions in CH4 emissions”, as it couldlimit the warming effect resulting from declining aerosol pollution and would improve air quality”.

The fate of the world lies in the hands of the G20 – don’t just “end coal”, also “end oil & gas”

It is clear that not all fossil fuels are created equally. But given imminent dire consequences, the playing field must be levelled. Even the IEA also said that no new oil, gas or coal development if the world is to attain net-zero by 2050. A recently leaked IPCC AR6 report (Part 3 due out in 2022) warned that GHG’s emissions must peak within 4 years and coal and gas-fired power plants must close in the next decade.

The science cannot be clearer. Now, it’s up to politicians to do their job and phase out fossil fuels.

But as Emily Atkin said in her excellent newsletter HEATED, the 41 page IPCC report summary for policymakers (which needs governments’ approval) does not even mention “fossil fuel”, proving the tenacity and reach of fossil fuel lobbies. By the way, fossil fuels do appear in the technical summary and the actual 4000 page IPCC report – but who except us, reads those.

  • Full Report p.46: Of the total anthropogenic CO2 emissions, the combustion of fossil fuels was responsible for about 64% ± 15%, growing 49 to an 86% ± 14% contribution over the past 10 years
  • Full Report p.116: The main human causes of climate change are the heat-absorbing greenhouse gases released by fossil fuel combustion, deforestation, and agriculture
  • Technical Summary p.10: WGI AR6 reports a faster 1 growth over 2014–2019 and assesses growth since 2007 to be largely driven by emissions from the fossil fuels and agriculture (dominated by livestock) sectors
  • Technical Summary p.35 : There is high confidence that this recent growth [in methane] is largely driven by emissions from fossil fuel exploitation, livestock, and waste

As Emily succinctly puts it “You’ll learn the world is ending, and you will not know who to blame” if you just read the policymakers summary.  

If G20 (& the G7) don’t lead deep cuts across all fossil fuels, the world will end but we will know who to blame

Fortunately, the ability to avoid the end of the world is in the G20 hands. The G20 (and the G7) have the opportunity to set a fair and just course, set aside disputes and lead deep cuts across all fossil fuels. Don’t just try end coal, add deep cuts for oil & gas; or even better, end oil & gas too … and if they don’t, the world will end but we will know who to blame.

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Ronald Leung
Author: Ronald Leung
Hailing from Hong Kong, Ronald’s interest in geopolitical and economic issues led him to understand that climate change is one of the most pressing challenges of our times, yet politically, the topic lacked urgency and societal attention. This motivated him to join CWR upon graduation from the Master of Global Political Economy at The Chinese University of Hong Kong. He assists the team in research across various focus areas and sectors that CWR covers and works on the publication of CWR’s monthly newsletter. He also helps manage and expand our network of contributors plus keeps the content on our website updated. Prior to CWR, Ronald focused on market and competitor research in a property conglomerate and a travel tech start-up. Besides, he conducted country analysis and co-published geopolitical articles with his professor in CUHK. He hopes to use his experiences as a debate team captain in the University of Hong Kong (where he obtained a Bachelor in Accounting & Finance) to raise public awareness towards climate change in Hong Kong.
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