OVEREXPOSED

Gobal Witness

HOW THE IPCC’S 1.5°C REPORT DEMONSTRATES THE RISKS OF OVER INVESTMENT IN OIL AND GAS

23 APRIL 2019

Overinvestment in oil and gas creates risks for investors, regardless of whether the world is effective in tackling climate change. Either investors face assets being stranded as demand for fossil fuels falls in a transition to a low carbon economy, or the overinvestment contributes to excess emissions from fossil fuels, the failure to transition and the financial costs of a dramatically changed climate.

Our analysis compared average oil and gas demand in the IPCC scenarios that are not reliant on high levels of future carbon capture or removal with industry production forecasts. ii It found that over the next decade: Any production from new oil and gas fields, beyond those already in production or development, is incompatible with limiting warming to 1.5°C. This report assesses what the Intergovernmental Panel on Climate Change (IPCC)’s landmark report on 1.5°C means for the future of investment in the upstream oil and gas industry. By comparing data from the IPCC’s climate models with forecasts from industry analysts Rystad Energy, this report demonstrates the degree to which future production and capital expenditure (capex) is incompatible with limiting warming to 1.5°C.

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