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In December 2015, almost 200 nations signed up to the Paris Agreement, agreeing to cut greenhouse gas emissions in an attempt to avoid catastrophic climate change. While the Paris deal is just the first of many steps needed to achieve this goal, it clearly spells the end for fossil fuels.
The Paris text commits governments to limiting global warming to less than 2°C above pre-industrial levels, with an aim to cap temperature rise at 1.5°C. While climate scientists widely agree warming must be limited even further so as to avoid the most damaging effects of climate change, the 2°C target has been used to calculate the maximum carbon dioxide (CO2) that can be released into the Earth’s atmosphere, giving us a ‘carbon budget’ to work within.
The Carbon Tracker Initiative states that the carbon budget for 2013 to 2049 is 565 Gigatonnes. Yet the fossil fuels held in current reserves represent an estimated 2,795 Gt of potential CO2 emissions if dug up and burnt.
That’s five times the ‘safe’ amount. It means that around 80% of the world’s current fossil fuel reserves must stay in the ground if we are to avoid the most catastrophic effects of climate change.
University College London's 2015 study into unburnable carbon under a 2°C constrained world suggested that, for a 50% chance of avoiding 2°C of warming, a third of all the world’s known oil reserves, half of all gas and over 80% of all coal can't be extracted if we are to keep from breaching the limit. Here in Australia these numbers jump up to over 50% for both oil and gas and around 95% for coal.
To learn more about what the carbon budget could mean for fossil fuel companies and assets, check out our stranded assets page.