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In December 2015, almost 200 nations signed on to the Paris climate deal, agreeing to cut greenhouse gas emissions in an attempt to avoid catastrophic climate change. While the Paris agreement is only the first of many steps that need to be taken 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 than pre-industrial levels, with an aim to cap temperature rise at 1.5°C. While climate scientists widely agree that if the most damaging effects of climate change are to be avoided warming must be limited even further, 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.
As reported by the Carbon Tracker Initiative, the carbon budget for 2013 to 2049 was 565 Gigatonnes. However, the fossil fuels that are 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, and means that around 80% of the world’s current fossil fuel reserves must remain in the ground if we can realistically hope to avoid the most catastrophic effects of climate change.
Courtesy of University College London, the latest exploration into unburnable carbon under a 2°C constrained world suggests that, for a 50% chance of avoiding two degrees of warming, a third of all the world’s known oil reserves, half of all gas and over 80% of all coal must stay underground 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.
China and the USA – the largest and second largest greenhouse gas emitters in the world respectively – struck a deal in late 2014 that will see them reduce future emissions in an attempt to limit warming to below 2°C. Since then, the European Union – collectively representing the third largest share of emissions – have approved a plan to cut emissions by 40% of 1990 levels by 2030.
Check out Climate Action Tracker to find out more about each country’s emissions reduction commitments.
But a 2015 report by US-based Fossil Fuel Indexes found that the top 200 coal, oil and gas companies in the world have continued their rampant exploration and development of reserves, growing them by 10% since the end of 2010.
Unfortunately it seems the industry is banking on a carbon emissions targets not being met. But we know this would spell disaster for the climate, which is why it is necessary to maintain widespread and vocal pressure on both government and industry, ensuring stringent emissions guidelines are set and adhered to.
Financial experts around the world are highlighting the economic risks associated with fossil fuel companies and, as noted by Alan Rusbridger of The Guardian, the pragmatic reasons for divestment are now adding to the well-established environmental motivations behind the movement.
“In its below-2C scenario, the IEA sees 1,715GW closing early, of which 1,330GW is coal. This is equivalent to the current fleets of China, the US, Japan, Germany and Poland. The plants closing early would lose $3.7tn in revenue to 2060 for the electricity they would otherwise have generated.”Carbon Brief, analysis data from the International Energy Agency