Left behind: Emerging oil and gas producers in a warming world

Published in Climate Policy journal and available to read for free thanks to Open Access.

Summary

The push for decarbonization is dampening resource prospects in nations with undeveloped oil and gas. It is critical to reduce greenhouse gas (GHG) emissions from the petroleum sector, but there are equity issues related to requiring a shift away from oil and gas before development gains are made, especially in countries that have contributed very little to historical emissions. We review the prospects for five emerging producers to produce oil and gas at the lowest emissions intensity while achieving their economic and environmental goals. We find they lack the required capacity for stringent emissions management and to manage transition risks. The low-carbon pathway presents its own challenges with plans that lack national specificity and offer no substitute to the fiscal potential of the petroleum sector, and a lack of supportive technical assistance and finance. A just transition (JT) approach in these countries will not be about reskilling as they move away from a petroleum dependent economy, but instead about engaging with citizens to break the mould of petroleum-led development expectations and defining the new pathway for development. These countries will require support for transition planning that ensures that any oil and gas production minimizes GHG emissions, and limits the risk of economic lock-in, to invest in broad-based benefits and in a credible shift to a low-carbon economy. Inadequate international support risks leaving some countries behind, or to essential changes being contested in the transition.

Key insights

  • Emerging producers are not yet dependent on the petroleum sector, and are broadly energy poor, climate vulnerable, lower income countries.
  • These countries hold high aspirations for the petroleum sector to address their development needs.
  • The growing consensus that there should be no new oil and gas projects creates perceptions by emerging producers of injustice around the transition and could result in change being contested or some countries being ‘left behind’.
  • A just transition approach for these countries will minimize the oil and gas resource curse and its economic lock in, to ensure the sector is developed with broad societal benefits that do not increase national emissions.