Rocketing demand for fossil fuels could deal blow to climate goals, report says
Source: The Guardian
Rocketing demand for fossil fuels could deal blow to climate goals, report says
Soaring oil and gas prices may tempt investors to plough more funds into long-term projects, warns thinktank
Jillian Ambrose Energy correspondent
Thu 27 Jan 2022 00.01 GMT
Global oil prices have climbed to $90 a barrel, which could tempt investors to pile more cash into long-term fossil fuel projects, dashing the world’s hopes to limit carbon emissions in line with climate targets and wasting billions in investment, according to a report.
Recent price rises could mean more potential projects appear to be lucrative investments in the short-term, the report by the financial thinktank Carbon Tracker says. But the analysis suggests demand for fossil fuels could begin to dwindle by the time these projects begin, creating “a nightmare scenario” for investors and climate campaigners.
Demand for oil and gas has rebounded strongly as the global economy bounces back from the economic slowdown triggered by the Covid-19 pandemic in 2020, leading to a global gas supply crunch and rocketing energy market prices.
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Axel Dalman, a Carbon Tracker analyst and the lead author of the report, said: “Companies may see high prices as a huge neon sign pointing towards investment in more supply. However, this could become a nightmare scenario if they go ahead with projects which deliver oil around the time that demand stars to decline.”
A failure to acknowledge “the sea change risks” facing fossil fuel developers from the global transition to low-carbon energy risked locking in carbon emissions, which would dash the Paris climate goals as well as investor returns, Coffin added.
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Read more: https://www.theguardian.com/business/2022/jan/27/demand-fossil-fuels-climate-goals-oil-gas-prices-investors
