The production and consumption of oil and gas are the source of more than 40% of global anthropogenic greenhouse gas emissions. The amount of greenhouse gases being added to the atmosphere needs to be at least halved by 2030 and be near zero by 2050, if the world is to have even a reasonable chance of keeping average global temperature rise to 1.5°C and averting catastrophic climate change. To have a high chance of reducing greenhouse gas emissions to near zero by 2050, the production and consumption of oil and gas need to be phased out urgently.
Transformation of the world’s energy systems at the speed and scale necessary to address the climate emergency will have economic and social implications. Many of these are positive, for instance: reducing negative social and environmental impacts of fossil fuel use, such as air and water pollution; lowering economic and governance risks in producer countries; and protecting citizens from fluctuating fuel prices.
However, concrete impacts will depend on the policies, actions and governance of governments, private and public finance sectors, and business, both globally and in specific countries. Economic development in some regions calls for an increase in energy consumption. To manage the necessary structural changes within a transition from oil and gas to renewable energy requires planning and support for communities, businesses and workers affected.
Failure to manage a phase-out of oil and gas would significantly undermine progress to achieving the Sustainable Development Goals (SDGs). Conversely, limiting global heating to 1.5°C rather than 2°C reduces by:
- 90 million the number of people exposed and vulnerable to water stress
- more than 300 million the number of people exposed to lower crop yields
- about 2 billion the number of people exposed to heat waves
- 62–863 million the number of people exposed to poverty because of multi-sector climate risks.
As the world begins to address the climate emergency and undertakes a transition to renewable energy, the strategies and plans of developing countries will need to carefully consider and manage the risks and opportunities of this transition, including who will benefit and which communities will need support to transition into new jobs. This includes considering the future role of oil and gas in specific country energy transitions, and the social, environmental and climate implications of their use.
The purpose of this briefing paper is to examine the evidence on the relationship between oil, gas and poverty, as well as the key considerations around energy pathways to transition to low-carbon development. It focuses on poverty eradication, economic development and job creation, access to modern energy (SDGs 1, 8 and 7), and the environmental (SDGs 13, 14, and 15) and social impacts (SDGs 3, 5, 6, 12 and 16) of oil and gas exploitation.
