Feb 20, 2021, 03:08 am
A new report estimates that the shift towards lower-carbon energy will cost oil and gas producing countries trillions of dollars in government revenues over the next two decades.
The findings by Carbon Tracker are a “wake-up call” for countries heavily reliant on oil and gas to fund public spending to diversify their economies. Carbon Tracker has also called on richer states to help those with weaker finances to make the transition towards cleaner energy.
The Beyond Petrostates report focuses on 40 countries with the greatest fiscal dependence on oil and gas revenues. These so-called petrostates are predominantly in the Middle East, North and West Africa and South America. They stand to see a 46% drop in these revenues as the world makes the transition to renewables and other low-carbon energy sources.
While hydrocarbons will continue to dominate the world’s energy mix for decades to come, the International Energy Agency (IEA) and others have slashed long-term demand forecasts in light of the coronavirus (COVID-19) pandemic and accelerated pushes by countries to decarbonize their economies. This has led to producers reducing their price predictions and writing off billions of dollars of production assets no longer viewed as commercially viable.
The report, which will be launched on February 24, attempts to quantify the potential shortfall in revenues under a low-carbon scenario compared with budget receipts over the past decade. Suriname is set to see the biggest percentage shortfall of 94%, as most of its oil reserves are yet to be developed. It is followed by Timor-Leste, Colombia, Cameroon and Sudan.
Some 400mn people live in the 19 most vulnerable petrostates and 10 of these countries are categorized as “low” in the UN Human Development Index.
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https://www.intellinews.com/petrostates-...azerbaijan
The findings by Carbon Tracker are a “wake-up call” for countries heavily reliant on oil and gas to fund public spending to diversify their economies. Carbon Tracker has also called on richer states to help those with weaker finances to make the transition towards cleaner energy.
The Beyond Petrostates report focuses on 40 countries with the greatest fiscal dependence on oil and gas revenues. These so-called petrostates are predominantly in the Middle East, North and West Africa and South America. They stand to see a 46% drop in these revenues as the world makes the transition to renewables and other low-carbon energy sources.
While hydrocarbons will continue to dominate the world’s energy mix for decades to come, the International Energy Agency (IEA) and others have slashed long-term demand forecasts in light of the coronavirus (COVID-19) pandemic and accelerated pushes by countries to decarbonize their economies. This has led to producers reducing their price predictions and writing off billions of dollars of production assets no longer viewed as commercially viable.
Quote:“Populations that are heavily reliant on fossil-fuel production face lower government revenues and job losses as the pace and inevitability of the energy transition increases,” Carbon Tracker states. “Compared with industry expectations, petrostates’ government revenues would be $9 trillion lower over the next two decades under the low-carbon scenario. The majority of this decrease is driven by lower prices, rather than lower volumes.”
The report, which will be launched on February 24, attempts to quantify the potential shortfall in revenues under a low-carbon scenario compared with budget receipts over the past decade. Suriname is set to see the biggest percentage shortfall of 94%, as most of its oil reserves are yet to be developed. It is followed by Timor-Leste, Colombia, Cameroon and Sudan.
Some 400mn people live in the 19 most vulnerable petrostates and 10 of these countries are categorized as “low” in the UN Human Development Index.
Quote:“The populations of economies that are heavily reliant on fossil-fuel production are perhaps the most obvious examples where the transition will also have some negatives, for example, lower government revenues and job losses,” Carbon Tracker says. “Decisive and forward-looking policies will be required to prevent and mitigate these impacts, both on the part of domestic policymakers and the overseas community.”
https://www.intellinews.com/petrostates-...azerbaijan