Financing a 1.5˚C-Aligned Transition

The document establishes a consensus across multiple energy models, including the IEA NZE and IPCC pathways, that no new oil and gas fields should be developed to meet the 1.5 target. It argues that oil and gas production must decline by at least 65% by 2050 from 2020 levels. The brief asserts that the energy crisis in Europe caused by Russia's invasion of Ukraine does not justify new fossil fuel production, as existing capacity and demand reduction can meet needs. It highlights a significant investment gap in renewables, noting that annual solar and wind investments must reach USD 830 billion by 2030 to bridge a USD 450 billion annual gap. Finally, it recommends that financial institutions cease financing new oil and gas projects and push for the phase-out of fossil fuel subsidies.

• There is a broad consensus across various climate and energy models, including the IEA Net Zero Emissions (NZE) and selected IPCC pathways, that developing new oil and gas fields is incompatible with a 1.5 limit.
• To align with 1.5, global oil and gas production must decrease by at least 65% by 2050 compared to 2020 levels, with reductions of 18% (IEA) and 30% (IPCC) required by 2030.
• The energy security concerns in Europe following Russia's invasion of Ukraine do not justify new oil and gas fields, as new infrastructure would not be operational in time to address the short-term supply crunch.
• A significant investment gap exists for renewable energy; annual investments in solar and wind need to reach approximately USD 830 billion by 2030, leaving an annual gap of over USD 450 billion based on current projections.
• Current global financial imbalances favor fossil fuels, which receive USD 370 billion in annual subsidies compared to USD 100 billion for renewable energies.
• Most oil and gas companies lack transition plans aligned with 1.5; for example, only three of 39 companies assessed by the Climate Action 100+ Net Zero Company Benchmark had aligned pathways.

APA

Jones, N., von Kursk, O. B., & Rouse, L. (2023). Financing a 1.5˚C-Aligned Transition. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-07/financing-1.5-aligned-transition.pdf

Chicago

Jones, Natalie, Olivier Bois von Kursk, and Louise Rouse. Financing a 1.5˚C-Aligned Transition. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-07/financing-1.5-aligned-transition.pdf.

Wikipedia

{{cite report |last1=Jones |first1=Natalie |last2=von Kursk |first2=Olivier Bois |last3=Rouse |first3=Louise |title=Financing a 1.5˚C-Aligned Transition |publisher=International Institute for Sustainable Development |date=July 2023 |url=https://www.iisd.org/system/files/2023-07/financing-1.5-aligned-transition.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{jones2023financing, author = {Jones, Natalie and von Kursk, Olivier Bois and Rouse, Louise}, title = {{Financing a 1.5˚C-Aligned Transition}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = jul, url = {https://www.iisd.org/system/files/2023-07/financing-1.5-aligned-transition.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }