Navigating Energy Transitions

The report finds that limiting global warming to 1.5C requires a rapid decline in oil and gas production, with a minimum 65% reduction by 2050. It argues that developing new oil and gas fields is incompatible with this goal and would likely create stranded assets. To replace fossil fuels, the world must significantly scale up wind and solar deployment; the annual investment gap for these technologies is estimated at USD 450 billion until 2030, a sum that could be covered by redirecting funds currently slated for new fossil fuel exploration (USD 570 billion annually). The report also examines the 'dash for gas' in Europe following the Russian invasion of Ukraine, concluding that existing infrastructure can meet medium-to-long-term demand if consumption is reduced. Finally, it highlights legal risks from investment treaties, which could cost governments up to USD 340 billion in compensation claims, and criticizes the lack of transparency and ambition in corporate net-zero targets.

• Developing any new oil and gas fields is incompatible with limiting global warming to 1.5C, as production from existing and under-development fields already exceeds the permissible carbon budget.
• Global oil and gas production and consumption must decrease by at least 65% by 2050 to align with 1.5C pathways.
• There is a significant investment gap for renewable energy; annual investments in wind and solar must reach approximately USD 830 billion by 2030, leaving an annual gap of over USD 450 billion based on current policies.
• The capital currently forecasted for new oil and gas exploration and development (USD 570 billion annually by 2030) is more than enough to bridge the entire investment gap for wind and solar.
• Global gas power generation capacity must decrease by more than 55% by 2035 compared to 2020 levels to meet Paris Agreement goals, meaning no new unabated gas power plants should be built.
• Existing global import capacity is sufficient to meet Europe's medium- and long-term gas demand without Russian imports, provided Europe reduces consumption in line with 1.5C targets.
• The 'dash for gas' triggered by the war in Ukraine risks creating stranded assets in Europe and developing countries, particularly those with exploitable gas reserves.
• Investment treaties pose a major legal barrier to the energy transition; cancelling projects in development but not yet producing could lead to USD 340 billion in investor-state dispute settlement (ISDS) claims.
• Corporate net-zero targets are often inadequate, frequently excluding scope 3 emissions and relying on contentious offsetting practices rather than deep absolute emission reductions.
• Developing countries, particularly in Africa, have the opportunity to 'leapfrog' fossil-fuel-based energy systems by moving directly to 100% renewable energy, which is often more cost-competitive than fossil options.
• To achieve 1.5C goals, annual capacity additions for wind and solar by 2030 must be at least 2.5 times and 1.5 times higher, respectively, than current policy forecasts.

APA

International Institute for Sustainable Development (2022). Navigating Energy Transitions. https://www.iisd.org/system/files/2022-10/navigating-energy-transitions-mapping-road-to-1.5.pdf

Chicago

International Institute for Sustainable Development. Navigating Energy Transitions. 2022. https://www.iisd.org/system/files/2022-10/navigating-energy-transitions-mapping-road-to-1.5.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Navigating Energy Transitions |date=October 2022 |url=https://www.iisd.org/system/files/2022-10/navigating-energy-transitions-mapping-road-to-1.5.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2022navigating, author = {{International Institute for Sustainable Development}}, title = {{Navigating Energy Transitions}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = oct, url = {https://www.iisd.org/system/files/2022-10/navigating-energy-transitions-mapping-road-to-1.5.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }