Closing the Fossil Fuel Production Gap

This briefing from the Stockholm Environment Institute discusses the 'production gap'—the divergence between planned fossil fuel production and the levels consistent with Paris Agreement temperature goals. It argues that supply-side policies, such as production limits and subsidy removals, are essential to avoid carbon lock-in and achieve cost-effective emission reductions.

• Preliminary research indicates a significant gap between planned fossil fuel production and climate goals: the world is projected to produce 50% more fossil fuels by 2030 than is consistent with a 2°C pathway, and 120% more than is consistent with a 1.5°C pathway.
• The production gap is most pronounced for coal initially, though oil and gas are also projected to exceed carbon budgets, leading to increased 'lock-in' effects over time.
• Supply-side policies—such as moratoriums on exploration, removing industry subsidies, and divestment—can prevent 'carbon lock-in,' where existing investments maintain the dominance of fossil fuel incumbents and tie future economies to their production.
• Combining supply-side and demand-side policies is more cost-effective for emission reductions and prevents 'leakages,' such as when energy efficiency gains lower fuel prices and subsequently increase fuel use.
• There is a financial risk of 'stranded assets' if governments and investors fail to account for 'unburnable carbon' in their economic planning, which could lead to a more disruptive and costly transition.
• Several countries have already implemented supply-side measures: New Zealand, France, Costa Rica, Belize, and Denmark have limited oil and gas exploration/extraction, while Germany and Spain have committed to phasing out coal production.

APA

Lazarus, M., Verkuijl, C., & Yehle, E. (2019). Closing the Fossil Fuel Production Gap. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2019/09/closing-the-fossil-fuel-production-gap-brief.pdf

Chicago

Lazarus, Michael, Cleo Verkuijl, and Emily Yehle. Closing the Fossil Fuel Production Gap. Stockholm Environment Institute, 2019. https://www.sei.org/wp-content/uploads/2019/09/closing-the-fossil-fuel-production-gap-brief.pdf.

Wikipedia

{{cite report |last1=Lazarus |first1=Michael |last2=Verkuijl |first2=Cleo |last3=Yehle |first3=Emily |title=Closing the Fossil Fuel Production Gap |publisher=Stockholm Environment Institute |date=2019 |url=https://www.sei.org/wp-content/uploads/2019/09/closing-the-fossil-fuel-production-gap-brief.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lazarus2019closing, author = {Lazarus, Michael and Verkuijl, Cleo and Yehle, Emily}, title = {{Closing the Fossil Fuel Production Gap}}, institution = {Stockholm Environment Institute}, year = {2019}, url = {https://www.sei.org/wp-content/uploads/2019/09/closing-the-fossil-fuel-production-gap-brief.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }