Search Climate Insights Directory

This fact sheet presents data to justify a transition away from fossil fuels in Latin America and the Caribbean, emphasizing the risk of stranded assets and the region's high vulnerability to climate impacts. It highlights a contradiction where the region possesses the world's cleanest electricity grid yet continues to increase fossil fuel production and consumption. The document calls for the elimination of fossil fuel subsidies—which totaled USD 52.8 billion in 2024—and the implementation of a 'Just Transition Mechanism' following COP30 to support labor reconversion and community sovereignty.

Analysis of the Global Oil and Gas Extraction Tracker (GOGET) reveals that oil and gas fields now take significantly longer to come online than in the 1960–1980 period, with 2025 startups averaging 15.1 years. This increase is driven by the depletion of easily accessible fields, forcing companies to target technically challenging 'hard-to-recover' reserves, such as ultra-high pressure '20K technology' fields in the U.S. Gulf of Mexico and remote Arctic projects in Russia. Additional delays stem from reservoir compositions (e.g., sour gas), ecological risks in protected areas, and more stringent environmental regulations, such as the UK's 2025 guidance on scope three emissions. The report argues that these long lead times increase the risk of creating stranded assets and locking in production that contradicts global climate targets to limit warming to 1.5°C.

Analysis of the Global Oil and Gas Extraction Tracker (GOGET) reveals that the time from discovery to production for new oil and gas fields has increased significantly, averaging 15.1 years for fields starting in 2025 compared to 4.9 years between 1960 and 1980. This trend is driven by the depletion of easy-to-access reserves, forcing companies toward technically complex '20K' high-pressure reservoirs, deepwater projects, and 'acid gas' fields. Additional delays stem from stricter environmental regulations, such as the UK's 2025 requirement to include Scope 3 emissions in impact assessments, and ecological risks in protected areas. The report argues that these long lead times increase the risk of creating stranded assets and conflict with the 1.5 °C warming limit, suggesting that capital should be redirected toward renewable energy.

The document argues that the ICJ's 2025 advisory opinion transforms the legal landscape for investment disputes by establishing that climate action is a binding legal obligation rather than a discretionary policy choice. This shift undermines investor claims based on 'legitimate expectations' for fossil fuel activities and provides states with stronger defenses against claims of unfair and inequitable treatment (FET) or indirect expropriation. The author recommends that states reform investment treaties to exclude climate measures from compensation claims, limit prospective damages based on future fossil fuel revenues, and negotiate agreements to neutralize survival clauses in treaties like the Energy Charter Treaty.

The ICJ's 2025 Advisory Opinion establishes that states have binding legal obligations to protect the climate system, which includes phasing out fossil fuel production and subsidies. This finding challenges the legal basis for many investor-state claims, as it undermines the 'legitimate expectations' of investors in carbon-intensive industries and provides states with stronger defenses against claims of fair and equitable treatment (FET) violations. The brief argues that the prospect of ISDS can cause 'regulatory chill,' deterring necessary climate action. It recommends that states reform investment treaties through sector-based carve-outs, restrict forward-looking damages based on projected fossil fuel revenues, and coordinate withdrawals from outdated agreements like the Energy Charter Treaty.

The Indigenous Advisory Group (IAG) of the Banks and Biodiversity Initiative calls on financial institutions to uphold the Amazon Soy Moratorium's (ASM) zero-deforestation standards despite Brazilian political rollbacks. The IAG argues that soy expansion drives land encroachment and tenure insecurity for Indigenous Peoples, while abandoning ASM criteria increases legal, reputational, and transition risks for banks. The group advocates for farm-level traceability, the treatment of all Amazon deforestation as incompatible with financing, and the integration of Free, Prior and Informed Consent (FPIC) into due diligence.

The report highlights a conflict between the strategic autonomy of the European Union and the financing activities of major European banks, which continue to support US LNG export terminals. It notes that the EU imported 57% of its LNG from the US in 2025, a figure that could rise to 80% by 2030. The document identifies specific banks—including ING, Crédit Agricole, Santander, BPCE (via Natixis), and Société Générale—as key financiers of US developers like Venture Global and Freeport LNG. It warns that this dependence, compounded by a July 2025 trade agreement requiring the EU to purchase US$750 billion of US energy by 2028, exposes Europe to price volatility, geopolitical leverage by the US administration, and the risk of stranded assets.

The report claims that the EU's shift from Russian gas to US LNG has created a new strategic dependency, exacerbated by financing from major European banks like ING and Crédit Agricole. It highlights a July 2025 trade agreement requiring the EU to purchase $750 billion in US energy by 2028 as evidence of US geopolitical leverage. The author warns that this dependency leads to price volatility, risks stranded assets due to LNG overcapacity, and threatens EU climate targets.

China experienced a record surge in coal power commissioning and project proposals in 2025, despite a decline in actual coal power generation and the rapid growth of clean energy and storage. The report highlights a growing gap between investment decisions and system realities, noting that new capacity is dominated by large, inflexible units designed for baseload operation. This trend risks creating stranded assets and structural barriers to decarbonisation. The authors argue that the 15th Five-Year Plan must end net coal capacity growth and shift coal's role from a primary energy source to a flexible, residual support system to meet 2030 climate targets.

Pension funds, managing over USD 73 trillion globally, face systemic risks from climate change that could reduce returns by 33% by 2050. While 200 major funds have begun divesting from fossil fuels to fulfill fiduciary duties, third-party asset managers often maintain carbon-intensive investments. This misalignment has led pension funds to withdraw over USD 100 billion from managers including BlackRock and State Street.

The policy brief assesses the macroeconomic, financial, and labor risks associated with Colombia's energy transition, particularly for five vulnerable departments. It warns that a disordered transition could lead to the loss of 448,000 jobs by 2035 and increased country risk. To mitigate this, the authors propose an integrated policy package comprising macro-fiscal-financial measures to lower capital costs, territorially differentiated labor protections, and a productive-territorial strategy focusing on 'lever sectors' like electric energy, efficient construction, and agroecology to create sustainable local employment.

In 2025, global coal capacity grew by 3.5% while generation fell by 0.6%, a divergence driven primarily by China and India. While new commissioning reached near-record levels of 97.4 GW, coal is increasingly used as 'system insurance' rather than a primary energy source. The global pipeline is narrowing geographically, with only 32 countries proposing or building new plants in 2025, and 95% of all construction concentrated in China and India. Meanwhile, the U.S. and EU saw significant delays in planned retirements, though for different reasons: federal emergency orders in the U.S. and energy security concerns in the EU. Latin America reached 'No New Coal' status in 2025, while South Korea committed to a phaseout by 2040.

The report evaluates the viability of firm and dispatchable renewable energy (FDRE) in India, finding that its competitiveness against coal depends on the ability to sell surplus power and the inclusion of external costs like pollution. It highlights that FDRE can be deployed significantly faster than coal plants and provides net economic gains, including GDP growth and job creation, while reducing emissions.

Following the 2022 invasion of Ukraine and subsequent Western sanctions, Russia has pivoted its fossil fuel exports toward Asia. While this has partially offset revenue losses from the European market, the report argues that Russia remains locked in a hydrocarbon-centric model that is increasingly misaligned with the decarbonisation trajectories of its primary Asian customers. China and India have leveraged discounted Russian oil and coal to support economic growth while simultaneously diversifying their energy portfolios and expanding renewable capacity. Vietnam has seen modest growth in Russian coal and nascent LNG trade, balancing energy security with sustainability goals. The report highlights structural bottlenecks, such as limited rail capacity for coal and the risks of a 'shadow fleet' for oil, as significant constraints on Russia's long-term export viability.

The report proposes a Gas System Analysis (GSA) framework to counter rising consumer costs and risks associated with massive gas infrastructure investments. It outlines a three-part process: depicting current system characteristics, defining future scenarios (including business-as-usual and alternative pathways), and forecasting impacts on costs, emissions, and public health. The framework aims to prevent stranded assets and support the transition to clean heat through electrification and non-pipeline alternatives.

The report analyzes the role of Global North private equity firms in maintaining fossil fuel assets across the Global South, highlighting a pattern of extracting profits while offloading environmental and social risks onto local communities. Using data from the 2024 Climate Risk Scorecard, it identifies 13 firms with assets in 32 Global South countries, with a significant concentration of risky assets in Latin America, particularly Mexico. The document details specific instances of pollution in India, social displacement in Brazil, and financial instability in the Philippines, while providing a comprehensive case study on Mexico's LNG and pipeline infrastructure. It concludes that the private equity model's lack of transparency and short-term focus exacerbate climate injustice and expose institutional investors, such as public pensions, to significant financial risk.

The policy brief argues that gas utilities in the U.S. spend between $3.5 billion and $7 billion annually to replace aging service lines. It proposes a service line NPA framework where utilities offer customers financial incentives to electrify and disconnect from the gas system instead of replacing the pipe. This approach aims to reduce ratepayer costs, lower emissions, and avoid stranded assets. The brief highlights Con Edison's Energy Exchange Program as a developed example and discusses design considerations such as participant incentives, utility support, and customer outreach.

The report analyzes 65 state-level tariffs to identify mechanisms that protect ratepayers from the costs of surging demand from large energy users. It highlights five key safeguards: minimum contract terms, minimum monthly billing demands, collateral requirements, exit fees, and capacity reassignment. The author argues that while these tariffs provide a foundation for fair cost allocation, they should be paired with broader strategies like grid flexibility and optimized planning to ensure reliability and affordability.

The document analyzes Brazil's position as a top global oil producer, noting that while its current production is economically resilient to most climate scenarios, the pursuit of new frontiers like the Equatorial Margin carries high stranded asset risks. It highlights Brazil's potential to lead in low-carbon fuels and critical minerals but warns that a lack of coordinated industrial policy and investment in innovation may limit its competitiveness. The author recommends using advanced modeling to optimize investments in refining and green fuels and suggests leveraging diplomatic ties with China and the EU to diversify the economy post-fossil fuels.

The IISD response asserts that Equinor's application for the Rosebank field development ignores critical Department for Energy Security and Net Zero (DESNZ) guidance regarding downstream Scope 3 emissions. The document argues that the project is incompatible with the Paris Agreement's 1.5°C target, as no new oil and gas fields are needed or permissible in such scenarios. Furthermore, the IISD claims the project offers minimal economic benefit, potentially resulting in a net loss to the UK Treasury and providing negligible contributions to energy security.