Forecasts by oil, coal and gas fuel companies are “skewed to the upside” and failing to take into account factors that threaten demand by 2040 for these sources of energy, a new report published today has found.
The Carbon Tracker Initiative, which works to limit future greenhouse gas emissions, said the study is the first to compare published industry scenarios against authoritative financial market research.
It said it challenged nine business-as-usual assumptions made by large fossil fuel companies, for example all of these firms applying the UN’s 2015 median-variant forecast that global population growth will rise to about nine billion by 2040 rather than the 8.3 billion expected by climactic and socioeconomic modelling. The report said fossil fuel companies are failing to address the scale and pace at which demand for oil, coal and gas could fall as progress is made in renewables and battery technologies, with international climate change commitments playing a growing role.
Carbon Tracker’s head of research James Leaton cited the Volkswagen emissions scandal as an example of the fossil fuel sector having misled consumers. He said: “Investors need to challenge companies who are ignoring the demand destruction that the market sees coming through much sooner than the business as usual scenarios being cited by the industry. Otherwise they will be on the wrong side of the energy revolution.”