Oil powers the cars we drive and the flights we take; it heats many of our homes and offices. It is in things we use every day, and it plays an integral role across industries and economies. Yet it has become very clear that the relentless burning of fossil fuels cannot continue unabated.
The United Nations’ Intergovernmental Panel on Climate Change (IPCC) recently warned that a 2015 pledge by governments to restrict global warming to 2 degrees Celsius above pre-industrial levels will not be enough. It recommended that average temperature rises be capped at 1.5 degrees to avoid irreversible environmental damage.
To achieve the global emissions pledge by 2050 and limit temperature rises to agreed targets, oil demand may need to fall 30%. Our Research team investigated whether the globe’s estimated oil needs for the next few decades could be compatible with such a drop.
Source: BP Statistical Review for historic data. Barclays Research for forward looking estimates.
Going forward, oil is likely to remain an important player in the energy mix: alternatives that provide the capacity to support growing populations and economies do not yet exist. But by 2050, the world will undoubtedly look different as advances in renewable energy, technological innovation and strict low-carbon policies help to ease the reliance on fossil fuels.
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While we can expect some new efficiencies in the next 30 years, to achieve the global emissions pledge by 2050, radical change needs to occur at a global level to reduce oil demand. This involves a fundamental shift in the way governments, companies and individuals prioritise long-term investments over short-term economic gains.
Read our full report to learn more about how efforts to curb global warming will affect the world’s need for oil over the next 30 years.
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