Carbon Tracker study: Climate targets could cost oil states $ 13 trillion | latest news

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A report by the Research Center, Carbon Tracker, said that some oil-producing countries may lose 40% of their budgets as the world moves to reduce the use of fossil fuels by 2040.

According to the report, the total loss of all oil-producing countries is estimated at nearly $ 13 trillion, (in dollar prices in 2020), because efforts to control global warming seek to remove carbon in energy production.

This report is a warning to oil-producing countries and international policy officials, who set their plans on the basis that oil demand will continue to rise until 2040.

However, the center says that demand will decrease to achieve the goals of climate change, and that prices will be lower than what the producing countries and oil industries expect.

The report examines what will happen to government budgets if temperature rises on the ground are set at 1.56 degrees Celsius.

The report indicated that the loss (estimated at $ 13 trillion in revenue) may include countries whose economies do not depend primarily on oil, such as the United States, Britain, China and India.

But the report focuses on a group of countries in which the loss will be more severe for them, namely, 40 countries, which the report calls “oil states.”

The budgets of these countries are expected to incur a severe loss of up to 46% of their oil and gas revenues.

Reliance on oil and gas revenues is essential for countries such as Iraq and Equatorial Guinea, and reaches more than 80%. For seven other countries, including Saudi Arabia, the dependence on oil revenues exceeds 60%.

Some countries face a major loss in their budgets, as Angola and Azerbaijan are expected to lose at least 40 percent of their revenues. Meanwhile, 12 other countries, including Saudi Arabia, Algeria and Nigeria, are expected to lose 20 to 40 percent of their revenues.

The impact of the shift in energy production methods will be less severe for some countries in the Middle East and North Africa, because the low cost of production gives these countries an advantage in the international market.

The report also raises concerns about what it calls “emerging petroleum states”, and the losses they will incur in the oil wells that have developed plans to exploit them in the coming years. Among the countries facing these risks are Ghana, Guyana, and Uganda.

Poorest countries will have severe losses

We find that some countries that face severe losses in current or potential gas and oil production are among the poorest countries.

The report says that diversifying economic revenues has become an urgent task for these governments, according to the needs of each of them. But there are steps that all countries must take.

Among these common steps are investment in education, improving government performance and the economic climate. Amounts not invested in fuels should be transferred to investment in industries that are compatible with this shift in energy production and consumption.

The report says that the rest of the world should support this transformation, for ethical reasons, because many of the countries at risk of loss are poor countries.

This will lead to better results in the field of climate change, and it will also help prevent petroleum states from becoming unstable. These countries may witness social unrest due to the lack of expenditures and the lack of funding for the security services, which are in charge of preventing unrest.

Carbon Tracker is a London-based non-profit research organization that researches the impact of climate change on financial markets. The foundation had promoted the concept of a carbon bubble, which describes the mismatch between the continued development of fossil fuel projects and the fight against climate change.





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