Scale and cost of global decarbonisation target "scarily high" finds BP

8 Jul 2021

Quantum Commodity Intelligence - The drop in worldwide carbon emissions last year from energy use, such as oil and coal, cost a “scarily high” price of $1400/mt when the huge loss in economic output and activity is taken into account, warned Spencer Dale, chief economist at BP, on Thursday as he launched the company’s Statistical Review of World Energy.

The 6.3% year-on-year drop in global carbon emissions is what the world needs to average every year for the next 30 years to be on track to meet the Paris climate goals, Dale pointed out.

“Put more concretely, if carbon emissions declined at the same average rate as last year for the next 30 years, global carbon emissions would decline by around 85% by 2050,” Dale said.

He added: "A simple calculation comparing the fall in emissions with the decline in world output equates to an implied carbon price of almost $1400/per tonne - scarily high."

Most of the fall in carbon emissions resulted from oil demand dropping 9.1 million bpd, or 9.3% from 2019.

The US felt the brunt of the oil demand fall, dropping 2.3 million bpd, following by the EU, dropping 1.5 million bpd, and then India, dropping 480,000 bpd.

China was virtually the only country where consumption increased, up 220,000 b/d, BP’s Statistical Review of World Energy 2021 noted.