The “supply” side of the climate crisis: Why production matters

Climate policy, at the UN as well as at the State level, has focused largely on emissions (demand). But the climate crisis is structurally driven by fossil fuel production.

Some key facts:

1. Fossil fuels (coal, oil and gas) still account for around 80% of global primary energy supply.

2. Global fossil fuel production has not declined — in many regions it continues to expand, despite climate commitments.

• Fossil fuel supply from 20 major producer countries (which together account for ~80 % of global production) is still increasing in most cases instead of peaking or declining. Yet, based on scientific energy system models, to keep warming to a ≤50 % chance of 1.5 °C, around 60 % of oil and gas reserves and ~90 % of coal reserves would need to remain unextracted by 2050.

• Governments plan to produce more than double the amount of fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C (UN Production Gap findings).

3. Existing fossil fuel infrastructure (wells, pipelines, LNG terminals, coal plants) already locks in emissions that would exceed the remaining 1.5°C carbon budget if fully utilized.

4. Fossil fuel extraction and processing generate long-term environmental and public health damage that persists for decades. Oil spills, methane leaks, coal ash contamination, abandoned wells, groundwater pollution and toxic air emissions leave lasting impacts on ecosystems and communities. Even after production stops, cleanup costs and health consequences continue — often borne by the public rather than the companies responsible.

5. Exploration licensing for potential projects today determines energy system trajectories for decades : once built, fossil fuel infrastructure operates for decades: Oil and gas fields: 20–40 years, LNG terminals: 30–50 years, Coal plants: often 40+ years. These new production projects create “lock-in effects”: financial, contractual, and political pressures to keep extracting in order to recover investment.

6. Major producing countries subsidize fossil fuel extraction directly and indirectly through tax breaks, public finance, and export guarantees. Public financial institutions and export credit agencies also continue to support new oil and gas infrastructure abroad.

7. Energy systems are path-dependent: once pipelines, ports and grids are built, entire regions adapt around them.

8. Every new oil or gas field increases the risk of stranded assets — infrastructure that becomes economically obsolete in a 1.5°C-aligned transition.

9. Fossil fuel supply expansion lowers global prices, which stimulates consumption and slows the transition to renewables. 

10. Managing the decline of fossil fuel production in a planned way is more economically stable than allowing chaotic collapse triggered by climate disasters, price shocks or stranded assets.

Production decisions shape the entire global energy system:

• They influence global prices.

• They determine investment flows.

• They lock in infrastructure.

• They slow or accelerate renewable deployment.

• They shape geopolitical power balances.

Without a planned phase-out of fossil fuel production, emissions reductions alone will not be enough. Supply-side action is therefore:

• A climate necessity.

• A financial stability measure.

• A geopolitical de-escalation strategy.

• A prerequisite for a just transition.

The Santa Marta Conference aims at addressing this gap in the inter-State negotiating process.