Maximizing Opportunities and Managing Risks of Declining Demand for Oil and Gas-Dependent Producer Countries (Climate Week 2)

Almost a decade after the adoption of the Paris Agreement, we remain far off course to meet our goal of limiting global temperature rise to well below 2°C. Most forecasters today, including the International Energy Agency, expect global oil and gas demand to peak before 2030 even in the absence of new climate policies. This decline is driven by new technologies (e.g. in wind and solar power generation) which, as they become more competitive, are replacing fossil fuels in their largest uses. Likewise, major importing regions like the EU and China aim to reduce fossil fuel consumption and imports based on climate and energy security concerns.

Africa plays an important role in this global energy ecosystem. Countries like Nigeria, Algeria, and Libya hold important oil and gas resources and rely on this sector to secure fiscal revenues and finance their economic development. The decline in oil and gas demand will create significant challenges for these economies and worsen pre-existing socioeconomic challenges related to fiscal deficits, debt, currency instability, and low energy access. This puts unprecedented pressure on these countries to not only shift their energy systems but also to transform their entire economies to prepare for this decline. As the energy transition unfolds, governments must take urgent and proactive steps to ensure a people-centered and justice-oriented transformation away from oil and gas dependency.

Leveraging the recent Policy Dialogue on Just Energy Transitions, this event will convene diverse stakeholders from research, policy, labour, civil society and finance sectors to explore the emerging risks and transboundary implications of oil and gas demand decline for (new) producer countries, with a special focus on African perspectives and experiences. The discussion aims to identify evidence-based policy solutions to this challenge, maximizing socioeconomic opportunities and enabling pathways to prosperity beyond fossil fuels.