Production Gap Report 2021

Why in news?

• The third edition of Production Gap Report was published on October 18, 2021.

About the report:

• The Production Gap Report measure the gap between projected future fossil-fuel production and the maximum allowable production, to stay within the Paris Agreement’s temperature thresholds. This is the so-called production gap.

Why the report was launched?

• There was a belief among international policymakers that efforts to reduce emissions had focused exclusively on decreasing the demand for fossil fuels, by improving energy efficiency and innovating renewable power sources, while supply side measures were also necessary but relatively sidelined.
• In short, we skipped the active measures that we needed to take to actually reduce the production of fossil fuels, irrespective of demand.
• To measure our progress to that end, the UNEP, along with the Stockholm Environmental Institute, launched  Production Gap Report in 2019.

Key findings of 2021 report:

• The world is on track to producing 110% more fossil fuels in 2030 than would be consistent with the 1.5º C threshold, and 45% more fossil fuels than would be consistent with the 2º C threshold.
• Projected fossil fuel production
  • The report estimates a big increase in global oil and gas production and only a small decline in coal production.
  • The decline in coal production is slated to be led by China and the US – but much of that will be nullified by higher production in India, Russia and Australia.
  • The increase in oil production is expected to be led by Saudi Arabia, the US and Brazil, while the increase in gas production is led by Saudi Arabia, China, Russia and the US
• Fuel finance
  • In 2019, fossil-fuel subsidies totaled around Rs 35 lakh crore.
  • The report also notes that a lot of the post-COVID stimuli of governments around the world have been directed at fossil-fuel producing and consuming activities
  • Governments have also supported fossil-fuel production through new tax incentives, guarantees, regulatory changes etc.

India’s Position:

• India plans to augment coal production from 730 million tonnes in 2019 to 1,149 million tonnes in 2024.
• India also aims to increase total oil and gas production by over 40% in the same period through measures such as accelerated exploration licensing, faster monetization of discoveries, and gas marketing reforms.

Add ons:

• UK has become the first country to exclude all fossil-fuel production from support from its export credit agency.

PRACTICE QUESTION:

With reference to ‘Production Gap Report’, consider the following statements:

1. It measures the gap between demand and supply of capital goods in the international market

2. It is launched by World Trade Organization (WTO)

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer