COP29 in Baku concluded by reaffirming the agreed call on all parties at the previous UAE COP28 to contribute, inter alia, to ‘Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.’

A key issue raised by the transition away from fossil fuels is where the responsibility lies between fossil fuel exporting and importing countries. Who bears the responsibility to do the transitioning? There is a significant divide here between the climate movement and the fossil fuel industry and producing states.

The former advocates supply-side production cuts in export countries, arguing that the remaining global carbon budget allows for no new oil and gas fields to be explored and developed.

The latter argue that they are merely meeting existing consumer demand and that with greater electrification of the economy, production will naturally fall as demand falls. To cut supplies independently would, they argue, make for a disorderly transition because of the threat to short-term energy security. In any event, there is a risk that other companies or countries would simply step in to replace that supply. (That final argument has been labelled, somewhat caustically, by the climate movement as the ‘drug dealer’s defence’.)

What does the Paris Agreement say about exported emissions? 
The Paris Agreement’s greenhouse gas accounting rules do not help. They provide little incentive for exporting states to take action to reduce their emissions by curbing their exports of fossil fuels. These rules mean that major exporting countries – including Russia, the US, Saudi Arabia, Norway, Qatar and Australia – do not have to account for their Scope 3 emissions from exports. Instead, those emissions show up in the accounts of the importing countries where the fuels are consumed.

Of course, the export countries have to account for their domestic production emissions – those that arise from vented and fugitive methane at production wells, and CO₂ from flaring and from power used in drilling, transport and LNG liquefaction.

While reducing the ‘emissions intensity’ of production sites is also important for climate change, by far the greatest climate impact comes from consumption emissions when fossil fuels are burned.

The Paris accounting rules for states are out of step with the way companies are increasingly being held to account for their emissions, with most now being pushed to include their customers’ Scope 3 emissions under corporate climate disclosure rules and in Paris-aligned corporate climate targets.

Not all companies are on board. Saudi Aramco has failed to set Scope 3 net zero targets. And some, like Shell and BP, have rowed back on theirs. But there is at least pressure for companies to play their part in reducing global emissions across their value chains. They are increasingly having to account for those emissions, and not just Scope 1 and 2 emissions associated with their own operations.

The question thus remains after recent COPs: why are we lacking such pressure on fossil fuel exporting countries, which are conveniently offshoring their emissions while reaping the economic benefits? Until they have a proper incentive to reduce those export emissions, because they will show up on their own Paris nationally determined contribution (NDC) pledges rather than someone else’s, COPs are likely to continue to disappoint on the mitigation of emissions from fossil fuels.

Accounting and disclosure matter. If companies are obliged to account for their Scope 3 emissions and consider measures they can take to reduce them, states must be too. Very few producer NDCs currently contain such information. We should not be in a position where countries can trumpet reduced domestic emissions in their NDCs while their exported emissions remain high.

The question thus remains after recent COPs: why are we lacking such pressure on fossil fuel exporting countries, which are conveniently offshoring their emissions while reaping the economic benefits?

Why shouldn’t exporters report their Scope 3 emissions? 
What are the possible downsides of this approach? One is a risk of double counting of emissions. We need the combustion emissions in importing states to show up still, because that helps to incentivise energy efficiency measures and decarbonisation of their economies. A way forward would be to require exporting countries to report their exported emissions in their NDCs and, like companies with Scope 3 declarations, to have a target and plan for reducing them.

That would make these export emissions visible and hold countries to account for them without the figures necessarily needing to be counted as such for the purposes of capturing total global emissions (where you do want a single measure).

The second is the need to ensure a just transition. The economies of some low-income countries are heavily reliant on fossil fuel exports. When it comes to supply cuts, the principle of common but differentiated responsibilities (CBDR) in the Paris Agreement means that richer exporting countries should take on the lion’s share, leaving low-income countries longer to transition.

But the ‘common’ part of CBDR matters as much as the differentiation part: all exporting countries should be obliged to disclose their exported emissions and have a target and plan for how they intend to reduce them.

This is all the more timely in light of the current International Court of Justice Advisory Opinion proceedings on climate change. Requested in April 2023, the Hague, Netherlands-based Court began deliberations on 13 December last year after a two-week public hearing. That day, Judge Cleveland asked state participants: ‘What are the specific obligations under international law of States within whose jurisdiction fossil fuels are produced to ensure protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases, if any?’

Mandatory requirements on disclosure and targets for exported emissions may well end up in the answers.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.

• Further reading: ‘New fossil project approvals must consider Scope 3 emissions, rules UK Supreme Court’. The UK Supreme Court ruled in favour of a climate campaigner in her legal challenge against plans to drill for oil in Surrey, in a case which some say could set a precedent restricting plans for future fossil fuel extraction projects in the UK.
• Sustainability and carbon emission reduction is no longer optional for larger companies, but a requirement to stay afloat in today’s market. Find out more on the implications of new UK government energy and carbon regulation schemes.