If world governments don't limit the production of coal, oil and gas in the next decade, global warming will exceed the targets needed to ward off the worst effects of climate change, according to a new report.

The Production Gap Report, released Wednesday by a group of research organizations including the United Nations Environment Programme (UNEP), found the world is set to produce about 50 per cent more fossil fuels in 2030 than it will take to limit warming to 2 C, and about 120 per cent more than would be needed to limit it to 1.5 C.

Even under 1.5 C of warming, there will be an increase in heat waves around the world, and more extreme storms in eastern North America and eastern Asia, scientists have said.

Two degrees of warming would be even worse, causing the destruction of ecosystems on 13 per cent of the world's land area and increasing the extinction of many plants, insects and animals.

"This calls for a sharpened, and long overdue, focus on fossil fuels," UNEP executive director Inger Andersen said in her introduction to the report. "The world’s energy supply remains dominated by coal, oil and gas, driving emission levels that are inconsistent with climate goals."

Researchers identified that the oil and gas sector, specifically, is on pace to exceed carbon targets, with countries expected to produce between 40 and 50 per cent more oil and gas by 2040 than would be required to limit warming to 2 C.

Canada, the world's sixth-largest oil producer, was singled out for offering federal and provincial subsidies to fossil fuels, as well as the government's 2018 purchase of the Trans Mountain Pipeline for $4.5 billion.

"Though Canada plans to address domestic emissions by putting in place a nation-wide carbon price, fossil fuel production is expected to grow progressively, largely driven by oilsands expansion," reads the report, which goes on to cite research from the National Energy Board forecasting a 60 per cent increase in oil production in Canada from 2017 to 2040.

To that end, one researcher believes Canada has yet to establish a clear path to meeting its climate commitments.

"I would say that, as of yet, Canada does not have a coherent policy framework," Vanessa Corkal, a Montreal-based energy policy analyst at The International Institute for Sustainable Development, said in an interview. "We’ve seen unprecedented efforts by the government to establish some really ambitious policies, but I think Canada needs to have a serious conversation — and it’s a testy conversation — about the fact that our economy is still hugely reliant on the oil and gas industry and that's not compatible with the future."

The fossil fuel sector currently accounts for about eight per cent of Canada’s GDP.

The report says federal subsidies to oil and gas in Canada were $1.6 billion per year from 2013 to 2015, though have fallen since then. It also notes oil, gas and coal subsidies in Alberta amounted to $2 billion the 2017-18 fiscal year.

One bright spot, according to the researchers, is Canada's commitment to phase out coal power 2030, with coal production expected to decline by about 90 per cent from 2017 to 2040.

This is particularly notable in the international context, as the coal sector faces the largest production gap to reach climate change goals: countries currently plan to produce 150 per cent more coal in 2030 than would limit warming to 2 C, and 280 per cent more than would limit it to 1.5 C.

Overall, Canada saw a two per cent reduction in its 2017 emissions relative to 2005 levels. However, its target under the Paris Agreement is to reduce emissions to 30 per cent below 2005 levels by 2030.

"Ongoing fossil fuel production could create challenges for meeting this goal, as upstream oil and gas production alone accounts for 27 per cent of Canada’s territorial emissions," says the report, which notes Prime Minister Justin Trudeau has said expanding the country’s fossil fuel export infrastructure is “of vital strategic interest to Canada.”

The report argues that most current climate policies around the world seek to address consumption, rather than the production side of coal, oil and gas.

It suggests governments consider the adoption of “supply side” climate policy tools, including introducing fossil fuel subsidy reform, taxing the production or export of fuels and using regulatory powers to limit extraction. It also suggests redirecting public finances away from the fossil fuel sector, including the development of transition plans to support workers and communities that rely on fossil fuel industries.

"It’s not something we can avoid, and the longer we wait to invest in communities to improve their economic conditions as we transition to new energy sources, the worse it will be on those communities," Corkal said.

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