February 12, 2021


Africa & Middle East

Diversion from oil and gas will cost trillions of dollars to mining countries – 24T24 – Czech TV

The world community is trying to reduce the production of greenhouse gases, the main source of which is fossil fuels, due to the steady rise in average temperature. Carbon Tracker, a non-profit organization, explores the effects of climate change on financial markets. He describes his new report as a warning to mining nations and decision-makers.

For example, he points out that their predictions were based on the assumption that oil demand would increase until 2040. But carbon tracker researchers say that’s just not possible. Oil consumption must be reduced if countries are to achieve their own climate goals. The result is that oil prices will be lower in the coming years than manufacturers now think.

The report analyzes what would happen to the revenues of selected countries if the average global temperature rise were defined as 1.65 degrees Celsius. The report compares $ 13 trillion to a revenue shortfall, which remains the same, with the world extracting oil and gas as before.

Income deficits will affect forty countries

The report also includes countries that do not have fossil fuel-based economies. He mentions Britain, America, India and China. However, it often analyzes the economies of countries where the loss of oil revenues is entirely critical. There are forty countries on this list and are listed as “Petrostates” in the report.

Oil and gas dependence is marked in Iraq and Equatorial Guinea. In both countries, revenue from the sale of these raw materials accounts for more than 80 percent of the state treasury. In the other seven states, including Saudi Arabia, it is at least sixty percent.

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Some states also face huge losses in gross revenue. Seven of them, including Angola and Azerbaijan, are expected to lose at least 40 percent. For the other twelve, including Saudi Arabia, Nigeria, and Algeria, the loss would reach twenty to forty percent. For some countries in the Middle East and North Africa, the impact will be mild because lower costs will give them a competitive advantage in the global supply chain.

The progress of countries that do not have large oil producers, but continue to make deposits, is also worrying. This also applies to Ghana, Uganda and Guyana, so they may face projected revenue losses in the coming years.

Poor countries often face the greatest losses among countries that are already involved in mining or are mine. So the urgent task is to focus on diversification, the report quoted the BBC as saying. It is necessary to diversify both government revenue and the structure of economies.