Climate and environment
The mining and petroleum sectors are significant contributors to global greenhouse gas (GHG) emissions. Achieving the goals of the Paris Agreement will require acceleration of mitigation efforts given the widening emissions gap. Effective policy and regulatory frameworks governing these sectors’ GHG emissions are extremely powerful public policy tools for addressing the global climate crisis. The petroleum sector is a particular area in which, with targeted support, significant reductions can be achieved. For example, methane reductions of 70 per cent can be achieved with existing technology alone.
The large footprint and poor practices of projects can contribute to pollution, ecosystem degradation and loss of biodiversity. For example, mining is responsible for around 7 per cent of annual forest loss in developing countries. Robust regulations and enforcement is needed to minimise these impacts.
Development
In the face of compounding crises, many governments are looking to these sectors to provide foreign exchange and revenues to, for instance, finance development needs, service debt, and deal with the loss and damage of climate change. If wisely managed, natural resources can lead to economic growth and poverty reduction. However, most resource-rich countries underperform on social, environment and economic measures, and have high levels of corruption, inequality and conflict. Good governance is recognised as instrumental to avoiding this ‘resource curse’ and generating positive development outcomes. 7
Just energy transition
Each country’s energy transition pathway will reflect its national policies, circumstances and nationally determined contributions under the Paris Agreement. The global energy transition also has additional risks and opportunities for mining and petroleum producing countries. Good governance is important to ensure policy coherence, minimise economic and social disruptions, avoid stranded assets and maximise benefits from the circular economy and new value chains.
The effective and transparent management of natural resources can, in many countries, provide a cornerstone of climate-resilient, inclusive sustainable development which can improve the prosperity of all citizens.
