New Analysis: Climate Costs of North Sea Oil Projects Dwarf Promised Economic Gains
A new economic assessment has cast doubt on the financial justification for the UK government’s proposed development of the Rosebank and Jackdaw oil and gas fields, revealing that the potential climate-related damage could outweigh projected economic benefits by billions of pounds.
The research, which has been submitted for academic publication and provided to the government’s consultation, estimates that the carbon pollution generated by these projects will result in between £119bn and £336bn in global economic damage over the coming decades. These figures stand in stark contrast to the £28.7bn in value to the UK economy cited by Adura, the fossil fuel company spearheading the projects.
A Stark Economic Mismatch
The analysis applies peer-reviewed data on how rising global temperatures impact economic productivity to production estimates provided by the developer. Experts warn that even these high figures are likely conservative, as they do not account for the catastrophic costs associated with increased climate-related mortality, sea-level rise, or the destruction caused by amplified extreme weather events.
“The numbers presented here show there’s going to be a very strong destruction of economic value above and beyond what Rosebank and Jackdaw could generate for the UK,” said Luke Hatton of Imperial College London, who led the study. “The alternative is to really double down on clean energy technologies, a sector that has grown three times faster than the overall UK economy in recent years.”
The findings have sparked a heated debate regarding the future of the North Sea. While industry proponents and some political factions argue that new drilling is essential for energy security and economic growth, climate scientists and independent energy experts categorize such claims as a “climate damage” that undermines the nation’s long-term prosperity.
Political Friction
The decision—which rests on the desk of Prime Minister Andy Burnham—has become a flashpoint for internal political conflict. Burnham faces significant pressure from a group of Labour MPs opposed to the drilling, mirroring earlier critiques from prominent figures like former energy secretary Ed Miliband, who once infamously labeled the Rosebank proposal “climate vandalism.”
Energy experts have further debunked the notion that these fields will lower consumer bills, noting that oil and gas are internationally traded commodities. “Expanding oil and gas production in the North Sea is not just an environmental crime but also economically illiterate,” said Richard Sulley of the University of Sheffield’s Grantham Centre. “Remaining tied to the use of fossil fuels keeps UK industries and consumers exposed to international markets… which will cost way more than it can ever deliver in growth.”
The “Net Zero” Imperative
The government’s own official advisers, the Climate Change Committee, have consistently maintained that a transition to net zero is a more cost-effective path for the UK than maintaining a reliance on fossil fuels.
While the Department for Energy Security and Net Zero maintains that the North Sea remains a “vital national asset” for jobs and energy security, the research team behind the new analysis notes that the economic case for leaving these resources in the ground is becoming increasingly difficult to ignore.
Should the UK experience just 6% of the projected climate damages from these specific projects, it would be enough to entirely wipe out all of the economic gains promised by the developers. With the world facing increasingly volatile energy prices and the accelerating impacts of global warming, the debate over Rosebank and Jackdaw has shifted from a question of energy policy to one of long-term national economic stability.
