The International Monetary Fund (IMF) has published a Fiscal Affairs Department paper finding that national climate commitments remain insufficient to meet Paris Agreement temperature goals, while stronger mitigation could substantially reduce exposure to energy supply shocks. Across 169 Paris Agreement economies, expected annual welfare losses from oil and gas supply disruptions totaled an estimated USD 1.1 trillion in 2025, equivalent to 1.3% of their combined gross domestic product (GDP). An illustrative pathway limiting peak warming to 2°C could reduce those losses by USD 339 billion in 2035, or 31% relative to the current policies baseline, measured in constant 2025 prices.
Existing nationally determined contributions imply a 5% reduction in global greenhouse gas emissions by 2035 relative to 2019. Pathways peaking at 2°C and 1.7°C require cuts of about 20% and 45%, respectively, whereas emissions would rise 12% under unchanged policies. Even persistently high energy prices would not achieve the 2°C pathway without stronger mitigation measures. Annualized mitigation costs under an illustrative approach assigning deeper reductions to wealthier countries average 0.5% of global GDP in 2035 for the 2°C pathway, compared with 0.2% for fulfilling existing commitments.
The estimated energy security savings are gross avoided disruption losses, before mitigation costs and other transition effects, and depend on uncertain assumptions about output responses and lasting economic damage. Electricity reliability and critical mineral supply risks fall outside the measure. Policy options include carbon and fuel pricing, with sectoral feebates offering an alternative where pricing is politically difficult. Targeted household transfers can preserve incentives to conserve energy, unlike broad price suppression. Strategic reserves and diversified supply routes can cushion disruptions, but additional fossil fuel infrastructure must be assessed against future demand, carbon lock-in and stranded asset risks.