Climate change policies in line with the objective of transitioning to a lower-carbon world are progressively gaining support amongst policymakers worldwide. In the run-up to the UN Climate Change Conference in December 2015 in Paris, policymakers are intensifying their efforts to agree on a new global framework. The recent agreement between China and the United States and the G-20 meeting in Brisbane in November 2014 underscore these renewed efforts. Because the energy supply sector is the largest contributor to greenhouse gas (GHG) emissions,[1] reworking the current energy supply mix is a priority for policymakers. So far this has resulted mainly in the promotion of low-carbon-emitting energy technologies. However, as part of this strategy, governments are also establishing support schemes for the deployment of renewable energy sources, and in some economies efforts are being made toward higher energy efficiency.

It is widely recognised, at least with regard to existing technologies, that most renewable energy sources in electricity generation need to be backed up by more predictable and stable forms of energy, and fossil fuels often seem to be the unavoidable option. In view of the low-carbon goals mentioned above, it would seem logical that natural gas, as the fuel that produces the most energy per carbon emitted, would be strongly promoted: in combination with investments in renewable energy sources or stand-alone, gas-fired power generation achieves a meaningful reduction in GHG emissions compared to energy mixes that rely mainly on coal, for example.

However, fuel switching for environmental purposes has not yet gained momentum. On the contrary, the last ten years have seen a marked increase in coal-fired generation, which has dwarfed the use of gas-fired generation in some cases and may have even negated the gains from investments in renewable energy. The contribution which gas can make towards reducing global warming by replacing coal in the fuel mix has not been reflected in any firm policies by policymakers.

This paper aims to explain this counter-intuitive development by reviewing the current status of gas as a “clean fuel” in energy policies. It discusses reasons why governments hold back on making gas a centrepiece of their energy policies and examines why the role of coal, the main competitor of gas, has managed to be largely unaffected. The paper concludes with a look at what might lead to a change in the future with regard to the role of gas in a low-carbon economy.