Climate Damage Would Obliterate Any Economic Benefits of New North Sea Fields, Analysis Shows

 

Climate Damage Would Obliterate Any Economic Benefits of New North Sea Fields, Analysis Shows

## Introduction: The £28.7 Billion Mirage

There's a moment in every policy debate when the numbers stop being abstract and start telling a story that can't be ignored. For the UK's North Sea oil and gas ambitions, that moment arrived on August 25, 2026.

An independent analysis, submitted to the Rosebank consultation and an academic journal, has delivered a verdict that cuts through the political noise: **the climate damage from developing the Rosebank and Jackdaw oil and gas fields would destroy their economic benefits many times over**.

The numbers are stark. The economic damage caused by the carbon pollution from the oil and gas produced would be between **£119 billion and £336 billion** in the coming decades. That's compared with just **£28.7 billion** in value to the UK estimated by Adura, the fossil fuel company promoting the new fields.

Luke Hatton, at Imperial College London, who conducted the analysis, put it bluntly: *"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"*.

This isn't just another environmental report. It's an economic autopsy of a policy that, according to the data, makes no financial sense.

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## The Fields: What Are Rosebank and Jackdaw?

### Two Giants of the North Sea

Rosebank and Jackdaw are two of the largest undeveloped oil and gas fields remaining in the North Sea.

**Rosebank**, located west of the Shetland Islands, is the UK's largest undeveloped oil field. **Jackdaw** sits east of Aberdeen. Together, they represent a significant portion of the UK's remaining fossil fuel reserves.

Adura, the joint venture between Shell and Norway's Equinor promoting the projects, has argued that the fields would bring real economic benefits. The company estimates the projects represent around **£8 billion in investment** and would support **3,500 jobs at the peak of construction**, with **880 people employed over the lifetime of production**.

### A History of Controversy

The fields have a contentious history. They previously received approval from the Conservative government in 2022 and 2023, but these decisions were later **overturned by courts in 2025** due to inadequate environmental impact assessments that failed to consider downstream emissions.

Now, the decision rests with Prime Minister Andy Burnham, who faces a revolt from Labour MPs who oppose the plans. Former energy secretary Ed Miliband once called the Rosebank proposal **"climate vandalism"**.

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## The Analysis: How the Numbers Were Calculated

### Peer-Reviewed Science Meets Real-World Data

The analysis applies **peer-reviewed research published in the journal Nature in March** on how rising temperatures harm economies. It uses production estimates for the fields submitted to the government by Adura.

The researchers calculated how much carbon dioxide pollution would result from Rosebank and Jackdaw and how much economic damage that would cause around the world. The economic damage is estimated for the period up to 2100.

The spread of estimates—from £119 billion to £336 billion—results from using ranges for how damages may increase in the future, valued in today's money.

### Conservative Estimates

Crucially, the figures are likely to be **underestimates**. They do not include losses from amplified extreme weather, sea level rise, or climate deaths.

If oil and gas production at Rosebank and Jackdaw is better than Adura's central case, the climate damage range rises to **£170 billion to £482 billion**.

Just 6% of this higher estimate would need to be felt in the UK to wipe out all the suggested economic gains within the country.

### The "Additionality" Assumption

The analysis is based on the evidence that new oil and gas fields do not generally lead to other fields being shut down. In other words, developing Rosebank and Jackdaw would add new carbon to the atmosphere rather than replacing existing production. This is a critical assumption that underpins the entire analysis.

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## The Carbon Footprint: A Colossal Emissions Burden

### 250 Million Tonnes of CO₂

Estimates suggest Rosebank alone could produce **more than 250 million tonnes of CO₂** over its lifetime—**equivalent to 70% of the UK's annual emissions**.

Combined with Jackdaw, the emissions burden is staggering. And all of this carbon would be added to the atmosphere at a time when the world is struggling to meet its climate goals.

### The "Lower Emissions" Argument

Adura has argued that Rosebank and Jackdaw would be "among the lowest emission projects in the UK". The company has said the two projects would produce around **half the average production emissions** of UK continental shelf oil and gas schemes and would be **eight times lower than imported LNG**.

But the new analysis cuts through this argument. Even if the fields are relatively efficient compared to other fossil fuel projects, the sheer scale of the emissions means the climate damage would still dwarf any economic benefits.

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## The Economic Reality: A Net Loss for the UK

### The £28.7 Billion vs. £119-336 Billion Gap

The numbers are unambiguous. Adura estimates the fields would add **£28.7 billion in value** to the UK economy. The analysis estimates climate damage of **£119 billion to £336 billion**.

Even at the lowest estimate, the climate damage is **more than four times** the projected economic benefit. At the highest estimate, it's nearly **twelve times** larger.

### The Taxpayer Burden

Multiple analyses suggest the project could yield a **net financial loss for the UK Treasury** over the long-term compared to the private profits generated. UK taxpayers would shoulder more than 80% of the project's costs whilst not benefiting from the profits.

Prof Ian Bateman, at the University of Exeter Business School, put it in stark terms: *"This is an interesting study which shows the cumulative global climate damage of oil extraction and use is beginning to exceed its face value. When we add in the tax giveaways to the oil industry and compare this to the declining cost and zero climate damage of renewable energy then the economic case for leaving oil in the ground is overwhelming"*.

### The Energy Security Delusion

The argument that approving Rosebank and Jackdaw would reduce UK bills and improve energy security is a **"delusion"**, according to energy experts. Oil and gas are internationally traded commodities. The UK cannot insulate itself from global prices by producing more domestically.

In fact, Rosebank and Jackdaw would displace only **1% and 2% respectively of the UK's gas imports**. The impact on energy security would be negligible.

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## The Broader Context: A £4.4 Billion Warning

### This Summer's Heatwave Cost

Richard Sulley, of the University of Sheffield's Grantham Centre for Sustainable Futures, who was not part of the study, offered a powerful perspective:

*"Expanding oil and gas production in the North Sea is not just an environmental crime but also economically illiterate. Climate change has already damaged the UK economy, with an estimated £4.4bn loss from this summer's heatwaves alone"*.

The UK is already paying the price of climate change. Approving new fossil fuel projects would only increase that cost.

### The Net Zero Alternative

The UK's net zero sector has grown **three times faster** than the overall UK economy in recent years. The transition to clean energy is not just an environmental imperative—it's an economic opportunity.

As Hatton put it: *"The alternative is to really double down on clean energy technologies"*.

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## The Political Landscape: A Prime Minister Under Pressure

### Burnham's Dilemma

Prime Minister Andy Burnham faces a difficult decision. The oil industry, some energy leaders, and rightwing political parties are pushing for the go-ahead. Most centre and leftwing political parties, climate scientists, and environmental campaigners are opposed.

Burnham also faces a revolt from Labour MPs who oppose the plans. The former energy secretary Ed Miliband once called the Rosebank proposal "climate vandalism".

### The Conservative Position

The Conservative Party has branded the move to shut down oil and gas and the refusal to tap into the Jackdaw and Rosebank fields as **"economic insanity"**. They argue the UK needs both resources for decades to come.

### The SNP Split

Even the Scottish National Party is divided. The SNP split has deepened as John Swinney's own MSP has rejected new drilling.

### A Possible Compromise

It has been suggested Burnham could approve Jackdaw but block Rosebank. Rosebank's anticipated production accounts for the bulk of the damages—about 88%. Such a compromise might allow Burnham to claim he is supporting jobs and energy security while limiting the worst climate damage.

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## The Scientific Community's Verdict

### "A Reasonable Piece of Exploratory Work"

Dr Rick Lupton, at the University of Bath, offered a measured assessment: *"The analysis is a reasonable piece of exploratory work based on real data and studies, but there are lots of assumptions involved in the specific numbers. The general point is sound: climate damage will certainly increase from exploiting these fields, and this may well be comparable or much larger than the economic benefits from the development, especially considering the mismatch between who benefits and who suffers the impacts"*.

### The Climate Change Committee's Warning

The government's official advisers, the Climate Change Committee, said in March: *"Achieving net zero is a more cost-effective path for the UK economy than continued reliance on fossil fuels, bringing a net benefit to society"*.

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## Frequently Asked Questions (FAQs)

### 1. What are the Rosebank and Jackdaw oil and gas fields?

Rosebank and Jackdaw are two of the largest undeveloped oil and gas fields remaining in the North Sea. Rosebank, located west of the Shetland Islands, is the UK's largest undeveloped oil field. Jackdaw sits east of Aberdeen. Together, they represent a significant portion of the UK's remaining fossil fuel reserves.

### 2. What did the new analysis find?

The analysis found that the climate damage from developing Rosebank and Jackdaw would be between **£119 billion and £336 billion** in the coming decades, compared with just **£28.7 billion** in value to the UK estimated by the fossil fuel company promoting the fields.

### 3. How was the analysis conducted?

The analysis applied peer-reviewed research published in the journal *Nature* in March on how rising temperatures affect economies. It used production estimates for the fields submitted to the government by Adura, the joint venture between Shell and Equinor.

### 4. Are the damage estimates likely to be accurate?

The figures are likely to be **underestimates**. They do not include losses from amplified extreme weather, sea level rise, or climate deaths. If production exceeds central forecasts, the damage range rises to £170 billion to £482 billion.

### 5. How much carbon would Rosebank produce?

Rosebank alone could produce **more than 250 million tonnes of CO₂** over its lifetime—equivalent to 70% of the UK's annual emissions.

### 6. Would developing these fields improve UK energy security?

Energy experts say the argument that approving Rosebank and Jackdaw would reduce UK bills and improve energy security is a **"delusion"**. Oil and gas are internationally traded commodities, and the fields would displace only 1% and 2% respectively of the UK's gas imports.

### 7. What is the political context?

Prime Minister Andy Burnham faces a difficult decision. The oil industry and rightwing parties are pushing for approval. Most centre and leftwing parties, climate scientists, and environmental campaigners are opposed. Burnham faces a revolt from Labour MPs over the plans.

### 8. What is the alternative to developing these fields?

The UK's net zero sector has grown **three times faster** than the overall UK economy in recent years. The transition to clean energy is not just an environmental imperative—it's an economic opportunity.

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## Conclusion: A Choice Between Profit and Survival

The new analysis on Rosebank and Jackdaw is not just another environmental report. It is an economic verdict. It tells us that the climate damage from developing these fields would **destroy their economic benefits many times over**.

The numbers are stark: £119 billion to £336 billion in climate damage versus £28.7 billion in projected economic benefit. Even at the lowest estimate, the damage is more than four times the benefit. At the highest, it's nearly twelve times larger.

The argument that these fields would improve UK energy security is a delusion. The argument that they would create jobs ignores the fact that jobs in the sector fell by more than half between 2013 and 2023, from 441,000 to 213,000. And the argument that they would boost the economy ignores the fact that climate change has already cost the UK £4.4 billion from this summer's heatwaves alone.

As Richard Sulley put it: *"Expanding oil and gas production in the North Sea is not just an environmental crime but also economically illiterate"*.

The UK faces a choice. It can continue to invest in fossil fuels that will destroy the climate and, ultimately, the economy. Or it can double down on clean energy technologies that are already growing three times faster than the overall economy.

The numbers are clear. The science is settled. The only question is whether the politicians are listening.

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## Disclaimer

*This article is for informational and educational purposes only and does not constitute financial, investment, tax, or legal advice. All views expressed are based on publicly available information as of August 25, 2026. The analysis discussed is subject to assumptions and uncertainties. The author does not endorse any specific policy positions or investment strategies. Before making any decisions based on the content of this article, please consult with qualified professionals who can evaluate your specific situation. The author is not affiliated with the Guardian, Imperial College London, or any other entity mentioned in this article.*