Investment Institute

A climate change conundrum: Is there a sweet spot for natural gas in the energy transition?

  • 27 September 2021 (10 min read)


  • When burned, natural gas derived from methane emits far less CO₂ than coal. However, if released directly into the atmosphere, it has a far higher warming potential
  • The concentration of methane in the atmosphere is higher now than at any time in at least 800,000 years, and this is due to human activity
  • Leakage of methane from oil and gas infrastructure has dented the green credentials of natural gas, but those emissions are very often preventable
  • We believe regulators should push for stricter policies, pushing oil and gas companies to adopt best practice in operations
  • If inadvertent emissions can be brought under control, then we think methane can have a role in the energy transition, especially as an alternative to coal
  • Care must be taken to ensure this does not slow the adoption and deployment of renewable energy to reduce absolute greenhouse gas emissions


    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial, and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee that forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document are provided based on our state of knowledge at the time of creation of this document. While every care is taken, no representation or warranty (including liability toward third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    Back to top