Hijacking Future Horizons to Capture the Present

Photo by Dieter Zinnbauer

“We need facts, not fantasies. We need impartiality, not ideology. We hope that the IEA’s World Energy Outlook represents a return to the fold of analysis grounded in energy realities and that we have passed the peak in the misguided notion of ‘peak oil.’”

— OPEC, November 2025

What Is Policy Capture?

In principle the notion of policy capture is easy to grasp: vested interests influencing specific policies and policy-making in their favour. But it is devilishly hard to unpack. How exactly is this influencing taking place and being organised? Explanations veer between simplistically material, equating more resources with more influence, and on the other end of the spectrum the conspiratorial mantra of a collusive interlock between big government and big business. The reality is more interesting: a mix of the coarse and mundane with the intriguingly delicate, subtle, and acupunctural.

Peak Capture Risk: Climate Politics with a Trillion-Dollar Price Tag

There is probably no better reservoir of examples than the energy transition when it comes to policy capture. An effective response to the climate crisis, a just and swift energy transition, all but hinges on putting in place the right policies. The technologies are available or soon will be; the economics of cost-superior renewables and high-efficiency electrification look better by the day; the scientific grounding is in place; the planning frameworks are ready. Only the politics and political support remain the most contested and most critical piece of the puzzle.

This battle for the right politics pits highly concentrated direct economic losses in the trillions against much higher, yet much more dispersed public gains in the priceless realm of protecting planetary boundaries and the flourishing of future generations. Consider just a couple of empirics that highlight the primacy of politics and what is at stake for fossil interests:

• Policies that limit global warming to the Paris anchor of 1.5 degrees by 2050 would require nearly 90% of coal and 60% of oil and gas reserves to remain in the ground (Welsby et al., 2021), leading to asset write-downs amounting to USD 13–17 trillion in conservative estimates (Hansen, 2022).

• Companies that assess and report on climate change impact on their business models are much more likely to view regulatory and policy risks as material than physical risks directly induced by climate change (Bolstad et al. 2020; Vita & Kang, 2024), and they are more inclined to get involved in lobbying when confronted with these policy-related risks (Jiao et al., 2025).

Influencing climate politics now, slowing them down, thinning them out, nudging them into ineffective dead-ends comes with tremendous upside for fossil and fossil-adjacent industries. There is no better place to observe attempts of policy capture than climate politics, no more urgent policy arena to fight it.

Capturing the Future: The Battle of the Baselines

Here is a very recent and particularly pernicious example that exemplifies policy capture in all its complexity, tactical shrewdness, and critical consequence: the arcane battle about IEA baseline scenarios for projecting energy system developments.

The International Energy Agency is tasked with making informed projections about how energy systems are likely to evolve. This type of modelling is fiendishly complicated and rests on core assumptions about energy innovation, economics, and—very importantly—energy and climate policies. What is a realistic rate of technological innovation? How are cost-curves shifting? How are demand and supply moving? And, enveloping it all, how are policies, targets, and their implementation evolving?

Finding the Right STEPS

Since 2019, when it renamed its earlier New Policies Scenario, the IEA has used the so-called STEPS (Stated Policies Scenario) as its central projection. STEPS does not just account for the status quo of policies and technological development but takes into account stated and planned policies, plausible evolution of commitments, and the trajectory of technological change. It does not freeze a current level of ambition in place but sensibly works with the plausible trajectory of how ambitions are likely to evolve according to stated objectives, articulated intentions, and how technological and economic conditions are changing based on observed trajectories.

In short, to arrive at a more accurate scenario it takes into account a more robust second derivative of societal change: not only the changes likely to happen but also the changes in change rates and dynamics that bear on the evolution of energy systems. This approach is not just defensible but likely more accurate than simply projecting the status quo into the future.

This STEPS approach yields a highly influential projection: that peak oil demand will be reached around 2030. That finding provoked the fossil fuel industry to wage a concerted battle to change the baseline assumption and push for a re-introduction of the more conservative Current Policies Scenario (CPS), which the IEA had dropped after 2020 on the grounds that such a pathway was, in the agency’s own words, “difficult to imagine prevailing in today’s circumstances.”

Capturing Your STEPS

Business interests adopted a multi-pronged approach to influence the selection of the baseline scenario:

Ideational groundwork. Fossil-funded think tanks and advocacy groups framed the STEPS scenario as out of step with reality and reliant on naïve, overly optimistic projections of political will. Energy In Depth, funded by Chevron, BP, Halliburton, and the American Petroleum Institute, ran coordinated messaging campaigns casting STEPS as “activist modelling.” The National Center for Energy Analytics (NCEA)—launched in March 2024 by the Texas Public Policy Foundation, a conservative policy organisation with documented ties to Koch Industries and fossil fuel interests—produced reports explicitly designed to challenge IEA transition scenarios and influence Republican energy policy.

Political pressure. This messaging provided rhetorical ammunition for influential lawmakers to issue harsh criticism and veiled warnings to the IEA. Senator John Barrasso (R-Wyoming), who has received over $1.3 million in career oil and gas contributions, and Representative Cathy McMorris Rodgers (R-Washington), who received nearly $950,000 in career oil and gas funding, were the primary political attackers of STEPS. Barrasso participated in the NCEA report launch in January 2025. Through long-cultivated relationships and campaign finance, fossil interests had built congruent viewpoints with these key policymakers who held direct jurisdiction over energy policy.

Structural leverage. The aggressive stance of the US administration on energy issues, paired with a demonstrated willingness to meddle deep in the weeds of international bodies’ operations, provided further coercive force. The US bankrolls around 14% of the IEA’s budget. US Energy Secretary Chris Wright labelled the IEA’s peak oil demand assumption “nonsensical” and threatened to defund the agency. As Carbon Tracker put it: the threat by the US Energy Secretary to defund the IEA achieved its goal—the return of the pro-fossil-fuel Current Policies Scenario to the agency’s flagship reports.

Financial dominance, ideational hegemony, coordinated messaging by influential stakeholders, and a credible, deterring track record of disciplining “rogue” international bodies all but closed the option space for the IEA.

Nothing to See Here?

So what, you may ask. Now we have a detailed account of how policy capture unfolds, but does it really matter? After all, what has been captured is a tiny, arcane technical widget, used by an agency few people outside the ordained have ever heard about, pertaining to one of a gazillion scenario exercises released into the wild every year. What’s more didn’t the industry push for a more alarmist project that portended a more egregious policy gap to be filled? This appears even counterproductive to fossil interests. So what is the big deal?

The Acupunctural Fall-Out from Baseline Battles

When expectations default to a new, much less ambitious baseline, the consequences cascade. Long-term investment decisions can more generously centre around new fossil exploration without coming across as reckless. Asset allocators can continue their support for fossil fuel expansion and shield themselves from critical shareholders by pointing to the new baseline. Under the CPS, the IEA projects that oil demand rises to 113 million barrels per day by 2050, and meeting this scenario would require roughly an additional $100 billion per year in upstream capital expenditure compared to current levels.

But there is more. The situation reverses: earlier asset retirement becomes the new reckless, a premature forgoing of future profits, opening litigation opportunities for fossil-friendly shareholders. Or as BP’s then new CEO put it: “Our optimism for a fast transition was misplaced and we went too far, too fast ... As Oil and gas will be needed for decades to come.” (Moore & Wilson, 2025).

So the CPS is not just an epistemic shield but an epistemic attack weapon operating on several levels:

Re-anchoring plausibilities. The CPS shifts the Overton window: if you introduce an obnoxious scenario, the bad one does not look so bad any more.

Loosening corporate responsibilities. If your business model is anti-climate, if your material risks hinge on the efficacy of the energy transition, a scenario of relative policy inertia means you need not take decisive action. You need not fear stranded assets or disrupted revenues any time soon, so you need not report about them, need not track your performance, can continue investing and expanding in all things climate-toxic.

Cascading through the corporate ecosystem. The vanishing of climate change as a material risk relieves asset managers from the duty to track and shift investments away from fossil and adjacent industries.

In other words, you make the climate issue invisible and insignificant, and thus double down on the carbon lock-in of the present. In sum, this turns into a self-fulfilling prophecy: making the CPS future more likely and plausible than the STEPS one.

A move towards the CPS is not business as usual. It is a project of stunted, retrograde development, yet its embrace precipitates responsive actions that bring about the very gloomy scenario it conjures up. This is the bitter irony of the entire project: advocating for an apparently more alarming” scenario that shows an even wider policy and ambition gap than STEPS does not precipitate more action and effort—it becomes a technocratic tranquilliser, lowering incentives, diminishing legal duties, and dampening pro-climate corporate effort. The scenario ostensibly representing “current policies” actually requires assuming policy reversal and technology stagnation that runs counter to observed trends. It is not a neutral baseline but an analytic advocacy sord dressed in technocratic clothing.

References

Bolstad, P., Sadie F., Gesic, E. Et al. (2020). Flying Blind: What Do Investors Really Know About Climate Change Risks in the U.S. Equity and Municipal Debt Markets? Brookings.

Carbon Tracker. (2025, November). The IEA’s World Energy Outlook 2025: Implications for investors. Carbon Tracker Initiative.

Hansen, T. A. (2022). Stranded assets and reduced profits: Analyzing the economic underpinnings of the fossil fuel industry’s resistance to climate stabilization. Renewable and Sustainable Energy Reviews, 158, 112144. https://doi.org/10.1016/j.rser.2022.112144

International Energy Agency. (2019). Understanding the World Energy Outlook scenarios. IEA. https://www.iea.org/commentaries/understanding-the-world-energy-outlook-scenarios

International Energy Agency. (2025). World Energy Outlook 2025. IEA. https://www.iea.org/reports/world-energy-outlook-2025

Jiao, R., Sun, Q., & Ren, X. (2025). Navigating climate policy: Corporate lobbying strategies in response to intensified climate risk exposure. Energy Economics. Advance online publication. https://doi.org/10.1016/j.eneco.2025.108243

Moore, M., & Wilson, T. (2025, December 11). Inside the failed green revolutions at BP and Shell. Financial Times.

OPEC. (2025, November 12). The IEA’s rendezvous with reality. OPEC Press Notice. https://www.opec.org/pn-detail/1602272-12-november-2025.html

Vita, G.,&Kang, J. (2024). Corporates Increasingly Concerned about Climate Risks. Rabobank / RaboResearch. https://www.rabobank.com/knowledge/d011459980-corporates-increasingly-concerned-about-climate-risks.

Welsby, D., Price, J., Pye, S., & Ekins, P. (2021). Unextractable fossil fuels in a 1.5 °C world. Nature, 597(7875), 230–234. https://doi.org/10.1038/s41586-021-03821-8