The global oil market was marked by double-digit gains at about 18% to energy investors in 2013. But oil explorers risk wasting $1.1tn of investors’ cash through 2025 on expensive, uneconomic projects from the Arctic and deep seas to tar sands, according to a study.

A mind-boggling figure by any measure. The $1.1tn, around 15% of the decade’s total global oil and gas spending at current rates, is set aside for projects that would require a price of at least $95 a barrel to break even. But that investment is at risk if governments enforce plans to curb global warming to 2 degrees Celsius, which is the threshold for avoiding the worst effects of climate change, a report by Carbon Tracker Initiative (CTI) said. Almost 200 nations have endorsed that goal and are due in 2015 to sign up to cut greenhouse gas emissions.

Petroleo Brasileiro’s capital spending on projects needing $95 a barrel or more may reach $83bn through 2025, with ExxonMobil at $73bn and Rosneft at $70bn, CTI said.

The International Energy Agency (IEA) said last year even under current policies half of proven fossil fuel reserves would be left undeveloped to 2050. This percentage could increase as governments plan tougher curbs.

Trading at around $107 a barrel currently, the Brent has mostly held above $100 for the past three years. Driven by the historically high prices, companies have increased exploration in areas such as the Arctic and ever-deeper coastal waters. The private sector is the major funder of these high cost projects.

But “investors should require the majors to demonstrate improved capital discipline, to deliver shareholder value, not just volume of production”, according to James Leaton, CTI’s research director.

The cost of securing a clean energy future for the world is rising, the IEA warned on Monday, estimating that an additional $44tn of investment, up from the $36tn it had forecast in 2012, is needed to meet 2050 carbon reduction targets. The IEA also pointed out that the $44tn spending would be more than offset by an estimated $115tn in resulting fuel savings.

Despite ambitious targets set by various global agencies and governments, the transition to a world powered by clean energy is going to be a long-drawn journey with renewables currently accounting for only 18% of the global energy mix. But natural gas is expected to play a more prominent role in the transition with its cleaner burning properties and availability, according to the Gas Exporting Countries Forum.

The global oil industry, with a costly bottom-line to protect, is always looking for diversified sources of energy supplies. Exxon, the world’s largest publicly-traded oil company, has said there is little risk to its reserves because they will be needed to meet expected growth in energy demand.

But the oil industry is now coming under increasing pressure from investors to reduce exposure to high-cost and risky projects. If global measures to rein in climate change could lead to lower oil demand, oil majors need to rethink their investment model to factor in the risk-return equation for longer-term sustainability.