include more investment in alternative energy.
BP will have to fundamentally reorganise itself to help make those changes, said Mr Looney, who took over as chief executive last week.
It follows similar moves by rivals, including Royal Dutch Shell and Total.
Mr Looney said in a statement: "The world's carbon budget is finite and running out fast; we need a rapid transition to net zero.
"Trillions of dollars will need to be invested in replumbing and rewiring the world's energy system. It will require nothing short of reimagining energy as we know it.
"This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change - this is the right thing for the world and for BP."
He is due to outline his plans in a keynote speech later on Wednesday.
On Instagram, which Mr Looney recently signed up to, he said "Rest assured - a lot of time - and listening - has gone into this."
"All of the anxiety and frustration of the world at the pace of change is a big deal. I want you to know we are listening. Both as a company - and myself as an individual."
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In the long term, BP's plans will involve less investment in oil and gas, and more investment in low carbon businesses.
However, in the short term large investment in oil and gas will continue.
The company said it wanted to be "net zero" by 2050 - that is, it wants the greenhouse gas emissions from its operations, and from the oil and gas it produces, to make no addition to the amount of greenhouse gases in the world's atmosphere by that date.
It also wants to halve the amount of carbon in its products by 2050.
However, it did not set out the steps it intended to take to get to "net zero", drawing criticism from environmental campaign organisation Greenpeace.
Charlie Kronick, oil advisor from Greenpeace UK, said: "BP's 'ambitions' and 'aims' all seem to apply to [Mr] Looney's successors, and leave the urgent questions unanswered.
"How will they reach net zero? Will it be through offsetting? When will they stop wasting billions on drilling for new oil and gas we can't burn?
"What is the scale and schedule for the renewables investment they barely mention? And what are they going to do this decade, when the battle to protect our climate will be won or lost?"
However, Climate Action 100+, a group of large investors that are trying to put pressure on major greenhouse gas emitters to clean up their act, said the BP announcement was "welcome".
"We need to see a wholesale shift to a net zero economy by 2050," said Stephanie Pfeifer, a member of the action group's steering committee.
"This must include oil and gas companies if we are to have any chance of successfully tackling the climate crisis," said Ms Pfeifer, who is also chief executive of the Institutional Investors Group on Climate Change.
She said that Climate Action 100+ investors, who have already been putting pressure on BP, will continue to look for progress from the company in addressing climate change.
"This includes how it will invest more in non-oil and gas businesses, and ensuring its lobbying activity supports delivery of the Paris Agreement," she said.