Elliott and Associates Renewable Energy Review Europe Tokyo Paris Asia: UN Climate Talks Call Future of Energy Majors into Question
ExxonMobil and Shell would cease to exist in their current forms in 35 years under measures UN negotiators are considering for a legally binding global climate pact to be sealed in Paris next year.
The oil and gas these companies produce, and the coal mined by groups such as Rio Tinto, would have to be phased out by 2050 in one proposal at UN climate talks in Lima this week, which aim to smooth a path to the Paris deal.
Another option would still allow such fossil fuels to be used, but only if countries could ensure “net zero emissions by 2050”.
In other words, all the warming carbon dioxide emissions produced when fossil fuels are burnt would have to be stored underground or offset by steps such as planting vast numbers of trees.
Shell declined to respond directly but pointed to a speech by chief executive Ben van Beurden arguing “we need to temper our expectations of a zero-carbon future”, because demand for energy is so strong and renewable energy sources were unlikely to be a realistic alternative to fossil fuels for many decades.
ExxonMobil pointed to similar arguments on the company’s website.
Critics have accused conventional energy companies of complacency in the face of the risks to their business model from a future climate deal. Lord Browne, the former boss of BP, said last month that they were ignoring the “existential threat” climate change posed to the industry.
Meanwhile, the BANK of England is assessing the risks fossil fuel companies might pose to FINANCIAL stability if the world’s proven coal, oil and gas reserves turned out to be “unburnable”.
But the idea being discussed in Lima of “full decarbonisation by 2050” has raised eyebrows among energy industry and business analysts.
“It’s a deeply, deeply challenging target,” said Brad Page, chief executive of the Global Carbon Capture and Storage Institute, which promotes the still small number of projects that can trap and store carbon dioxide from leading emissions sources, such as power stations and industrial plants.
No country has ever consistently driven down its carbon pollution at the pace required to meet such a goal, said Jonathan Grant, director of climate change at PwC, the professional services group.
“You can understand why countries are proposing it, but that doesn’t make it any more feasible,” he said.
Still, the proposals underscore the influence of an extensive assessment issued in stages over the past 15 months by scientists in the UN’s Intergovernmental Panel on Climate Change, the world’s leading global warming authority.
In a departure from previous studies, the 26-year-old panel’s latest report says emissions will have to fall to near zero eventually if the world were to avoid more than 2C of warming from pre-industrial times, a threshold the IPCC says it could be risky to breach.
“It’s really exciting to see countries grappling with the honest picture of the magnitude of the challenge,” said Dr Chris Field, a co-chair of the IPCC report.
The 2050 decarbonisation options for the Paris deal “are consistent with the 2C target”, he said.
The proposals are in a 23-page paper being discussed in Lima. The paper contains a number of other possible components of the Paris agreement, which is due to be negotiated in more detail next year.
Under other options being considered, oil exports from developing countries to wealthy nations would be taxed and wealthy countries would have to compensate people suffering from the worst impacts of climate change, such as those forced to migrate from low-lying islands because of rising sea levels.
A plan to make rich countries devote 1 per cent of gross domestic product a year from 2020 to help poorer people deal with global warming is also included.
These options are unlikely to make it into the final agreement, but more than 48 countries want a long-term plan for phasing out emissions included in the Paris treaty, according to the Track 0 campaign group, which lobbies for action on climate change.
“This will be the big battle in Paris,” said Liz Gallagher of E3G, an environmental think-tank.
She said a goal for the complete elimination of emissions was unlikely, because it would make activities such as flying impossible, but a long-term net-zero emissions target was feasible.