By John Pickard
A recent report by the International Energy Agency makes grim reading for anyone interested in climate change and the future of the planet. It basically argues that the Paris climate accords agreed in 2015 aren’t worth the paper they’re printed on.
The IEA is the international organisation that monitors global energy use, measured by the source of the energy as well as the end-use, and the direction in which future energy investment is headed. Their report concludes that despite the Paris agreement to limit carbon emissions, so as to keep global warming to a relatively modest increase of 1.5oC, in fact the world is moving in the opposite trajectory.
For the second year in succession, 2018 saw an increase in expenditure on the extraction of fossil fuels and a decline in investment in renewable (non-carbon) energy. Expenditure on solar, wind, biomass and other renewable projects fell in real terms in 2018 to $304bn, the lowest level since 2014. On the other hand, investment in coal-mining, the ‘dirtiest’ of the carbon emission sources, rose by 2.6 per cent, to $80bn. Capital expenditure on oil and gas rose even more, by 3.7 per cent, to $477bn. (Financial Times, May 15, 2019)
It’s not that renewable energy is expensive. Between 2010 and 2018, the cost of solar energy fell by 75 per cent and onshore wind turbines by 20 per cent. The surge in growth of renewables came to a halt last year, “as China slashed subsidies and new renewables capacity fell in India and the EU…big energy companies such as Royal Dutch Shell and Exxon-Mobil have been drawn to shale projects that require modest cash injections and less time to start up compared with the capital-intensive mega-projects of the past.” (Financial Times)
Coal is the biggest single culprit in carbon emissions
The net result of all this, according to the IEA, is that “Driven by higher energy demand in 2018, global energy-related CO2 emissions rose 1.7 per cent to a historic high of 33.1 Gt (giga-tonnes). While emissions from all fossil fuels increased, the power sector accounted for nearly two-thirds of emissions growth. Coal use in power alone surpassed 10 Gt CO2, mostly in Asia. China, India, and the United States accounted for 85 per cent of the net increase in emissions, while emissions declined for Germany, Japan, Mexico, France and the United Kingdom.”
For the first time, the IEA assessed the impact of fossil fuel use on global temperature increases. It found that CO2 emitted from coal combustion was responsible for over 0.3°C of the 1°C increase in global average annual surface temperatures above pre-industrial levels. This makes coal the single largest source of global temperature increase. “In fact, coal-fired power plants were the single largest contributor to the growth in emissions observed in 2018, with an increase of 2.9%, or 280 Mt, compared with 2017 levels, exceeding 10 Gt for the first time”
Socialists have argued that the fundamental precondition for being able to plan and organise a global energy policy rationally is to take the big energy companies out of the hands of the private profiteers who currently own them. As long as Greed and Ignorance stand in the way of rational planning, there will be no solution to the nightmare of climate change. Nothing that has happened in the past few years has changed that view.
Big Oil makes only cosmetic changes
To be sure, all the giant oil and energy companies – including ‘Big Oil’ – are making noises about climate change to try to cut across criticism of their role in destroying the planet. But that is all they do…make noises. In practice, their policies have barely changed. Last month, for example, the CEO of BP claimed that the company had a commitment to “carbon pricing”, a relative mild way of monitoring emissions. But last year his company was one of the top financial backers of a multi-million dollar lobbying effort to stop a ballot measure in the US state of Washington that would have created a carbon tax.
Much the same double-standards are operated by the giant US oil company Exxon-Mobil, which has just announced to great fanfare that it is putting $100m into climate research funding, spread over ten years, a figure that is less than 1 per cent of its total research and development budget of $1.12bn.
According to the US environmental group Amazon Watch, “scores of European and US companies, including some of the world’s biggest banks and investment groups, have been accused of aiding the destruction of the Amazon rain forest…”(Financial Times, April 26, 2019). There is growing tension in Brazil, where the right-wing president, Jair Bolsonaro, has a policy of ‘opening up’ the Amazon to the big agribusiness and logging companies.
While the big oil and energy companies boast about their ‘green’ credentials, they spend hundreds of millions to lobby and bribe politicians around the world to let it all rip, maximising oil and gas exploration and extraction and maximising their profits. That is what private companies do.
Share-holders cannot be persuaded to operate ethically
There is also a body of opinion that believes it is possible to persuade these big companies to behave ‘ethically’. One of these groups is Action 100+, a group composed of over 300 investors, many large-scale, with total assets of $33tn. By lobbying at shareholders’ meetings and moving resolutions, the Action 100+ group hopes to “persuade” big oil companies to adopt policies that move them towards sustainable energy policies.
These campaign groups argue that climate activists need to “engage” with the oil companies, to push them towards adopting emissions targets and towards cleaner fuels. That is all well and good, but having an “emissions target”, which has been adopted by some oil companies, is at best only inching towards a clean energy policy and there is in any case nothing that holds the companies firmly to their commitment.
More to the point, away from the prying eyes of the shareholders in their comfortable meetings in Europe and the USA, these companies cause massive devastation to local environments in developing countries, both in exploration and in oil and gas extraction. The Action 100+ movement boils down in the end as just one more attempt to put some gloss on bag of turds.
In the final analysis, as the Financial Times correspondent wrote, “share-holders want to make sure the oil and gas companies they invest in can thrive and their assets do not become uneconomic.” (FT, May 20, 2019). The end result is that “investors do not agree on what collective action looks like in practice and which strategies must be implemented to force change at energy majors.” In the battle between greed and ‘ethical’ policy, greed wins out every time.
These big oil companies will not be tamed by appeals to reason or appeals about the well-being of mankind in general. Like other industries that relate one way or another to the health and long-term interests of the planet – notably transportation and food – the energy industries cannot be left in the hands of those who base all key decisions on profit. On an international basis governments need to take control of these giant companies and implement a coherent, planned and rational policy of investment and development with a clear trajectory towards non-carbon, renewable energy.
The democratic planning of industrial and energy-sector investment, with complete openness and transparency in all financial matters, and with the active involvement of workers in all the industries, is a necessary pre–requisite for a planet-saving energy policy. If we have a climate emergency, as scientists now argue, then emergency measures are needed. The sooner such policies are discussed and adopted by the labour movement in Britain and internationally, the nearer we will be to a policy that offers some hope of minimising or halting climate change.
May 21, 2019
