It’s Time to Jump on the Train to the Future: All Aboard the Low Carbon Express
Six weeks from the Paris climate summit, this was the week that incumbent fossil interests pulled back from their long-held line of defense, the argument that reliance on coal and oil was essential for global prosperity, growth and stability, and that climate risks would simply have to be endured. Instead two powerful forces seem poised to sweep the global community towards a potential solution to the climate crisis.
The first game-changer is the now seemingly inexorable shift in the economics of clean energy and renewables. The second was the decision taken after the Copenhagen debacle to abandon the top down rationing approach of the first 15 years of climate diplomacy, replacing it with a bottom-up, bidding in approach ratifying rather than forcing emerging communities of interest.
As momentum builds for Paris, coal and oil companies, and their historic utility and automotive partners, are abandoning their 20 year insistence that no alternative to fossils exists. The two largest auto manufacturers, Toyota and Volkswagen, declared in a single week that the future belongs to electric cars, with Toyota giving a date for the end of the internal combustion era, 2050.
BP’s Chief Economist warned that, given global climate concerns, it was unlikely that even existing reserves of oil would be fully exploited, much less “the new discoveries which are being made all the time or of the vast resources of fossil fuels not yet booked as reserves.”
Ten of the globe’s biggest power companies, representing 30 percent of global electricity generation, issued a declaration asking for the Paris COP to “accelerate the development and deployment worldwide of energy efficiency measures and of innovative technologies with effective policies.” Many were low carbon generators like Electricite de France and Hydro-Quebec, but historically coal dominated American Electric Power signed up as well.
— BloombergNEF (@BloombergNEF) October 19, 2015
In another configuration, 14 major multi-national giants, including coal mining behemoths BHP and Billiton, oil giants Shell and BP, Alcoa, #1 cement producer Lafarge, plus a number of lower carbon utilities and tech companies, called for the Paris Agreement to embrace long-term policy certainty, transparency, competitive markets and carbon pricing.
Most startlingly, the national oil companies of Saudi Arabia and Mexico joined eight other oil producers in an Oil and Gas Climate Initiative which declared “Our shared ambition is for a 2 degree Celsius future … Over the coming years we will collectively strengthen our actions and investments to contribute to reducing the greenhouse gas intensity of the global energy mix,” and called on the world community to embrace a Paris agreement which would advance that goal.
So what’s going on? Most likely the companies themselves do not quite agree—or perhaps know—how far they will pull back from their historic positions before counter-attacking again the emerging clean energy transition. U.S. coal and oil producers are spectacularly absent from this new consensus, with Exxon Mobil responding to Congressional demand for Justice Department fraud investigations into its climate denial financing by clinging to its previous blunt riposte that it was not going “to fake it” on climate change—the world would have to live through it. Do U.S. companies see the world differently—maybe? But as likely they are afraid to offend their Congressional Republican allies, who desperately want to keep climate change as a partisan wedge issue.
— EcoWatch (@EcoWatch) October 17, 2015
And not all the signers have changed their stripes. AEP, for example, is still trying to persuade the Ohio Public Utility Commission to approve a rate-payer subsidy to guarantee profits at its aging fleet of coal fired power plants.
By why is Big Carbon and its allies retreating now?
Perhaps because they see no choice.