By Johnny Wood
What does COVID-19 mean for the energy transition? While lockdowns have caused a temporary fall in CO2 emissions, the pandemic risks derailing recent progress in addressing the world's energy challenges.
Unprecedented Change<p>The past decade has seen rapid transformations as countries move towards clean energy generation, supply and consumption. Coal-fired power plants have been retired, as reliance on natural gas and emissions-free renewable energy sources increases. Incremental gains have been made from carbon pricing initiatives.</p><p>Since 2015, 94 of 115 countries have improved their combined score on the Energy Translation Index (ETI), which analyzes each country's readiness to adopt clean energy using three criteria: energy access and security; environmental sustainability; and economic development and growth.<br><br>But the degree of change and the timetable for reaching net-zero emissions differ greatly between countries, and taken as a whole, today's advances are insufficient to meet the climate targets set by the Paris Agreement.</p>
The 10 Countries Most Prepared for the Energy Transition<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3OTU4My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzMDQ0NjQ4MX0.SumXaqZnlWq6pBIoqAggmvg9LDqI_Vqn984i3YL1yhU/img.png?width=980" id="53351" class="rm-shortcode" data-rm-shortcode-id="0d6767a8b912d7699fb087ecff33ce3f" data-rm-shortcode-name="rebelmouse-image" />
Sweden is the nation most ready to transition to sustainable energy. WEF Fostering Effective Energy Transition 2020 edition
Powerful Shocks<p>Outside the top 10, progress has been modest in Germany. Ranked 20th, the country has committed to phasing out coal-fired power plants and moving industrial output to cleaner fuels such as hydrogen, but making energy services affordable remains a struggle.</p><p>China, ranked 78th, has made strong advances in controlling CO2 emissions by switching to electric vehicles and investing heavily in solar and wind energy - it currently has the world's largest solar PV and onshore wind capacity. Alongside China, countries including Argentina, India and Italy have shown consistent strong improvements every year. Gains over time have also been recorded by Bangladesh, Bulgaria, Kenya and Oman, among others.</p><p>But high energy-consuming countries including the US, Canada and Brazil show little, if any, progress towards an energy transition.</p><p>In the US (ranked 32nd), moves to establish a more sustainable energy sector have been hampered by policy decisions. Neighboring Canada grapples with the conflicting demands of a growing economy and the need to decarbonize the energy sector.</p><p>The COVID-19 pandemic serves as a reminder of the impact of external shocks on the global economy. As climate change increases the likelihood of weather extremes such as floods, droughts and violent storms, the need for more sustainable energy practices is intensified.</p>
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Two years after internal documents surfaced showing that Royal Dutch Shell, like ExxonMobil, knew about climate dangers decades ago, the oil giant released its latest annual report outlining its business strategy and approach to addressing climate change. Despite clear warnings from scientists, global health experts and even central banks of impending climate-driven crises, Shell's report largely sends a message that everything is fine and the company's "business strategy is sound."
Shell’s Strategy<p>According to the report, there are three parts to Shell's overall strategy going forward: to thrive in the energy transition, to provide a world-class investment case, and to sustain a strong societal license to operate. That may sound good on paper, but in reality significant challenges are mounting for each of these pillars.</p><p>In terms of the energy transition, Shell appears to be paying lip service to it more than actually revamping its portfolio or overhauling its business model. Its core business remains oil and gas. Period.</p><p>The company may be ahead of some other oil giants like Exxon and Chevron in terms of adding alternative energies to its energy mix, but overall its commitment to clean energy is minimal.</p><p>Shell notes in its report that it spends "$1-2 billion a year until 2020 in different services and products from a range of cleaner sources," and "investments in power could grow to $2-3 billion a year on average" from 2021 to 2025. The vast majority of the company's capital expenditure ($24bn to $29bn in 2020) goes into oil and gas, and failure to replace proved reserves could have a "material adverse effect." Instead of aligning with the energy transition, Shell's business model is based on continual hydrocarbon exploitation.</p>
Shell Claims to Support Paris Agreement, Plans for Gradual Energy Transition<p>In its report, Shell says it fully supports the Paris agreement goal to limit warming well below 2 degrees C, and supports "the vision of a transition towards a net-zero emissions energy system." But, in <a href="https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bernard-looney-announces-new-ambition-for-bp.html" target="_blank">contrast to fellow European oil major BP</a>, Shell is not committing its own business to net zero emissions.</p><p>Shell says it has "no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years." Instead, Shell's Net Carbon Footprint "ambition" is to reduce emissions (including its customers' and suppliers' emissions) of its energy production and products by 20 percent by 2035 and by 50 percent by 2050. This is not aligned with climate science guidelines that say complete decarbonization or "net zero" is necessary by 2050 at the latest.</p><p>Shell's own business is therefore not aligned with the goal of the Paris agreement, and the company is <a href="https://www.climateliabilitynews.org/2019/04/05/shell-sued-in-the-netherlands-for-insufficient-action-on-climate-change/" target="_blank">facing a lawsuit</a> over this in its home country of the Netherlands. Current emissions reduction plans or "Nationally Determined Contributions" (NDCs) submitted by countries under the Paris agreement are also inadequate. As Shell notes in its report, current NDCs amount to about 3 degrees C of warming. "In coming decades, we expect countries to tighten these NDCs to meet the goals of the Paris agreement," the report states. Shell's view appears to be that the world has decades to get its act together.</p><p>In that view, Shell says it is fully on board with the energy transition and plans to transform its own business "over time." The report includes statements like "Shell aims to become an integrated power player and grow, over time, a material new business", and, "for us, protecting the environment also means working to transform our product mix over time, for example, by expanding the choice of lower-carbon products we offer customers."</p>
Climate Litigation Risk<p>Shell, like other fossil fuel companies, has long been concerned about governments imposing climate policies or regulations that would affect its business. Shell and its industry peers are already facing climate lawsuits, and Shell is explicitly identifying climate litigation as part of a broader risk factor associated with "rising climate change concern."</p><p>In its report, Shell acknowledged the lawsuits could negatively impact its financial condition: "In some countries, governments, regulators, organisations and individuals have filed lawsuits seeking to hold fossil fuel companies liable for costs associated with climate change. While we believe these lawsuits to be without merit, losing any of these lawsuits could have a material adverse effect on our earnings, cash flows and financial condition."</p><p>Shell actually foresaw climate-related lawsuits as a possibility more than 20 years ago. One of the internal documents that a Dutch news organization first uncovered (and published on the site Climate Files) is a <a href="http://www.climatefiles.com/shell/1998-shell-internal-tina-group-scenarios-1998-2020-report/" target="_blank">1998 document of Shell planning scenarios</a> where the company hypothetically envisions a series of violent storms battering the eastern U.S., which then spur environmental <span style="background-color: initial;">NGO</span>s to bring "a class-action suit against the <span style="background-color: initial;">US</span> government and fossil-fuel companies on the grounds of neglecting what scientists (including their own) have been saying for years: that something must be done."</p>
Shell Knew<p>One statement from Shell's annual report rings particularly true: "Shell has long recognised that greenhouse gas (GHG) emissions from the use of fossil fuels are contributing to the warming of the climate system." </p><p>Indeed, Shell has <a href="https://www.desmogblog.com/2018/04/04/here-what-shellknew-about-climate-change-way-back-1980s" target="_blank">long known</a> that fossil fuels are warming the planet and that the consequences would be of a huge magnitude.</p><p>One internal Shell document from 1988 called "The Greenhouse Effect" warned that GHG emissions would lead to warming over the next century, likely ranging from 1.5 C to 3.5 C. According to that document, "The changes may be the greatest in recorded history." Some parts of the planet may become uninhabitable, and there may be "significant changes in sea level, ocean currents, precipitation patterns, regional temperature and weather," it says. Impacts could be severe and "could have major social, economic, and political consequences."</p><p>What did Shell do with that knowledge? It started introducing doubt and giving weight to a 'significant minority' of 'alternative viewpoints' as the <a href="https://www.desmogblog.com/2018/05/17/shell-knew-charting-thirty-years-corporate-climate-denialism" target="_blank">full implications for the company's business model</a> became clear.</p><p>Shell was a member of the <a href="https://www.desmogblog.com/global-climate-coalition" target="_blank">Global Climate Coalition</a>, a fossil fuel industry-funded group that worked to undermine climate science and block climate policy internationally. The group formed in 1988 and Shell was a member throughout much of the 1990s.</p><p>During that time Shell was <a href="https://www.desmogblog.com/2018/08/20/exclusive-company-docs-show-shell-secretly-studied-climate-risks-10-years-warning-investors" target="_blank">not exactly upfront with its own shareholders</a> about potential risks climate change posed to its business. The first time Shell even mentioned climate change was in a 1991 annual report. But it wasn't until 2004 that Shell made a clear warning in its annual report about financial risk associated with fossil fuel investment.</p><p>Critics have for many years accused Shell's <a href="https://www.desmogblog.com/2018/04/11/how-shell-greenwashed-its-image-internal-documents-warned-fossil-fuels-contribution-climate-change" target="_blank">of greenwashing</a> — acknowledging the climate threat and touting its "commitment" to being part of the solution, despite continuing to spend heavily on oil and gas with only minimal investment in alternative energy. Shell's latest annual report suggests the company isn't deviating far from that strategy.<span></span></p>
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New research shows that the choice between climate action and economic growth is in fact a false dichotomy. chuyu / iStock / Getty Images Plus
Every country around the world would see economic gains from combating the climate crisis and trying to keep global heating within the bounds of the Paris agreement, according to a new study published in Nature Communications.
The straw man argument against taking action on the climate crisis is that the cost of limiting emissions and investing in green infrastructure is too steep and would cripple economies. It turns out, according to the research, that the opposite is true.
In fact, the study found that if nations around the world fail to curtail greenhouse gas emissions within the bounds of the Paris agreement, the global economy will lose anywhere from $150 trillion to nearly $800 trillion by the year 2100, as CBS News reported. The upper end of the range is if countries fail to meet their current commitments, which are inadequate to meet the Paris agreement as they are expected to lead to 3 degrees Celsius in warming.
The study's authors, from the Beijing Institute of Technology and other Chinese institutions, billed their findings as a self-preservation strategy for government, according to The Guardian.
The researchers calculated the potential benefits of emissions reductions by looking at the social welfare aspects of cutting greenhouse gases and its affect on economic growth. They found that the benefits from cutting emissions would provide the largest boost to developing countries with large populations of poor and vulnerable people, who are most likely to be negatively affected by droughts, floods, fires, storms and food shortages, as The Guardian reported.
While all countries would benefit in the long term, the most immediate benefits would go to developing countries with high emissions, such as India, Indonesia, Nigeria and China, according to The Guardian.
The Paris agreement is composed of voluntary commitments known as Nationally Determined Contributions, or NDCs, made by each country in the accord. The main aspect of the commitments is to reduce greenhouse emissions by cutting the burning of fossil fuels, thus reducing global warming and the adverse impacts of warming. However, many countries are witnessing economic damage from the coronavirus lockdowns and are rethinking their commitment to their NDCs. Already, government bailouts for the fossil fuel industry and the airline industry are in the works, as well as a rollback of their carbon emission reductions, as CBS News reported.
"A number of studies have proved that current [NDCs] are not enough to achieve the global warming targets," said Biying Yu, from the Beijing Institute of Technology and a co-author of the study, as CBS News reported.
The research shows that the choice between climate action and economic growth is in fact a false dichotomy. The authors' work concludes that countries could reach their climate goals and at the same time see an increase in their net income.
According to CBS News, Yu and her team calculated ideal strategies for countries to improve their NDCs, minimize economic losses and maximize gains. They found that if nations are able to reduce greenhouse gas emissions, then the net global economic benefit would range between $127 trillion and $616 trillion by the end of the century.
"Early and quick action will provide a better chance to close the widening emissions gap, even though a large amount of abatement cost would occur in the short term," said the study.
"The literature overwhelmingly shows the economic benefits of serious mitigation efforts exceed the costs in the long run," said Noah Kaufman, a climate and energy economist from Columbia University, to CBS News.
However, Yu is concerned that governments will be short-sighted and balk at the upfront cost of investing in infrastructure to combat the climate crisis. She also sees that the climate emergency takes commitments from every country.
"Combating climate change is not a matter for one country. It requires collective action and cooperation from all countries around the world," Yu explained, as CBS News reported. "Let's work together and save ourselves."
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By Courtney Lindwall
President Trump says fulfilling the country's commitment to the Paris climate agreement would be bad news for the U.S. economy, but the growing tally of business leaders pledging to take action anyway suggests otherwise. These businesspeople understand that while climate action costs money, climate change costs far more.
Bottom Lines<p>Trump often says that the Paris Agreement "<a href="https://www.whitehouse.gov/briefings-statements/statement-president-trump-paris-climate-accord/" target="_blank">punishes</a>" the U.S., particularly its businesses, but he outright ignores the far more destructive economic force of climate change. According to a <a href="https://www.nber.org/papers/w26167" target="_blank">recent study</a> from the National Bureau of Economic Research, a business-as-usual high-emissions scenario (like the one Trump touts) could result in a <a href="https://www.washingtonpost.com/weather/2019/08/19/climate-change-could-cost-us-up-percent-its-gdp-by-study-finds/" target="_blank">7.2 percent drop in GDP</a> per capita worldwide by the end of the century. Disruptions to global supply chains are <a href="https://epsnews.com/2018/02/01/resilinc-supply-chain-disruptions-nearly-doubled-2017/" target="_blank">already upon us</a>, and as carbon pollution continues to collect in our atmosphere, more will come. <a href="https://blogs.ei.columbia.edu/2019/06/20/climate-change-economy-impacts/" target="_blank">Experts predict</a> far-reaching impacts to the infrastructure that supports nearly all businesses, such as extreme weather affecting the transportation of raw goods and rising sea levels swamping the fiber-optic cables essential to the internet.</p><p>Of course, climate change will also jeopardize specific industries, such as winter sports (see: <a href="https://www.nrdc.org/onearth/year-without-snow" target="_blank">decreases in snowfall</a>), and products, like your morning cup of coffee. In fact, it's little wonder that Starbucks has also <a href="https://www.bizjournals.com/seattle/news/2017/06/05/trump-paris-climate-amazon-microsoft-starbucks.html" target="_blank">signed on</a> to We Are Still In. Climate change may bring increasingly irregular growing seasons (and skyrocketing prices) for <a href="https://insideclimatenews.org/news/17012019/coffee-climate-change-risk-wild-arabica-endanagered-kew-study" target="_blank">coffee beans</a> on top of increased sick days for field workers exposed to <a href="https://www.nrdc.org/onearth/too-hot-handle" target="_blank">extreme heat</a>. Such concerns would apply to almost any business dependent on either agriculture or a global workforce, or both. According to a <a href="http://dels.nas.edu/resources/static-assets/materials-based-on-reports/booklets/warming_world_final.pdf" target="_blank">2011 National Academy of Sciences</a> report, for every additional degree Celsius that the planet warms, we can expect a 5 to 15 percent reduction in total crop yield.</p>
Big Penance<p>While many corporations have spewed more than their fair share of carbon pollution, several are now taking the opportunity to have a supersize impact on emissions reductions. Look at the world's two biggest retailers: Amazon and Walmart. Amazon says it will go carbon neutral by 2040, <a href="https://www.nytimes.com/2019/09/19/technology/amazon-carbon-neutral.html" target="_blank">10 years ahead</a> of the Paris goals, and recently made moves to start transitioning its <a href="https://www.nrdc.org/stories/story-normal-car-factory-abandoned-gas-guzzlers-soon-be-buzzing-electric-vehicles" target="_blank">fleet of delivery trucks</a> to electric vehicles. Soon after Trump took office, Walmart announced its <a href="https://www.walmartsustainabilityhub.com/project-gigaton" target="_blank">Project Gigaton</a> initiative, which set the ambitious goal of lowering the company's global carbon emissions — by pressing for action on the part of its suppliers — by one billion metric tons before 2030. Walmart has since reported that it's <a href="https://www.greenbiz.com/article/walmart-inches-toward-audacious-project-gigaton-goal" target="_blank">on track to meet</a> its goal, which is no small feat: the entire U.S. emitted <a href="https://www.c2es.org/content/u-s-emissions/" target="_blank">6.5 billion metric tons</a> of carbon in 2017.</p>
Market Trends<p>Climate action is <a href="https://www.newyorker.com/news/news-desk/the-false-choice-between-economic-growth-and-combatting-climate-change" target="_blank">no longer seen as the enemy</a> of economic progress. While the <a href="https://www.e2.org/wp-content/uploads/2017/02/E2_CleanEnergyJobs_National.pdf" target="_blank">clean energy industry</a> has known this for a while, the notion is (finally) catching on in other corners of the economy — and most excitingly it's creating opportunities for market-disrupting innovation.</p><p>Take electric vehicles (EVs). While Trump <a href="https://www.nrdc.org/onearth/trump-trying-stand-way-electric-cars-theyre-breezing-right-past-him" target="_blank">fights the auto industry's progress</a> in manufacturing cleaner cars and trucks, countries such as China are investing in zero-emission vehicle technology at warp speed. According to a <a href="https://www.jpmorgan.com/global/research/electric-vehicles" target="_blank">recent report by JP Morgan Research</a>, China is expected to account for <a href="https://www.entrepreneur.com/article/327143" target="_blank">nearly 60 percent</a> of all global EV sales by next year, and many Chinese businesses (the ride-sharing company Didi Chuxing, for example) are eager to profit while they help the world progress. The same goes for the folks behind other innovations — like <a href="https://www.newyorker.com/magazine/2019/09/30/can-a-burger-help-solve-climate-change" target="_blank">plant-based faux meats</a>, and energy-efficient fabrics <a href="https://www.vice.com/en_us/article/78m7mz/this-taiwanese-company-makes-clothes-out-of-coffee-grounds" target="_blank">made from coffee grounds</a>, and <a href="https://reset.org/blog/compostable-bottle-every-use-veganbottle-11192017" target="_blank">petroleum-free plastics</a>, and delivery vans <a href="https://www.fastcompany.com/3068244/these-grocery-delivery-trucks-are-powered-by-food-waste" target="_blank">fueled by food waste</a> and ... you get the idea. A poll by the data firm Nielsen showed that <a href="https://www.nielsen.com/us/en/insights/article/2018/global-consumers-seek-companies-that-care-about-environmental-issues/" target="_blank">81 percent</a> of consumers feel strongly that companies should help improve the environment. The sustainability economy is booming — and <a href="https://www.nrdc.org/onearth/friday-school-out-and-climate-strike" target="_blank">climate-conscious Gen Z'ers and millennials</a> are ready to buy accordingly.</p>
Consumer Trust<p>At their best, corporate climate pledges open business practices up to public accountability and mark a first step toward real-life emissions cuts. At their worst, they provide a greenwashed shield behind which polluting companies can hide their status quo behaviors. Procter & Gamble, for one, boasts about the forest-friendly sourcing and certifications of its Charmin toilet paper (the company has no climate pledges to speak of). But in practice, P&G has been <a href="https://www.nrdc.org/experts/shelley-vinyard/unrolling-charmins-sustainability-claims" target="_blank">clear-cutting</a> one of the world's most important carbon sinks, Canada's boreal forest, in the name of softer TP.</p><p>We are all in this climate crisis together, which is why it's crucial to make sure our leaders and retailers keep their promises. Presidents have power, but so do corporations. Corporations have power, but so do consumers.</p>
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This April 22, Earth Day turns 50.
The world's largest secular holiday approaches its golden anniversary in the shadow of two global crises. This year's day is dedicated to climate action, and the celebration has moved online in response to the coronavirus pandemic.
But Earth Day has a history of uniting people around the world to solve the major problems facing our planet. Here's a look back on some of the most important Earth Days in the celebration's 50-year history and what they helped accomplish.
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The Great Barrier Reef, a natural wonder that once teemed with life, just experienced a major coral bleaching event, according to scientists who conducted aerial surveys over hundreds of individual reefs, as The Guardian reported.
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President Trump confirmed Wednesday that his administration will start its official pullout from the 2015 Paris agreement, a long expected move that sacrifices the country's ability to be a leader in the fight against the global climate crisis.
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