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The summit hadn’t even started when Al Jaber was caught on tape saying there “is no science out there, or no scenario out there, that says that the phase-out of fossil fuel is what’s going to achieve 1.5” degrees Celsius, and arguing that a phaseout would send the world “back into caves.”
OPEC later took offense at a report from the International Energy Agency. “The industry has been told that it must ‘choose between fueling the climate crisis or embracing the shift to clean energy,’” sniffed a release from the oil cartel.
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If there is a silver lining here, it is that at least this conversation has started. Without the cooperation of Al Jaber and his OPEC buddies, it’s unlikely the battle against climate change can be won.
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According to the new IEA report (the one OPEC dislikes), if all governments deliver on pledges they’ve made since 2015 to combat climate change, oil and gas use will drop almost in half by mid-century. In order to hit zero net greenhouse gas emissions in 2050, use must fall 75 percent.
In effect, the IEA is calling for oil and gas companies to say goodbye to trillions of dollars’ worth of stranded investments. While the fossil fuel industry is gradually trimming investments, it is largely planning to phase “down” the use of oil and gas, not to phase it “out.”
Haitham Al Ghais, the OPEC secretary general, who hails from Kuwait (on the other end of the Persian Gulf from the UAE), griped that the IEA lectures about what oil producers should do were “undiplomatic to say the least.”
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The blowback from the oil and gas crowd underscores how difficult it will be to shift the world economy away from carbon-based energy and how limited are the tools available to accomplish the transition.
Economists will tell you that to get rid of an industry, you must curtail demand. Think of Prohibition and booze, or the United States’ endless War on Drugs. Barring action on the demand side, efforts to stop the supply of undesirable commodities usually fail. The IEA’s insistence that the fossil fuel industry simply stop drilling has little or no precedent: It would be altruism on an epochal scale.
The world has some tools to push out fossil fuels. Subsidies and fiscal incentives have redoubled investments in clean energy, which this year will account for about $1.8 trillion of the $2.8 trillion in total global energy investment, according to the IEA.
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This has started cleaning up the power grid. The U.S. coal business, for instance, has tanked because of falling demand from power generators that have turned away from coal and toward cheaper natural gas. The green crowd in Dubai is hoping that the fast fall in the price of clean energy from the sun and the wind will ease out fossil fuels altogether.
Yet $1 trillion is being invested in fossil fuels this year, when, according to the IEA’s road map, the figure should be much nearer zero. Some big bad oil companies are doubling down on fossil fuel investments.
This mismatch highlights the value of a critical weapon still missing from most climate change arsenals: a tax on carbon emissions that could swiftly raise the price of fossil energy and accelerate the decline in demand. Without such a tool, the future of the world could depend on the altruistic impulses of people such as Al Jaber.
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The battle is not lost, though. Maybe China, the United States and other big polluters will eventually realize how vital it is to add carbon taxes to their arsenals. And, who knows, moral suasion might help. Keep in mind that the most important decisions will be made not by corporate boards but by political systems in countries that have pledged to combat climate change.
OPEC countries must change course. But so must Norway. It has set itself on a path to reduce greenhouse gas emissions by 50 percent by 2030, compared with 1990 levels. It has a “Climate Investment Fund” with almost $1 billion to spend over the next five years to help decarbonization in poorer countries. But this year it also announced $18 billion worth of investments in oil and gas production.
Brazil is champing at the bit to pump oil from near the mouth of the Amazon River, even as it pledges to cut emissions.
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National oil companies account for about half the world’s production of oil and gas and close to 60 percent of reserves. When the IEA asks what justifies investments in fossil fuel infrastructure worth hundreds of billions of dollars a year, it is talking mainly to them.
Maybe a few more U.N. climate summits in OPEC capitals will help convince everyone that cutting oil and gas use to save the planet is worth the trouble.
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When the United Nations holds its annual climate summit in the United Arab Emirates, perhaps no one should be shocked if the conversation turns to fossil fuels and devolves into acrimony.
Fossil fuel companies sent thousands of delegates to the climate talks that started Nov. 30, perhaps hoping to land a place at the table in the meetings where Sultan Al Jaber, who juggles an unlikely pair of portfolios as UAE climate envoy and CEO of the state oil firm, planned to discuss potential new oil and gas deals.
The summit hadn’t even started when Al Jaber was caught on tape saying there “is no science out there, or no scenario out there, that says that the phase-out of fossil fuel is what’s going to achieve 1.5” degrees Celsius, and arguing that a phaseout would send the world “back into caves.”
OPEC later took offense at a report from the International Energy Agency. “The industry has been told that it must ‘choose between fueling the climate crisis or embracing the shift to clean energy,’” sniffed a release from the oil cartel.
If there is a silver lining here, it is that at least this conversation has started. Without the cooperation of Al Jaber and his OPEC buddies, it’s unlikely the battle against climate change can be won.
According to the new IEA report (the one OPEC dislikes), if all governments deliver on pledges they’ve made since 2015 to combat climate change, oil and gas use will drop almost in half by mid-century. In order to hit zero net greenhouse gas emissions in 2050, use must fall 75 percent.
In effect, the IEA is calling for oil and gas companies to say goodbye to trillions of dollars’ worth of stranded investments. While the fossil fuel industry is gradually trimming investments, it is largely planning to phase “down” the use of oil and gas, not to phase it “out.”
Haitham Al Ghais, the OPEC secretary general, who hails from Kuwait (on the other end of the Persian Gulf from the UAE), griped that the IEA lectures about what oil producers should do were “undiplomatic to say the least.”
The blowback from the oil and gas crowd underscores how difficult it will be to shift the world economy away from carbon-based energy and how limited are the tools available to accomplish the transition.
Economists will tell you that to get rid of an industry, you must curtail demand. Think of Prohibition and booze, or the United States’ endless War on Drugs. Barring action on the demand side, efforts to stop the supply of undesirable commodities usually fail. The IEA’s insistence that the fossil fuel industry simply stop drilling has little or no precedent: It would be altruism on an epochal scale.
The world has some tools to push out fossil fuels. Subsidies and fiscal incentives have redoubled investments in clean energy, which this year will account for about $1.8 trillion of the $2.8 trillion in total global energy investment, according to the IEA.
This has started cleaning up the power grid. The U.S. coal business, for instance, has tanked because of falling demand from power generators that have turned away from coal and toward cheaper natural gas. The green crowd in Dubai is hoping that the fast fall in the price of clean energy from the sun and the wind will ease out fossil fuels altogether.
Yet $1 trillion is being invested in fossil fuels this year, when, according to the IEA’s road map, the figure should be much nearer zero. Some big bad oil companies are doubling down on fossil fuel investments.
This mismatch highlights the value of a critical weapon still missing from most climate change arsenals: a tax on carbon emissions that could swiftly raise the price of fossil energy and accelerate the decline in demand. Without such a tool, the future of the world could depend on the altruistic impulses of people such as Al Jaber.
The battle is not lost, though. Maybe China, the United States and other big polluters will eventually realize how vital it is to add carbon taxes to their arsenals. And, who knows, moral suasion might help. Keep in mind that the most important decisions will be made not by corporate boards but by political systems in countries that have pledged to combat climate change.
OPEC countries must change course. But so must Norway. It has set itself on a path to reduce greenhouse gas emissions by 50 percent by 2030, compared with 1990 levels. It has a “Climate Investment Fund” with almost $1 billion to spend over the next five years to help decarbonization in poorer countries. But this year it also announced $18 billion worth of investments in oil and gas production.
Brazil is champing at the bit to pump oil from near the mouth of the Amazon River, even as it pledges to cut emissions.
National oil companies account for about half the world’s production of oil and gas and close to 60 percent of reserves. When the IEA asks what justifies investments in fossil fuel infrastructure worth hundreds of billions of dollars a year, it is talking mainly to them.
Maybe a few more U.N. climate summits in OPEC capitals will help convince everyone that cutting oil and gas use to save the planet is worth the trouble.
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