Michael Roberts – COP28: business as usual

COP28: the CO2 is increasing, the temperatures are increasing, fossil fuel production is increasing, the lies are increasing, the hypocrisy is increasing.

Michael Roberts is an Economist in the City of London and a prolific blogger

Cross-posted from Michael Roberts’ blog

This image has an empty alt attribute; its file name is Baerbock-COP28.jpg

Hypocrisy and show. The woman left is Germany’s leading war-mongerer f0r Ukraine and Israel’s genocide in Gaza, the Green Foreign Minister Annalena Baerbock

The COP28 conference on what to do about global warming and climate change held in Dubai finished last Thursday.  Attended by a record 70,000 people (carbon footprint?) and hosted by the head of Dubai’s state oil company (!), the final statement appeared to make a major breakthrough.  The statement talked of “a transition away from all fossil fuels”.  For the first time, it was agreed that fossil fuel exploration, production and use must end.  An historic step, it has been argued.

But a ‘transition away’ is really mealy-mouthed sophistry to avoid ‘phasing down’, let alone ‘phasing out’ fossil fuels that cause over 90% of all carbon emissions into the atmosphere. The ‘transition away’ means that fossil fuel companies can go on producing oil, gas and coal and countries and governments and companies can go on using these energy sources with no agreed reductions.  It’s business as usual for the energy companies and for countries with high greenhouse gas emissions.

Supposedly, fossil fuel production and use will gradually be reduced to avoid emissions that are driving global average temperatures above the 1.5C target limit above pre-industrial levels.  This target was set in 2015 at the Paris COP to be achieved by 2030 and then zero net emissions by 2050.  But words are easy to say.  In action, it won’t happen. The targets will not be met and the consequences for people and the planet will follow.

Indeed, just as the COP28 communique was agreed, temperatures hit 43C in Brazil and Australia – records for this time of year.  The average global temperature reached a record 1.5C above pre-industrial levels in November and the year is likely to end with an average 1.2C above – so not far short of 1.5C already.

Global greenhouse gas emissions are rising inexorably to put the world on course for a near 9% rise by 2030 from 2010 levels, according to the latest progress report by the UN scientific body, the Intergovernmental Panel on Climate Change (IPCC) that is the world’s leading authority.  So no fall at all. While the rise projected by the IPCC is slightly better than the 11% rise forecast in last year’s assessment, it remains vastly short of the 45% cut needed to limit warming to the 1.5C goal set as part of the Paris Agreement.

The energy plans of the petrostates contradict their climate policies and pledges, the UN report said. By 2030, their plans would lead to 460% more coal production, 83% more gas and 29% more oil than it was possible to burn if global temperature rise was to be kept to the internationally agreed 1.5C. The plans would also produce 69% more fossil fuels than is compatible with even the more damaging 2C target.

The countries responsible for the largest carbon emissions from planned fossil fuel production are India (coal), Saudi Arabia (oil) and Russia (coal, oil and gas). The US and Canada are also planning to be major oil producers, as is the United Arab Emirates. Another recent report found that the state oil company of the United Arab Emirates, whose CEO, Sultan Al Jaber, presided over COP28, has the largest net zero-busting expansion plans of any company in the world.

Yes, renewables and clean energy production are rising fast.  The International Energy Agency (IEA) in its annual World Energy Outlook reckons that global investment in all clean energy technologies in 2023 is on track to be 40% higher than in 2020. “The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’ – and the sooner the better for all of us,” said the IEA’s executive director Fatih Birol.  However, it’s not enough by any measure. The IEA Outlook concludes that current global energy commitments from policymakers are aligned with a temperature trajectory of 2.4C above pre-industrial levels by 2100.

The Outlook also comes with several warnings about the delivery of existing commitments. Supply chain disruptions in sectors including wind, plus the grapple for energy security in the face of the Russia-Ukraine war and global economic downturn, are prompting many countries to seek to bolster fossil fuels.  Birol emphasised: “Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever.”

The Outlook concludes that, unless additional policy interventions are made, the share of fossil fuels in the global energy supply will still be 73% in 2030, down from around 80% at present. But, according to the IEA, to align with a 1.5C temperature, the trajectory would require the share dropping to around 60% by the end of this decade.  So much for a ‘transition away’.

The commitments and actions to achieve sufficient emissions-cutting are just not anywhere near enough.  Pledges made by about 130 countries and 50 fossil fuel companies made before COP28 will still leave the world far off track in limiting global warming to 1.5C above pre-industrial levels, according to the IEA.  The planned reductions in 2030 emissions, even if implemented honestly and transparently. represent only around 30% of the emissions gap that needs to be bridged to get the world on a pathway compatible with limiting global warming to 1.5 C (the IEA’s Net Zero Emissions by 2050 Scenario).  Indeed, the IEA said fossil fuel demand must fall by a quarter by the end of this decade.

Not a single G20 country has policies in place that are consistent with that, says Climate Action Tracker.

The IPCC report found that existing national pledges to cut emissions would mean global emissions in 2030 were 2% below 2019 levels, rather than the 43% cut required to limit global heating to 1.5C. Only one of the more than 20 sponsors of COP28 had signed up to UN-backed net zero science-based targets, (SBTi). Most of the corporate sponsors, which include the oilfield services company Baker Hughes as well as Bank of America, have made no commitment to reduce emissions to net zero in any time period under the target system. Lincoln Bauer of Spendwell, which carried out the analysis, said: “Science-based targets are the gold standard validation system for companies. The fact that so few of the sponsors are signed up to their net zero targets, and that EY itself, chosen to verify the climate commitments of the sponsors, doesn’t have set targets yet, suggests this is just greenwashing.”

The carbon budget is the maximum amount of carbon emissions that can be released while restricting global temperature rise to the limits of the Paris agreement. The latest figure is half the size of the budget estimated in 2020 and would be exhausted in six years at current levels of emissions.  Instead, the world’s fossil fuel producers are planning expansions that would blow the planet’s carbon budget twice over, the UN report found.

A new analysis found the carbon budget remaining for a 50% chance of keeping global temperature rise below 1.5C is about 250bn tonnes. Global emissions are expected to reach a record high this year of about 40bn tonnes.  So to retain a 50% chance of a 1.5C limit, emissions would have to plunge to net zero by 2034, far faster than even the most radical scenarios. “Having a 50% or higher likelihood that we limit warming to 1.5C is out of the window, irrespective of how much political action and policy action there is” ,said the report’s author.

The reality is that the planet is on the verge of five catastrophic climate tipping points. Five important natural thresholds already risk being crossed, according to the Global Tipping Points report and three more may be reached in the 2030s if the world heats 1.5C (2.7F) above pre-industrial temperatures.

The tipping points at risk include the collapse of big ice sheets in Greenland and the West Antarctic, the widespread thawing of permafrost, the death of coral reefs in warm waters, and the collapse of one oceanic current in the North Atlantic.  Unlike other changes to the climate such as hotter heatwaves and heavier rainfall, these systems do not slowly shift in line with greenhouse gas emissions but can instead flip from one state to an entirely different one. When a climatic system tips – sometimes with a sudden shock – it may permanently alter the way the planet works.

What to do?  First, remember that it is the poor that will take the hit from global warming and climate change, while the rich (and I mean very rich) are the main contributors to global emissions.  The richest 1% of people are responsible for as much carbon output as the poorest 66%, research from Oxfam shows. Luxury lifestyles including frequent flying, driving large cars, owning many houses and a rich diet, are among the reasons for the huge imbalance.

Inequalities are not just between the global north and the global south: the research from Oxfam shows that the differences in carbon footprint of rich and poor people within countries are now greater than the differences between countries.  So reducing global inequality and inequality within countries would also reduce global warming rises.

Kevin Anderson, a climate scientist, says the 1% of richest emitters also influence far wider consumption. “The 1% group use their hugely disproportionate power to manipulate social aspirations and the narratives around climate change. These extend from highly funded programmes of lying and advertising to proposing pseudo-technical solutions, from the financialisation of carbon to labelling extreme any meaningful narrative that questions inequality and power. Such a dangerous framing is compounded by a typically supine media owned or controlled by the 1%. The tendrils of the 1% have twisted society into something deeply self-destructive.”

Since the 1990s, the richest 1% have burned through more than twice as much carbon as the bottom half of humanity.  But more than 91% of deaths caused by climate-related disasters of the past 50 years have occurred in developing countries. The death toll from floods is seven times higher in the most unequal countries compared to more equal countries.

Is too late and if not, what’s the answer?  The solutions proposed by mainstream economics and governments are no solutions at all but just ‘greenwashing’.  The IMF and the World bank promote carbon pricing and taxation.  The theory is that we make polluters pay for what they emit, providing a strong nudge to clean up their act. It can take the form of a tax or an emissions trading scheme (ETS) that requires companies to purchase tradable allowances to cover their emissions.

This market solution won’t deliver.  To get emissions down, the global price of carbon would need to reach an average at least of $85 a tonne by 2030, compared with just $5 today.  And less than 5%of global GHG emissions are covered by a direct carbon price equal to or higher than the suggested range for 2030.

What about increasing investment in renewables?  It’s true that the cost of renewables is falling fast.  The cost of electricity from solar power is now 85% lower than it was in 2010. Battery technology is progressing far faster than anticipated, powering the electrification of road transport: in China, 35% of all new passenger car sales are now electric.  But this still pales in comparison with capital spending on fossil fuels, while subsidies by governments and credit by banks outstrip the same for renewables and other green investments.

Oil and gas producers should be spending about half of their annual investment on clean energy projects by 2030 to be aligned with global climate goals, the IEA has said.  But so far, producers account for just 1% of global green energy investment and last year committed just 2.5%, or $20bn, of their capital to the sector.  Not much of a ‘transition away’ from fossil fuels yet!

Chevron will spend just $2bn of its $14bn capital spending budget on lower-carbon investments this year. Exxon said last December it planned to spend $17bn in total on lower-emission initiatives through to the end of 2027, while annual capital spending on fossil fuels would remain at $20bn-$25bn during the period. Shell has said it planned to invest about $5bn on average a year between 2023 and2025 on low-carbon energy, against overall capital spending of $22bn-$25bn a year.  France’s TotalEnergies said it planned to put 33% of its capital expenditure between 2023 and 2028, or about $5bn a year, towards investments deemed low carbon.

The problem for capitalist industry is that it is still more profitable to invest in fossil fuels than in clean energy projects.  The IEA estimated the return on capital employed in the oil and gas industry was 6-9% between 2010 and 2022, compared with less than 6% for clean energy projects.

Then there is talk of new technologies to capture carbon in the air.  This was the cry of the fossil fuel lobby at COP28. Industrial carbon capture technologies come in many flavours, but the most prominent are carbon capture and storage (CCS), which removes carbon dioxide from highly concentrated point sources like power plants; and direct air capture (DAC), which attempts to remove CO from open air, where concentrations are much lower.  Limiting global warming to 1.5C would require significant carbon dioxide removals, achieved either by nature-based solutions such as reforestation, or by capturing CO₂ direct from the air and storing it permanently underground.

But currently, the planned Regional Direct Air Capture Hubs the US Department of Energy is supporting will only be able to capture one million metric tonnes of CO every year; while the world emits 40.5 billion. The technology is also expensive, costing thousands of dollars for every tonne of CO2 removed.  The US Department of Energy has already poured tens of billions into poorly conceived and managed ‘clean coal’ and CCS projects. They have almost entirely failed, earning the condemnation of the Government Accountability Office. The US government has tax credits for these carbon capture projects at $60 a tonne for carbon used in enhanced oil recovery—which delays the retirement of the fossil fuel production.

So there is no escaping it. Since fossil-fuel combustion currently produces about 32Gt of CO₂ emissions a year, that means more than 85% of emission reductions must come from ending fossil-fuel use and less than 15% from applying carbon capture.

All these proposals are avoiding the elephant in the room – getting rid of fossil fuel production and use in the planet.  Yes, the technology is there to do it and the money is there to help those poor countries and people to make the transition.  What stands in the way are the vested interests of the global energy companies; the current profitability of fossil fuel production and use; and of course, the lack of any global agreement, let alone coordination, to implement any phasing out plan.

According to Daniela Gabor, an associate professor in economics at the University of the West of England, we need states to undertake an “extensive, deep intervention in the reorganisation of economic activity that is necessary for a just transition. Carbon wealth taxes don’t even begin to scratch the surface of that transformation.” Jason Hickel wants “democratic control over investment … and production, because profit-seeking markets prioritise the wrong things. When people have democratic control over production, they prioritise human well-being and ecological sustainability,” he says.

This must mean a campaign to bring into public ownership the fossil fuel industry globally and to use the profits and revenues to dramatically invest in renewables, electrification and environmental projects.  The solution does not lie in replacing petrol and diesel vehicles with electric cars, but in replacing private transport with carbon and price-free public transport.  The solution is not in building homes for profit and speculation, but in well planned urban housing projects built by governments and controlled by working people.

And we still face hell if we do not stop the destruction of nature and instead save the forests, wetlands, land and ocean life. Saving the planet and its species is inexorably connected to controlling global warming. 

Michael Roberts

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