The world is warming. Carbon emissions are going up but so is energy demand. The rich world cannot deny developing countries the fruits of higher per capita energy consumption – nor should it want to. What is to be done?
“We need to create a sense of urgency.”
Everyone in the room could agree on this even though you might have thought, given recent school strikes and Extinction Rebellion protests, that there was a sense of urgency already.
There was also broad agreement, including from BP, on the need to hit or exceed Paris carbon emissions targets to hold global warming to 2 degrees or below. The question is how.
The Paris targets are non-binding. The US has withdrawn from the agreement anyway. Net Chinese emissions are surging even though on a per capita basis they are remarkably low. Projections show total energy demand rising to 2040 and beyond, especially in Asia, Africa and Latin America. Only a rapid transition away from fossil fuels, especially in power generation in the developing world, offers a realistic hope of staying under that 2 degree cap.
Most of the oil majors support this rapid shift in principle. Is that enough? Dominic Emery, BP’s head of group strategic planning, said that depends on three big things:
- Technology: Solutions are available. The cost of renewables has fallen so far, so fast that they could meet most of the new demand for power. Lower tech “land carbon” (eg planting trees) can meanwhile slow down net carbon emissions increases.
- Money: The means for the transition are also available. Climate Action 100+ is not actually offering to pay for it, but it wants more disclosure from BP on how the company’s strategy is consistent with the Paris goals – and its members manage $32 trillion in assets.
- Leadership: Not so evident. “We need government to support us,” Dominic said.
To some that sounded reasonable. A decade on from the Copenhagen climate summit there’s still no carbon tax or pricing scheme that binds in the world’s biggest emitters, for instance.
Others wanted more leadership from industry. Glada Lahn from Chatham House suggested its commitment to more energy and lower emissions would carry more weight with more detail. She pointed out that BP’s view of a rapid transition depends heavily on carbon capture and storage (CCS), but that’s not happening on anything like the scale required. More generally the majors talk of the need to invest in renewables but most of their actual investment (96-98 per cent) is still in oil and gas.
No dispute here: BP reckons the world needs 5 gigatons (5 billion tonnes) of CCS per year compared with the actual current figure of 30 million. And Dominic acknowledged that the industry’s investment in wind, solar and other renewables wasn’t at the level it needs to be.
Some of the oil majors hope to reinvent themselves as broad-based energy companies – BP, Shell and Total among them. Exxon and Chevron don’t. They’re sticking with what they know. But in the meantime the question arises: why wait for businesses that specialise in oil and gas to save the world from oil and gas, especially when demand for both is rising?
Change in energy demand, 2016–2040, in million tonnes of oil or equivalent (mtoe)
The question came up in multiple guises. Have we turned our backs on nuclear power? What about fusion? Why look to fossil fuels at all in developing countries that could transition straight from no power to household solar with “solar mini-grids”?
There were answers, too. China is virtually mass-producing nuclear power plants and driving down unit costs in the process. Fusion may no longer be a dream 50 years from realisation. Gas may be a transition fuel, but as Jasmin Cooper, of Imperial College and the Sustainable Gas Institute, reminded us, it’s still a fossil fuel – just 50 per cent less carbon-intensive than coal and 25 per cent less than oil.
In the end this was a conversation about responsibility. “The context is a climate emergency,” Bruce Davis reminded us. Or as another Tortoise member put it: “This is very cosy talk, but it’s not business as usual.” Far from it. Energy businesses are unavoidably caught up in a climate crisis. They are not neutral players but their customers and shareholders increasingly expect them to rip up old business models and come up with new ones. Governments are just as prone to inertia, but answerable ultimately to voters.
So can we meet energy demand and lower emissions? The answer I took from the room reminded me of our ThinkIn on renewables in February: yes, but it’s up to us as individuals, and we have to want it badly.
At Tortoise we’ll aim to follow up by looking more closely at
- Chinese nuclear power
- Progress on fusion
- Britain’s inadequate power grid
- Whether the oil majors really can make the transition they envisage
We’ve captured the highlights from the ThinkIn in this short film:
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Illustration by Waldemar Stepien