Futures Forum: Climate change: is it humanity's greatest 'existential risk'?
Perhaps, observes Jeffery Sachs, it poses even bigger problems for the oil industry:
January 18, 2015 7:09 pm
Even libertarians can appreciate that the fight is over money, writes Jeffrey Sachs
he announcement that last year was the warmest on record puts another nail in the coffin of climate denial. Not that one was needed. The pseudo-debate about climate science has always been about politics, not science.
There are two main sources of climate denial. The first is libertarian ideology, which opposes government more than climate change. Climate change requires public policy and, for libertarians, that’s enough to declare it false. Since libertarianism is the elixir of financiers and wealthy peers, climate denial haunts Wall Street, the City of London, a surprising number of FT readers and the House of Lords.
The real climate fight, however, is not about ideology but between oil companies like ExxonMobil, Chevron, and Koch Industries, and the general public. The oil groups will suffer massive capital losses when climate controls are finally instituted. Perhaps even libertarians can appreciate that the real battle is therefore over money, lots of it, and the corruption of government by that big money.
Human-induced climate change represents an “existential threat” to the oil industry. Professor Paul Ekins and Christophe McGlade at University College London have shown this rigorously in an important new paper in the journal Nature. They asked the key question: what does climate safety mean for the future use of the proven fossil fuel reserves in various parts of the world?
Their conclusions are stark. Roughly one-third of the world’s oil, a half of the world’s natural gas and 80 per cent of coal reserves are unburnable by 2050 if we are to keep warming within an internationally agreed 2C limit.
And yet the business of the oil companies in recent years has been to spend hundreds of billions of dollars to add new, high-cost, unconventional hydrocarbon reserves on top of the heap of already unusable currently proved reserves.
The Ekins and McGlade paper makes vividly clear how wrongheaded that approach is. There is simply no use for Arctic oil, ultra-deep-sea oil, and most of the Canadian oil sands (to be carried by the Keystone Pipeline) in a world that keeps human-induced warming to below 2C. The recent sharp drop of world oil prices has temporarily cut off the financing for these unneeded projects. One job of the upcoming climate agreement to be reached in Paris at the end of this year is to put in place global commitments and policies so that the superfluous exploration and development projects are not restored if and when oil and gas prices rebound.
At the end of the day, we have a classic story of political economy. There is a very concentrated but very weighty interest group with an interest in finding and pumping oil, and then there is the rest of humanity, with an interest in a rapid transition to a low-carbon future. The interest group owns Congress and much of the airwaves; it moves election results in Australia and Canada, two other carbon economies; it drives politics in the Middle East and Russia. Politics is often a close call. This one – for the survival of the planet – is going down to the wire, with a crucial rendezvous in Paris at the end of the year.
Jeffrey Sachs is the director of The Earth Institute at Columbia University in New York and author of the upcoming book ‘The Age of Sustainable Development’.
This article was first published on the FT’s Exchange blog.
The real climate battle after a sweltering 2014 - FT.com
Futures Forum: Climate change: "Conservatives don’t hate climate science. They hate the left’s climate solutions"
Futures Forum: Climate change: perceptions and solutions: a summary
Futures Forum: The end of peak oil: "supply just keeps expanding while demand fails to take off"
Futures Forum: Climate change: 'stranded assets' and 'unburnable oil' ...... or the pressures to leave oil and gas in the ground
Futures Forum: Overproduction and the end of Big Oil's business model
Futures Forum: Climate change: is Big Energy changing its tune?
Futures Forum: Climate change: businesses wake up to climate action