By Aarti Khosla & Aniruddha Bhattacharjee
The COP28 in December should play out like an epic blockbuster with twists and turns where the climate agenda emerges victorious at the last moment—or at least that’s the hope as the renewed discussions on gathering momentum happen alongside lacklustre climate meets across the world. In reality, the world is moving woefully slowly on climate action despite the mounting destruction from extreme weather and the breach of the planet’s boundaries.
The battle lines are clear: the worst affected nations and communities want an immediate pledge on phasing out fossil fuels while the richest nations stack their weight behind abating and removing emissions. This is technical speak for preventing carbon emissions from coal, oil, and natural gas from entering the atmosphere and removing what has been emitted. It is done through fixes like the CCS (carbon capture and storage) technologies that store carbon underground or under the sea and are being touted as a convenient solution to lowering emissions without stepping away from fossil fuels. The reality is not that straightforward.
The problem is that such a technology-driven approach to solving a planetary crisis has significant limitations. CCS has been around since the 1970s, but all evidence points towards its futility in scrubbing carbon out of the air. Instead, whatever carbon is captured is pumped underground through oil and gas shafts to recover more of the fuels. There are examples of projects around the world where storage methods are faulty, unreliable, and leaky with little or no carbon pollution actually reduced in reality.
Proponents of CCS, such as oil and gas firms and even some governments, now have come out to say that a premature phaseout of the carbon-heavy fuels is dangerous. The EU too has declared it will push for the phaseout of unabated fossil fuels at the COP (except for France), but the apprehension is that CCS will indefinitely extend their use and even greenlight their expansion.
The issue is complex as the global economy remains heavily dependent on hydrocarbons. Fossil fuel use must be reduced by more than a quarter of current levels if runaway climate change is to be checked. There is no room for new exploration or extraction of coal, oil, and gas. Yet shipping, aviation, and most of the world’s road transport still run on varying grades of petroleum and strengthening growth and development will mean doubling energy needs within a decade or two.
The right to development and better living standards in the Global South, too, are primary drivers that are making a case to exploit local fuel reserves. Brazil has okayed exploratory drilling in the Equatorial Margin offshore zone despite it being an ecologically sensitive region along the Amazon. The country draws 88% of its power from renewable sources and it argues that the added revenue from oil and gas projects will improve the people’s lives in the impoverished region. The UK too has granted a licence to the Rosebank oil field—the largest undeveloped field in the North Sea oil patch—over its stated goal of energy security, even though it could emit the same emissions as 90 countries put together.
It comes as no surprise then that apart from the petroleum industry’s record high profits of $219 billion in 2022—its highest ever—natural gas has emerged as the go-to fuel for economic growth. It burns relatively cleaner than coal and oil, can be piped and shipped across borders, and a recent survey by the Financial Times found that it’s being seen as an investment as dependable as renewables. This is happening even though methane, which makes up 85 – 90% of the fuel, has 86 times the global warming potential of CO2 over 20-odd years. And when gas projects may not advance as planned, breakthrough technologies for batteries and deflationary prices of solar and wind power take over the markets.
Globally, fossil fuels received an incredible $7 trillion in subsidies in 2022. Critics argue that this keeps them artificially close to the levelised cost of electricity of renewables, but the subsidies continue to flow even as the world is predicted to warm by 1.5°C by the mid-2030s. Meanwhile the power from utility-scale solar and even offshore wind energy farms is now cheaper than from new coal and gas plants; the subsidies, if re-directed to renewables, could do wonders to move the needle on decarbonisation.
Discussions on transforming development finance urgently are now gathering pace. Given the need to bring immediate liquidity into clean energy markets, would it not be possible to allocate a percentage of fossil profits directly into development of wind and solar power across the world?
A tripling of the G20’s renewable energy capacity, as agreed in Delhi this year, could indeed stave off seven billion tons of CO2 emissions between now and 2030 and further deflate clean energy tariffs, if it is not matched by similar ambitions for abatement technology. By inference, this could mean that new natural gas projects worth billions of dollars in investments may end up as stranded assets well before they are designed to go offline. A decisive shift in the funding towards renewables may happen when the insurers and underwriters demand that big businesses and investors declare their role in, and exposure to, climate risks.
As the world draws closer to COP28, all eyes will thus be on securing serious commitments that get to work immediately. The pushback from the supporters of conventional energy is predictable, but this year’s meet is almost being seen as a do-or-die window for humanity. The small island nations and the poorest of the Global South are pleading for an end to fossil fuels as to them climate change has become an existential threat. One therefore hopes that as the delegates pour over every word that goes into the final declaration, the intent will be to hammer out the boldest, most progressive climate solutions that the world can afford at this moment.
Aarti Khosla & Aniruddha Bhattacharjee, Respectively, director and researcher, Climate Trends
Views are personal