Climate Change Is Complex. We’ve Got Answers to Your Questions.

We know. Global warming is daunting. So here’s a place to start: 17 often-asked questions with some straightforward answers.

[The article is divided into three sections. Part 1: What is happening?; Part 2, What could happen?; Part 3: What can we do?.

Below we have posted Part 3, The complete article can be found here. ]

Part 3

What can we do?

1.Are there any realistic solutions to the problem?

Yes, but change is happening too slowly.

Society has put off action for so long that the risks are now severe, scientists say. But as long as there are still unburned fossil fuels in the ground, it is not too late to act. The warming will slow to a potentially manageable pace only when human emissions are reduced to zero. The good news is that they are now falling in many countries as a result of programs like fuel-economy standards for cars, stricter building codes and emissions limits for power plants. But experts say the energy transition needs to speed up drastically to head off the worst effects of climate change.

2.What is the Paris Agreement?

Virtually every country agreed to limit future emissions.

The landmark deal was reached outside Paris in December 2015. The reductions are voluntary and the pledges do not do enough to head off severe effects. But the agreement is supposed to be reviewed every few years so that countries ramp up their commitments. President Trump announced in 2017 that he would pull the United States out of the deal, though that will take years, and other countries have said they would go forward regardless of American intentions.

3.Does clean energy help or hurt the economy?

Job growth in renewable energy is strong.

The energy sources with the lowest emissions include wind turbines, solar panels, hydroelectric dams and nuclear power stations. Power plants burning natural gas also produce fewer emissions than those burning coal. Converting to these cleaner sources may be somewhat costlier in the short term, but they could ultimately pay for themselves by heading off climate damages and reducing health problems associated with dirty air. And expansion of the market is driving down the costs of renewable energy so fast that it may ultimately beat dirty energy on price alone — it already does in some areas.

The transition to cleaner energy certainly produces losers, like coal companies, but it also creates jobs. The solar industry in the United States now employs more than twice as many people as coal mining.

4.What about fracking or ‘clean coal’?

Both could help clean up the energy system.

Hydraulic fracturing, or “fracking,” is one of a set of drilling technologies that has helped produce a new abundance of natural gas in the United States and some other countries. Burning gas instead of coal in power plants reduces emissions in the short run, though gas is still a fossil fuel and will have to be phased out in the long run. The fracking itself can also create local pollution.

“Clean coal” is an approach in which the emissions from coal-burning power plants would be captured and pumped underground. It has yet to be proven to work economically, but some experts think it could eventually play a major role.

5.What’s the latest with electric cars?

Sales are still small overall, but they are rising fast.

The cars draw power at night from the electric grid and give off no pollution during the day as they move around town. They are inherently more efficient than gasoline cars and would represent an advance even if the power were generated by burning coal, but they will be far more important as the electric grid itself becomes greener through renewable power. The cars are improving so fast that some countries are already talking about banning the sale of gasoline cars after 2030.

6.What are carbon taxes, carbon
trading and carbon offsets?

It’s just jargon for putting a price on pollution.

The greenhouse gases being released by human activity are often called “carbon emissions” for short. That is because two of the most important gases, carbon dioxide and methane, contain carbon. (Some other pollutants are lumped into the same category, even if they do not actually contain carbon.) When you hear about carbon taxes, carbon trading and so on, these are just shorthand descriptions of methods to put a price on emissions, which economists say is one of the most important steps society could take to limit them.

7.Climate change seems so overwhelming.
What can I personally do about it?

Start by sharing this with 50 of your friends.

Experts say the problem can only be solved by large-scale, collective action. Entire states and nations have to decide to clean up their energy systems, using every tool available and moving as quickly as they can. So the most important thing you can do is to exercise your rights as a citizen, speaking up and demanding change.

You can also take direct personal action to reduce your carbon footprint in simple ways that will save you money. You can plug leaks in your home insulation to save power, install a smart thermostat, switch to more efficient light bulbs, turn off unused lights, drive fewer miles by consolidating trips or taking public transit, waste less food, and eat less meat.

Taking one or two fewer plane rides per year can save as much in emissions as all the other actions combined. If you want to be at the cutting edge, you can look at buying an electric or hybrid car or putting solar panels on your roof. If your state has a competitive electricity market, you may be able to buy 100 percent green power.

Leading corporations, including large manufacturers like carmakers, are starting to demand clean energy for their operations. You can pay attention to company policies, support the companies taking the lead, and let the others know you expect them to do better.

These personal steps may be small in the scheme of things, but they can raise your own consciousness about the problem — and the awareness of the people around you. In fact, discussing this issue with your friends and family is one of the most meaningful things you can do. SOURCE

Coronavirus Delays Key Global Climate Talks

Credit…Jeff J. Mitchell/Getty Images

This year’s United Nations-sponsored climate talks, widely regarded as the most important climate meeting of the past four years, were postponed on Wednesday because of the coronavirus pandemic.

The session, known as the Conference of Parties, had been scheduled to take place in Glasgow for a week and a half in mid-November. It was postponed to 2021, the world body’s climate agency and the host government, Britain, confirmed late Wednesday.

“In light of the ongoing, worldwide effects of Covid-19, holding an ambitious, inclusive COP26 in November 2020 is no longer possible,” the British government said in a statement.

The conference venue in Glasgow, an arena where tens of thousands of delegates from around the world were to have gathered, is being turned into a field hospital for people with Covid-19, the disease caused by the virus. Covid patients are also being housed in the convention center in Madrid where the Conference of Parties took place last December; Spain has one of the world’s largest outbreaks.

The decision to postpone this year’s conference, known as COP26 because it’s the 26th such annual meeting, was made at a virtual meeting of the rotating decision-making board for the conference.

The conference is vital to the world’s ability to avert the worst effects of climate change, including fatal heat waves and flooded coastal cities.

It took more than 20 such conferences for countries to negotiate the landmark 2015 Paris Agreement, pledging to keep global average temperatures from rising well below 2 degrees Celsius, or 3.6 degrees Fahrenheit, compared to preindustrial levels.

Countries have announced voluntary targets to rein in their emissions of greenhouse gases. Even so, emissions are rising and the world as a whole is on track to warm by more than 3 degrees Celsius, on average, an increase that scientists say heightens the likelihood of extreme weather events and sea levels rising to dangerous levels.

The conference scheduled for November was particularly important because the goal was to spur countries to revise and strengthen their targets for greenhouse-gas reductions, as required by the Paris agreement every five years.

Patricia Espinosa, executive secretary of U.N. Climate Change agency, urged governments to rebuild their economies after the pandemic with climate goals in mind.

“Soon, economies will restart,” she said. “This is a chance for nations to recover better, to include the most vulnerable in those plans, and a chance to shape the 21st century economy in ways that are clean, green, healthy, just, safe and more resilient.”

SOURCE

RELATED:

Cop26 climate talks in Glasgow postponed until 2021

Crucial UN conference will be delayed until next year as a result of the coronavirus crisis

Oceans’ capacity to absorb CO2 overestimated, study suggests

Research into North Atlantic plankton likely to lead to negative revision of global climate calculations

Phytoplankton blooms are visible from space in this 2017 satellite image taken of the Gibraltar strait. Photograph: Suomi/VIIRS and Modis/Nasa

The North Atlantic may be a weaker climate ally than previously believed, according to a study that suggests the ocean’s capacity to absorb carbon dioxide has been overestimated.

A first-ever winter and spring sampling of plankton in the western North Atlantic showed cell sizes were considerably smaller than scientists assumed, which means the carbon they absorb does not sink as deep or as fast, nor does it stay in the depths for as long.

This discovery is likely to force a negative revision of global climate calculations, say the authors of the Nasa-backed study, though it is unclear by how much.

“We have found a misconception. It will definitely impact the model of carbon flows,” said Oregon State University microbiologist Steve Giovannoni. “It will require more than just a small tweak.”

Researchers say the spring phytoplankton bloom in the North Atlantic is probably the largest annual biological carbon sequestration mechanism on the planet. Like a vast forest of tiny plants in the sunlight upper part of the ocean, they draw down carbon dioxide through photosynthesis. The bigger the plankton, the higher the chance they will sink into the deep mesopelagic zone of the ocean, where carbon can be trapped for more than 1,000 years.

Until now, climate models have assumed that diatoms – one of the biggest types of plankton – were dominant. But the study, published in the International Society for Microbial Ecology Journal, reveals they are a very minor share of biomass when compared with much smaller cyanobacteria, picophytoeukaryotes and nanophytoeukaryotes.

This was expected in winter, but the research team found that even in spring – shortly before the annual bloom – there were far fewer diomeds in the western North Atlantic than assumed

“We asked, how could our impressions of this ocean region be so far off?” Giovannoni said. “There are three possibilities: new equipment that allows us to see smaller plankton more clearly, the fact that previous studies had focussed on more eastern regions, and climate change altering the biology of the ocean.”

Although the findings of this study of one part of the North Atlantic – much of it carried out in fierce gales – do not necessarily apply to all oceans, Giovannoni said they highlight how little is understood of marine biology, as well as the need for close-up study.

Nasa and other satellite monitoring agencies have previously used images from space to assess the carbon draw-down capacity of algae blooms, but they will need to revise the assumptions on which their calculations are based. SOURCE

Under coronavirus, pro-market ideologies are overturned around the world. But it’s too little, too late

If there is an economic alternative now, there was one before – and we are all suffering from the failure to take it

‘Scott Morrison’s administration has, almost overnight, delivered one of the largest boosts to benefits in Australian history.’ Photograph: Lukas Coch/AAP

Covid-19 isn’t just infecting humans. It’s also weakening ideology.

Think about Tina: the acronym popularised after Margaret Thatcher declared that “There is no alternative” to the market economy.

From the 1980s on, a thoroughgoing and overt commitment to capitalism became fundamental to every mainstream political party.

Well, if Tina was a person, you’d find her today languishing in an overcrowded ICU, as, all around, the coronavirus forces a recognition of the alternatives always available.

A few months later, his administration announced it would pay the wages of all those who had lost their jobs, a plan that the chancellor of the exchequer Rishi Sunak correctly described as “unprecedented in British history”. Meanwhile, as Owen Jones notes, ConservativeHome now demands “Big State Government on a scale unknown in modern times”, while pundits in the right-leaning Spectator urge Johnson to “borrow from Corbyn’s playbook”.

Across the Atlantic, the New York governor, Andrew Cuomo, was not so long ago inflicting market-driven cuts on medical services for the vulnerable.

But, with New York a centre of infection, Cuomo is – rhetorically, at least –currently out-Sandering Bernie Sanders: decrying competition between manufacturers of masks, gowns and other medical supplies as inefficient and wasteful, and urging the nationalisation of factories to distribute goods according to need.

Likewise, Scott Morrison’s administration has, almost overnight, delivered one of the largest boosts to benefits in Australian history, with “Scotty from Marketing” effectively doubling the rate of jobseeker payments.

How, you might wonder, was a dole judged too low to feed and house those laid off during the pandemic considered adequate in July last year, when Morrison decried a boost to Newstart as “unfunded empathy”?

The question illustrates the problem with the Damascene ideological conversions taking place all around us: namely, that they’re too little, too late.

After all, if welfare hadn’t been such a whipping boy for politicians for decades, something might have been done to fix the decrepit Centrelink website so that it didn’t crash right when people needed it most.

If Australia had invested in a decent public broadband system back when the economy was growing, those of us now working from home wouldn’t be dealing with stuttering, buffering video links.

If the Fair Work Act hadn’t been systematically weighted in the interests of capital, companies such as Qantas wouldn’t be able to respond to coronavirus by standing down employees without pay. More generally, if successive governments hadn’t sold off the plum state-owned assets, the government might now have more options for cushioning current pain.

One could go on but you get the idea: the failures of today stem from the choices of the past.

To put it another way, if there’s an economic alternative now, there was an economic alternative then – and we are all suffering from the ideologically-driven failure to take it.

Now, we can’t step back in time. But we can change what happens next.

The Covid-19 catastrophe demonstrates – if any demonstration is needed – that prevention is better than cure. It shows that scientific experts know, by and large, what they’re talking about, and that their modelling accurately predicts real world effects.

The implications for climate change could not be more obvious.

Scientists have told us, over and over again, that a warming planet will deliver increasingly horrific disasters, with the recent Australian bushfires a taste of what’s to come.

After the last weeks, it’s simply not credible to say nothing can be done about the rising temperatures. We don’t have to wait for some market mechanism to sort things out.

Other alternatives exist – and the sooner we embrace them, the less disruption we face.

In the end, ideology matters less than material interest. The politicians currently buffeted by extraordinary events will, quite soon, recover their equilibrium – and, when they do, we should expect a return to the old rhetoric, as the big end of town insists the rest of us pay for what’s happened.

Indeed, the economic devastation will be used to justify more of the same indifference to the threats of the future, with climate action dismissed as a job-killing indulgence in a time of mass unemployment.

But it doesn’t have to be like that. We have a chance to build from the wreckage – to learn from this crisis and prevent the crisis we know is coming.

If we don’t, it will all happen again. SOURCE


 Jeff Sparrow is a Guardian Australia columnist

 

Could ecocide become an international crime?

A long-running campaign to classify environmental destruction as a crime is finally gaining ground. But who is behind Stop Ecocide and why is the world starting to listen? 

Getty

Look closely at an Extinction Rebellion rally and you may see, among the flags featuring the movement’s hourglass logo, another symbol: a green peace sign, turned upside down. Squint, and it could look like a branching tree. This is the symbol of the Stop Ecocide campaign, an initiative set up by the lawyer Polly Higgins, and led by her until her death from cancer last year. Stop Ecocide want to make the large scale destruction of the environment a crime against peace, like genocide.

Higgins spent ten years proselytising, but only in the past year has her idea caught on. Extinction Rebellion made it a demand and, in November 2019, Pope Francis said he was considering making ecocide a sin. There is no single solution to the climate and ecological crisis, but increasingly a number of people think Higgins imagined the nearest thing to it.

Higgins defined ecocide as “the extensive destruction, damage to or loss of ecosystem(s) of a given territory, whether by human agency or by other causes, to such an extent that peaceful enjoyment by the inhabitants of that territory has been severely diminished.” She intended this definition to cover environmental destruction on the scale of the 2010 BP oil spill which was considered to be the largest ever: 134 million gallons leaked in the Gulf of Mexico, killing between two and five trillion fish and nearly 200,000 turtles. It cost the fishing industry an estimated $247m.

Last summer’s fires in the Amazon could be another example. They were largely thought to have been started by ranchers and loggers. President Bolsonaro, in office since January 2019, had overseen a sharp drop in fines dished out for environmental infractions whilst also taking resources and protections from officials who were supposed to enforce them. It amounted to tacit support. If ecocide were made an international crime, then Bolsonaro could be tried in the International Criminal Court (ICC).

With cases of genocide and other war crimes, the ICC does not try the foot soldiers following orders, but the politicians and generals who issued those orders. Similarly, if ecocide passed into law, politicians and CEOs would be deemed to have ultimate responsibility and would be the ones tried.

The proposed law would also criminalise large-scale commercial activities such as tar sand oil extraction and deforestation. This would render many destructive business models unviable and should, in theory, allow more environmentally friendly ones to flourish.

Supporters argue economic disruption is a small price to pay to protect the ecosystems on which civilisation depends. Resources from the natural world are currently being consumed at 1.7 times the rate they can replenish themselves. In May, Jared Diamond, a Pulitzer Prize winner and professor of geography at UCLA, told New York Magazine that, unless we slow the rate we are exhausting fisheries, soils and freshwater, he would estimate “the chances are about 49 per cent that the world as we know it will collapse by about 2050”.

“Sooner or later,” says Jojo Mehta, who now runs the ecocide campaign, “the state to which we’re reducing the ecosystems on which we depend is going to dictate that a law like this has to come into place. What we are trying to do is get ahead of the game and make sure this law comes in sooner so we have time to adapt.”

Expanding the remit of the ICC is a surprisingly simple process. Any state can propose an amendment to its governing document, the Rome Statute. If two-thirds of the 123 ICC member states back it, then it will apply to those two-thirds. If eight-tenths back it, it will apply to everybody. Perhaps Donald Trump would withdraw from the ICC rather than allow American CEOs to be put on trial, but even if he did, they could still be tried for overseeing ecocide in ICC signatory countries. But Mehta hopes nobody would need to be tried, because companies would be granted time to transition to new business models.

Higgins and Mehta long ago gave up trying to convince wealthy post-industrial nations. Instead, Mehta now mostly lobbies countries at the front line of the climate and ecological crisis, such as Vanuatu, the South Pacific island nation threatened by sea level rises. Votes from these smaller nations are just as powerful in the ICC as those from larger countries. On 2 December of last year, at an assembly in the Hague, John Licht, Vanuatu’s ambassador to the EU, said: “We believe this radical idea merits serious discussion.” It was the first time a state representative had called for ecocide to be a crime since 1972 when it was raised by Swedish politician Olof Palme at a UN environmental conference in Stockholm.

Licht’s statement was a strong hint that Vanuatu may soon submit the amendment. Mehta hopes that, once one government submits, worldwide pressure will encourage other governments to do so.

Critics of the Stop Ecocide campaign say that the imposition of this law would collapse the economy. Polly Higgins liked to assuage this fear by comparing it to the fears of business leaders two hundred years ago, who said the economy would collapse if the slave trade was abolished. It didn’t. She wrote in her book, Eradicating Ecocide, that “within just a year of rendering slavery unlawful, traders were profitably trading in other commodities, such as tea and china”.

This analogy with abolishing the slave trade is beguiling. It suggests consumerism could simply go on as before. But, whilst the process of changing international law might be surprisingly simple, the scale of change it would bring to our everyday lives is vast. It would change what we eat, by increasing the cost of beef and other foods linked to deforestation. It would change what we wear, by putting an end to fast fashion. It would change our choice of gadgets, transport, and much else.

If the Stop Ecocide campaign succeeds it will need to argue that a more frugal existence might actually be a happier one, but also that we have no alternative. SOURCE

 

Ottawa owes less than federal government calculated in First Nations child welfare case, PBO says

Parliamentary Budget Officer Yves Giroux is seen on Parliament Hill, in Ottawa, in a March 10, 2020, file photo.  ADRIAN WYLD/THE CANADIAN PRESS

Canada’s parliamentary budget officer says Ottawa will have to pay up to $2.9-billion in compensation to First Nations children and families torn apart by an underfunded child-welfare system – half the amount estimated by the federal government.

Yves Giroux says his office estimates between 19,000 and 65,100 people would be eligible for compensation awarded by the Canadian Human Rights Tribunal ruling last fall. The tribunal found the federal government “wilfully and recklessly” discriminated against Indigenous children living on reserves by not properly funding child and family services for them.

Using Giroux’s estimates, Ottawa would have to pay compensation in the range of $900-million to $2.9-billion.

The tribunal ordered Ottawa to pay $40,000 to every First Nations child who was inappropriately taken away from their parents after 2006, and to their parents and grandparents.

The government has agreed its actions were discriminatory and has said compensation will be paid, but Ottawa is still challenging the ruling.

In its legal filings, the federal Indigenous Services department estimated last October that satisfying the order could cost the federal government up to $7.9-billion.

NDP MP Charlie Angus asked the budget office to do an independent analysis to determine whether that figure held water.

In the report released Thursday, budget officer Giroux says Indigenous Services Canada provided information saying it expects 125,600 people are eligible for compensation totalling $5.4-billion – down from the amount quoted in its legal arguments to the tribunal but still much higher than the estimates from the PBO.

The difference lies in the number of people expected to receive compensation. The PBO tallied fewer people as eligible mainly because it assumes children taken from their parents and placed within their extended families or communities are not eligible for compensation, as in the parameters set out in the tribunal’s ruling, Giroux says in the report.

The federal interpretation of the tribunal’s ruling is broader and included more children, parents and grandparents in its estimates.

Despite its legal challenges, Ottawa has said it will pay compensation, but wants those payments to come through a settlement in a separate but related class-action lawsuit filed in early 2019, which is seeking $6-billion in damages for Indigenous children. That case could cover all victims going back to 1991. The government’s lawyers argued in court that the tribunal’s compensation plan doesn’t allow for this because its order only includes victims and their families since 2006.

A second, similar class action has also been filed by the Assembly of First Nations.

But the PBO says Canada “cannot void the (tribunal’s) order simply by settling a class action.” Giroux also notes there could be significant barriers to a successful settlement in a class action due to the wide-ranging experiences of individual children and families in different provinces at different times. This could result in fewer families receiving compensation, the PBO says.

In addition, after looking at other Indigenous settlement regimes including the Sixties Scoop and residential school settlements, the PBO estimates compensation for each child through a class-action settlement in this case would not necessarily be more than the $40,000 awarded by the tribunal.

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, which filed the human-rights complaint close to 13 years ago, says the findings in this report support what advocates like her have been arguing for years.

“It really defeats Canada’s idea that this is way too complicated to be able to do,” Blackstock said.

“The other thing is that it reinforces what we have been saying over the years, which is that the CHRT compensation is a ‘yes, and’ with the class actions. You can’t replace a CHRT compensation amount by settling a class action.”

Work is ongoing between the parties involved in the tribunal decision to come to an agreement on how to proceed, but those discussions are confidential. Meanwhile, the federal government is still pursuing a judicial review of the tribunal’s decision. SOURCE

Will the coronavirus kill the oil industry and help save the climate?

Analysts say the coronavirus and a savage price war means the oil and gas sector will never be the same again

A flame from a Saudi Aramco oil installation in the desert near the oil-rich area of Khouris, 2008. Photograph: Marwan Naamani/AFP/Getty Images

The plunging demand for oil wrought by the coronavirus pandemic combined with a savage price war has left the fossil fuel industry broken and in survival mode, according to analysts. It faces the gravest challenge in its 100-year history, they say, one that will permanently alter the industry. With some calling the scene a “hellscape”, the least lurid description is “unprecedented”.

A key question is whether this will permanently alter the course of the climate crisis. Many experts think it might well do so, pulling forward the date at which demand for oil and gas peaks, never to recover, and allowing the atmosphere to gradually heal.

The boldest say peak fossil fuel demand may have been dragged into the here and now, and that 2019 will go down in history as the peak year for carbon emissions. But some take an opposing view: the fossil fuel industry will bounce back as it always has, and bargain basement oil prices will slow the much-needed transition to green energy.

Who is right depends on a heady mix of geopolitics, profit, investor sentiment, government bailouts and net zero emissions targets, campaigner pressures and, not least, consumer behaviour – is virtual working, for instance, the new normal?

What is beyond doubt is the carnage in the sector. The lowest oil prices for almost two decades, with worse potentially on the way. Some oil major stock market valuations halved since January. At least two-thirds of annual investment – $130bn – dumped and tens of thousands of job losses. In a few markets prices have gone negative – sellers will pay you to take the oil, as global storage capacity fills.

“The price war and Covid-19 have really thrown the oil and gas sector into turmoil, and now we have companies really in survival mode,” said Valentina Kretzschmar, director of corporate research at analysts Wood Mackenzie.

Oil wells responsible for almost 1m barrels a day may have already been shut down because the price of oil is now lower than the cost of shipping it, according to US banking giant Goldman Sachs, with the number of wells growing “by the hour”. This is likely to “permanently alter the energy industry and its geopolitics” and “shift the debate around climate change”, said Jeffrey Currie, head of commodities at the bank.

Demand for oil has plummeted as the coronavirus locks down people in their homes and airplanes on runways. “The virus will bring forward peak demand for fossil fuels,” said Kingsmill Bond, at analysts Carbon Tracker. This latest cyclical oil shock is hitting an industry already heading towards a structural peak created by nations committing to net zero future emissions, he said.

“As for the impact of the virus on the timing [of peak demand], it depends of course on the severity,” he said. In 2018, Carbon Tracker estimated peak demand would come in 2023 but Bond said it was possible that the crisis has advanced this by three years. “That means that peak emissions was almost certainly 2019, and perhaps peak fossil fuels as well,” he said. “It will be touch and go if there can be another mini-peak in 2022, before the inexorable decline begins.”

While the oil companies themselves have long argued peak demand is too far off to put a number on, most observers thought it would happen this decade. Mark Lewis, head of climate change investment research at BNP Paribas, agreed the crises could bring it closer.

“When the dust settles, the peak demand narrative will be there stronger than ever,” he said. “This is particularly true if long-haul aviation fails to recover. This has been a very strong source of oil demand growth in recent years but the longer we are at home – remote working, using video conferencing – the more people will wonder: do we really need to get on a plane?”

End of an era?

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 The price of petrol displayed at a fraction of a penny under £1/litre at Costo’s filling station in Birmingham. Photograph: Morgan Harlow/PA

The oil price plunge has also demolished the lucrative returns on exploration projects to which investors have become accustomed. This threatens what Lewis calls the “golden dividend era” of the last two decades, which has made oil stocks mainstays of portfolios.

Wood Mackenzie last week analysed the impact of an oil price of $35 on companies’ previous investment plans for 2020. “It’s a very, very ugly picture,” said Kretzschmar. “At $35 per barrel, 75% of projects don’t even cover the cost of capital.”

Most strikingly, the fat rates of return projected for the oil and gas projects have slumped from about 20% down to 6%, she said. “They’re very much in line now with what you can get from solar and wind projects.”

“The oil and gas sector is already a very much unloved sector by investors and in this kind of oil price environment, it becomes low return, high risk and high carbon,” Kretzschmar said. “It is not a very attractive proposition.” With oil prices predicted by some to collapse even further, Kretzschmar is blunt: “At $20 [the industry] will be decimated.”

The oil industry was already under pressure from investors concerned about the climate crisis and increasing regulation from governments to cut emissions. Colin Melvin, at Arkadiko Partners, a consultancy advising some of the world’s biggest investment management and pension funds, said that after the crisis he expects investment to flow increasingly towards companies perceived to offer wider social benefits.

“The purpose of the investment of capital in business is to create wellbeing, to create wealth in the true sense, and I think that is going to become more and more relevant to investors,” he said.

Adam Matthews, director of ethics and engagement at the Church of England pensions board, said the implications for the oil and gas sector could be significant. “[Demand reduction] could be the catalyst for rapid change and I think investors are going to look at long term systemic challenges very closely and want to see much greater resilience.”

As well as climate concerns, the wild instability of the oil markets provoked by the crises may also deter investors, according to analysis from the University of Oxford’s Institute for Energy Studies: “This is a market that is being tested to its limits.”

However, not all experts think the oil industry’s loss is necessarily a gain for green energy and the climate. “If anything it may hold up the share of oil for longer, because it’s cheaper. It could be bad news from a climate point of view,” said Dieter Helm, professor of energy policy at the University of Oxford.

He said securing a green economic recovery from the coronavirus crisis will require deliberate policy measures from governments: “This is where the carbon tax comes in. Now is the moment.”

‘Historic opportunity’

Governments are deploying stupendous sums to stimulate the coronavirus-wracked global economy – $5 trillion from the G20 nations alone – but how it is disbursed remains uncertain. European Union leaders have promised to make their emergency measures align with their Green Deal programme and Fatih Birol, executive director at the International Energy Agency, has said there is an “historic opportunity” to pour investment into energy technologies that cut greenhouse gas emissions.

But the $2tn US coronavirus relief package is doling out $60bn to struggling airlines and offering low-interest loans that are available to fossil fuel companies, without requiring any action to stem the climate emergency. The Canadian government has said it will give loans to its oil companies, who say they are on “life support”.

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 Aerial view of the Noor 3 solar power station which is nearing completion, near Ouarzazate, southern Morocco in 2017. Photograph: Abdeljalil Bounhar/AP

After the 2008 global financial crisis, there were high hopes that the trillions of dollars delivered at that time would green the economy, but fossil fuels and their emissions powered on, ever upwards. Bond said: “The big difference to 2008 is that the cost of renewables is now below that of fossil fuels. There is no point trying to sustain the unsustainable high-cost fossil assets in any event. It would be deeply ironic for [neoliberal] advocates of Ayn Rand to ask for a government bailout.”

Adrienne Buller, an economist at the Common Wealth thinktank, said governments in countries like the UK, US and Canada should now consider nationalising major oil corporations.

“Fossil fuel companies won’t be allowed to fail en masse.

Any bailout should at a bare minimum come with equivalent public stakes in the companies, and strong conditions for environmental and climate protections and a transition away from fossil fuel production.

“However, given the intent of acquiring this stake should be to wind down production as rapidly as feasible while ensuring a just transition for workers and security of energy supply, nationalisation may be more appropriate and pragmatic.”

The global industry trade body, the International Association of Oil and Gas Producers, insists its members have a vital role after the pandemic. “Oil and gas play a significant role in the global energy mix and will do so in the future,” said a spokesman. “It is too early to predict what the midterm impact will be. But the oil and gas industry has a history of successfully responding to difficult situations and we anticipate that it will adapt as it has before.”

“Furthermore, the industry has been a key engine of prosperity and a driver of innovation for many decades,” he said. “It has the experience, skills, knowledge and resources needed to realise a low-emissions energy future – a transition that would be more difficult and more expensive without it.”

‘Saudi Arabia is desparate to cash out’

Adding fuel to the fire of the pandemic is the price war being waged by Saudi Arabia and Russia, who increased production just as the pandemic slashed demand, sending prices towards the floor. The moves are seen as an attempt to grab market share by killing the higher cost producers behind the US shale boom.

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 Saudi Arabia’s crown prince, Mohammed Bin Salman Photograph: Brendan Smialowski/AFP via Getty Images

Prof Bernard Haykel, at Princeton University, US, said it also reflects a more fundamental strategic shift led by Saudi Arabia’s crown prince, Mohammed bin Salman: “With a global clean-energy transition inevitable, he is desperate to cash out while the Kingdom still can.”

The lasting impact of the price war depends on how long Saudi Arabia and Russia can keep pumping cheap oil. While their production costs are very low, they depend on high revenues to balance their national budgets.

Michael Liebreich, at Bloomberg New Energy Finance, said the fiscal break-even for Saudi Arabia is around $80 per barrel, meaning its foreign exchange reserves might sustain rock-bottom oil prices for only two or three years. “Russia, with a $40 a barrel fiscal break-even and much more diversified economy, can survive low oil prices for a decade,” he said.

Whatever happens, the industry will never be the same again after the double whammy of the pandemic and price war. “The companies that emerge from the crisis will not be the ones that went into it,” said Carbon Tracker’s Bond. “We will see write-downs, restructuring and radical change.”

Experts, including Currie at Goldman Sachs, say the climate change debate will almost certainly take a difference course after the crisis. But exactly what that looks like remains to be seen. “The question is how long this is all going to last, and no one really knows,” said Kretzschmar. SOURCE

Molly Mulloy: Where is Humanity Headed?

 

If we are to survive, which seems to be less and less likely with every passing day,:

We need to stop our consumptive, capitalist society, consumer behaviour. We need to realize that there are limits to growth! We need to abandon the idea of progress which has come to mean constantly getting more, more, more…..

Sadly, there are not nearly enough people who understand ecological realities, who are not swept up by the goal-oriented, modern, money-economy-focussed paradigm of our modern age. Most people do not realize that the word economy derives from ecology, and that word, from the Greek ‘eco = home’.

We need a major shift in values, ethics and behaviours. I’m losing faith that such a change will happen since I know how few people are privileged enough to have developed a connection with the natural world. Most if us have no direct connection to the food we eat, the energy sources we use, the materials our homes, clothing, vehicles, etc are made from,…

At least in our culture (certainly the vast majority of politicians and corporate decision makers), the majority of humans don’t understand that we do not live in a top down pyramid world; but rather within an intricate, inter-dependent planetary web of life, without which our demise is imminent. Our centralized, corporately controlled culture is a disaster for the planet, for us and for all life.

Presumably most of us in western countries have heard of the Green New Deal – progressive ideas that set out a tremendously just, alternative way of living… We need to pressure leaders around the world to adopt these principles that were developed by many thousands of people from all walks of life meeting in many town halls in many countries.

The Green New Deal offers a wonderfully hopeful alternative way of living. Canada’s GND is slightly different from the USA’s. If you haven’t yet, check it out ! https://greennewdealcanada.ca/

Molly Lawson Mulloy, Prince Edward County