A week into the Climate negotiations at Sharm El-Sheikh, Egypt and there is consternation among civil society groups and green commentators about the record number of lobbyists from fossil fuel companies and interests who have infiltrated the conference.
An advocacy group Global Witness estimated that there were 636 of them, 25 per cent higher than the previous World Conference in Glasgow last year.
This is sheer irony. COP27 – or the Conference of Parties committed to reverse Climate Change – has pledged to phase out the use of fossil fuels. Yet you have hundreds of executives representing polluting companies tagging on to national delegations with free access to crucial negotiations. Gazprom of Russia, and Exxon, are all there.
The strange scenario reflects the immediate crisis in Climate negotiations. On one hand, the Ukraine war has created a huge energy crisis. On the other hand, oil and gas companies are making billions of dollars in windfall profits as energy costs spiral. The developed world is suddenly going slow in phasing out oil, gas and coal. The big sufferers in the new turmoil are the developing nations wanting to know why they should accept climate targets that deny them access to their own coal and oil assets.
After experiencing years of Climate Change havoc, world leaders had broadly committed to phasing out fossil fuels to reduce greenhouse gas emissions related to burning coal and oil to generate energy. The process has however been slow with renewable energy like solar, wind and biofuels growing to just 28% of the energy pie, from 20 per cent in a decade – from 2011 to 2021.
New boost for coal
The Ukraine war and the energy crisis have given a new boost to coal-based power plants. Coal energy generation has risen 1 per cent till August this year, and is today the world’s biggest source of electricity. Coal consumption has surged in Europe to replace shortfalls in hydro, nuclear and Russian gas.
The developed nations have provided nearly USD 700 billion in subsidies for coal, oil and gas production in 2021, according to Climate Policy Factbook released days ago by BloombergNEF and Bloomberg Philanthropies.
Sample this: The UK government last October had rejected the development of the Jackdaw gas fields in the North Sea due to environmental concerns. It has now approved fresh plans by Shell to develop the offshore region to increase gas output so as reduce reliance on Russian oil and gas.
But even as consumers pay back-breaking prices for gas and fuel at the retail pumps in Europe and the US, the big oil companies have been making windfall profits not seen in over a decade. Recent third-quarter results show ExxonMobil pulling in nearly $20 billion in profit. Chevron USD 11 billion, Shell USD 9.5 billion, and BP 8.5 billion. Saudi Aramco reported USD 42 billion profit this quarter.
This is not ‘phasing-out’ fossil fuels, it is not even ‘phasing-down’ production – the compromise term used in the Glasgow Climate talks; it is ‘phasing-up’. It’s the simple law of capitalism. The investment follows if money is to be made. For instance, the commitments by automakers to shift to electric vehicles (EVs) by 2030 might not materialize as the world’s biggest carmakers plan to build about 400million more diesel and petrol cars than what is sustainable to contain global heating.
This brings us to the final point. While the West is busy turning on emergency measures to exploit oil and gas to face the energy crisis, the developing world is supposed to fall in line and implement targets to phase-out fossil fuels drawn up at Climate Change conventions. This will never happen as the costs are too high for the poorer countries.
One of the oil lobbyists at Sharm El-Sheikh, Dr Omar Farouk Ibrahim, representing the African Petroleum Producers Organization, quite frankly admitted he was there at the Climate talks to influence negotiators to support the development of oil and gas in Africa. He said there were 600 million people across the continent who don’t have access to electricity.
Dr Ibrahim’s argument is Africa cannot forgo its large fuel reserves for the mirage of renewable energy and funds from the West which may never come. Similarly, will India, which today imports 85% of its petroleum needs, be willing to forego a major oil and gas find in say the K-G basin?
Targets to phase out fossil fuels, especially for developing nations, will never be achieved unless the technology and funding for renewable energy are provided at a heavily subsidized cost, preferably zero cost.
Barbados Prime Minister Mia Mottley quite frankly told the rich nations at Sharm El-Sheikh that their prosperity was built on exploiting cheap coal and oil since the Industrial Revolution of the 19th Century. It was at the expense of the poor; and now the poor nations were being forced to pay again, as victims of climate breakdown that they did not cause. In a one-sided world, It is difficult to see how fossil fuel phase-outs can be successful in the near future.