Recently we have been seeing Obama talking about climate change, and that’s news. The scientific community has been demonstrating, for at least 30 years, that their studies showed some deviations on climate factors like temperature, rainfall, melting glaciers, etc. Nobody listened. Oil was on its peak. 100 dollars a barrel. Was not profitable to listen to those studies. But, will the human race only react to the problem when economy force us to do so?
Alerts about the impact of measures against climate change in fossil fuels have jumped into the Organization for Economic Cooperation and Development. In one of its latest reports, the OECD predicts that “tougher climate policies will not only have an impact on future investment decisions, but also on the profitability of existing assets.” The International Energy Agency (IEA) has estimated at 300,000 billion assets in oil, gas and coal devalue in the portfolios of companies and investors before 2050 only in the energy sector, whether it complies with international goal reduce CO2 emissions to limit global temperature increase to two degrees.
“The tougher climate policies have an impact on the profitability of existing assets,” stresses the OECD in its study on “carbon-free” economics, published during 2015. During the presentation of the report in London, Angel Gurria, OECD general secretary, put the focus on coal, whose use to produce electricity has increased in the major economic powers since 2009. “Some coal-based assets cannot complete economic life, “Gurria warned.
“The question is whether power generation from coal without carbon capture and storage is now a rational choice,” he added the head of the OECD on a sector in which about seven million people work in the world. The IEA, in the same direction as Gurria, said a few weeks ago to the need to “reduce the use of less efficient coal plants and banning its construction”.
Detached emissions growth
The IEA has encountered a new phenomenon in the last 40 years the world economy grew by 3% in 2014 but no CO2 emissions. China is partly behind this phenomenon. For the first time since 1999, emissions there, fell 1.5%. “Demand for coal, which has experienced extraordinary growth in China in recent decades, fell by about 3%,” says IEA, which makes more obvious that China is maybe lying about the real situation of its economy, much worse than what they have always said. In this it has influenced the growth of hydropower through it was a rainy year. But the generation of wind and solar energy grew 34%.
Carbon Tracker, a group of expert analysts in finance, energy and climate- spent years tracking down what they call “carbon bubble”. Anthony Hobley, chief executive of this organization states that are creating a “perfect storm” and regarded as fundamental element “action by governments through laws and climate policy” to stop the warming.
Coal, the most beaten
End of 2015, Paris will host the global climate summit and is expected to go hence the new protocol to replace Kyoto. This time the goal is that all countries commit to reduce their CO2 emissions from 2020. The main sources are coal, gas and oil (the first two in the production of energy and the third in transport). Four of the six first CO2 power stations China, US, EU and Russia have presented their reduction commitments to the UN. India and Japan are missing.
While various international organizations and experts have warned that the road map proposed by the various governments is not enough to limit the temperature increase to two degrees by the end of-the century threshold set by scientists to avoid devastating damage on the planet – the truth is that mitigation measures will impact on the sector of fossil fuels, according to various reports from the OECD, the IEA and the UN. The Hobley analyst believes that “the greatest political risk” now is for power generation with coal, which is also the industry that emits more CO2 to produce electricity. It is, he says, a “very small industry” compared to the oil and gas adds. “I also believe that the oil and gas industry can paint coal as the villain”, and trying to take their CO2 emissions and slow its decline, he says.
In early June, BP Group, BP, Eni, Royal Dutch Shell and Total Satoil Six major oil europeas- released a letter in which recognized that climate change was a problem and asked also negotiate with States under the Paris summit. “Clearly, they do not by idealism,” said Gurria few days ago. These companies proposed as a method to combat climate change, the spread of the price system of carbon emissions (which collapsed), and gas, the least intensive of the three fossil fuels. Hobley believes that after this “perfect storm” for dirty energy, in addition to emission reduction commitments, in the case of oil also influence the “new fuel efficiency standards for vehicles in OECD countries” which have caused a drop in oil demand “for the first time without being in a major crisis.” Also adds the significant drop in oil prices (which makes many investments unviable) and “the cost of renewable energy technologies.” But renewables still have a hurdle with subsidies up to 40 governments continue rewarding those fossils.
In its Energy and Climate Change report, the IEA indicates that in 2014, fossil fuels were 510,000 million in subsidies, which means that about 13% of world CO2 emissions are subsidized. This also means that, contrary to the widespread belief, dirty energies are “four times” more subsidies than renewables. Another study this year the International Monetary Fund, including the costs arising from damage to health and the environment, even estimated that the aid amounts to $ 5.3 trillion. Both the OECD and the IEA are necessary to eliminate subsidies that make down “artificially” prices.