PROGRESS REPORT ON THE PARIS CLIMATE
AGREEMENT PART 16
2022 JULY ISSUE
By Andrew Sia
We reported the forthcoming COP27 in November will be held in Sharm el-Sheikh, Egypt.
The world has found the invasion of Russia in Ukraine triggered the oil to reach an all-time high. Nobody is talking about moving into renewables because the oil companies and investors are enjoying the dividends and reducing of the carbon emissions can perhaps come later. Obviously the agenda has been switched.
Sharm El Sheikh Hotel | Red Sea Resort
Courtesy of: marriott.co.uk
Renewables have also faced the challenge, especially the wind farms in Germany and Italy. Other countries have applied strict regulations with the development of wind farm.
We feel that we should continue to bring awareness to our readers or otherwise the Earth will have a lot to lose.
We found that at this time Vietnam has taken the initiative to encourage the solar-power suppliers to supply power. It is today the world’s tenth-biggest producer of solar power. The country is also the biggest supplier of the mobile phone and its garment and textiles has come up as second largest export of its country. We are very impressed for their achievement in the last four years.
Opening Remark
At the end of the first quarter of 2021, CEOs of the three biggest U.S. oil and gas companies—Exxon-Mobil, Shell and Chevron, presented their companies’ earnings, investors were firing questions about how they would address climate change. At that time the oil price was so low and the cause was the pandemic. We can still remember when crude oil prices even turned negative, and traders were actually paying buyers to get the oil off their hands. In that year ExxonMobil reported its historical net loss for 2020.
The market turned its attention to address the climate change and viewed fossil fuels as an outdated and dirty energy and investors were looking to hear from the oil companies about their way to combat it. They looked also for the way the oil companies would find ways to decarbonizing emissions.
This time, in 2022, it is good time for the oil companies, and an even better time for the oil investors. A surge in profit for the first three months of the year.
First of all, it is the surging of the crude oil prices. Brent crude futures have surged more than 40% this year, and it is going above $130 per barrel following Russia’s invasion of Ukraine. Although prices have come down, Brent is still trading above $100 per barrel.
ExxonMobil reported its net profit more than double to $5.5 billion from a year ago. This was even after booking a $3.4 billion charge from exiting its operations in Russia.
Same for Chevron who reported its highest profit in nearly a decade, and Shell posted its highest earnings ever. Despite their write-off tied to Russia, they still enjoyed their best quarter earnings.
ExxonMobil plans to buy back up to $30 billion in shares by the end of next years, triple what it had initially projected. The record earnings in the first months of this year are leading to big dividends and share buybacks for investors.
Also at this time when oil companies announced the massive profits, questions about the climate change hardly came up. For years, activists and politicians have condemned the industry for its efforts to reduce the carbon emissions, and what really drives the industry is its financial performance.
In the years when the Covid-19 started, energy was the worst-performing sector in the S&P 500 stock index. Now the financial situation has improved and the industry is no longer willing to improve the industry’s performance to align to the requirement for climate change. It is a complete reverse from two years prior, energy is now the best-performing sector on the S&P 500 stock index.
This surging profitability has raised alarm from the International Energy Agency (IEA). It has been calling for limiting global temperature rise to less than 2ºC to the pre-industrial levels. It is known that the oil industry will need to pour trillions of dollars into clean energy and reduce financing for fossil fuels. It is agreed that by 2050, fossil oil’s need will have to reduce by 75%.
In 2020, according to the Forum for Sustainable and Responsible, some $17 billion in investment had invested into the so-called ESG Investments, short form for Environmental, Social and Governance. The industry slowly moved towards the direction knowing that this is the trend going forward.
But the Covid-19 brought the heavy blow to the industry and has caught the industry and its investors by surprise. What efforts were taken previously to reduce the carbon emissions were incomparable to the global lockdowns that stop the business activities. The Covid-19 caught the surprise in many ways that affect the world economy. All of the sudden, the carbon emissions was reduced due to the demand situation and not by the intention or any effort.
The Russian invasion of Ukraine has brought another unexpected situation, and it has put the world venerable to the economic consequences of higher fuel prices. Calling for oil and gas production to counterbalance the supply and demand, remember that Russia is under the global sanction for its fuel export, and the push for renewable energies are back in action.
The dynamic has led the advocates , activists and politicians to rethink their approach. At this time of the high energy cost, to criticize the industry’s climate failure would not be popular. The world has to deal with the list of priorities, some for the more immediate action, and some would have to wait. We have to admit that at this moment it is difficult to please every party but to wait until things can begin to settle down and the agenda to limit global temperature rise to less than 2ºC to the pre-industrial levels will come eventually.
Study of Climate Change in Arctic Circle – WSJ, March 22, 2022
Russia is one of the eight countries that control land and ocean territories in the region north of the Arctic Circle. The recent invasion of Russia in Ukraine has derailed international collaborations in climate study in the region. Already the meetings and expeditions have been cancelled in Russia or Russian waters.
The Russian territorial waters and Russian coastline comprise a large part of the region. The region is known for regulating the global climate and without the access to the Russian part is going to become a missing of some key knowledge to better understand the climate change in the Arctic region.
For going forward, it is necessary to know the situation with Russia as their scientists have brought a lot of data and expertise to the discussion table. To continue the monitoring in Russian territories and working with their experts are essential to fully understand the Arctic climate and the global consequences of changes in the region.
Climate Anxiety
This writeup triggered us to get to the sorrows and grieves we have all encountered since the beginning of the pandemic. Almost a year of lockdown have brought us grievances in different levels especially that in the past weeks we have the shootings in the school in Texas that caused 19 children and two teachers who lost their life. The country is still in the mourning. Symptoms of grieves are difficulty in focusing, worry and anxiety, fear, fatigue, anger, loss of interest.
We have also found out that June 27, Monday, is the PTSD Awareness Day and the month of June is dedicated as the awareness month.
For climate, there is this climate emotion conversation which refers to grief, terror, rage, shock, betrayal, guilt and alienation. They are all for those who think that humanity is doomed and climate anxiety affected their daily lives. The pre-traumatic stress disorder is still neglected and ignored by the mental health.
The climate effect—more intense drought, sea-level rise, superstorms and heat waves, and climate change has already damaged global food security and threatened the food supply, especially in the developing countries.
In the past two years during the Covid-19 somehow it has grounded the climate movement but we have seen them reviving and calling for public’s attention through mass protest and nonviolent civil resistance. We will hear more voices in regarding this matter, but to look after the health of those who have taken this to their heart will become more important before it will grow into a public phenomenal.
Renewables Are Facing Opposition in European Countries
Although Europe has a plan in within five years by installing wind turbines and solar panels on a massive scale, but environmental groups, local oppositions and bureaucracy stands in the way.
In Germany, Europe’s biggest buyer of Russian gas, but their wildlife protection groups continuously challenge those wind farms. The approval time for them takes longer and longer. In Italy, the situation is no better. It is Europe’s second-largest Russian gas consumer, and their authorities have already rejected 90% of all wind energy projects. Strict regulations and public oppositions in Poland, France and Hungary have restricted large areas of the countries from wind farm development.
The solar farms are facing the same set back in Europe.
But in the wake of Russia’s invasion of Ukraine, Europe’s wish to move away from fossil fuels and the European Union is proposing to more than double the bloc’s electricity generated from wind and more than triple from solar panel in 2030, when the 27-nation bloc should generate 45% of each energy from renewable sources.
In order to meet these targets, EU officers are urging national governments to expedite the approval time for renewable energy projects. But they are facing local officials increasing fear of the wind towers and solar farms would clash with Europe’s historical landscapes of chateaus, medieval churches and farms. The wildlife groups are worrying for the impact on birds and bats.
WestfalenWIND has been fighting in bringing the wind turbines which are three times more powerful and faced the opposition of NABU, one of Germany’s most powerful environmental groups.
Although there are plans to stop buying Russian natural gas, the use of more renewables are still running into opposition.
There is the report known as Environmental Performance Index (EPI) and it has found that based on the trajectories from 2010 to 2019, only Britain and Denmark were on a sustainable path to eliminate emissions by 2050.
The fact was almost all countries pledged by 2050 to reach net-zero carbon emissions, almost none are on track of doing it.
Practically for the four years of Trump administration, nothing was being done in the U.S. The rest of the 176 nations are fall short of net-zero goals, some by large margins. China, India, the U.S. and Russia, accounted for more than half of the 2050 global emissions and you can imagine this time with the war, geopolitical tensions and the pandemic, so little would have achieved.
Climate Changing & Coral Reefs
Global warming has been one of the factors altering habitats. Interventions to save ecosystems have been reintroduced. On our land we have the rainforests, but in the ocean, we have coral reefs. They exist on vast scales: half a trillion corals line the Pacific from Indonesia to French Polynesia, and they have roughly the same number of trees in the Amazon forest. They are equally important havens for biodiversity. We know that rainforests cover 18% of the land’s surface and offer the habitats to more than half of its vertebrate species. Coral reefs cover 0.1% of the ocean and host a quarter of marine species.
Corals are useful to mankind. The reefs are protecting the low-lying islands from crashing waves, and if not, the Maldives would have been flooded long time ago. For cities like Cancun, Honolulu and Miami, the coral reefs keep the ocean wave at bay and act as wave breakers. A special economist team who is familiar with this subject is estimating the global coral ecosystem is something that is worth $1 trillion per year.
But the reefs are under the threat of rising temperature of the sea water. Corals are depending on algae for food. The heat will generate toxins that can lead to algae’s expulsion. This is known as “bleaching” and can cause the coral’s death. Already Australia’s Great Barrier Reef lost more than 30% of its corals in between 2015 to 2018 to have died by corals bleaching.
Scientists are coming up with ideas and plans to plant the heat-resistant corals and move them around the world. They even crossbreed them to become more heat-resistance. Corals from the Gulf of Aqaba at the northern tip of the Red Sea, which is one of the hottest places on Earth, where the coral reefs can withstand temperature of 5° C above the 27° C at which they normally live.
We have not to forget that coral reefs are important part of the world’s ecology, but also the fact that it hosts a quarter to a third of multicellular marine species, including many commercially important fish. They are also part of the tourist attractions.
What We Can Learn from Vietnam for the Renewables
South-East Asia is among the parts of the world that is more vulnerable to climate change. This region is the smoke-belching and unmoved in giving up fossil fuels for its history. But this time we have seen that Vietnam, in the four-year period, increased from practically nothing to nearly 11% for its electricity generated by solar. This is a significant move and it beats the fastest pace than almost anywhere else in the world. Vietnam today is the world’s tenth-biggest producer of solar power.
This energy transition is from its prime minister, Pham Minh Chinh, who vowed in November of 2021 to stop building new coal-powered plant and to reduce emissions to net zero by 2050. Vietnam has quadrupled its wind and solar capacity since 2019. This is the result of the country’s determination and market incentive. Already in 2017, the country began paying solar-power suppliers a fixed-rate of $0.0935 for every kilowatt-hour they delivered to the grid. As a result, 100,000 rooftop solar panels were installed and in 2019 and 2020, the country’s solar capacity increased by 16 gigawatts.
This has encouraged the foreign investors who are environmental conscious to invest in Vietnam.
We encourage our readers to dig deeper in this subject and go for the source of World Bank 2020.
Exploitation of Sand Extraction
Environmentalists have long been showing concerns of the soaring demand of sand and most of it has gone for the construction’s use to mix with cement. China is the biggest consumer of sand and its construction of cities, infrastructure, and different constructions are taking the illegal extraction from rivers and lakes.
The central authorities have imposed control as they have noticed the extraction has threatened the embarkments to prevent potentially catastrophic floods. It has also hindered the river flows and post threats to wildlife, including the rare cranes and porpoises.
The central government launched new campaigns against unauthorized mining of sand and pounded dredging boats and sand barges that have been operating illegally. It resulted thousands of “kuangba”, also known as “mine tyrants” and “shaba” also known as “sand tyrants” who have been operated like syndicates and protected by district officials who provided protections for their criminal activities.
In fact, the United Nations’ environmental agency, UNEP, have also warned a looming “sand crisis” and if the ill-regulated extraction in many countries can result the coastlines more vulnerable to rising sea levels and also flooding.
How America is Looking at Climate Change
In general, its Republican Party in recent years has largely resisted government action on global warming. They are against the limits on emissions, the phaseout of coal power generation, and even play the role in the Paris climate accord. In a pro-environment vote on legislation, average score for Republicans across the House and Senate combined in 2021 was 14.21 out of a possible 100. Republicans expressed their care about our Earth and our planet but they complained that they have no been vocal enough in the climate summit.
The two parties, Democrats and Republicans, agreed to invest in renewable energy generation and storage but insisted on fossil fuels should continue to play the active role in the energy mix.
At this time of the war between Russia and Ukraine, the U.S. is ready to replace Russia’s oil and gas. The same for Venezuelan oil with U.S. supplies.
In a Pew Research survey of more than 10,000 this year found that 64% of the respondents claimed to be moderate Republicans who wanted to put renewable energy sources ahead of expanding oil and gas. Unfortunately, the most extreme candidates from both parties dominated the media and blocked the truth from its people. In according to them, this damage has been brought down over the years that global warming was “probably” caused by human, but a greater part was through weather cycles and the sun.
For the U.S. as the country will still have a long way to go in order to be able to come into a consensus.
Japan’s Proposal for Carbon Tax for Shipping Industry
Japan is the world’s third-largest shipbuilder and it is widely accepted to be able to help to chart a course between western ambitions on climate change and developing nations’ concern over economy. In a recent International Maritime Organization’s meeting, Japan told the global shipping regulators that it would support a carbon tax to raise more than $50 billion a year to address emissions from maritime transport. It is known that the maritime carbon emissions generated almost 3% of global greenhouse emissions. To decarbonize it, clean fuels like green hydrogen, ammonia and methanol have to be available on commercial scale.
Japan’s proposal suggested that the industry should pay $56 per ton of carbon emissions from 2025 to 2030 on shipping’s total emissions of almost one billion tons. This can raise $50 billion per year from fossil fuel powered vessels to support zero-emission vessels. This will allow the eco-conscious and environmental-friendly shipping operators to recoup part of their investments.
The industry’s lobbying group, the International Chamber of Shipping, is proposing a levy equal to 63 cents per CO2 ton to set up a research fund which will go back into paying for decarbonization and the need for infrastructure.
Conclusion
Most of the countries are on track to their 2050 emissions goals.
For a change for the coming COP27, the host country will be Egypt, who can represent developing countries. It is the time when Russia will probably be still at war with Ukraine, and it has caused rising cost in fuels and food prices around the world. It has made the biggest economies in the world, and also the biggest emitters of greenhouse gases hard to fulfil the pledges they made at Glasgow last November to reach their targets on emissions cuts. And this has also affected their intention to help the poorer countries when they have found that their hands are tied.
This time on June 6, Bonn Annual UN Climate Change Conference, started the groundwork for COP27 at Sharm el-Sheikh, Egypt.