Decarbonizing in de-globalization
Decarbonizing in de-globalization
Newsletter # 33
Photo by Reproductive Health Coalition on Unsplash
Decarbonization in a de-globalizing world is a theme for a year in which both the G7 and G20 presidencies are held by Asian countries. Whilst countries outside of the OECD bloc are shaping their own, region-specific iterations of energy transition, the jaw dropping profits that oil and gas majors made last year are also driving a change in narrative from we are part of the solution, to we are here for the long-haul.
This in turn is re-shaping the battleground for climate action, which involves basically a big ratchet, all of this against a backdrop of surging renewables - the latest IEA report predicts that renewables will be the world’s largest electricity source within 3 years.
In this newsletter, we’ll look at two recent papers which put the spotlight on the responsibility of the global North to step up oil and gas phase-out to meet the Paris Agreement targets, and why mining lithium like crazy isn’t the key to the energy transition. Also new climate lawsuits to watch, and more.
Highlights from the Sustainability Agenda
Why the global North needs to phase out oil and gas much faster
A new paper in Nature Climate Change finds that finds 1.5C pathways underestimate how much Global North must cut CO2 emissions and how fast oil & gas must be phased out globally. This is because pathways rely too much on phasing out coal, with less emphasis on oil & gas.
A key point is that the typical pace of coal phaseout used in the models are basically not feasible for highly coal dependent countries such as China, India and South Africa. This then puts the onus on Europe and the US making a much bigger lift in transport and industry, and implies a faster decline in global oil and gas production.
Half of the world’s coal use is currently in China, and a quarter in other non-OECD countries. The paper points out that there are 2 elements of system inertia that make transition more difficult: the size of the system and the degree of the incumbent’s technology dominance within.
The twitter thread from one of the authors is a good summary:
need to phase out oil and gas much faster, hence confronting oil and gas industry much more strongly
curbing transport energy in core industrialised countries of EU and US is part of the solution and requires confrontation with automotive industries
The study “reinforces the importance of rapidly phasing out coal power generation, but observes that the challenge of coal phaseout is unevenly distributed.”
It concludes that rebalancing mitigation measures could show more feasible paths to achieving the Paris Agreement Goals.
De-globalizing the Net Zero narrative
Emerging and developing economies are facing the most strain from the push towards a net zero future because they have higher exposure to social risks, weaker governance and lower financial buffers compared to OECD countries, particularly for countries that are highly fossil-dependent.
So it’s little surprise that the Asian nations leading the G7 and G20 this year - Japan and India respectively - are avoiding the net zero language in their agendas, and placing the main accent elsewhere.
Japan’s G7 agenda showcases its GX (Green Transformation) plan which is mostly about nuclear energy and hydrogen. India’s G20 agenda is focused more on energy efficiency and transition finance than coal phase-out.
Debunking the myth that decarbonization depends on mining like crazy for lithium
Another new paper out last month, which also zooms in on the low-hanging fruit in the US transportation system, finds that the U.S. can achieve zero emissions transportation while limiting the amount of lithium mining necessary by
reducing the car dependence of the transportation system
decreasing the size of electric vehicle batteries
maximizing lithium recycling.
The paper argues that making policy and spending shifts to prioritize public and active transit while reducing car dependency has many co-benefits such as global justice, protecting ecosystems and respect for Indigenous rights.
U.S. academic Theo Riofrancos is one of the authors, if you want to learn more about her work on critical minerals and the energy transition, do check out our 🎙️ interview with her and journalist Ian Morse, whose newsletter Green Rocks is a great way to follow this top of agenda issue.
Lawsuits to watch
Among the hot 2023 lawsuits to watch, Client Earth filing against the board of directors of Shell, arguing that the Board is pursuing a "fundamentally flawed" transition strategy that fails to take into account the risks associated with the energy transition. The case argues that:
the Board has breached its legal duties by failing to manage material risks posed to the company by climate change.
it is in the company’s best interest to adopt an energy transition strategy aligned with the Paris agreement, which will protect the company and long-term shareholder value.
the company is not on track to deliver a 45% reduction in group wide emissions by the end of the decade, as was ordered by a Dutch court in May 2021. On the contrary, the Board has continued to invest in new oil and gas projects.
The claim is backed by a group of big institutional investors holding over 12 million shares in the company, including Nest, London CIV, AP3, AP Pension, DPAM, Sanso IS and Danske Asset Management and Danica Pension.
👉 Takeaway: How the court interprets directors duties could be a game-changer.
Vanuatu is pushing for a UN General Assembly Resolution that asks the International Court of Justice to clarify the legal obligations for States to protect present and future generations from the adverse effects of climate change.
If approved in March, it will send a clear signal for future climate litigation cases. So far 89 countries have pledged to support this resolution, but hold-outs include the US, Canada, Sweden, Finland, Italy, Ireland, Norway and Switzerland.
What’s coming on water
Is it the next big thing in corporate sustainability reporting? Right now, more than one-third of financial institutions disclosing are not factoring water-related issues into their investment decisions. Corporate disclosure on water will be on the agenda at next month’s UN 2023 Conference on Water.
Last year, CDP launched a water reporting survey for financial institutions last year to spotlight water portfolio impacts and shift capital allocation away from water-negative investments.
From and Beyond the podcast
Just out from previous podcast guest Edouard Morena (we talked about Just Transitions & the climate elite, you can catch up here) is his new book, in French, "Fin du monde et petits fours, Les ultra-riches face à la crise climatique”.
Morena is a Paris-based academic who has spent years researching the ins and outs of the so-called climate elite, and his book poses some challenging questions:
In the book, I try to show how the ultra-rich are pushing for a transition which enables reduction of greenhouse gases whilst safeguarding their interests by steering the debate and weighing on public policies.
Arguing that social justice is still absent from the debate, he recalls:
For a long time, the priority of the climate movement was putting climate on the agenda. Globally, one can say that this has been successful. But now what do we do? What type of low-carbon transition do we want, and in the interest of whom (…) There is a clear scientific consensus but the question of the type of transition desired and desirable is still open. Is there an alternative to green capitalism?
As ever I enjoy getting feedback from subscribers on the topics discussed. Coming up, the IPCC will be releasing its Sixth Assessment Report synthesis next month so watch out for upcoming podcast interviews with authors on the highlights.
If you’d like to get involved directly to tell me what you think, what you’re reading and what you’d like to talk about next, download the Substack app and join our subscriber conversation.
