by Alex Evans | Nov 6, 2008 | Climate and resource scarcity
Next week sees the publication of the International Energy Agency’s latest flagship World Energy Outlook, which has been heavily leaked to the Financial Times. The report makes the same point that I’ve been arguing since prices started to slide from their peak of $147 over the summer (to around $60 today): oil prices are going to go back up. A lot. As Javier Blas and Carola Hoyos summarise in the FT,
The world economy will witness a $2,000bn shift in wealth and power from oil-consuming countries to members of the Organisation of the Petroleum Exporting Countries as oil prices rise to $200 a barrel by 2030.
The IEA says that Opec oil reserves are big and cheap enough to increase production and cap oil prices, but it warns: “Investment by these countries is assumed to be constrained by several factors, including conservative depletion policies and geopolitics. “There remains a real risk that underinvestment [bet-ween now and 2015] will cause an oil supply crunch” the report states…
In its report, the IEA sees oil prices reaching $200 by 2030, almost doubling last year’s forecast of $108 by the same year. The report suggests that current oil prices – below $70 a barrel and less than half their peak summer level – are a temporary effect of the economic crisis.
The $200 a barrel figure is the same one mooted by a Chatham House report on oil published in August, which shared the IEA’s concern that the investment needed to bring new production on stream just wasn’t happening fast enough. The IEA was already worried about that point when it published last year’s Outlook, remember – the fact that prices have crashes to less than half their peak level since then will hardly have helped to bring new investment on stream.
Exactly as with food prices, then, it’s the recent fall in prices that represents the blip – and the recent highs that represent the start of a long term trend. The IEA’s report is just the latest in a series of very good reasons why policymakers need to get their act together quickly on agreeing collective approaches to resource scarcity issues while the political heat on them is – for a little while – off.
But to repeat what I said in July, massive investment in new oil production just can’t be squared with what needs to happen on climate change. The global deal that we really need for managing energy security and competition for oil resources is a global framework for climate policy that manages the problem over the full term of its lifecycle – not just the next few years, as with Kyoto, as this is far too short term to give real investment certainty – and that has targets for all countries, not just developed ones.
That, of course, takes us straight back to David’s recent question on developing country participation. More on that in another post shortly…
by David Steven | Oct 21, 2008 | Climate and resource scarcity, Conflict and security, Global system, Influence and networks
In the summer, I gave a talk at the United Nations University G8 symposium on climate change, where I explored the threshold between conflict and cooperation on carbon control.
Belatedly, the talk is online – either as a pdf, or you can read the full text after the jump.
(more…)
by David Steven | Oct 19, 2008 | Climate and resource scarcity, Cooperation and coherence
Imagine you’re advising China or India – or perhaps a poorer developing country such as Ghana – on their preparations for the climate change negotiations in Copenhagen. What sort of deal should these countries be prepared to accept? What would seem fair?
Nick Stern sidles up to these questions in his paper – Key Elements of a Global Deal on Climate Change. His starting point is that global emissions need to drop to around 20 gigatonnes of carbon dioxide equivalents (and then further to around 10GT CO2e in the decades that follow) – that’s around 2 tonnes of CO2e in 2050 for each of the world’s 9 billion people or so.
Stern believes that there is no choice but for countries to converge on this per capita average:
This target for per capita emissions by mid-century is so low that there is little scope for any major country to depart significantly above or below it. If one or two large countries were to manage only to reduce emissions to, say, 3T or 4T per capita, then it would be difficult to see which other major grouping of countries would be able to get emissions close to zero: and the global target would be unlikely to be reached.
So…let’s imagine the Americans have accepted this logic (suspend belief for a moment) and have a proposal for reducing their emissions from over 20T today to Stern’s 2T by 2050. They enter the negotiating room expecting other countries to do the same.
How would you advise China, India or Ghana to respond? They start from a very different point – around 5T per Chinese citizen, 2T for an Indian, and maybe around 1/2 tonne for a Ghanaian.
Now, as Stern admits, for them, simple convergence would be a pretty rough deal.
All major groups getting to 2T/capita is a pragmatic approach and not a strongly equitable one. It takes little account of the greater per capita contributions of the developed countries to the historical and future contributions to the stock of GHG emissions.
My instinct would be to urge the Chinese, Indians and Ghanaian to forgo what might be a fun, but ultimately unproductive, squabble about historical emissions. Be magnanimous about the past, I’d suggest. Instead focus on what really matters – who’s going to be allowed to emit what over the next forty years.
Because however far Chinese, Indian or Ghanaian emissions are allowed to increase before they start to drop towards 2T – its absolutely certain that their total emissions between now and 2050 (on a per capita basis) will be significantly lower than America’s.
In other words, there’s no trajectory that can be drawn that gives these countries a fair share of the next generation emissions ‘cake’.
So what deal would you advise them to strike?
by Leo Horn Phathanothai | Oct 16, 2008 | Climate and resource scarcity, Global system
With a global recession looming, international efforts to curb greenhouse gas emissions may be in jeopardy, as concerns are voiced in the US, Canada and Europe about the wisdom of adopting measures that would impose an additional cost burden on already fragile economies. Such thinking is misguided, and it is dangerous. A recession may in fact ease the introduction of carbon emissions trading schemes.
At the recent EU summit in Brussels there was widespread reluctance to meet pledges all EU governments made last year to cut CO2 emissions by 20% by 2020. Eight Eastern European countries – including Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia — released a joint statement urging the EU to balance the wish for cleaner air against “the need for sustainable economic growth” at a time of “serious economic and financial uncertainties.” Italy threw its weight behind these countries, threatening to veto the proposed EU plans.
Likewise in the US, top power industry executives seized the opportunity to lobby for delaying carbon emissions legislation, at the recent New York Utility Conference. More dramatically in Canada, the Liberals were dealt an electoral defeat on Wednesday largely on the basis of their strong advocacy in favour of a carbon tax (see story here).
All this backtracking is akin to forfeiting the forest for the tree. Financial crises are short-term phenomena, global warming on the other hand is with us for the long haul, and the window of opportunity for addressing it is fast narrowing. The prospect of economic recession does not in any way reduce the magnitude or the urgency of the climate problem, nor does it provide any compelling reason for delaying action. Or as EU President Barroso put it:
“Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis.
Moreover, as David Wheeler of the Center for Global Development argues, smart carbon regulation will be easiest, not hardest, to introduce during a recession, since a slowing economy emits less, and smart cap-and-trade regulation can “lock in” this head start on emissions reduction at almost no cost during the recession. His proposal for the US is to:
• Immediately pass a cap-and-trade bill that sets the initial total limit at the pre-recession emissions level, and schedule a progressive decline in the overall limit that will achieve the needed long-run goal.
• Establish an annual auction for 100% of the emissions permits.
• Set aside a healthy share of the auction proceeds to provide a compensating rebate for every American
In this way the consumer is shielded from cost increases, and the power provider incentivised to develop less carbon-intensive energy options for the future.
It is amply clear that big emitting developing countries such as China and India will not make significant commitments to curb their greenhouse gas emissions unless the US and EU lead by example. With only about a year to go before the new global deal to replace the Kyoto Protocol is due to be reached in Copenhagen conference, the US and EU have no room to falter. More than ever, political courage and leadership is needed to ensure global efforts to address climate change are not jeopardized.
by Alex Evans | Jul 29, 2008 | Climate and resource scarcity
[youtube:http://www.youtube.com/watch?v=zY__KBYJjMM]
Freed from the nice-guy constraints of being Josh on the West Wing, Bradley Whitford was clearly having a grand old time as a Machieavellian oil industry lobbyist in Burn Up on BBC2 last week; Neve Campbell and Rupert Penry-Jones (from Spooks) completed the ensemble cast for a production that cost the BBC $15 million to make. Watch it if you haven’t already – if you live in the UK, you’ve got until 10.29pm on Wednesday 30th July to stream or download both episodes via the BBC’s Iplayer (if you download, you then have 30 days to watch them).
It was a riot – above all because, notwithstanding that this was a political thriller, the scriptwriter (Simon Beaufoy of The Full Monty fame) had really done his homework on climate change and energy policy (a task in which he was helped by Joe Smith from Open University, who co-edited Do Good Lives Have to Cost the Earth? with Andrew Simms).
So we were treated to climate summits with delegates negotiating square bracketed text through the night as the US and OPEC countries raise flags to object to use of the word ‘mandatory’; China playing it both ways, cutting a deal with the EU for carbon sequestration before dropping them like a stone when the US offers free nuclear power instead (agonised British head of delegation: “the Chinese have stitched us up!”); and even – ta da! – the sight of climate negotiators agreeing a climate framework based on per capita convergence, with proper terminology and everything.
However (spoiler alert: stop reading now if you plan to watch it), all of this then falls apart when ‘moderates’ in the US delegation (“Withdraw that proposal, Tuvalu, or kiss your AIDS funding goodbye”) are replaced by even nastier military-industrial-spook types, who – it later transpires – have a Secret Plan, the gist of which is that the US is deliberately allowing climate change to happen on the basis that if it will damage the US, it will really screw China.
As prospects for a global deal recede, oil company CEO Rupert Penry-Jones (who has had a Damascene conversion to the path of climate righteousness after watching an Eskimo set herself on fire in protest at global warming, and then seeing methane hydrate plumes catching fire in holes in the Arctic pack ice as positive feedbacks start to kick in) decides to start playing real hardball: so he leaks secret geological data from Saudi Arabia to environmentalists (and thence the media), which shows that – ta da ! – Peak Oil is upon us. The film closes with snippets of media reporting of the massive economic crash that follows, and the prospect of something called the ‘third energy age’.
Only thing is, it’s not entirely clear why Penry-Jones has abandoned his earlier view that to tell the world that the oil peak is already passed would be a Very Bad Idea on the basis that it would (a) cause economic Armageddon, (b) kill thousands if not millions and (c) cause World War Three. I was sort of with Bradley Whitford’s evil lobbyist when he suggested that allowing the news to leak out ve-e-ery gradually might be a better approach. Leaking the news of Peak Oil being already behind us also looks to me like as much of a recipe for tar sands, liquids from coal and all US corn going to biofuels as it does a recipe for solar, wind and the ‘third energy age’.
But hey. Top marks to the Beeb for definitely the edgiest (and most politically accurate) climate drama we’ve seen so far. Eat your heart out, The Day After Tomorrow.
