WEEKLY WRAP: Coal and oil producers take a hit, shorter Paris text published, India’s climate plan comes under scrutiny
With sales and revenues down, Peabody took a $901 million hit to the value of its coal portfolio (Pic: Pixabay)
By Ed King
Second quarter results from leading fossil fuel producers indicate many are facing tough times.
The world’s largest private coal producer Peabody suffered a net loss of $1 billion in the last quarter, announcing job cuts to save cash.
Shell is slashing 6500 jobs due to slumping oil prices and trimming capital spend by 20% over 2015. BP has cut its spending plans by $2 billion – its profits were also down, due to low prices and a $10.8 billion charge for the 2010 Gulf of Mexico oil spill.
BG Group’s profits over the same period fell 50%, as did Exxon-Mobil’s. Chevron’s nosedived 90% on last year’s results. All cited low oil prices.
The results add to a sense of gloom over the industry – highlighted by a Wood Mackenzie report out earlier this week revealing $200 billion of new projects had been put on hold by producers. This includes tar sands exploration in Canada, now postponed till 2017.
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Carbon bubble?
Linked to the oil crisis, speculation is mounting over impending reports from the Bank of England and Financial Stability Board into the risks fossil fuel assets stranded by tougher climate policies could pose to the global economy. As RTCC reported this week, BoE chief Mark Carney will join the UN’s top climate official Christiana Figueres to discuss the threat of a carbon bubble in London this October.
New UN plans
Late last Friday, the two men chairing UN negotiations on a global deal released a new set of proposals for a 2015 Paris deal. Here’s 9 things we learned from the new document, which still weighs in at a hefty 83 pages.
QUOTE OF THE WEEK
“We will not back down. We will finalise a stronger rule” – Denis McDonough, White House chief of staff tells critics of new plans for US climate action, due out Monday, to suck it up
INDC watch
Only one out this week – Monaco. 50% greenhouse gas cuts on 1990 levels by 2030. Potentially bad news for all the F1 drivers who live there.
Still, there’s plenty cooking. Megan Darby contacted the top Delhi think tanks advising India’s government on its Paris pledge. An emissions peak date is unlikely, but expect tighter carbon intensity targets and a request for more finance to help it meet adaptation goals.
Little change is expected from coal-dependent South Africa. A document seen by RTCC detailing the country’s plans, authored by deputy director of international climate change mitigation Rabelani Tshikalanke, indicates it will stick with the target it proposed back in 2009.
“Under mitigation South Africa reiterates that it will take… a 34% deviation below the ‘Business As Usual’ emissions growth trajectory by 2020 and a 42% deviation below BAU emissions growth trajectory by 2025. The action will be implemented depends on the provision of financial resources, the transfer of technology and capacity building support by developed countries.”
Cashback
On the money, the EU is mulling plans for a ‘toolbox’ to display and add up all the various strands of finance. Think public funds, green bonds and other flows of money. The G20 is another venue where progress could develop later this year. Unless there’s a roadmap to $100 billion by 2020, France’s chief climate diplomat says success will be hard.
Meanwhile, Transparency International flagged concerns that some of the countries most in need of climate cash – think Bangladesh and the Maldives – also have poor records on corruption.
STAT OF THE WEEK
Global temperatures have hit 1C, halfway towards the globally agreed warming ceiling of 2C, according to analysis from the New Scientist.
Whither Russia?
Privately some climate negotiators say they do not have a clue what Russia’s strategy for Paris is. That may be because it doesn’t have a strategy. Olga Dobrovidova reports for RTCC from Moscow.
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$140 billion
Apple, Coke, Microsoft and General Motors are among US companies banking on COP21.
Security threats
What happens if there’s an oil disaster in the Arctic? A new Pentagon report indicates you shouldn’t bother calling the US – it’s not ready. Over in New York, small island states outlined their climate fears in a special UN Security Council session. This represents progress, the Maldives foreign secretary tells RTCC.
Sinking feeling
The seat of US government is subsiding, geologists have warned, making Washington DC extra vulnerable to sea level rise.
“It’s ironic that the nation’s capital–the place least responsive to the dangers of climate change–is sitting in one of the worst spots it could be in terms of this land subsidence,” said co-author Paul Bierman.