Amid smashed temperature records, China emissions are falling, renewables are rising and consultancies are advising clients to start divesting fossil fuels
By Ed King
There’s little doubt 2015 was the hottest year on record – by some margin.
It’s also pretty clear national climate pledges towards the UN climate pact agreed in Paris last month won’t stop dangerous warming.
So is this a doom and gloom tale? Well, not exactly. Amid the cold winds of January (in London at least), there’s a huge amount of positive news knocking about.
Here are 9 developments in the last two weeks to note.
The world’s biggest polluter is getting its act together. An 18 January research note from Barclays suggests greenhouse gas emissions will start plateauing until 2025 and decline after, an assumption say analysts that requires “no major reorientation of China’s growth path”. The latest government data suggests coal burning fell 2.8% and mining output 3.5% in 2015.
Greenpeace reckons CO2 emissions fell 3% over the same period. China’s data is notoriously dodgy, but a pattern of slowing emissions is slowly appearing. Air quality levels improved slightly in 2015. Tighter pollution caps may be imposed in the next Five Year Plan, due in March.
According to Bloomberg New Energy Finance, investment in clean energy rose 4% in 2015, up to $329 billion. China, the US, Mexico, Chile, South Africa and Morocco saw significant spikes said BNEF analysts, observing the rapid rise of ‘new markets’. Key takeaways include a fall in costs of renewables; the share of wind and solar rising to 50% of all new capacity; a decline in European investment and limited impacts from crashing oil prices. Even the Saudis and United Arab Emirates want a piece of the action.
3. Coming clean
Ex New York mayor and media mogul Mike Bloomberg has assembled a heavyweight pack of business leaders to assess the risks to the finance sector if tougher climate policies come online – specifically what threats this poses to oil, gas and coal companies. He’s not messing about, picking top executives from Blackrock, Axa, Aviva, S&P, JP Morgan and Bradesco. Their agenda: disclosure and transparency. It could get messy for fossil fuel giants. “The recommendations from the task force will increase transparency and help to make markets more efficient, and economies more stable and resilient,” said Bloomberg.
4. Talking of S&P…
The credit ratings giant released a bundle of reports and blogs this week focused on the impacts December’s Paris agreement may have on global investment flows. No shilly-shallying here. Global renewables are on their way up, say its team of analysts.
Here are some tasters:
“The COP21 outcome will certainly speed up the transformation of the sector, and we anticipate a significant decrease in investments into coal-fired power plants, and increasing closures of the least efficient and highest polluters.”
“Aviation + shipping: discussions in Paris will no doubt lead to tighter regulation and see some significant changes before 2020, we believe.”
“What is clear from Paris is that the tide is turning. Investors in more traditional markets will increasingly accord greater weight to environmental and climate change issues in their investment choices.”
S&P also predict the $16.5 trillion required for a clean energy transition up to 2030 *could* happen “at a far quicker pace than many expect” given the right incentives, mechanisms and policies.
5. PwC agree…
On Thursday the global consultancy issued a clear warning to clients engaged in the oil, gas and coal sector: diversify or die. “They must tackle cost and investment concerns in the short term while readying themselves to respond to the future impact of inevitable external environmental pressures,” said the briefing note.
Here are some highlights:
“Firms should also start linking their investment to programs that will enable them to produce oil competitively while reducing their carbon footprint as much as possible. Even integrated energy firms should seriously consider incremental diversification, moving gradually into low-carbon technologies such as natural gas as a transition fuel or managing/acquiring renewable sources such as wind, solar or biofuels.”
“If you are a business leader in this industry, your most important task this year is to address or at least face up to a vital existential issue: how to successfully do business as an O&G company in an increasingly carbon-constrained world.”
“Look into technology that can retrofit existing equipment for refining and producing renewable energy. Some large O&G companies, including ConocoPhillips, Eni, and Neste, are investing in refining processes to replace diesel with fuel from soybean, palm, and canola oils as well as fats and animal tallow in airplanes and commercial transportation.”
6. US carbon markets…
Whisper it but they are moving. As the team at Carbon Pulse reported last April, nearly all US states have explored whether they should use markets to meet new GHG targets under the Clean Power Plan, President Barack Obama’s flagship climate legislation.
The CPP stipulates that carbon emissions from power plants should fall 32% below 2005 levels by 2030, with each state contributing to that total. Even coal-rich West Virginia is quietly contemplating a carbon market, ClimateWire reported this week, despite vociferous opposition from senior lawmakers. With a 27-state push to delay the CPP dismissed by a DC judge this week, those markets may arrive sooner than later.
7. Aviation faces cap
So long free from any punitive emission cuts, aviation’s time flying free may be about to change. This week China named the industry as one of eight likely to come under a new national carbon market due to be launched in 2017.
European MEPs want the bloc to step in with its own legislation if there is no progress at the UN’s International Civil Aviation Organisation (ICAO) this year.
“If ICAO is not in a position to get a reduction of GHGs, not just a stabilisation, I would hope we can get some credible legislation off the ground,” said German lawmaker Peter Liese on Thursday. International aviation and shipping are not covered under the Paris climate deal; together they account for 5% of emissions.
8. Coral IVF
Yes – really. Amid news of widespread coral bleaching events linked to warming ocean waters, a spot of good news. A British scientist thinks he has cracked why and when a major coral species decides to spawn, offering experts the chance to collect more eggs and sperm from corals and potentially help them reproduce in captivity.
“There’s a lot of research into the impact of climate change on corals but a reef can’t recover unless it can reproduce,” said Jamie Craggs, who’s based at the Horniman Museum in South East London.
“The limit at the moment is researchers have 2-3 days to do all their studies in the year because of these mass spawning events. But if we understand it in captivity can we then manipulate the corals using [computers] so we can spawn when we want.”
9. Cara and Leo
What list is complete without some jet-set climate-stars? Wolf of Wall Street star Leonardo DiCaprio lambasted oil and gas chiefs for “corporate greed” the World Economic Forum in Davos this week.
“Those entities with a financial interest in preserving this destructive system have denied, and even covered-up the evidence of our changing climate. Enough is enough. You know better. The world knows better. History will place the blame for this devastation squarely at their feet,” he said.
And then there’s Cara. She’s taking the fight to climate sceptic Donald Trump on Instagram.