Tuesday, April 23, 2024
Home > cctne > The Paris Agreement: have oil companies got the memo?

The Paris Agreement: have oil companies got the memo?


3rd May 2016

If you’re the boss of BP, Chevron or Shell, how worried are you right now?

171 governments put pen to paper last week, formally signing the Paris Agreement on Climate Change. The New York event was an encouraging, albeit largely symbolic, confirmation of December’s commitment to limit temperature rises to two degrees or lower.

The world has spoken; the science is clear; the likes of Mark Carney continue to warn about the economic risk of drilling like there’s no tomorrow. Paris provokes a very simple acid test: most of the world’s known reserves of oil, coal and gas will have to be kept in the ground – and you can forget prospecting for more.

There’s only one problem: oil companies don’t seem to have noticed.

Since Paris, BP’s latest Annual Energy Outlook confidently predicted that fossil fuels would account for fully 80% of global energy usage in the year 2035.  That cheerfully ignores both the Agreement and the devastating climate path we’d be on if it came to pass.  BP’s Chief Economist, Spencer Dale, even appeared to question the by now really rather unquestionable link between carbon emissions and temperature.

That an oil company’s analysis concludes it will still be selling bucket loads of oil in 20 years shouldn’t be news (except apparently it was, with most media solemnly reporting it as gospel).  It is an internal political document first and foremost. The share price of the company and the pacification of its shareholders – already smarting from eye-watering losses before today’s latest grim figures, and already outraged enough to reject the pay hike of its CEO, Bob Dudley – relies on the promise of selling oil, today, tomorrow, and for many years to come.  But it also shows that if BP do think the Paris Agreement will radically change their business model, they aren’t prepared to say so.

Oil companies talk a good game on climate change, calling for a global carbon price. Tom Burke rightly points out the duplicity at work: the companies are both acutely aware that this will never happen in practice, while also delaying progress by not constructively suggesting something else that might actually work. We are talking about an industry one of which is under investigation by the New York attorney to see if it systematically lied about climate change, after all.

To read the full story on New Economics Foundation please click here