The virtue of green choice for Qatar

The virtue of green choice for Qatar


The virtue of green choice for Qatar could well be served by only reducing all greenhouse gas emissions across all sectors by 25% by 2030 . . . 

The above-featured image is for illustration and is credit to Middle-East campaign.

The virtue of green choice for Qatar

Dr. Yassine Talaoui in The Peninsula of 20 Sep 2023

Qatar seeks to increase LNG production by 63% by 2027 and commits to reducing greenhouse gas emissions across all sectors by 25 percent by 2030. Though the two goals may sound contradictory, the curious mind muses on how this could lead Qatar to fashion a dual role as both gas exporter and green-energy powerhouse. Further, the challenge in setting up Qatar’s dual energy role isn’t in the potential or commitment. After all, the region has witnessed multiple attempts of diversifying commodity-based economies to no avail.

How can Qatar square the circle, then? Put simply, by coming through with the finance and the mechanics of spending it.

Allow me to explain.

Since its discovery in 1972, Gas has propelled Qatar development into a wealthy and ambitious state. The kind of ambition that landed Qatar the FIFA World Cup and carved it a role as a regional problem solver. The time now has come to use that very same commodity to build a different economic future for generations to come.

Last year, Qatar has reported a budget surplus of $24billion. This cash excess is likely to swell further due to the increasing gas demand caused by the Ukraine-Russia Crisis, which has turned gas into the new oil. Qatar’s ministry of finance could use this surplus to beef up the Qatar Investment Authority to snap up some trophy assets. But it could also divert these proceeds toward building electric grids capable of handling the transition to clean energy. In the long run, the latter option translates to choosing action today and fewer tradeoffs ahead. It would mean spreading the cost of climate change by securing a more productive hydrocarbon-free economy for Qatar, fewer emissions, and lowering the risk of flooding and extreme heat. As such, Qatar could power its growth using renewable grids, which would replace the ones running on hydrocarbons. In this vein, Qatar’s high solar potential could be used to develop solar energy projects to create thousand megawatts of solar generation capacity.

As the country expands its domestic production capacity by $30billion to swell further gas revenues, pumping these surpluses into renewable grids would elevate Qatar to a much higher level of success toward reaching NetZero emissions. This necessitates a pledge to invest continuously in green development projects that can reduce emissions and spur carbon-free economic growth. Such an aim can be achieved via proper carbon pricing and international emissions trading to persuade the private sector to join forces for Qatar’s decarbonizing efforts. Government aids and loans can follow with green strings to incentivize the private sector to contribute to cutting emissions and converting hydrocarbon-powered consumption to a green one.

Becoming an even bigger player in gas production would mean Qatar can pour gas proceeds into clean manufacturing and diversifying local economies. As cash flows in, Qatar’s transition away from hydrocarbons speeds up and its competitiveness in the non-hydrocarbon economy rises. It is possible to imagine how such a virtuous cycle of hydrocarbon proceeds and clean-economy growth might lead to more investment and trade that lifts Qatar’s living standards and broadens prosperity for its population. The gas bonanza can be used to finance essential infrastructure and desalination projects that can help Qatar’s cities stay habitable amid rising temperatures. Environmental journalist Gaia Vince argues, in her book “Nomad Century, that regions populated by close to 3.5 billion people would become unsuitable for living if the world temperature grew by a mere 4 degrees.

Gas has been and continues to be a valuable source of foreign exchange for Qatar. With its revenues, the government can continue its social spending, school, healthcare, and public services funding, and direct what is left of its budget toward green economy maneuvers. These entail a series of projects such as waste-processing plants, a big sea wall, or even swapping to electric buses. At the global level, these moves will bring Qatar closer to the COP national climate targets. At the national level, they will shield Qatar from regional and global crises 10 to 20 years from now. And most importantly, on Qatar’s balance sheet, their cost can be afforded today.

By acting now, Qatar can avoid the tradeoff, lying ahead, between climate and development. As temperatures rise and world poverty presses, the tradeoff is imminent. Weird as it may sound, Qatar’s gas production expansion is its exit plan from a hydrocarbon-based economy toward a diversified economy aimed at lowering environmental risks and ecological scarcities and building infrastructure that promotes social and environmental sustainability.

Dr. Yassine Talaoui  is Assistant Professor of Strategic Management at the Center for Entrepreneurship and Organizational Excellence, College of Business and Economics, Qatar University.





Developing, developed countries can reduce emissions from construction

Developing, developed countries can reduce emissions from construction


Switching from unsustainable building practices to using alternative low-carbon building materials can help developing and developed countries reduce emissions from construction.

The above-featured image is for illustration and is of GreenBiz


UN report outlines how developing, developed countries can reduce emissions from constructions

If India uses recycled materials, it could reduce emissions in the material cycle of residential buildings by 50-70 per cent.

UN report outlines how developing, developed nations can reduce emissions from constructions

 Processing of cement, the binding agent in concrete, contributes 7 per cent of global carbon emissions, according to a new UNEP report. Photo: iStock

Developing countries should switch from unsustainable building practices to using alternative low-carbon building materials to reduce greenhouse gas emissions, a new UN report highlighted.

The world adds buildings equivalent to the size of Paris every five days, states the report — Building Materials and The Climate: Constructing A New Future — by the United Nations Environment Programme (UNEP), and the Yale Center for Ecosystems and Architecture.

About 37 per cent of global greenhouse gas emissions can be traced back to the built environment sector, which includes buildings, the distribution systems that supply water and electricity, and the roads, bridges, and transportation systems.

The UNEP report makes a case for “Avoid-Shift-Improve” strategies to reduce emissions. “Avoiding” emissions through circularity to ensure waste is eliminated while extending a building’s life, “Shifting” to sustainable materials, and “Improving” the production of conventional materials such as concrete, steel, aluminium, plastics, glass and bricks.

Greenhouse gas emissions from the built environment are categorised into two groups: embodied emissions and operational emissions.

Embodied emissions are all the emissions associated with the construction and demolishing of a building. They also include emissions from extraction, manufacturing, transport and on-site construction of building materials and “end-of-life” demolition or reuse.

Operational emissions are the emissions generated while maintaining the building’s indoor “comfort levels,” including by heating, cooling, lighting and electrical appliances.

Indirect operational emissions from residential buildings make up a majority of emissions (11 per cent), while embodied emissions from the use of concrete, steel and aluminium account for at least six per cent.

So far, the focus has been on operational emissions. The UNEP, however, warns that embodied carbon (the amount of carbon dioxide across the life cycle of the built environment process) is projected to surge from 25 per cent to nearly half (49 per cent) by 2050, whereas the share of operational carbon emissions will shrink due to increased adoption of renewable energy and improvement of energy-efficient buildings.

Developed countries, it adds, should focus on renovating existing and ageing building stock. Renovating a building generates 50-75 per cent fewer emissions than new construction, the report highlighted.

For new buildings, the experts call for incorporating circular design strategies such as the design for disassembly. It is a design process that enables the recovery of products, parts and materials when a building is disassembled or renovated. This can reduce greenhouse emissions by 10-50 per cent.

“Despite growing awareness, most contemporary material cycles continue to be more linear than circular. As a result, non-renewable, energy-intensive materials still supply the majority of demand,” the report reads.

The report added that a new supply-and-demand model should be developed. Tasks such as carefully dismantling buildings for storing, preparation and maintenance of second-cycle materials for resale will enable circular economies while providing job opportunities.

If G7 countries and China use recycled materials, they could reduce emissions in the material cycle of residential buildings by 80 to 100 per cent by 2050. In India, the reductions could reach 50-70 per cent, the report quotes the International Resource Panel (a scientific panel of experts that aims to help nations use natural resources sustainably).


Source: UNEP

They also state that increasing the lifetime of buildings creates significant opportunities to reduce aggregate embodied carbon.

The second principle is to switch towards properly managed bio-based materials. “To reach net zero emissions in the built environment sector, the building materials of the future will need to be procured from renewable or reusable sustainable sources wherever possible,” the report reads.

Of the available options, mass timber has emerged as an attractive alternative to carbon-intensive concrete and steel due to its potential for scalability, sustainability, strength and flexibility in mid-rise urban buildings.

Bamboo can be processed and manufactured into a variety of composite materials called engineered bamboo. This version has demonstrated structural performance similar to that of cross-laminated timber and steel.

As for the third principle “improve”, UNEP recommended electrifying and decarbonising the energy that is supplied to the production and maintenance of materials, buildings and urban infrastructure across their life cycle.

Processing of cement, the binding agent in concrete, contributes 7 per cent of global carbon emissions. Solutions such as reducing the clinker (produced from limestone and chalk)-to-cement ratio and increasing the share of cement alternatives, among others, could help in decarbonising the sector.

Another technology that could potentially be used is Carbon capture and utilisation for concrete production (CCU concrete). It is a process of removing carbon from the atmosphere and storing it within the building material itself over time

It is estimated that CCU concrete can remove 0.1 to 1.4 gigatonnes of CO2 by 2050. “However, there are conflicting opinions as to whether the benefits of increased strength and optimisation of materials will outweigh the carbon costs of capturing, transporting and incorporating the captured CO2 into concrete products,” reads the report.

Avoiding raw material extraction by promoting steel reuse and producing steel from scrap (discarded steel or steel product) can save around 60-80 per cent of energy, the report noted.

It also helps to reduce steel demand by extending building lifetimes, and switching to circular bio-based materials such as engineered timber and bamboo, it added.

Using renewable energy for aluminium production is important and producing aluminium from scrap can reduce the energy demand by 70-90 per cent.




Not able to prevent climate breakdown without impacting the living world

Not able to prevent climate breakdown without impacting the living world


The authors elaborate on how at this stage, we are not able to prevent climate breakdown without impacting the living world.  Would what is put forward be applicable to the MENA region? Or is it a No longer Climate Change but an Environmental breakdown forever?


The above-featured image is for illustration and is credit coverdrone


Why we won’t be able to prevent climate breakdown without changing our relationship to the rest of the living world

Not able to prevent climate breakdown without impacting the living world
Not only is deforestation unsightly. Fewer trees also mean less precious carbon sinks to absorb anthropogenic greenhouse gas emissions.
Flickr, CC BY-SA

Christian de Perthuis, Université Paris Dauphine – PSL and Édouard Civel, Université Paris Dauphine – PSL

Because of its growing impact on society, global warming has taken centre stage in the public debate. While most of us have not read the reports by the Intergovernmental Panel on Climate Change (IPCC), heat waves, intensifying storms and the multiplication of extreme events remind us of the scale of climate disruption and the urgency of action.

Despite being documented by the Intergovernmental Sciences Policy Platform on Biodiversity and Ecosystem Services (IPBES), the equivalent of the IPCC for biodiversity, we know little about how biodiversity erosion might affect us and the rest of the planet. Its links and interactions with climate change are underestimated, and any policy to address either in isolation will miss the mark. It’s impossible to take effective action against global warming without addressing our impact on the rest of the living world, and vice versa.

Fossil carbon, living carbon

IPCC scientists have been explaining since their first assessment report (1990) that climate change is a stock problem. To halt global warming, it is not enough to slash greenhouse gas emissions. We need to stabilise their stock in the atmosphere. To achieve reach net zero we must reduce emissions – the inflow into the stock – to the level of the outflow, which is made up of CO2 absorption by carbon sinks (forests and oceans) and the elimination of non-CO2 greenhouse gases at the end of their life cycle.

This requires that we adopt a two-pronged plan, aimed both at cutting down our reliance on both fossil and living carbon. The former feeds the vast majority of the world’s pollution, with coal, oil and natural gas accounting for 70% of the world’s greenhouse gas emissions. Tackling it will require that we take on the so-called energy transition.

On the other hand, a quarter of greenhouse gas emissions come from “living carbon”, mainly as a result of specific agricultural emissions (unrelated to fossil fuel use) and tropical deforestation and other land use changes that erode carbon sinks. There is no way to achieve carbon neutrality without a profound transformation in the use of living resources, to ensure the reflux of agricultural emissions and better protection of carbon sinks. This is the challenge of what we might call the agroclimatic transition.

One of the major difficulties of the ecological transition is to carry out these two transformations simultaneously, as they involve distinct economic mechanisms. For fossil carbon, we need to introduce scarcity by reducing the use of coal, oil and natural gas to the absolute minimum. For living carbon, we need to reinvest in the diversity of ecosystems to reduce agricultural emissions and protect carbon sinks as part of a bioeconomy.

From adding to subtracting

Since the start of the Industrial Revolution, energy transitions have followed one another. They have all involved adding new energy sources to a system initially based on the use of biomass. The result has been a massive increase in the amount of energy used worldwide.

The climate is forcing us to break with this logic. Lowering emissions is not a matter of adding decarbonised sources to the energy system. It’s about removing fossil fuels. We need to switch from a logic of addition to one of subtraction.

Not able to prevent climate breakdown without impacting the living world

Russian tractor in a field in Ethiopia

Deforestation and agriculture are the source of ‘living’ carbon emissions.
Ifpri/Flickr, CC BY-SA

From an economic viewpoint, this means massively reconverting brown assets linked to the production or use of fossil fuels, through a double movement of investment in green and disinvestment in brown. The heaviest cost for the economic system is not the hundreds of billions invested in wind or solar farms, battery gigafactories or hydrogen electrolysers. It’s the cost of disinvestment that forces us to downgrade or reconvert brown assets: financial assets, of course, but also physical assets and, above all, the human assets on which the energy transition depends.

Multiple instruments will have to be called upon to bring about such a transformation. Pricing carbon from fossil fuel use is a key way to reflect the increasing scarcity of the atmospheric capacity to store carbon. Whether obtained through taxation or emission trading schemes, such taxation raises the cost of using fossil fuels, without returning the resulting rents to producers, as happens, for example, when oil prices soar on energy markets. On the demand side, it is a powerful stimulus to energy efficiency and sufficiency; on the supply side, it encourages a shift away from carbon assets.

The main difficulty with fossil carbon taxation lies in controlling its distributive impact. As the “gilets jaunes” protests in France showed, fossil carbon taxation without redistribution to the most vulnerable poses more problems than it solves. Only a redistributive carbon tax will be socially acceptable. Similarly, if carbon pricing is to be extended on an international scale, the proceeds must be returned on a massive scale to the countries of the South.

The distributional impacts of regulated carbon markets should also not be underestimated. Within the European Union, the extension of the emission trading scheme to the transport and buildings sector will increase household energy bills. This is why the proceeds from allowances sales at auction must be redistributed to the most vulnerable households via a “social fund” which will be the pillar of the regulation to be put in place.

Yellow vests’ protest in Paris in January 2019  Wikimedia, CC BY-SA


While fossil carbon taxation accelerates the energy transition, negative carbon taxes – in other words, fossil fuel subsidies – delay it. Following the outbreak of war in Ukraine, these subsidies reached unprecedented levels in the European Union, with the multiplication of “tariff shields” erected as a matter of urgency to protect Europeans from the worst of the cost of living crisis.

Another pernicious form of subsidy to fossil fuels is the free allocation of CO2 allowances in the European trading scheme, which hampers the emergence of a green industry, a lever for the competitiveness of tomorrow’s Europe.

Investing in the diversity of living beings

Let’s imagine for a moment that the world has eradicated all use of fossil fuels in 2050. Would we automatically be in a situation of climate neutrality? Everything depends on what has been achieved on the second front of the transition, that of living carbon, the source of a quarter of the world’s greenhouse gas emissions.

Pricing fossil carbon is hardly useful for the agroclimatic transition. Worse, it could even prove counterproductive: using a CO2 price based on energy criteria, it would become profitable to transform the Amazon rainforest (or the centuries-old oaks of the French Tronçay forest) into short rotation coppice to produce energy! The reason is simple. Agro-climatic transformation means finding ways to reinvest in biological diversity, in other words, in the abundance of living things. But the price of CO2 does not reflect the value of this diversity. We therefore need to use other instruments, which are more complex to implement.

On land, forests are the main carbon sink. Their capacity to soak up atmospheric CO2 is weakened by a combination of climatic and anthropogenic factors. In France, for example, the CO2 storage capacity of forests has been divided by three since 2005, mainly due to climatic factors. There is therefore an urgent need to adapt forest management methods in anticipation of the severity of tomorrow’s climates. Worldwide, the main anthropogenic impact on forests is tropical deforestation. Its main cause is the expansion of land for crops and livestock. This is why the key to halting deforestation lies in changing agricultural practices.

The key issues of agriculture and food

The impact of farming systems on the net balance of greenhouse gas emissions is not limited to deforestation. Depending on the techniques used, farming systems may themselves release carbon into the atmosphere (deep ploughing, draining of wet soils, etc.) or, on the contrary, store it in living soils (conservation agriculture, agroforestry, etc.). The former erode biodiversity by specialising farmers according to industrial-type logics. The latter use living diversity to intensify production and regenerate the natural environment.

These agroecological techniques also make it possible to better withstand tougher climatic conditions, while reducing methane and nitrous oxide emissions from agricultural sources. In economic terms, their promotion requires investment in innovation, research and development, the establishment of dedicated farm advisory networks and, above all, incentivisation to reward farmers for the ecosystem services they provide to society. This is not something that happens spontaneously on the market. It requires public intervention and dedicated funding.

As in the case of energy, the agroclimatic transition implies, on the demand side, that we consume smarter and less. The foods we eat have contrasting climate footprints. There can be no successful agroclimatic transition without finding ways to dramatically reduce emissions associated with the most polluting ingredients, including industrially processed foods and animal products, especially those from ruminant breeding. The use of food rations might be one way of achieving this, according to the recommendations of the world’s health authorities.

Remembering the ocean

Last but not least, the agroclimatic transition will have to take into account the management of the oceans and marine biodiversity, which are currently the blind spots of climate policies. Global warming and certain human practices (overfishing, pollutant runoff, etc.) are altering marine biodiversity, a crucial component in the storage of CO2 by the oceans. Protecting the ocean sink is vital to stabilise tomorrow’s climate: it is estimated that the continental biosphere contains four times more carbon than the atmosphere. For the oceans, it’s 47 times.

The authors thank Frank Convery for his insightful review

The Climate Economics Chair of Paris Dauphine-PSL University is organising, in partnership with the Toulouse School of Economics and the National Museum of Natural History, the 24th Global Conference on Environmental Taxation, which will take place from September 6 to 8, 2023 and will have as its theme “Climate & Biodiversity: Tackling global footprints”.


Christian de Perthuis, Professeur d’économie, fondateur de la chaire « Économie du climat », Université Paris Dauphine – PSL and Édouard Civel, Chercheur au Square Research Center et à la Chaire Economie du Climat, Université Paris Dauphine – PSL

This article is republished from The Conversation under a Creative Commons license. Read the original article.




The next big market: Emissions trading

The next big market: Emissions trading


Carbon credits grant organizations the right to emit a certain amount of CO2 annually, thus giving an opportunity to trade off any unused allowance which allows countries to stay within their emission control goals. So, the next big market would undoubtedly be Emissions trading.  

The above-featured image is for illustration and is credit to REFINITIV.


The next big market: Emissions trading

By Zaid Aboobacker in Kuwait Times

17 August 2023

KUWAIT: Step into the world of carbon credits. Picture this: A permit granting countries and organizations a set carbon emission limit. But here’s where it gets intriguing – if they don’t use up their allowance, they can trade it. Imagine a company selling its unused emissions to another that’s gone overboard their emission limits. In simple words, carbon credits grant organizations the right to emit a certain amount of CO2 annually, acting as a regulatory framework which allows countries to stay within their emission control goals.

Emission trading systems

Carbon markets mainly fall into two types: Compliance and voluntary. Compliance markets emerge due to the presence of national, regional and/or global policies or regulatory obligations. These are obligatory responsibilities that businesses must meet. Voluntary carbon markets, both at the national and international levels, refer to the voluntary trading, purchasing and selling of carbon credits. The current supply of voluntary carbon credits comes mostly from private organizations that develop carbon projects, or governments with certified programs that reduce emissions and/or removals.

Demand is generated by businesses with sustainability goals, private individuals looking to offset their carbon footprints and other parties looking to profit by trading credits. One of the first tradable emission offset mechanisms is the 1997 US Clean Air Act. This act enabled a permitted facility to increase emissions if it compensated by paying another company to cut emissions by an equal or greater amount.

This act laid the groundwork for a mesmerizing dance of emission trading that echoes across subnational, national, and international stages. In 2023, under India’s Carbon Credit Trading Scheme, entities exceeding emission limits now face a choice: Pay a penalty or embrace responsible practices. Programs like California’s Cap Trade Program cover about 85 percent of statewide GHG emissions. One of the biggest emission trading systems is the European Union Emission Trading System (EU ETS), which witnessed emission allowances from €12.4 per ton by the end of 2010 to a jaw-dropping €100.3 per metric ton of CO? by 2023.

Nadine Mustafa

Carbon offset schemes for carbon credit

Let’s talk about carbon offset schemes — these schemes are programs which produce credits in exchange for funding programs that offset carbon emissions. Carbon credits and offsets are produced from diverse projects like fuel switching, energy efficiency, reforestation and renewable energy. In practice, a developed country can fund a greenhouse gas reduction project in a developing country. As a result, the developed country receives credit for achieving its carbon reduction goals, while the developing country receives funding for projects, technologies or a favorable change in land use. This falls under the Clean Development Mechanism, a UN-administered carbon offset initiative. CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, represents a global initiative aimed at limiting international aviation emissions, which also establishes a framework for generating credits and offsets on a global scale. The REDD+ program is another international program that aims to monetize landowners to refrain from deforestation or degradation. In doing so, the program fosters a collaborative balance between conservation and compensation. Dr Nadine Moustafa, a PhD researcher specializing in carbon capture technologies, said: “Should Kuwait embark on implementing such a scheme, it must brace itself for an ongoing and vigilant monitoring process.

Embracing an emissions trading scheme becomes especially pivotal if Kuwait intends to embrace industrial innovation, championing technologies like carbon capture and storage.” Some carbon markets are implementing blockchain technology for processes like tracking carbon credit transactions or monitoring, reporting and verification. This can improve the auditability of emission-reduction project data, streamlining verification processes, thus reducing transaction costs and enhancing trust among market participants, according to the World bank.

Value of Credits

How are the carbon credits valued? How can we ensure the quality of a carbon credit? How do we determine the value of a carbon credit produced by a carbon offset program? We will all answer it here. A number of factors can affect the prices of the value of the credits produced in an offset program. Project development costs and certification from a respected organization, projects that absorb CO2 and projects with added social and environmental advantages can all command a higher price. Carbon credits with older vintages tend to be valued lower on the market. The vintage is the year in which the carbon emissions reduction project generates the carbon offset credit. Certification programs are a key component of this community. In 2022, voluntary carbon market prices ranged from $8 to $30 per ton of CO2 for the most common types of offset projects.

Risks of the current market

Dr Moustafa also informed Kuwait Times about potential drawbacks and uncertainties such as carbon leakage, overallocation of credits, lack of additionality and inaccurate emission accounting. She added it is important to note that these risks can be managed and mitigated through proper design and transparency.

Carbon credit for Kuwait

Kuwait has huge potential to implement this into their system in the future, according to Shariq Ahmed, who works as an HSE Specialist in a Kuwait petroleum company. “Several factors could influence the implementation and success of carbon credits or an emission trading system, as Kuwait’s economy profoundly depend on oil exports, and the oil industry is a major supplier to its carbon emissions.

The availability of technologies for monitoring and reporting emissions is important for an effective ETS or carbon credit system. Precise measurement is necessary to ensure the integrity of emission reductions,” he said. Kuwait Finance House supported the first carbon offset platform in 2021. Its aim was to mitigate carbon emissions by increasing tree plantings and starting new environmental projects. But Kuwait has still not established a proper emissions trading system.


Read more on Kuwait Times



The oil industry and its dangerous new climate denialism


The oil industry and its new climate denialism seem to tread on dangerous grounds.  Adi Imsirovic of the University of Surrey elaborates on the details.

The above-featured image is for illustration and is credit to the IFS.


The oil industry has succumbed to a dangerous new climate denialism

OPEC predicts oil demand will be 10% higher by the 2040s. Iurii

If we have not been warned of the dangers of climate change this summer, we never will be. Extreme heat, forest fires and floods have been all over news reports. Yet the oil and gas industry remains largely in denial.

The International Energy Agency (IEA) says steep cuts in oil and gas production are necessary to reach the Paris (COP 21) goal of keeping global warming at 1.5℃. However, only a tiny fraction of the industry, accounting for less than 5% of oil and gas output, has targets aligned with the IEA’s “net zero” requirements.

The current secretary general of production cartel Opec, Haitham al-Ghais, expects global oil demand to rise by about 10% to 110 million barrels a day by 2045, a volume incompatible with the Paris goals. The UK government has just offered a helping hand, granting around 100 new North Sea licences. What are we to make of this mismatch?

The new denialism

Typical of the new breed of climate denialism is a recent report by the Energy Policy Research Foundation (ERPF), a body funded by the US government and various undisclosed corporate interests and foundations. It sees the IEA’s requirements as a “seal of approval … to block investment in oil and gas production by western companies”. The report views meeting the targets as too costly, too harsh on poor countries and too bad for the energy security of the west.

In fact, it is wrong on each account. Many eminent economists and scientists use the concept of the social cost of carbon (SCC), which is defined as the cost to society of releasing an additional tonne of CO₂. Expert estimates from 2019 put this at between US$171 and US$310 (£133 to £241). If we go with, say, US$240 per tonne, the social cost of continued carbon equivalent emissions comes out at almost US$8.5 trillion every year.

A recent study has factored into the calculation climate feedback loops. This is where one problem caused by global warming leads to others, such as melting permafrost unleashing stores of methane.

When the study estimated the economic damage that this could cause, it produced an SCC in excess of US$5,000. That implies annual costs of more like US$170 trillion a year, which makes the US$4 trillion investment into clean energy that the IEA thinks necessary to meet the Paris climate goals look like a drop in the ocean.

Temperatures in countries such as Greece have soared to dangerously high levels this summer. EPA

It may help to break this down to one barrel of oil. A special IEA report for COP28 estimates that on average, each barrel of oil emits 0.53 tonnes of CO₂ equivalent in greenhouse gas across its life cycle, 20% of which comes from production.

Going back to our average SSC per tonne of US$240, that points to a social cost of US$126 per barrel. With oil currently at US$85 per barrel, the societal damage from producing, transporting, refining and consuming it is far greater – and that’s before including climate feedbacks.

Meanwhile, the arguments by the EPRF and like-minded supporters about energy security are laughable. The history of the oil and gas industry is a history of wars and geopolitical tensions. Transitioning to cleaner fuels can only increase our energy security and reduce the need to police remote autocracies.

The argument that poor countries need to continue burning carbon for development reasons is no better. In its latest report from 2022, the Intergovernmental Panel on Climate Change (IPCC) said climate change would probably see an increase in “losses and damages, strongly concentrated among the poorest vulnerable populations”.

Equally, the World Health Organization estimates that: “Between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year from malnutrition, malaria, diarrhoea and heat stress.”

How to respond

The denialists offer no alternatives to cutting carbon emissions, and often simply ignore climate change altogether. The recent ERPF report mentions climate change only four times. It is as if heatwaves, forest fires, flooding, rising sea levels and the demise of natural habitat caused by climate inaction were happening on another planet.

We still have time to limit global warming below 1.5℃. It is true that we will need oil and gas for many years, and that there are currently no alternatives for certain sectors such as air travel, shipping and some industries. Nonetheless, there is still much that can be done now to make a substantial difference.

To incentivise the transition to cleaner energy, governments need to end fossil fuel subsidies, which the IMF estimates amounted to US$5.9 trillion in 2020 alone. We also need to put a proper price on carbon – only 40 countries have attempted this so far, and none has it anywhere near the estimated social cost of emitting carbon.

Countries that resist charging their own polluters should face a carbon border adjustment mechanism, which is a tariff that effectively puts the polluter on the same footing as local players. If all the actors in the fossil fuel supply chain had to face the cost of the damage they cause, the need to phase out long-term investments in fossil fuels would become more obvious.

The IEA requirements for “net zero” are just one of the pathways towards meeting the Paris goal of 1.5℃ warming. Others are explored by some of the more credible actors in the petroleum industry, such as Shell, BP and Norway’s Equinor, but all require a substantial decline in oil demand and production by 2050.

Required production cuts

I left the IEA’s scenario off the graph because it published so few datapoints, but it is broadly in line with the others. Meanwhile, the OPEC data is for reference and not a net zero scenario. BP, Shell, Equinor and OPEC

Instead of criticising efforts to slow climate change and sponsoring ridiculous reports calling for more fossil fuels, the oil industry should eliminate leakages, venting and flaring of methane, and electrify as many processes as possible using renewable power. It should also employ carbon capture, usage and storage technologies over the next ten years – yes this will increase the price of fossil fuels, but that is exactly what we need to make clean sources of energy competitive across the board and speed up the energy transition.

The sooner the industry starts facing up to the realities of climate change, the more chance it has to survive. The companies and even countries that produce fossil fuels will have to face and pay the cost for the damage they cause. Those costs are already massive and will grow. Those that survive will do so only as a provider of clean and sustainable energy.



Adi Imsirovic, Fellow, University of Surrey

This article is republished from The Conversation under a Creative Commons license. Read the original article.