Photo by Dominik Vanyi on Unsplash
Haven’t we already agreed to end the era of fossil fuels?
It may not always seem like it, but by signing the Paris Agreement in 2015, world leaders effectively agreed that the game was up for fossil fuels. In the intervening period governments and large emitters have begun to publish their intentions to reach net zero by 2050, to prevent global temperatures exceeding 1.5 degrees. There are early indications this is working with news that most plans for new coal plants across the world have been scrapped.
So what’s the issue?
Despite the good news on coal, we have yet to succeed in cutting global fossil fuel emissions. In fact, emissions have continued to grow since the original Earth Summit in Rio back 1992. This growth has continued unabated during every COP meeting that has been held since. The only sign of a reduction came during the early stages of the pandemic when emissions temporarily dopped by just over 6%, before returning to pandemic levels. The obvious problem that stems from this is that the longer we leave it, the more we deplete our carbon budget and the more likely we are to overshoot the 1.5-degree threshold.
Don’t we just need to halt new fossil fuel extraction?
In May this year the International Energy Agency (IEA) published its Net Zero by 2050 Roadmap. Their headline conclusion was that the world needed to stop investing in coal, oil and gas, effective immediately. The landmark report left governments and corporations reeling as it made clear that this means no new oil and gas fields or coal-fired power stations from 2021 onwards. This proclamation has certainly changed the discourse, especially considering most governments across the world still had plans in place for new fossil fuel infrastructure.
So, will that be enough?
Whilst challenging, this IEA statement seem quite straight forward. Unfortunately, it’s not that simple. Because we have left it so late we have to go further and faster than just halting new production. In recent months new research, by the Institute for Sustainable Futures in Sydney, has shown that immediately stopping expansion of coal, oil and gas is far from sufficient, if we are to keep the planet within the 1.5-degree threshold. The Fossil Fuel Exit Strategy analysis also found that none of the net zero pledges made to date, by major oil and gas producing countries, appear to include explicit targets to cut production.
Ok, then most fossil fuels need to stay in the ground?
The critical finding of the Fossil Fuel Exit Strategy was that even if no new fossil fuel projects were built from today, the carbon emissions from the existing fossil fuel infrastructure would result in the world overshooting the Paris climate targets. Modelling in the report shows that by 2030, even without any new coal, oil or gas projects, the world would still produce 35% more oil and 69% more coal than is consistent with a 1.5°C pathway.
Subsequent research published in Nature (covered across media networks) went a step further with landmark findings that stated the extent to which coal, oil and gas reserves must stay in the ground, if the planet was to stand any chance of reducing heating to safe limits. It is worth noting that, in reality, the percentage headlines in the report should really be higher, as this scenario only produces a 50% chance of remaining within 1.5 degree warming.
A tough challenge; but can it be done?
The good news is yes, according to the Fossil Fuel Exit Strategy, the twin challenge of phasing out fossil fuels and building up our renewable energy capacity is possible using technologies that already exist. The researchers found that every continent on the planet has enough renewable energy potential to provide 100% renewable energy access to its population. In fact, the report notes that solar and wind energy could potentially power the world more than 50 times over. The report excluded technologies that are as yet unproven and those that require unreasonable amounts of land use. It’s worth noting that such technologies are included within the IEA report as well as the latest IPCC report.
This can summed up by Rebecca Byrnes, Deputy Director for the Fossil Fuel Non-Proliferation Treaty Initiative:
“This report shows that a practical pathway exists where there are no new fossil fuel projects, existing projects are phased out, emissions are kept within a 1.5°C budget and energy access becomes universal, all while using existing and increasingly cost-competitive technologies. The hurdle is no longer economic nor technical; our biggest challenges are political. A cleaner future is within reach and, while international cooperation is essential for innovation and investment, nation-states can and should act now to regulate fossil fuel production decline”
Is it also worth considering carbon removal?
There are numerous options on the table but two look particularly promising. The first involves the oceans. By restoring whale and dolphin population and stimulating the phytoplankton populations it is very possible we could remove up to 20-30 billion tonnes of CO2 annually. The other interesting idea is marine cloud brightening. This involves salt water sprayed into dark clouds over the artic to lighten them, thus increasing their reflectivity. In theory this then allows the artic to refreeze over the winter reversing the loss of ice and helping protect the jetsteam and restore crucial weather patterns.
These activities, known as negative emissions technologies (NET’s) will still be required in addition to the reduction in emissions identified above.
What are we waiting for?
Currently, none of the G20 countries have plans in place to meet their climate obligations. The era of climate denial is over, so how do we explain this inertia? The best explanations relate to a belief in conducting an orderly transition, one where we somehow succeed in transitioning away from fossil fuels without causing any ripples to our economic system. Unfortunately, the science relating to just how few fossil fuel reserves we can now extract, makes it apparent that we no longer have the luxury of an orderly transition. Instead, we need to accept the road ahead will be disruptive and unpredictable. The import thing is its still within our grasp.
What role is Naturesave playing?
Whilst Naturesave is only small, the insurance industry itself has more potential to tackle climate change than any other sector. When it comes to driving investment in fossil fuels, the industry is second only to the pension sector. When this level of financial influence is combined with the insurance industry underwriting fossil fuel extraction and processing, the potential for change becomes apparent. To put it another way, there would be no working coal mines, gas fields or oil wells without insurance!
Naturesave’s role in this is to help demonstrate to our underwriting partners and to the insurance industry, that homeowners and businesses along with wider society want the industry to embrace this unique potential and use it to make urgent and far reaching changes.
Naturesave will continue to lobby the industry to;
- Align their businesses with the Paris Agreement and a 1.5 degree increase in global temperatures
- Not invest in or provide underwriting services for, any company that has not produced plans to wind down fossil fuel operations in accordance with the above
- Cease investments in, and underwriting of, any new fossil fuel extraction (including exploration and associated infrastructure)
- Measure and publish all direct and indirect emissions relating to investment and underwriting activity
- Develop detailed plans to achieve net zero by 2050 (including halving emissions by 2030)
For more about our efforts in this area read our divestment report – The Insurance Industry’s Climate Change Challenge
