31/05/2021

(USA NYT) Big Setbacks Propel Oil Giants Toward A ‘Tipping Point’

New York Times - Somini Sengupta

A surprising mix of environmentalists, pension fund managers and big money investors have scored startling victories against oil and coal, opening new battle fronts in the climate fight.

Credit...Piroschka Van De Wouw/Reuters
A nun, an environmental lawyer, pension fund executives, and the world’s largest asset manager. These were among the unusual collection of rebels who claimed a series of startling victories this week against some of the world’s biggest and most influential fossil fuel companies.

From Houston to The Hague, they fought their battles in shareholder meetings and courtrooms, opening surprising fronts in an accelerating effort to force the world’s coal, oil and gas companies to address their central role in the climate crisis. And even as they came with strikingly disparate points of view — corporate shareholders, children’s rights advocates, environmentalists, thousands of Dutch citizens — they delivered a common underlying message: The time to start retreating from the fossil fuel business is no longer in the future, but now.

“These companies are facing pressure from regulators, investors, and now the courts to up their game,” said Will Nichols, head of environmental research at Maplecroft, a risk analysis firm. “That’s a big chunk of society, and it’s not a great look to be pushing back against all of that.”

The most dramatic turning point came in the Netherlands, where a court instructed Royal Dutch Shell, the largest private oil trader in the world and by far the largest company in the Netherlands itself, that it must sharply cut greenhouse gas emissions from all its global operations this decade. It was the first time a court ordered a private company to, in effect, change its business practice on climate grounds.

The symbolism was inescapable: The Netherlands, famously built on land reclaimed from the sea, faces the immediate threat from a warming climate caused by the burning of Shell’s own products — oil and gas.

In another example this week, at the annual shareholder meeting of Exxon Mobil, the biggest American oil company, the message was framed sharply in terms of profits: A tiny new hedge fund led an investor rebellion to diversify away from oil and gas — or risk hurting investors and the bottom line.

Chevron’s shareholders voted to tell the company to reduce not only its own emissions, but also, remarkably, the emissions produced by customers who burn its oil and gasoline. And in Australia, a judge warned the government that a proposed coal mine expansion, a project challenged by eight teenagers and an 86-year-old nun, would need to ensure that it wouldn’t harm the health of the country’s children.

The timing was significant. This week scientists also concluded that, in the next five years, the average global temperature will at least temporarily spike beyond a dangerous threshold, climbing more than 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, warmer than in pre-industrial times. Avoiding that threshold is the main objective of the Paris Accord, the landmark global climate agreement among the nations of the world to fight climate change.

Of course, none of these actions represents an immediate threat to the fossil fuel industry. For a century and a half, the global economy has been fueled by oil and coal, and that won’t change immediately.

Nevertheless, rulings like the one in the Netherlands could be a harbinger for similar legal attacks against other fossil fuel companies and their investors, experts said. Kate Raworth, an economist at Oxford University, called Shell’s loss in court “a social tipping point for a fossil-fuel-free future.”

Shell said it found the ruling, by a district court in The Hague, “disappointing” and intended to appeal. That process could take years to reach the country’s supreme court, delaying action but also drawing continued public attention.

Credit...Remko De Waal/Agence France-Presse — Getty Images

If the ruling of the lower court stands, though, analysts said, Shell would most certainly have to reorient its business to reduce oil in its portfolio and halt its growth in liquefied natural gas, in which Shell is an industry leader.

That is a matter of concern for the investors who have their money in the oil and gas reserves of companies like Shell, said Patrick Parenteau, a professor at Vermont Law School. “A decision telling a company, ‘You’ve got to get out of the oil business.’ For cautious individuals within the financial community, that’s got to cause them serious concerns.”

Dangerously for Shell, the national judiciary of the Netherlands in the past has shown itself to be among the most out-front on climate litigation. In 2019, the Supreme Court of the Netherlands ordered the government to cut greenhouse gas emissions because of a lawsuit filed by Urgenda, an environmental group. It was the first case in the world to force a national government to address climate change in order to uphold its human rights commitments.

That case, too, began in a district court in The Hague, before making its way up the judicial ladder. The lawsuit against Shell marked an escalation in that strategy.

Having sued the government and won, environmental advocates decided to take on one of the country’s most influential companies. The case was brought in 2019 by Milieudefensie, the Dutch branch of Friends of the Earth, as well as Greenpeace and 17,000 residents of the Netherlands. The complainants argued that the company has a legal duty to protect Dutch citizens from looming climate risks. The district court agreed.

“The consequences of this case for the fossil fuel industry will be systemic and immediate,” Tessa Khan, the lawyer who had sued the government on behalf of Urgenda, said on Twitter. She predicted that it would spur other cases and “escalate the perception of risk among investors.”

Shell had already begun to see the writing on the wall. It said earlier this year that global oil demand had likely reached a peak in 2019 and would slowly wane in the coming years.

And at least compared to some of its American peers, Shell had set relatively more ambitious climate targets. It had already promised to reduce the carbon intensity of its operations, which means that it could still continue to expand oil and production, but with lower emissions for every barrel it produced.

The district court on Wednesday instructed the company to cut its absolute emissions by 45 percent by 2030, relative to its 2019 levels. The ruling applies to Shell’s global operations. But, that said, even if it is upheld on appeal, enforcing it, say, in Nigeria, where Shell is the biggest oil producer, could prove to be “impractical,” said Biraj Borkhataria, an analyst at RBC Capital Markets, an investment bank.

“However,” he said separately, in a note to clients on Thursday, “it is another example of society asking more from oil companies.”The Shell ruling is particularly notable because private companies have been targets of climate litigation in the United States and elsewhere, but courts have rarely ruled against them.

Credit...Carlo Allegri/Reuters

The Dutch case opens a potentially new front, emboldening climate advocates to pursue more cases in a wider variety of countries, particularly where national laws enshrine the right to a clean environment.

Several European and Latin American courts, including in the Netherlands, have interpreted their national laws in this way. A farmer in Peru is suing a German energy giant over the effects of global warming on a glacier in his country. About 20 American cities, counties and states have sued the fossil fuel industry since 2017, seeking damages for the local costs of climate change.

Governments are also on the hook.

Germany’s highest court recently told the government to tighten its climate targets because they did not go far enough to ensure that future generations would be protected.

In the Australian case, eight teenagers, joined by Brigid Arthur, the nun, went to court to stop the government from expanding an enormous coal mine called Whitehaven. The court on Thursday stopped short of issuing an injunction against the mine, as the plaintiffs had sought.

But in ordering the government to take “reasonable care to avoid personal injury to the children,” it recognized climate change as an “intergenerational crime,” said Michael Burger, executive director of the Sabin Center for Climate Change Law at Columbia University and a lawyer who represents several U.S. cities and states suing fossil fuel companies.

“The actions we take today with respect to climate change can consign our children, our children’s children, and other future generations to a world that is fundamentally livable or a world that is not,” he said. “Courts recognize that.”

The most closely watched case in the United States, filed on behalf of young people against the United States government, seeks to establish a constitutional right to a sound environment. After recent setbacks in the federal courts, a federal judge has ordered the parties to enter settlement discussions.

The actions against Chevron and Exxon are notable because they reveal the extent to which shareholders are quickly awakening to the risk to their investments if energy companies don’t dramatically start changing their business models.

A significant chunk of shareholders demonstrated that they were increasingly distrustful that the companies could deliver the financial performance they expected without diversifying away from oil and gas.

Exxon this week lost a battle against a small new hedge fund, Engine No. 1, which rallied big investors like Blackrock and the New York state pension fund to force the company to change course. The hedge fund won at least two seats on Exxon’s 12-member board.

Tensie Whelan, director of the New York University Stern Center for Sustainable Business, called it “a pivotal moment for board accountability.” Activist shareholders have traditionally taken on company executives over financial issues, not social issues like climate change, she said. “Shareholders are deeply concerned about the financial risks posed by climate change and increasingly willing to hold the board to account,” Ms. Whelan said.

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(The Guardian) ‘Black Wednesday’ For Big Oil As Courtrooms And Boardrooms Turn On Industry

The Guardian - 

Campaigners sense turning point as shareholders, boards and The Hague act to force Chevron, ExxonMobil and Shell to cut pollution

An oil rig in the Beaufort sea, in the Arctic. Photograph: Stockbyte/Getty Images

The world’s patience with the fossil fuel industry is wearing thin. This was the stark message delivered to major international oil companies this week in an unprecedented day of reckoning for their role in the climate crisis.

In a stunning series of defeats for the oil industry, over the course of less than 24 hours, courtrooms and boardrooms turned on the executives at Shell, ExxonMobil and Chevron. Shell was ordered by a court in The Hague to go far further to reduce its climate emissions, while shareholder rebellions in the US imposed emissions targets at Chevron and a boardroom overhaul at Exxon.

“There is no doubt that this week’s news has been not so much a shot across the bows as a direct hit to the hull of Big Oil,” says Mark Lewis, the chief sustainability strategist at BNP Paribas Asset Management. “They will have to recognise now that no amount of patching up the hole will do; shareholders and society want the vessel completely overhauled.”

Director of Dutch environment organisation ‘Milieudefensie’ Donald Pols reacts as he walks outside a court in The Hague. Photograph: Remko de Waal/ANP/AFP/Getty Images

For climate campaigners, the oil industry’s “Black Wednesday” marked a turning point in the financial and legal consequences awaiting oil companies that do not act fast to take accountability for their role in preventing a climate catastrophe.

“It was honestly a really emotional moment,” says Jasper Teulings, the former general counsel for Greenpeace International. The ruling by the Dutch court ordering Shell to cut its emissions by 45% within the next 10 years “shifts the debate” and could influence courtrooms across the globe, he told the Guardian.

“It makes clear that the onus is on the industry to act, and that it can be held accountable to take very specific steps. It’s very relevant in legal terms because the ruling was very pure in its demand: it’s not about money, it’s about conduct. It was astutely reasonable,” he says.

The basis of the case, brought by Dutch climate campaigners at Milieudefensie, was rooted in norms derived from elements of human rights law and the UN’s Guiding Principles, which have “near-universal application” and could be used in cases against other major polluters.

“We’re seeing a convergence of issues because, really, climate issues are human rights issues. I don’t see any reason why these [arguments] won’t be replicated elsewhere. Polluters can expect to see their day in court,” Teulings says.

Shell has said it will appeal against the “disappointing” ruling, which calls for the company to align with the emissions targets set out in the Paris Climate Agreement. The decision could lead to years of legal wrangling and prove profoundly damaging to Shell’s reputation.

“If they truly believe their strategy aligns with Paris, then there should be no problem complying with the court’s demands,” says Teulings. “Shell’s decision to appeal is therefore irreconcilable. Therein lies the lie.”

The court ruling will force Shell to slash at least a million barrels of oil and gas from its fossil fuel production every day, at a cost of several billion dollars a year, according to oil industry analysts.

Biraj Borkhataria, an analyst at RBC Capital, says: “To put this simply, this aggressive shift would have meaningful cashflow implications for Shell.” He estimates that the sharp cut in fossil fuel production could cost Shell $6bn a year.

Increasingly, major institutional investors are also growing concerned over the cost of failing to act on the climate agenda. It marks the clearest sign yet that climate action is being treated as a major financial risk as well as an environmental one.

Exxon shareholders, including investment giants BlackRock and Vanguard, voted to oust at least two of the oil giant’s board members in favour of candidates put forward by Engine No 1, an activist hedge fund founded less than six months ago, for failing to take the transition to low-carbon energy seriously.

At Chevron, more than 60% of investors voted in favour of a climate resolution from Dutch campaign group Follow This to force the company to reduce its emissions.

Eli Kasargod-Staub, the executive director of Majority Action, a shareholder group, said, after the twin US rebellions, that “for the first time in history, responsible shareholders have breached the walls protecting recalcitrant boards of directors”.

“The ExxonMobil challenge is only the beginning of a reckoning for board directors who fail to make measurable progress towards decarbonisation and protecting long-term shareholder value,” Kasargod-Staub added.

Among the fossil fuel industry’s largest institutional investors, concern is weighted far more heavily towards the potential destruction of long-term shareholder value than the destruction of the environment. But they do expect executives to take a defensive stance against the risks of a greener world – which means investing in the green technologies of the future.

Within days of the oil industry’s ‘Black Wednesday’ reckoning, credit rating agency Moody’s warned that the credit risk of major oil producers had increased. The convergence of financial risk with the long-held concerns of climate activists could prove to be a crucial tipping point against climate action cynics.

Oil industry pundits have warned that forcing Shell to cut its fossil fuel production would simply shift its barrels of oil to smaller, private oil companies or larger state-owned oil giants, with little impact on global emissions.

This overlooks the endemic climate concerns taking hold in the financing of the fossil fuel sector, says Mike Coffin, a researcher at financial thinktank Carbon Tracker. Climate activist pressure “will be felt by the banks which finance these projects” and by the insurers that underwrite the risk. No matter which company is hoping to drill for oil, it will be viewed as a riskier prospect and capital will be restricted, he says.

The flow of capital once destined for fossil fuels into sustainable investments may even help hasten the inevitable trajectory of lower oil demand and dwindling market prices, which could force oil-producing countries to rethink their state investments too, Coffin says.

For longtime campaigners including Teulings, the compounding implications of the climate victories of the last week offer a rare opportunity for optimism.

“Anyone who cares about the climate has felt times of panic, and despair, and helplessness. The ruling is a beacon of hope,” he says. “Perhaps that’s the biggest impact; beyond the legal impact, and the concrete impact on carbon emissions, the ruling offers hope. It’s what we’ve been waiting for.”

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(AU SMH) False Prophets And Snake Oil Will Fail Coal Communities

Sydney Morning Herald - Patrick Suckling

Author
Patrick Suckling, Australia’s former environment ambassador, is a senior fellow at the Asia Society Policy Institute and senior partner at the climate advisory and investment firm Pollination.
Joel Fitzgibbon is trying to walk both sides of the street on coal and climate. As everyone knows you can’t.

This week the Labor member for the federal seat of Hunter asked whether his party had the “agility” to appeal to residents of progressive inner Sydney and Melbourne suburbs and resource-rich regions.

Two-faced politics rarely succeeds, certainly not over time and on issues as serious as climate change.

Coal mining is in decline and its days are numbered. Pretending otherwise will not help miners and their families. Credit: Rob Homer

Presumably in a demonstration of this agility, Fitzgibbon’s prescription is to tell coal miners and their families in the Hunter that their industry is critical to Australia’s economic fortunes, it has unqualified support and that we will fight to keep it alive and well.

Given where the world is going on climate transition, this is snake oil. The curtain is closing on coal. Economics is against it, given renewable energy is a cheaper build for new power across the world. Sentiment is against it, not least because of its major role in 7 million deaths a year from air pollution. The climate is against it, literally. Our children beseech us not to burn it.

More than 60 per cent of the global economy is now committed to net zero emissions by 2050, meaning the curtain will fall more rapidly on coal than thought even a few years ago.

Underlining the point, the International Energy Agency advocates no new coal mining from now – a position unthinkable for that organisation in the recent past.

Macquarie Group has announced it will end its investments in coal. Neither can be dismissed as the “excessive” or “radical progressives” against coal who Fitzgibbon derides.

He contends climate change is a small challenge compared with those of military conscription and communism in Australia’s past. It is not.

Climate change is the challenge for our generation. Unless the world successfully combats climate change, millions face destitution, displacement and death in ways now so extensively documented there is no argument.

Ecosystems and a million animal and plant species are threatened, too. In its 130-year history, the Australian Labor has fought against such iniquities.

Albanese’s challenge: putting the labour back in Labor
Climate action will be the barometer of leadership this decade, the next and the next. Leadership and snake oil are antithetical.

Workers in the Hunter and elsewhere will not prosper from the blandishments of false prophets but the vision, practical solutions and diligent application of those charting a way through the demise of coal to new and thriving futures for those workers and their families who deserve every respect and opportunity.

No one says this is easy. Nor that this is a tomorrow thing. There is a transition occurring, not only for coal but the entire global economy as it shifts to net-zero emissions.

The good news is that although coal is flaming out, the climate transition offers unprecedented opportunities for new skills and jobs through new technology, industry and investment.

In clean energy alone, joint analysis by the International Energy Agency and the International Monetary Fund foresees investment rising from $US2 trillion a year today to $US5 trillion ($6.46 trillion) every year from 2030 to reach net zero emissions by 2050.

Last week The Wall Street Journal, no less, reported climate investing is becoming mainstream and listed what it called a geyser of capital flowing in this direction, including more than $US5 billion of bonds and loans issued every day.

Big corporate emitters caught in a shareholder vice that’s tightening
This holds great prospects for regions such as the Hunter Valley, as our Prime Minister recently underlined to world leaders.

Renewable energy, hydrogen and agriculture are three cases in point, each linked to the emerging world of digital technology and all the opportunities it will unfurl.

Change is inexorable, and the transition is accelerating. In these circumstances, leadership requires levelling with people and working out a plan rather than ducking and punting it. That is what leadership is: making things possible.

Germany has done this with coal, phasing out its use over hard-fought years of working with its industry and across the economy.

When I was Australia’s ambassador for the environment, in every conversation I had with German officials and ministers, they put their concern for the workers and families affected – and on a just transition – at the heart of their work.

This gives every reason for hope for the Hunter and its workers. Politicians need to embrace it, not stoke the false hope of fading fires that are set to leave communities out in the cold.

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30/05/2021

(UK The Conversation) Climate Change: Six Priorities For Pulling Carbon Out Of The Air

The Conversation -  | 

Dmitry Kovalchuk/Shutterstock
To reach net zero emissions by 2050, global emissions must be cut faster and deeper than the world has yet managed. But even then, some hard-to-treat sources of pollution – in aviation, agriculture and cement making – may linger for longer than we would like. It will take time for clean alternatives to arrive and replace them.

That means the world also needs to find and ramp up ways of taking CO₂ out of the atmosphere to stabilise the climate. Just meeting the UK’s net zero target is likely to require the removal of 100 million tonnes of CO₂ a year, similar in size to current emissions from the country’s largest-emitting sector, road transport, but in reverse.

The UK government’s announcement of £31.5 million (US$44.7 million) in support for research and development of carbon removal is welcome. And while trials of new tech will help, there are many social issues that need to be tackled if removing greenhouse gases is to succeed.

Done right, carbon removal could be the perfect accompaniment to emissions cuts, bringing the climate back into balance. Done badly, it could be a dangerous distraction.

Cutting emissions is vital. So is carbon removal. Kamilpetran/Shutterstock

Getting removal right

Greenhouse gases can be removed from the atmosphere in several different ways. CO₂ can be captured by plants as they grow or absorbed by soils, minerals or chemicals, and locked up in the biosphere, oceans, underground, or even in long-lived products such as construction materials (including timber or aggregates).

These stores vary in size and stability, and methods for getting carbon into them vary in cost and readiness. Trees, for instance, are literally a shovel-ready way to soak up carbon with many additional benefits. But the carbon they store can be released by fires, pests or logging. Storing CO₂ underground offers a more stable reservoir and could hold 100 times as much, but methods of injecting it from the air are expensive and at an early stage of development. Nevertheless, a raft of innovations, competitions and start-ups are emerging.

Some experts worry that carbon removal could prove to be a mirage – particularly at the massive scales assumed in some pathways for reaching net zero – which distracts from the critical task of reducing emissions. So how do we get removals right?

Planting trees is quick, cheap and easy – but their carbon storage isn’t always reliable. Curved-Light/Alamy Stock Photo
As the scientists who will lead a national greenhouse gas removal hub, we’ve sketched out six priorities.

1. A clear vision

The UK government has yet to decide how much CO₂ it wants to remove from the atmosphere, the specific methods it prefers, and whether 2050 is an endpoint or a stepping stone to more removals beyond. A clear vision would help people see the merits of investing to remove CO₂, while also indicating which emissions sources should be stopped entirely.

2. Public support

Carbon removal at the scales under discussion will have big implications for communities and the environment. Entire landscapes and livelihoods will change. The government already aims to plant enough trees to cover twice the area of Bristol each year.

These changes need to offer other benefits and align with the values of local people. People care not only about the removal techniques themselves, but also how they are funded and supported, and will want to see that reducing emissions remains the priority.

Consultation is vital. Democratic processes, such as citizen assemblies, can help to find solutions that are attractive to different communities, increasing their legitimacy.

3. Innovation

The types of approaches that remove CO₂ permanently are at an early stage of development and cost hundreds of pounds per tonne of CO₂ removed. They are more expensive than most decarbonisation measures such as energy efficient lighting, insulation, solar and wind power or electric cars. Government support for research and development, and policies to encourage deployment are also crucial to stimulate innovation and bring down costs.

4. Incentives

 How does a business earn a profit from removing CO₂ from the air? Except for trees, there are no long-term, government-backed incentives for the removal and storage of carbon.

The UK government can learn from efforts in other countries. The 45Q tax rebate and Californian Low-Carbon Fuel Standard and the Australian Carbon Farming Initiative both incentivise businesses to capture and store CO₂.

Leaving the EU Common Agriculture Policy means the UK has its own opportunity to pay farmers to put carbon into their soils, trees and crops.

5. Monitoring, reporting and verifying

This is the vital but unglamorous work of ensuring carbon removal is properly documented and accurately measured. Without it, citizens would rightly worry whether any of this was real, and whether governments were simply handing out public money to companies for nothing in return.

Monitoring, reporting and verifying carbon storage in soil is a major challenge, requiring a complex system of in-field sampling, satellites and models. Even for trees there are gaps in international reporting in many countries, and no agreed method for reporting direct air capture and storage, which uses chemicals to absorb CO₂ from the air.

Direct air capture fans on the roof of a garbage incinerator in Hinwil, outside Zurich, Switzerland. Orjan Ellingvag/Alamy Stock Photo

6. Decision-making

A lot of information about CO₂ removal resides in academic literature and focuses on global-scale scenarios. But actually doing it will involve people ranging from local farmers to international financiers. All will need tools to help them make better decisions, from easy-to-read manuals to improved models.

These priorities will guide our research, and will be things to look out for in the government’s emerging removal strategy. They need to involve businesses and citizens, not just policymakers and scientists.

Unfortunately, it is so late in the day that we can’t afford to get this wrong. But we are optimistic that there is plenty of scope to get it right.

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(AU Editorial) The Guardian View On Climate Change Lawsuits: Big Oil Is In The Dock

The Guardian - Editorial

Fossil fuel firms are being held responsible for greenhouse gas emissions. That’s a good thing

Donald Pols, right, the director of Milieudefensie – the Dutch arm of Friends of the Earth – celebrates the outcome of the verdict in the court case against Shell in The Hague. Photograph: Peter de Jong/AP

History was made in the Hague district court this week.

Judge Larisa Alwin ruled that Shell, one of the world’s biggest oil companies, must cut its emissions by 45% by 2030 relative to 2019 levels.

Until Wednesday, courts in the Netherlands, France and Germany had concentrated on holding governments to their commitments under the Paris climate deal of 2015. States were found guilty of denying basic rights to future citizens, triggering more ambitious climate plans. The landmark Hague ruling shows that corporations can now be ordered to comply with the goals of the Paris agreement.

Governments are supposed to design the regulatory frameworks and put in place the laws so that companies and households steadily reduce their carbon emissions. But this relies on private entities playing their part. If they do not, preferring to hide behind slick PR, the law can step in.

The judge accepted the argument that Shell had failed in its duty to respect human rights by failing to adequately curb its role in global heating. Shell’s goals to mitigate its climate impact, the court found, “largely amount to rather intangible, undefined and non-binding plans for the long term”.

The judgment was also noticeable in placing responsibility on Shell not just for its own emissions, but for those of its customers. Taken together these amounted to 1.7bn tonnes of CO2 in 2019 – about the same as Russia, the world’s fourth-largest polluter. The company, headquartered in Holland, will appeal.

Many jurisdictions contain “duty of care” provisions similar to Dutch law. In a forthcoming paper, Stirling University’s Annalisa Savaresi and Joana Setzer of the London School of Economics point out that pursuing corporate actors on the basis of human rights law over climate has become a trend, with a dozen more cases pending worldwide.

For some this is perhaps a step too far; for others, not far enough. But sceptics must accept that the world is getting further and further away from hitting targets for carbon emissions. The Hague court was right to ask for a vision beyond business as usual. The spectre of a climate emergency is haunting the planet.

Ahead of this November’s Cop26 UN climate summit, countries are supposed to put forward new, more ambitious promises to cut emissions. Climate models show that to limit global heating to 2C above pre-industrial levels there needs to be a 25% cut in carbon dioxide emissions by 2030, compared to where they were in 2010. So far the pledges fall far short. The Hague court noted that the energy sector requires even steeper falls of around 45%.

It is not unreasonable, given that the planet’s future is at stake, for civil society to use every tool at its disposal. On the day Shell lost in court, ExxonMobil, the US oil giant, was defeated by activist shareholders on the election of two new members to its 12-strong board, and a large majority of Chevron shareholders voted for a “substantial” reduction in the firm’s emissions from the use of its products. These were stunning defeats.

But the hydrocarbon sector is striking back. Two German companies – RWE and Uniper – are suing the Dutch government for compensation over the country’s planned coal phase-out under a 1990s international investor treaty. Martin Dietrich Brauch of the Columbia Center on Sustainable Investment points out the absurdity of the EU permitting such actions, given that these decades are crucial for a global energy transition to cleaner fuels and the bloc’s net zero targets.

The answer is to shut down the outdated energy charter treaty. What must be faced is that carbon dioxide is building up in the air as more oil, gas and coal is burned. Unless this economic model is replaced, the fight will go on – inside and outside the courtroom.

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29/05/2021

(AU ABC) Financial Regulator APRA To Stress-Test Banks On Climate Change, To Examine What Would Happen In A 3-Degrees-Hotter World

ABC News - Daniel Ziffer

Thousands of protestors gathered in Melbourne for a climate change rally on May 21. (ABC News: Billy Draper)

A key financial regulator is testing what would happen to Australia's economy if climate change creates a 'hot house world' with temperatures more than 3 degrees higher than the Earth's current average.

A tender for the Australian Prudential Regulation Authority (APRA) is seeking "climate risk modelling" on behalf of major banks, by assessing the impact on the nation's 500-biggest listed companies.

"Climate change is a systemic threat that left unchecked will undercut Australian economic growth and long-term investment returns," said Erwin Jackson, director of policy at the Investor Group on Climate Change (IGCC)."

APRA's vulnerability assessment represents a critical step in the evolution of analysis on climate change as an economic and financial risk."

The group, a collaboration of Australian and New Zealand institutional investors managing over $2 trillion in funds, said the research would illustrate the financial risks of unchecked climate change.
"No company or investor can escape economy-wide damage from climate change," he added.
Check climate

The authority's 'Climate Vulnerability Assessment' will begin to calculate banks' exposure to climate risk by assessing the physical risk to 50 of Australia's largest non-finance businesses. It will then expand to the top 500 companies.

APRA chairman Wayne Byers. The regulator he runs looks after the financial stability of banks and the overall economy. (Supplied: APRA)
"Acute and chronic physical risks expected to include a combination of some or all of the following risk types at each asset location: Extreme heat, Extreme rainfall, Extreme wind, Flooding/inundation, Fire and bushfire, Soil subsidence, Coastal inundation, and Storm," the tender documents noted.
The tender wants to know what will happen under a "disorderly transition to 2 degrees" or a "hot house world".

Neither scenario is great

In 2017, a group of central banks created the Central Banks and Supervisors Network for Greening the Financial System (NGFS) to manage systemic risks posed by climate change to the financial system.

The network defines a 'disorderly' transition as one with action that is "late, disruptive, sudden and/or unanticipated" with sharper emissions reductions needed than an orderly scenario.

Financial regulator APRA is getting serious about the risk climate change poses to the Australian economy. (ABC News: Maren Preuss)

In a 'hot house world', limited action leads to "significant global warming and, as a result, strongly increased exposure to physical risks", including irreversible sea level rises.

The scenario maps more than 3 degrees of warming, but also the impact of 'tipping points' that may be triggered if the world surpasses 2 degrees, which could create what some experts call "runaway temperature scenarios".

Despite the 'hot house world' forecasting a 25 per cent loss of global gross domestic product (GDP) by 2100, it's considered conservative and does not include "extreme events and societal changes like migration and conflict".

'Incredibly important information'

It is scary but prudent, said Daniel Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility.

"It will assist APRA and the banks, insurers and super funds it regulates to better understand the possible impacts from runaway climate change. As the last 18 months have demonstrated, Australia is acutely exposed to bushfires, floods and storms," he said.
"Understanding how the increased frequency and severity of severe heat, heavy rainfall and natural disasters will impact the largest and most exposed ASX-listed companies is incredibly important information."
The centre, a research and shareholder advocacy organisation, doesn't believe ASX-listed companies have previously assessed the risks particularly well, creating a vacuum of information for shareholders to make good decisions.

"Australian companies must move beyond the approach of believing that extreme climate change just means warmer temperatures and understanding the systemic impact it will have on society," Mr Gocher concluded.

Scenarios help planning

ClimateWorks Australia helps businesses reduce carbon emissions, to try to avoid the worst impacts of climate change.

"This is part of the global 'new normal' for financial systems," said chief executive Anna Skarbek.
"We are seeing increasing investor and regulator expectations that financial institutions are prepared for a range of climate scenarios."

Chief executive of ClimateWorks, Anna Skarbek, works with business to reduce carbon emissions. (Supplied: ClimateWorks)
The organisation finds scenarios like APRA's tender "extremely useful", Ms Skarbek said, identifying risks and opportunities.

"Our economy-wide scenarios have been drawn on by financial institutions and governments already, as they seek to understand how the financial system, and the institutions within it, would respond to various climate scenarios," she said.

"APRA's work will help normalise this and build much-needed capacity for this."

The Australian Banking Association is a lobby group that represents the interests of large banks.

Its chief executive, Anna Bligh, said local banks were working with regulators on the issue.

"Increasingly, the financial risk presented by a changing climate is a key area for consideration," she said.

Anna Bligh, the chief executive of the Australian Banking Association, said banks operate "in accordance with strict regulatory requirements both in Australia and overseas". (ABC News: John Gunn)
"Banks are also working closely with their largest customers to manage the transition to a low emissions future, as required by regulators.
"The views of investors are also critical. The world’s largest investment funds expect banks to assess and act on climate-related risks."

The tender is due by June 18.

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(USA Yale E360) Net-Zero Emissions: Winning Strategy Or Destined For Failure?

 Yale Environment 360 - Fred Pearce

Net-zero emissions — balancing emissions by absorbing equivalent amounts of CO2 from the atmosphere — is the defining approach of international climate efforts. But some scientists are arguing that this strategy simply allows the perpetuation of the status quo and is certain to fail.

A coal processing plant in Hejin in central China's Shanxi Province. Associated Press
Author
Fred Pearce is a freelance author and journalist based in the U.K. He is a contributing writer for Yale Environment 360 and is the author of numerous books, including The Land Grabbers, Earth Then and Now: Amazing Images of Our Changing World, and The Climate Files: The Battle for the Truth About Global Warming.
Net zero. Those two words have become the near-universal language for policymakers intent on sealing a deal at the UN climate conference in Glasgow, Scotland in November.

But are they the key to fulfilling the promises to hold warming to 1.5 degrees made at a similar climate summit in Paris six years ago, or, as some scientists and activists are now saying, are they a dangerous delusion to which climate scientists have become complicit?

Achieving “net zero” requires that any carbon dioxide or other greenhouse gas emissions are balanced by absorbing an equivalent amount of CO2 from the atmosphere — sometimes called negative emissions.

More than 100 countries, including the biggest three emitters — China, the United States, and the European Union — have pledged to achieve net-zero targets in the coming decades. They are being applauded for finally getting a grip on climate change.

But while the net-zero strategy has united policymakers, it has divided climate scientists and activists. Some see the rush to make net-zero pledges in the run-up to Glasgow as a huge success for climate action.

But in a blistering commentary last month, a former chair of the Intergovernmental Panel on Climate Change (IPCC), Robert Watson, and two co-authors denounced net zero as a trap set by industrialists and governments to hoodwink the world and lambasted climate researchers for showing “cowardice” in not calling them out.
Net-zero “helps perpetuate a belief in technological salvation and diminishes the sense of urgency,” the critics write.
The hope is that allowing negative emissions to balance continued CO2 emissions as part of net-zero policies will provide a safety net for industries where it is technically impossible to eliminate all emissions — in aviation and agriculture, for instance.

The negative emissions might be achieved by increasing CO2 take-up by forests and other ecosystems, or by using industrial chemistry to capture CO2 from the air. But some fear the safety net will become a cover for business-as-usual in highly polluting industries.

The debate is as much about the politics of driving down emissions as about climate science or the potential of technology.

Watson was chair of the IPCC from 1997 until 2002, when the U.S. administration of President George W. Bush refused to nominate the former NASA climate scientist for a second term. Since then he has worked as an academic, currently at the University of East Anglia.

He and his co-authors wrote last month that while net zero might be “a great idea, in principle,” in practice it “helps perpetuate a belief in technological salvation and diminishes the sense of urgency surrounding the need to curb emissions now.”

Scientists who support the current push for net-zero, they contend, have “licensed a recklessly cavalier ‘burn now, pay later’ approach, which has seen carbon emissions continue to soar.”

Watson and his colleagues admit to their own roles. “We admit that it deceived us,” he and fellow climate scientists James Dyke of Exeter University and Wolfgang Knorr of Lund University in Sweden wrote. But “the time has come to voice our fears and be honest with wider society… Current net zero policies will not keep warming to within 1.5 degrees, because they were never intended to. They were and still are driven by a need to protect business as usual.”

Watson’s stand — especially coming from a former IPCC boss — has angered some fellow researchers. In a riposte published this month, Richard Black at Imperial College London said it makes little sense to attack net zero when it is “the defining lens through which many governments, businesses, NGOs and other types of entity view decarbonization.”

Black told Yale Environment 360, “high-carbon advocates have always found excuses to delay, and would do so whatever the policy framing.” But “it has nothing to do with net zero per se.”

Steam turbines at a carbon-capture-and-storage pilot project at the Mountaineer coal-burning power plant in West Virginia in 2009. The project was discontinued in 2011. SAUL LOEB/AFP via Getty Images
In any case, Black is upbeat. In March, he was lead author of an analysis of net-zero commitments that argued that “the global momentum on net zero represents an exciting window.” Besides 124 national governments committing to adopting various versions of net zero as targets, he found net-zero pledges from more than 1,500 major companies, representing $14 trillion in revenues.

Black agrees that not all these governments and businesses intend to honor their pledges. And auditing whether they do so is particularly difficult where those pledges involve offsetting their continued emissions by buying paper certificates from other organizations that claim to have prevented emissions elsewhere or absorbed CO2 in forests.

“There are big flaws in how net zero is being implemented in some cases,” Black said. “But pledging a target means that the entity can be held to account by voters, shareholders, or customers.”

This is happening, Black says. He cites the example of the German government. Last month the country’s highest court ordered it to up its short-term emissions reductions to ensure that its mid-century net-zero target did not leave a disproportionate share of the responsibility to future generations.

Industries too will be judged. The fossil-fuel industry’s public commitments to net zero by 2050 will from now on be compared with a detailed road map for achieving net zero across the energy industry published this month by the International Energy Agency (IEA), an intergovernmental body long considered by environmentalists as an apologist for fossil fuel companies.
If properly designed, nature-based solutions “can have a powerful role in reducing temperatures,” a new analysis says.
No longer. The IEA now says that meeting net zero requires an immediate worldwide end to approvals of new oil and gas fields — meaning all drilling for more oil or gas reserves should cease. This puts it at odds with oil giants that are promoting corporate net-zero strategies while continuing to search for more oil.

These include Shell. Its shareholders this month endorsed a strategy for making its business net zero by 2050. But a minority protested that the strategy contravenes the IEA’s call to end all fossil-fuel expansion now. Instead, the Shell plan anticipates a 20-percent increase in gas production by 2030.

Shell’s version of achieving net zero relies heavily on investment in forest projects to offset its emissions. Several have already proved controversial.

Following an analysis of the company’s net-zero strategy that they coauthored, Johan Rockstrom of the Stockholm Resilience Center and Gail Whiteman of the University of Execter said the negative emissions that Shell will need to offset its continued fossil-fuel activity “requires a forest the size of Brazil.”

Rockstrom and Whiteman call for the company to be drummed out of net-zero initiatives, such as the UN’s Race to Zero campaign, and questions its role advising the British government in the run-up to the Glasgow climate conference.

IEA director Fatih Birol also says net zero requires a global program for early shutdown of coal-fired power stations, especially in Asia. Yet signatories to net-zero policies, including the government of China, continue to fund new coal-plants, as do major finance houses such as Barclays and BNP Paribas, despite both joining a UN Net-Zero Banking Alliance.

A coal-fired power plant in Yokohama, Japan. Associated Press
Some environmental NGOs, such as The Nature Conservancy, nonetheless back net zero and have created their own offsetting projects to help companies take advantage of emission offsets. But others decry it. Friends of the Earth calls it “chasing climate unicorns,” allowing polluters to “hide behind the ‘net’ in net zero, claiming that they just need to pay someone else to remove carbon.”

Dyke told e360: “Net zero policies are best understood as the latest manifestation of a dysfunctional climate policy system” — the latest “framing” by apologists for the status quo.

He believes the slippery slope began in the 1990s when there was a push to persuade a reluctant U.S. to address climate change by allowing it to count the carbon absorbed by its forests as a contribution. The idea, says Dyke, was that “if it managed its forests well,” then the carbon stored “should be subtracted from its obligations to limit the burning of coal, oil, and gas.“

Technological fixes followed. At the climate conference in Copenhagen in 2009, companies promised to develop carbon capture and storage (CCS), the capture of CO2 as it went up power-station stacks for burial underground. But a decade on, he says, there are no such facilities in practical large-scale operation.

By Paris in 2015, the “new savior technology” was Bioenergy with Carbon Capture and Storage (BECCS). This combined CCS with burning wood or other bioenergy crops in power stations. If the wood or other fuel was then regrown, it would absorb more carbon from the air. In this way, the world could combine generating energy and negative emissions.
As part of C02 reduction strategies, some countries are claiming natural processes already included in future climate models.
But since Paris, it has emerged that full deployment of BECCS would require frequently harvested tree plantations or bioenergy crops covering anywhere from 25 to 80 percent of all land currently under cultivation. That would “devastate biodiversity,” according to Watson, who since his stint at the IPCC has also chaired the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services.

“The end result of all these diversions,” Dyke said, “has been the same — no effective mitigation.” Emissions today are 60 percent above the level of 1992, the year the world first agreed at the Rio Earth Summit to prevent “dangerous” climate change. ”Net zero is just the latest example of wishful thinking that effectively stops us critically reflecting on why we have failed,” he said.

In the search for means of achieving negative emissions to meet net-zero targets, there has been an increasing focus on what are called “nature-based solutions.” These involve using forest planting or restoration of carbon-holding wetlands, such as peat bogs or mangrove swamps, to draw CO2 from the air.

The term was coined in 2017 by Bronson Griscom, then at The Nature Conservancy. In a new analysis by him and others in the journal Nature this month, Griscom says they “can have a powerful role in reducing temperatures,” including in the long term, if they are properly designed and have good accounting standards.

But this too has drawn the ire of Watson and his co-authors. Knorr told e360 that while it was true that restored ecosystems can hold more carbon, calculating any additional benefit from short-term interventions is all but impossible. It is also wide open to misrepresentation, he said, as companies and countries adopt natural carbon sinks as part of their plans for net zero.

Mangroves on the Osa Peninsula of Costa Rica. Mangrove forests are major carbon sinks. Prisma by Dukas Presseagentur GmbH/ Alamy Stock Photo
“About a third of current CO2 emissions are taken up by forests and other ecosystems,” Knorr said. “Double counting is essentially unavoidable. We need the natural sink plus mitigation, not the sink as mitigation.”

Potentially even worse, he warns, climate change itself “could weaken forests and make them prone to fires or insect attacks,” at which point they start releasing their carbon. For such reasons “nature-based solutions don’t offer a guarantee that carbon will remain stored away. It’s a Pandora’s box,” Knorr said.

Climate modeler Myles Allen at Oxford University, a co-author of this month’s Nature paper on nature-based solutions, agrees. Climate-based solutions are “temporary and at risk of reversal as the world warms,” he told e360.

 Most climate models show the biosphere switching from as sink to a source of carbon over the course of this century. “So storing fossil carbon there is risky,” Allen said, “unless you have a plan to re-store it somewhere permanently if it starts to leak out again — which no offsetting schemes even think about.”

Such concerns have not stopped some countries from including their natural sinks in calculating their contributions to climate change. Bhutan and Suriname both claim to be carbon negative because their trees currently absorb more than their industries emit.

But this makes no scientific sense, says critics, because they are claiming as part of their CO2 reduction strategies natural processes that are already included in models of future climate. The danger is that other countries may try to join them.

When China recently committed to achieving net zero by 2060, it said that it would achieve this in part through nature-based solutions. The government’s special envoy of climate, Xie Zhenhua, said in 2019 that nature-based solutions could cut China’s net emissions by a third.

Last year, in a Nature paper, Yi Liu of the Chinese Academy of Sciences and colleagues calculated that between 2010 and 2016 China’s forests soaked up the equivalent of 45 percent of its human-made CO2 emissions.

Similarly, the U.S. Forest Service says 11 percent of national CO2 emissions are “offset” by American forests.

If the world’s two biggest emitters start claiming that the carbon being absorbed in these existing forests could be offset against their emissions to achieve net zero, then the scientific basis for net-zero policies to end climate change would swiftly unravel.

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