THE CARBON WAR

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The Winning of The Carbon War
whether companies are committing to future production which may never
generate the returns expected. They should insist that companies they are
invested in do a two-degrees stress-test.
James dives into the granular detail: the risk by country, by company. The
US has the greatest financial exposure, he says: $412 billion of unneeded fossil
fuel projects to 2025, at risk of becoming stranded assets, followed by Canada
($220 billion), China ($179 billion), Russia ($147 billion) and Australia ($103
billion).
The companies that represent the biggest risk in a demand misread to the
climate and shareholders alike in the next decade are a mix of state and listed
companies, including oil majors Royal Dutch Shell, Pemex, Exxon Mobil, and
coal miners Peabody, Coal India, and Glencore. Around 20 to 25% of oil and
gas majors’ potential investment is on projects that will not be needed in a 2°C
scenario, and cancelling them would mean forgoing growth.
The report looks at production to 2035 and capital investment to 2025. It
warns that energy companies must avoid projects that would generate a total
of 156 billion tons of carbon dioxide, in order to be consistent with the carbon
budget in the International Energy Agency’s 450 ppm demand scenario.
In my concluding remarks, I remind everyone that the IEA’s 450 scenario
sets out an energy pathway with just a 50% chance of meeting the UN
2⁰C climate change target. What we have all heard here this morning is a very
conservative analysis.
Hastings, 26 th November 2015
An evening talk that has an air of time travel about it. Hastings is the town
where I was brought up. It is also Amber Rudd’s constituency.
I walk to the venue along streets I remember well from a misspent boyhood.
The event, organised by Transition Town Hastings, is in the basement of the
building that used to house the local newspaper. I see from a phone message
that that paper, the Hastings Observer, is keen to interview me on my differences
of opinion on energy with Ms Rudd.
An audience of mostly elderly people sits in rows of deck chairs of the
kind deployed on the beaches of Hastings in summer. There is no heating, and
people have brought rugs to cover their legs.