The European Union is set to ratchet up its climate ambition, overhauling continent-wide regulation aimed at slashing greenhouse gas emissions.
The urgency is palpable as news of the climate crisis continues to grow worse. According to the World Meteorological Organization (WMO), the world may see 3 to 5 degrees Celsius of warming by 2100, far in excess of the 1.5-2.0 C target that governments are aiming for as part of the Paris Climate Agreement, and a faster rate than previously thought. Under this grimmer scenario, impacts on coastlines, rainforests, food production and human populations are widely expected to be catastrophic.
It is against his backdrop that world governments meet this week in Madrid for climate talks, where they hope to add more teeth to climate action. A flurry of public and private sector announcements have been timed for this week. Among them, for instance, include Repsol, the Spanish oil company, which announced a net-zero emissions target for 2050.
More importantly, the European Commission is set to unveil a European “Green New Deal” on December 11, a package of “deeply transformative policies,” according to a leaked draft. The overarching goal is net-zero emissions by 2050, but the policies to get there are numerous.
They may include expanding cap-and-trade to cover the maritime sector and maybe even transportation, while eliminating some allowances to aviation; stricter emissions controls on combustion engines; and a laundry list of other ideas aimed at everything from climate finance to industrial emissions and even agriculture. Many of the ideas are still vague and the details could change, but the document currently under consideration does seem bolder than anything put forward to date.
But alarmingly, emissions continue to rise. “The summary findings are bleak,” the UN Environment Program wrote in a report released last month. “Countries collectively failed to stop the growth in global GHG emissions, meaning that deeper and faster cuts are now required.” Scientists say that global emissions need to fall by roughly half by 2030, which, given the trajectory and the entrenched interests at play, hardly seems fathomable.
Still, as the climate prognosis grows worse, the ambition to change course is beginning to accelerate. The good news is that costs for renewable energy continue to fall. Renewable energy generation will surpass coal in the U.S. on an annual basis in the next two years or so. Even natural gas-fired power plants will struggle to compete with cheaper renewable energy in the coming years, and many could end up being stranded assets.
Meanwhile, costs for battery prices now average $156 per kilowatt-hour, down from over $1,100 in 2010, according to Bloomberg New Energy Finance. That figure could fall to as low as $100/kWh by 2023, allowing EVs to reach price parity with the internal combustion engine.
Nevertheless, the world is on track to dig up and burn 50 percent more oil and gas by 2030 than is consistent with 1.5-2C of warming, according to the UN. “This global production gap is even larger than the already significant global emissions gap, due to minimal policy attention on curbing fossil fuel production,” the UN said in a report.
A report from Carbon Tracker last month came to a similar conclusion, although focused its analysis on just the oil and gas majors. Carbon Tracker said that the majors need to cut oil and gas production by 35 percent by 2040 if they are to be financially viable in a carbon-constrained world.
What does it all add up to? There are two overarching trends occurring at once. Renewable energy is getting cheaper and will gradually edge out fossil fuels in many or even most sectors of the global economy. That transition seems inevitable and irreversible. On the other hand, it is occurring on a timeline that is completely out of alignment with the climate targets.
Governments meet in Madrid this week to try to find ways to accelerate the transition, but have thus fallen far short of the transformation that will be needed.
By Nick Cunningham of Oilprice.com
More Top Reads From Oilprice.com:
- Will OPEC Really Risk An Oil Price Crash?
- India Could See Real Growth In Oil Demand Next Year
- Oil Could Fall To $40 If OPEC+ Fails To Deepen Cuts