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One Side of the Coin in Guterres and Birol Climate Rhetoric

Najib Saab, July 2023

United Nations Secretary-General, António Guterres, was barely done speaking about the need to stop all investments in fossil fuels, when the Executive Director of the International Energy Agency (IEA), Fatih Birol, stressed the need for an immediate shift towards renewable energy and abandoning all others. While the call to accelerate climate action is welcome, a successful energy transition requires the adoption of a realistic plan, with alternatives and executable timetable, to ensure a balance between supply and demand and prevent fatal economic and social downfalls.

Guterres rightly warned that current policies will lead to a 2.8°C rise in temperature by the end of the century, which "spells catastrophe". He said limiting global temperature rise to 1.5 degrees Celsius is still possible, but will require a 45 percent reduction in carbon emissions by 2030. He called for immediate global action toward net-zero emissions, which "must start with the polluted heart of the climate crisis: the fossil fuel industry." Countries must progressively phase out fossil fuels, "moving to leave oil, coal and gas in the ground where they belong", and massively boost investment in renewable energy, he said. He also called on financial institutions to convert financing allocated for oil and gas into investments in renewable energies, as well as financing a just energy transition in developing countries. This includes assisting these countries in facing the impact of climate change and reducing emissions, while supporting their efforts to achieve the sustainable development goals. He asked fossil fuel industries to adhere to their promised targets to reduce emissions from their operations, and to lead the transition towards renewable energies, using their record "$4 trillion windfall" in income last year. "Yet for every dollar the industry spent on oil and gas drilling and exploration, only four cents went to clean energy and carbon capture combined," he said.

Days after Guterres' speech, Birol pointed the finger at fossil fuel industries, insinuating that they represent the prime cause behind climate change. In his remarks, Birol highlights that this year's COP28 Climate Change Conference in the United Arab Emirates, a major oil and gas producer, is a unique opportunity for the industry to demonstrate a real commitment to cutting emissions. "The oil and gas industry has the technologies, the money and the know-how to cut its emissions by 60% by 2030... and it has the responsibility to do so," said Birol. "This is a moment of truth: if the oil and gas industry wants to be taken seriously in climate discussions, it has to clean up its act." Like Guterres, Birol called for halting new investments in fossil fuels, and restricting financing to renewable energy.

Guterres and Birol's warnings, while justified, only express one side of the truth, other than speaking of oil and gas producers using an aggressive language and accusative tone. This is unjust focus on the supply side, while neglecting the demand side; for producers are ultimately meeting consumers' demands, and when they limit production they are accused of monopoly. Guterres and Birol would have done better had they equally demanded that industrialized countries clean up the carbon they have released into the atmosphere over the years. While it's true that the rate of increase in fossil fuels consumption slowed down in recent years, due to the enhanced efficiency and the expansion of renewable energy sources, especially sun and wind, as major players in the markets, it is also true that the net volume of production continued to rise, albeit at a slower pace, due to economic growth and population increase. Consumption only decreased during quarantine periods due to coronavirus. This situation will continue for years, before demand on fossil fuels stabilizes and begins to decline, responding to the increase in production from renewable and alternative sources. It might be necessary, in order to adhere to the goals of reducing emissions according to the set timetable, to reconsider the ban on nuclear reactors in the medium run, as a transition period until clean sources of energy, besides hydrogen as carrier and storage medium, can meet all demands. This process, however, is governed by the limitations of science and economy.

Until then, fossil fuels will remain a major component in the energy mix. The call to fully halt investments is unrealistic, because meeting the demand for oil and gas, until it reaches its peak and starts to decline, requires new investments; even with declining demand, investments will still be needed to maintain a minimum level of production, whether to service the existing wells or explore new ones to replace those which deplete. At that point, if Dr. Birol calls for an increase in oil and gas production to meet the demand and lower prices in times of crisis, as happened many times before, or if production from other sources was lower than planned, meeting this demand might not be possible, as an oil and gas industry stripped of investment won't be technically ready to.

Perhaps the most controversial point in Guterres' statement was asking to stop financing carbon capture and storage projects, and transfer all investments to renewable energy. As such, he puts all bets in one basket, which exposes energy security to great risks. The current research and applications in the field of circular carbon open the door to promising results, not limited to the capture and storage of carbon from burning fossil fuels, but also to its reuse, especially in hydrogen production, in large quantities and at cheap prices, which will represent a major leap in renewable energy storage and distribution. In addition to many developed countries, major oil producers, especially Saudi Arabia and the UAE, are investing in developing the production of all types of hydrogen, whether ‘green' from renewable energy or ‘blue' from capturing by-products of oil and gas. The success in applying circular carbon technologies, along with renewable energies, contributes to achieving carbon neutrality according to the set schedule. But carbon capture and reuse or storage applications will not be sustainable, in the long run, until practical and cheap solutions are found, and the process entirely becomes carbon-neutral. While these serious challenges remain unsolved, it is not advisable to place all the bets in one basket.

What is important is maintaining an open dialogue, based on recognizing the need for serious and fast action to confront climate change and its impacts. However, no serious options should be excluded, simultaneously exploring various alternatives, as there is no time to wait for the failure of one option before adopting another. All parties should immediately reduce emissions in order to reach carbon neutrality, by all available means, including enhancing efficiency and rationalizing consumption, not just through technology.

Addressing climate change requires reducing carbon emissions, not banning a specific type of fuel. But if it turns out that reaching "net-zero emissions" target requires reducing or stopping the use of any type of fuels, we must accept this as well, before it is too late.

The solution does not lie in the speeches of Guterres and Birol, that make-do with one side of the coin, nor is it with the skeptics who deny climate change and consider it a conspiracy, as a strategy to delay action.

 

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