UK Government snubs IEA roadmap to Net Zero
In this newsletter:
1) EU chaos: Deep divisions erupt as Brussels leaders fail to agree on climate change plans
Daily Express, 25 May 2021
2) Poland tells EU leaders that meeting climate rules makes the ‘poor, poorer’
Politico, 25 May 2021
3) UK Government snubs IEA roadmap to Net Zero
OilPrice.com, 26 May 2021
4) Biden Administration snubs IEA Net Zero roadmap
The New York Times, 26 May 2021
5) Germany threatens G7 deal on climate risk disclosure
The Daily Telegraph, 27 May 2021
6) Soaring solar energy costs could slow the renewable boom
OilPrice. 26 May 2021
7) Robert Taylor: The green home agenda is Government virtue-signalling, creating victims out of those who live in old houses
The Daily Telegraph, 26 May 2021
8) David Whitehouse: The WMO’s statistical temperature gamble
GWPF Observatory, 27 May 2021
9) And finally: Another nail in the coffin for the West's oil industry as Russia, China, Iran and green activists celebrate
The Wall Street Journal, 27 May 2021
Full details:
1) EU chaos: Deep divisions erupt as Brussels leaders fail to agree on climate change plans
Daily Express, 25 May 2021
FRESH divisions have emerged between European leaders over climate change goals after another fractious summit discussion.
Poland was singled out by EU colleagues as one country attempting to sink the bloc’s hopes to significantly reduce its carbon emissions in the coming years.
Warsaw is concerned that it will be left worse-off under plans for a new burden-sharing mechanism for climate targets that is due to be proposed by the European Commission.
As a result, the measure was dropped from conclusions on climate discussions held by EU leaders at a special summit in Brussels.
The EU’s so-called Emissions Trading System is meant to divide up emissions cuts between countries based on a formula.
The mechanism relies mostly of Gross Domestic Product, meaning poorer countries will have to slash their greenhouse gas outputs less.
However, the finer details of the system detailing emission rules were dropped from a planned statement by EU leaders.
Poland was said to have rejected endorsing the conclusions and instead, a placeholder was inserted.
It said: “The European Council will revert to the matter at an appropriate time after the Commission’s proposals have been submitted.”
Polish PM Mateusz Morawiecki argued the system would hit countries like his that aren’t at an advanced stage in their transition away from high-polluting energy sources.
Warsaw wants compensation for plans to expand the ETS, which Commission boss Ursula von der Leyen suggested could also include cars and buildings in the future.
Mr Morawiecki told the European Council summit that the measure would cost an additional €4 billion for his country.
Romania, Hungary and Latvia also issued similar warnings, while richer countries, including Germany, urged Eastern states to stomach the new rules.
EU leaders were discussing the Commission’s “Fit-for-55” policy package, which aims to detail how the bloc can cut emissions 55 percent by 2030.
In a post-summit news conference, Mrs von der Leyen admitted the new plans “may have a social impact”.
There is an expectation that consumers may have to pay higher fuel and heating bills unless a compensation system is introduced.
Belgian PM Alexander De Croo told reporters there was no point holding climate talks in the current vacuum.
Full story
2) Poland tells EU leaders that meeting climate rules makes the ‘poor, poorer’
Politico, 25 May 2021
The new era of EU climate politics looks a lot like the old one, with Poland standing almost alone at Tuesday’s European Council, insisting that current emissions rules are geared toward the rich.
Other EU leaders were reluctant to tangle with the Poles and their allies, agreeing on a bland policy-free final statement rather than engaging with Warsaw’s demands for a greater flow of money and for rich countries to be responsible for a bigger share of the bloc’s 2030 emissions cuts.
The EU has agreed to cut emissions by 55 percent by 2030 and to become climate neutral by mid-century, and now there’s a fierce scrap over how those often painful reductions should be apportioned.
“You cannot make the rich richer, and the poor poorer. It is a question of fairness,” Poland’s Prime Minister Mateusz Morawiecki told fellow leaders, according to an official briefed on the conversation, while brandishing a chart he said showed that the bloc’s carbon pricing system unfairly disadvantages Eastern and Southern Europe.
The European Commission is currently drafting a major policy package, called Fit for 55, that’s due for release in mid-July. It will redraft a dozen major legislative areas that govern European pollution.
The leaders’ statement provided little guidance for the Commission, but Council President Charles Michel interpreted that as a vote of confidence and a sign there was a “widely shared commitment to move towards solutions” for lowering emissions.
“We have affirmed our common goals, which are ambitious,” he said.
But behind closed doors, the divisions over specific policies were stark.
Full story
3) UK Government snubs IEA roadmap to Net Zero
OilPrice.com, 26 May 2021
The UK has no plans to stop new oil exploration, Reuters has reported, citing the Department for Business, Energy and Industrial Strategy. That’s despite the recent IEA roadmap to net zero, in which the authority said all new oil exploration must cease now if the world is to become net zero by 2050.
A section of the BP Eastern Trough Area Project (ETAP) oil platform is seen in the North Sea, about 100 miles east of Aberdeen in Scotland,, Reuters
“We are working hard to drive down demand for fossil fuels, however there will continue to be ongoing demand for oil and gas,” the Department for Business, Energy and Industrial Strategy told Reuters.
“We will not be cancelling licences that were recently awarded. Any future licences are only awarded on the basis that they are aligned with the government’s broad climate change ambitions, including the UK’s target of reaching net zero by 2050.”
The IEA shocked the energy world last week with its Net Zero by 2050 report that suggested the world won’t need any additional oil and gas projects beyond what is already approved as of this year. The report caused quite a stir, not the least of which came from several Asian countries that have high energy usage.
Australia and Japan, as well as Norway, were among the first to voice opposition to the suggestions made in the report, among which the IEA included driving less than 62 mph and setting air conditioning at more moderate temperatures.
African nations dependent on oil revenues will also likely disagree that there is one single path to net zero, and that is the IEA path of no new oil exploration.
[ ]( https://oilprice.com/Energy/Energy-General/UK-Snubs-IEA-Suggestion-To-Stop-Oil-Exploration.html )
Full story
4) Biden Administration snubs IEA Net Zero roadmap
The New York Times, 26 May 2021
WASHINGTON — The Biden administration is defending a huge Trump-era oil and gas project in the North Slope of Alaska designed to produce more than 100,000 barrels of oil a day for the next 30 years, despite President Biden’s pledge to pivot the country away from fossil fuels.
The multibillion-dollar plan from ConocoPhillips to drill in part of the National Petroleum Reserve was approved by the Trump administration late last year. Environmental groups sued, arguing that the federal government failed to take into account the impact that drilling would have on fragile wildlife and that burning the oil would have on global warming.
The project, known as Willow, set up a choice for the Biden administration: decline to defend oil drilling and hinder a lucrative project that conflicts with its climate policy or support a federal decision backed by the state of Alaska, some tribal nations, unions and key officials, including Lisa Murkowski, a moderate Republican senator seen as a potential ally of the administration in an evenly split Senate.
On Wednesday, the administration filed a brief in U.S. District Court for Alaska, defending the Trump administration decision to greenlight the Willow project.
In a statement, the Interior Department said that the Trump administration decision complied with the environmental rules in place at the time and that the plaintiffs did not challenge the approval “within the time limitations associated with environmental review projects” for the National Petroleum Reserve.
The administration declined to explain how its position on the Willow project aligns with its climate change policies. But in its court filing, the government said the Trump administration adequately considered Willow’s impacts on fish, caribou and polar bear habitat. It also upheld the method used by the prior administration to account for the greenhouse gas emissions generated by the project.
Full story
5) Germany threatens G7 deal on climate risk disclosure
The Daily Telegraph, 27 May 2021
Germany is fighting a push by Britain for tougher corporate climate change rules, as talks over a global deal on taxes go down to the wire.
The Germans are resisting UK efforts aimed at forcing major companies to report how exposed they are to the risk of climate change, sources said - a key priority for the Government as it gears up for the the delayed COP26 climate summit in Glasgow in six months' time.
Agreement is “on a knife edge”, Treasury sources said.
The dispute comes amid growing hopes of a separate deal on global taxation at next week's G7 summit, where US President Joe Biden is seeking to secure agreement on a minimum threshold for corporation tax.
In November, the Chancellor Rishi Sunak committed Britain's biggest companies to report climate risks to their business in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).
Under the UK plans, the disclosures will be compulsory in G7 countries by 2025, but it is understood that the Chancellor’s efforts to sign members up to the commitment are being resisted by Germany and Japan.
Despite green rhetoric from German Chancellor Angela Merkel which has won plaudits among climate activists in Britain, Europe’s biggest economy has been a laggard on cutting carbon emissions over the past decade and is the world’s sixth biggest CO2 emitter.
A quarter of its energy production came from coal in 2020, and the country has not committed to phasing it out until 2038.
Germany’s economy also relies on heavy industries following a pull away from nuclear power in the wake of 2011’s Fukushima disaster, while Volkswagen, the world’s second biggest car maker, was caught in a global scandal over faked emissions tests in 2015.
A Treasury source said: “It’s on a knife edge - it could go either way. But we want to make it work and if we can get it over the line it would be a major step forward to getting markets to play their part in the transition - and doing that globally.”
Full story (£)
6) Soaring solar energy costs could slow the renewable boom
OilPrice. 26 May 2021
This year looked like it would be a … windfall... for renewable energy companies with the advent of the Biden Administration and its massively expensive clean energy push. Nevertheless, solar is getting left behind unexpectedly.
Year-to-date, solar module prices have risen 18 percent after consecutive years of falling into the mainstream’s grasp.
One element in the solar module equation is to blame: polysilicon.
Polysilicon (known more formally as polycrystalline silicon) is a high-purity form of silicon that is a fundamental ingredient in solar photovoltaic (PV) manufacturing. It serves as a feedstock for the production of today’s solar cells.
Polysilicon is witnessing a severe supply squeeze. This is great for suppliers but not so great for solar manufacturers.
In fewer than 12 months, polysilicon prices have jumped from only $6.19/kg up to as high as $25.88/kg. And it could travel further upwards over the next year and a half.
Last week in China, spot prices for monocrystalline grade polysilicon rose to RMB164 (US$25.40)/kg, PVTech reported.
For solar manufacturers, it doesn’t just mean higher prices for end products; it means potential project delays because the costs simply aren’t tenable.
First Solar (NASDAQ:FSLR) has shed 24% year-to-date and has risen more than twice its March 2020 low. Still, we remain unconvinced that the timing is right due to the polysilicon supply squeeze.
SunPower (NASDAQ:SPWR) is also down YTD, and honestly, most of these solar stocks were already trading at high multiples of earnings.
Full story
7) The green home agenda is Government virtue-signalling, creating victims out of those who live in old houses
Robert Taylor, The Daily Telegraph, 26 May 2021
Why is it that ‘green initiatives’ so often sound more like government virtue-signalling than genuine attempts to solve environmental challenges?
This morning we discover that mortgage lenders will have to guarantee that the homes they cover have a higher average EPC rating from 2025. This, we’re told, is to ensure that homes throughout the UK achieve a rating of C or above by 2030 (mainly by being less draughty).
Fair enough, you might think. But it doesn’t take a genius to work out that lenders will therefore be less inclined to offer mortgages to the millions of people living, or wanting to live, in older homes. Such homes will therefore lose value, as mortgages will either be difficult to find or more expensive.
If this doesn’t affect you, then great. Congratulations. But millions of us are set to be disadvantaged. In fact, 19 million homes in the UK are rated EPC D or below – that’s well over half the total of 29 million homes in the UK altogether. Nearly 40 per cent of all homes in England and Wales were built before the war. And it means an awful lot of us could be hit in the pocket because of a housing decision we made years or even decades ago.
Now, of course, we all need to pull together to protect the planet, and, inevitably, that means making sacrifices. We can see the sense in flying and driving less, turning lights off and learning how to recycle just about everything we’ve ever bought.
But discriminating against us for the type of home we live in? Making our homes less valuable? As far as I can see, nobody’s done any thinking about what sort of effect this will actually have on global warming or preserving the planet – possibly because it’s so small that you’d need some kind of super-powered climate-change microscope to see it. If it exists at all.
But it’ll certainly create anxiety, just when we need it least, among millions of people, like me admittedly, who live in older homes built well before the modern craze for energy efficiency. Oh, and many of us, of course, are Tory voters.
So why would the government come up with such an idea at this particular juncture? Almost certainly, it’s about the UN’s climate talks, COP26, in Glasgow this autumn. This is a big deal for the UK on the world stage. Boris will play host. It’s a chance for Britain to demonstrate its soft power and to show that coming last in Eurovision was a mere blip. The UK still matters. Douze points. What’s more, we’re not just world-leaders in vaccinating people, but we’re fabulous at green technology. And we’ve set ourselves all sorts of tough environmental targets, like achieving net zero emissions by 2050. Beat that!
Then there’s the matter of party-political positioning. Many of us applaud Boris’s determination to plant himself bang in the centre ground, leaving Labour nowhere to go. He’s done it well. And, okay, that inevitably means that those of us on the centre-right find various government initiatives rather too lefty and statist for our liking – but we’re prepared to accept them if it means that a Labour party whose activists appear obsessed with critical race theory and bending the knee gets nowhere near the levers of power.
But we also want to avoid becoming innocent victims of ill-thought-through government wheezes designed, it appears, to impress Joe Biden and other world leaders in November.
Let’s hope, then, that this is one of those plans that is briefly considered then quietly discarded. Let’s trust that the government will come up with other initiatives to encourage better home insulation and energy efficiency without creating a two-tier society – with the millions of us living in older houses very much the bad guys.
Because, if this goes ahead, it might indeed help Boris bask in Glaswegian green glory in November. But it’ll store up a load of voter resentment come the next election.
8) David Whitehouse: The WMO’s statistical temperature gamble
GWPF Observatory, 27 May 2021
Dr David Whitehouse, GWPF Science Editor
We are going to be fed a regular diet of global temperature reports in the run-up to the COP26 climate talks later this year. They’re all going to be based on model projections of what’s likely to happen in coming years. The Paris Agreement’s 1.5 °C climate target is in focus, but whether it be exceeded and when remains uncertain.
2021 so far is comparatively cool, roughly the same as in 2014. Source Clive Best blog
The latest report from the World Meteorological Organisation says that over the next five years at least one of them will exceed that limit with a 90% certainty dislodging 2016 as the world’s warmest year, “these are more than statistics,” says WMO Secretary-General Prof. Petteri Taalas.
“Increasing temperatures mean more melting ice, higher sea levels, more heatwaves and other extreme weather, and greater impacts on food security, health, the environment and sustainable development,” he says.
His claims are the habitual alarmist mantra in contrast to empirical observations.
Taalas adds that 2020 was among the top three warmest years despite being influenced by the cooling La Nina effect. It’s a pity he didn’t also mention that the warmest year on record, 2016, attained its position because of a very intense El Nino warming effect.
It is noteworthy that any annual rise in global temperature is blamed on climate change while any fall in temperature is regarded as natural variability.The report is part of the “Annual to Decade Climate Update.” This is an interesting period since the definition of ‘climate’ is taken to be a 30-year average, but then an “Annual to Decade Weather forecast,” wouldn’t convey the same urgency.
So far 2021 is a very cool year with global temperatures similar to those seen fifteen years ago when they were meandering nowhere – until influenced by the 2007 and 2015 El Ninos. I suspect that if 2021 continues to be a comparatively cool year it will be rarely mentioned in the run up to COP26. But if the WMO’s models are right then we can expect a large increase in global temperature after the current La Nina conditions even if there is not an El Nino.
The obvious conclusion to be drawn is that annual temperature changes are, to the first order, modified by the lead up to and the aftermath of El Ninos and La Ninas which dominate the long-term trend of greenhouse gas forcing. We have been waiting for years for the warming trend to overwhelm these ocean cycles. Having one year reaching 1.5 °C doesn’t do that.
Feedback: david.whitehouse@thegwpf.com
9) And finally: Another nail in the coffin for Western oil industry as Russia, China, Iran and green activists celebrate
The Wall Street Journal, 27 May 2021
Shell and Exxon lose landmark decisions on the same day, demonstrating growing threats to fossil-fuel companies from activists and investors
Exxon Mobil Corp. and Royal Dutch Shell PLC suffered significant defeats Wednesday as environmental groups and activist investors step up pressure on the oil industry to address concerns about climate change.
In a first-of-its-kind ruling, a Dutch court found that Shell is partially responsible for climate change, and ordered the company to sharply reduce its carbon emissions. Hours later in the U.S., an activist investor won at least two seats on Exxon’s board, a historic defeat for the oil giant that will likely require it to alter its fossil-fuel focused strategy.
The back-to-back, watershed decisions demonstrated how dramatically the landscape is shifting for oil-and-gas companies as they face increasing pressure from environmentalists, investors, lenders, politicians and regulators to transition to cleaner forms of energy.
“The events of today show definitively that many leaders in the oil-and-gas industry have a tin ear and do not understand that society’s views and the legal and political environment in which they operate are changing radically,” said Amy Myers Jaffe, a professor at Tufts University’s Fletcher School who has advised energy companies.
Climate-change activists celebrated after a district court in The Hague ruled Wednesday that Royal Dutch Shell has to reduce its emissions by 45% by 2030.
Many oil companies have begun adopting comprehensive plans to reduce emissions, and some, especially in Europe, have diversified into renewable energy. But reducing emissions without sacrificing some returns is proving challenging, and many face skepticism about their strategies.
“It’s a real market predicament,” said Peter Bryant, a managing partner at business consultant Clareo. “Even if their plan is sound, it doesn’t matter right now.”
The Shell ruling, issued by the district court in The Hague, found that Shell must curb its carbon emissions by 45% by 2030 compared with 2019 levels—and that the company was responsible not only for lowering its own direct emissions from drilling and other operations, but also those of the oil, gas and fuels eventually burned by consumers.
Full story
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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