Last year we began to see game changing transformations in the energy sector. We seeing how fossil fuels are being replaced by renewables and market forces are already doing a great job of killing the industry. However if we are to seriously reduce our emissions in a timely fashion we must quickly ramp-up this transition.
The math behind the economics of climate change makes a compelling an irrefutable case for climate action. The demise of the fossil fuel industry is already well underway. The financial losses and diminishing oil industry profits signal the beginning of the end for fossil fuels.
If we are to keep temperatures from growing beyond the upper threshold limit of 1.5 - 2 degrees Celsius, there is no way around the fact that we must curtail our use of fossil fuels. In the wake of the COP21 agreement, the fossil fuel industry knows what is coming and they can be expected to continue their fight against efforts to slash emissions.
A conference called, "The Responsible Extractives Summit 2016," acknowledged that there is no way for the fossil fuel industry to continue with business as usual. A keynote speaker at this summit offered the following admission about his address:
"One of the biggest disrupters right now in the extractives industry is the international agreement on climate change targets. This session will look towards the future and re-evaluate how this changes ‘business as usual’"
We should not expect the fossil fuel industry to die easily, but we cannot allow ourselves to fall for another round of misinformation and deceit. They have already succeeded in undermining science based policy in the US and elsewhere and they cannot be allowed to interfere with the transition to a low carbon economy yet again. In the wake of the Exxon scandal it should be obvious to all that they cannot be trusted, and it is important to note that it is not just Exxon, the whole industry is rotten to the core.
Governments are working on policy positions consistent with the COP21 agreement. Governments around the world will unveil regulations and it can be expected that they will be ratcheted up over time. The Paris agreement states that the targets will be reviewed every five years starting in 2018. This will translate to ever stricter carbon pollution regulations.
In the US, the Clean Power Plan is the first major salvo in what can be expected to be a protracted and sustained effort to reign-in emissions. The five year extension of tax credits for wind and solar electricity production will help to make renewables more competitive. President Obama has been trying to end fossil fuel subsides for years and he has also advocated an oil tax and more investment in clean energy.
By incrementally decreasing subsidies and increasing taxes levied against the industry we can meet our emissions reduction objectives and further leverage market forces to keep the vast majority of fossil fuels in the ground.
The fossil fuel industry will come under growing scrutiny and increasingly burdensome regulations. As the primary cause of the climate crisis it is fitting that the industry should help finance the transition and renewable energy. Efficiency initiatives will also benefit from this approach.
While other industries may succeed in reducing their emissions profile, this does not hold for the fossil fuel industry. At its core fossil fuels are a dirty business and they known they cannot cost effectively eradicate emissions. Fossil fuels must die, but they must be killed in a way that benefits the transition to cleaner sources of energy.
While the dirty energy industry would like to have you believe that transitioning to renewables will be prohibitively expensive, this is just another lie in their mountain of deception. Global energy investments need not change, however, capital must be reallocated away from fossil fuels and towards renewable energy.
As reviewed in the Guardian, a recent study shows that by tackling climate change we could reduce financial losses. Unsurprisingly the study also indicates that fossil fuels will lose value.
"There is no scenario in which the risk to financial assets are unaffected by climate change. That is just a fiction," said Prof Simon Dietz of the London School of Economics, the lead author of the study. "There will be winners and losers."
Fossil fuels will be a big loser. However, we must ensure that their loss is renewables gain.
The data is clear we simply cannot afford to build any new carbon emitting power stations. The fossil fuels that are burned for energy will require carbon capture and storage technologies, but this will further increase the price and decrease competitiveness compared to renewables.
Well warranted concerns about stranded assets make oil a bad investment.
"Investors putting money into new carbon-emitting infrastructure need to ask hard questions about how long those assets will operate for, and assess the risk of future shut-downs and write-offs," said Prof Cameron Hepburn of the University of Oxford.
A Citibank report shows that eradicating our use of coal and oil could save upwards of $50 trillion over the next 25 years.
"Markets now have the clear signal they need to unleash the full force of human ingenuity and scale up investments that will generate low emissions and resilient growth," UN Secretary-General Ban Ki-Moon said in Paris after the talks concluded. "What was once unthinkable has now become unstoppable."
There is poetic justice to leveraging the massive wealth of the fossil fuel industry to pay for climate action. They made their fortunes by destroying the planet and killing its inhabitants. Worse still they systematically lied and developed sophisticated campaigns to conceal the truth.
Even if we succeed in squeezing the life and every last dime out of the industry, they will never be able to repay humanity for the crimes that they have committed.
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