Canada’s 2030 Emissions Reduction Plan (ERP) was made public March 29, 2022. Since the country’s oil and gas sector with methane included, plus transportation components, together, represent about half of Canadian emissions, one would have thought these sectors would be objects of strong climate initiatives. Yet, for these sectors, the ERP appears to be the product of accommodation of industry lobbies. The action items stupendously lack integrity and are weak. As such, the ERP like all previous government emission reduction targets, will not achieve its goals.
Justin Trudeau announced another of his Liberal government’s green plans in December. I have lost track of how many green plans we have had, but not a single one has met its targets. With the prime minister set to officially meet with the new U.S. president Tuesday, the Liberals’ environmental agenda looks embarrassingly unambitious by comparison.
Raising the price of carbon is one of the pillars of the government’s latest plan to reduce greenhouse gas emissions. But there are no magic bullets and piecemeal measures don’t work.
In other regions that have carbon pricing mechanisms, such as the European Union and China (with its pilot schemes), climate change abatement plans consist of many complementary measures, including stringent legislation.
As of last year, close to one thousand institutions with three per cent of global savings under management have engaged in some form of divestment from fossil fuels.
In June 2019, Norway’s parliament unanimously voted in favour of directing its $1.06 trillion Government Pension Global Fund (GPGF), the Norges Bank, to divest more than $13 billion from fossil fuels while dedicating more investments to clean technologies.
The caveat is that this will apply only to companies that are exclusively in the business of upstream oil and gas production and some coal sector investments. The GPGF is Norway’s sovereign fund derived from oil industry revenues to assure Norway has a steady source of revenues in the post-oil world.
Shell has expressed concern that the growing fossil fuel divestment movement could impact on the company’s performance.
A short list of just 25 fossil fuel producers are responsible for half of all carbon emissions since 1988, according to the The Carbon Majors Report. The report indicates that if fossil fuel extraction continues the same trend over the next 28 years, global average temperatures would rise approximately 4°C by the end of the century.
Diversification may be a matter of survival for fossil fuel companies in the event there is a global acceleration towards complying with the Paris Agreement. That would mean leaving 60 to 80 per cent of reserves in the ground. What are presently assets could turn into liabilities to the tune of $674 billion (USD) now and $6 trillion by 2028.
While getting Big Oil to pivot to clean energy may seem far-fetched, some fossil fuel giants are starting to get serious about reducing their carbon footprint and diversifying towards clean technologies. Shell is one example of the widening fault lines among Big Oil, and a very notable one.