Fossil Fuel Companies Say They Want to Help Fight Climate Change. Here’s What They Should Do
This year’s global climate fight has seen significant progress. I attended COP26 and believe that the Glasgow Climate Pact, which enshrines the collective commitments that aim to limit global temperature increases to well below 2°C, could be a transformative step on the road to net zero. The 2022 commitments will reveal more details about how actions will be taken. The fossil-fuel industry is one sector whose decisions will make a difference, yet was absent in formal proceedings at COP26. For almost 30 years I have argued that fossil fuel producers must participate in global efforts for energy transition. Because they currently produce more than 80 percent of all energy and will continue to do so for many decades. Some companies have committed to climate change, established targets and created plans for achieving those goals. However, there are still many things to do.
Companies must be more bold in seperating low- and no-carbon activities from fossil-fuels businesses. The first is growing rapidly, more capital intensive, and highly valued by investors. However, hydrocarbons are capital intensive, in decline, not loved by the market, and much less attractive to investors. If companies can separate the two kinds of activity, investors will be able to better allocate their capital and see the real value of small-scale hydrocarbon producers’ low-carbon businesses. ENI and other companies have taken steps in the last year to accomplish this; I am hopeful that the pace will accelerate in 2022.
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It is also time to accept the fact that hydrocarbons will be powering our energy system for many more years. By deploying scaled carbon capture, storage and usage technologies, it is important to address the issue of decarbonizing hydrocarbons. It also means that methane emissions are being monitored and detected at a higher level than the potential for global warming due to their 80-fold greater global warming potential. Oil and gas producers have the ability to deploy and adopt these technologies in their global operations. This is what investors, consumers, and regulators want.
Third, fossil-fuel firms should adopt the Science Based Target initiative. It is a partnership of the Carbon Disclosure Project with the United Nations Global Compact and the World Resources Institute. The Science-Based Target initiative assists companies in setting emission-reduction goals that are consistent with international agreements and climate science. Science-based targets can be set sector by sector, and they take into consideration the rate at which an individual company will reduce its carbon emissions. They are an independent way to track an organization’s progress toward net zero, and they are increasingly recognized as the gold standard in this area. All fossil fuel companies must support Science-Based Target’s efforts to create net-zero paths for all hydrocarbon producers by 2022. It will make the sector more credible and help it achieve real results.
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We must act quickly to stop climate change. The world is in a race against the clock. We should not lose sight of the overall objective of this work – we are in the pursuit of reducing emissions to allow the environment to heal and sustain itself. Our ultimate goal is to preserve and protect humanity’s health, which depends on it. It could prove to be a game changer if fossil-fuel companies cooperate in a proactive manner. It is possible to accomplish a lot in just 12 months. The work must begin immediately.
Please note: This opinion piece is not intended to reflect the opinions and views of BeyondNetZero or General Atlantic.