“The depressing reality about climate change is that we could solve the problem, at manageable cost, but are failing to do so.” So the Financial Times Editorial Board concluded on 26th December. “This failure is due to a mixture of blindness and self-deception. The blindness comes from those, such as US president Donald Trump, who deny the reality of climate change. The self-deception comes from those who accept the reality, but only pretend to solve it.”
Being diplomatic, the Board does not elaborate on those who are guilty of self deception and pretence. Let me offer a few examples for them.
I view this as rather more than a self-imposed academic exercise. The UN Secretary-General António Guterres spoke for many when he said, at the annual climate summit earlier this month, that those who do not wish to accelerate the decarbonisation goal of the Paris Agreement – knowing what climate scientists tell us of the dangers – are guilty of “immoral” and “suicidal” behaviour. Those with the most to lose, the young, spoke with anguished voices at that summit of a clear and present danger to the civilisation they hope to live in. Among the oldsters who see the stakes no differently, David Attenborough was an interesting new voice.
Anyone who has dipped into my compilations of the history will appreciate that I do not consider myself short of choice when it comes to those who are pretending when it comes to climate action. Let me limit myself to the pages of the FT this year, in the interests of brevity.
An op-ed yesterday is a good place to start. In it, Lord John Browne, former BP CEO and ongoing grandee of oil, tells his colleagues that they must do much, much better. Top of his list, they should finally get serious about carbon capture and storage (CCS), so that hydrocarbons can still be burned off into the future. If solar and wind can bring their costs down so spectacularly, Lord Browne argues, then surely CCS practitioners can do the same.
But how? CCS has been on the policy table almost since the climate drama began. True, it is a demonstrably feasible option. True, not many projects have been attempted by the oil industry in all these years. But enough have surely been completed to know that the costs of industrial-scale CCS, of the kind that would be needed to cut global emissions deeply, would be far higher than the many cheaper or soon-to-be-cheaper alternatives to burning fossil fuels in the first place. And of course, CCS is not relevant to the main use of oil: transport.
Tellingly, Lord Browne did not mention investment in clean-energy alternatives to fossil fuels in his article. Quick consideration of where he has deployed capital for others since leaving BP, and the way he has chosen to invest his undoubted brilliance in business, tells us all we need to know. Entering 2015 he was chair of Caudrilla, the front-runner in efforts to frack the UK for oil and gas. He left that paragon of low-carbon virtue to chair L1 Energy, an oil and gas investment vehicle deploying more than $20 billion for controversial Russian billionaire Mikhail Fridman.
I used to be an admirer of Lord Browne, as I describe below in an extract from my book The Winning of The Carbon War. I can only imagine how much faster and earlier the clean-energy revolution could have taken off if he could have fully thrown his weight behind the global energy transition.
Had Lord Browne mentioned investment on clean energy, he might have referred to another recent article in the FT, with the understated title “Oil majors keep tight grip on spending for greener future.” In it, Anjli Raval chronicles just how pitiful the oil companies’ investment in clean energy has been relative to their continued bankrolling of “legacy assets”.
Harry Brekelmans of Shell defends this state of play. A key frustration for energy companies such as his, he says, is that many people see only one pathway for decarbonisation – the elimination of fossil fuels – rather than more realistic options. Realistic is a loaded word in this context: code for expanded use of gas, on which Shell and others have staked – and continue to stake – multiple billions, notwithstanding the risk of creating assets that will end up stranded. This when the IEA warns that we have no carbon budget left for new fossil fuel infrastructure, of any kind, and the IPCC demonstrates clearly that we must pursue accelerated cuts in fossil-fuel burning, aiming at zero net emissions well before 2040.
Most in the oil and gas industry in fact profess we will need more gas, not less, decades from now. Meanwhile they do little to systematically monitor their horrific collective methane leakage. And some even bankroll active subversion of decarbonisation policies, as Lord Browne mentions in his article. How can they do all this, if they reflect on Mr Guterres’s application of words like “immoral” and “suicidal”? Or is the UN chief being “unrealistic”, like so many of the rest of us?
Some will say at this point that I should be mentioning Shell’s announcement in early December that it will set carbon emissions targets and link executive pay to them. True, it did, and yes, this is a positive development. But how was it achieved? Under duress, in the face of pressure from investor groups like the Church of England’s pension fund and Robeco. As recently as July, Mr Brekelman’s boss, Shell CEO Ben van Beurden, professed that setting firm carbon emissions targets was a “superfluous” exercise, and that he could be relied upon to set them himself, voluntarily. “You have to believe us that setting an ambition, sticking my neck out, my personal reputation, the reputation of the company, is a big enough incentive for me to get it right,” he said.
I invite the reader to have a scan through my slideshow on shale, and then see if you can find it within yourself to trust that statement. For me, knowing what I know, and having seen and heard all I have from oil bosses this last quarter century and more, I have to admit that I struggle. Certainly the investor groups who pressured Shell struggled, or why else would they have applied the pressure they did?
Perhaps in that, and the hope of a lot more of the same, there is a message of hope to end on.
Lisbon, 26th & 27th June 2015
Lord John Browne reclines in a sofa in the bar of a five star hotel, enjoying a bottle of fine red with his chef de cabinet. I see a vacant armchair next to him, and wander over. He greets me cordially, and we are soon deep in conversation. This is the kind of thing that happens at The Performance Theatre, an annual two-day retreat of business leaders worried about the state of society in general, and climate change in particular.
John Browne was CEO of BP between 1995 and 2007. He led a company with which I have spent much of my professional life in a state of polite but acute confrontation. He remains a BP loyalist, but with caveats. At this gathering, he describes BP and the other major oil companies as having dysfunctional cultures wherein, to use one memorable phrase of his, failure is routinely dressed up as just another form of success. Why do they have such cultures? They are creatures of an Establishment that itself has got much wrong about the world. BP, in another memorable phrase, was born as a standard bearer for the British Empire, and an arm of the Foreign Office, if not the Secret Service.
Disarmingly, he takes his own share of blame for the dysfunctional culture. I myself, he admits, made my own crop of mistakes along the way. But his reaction to climate change, early in his tenure as Chief Executive, was not one of these mistakes, according to people like me. Quite the reverse. We talk about those years, and the importance of the turnaround he led within BP on climate change. I explain that in my view the Kyoto Protocol could not have been negotiated without BP’s U-turn. The company broke ranks with the rest of the industry in 1996, admitted there was a problem, and said they intended to do something about it by accelerating clean-energy investments. That split in the corporate world, I believe, gave Al Gore and the progressives of the political world the air cover to deliver a treaty at the Kyoto climate summit. So I argue in my first book, The Carbon War.
Why, I’m so pleased you think that, Jeremy, John Browne says.
Yes, I say. But.
I emphasise the “but” and we both laugh.
You have built the biggest private-equity fund investing in renewables since leaving BP – another historic first – but now you are running a multi-billion dollar oil and gas investment fund with Russian capital. How you invest that – how much green energy you have in it, and how you position the oil and gas investments you make with respect to the carbon bubble and the degree of global warming – will define your place in the history books. You could really help the world on climate change, and make more history. You could maybe even be the man who turns the tide completely, if you wish. You have it in your power.
