Great expectations – COP21.

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It has been over a month since Paris Climate Conference had place. That was the biggest meeting of its kind since the andoption of Kyoto Protocol in 1997 and it connected representatives of 196 countries from all over the world. The overarching goal of the Paris Agreement (global agreement that was negotiated) is to reduce greenhouse gas emission to limit the global temperature increase. Thinking about climate change and global warming we often think that it is connected with supporting the suistainable energy sources, blaming countries that base their energy production on conventionals and … this is partialy true, but how does it affect oil&gas sector?

In fact ten of the world’s big oil companies, mainly from Europe, jointly acknowledged that their industry must help address global climate change and said that they agreed with the United Nations’ goals of limiting global warming. This initiative was caused by the need of convincing skeptical world that energy companies, which base on fossil fuels, are serious about their impact on climate change problem. Even despite the fact that none of the American biggest oil companies took part in this statement Mr. Dudley, who is chief executive of BP, told reporters in Paris: “I think we can make the difference, almost every company here has large investments in the United States.” Changing the world’s energy mix is not easy. It will take time. Even with an exponential increase in investment in alternative energy, forecasts predict that fossil fuels will still make up a large share of the energy mix in 2040. Less than the 80% share of today, but almost certainly well over 50%.

Supplying growing need of world’s population in energy and lowering greenhouse gas emissions requires technology development and transparent reporting. Oil and Gas Climate Initiative listed actions and instruments that they plan to introduce. Those included cleaning up their own operations, reducing methane emissions that escape from oil and gas installations, internal award, compensation schemes and exchange of information. Many experts say that solutions like putting a price on carbon or the trading of carbon-emission permits will only inevitably rise the prices of fuels, but still are most efficient. The carbon tax paid by Statoil in Norway has for decades been the highest in the world. That has helped them to be one of the most carbon-efficient producers of oil and gas in the world. It works.

What is more, not all fossil fuels produce the same amount of carbon dioxide when consumed. Shell and Total have already invested in natural gas bussiness in recent years, which emits much less carbon than oil and two times less than coal. So, replacing coal with gas in the power sector would reduce emissions in the EU by around 450m tonnes of CO2 a year.

Taking a more global look on the global warming unfortunately only EU countries are strongly commited to reduce emissions so goods produced by local companies become more expensive, customers choose those produced in developing countries, for example China, which contribution to carbon dioxide in the atmosphere is 30% and that creates a vicious cirle. Provided that China will stop the rise of greengases emission till 2035 other fast developing countries like India, south Asian, South American and African countries (together hold 20-30% of world’s CO2 emission) will not accept any of the restrictions unless they will get refund. If it comes to United States, contribution is 15%, The Byrd–Hagel Resolution is in force, what means that they cannot enter into any international treaty that could be harmful for their economy, but happily shale revolution which takes place there nowadays will enable lowering emission. With almost 0% of emission these countries are affected the most, but also their voice is the weakest- Small Island States such as Bahamas and Maldives. While others count financial profits and losses for these countries further rise of water in oceans may mean the end of their existance.

The agreement in Paris matters enormously. Not because it brings solutions and firm treaty that will be strictly kept by all the participants. But what it does, is that it has a vital value of creating a place for discussion and shows that diversity is important and even choices that every member of society make everyday matter. Pessimism will not bring about radical change. And pessimism will not orient us towards the solutions for climate change.

Sources:

http://www.theguardian.com/

http://www.nytimes.com/

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