Environmentalists hope for fossil fuel phaseout at COP 28
EU Member States are planning to push for a global phase-out of fossil fuels at COP 28, but there are concerns that the oil and gas lobby will derail progress.
Climate activists are hopeful that countries will agree a timeline for the complete phase out of fossil fuels at the upcoming COP 28 conference in Dubai in November, amid fears that the oil and gas lobby will derail progress on this key issue.
The meeting represents a “historical moment for society …We don’t think that G20 (countries) will, but we hope COP 28 will start to put timelines for the phase out of fossil fuels,” Maria Mendiluce, the CEO of non-profit organization We Mean Business Coalition, said.
Speaking at the Reuters IMPACT climate conference in London on Wednesday, she said that over 80 countries had been in support of the phase out of fossil fuels at the previous COP 27 meeting in Sharm-El-Sheikh, Egypt.
However, a deal could not be reached due to the opposition of oil and gas producing countries.
“We have done great strides to increase climate solutions but emissions are still rising… We haven’t done enough to tackle the primary cause of climate change, burning fossil fuels,” she added.
“Science says we need to end new exploration of fossil fuels, we need to start phasing them down so we can phase them out.”
Shifting away from fossil fuels also gives “a competitive advantage, reduces risks and creates customers loyalty and engagement” for businesses, she added.
“Accelerating permitting” for renewable energy sources and “using less energy in manufacturing” are also among the key steps that must be taken, amid a need to triple renewable power capacity within the decade, she said.
EU to push for phase out
EU Member States are planning to push for a global phase-out of fossil fuels at COP 28, according to media reports.
“The shift towards a climate neutral economy will require the global phase-out of [unabated] fossil fuels and a peak in their consumption already in the near term,” a draft of the EU’s position, seen by Reuters, said.
The energy sector should be largely free of fossil fuels “well ahead of 2050” thanks to cost-effective, CO2-free energy sources already available, it said.
A G20 meeting in India in July failed to agree a phase-out date for fossil fuels amid opposition by some producing countries.
G20 countries are responsible for three quarters of global emissions. In 2022, they directed over $1 trillion in subsidies towards fossil fuels, according to a report by the International Institute for Sustainable Development (IISD).
While much of this was support for consumers, around one third ($440 billion) was driving investment in new fossil fuel production, it said.
Energy efficiency is the “largest, fastest cheapest source of greenhouse gas emission reduction and energy security,” Jonathan Maxwell, CEO of UK independent climate and sustainability investment firm, Sustainable Development Capital, said.
“If you want to keep 60% of oil and gas in the ground, don’t waste most of it” he said, adding that waste occurred throughout the whole supply chain.
In addition to that, buildings energy and half of the food globally, most of which is dependent on fossil fuels, are wasted.
“We’ve got 7 years of carbon budget left…The good news is (efficiency) is the biggest opportunity” to slash emissions.
Financial markets “deeply intertwined” with oil and gas
Meanwhile, a moratorium on new oil and gas IPOs is needed to address the ongoing linkage between financial markets and the oil and gas industry, said Mark Campanale, founder and executive chairman of independent financial think tank Carbon Tracker Initiative.
The industrial system – energy, transport and manufacturing – was built on fossil fuels, with the financial system supporting that, he argued.
The two have a “deeply intertwined relationship” with banks struggling to wean themselves off it, he said.
To achieve decarbonisation targets “you have to make capital markets…Fit for purpose, starting with London,” he added.
“We can make the transition, we nee to make finance aligned with goals…Emissions are rising (but) funding is still in its heyday.”
Initial public offerings (IPOs) of energy companies are set to rebound in 2023 amid a higher return environment and after the slowdown of the past years.
One of the biggest IPOs in 2022 on the London market involved North Sea upstream operator Ithaca Energy. The company owns a majority stake in the controversial Cambo oil and gas field, the second largest undeveloped oil and gas field in the UK.