How energy companies are committing to tackle climate change

This article first appeared on The Financial Times. 

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Chief executives from 10 of the world’s largest oil and gas companies have pledged their support for reaching a climate change agreement at an upcoming conference in Paris aimed at keeping the rise in global temperature below 2 degrees Celsius.

The companies, representing a fifth of all oil and gas production worldwide, offered few concrete figures or timelines but said they wanted to invest in natural gas over coal and play a bigger role in renewable energy production.

They also signed up to end routine gas flaring and to invest in carbon capture storage, which in theory offers a way for fossil fuel companies to keep burning coal or gas in power stations without affecting the climate.

“Over the coming years we will collectively strengthen our actions and investments to contribute to reducing the greenhouse gas intensity of the global energy mix,” said a combined statement from BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total on Friday.

The commitment comes six weeks before delegates from nearly 200 countries are due to meet in Paris to finalise the first new global climate change accord in 18 years. The UN agreement is supposed to ensure governments cut planet-warming greenhouse gas pollution that is mostly produced by burning coal, oil and gas.

But the oil groups’ promises were met with cynicism by environmental groups, who said energy companies were attempting to soften their image by supporting the Paris conference but were failing to offer concrete change.

“To have credibility any initiative such as this must come up with more than warm words. It must set out concrete and quantitative commitments to take action,” said Anthony Hobley, chief executive of the Carbon Tracker Initiative.

“Anything less should be seen as nothing more than a cynical attempt to deflect the momentum for action, transparency and focus on the industry.”

Laurence Tubiana, France’s climate envoy for the UN conference in Paris, welcomed the efforts made by the energy companies but said a lot more needed to be done because the oil and gas industry’s current business models had to change if risky levels of global warming are to be prevented.

“It’s positive but the key question is still open about what kind of diversification of their business model they have in mind in the long term and there are big political issues like new resources and new reserves,” she told the FT.

Charlie Kronick, a Greenpeace activist, also attacked the energy industry’s business model.

“The oil companies behind this announcement have spent years lobbying to undermine effective climate action, each and every one of them has a business plan that would lead to dangerous global temperature rises. The world should thank them for their offer of advice but politely turn it down.”

A report from London-based group InfluenceMap, published on Friday, accused many in the energy industry of supporting climate change initiatives in public while at the same time supporting lobby groups that attempt to water them down.

It hit out at French oil major Total for having executive Jean-Michel Lavergne on the board of the American Petroleum Institute, which has criticised the Paris climate summit as being driven by a “narrow political ideology”.

It also criticised Shell for having an executive on the board of CEFIC, the European chemicals trade body, which has spoken out against certain changes to strengthen the region’s emissions trading scheme this year.

The companies said on Friday, however, that they could be part of a global solution agreed in Paris in December.

The 10 groups said current projections for global greenhouse gas emissions are “not consistent” with preventing a rise in average temperatures of more than 2 degrees Celsius from pre-industrial times.

The groups also said they wanted to improve the end-use efficiency of their fuels and other products and “work with manufacturers and consumers to improve the efficiency of road vehicles”.

This move follows a decision in May by half a dozen European energy groups to band together for the first time to ask the UN to let them help devise a plan to stop global warming.

The six chief executives published a letter in the Financial Times in which they sought direct talks with governments on creating a global carbon pricing system, although their US counterparts did not take part.

Chevron later criticised the initiative, its chief John Watson saying that putting a price on carbon emissions was unworkable.

This article first appeared on The Financial Times. Publication does not imply endorsement of views by the World Economic Forum.

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Author: The Financial Times covers, comments and analyses the latest UK and international business, finance, economic and political news.

Image: A chimney in an industrial area emits vapour. REUTERS/Tim Wimborne.