Increasingly, key economies are empowered by alternative energy sources: figures for the UK, for example, show that in 2018 more than half (51.8%) of all electricity came from renewable sources.
Yet, major oil and gas companies are still investing in extracting rich fossil fuel reserves from increasingly costly locations. Carbon Tracker, a financial thinktank, found that ExxonMobil, Chevron, Shell and BP each spent at least 30% of their investment in 2018 on projects that are “Inconsistent with climate targets”, and would be “deep out of the money in a low-carbon world”.
In fact, according to the report, leading oil and gas companies have invested $50bn (£40.6bn) in fossil fuel projects that undermine global efforts to avert a runaway climate crisis. This spending focused on high-cost plans to extract oil and gas from tar sands, deep-water fields and the Arctic despite the risks to the climate and shareholder returns.
Andrew Grant, the author of the report, said: “Every oil major is betting heavily against a 1.5C world and investing in projects that are contrary to the Paris goals.”
The study is the first to analyse individual projects to test whether they are compliant with a 1.5C world, and whether they would be financially sustainable in a low-carbon world.
It found that none of the largest listed oil and gas companies are making investment decisions that are in line with global climate goals, and risk wasting $2.2tn (£1.8tn) by 2030 if governments take a tougher stance on carbon emissions.
Last year, Shell said it would spend $13bn on a liquefied natural gas project in Canada and ExxonMobil agreed to invest $2.6bn in the Aspen project in Canada, the first greenfield oil sands project in five years.
The report completely contradicts the public claims of many oil executives who have said they support the Paris goals and who promised to invest in renewable energy projects.
Better news, however, is in a report from the UN Environment Programme: it has revealed that global investment in renewable energy projects over the last decade is on track to reach $2.6tn by the end of this year.
The investment boom has almost quadrupled the world’s total renewable energy capacity from 414GW at the end of 2009 to an expected total of 1,650GW by the end of this year.
Inger Andersen, the executive director of the UN Environment Programme, said: “Investing in renewable energy is investing in a sustainable and profitable future, as the last decade of incredible growth in renewables has shown.”
The report, co-authored by Bloomberg NEF, showed that solar power projects led the rise in renewables. Solar power attracted around half of the total investment in renewables over the last decade and has grown from 25GW at the beginning of 2010 to an expected 638GW by the close of 2019.
Jon Moore, the chief executive of BloombergNEF, said the sharp falls in the cost of electricity due to wind and solar usage over recent years has “transformed the choice facing policymakers”.
“These technologies were always low carbon and relatively quick to build. Now, in many countries around the world, either wind or solar is the cheapest option for electricity generation,” he said.
However, Inger Andersen warned that governments cannot be complacent about the growth of renewable energy if they hope to meet the UN’s climate targets.
“Global power sector emissions have risen about 10% over this period. It is clear that we need to rapidly step up the pace of the global switch to renewables if we are to meet international climate and development goals,” she said.
Renewable energy made up 12.9% of the world’s total electricity use last year, up from 11.6% the year before.
English business council original article