The Great Climate Backslide: How Governments Are Regressing Worldwide

an open coal mine in India - ENB
An open coal mine in India’s Jharkhand state. India is second only to China in coal use.Photographer: Xavieer Galiana/AFP/Getty Images

At the conclusion of COP26 in November, summit chairman Alok Sharma praised the “heroic efforts” by nations showing they can rise above their differences and unite to tackle climate change, an outcome he said “the world had come to doubt.”

Turns out the world was right to be skeptical.

Three months on, a toxic combination of political intransigence, an energy crisis and pandemic-driven economic realities has cast doubt on the progress made in Scotland. If 2021 was marked by optimism that the biggest polluters were finally willing to set ambitious net-zero targets, 2022 already threatens to be the year of global backsliding.

Rising Emissions -ENB
Source: Global Carbon Project

From the U.S. to China, in Europe, India and Japan, fossil fuels are staging a comeback, clean energy stocks are taking a hammering, and the prospects for speeding the transition to renewable sources of power are looking grim. That’s even as renewable energy costs have fallen rapidly and investment in clean technologies is soaring, while voters across the world demand stronger action.

“We’re going to have a multi-year stress test of political will to impose costly transition policies,” said Bob McNally, president of Washington-based consultant Rapidan Energy Group and a former White House official. He accused governments of showing “Potemkin support” for the necessary policy steps, a sham display of action that’s being exposed by the energy crisis.

Emissions rose last year, when they needed to decline if the world is to stay on track to hit climate goals. National interest was always going to run up against the kind of painful measures scientists agree are needed to meet the goal of limiting global warming to 1.5 degrees Celsius relative to pre-industrial levels. But even this early in the year, the headwinds to aggressive climate action are ferocious.

relates to The Great Climate Backslide: How Governments Are Regressing Worldwide
An Exxon Mobil site in the Permian Basin, where it plans to boost output by 25%.
Source: Businesswire

Oil is on a roll as the world economy picks up from its pandemic-induced swoon, nearing $100 a barrel just two years after the price collapsed. That’s swelling the coffers — and influence — of fossil fuel giants like Saudi Arabia and Russia, while reinvigorating an industry that had been shifting its focus to clean energies. Exxon Mobil Corp. has just given a vote of confidence in the U.S. shale industry with plans to boost output by 25% this year in the Permian Basin.

And with gas prices hitting records, utilities have been turning to coal instead, despite it producing about twice the carbon, according to Kit Konolige, an analyst at Bloomberg Intelligence.

Even the U.K. host of COP26 risks regressing, with Prime Minister Boris Johnson on the ropes and some members of his Conservative Party pushing back against his green agenda.

COP26 Day 14 - Negotiations Run into Extra Time
John Kerry, right, and Alok Sharma during the COP26 climate summit in Glasgow, in November 2021.
Photographer: Jeff J Mitchell/Getty Images

Little wonder that U.S. climate envoy John Kerry has seemed increasingly glum, repeatedly warning that the world is falling behind. “We’re in trouble,” Kerry said during a Chamber of Commerce event last month. “We’re not on a good track.”

For many, the highlight of COP26 was the surprise agreement by Kerry’s team and their Chinese counterparts to look beyond U.S.-China rivalry and jointly raise climate efforts this decade.

That deal still stands, but both nations have since backtracked in their respective actions.

The U.S. was the world’s top LNG exporter in January, taking the No. 1 spot from Qatar for a second month running. Coal consumption has surged, while production climbed 8% in 2021 after years of declines. It’s expected to inch upward through 2023, according to the Energy Information Administration.

In Washington, President Joe Biden is struggling to get his signature “Build Back Better” bill and its core climate measures through the Senate. An initial proposal, which would have devoted some $555 billion to climate and clean energy, has collapsed amid objections from all of the chamber’s Republicans and a key Democrat, Joe Manchin of coal- and gas-rich West Virginia.

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Joe Biden is under pressure to confront rising inflation, and especially the price of gasoline.
Photographer: Brendan Smialowski/AFP/Getty Images

Those climate provisions — including some $355 billion in multiyear tax credits for hydrogen, electric vehicles and renewables — are essential to fulfilling the U.S. Paris Agreement commitment to slash greenhouse gas emissions 50% to 52% by 2030. Without them, that pledge is in jeopardy, an analysis by the Rhodium Group found.

Rather than the leadership role that Biden has claimed, that makes the U.S. look like a climate straggler. Enacting the key provisions is needed “to empower us diplomatically,” Kerry acknowledged in a January interview. “Credibility will be in a hard place if we don’t.”

Democratic lawmakers are still hoping to revive the legislation, though there’s little time with November’s midterm elections looming large. And right now Biden is under pressure to confront rising inflation and especially gasoline prices that could weigh on his chances of retaining control of Congress. He’s responded by appealing to OPEC+ producers to boost output, asking domestic oil companies to drill more and rallying nations to join the U.S. in a coordinated release of emergency crude stockpiles.

off track - new policies
Source: Rhodium Group

Japan’s new prime minister, Fumio Kishida, is feeling similar pressure. Last month, in an effort to keep a lid on prices, his government announced subsidies for oil refiners worth some 3 U.S. cents per liter of gasoline produced. This week, it said it was considering going further to mitigate the impact of rising oil prices amid reports it may triple the subsidy rate.

All of which looks like a free pass to China, the world’s biggest emitter.

In several recent high-level meetings, top Chinese officials have stressed energy security alongside carbon reduction efforts. As the People’s Daily, a Chinese Communist Party mouthpiece, said in a recent commentary: “The rice bowl of energy must be held in one’s own hand.”

Japan’s new prime minister, Fumio Kishida, is feeling similar pressure. Last month, in an effort to keep a lid on prices, his government announced subsidies for oil refiners worth some 3 U.S. cents per liter of gasoline produced. This week, it said it was considering going further to mitigate the impact of rising oil prices amid reports it may triple the subsidy rate.

All of which looks like a free pass to China, the world’s biggest emitter.

In several recent high-level meetings, top Chinese officials have stressed energy security alongside carbon reduction efforts. As the People’s Daily, a Chinese Communist Party mouthpiece, said in an recent commentary: “The rice bowl of energy must be held in one’s own hand.”

 

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About Stu Turley 2062 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience in implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor in this space. Stuart has led the “Total Corporate Digital Integration” platform at Sandstone and works with Sandstone clients to help integrate all aspects of modern digital business. He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage and is the Co-Host of the energy news video and Podcast Energy News Beat. Stuart is on Board Member of ASN Productions, DI Communities Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.