By Gareth Vaughan
Following COP28's call for a transition away from fossil fuels, a key test will be how quickly a rethink on the market capitalisation of oil and gas companies starts emerging, says Rod Oram.
Fresh from attending COP28 in Dubai, Newsroom journalist Oram spoke to interest.co.nz for the latest episode of our Of Interest podcast.
COP28, or the 28th meeting of the Conference of the Parties to the United Nations Framework Convention on Climate Change, was overseen by its president Sultan Ahmed al-Jabar, managing director of Abu Dhabi National Oil Company, or ADNOC, the United Arab Emirates' state owned oil company.
Fossil fuels did, however, make it into the final agreement in a substantial way for the first time at a COP, Oram says. Whilst it's "weaker and slower and less specific [language] than is actually required," it's still significant progress.
The "UAE Consensus" text agreed by 198 countries also includes a global renewables and energy efficiency pledge.
"That does start to send a signal. Not only to governments as they prepare their next commitments under the Paris Agreement, by 2025 countries have to come back with an improved commitment, but it sends a powerful signal to them that they must be working more on fossil fuel reductions in consumption and production, and it also starts to send a stronger message to financial markets," says Oram.
The Paris Agreement is a legally binding international treaty on climate change.
"I think the key test in financial markets, both of that language on fossil fuels but then [also] on this language of a big increase in renewables, is how quickly we start to see a reappraisal of the market cap of oil and gas companies. And how quickly we'll see an appraisal that says 'oh, maybe they aren't going to be producing as much as we thought, say over the next 10 years, because people won't be burning as much because governments have started to shift, consumers have started to shift, renewables are escalating at a rapid pace.' And that to me is going to be the acid test as how soon we start to see that revaluation in the stock market of oil and gas companies," Oram says.
In terms of the annual COP meetings, Oram points out they require consensus across all 198 countries so it's not the place for really big breakthroughs. Instead COP, once a year, provides "a really good scorecard about what the state of play is on all of these issues."
"This isn't anymore just about negotiations between government officials and politicians. This is very much an all-of-society meeting, and that's why the numbers [of delegates attending] were so big this year."
In the podcast Oram also talks about the New Zealand presence at COP28, NZ winning fossil of the day, the first official recognition of and finance mechanism for helping developing countries cope with economic losses and physical damage from storms, droughts, and other climate impacts, the first time there has been a COP declaration on agriculture, and the "deeply, deeply, deeply fascinating" experience of attending a COP in person. Oram also addresses criticism of people flying across the world to discuss climate change, and his hopes for COP29 next year in Azerbaijan.
*You can find all episodes of the Of Interest podcast here.
28 Comments
Mate you're dreaming
Fossil fuel companies are likely to remain a very good investment for a very long time - shortage of supply and increasing or even static demand will ensure just that - Economics 101 Rod
Also likely to have better returns than solar panel or wind turbine manufacturers regardless of COP 28 decisions
- Had Germany spent $580 billion on nuclear instead of renewables, and the fossil plant upgrades and grid expansions they require, it would have had enough energy to both replace all fossil fuels and biomass in its electricity sector and replace all of the petroleum it uses for cars and light trucks.
These scenarios for Germany were chosen to be similar to the scale, speed, and price of nuclear expansion in France from 1980 to 2000.
https://www.forbes.com/sites/michaelshellenberger/2018/09/11/had-they-b…
https://environmentalprogress.org/big-news/2018/9/11/california-and-ger…
Must listen! Thanks for doing the podcast
Deeply, deeply fascinating is an interesting comment. Yes, I thought - circuses are deeply fascinating - but this is a real world one gone truly out-of-control. The sheer numbers attending is proof of that. And I found our new Minister's rah-rah-rah comments about what needs to be done to prevent this "catastrophic" potential warming quite hilarious. He makes the circus analogy so much more apt given his government is canning actual initiatives to reduce our FF use.
These COPs have turned into a opportunity for NGOs and other climate warriors to return home with what they promote as the 'spoils of war' - i.e., great victories over the 'bad guy' governments of the world.
COP - it's like an annual pilgrimage to a black comedy/exercise in greenwashing. Their hearts might be in the right place, but their individual actions are not.
And the Paris Agreement is not legally binding in the way the simple line in the article implies;
https://www.weforum.org/agenda/2021/11/paris-climate-agreement-legally-binding/
..
Legal form – Like the Kyoto Protocol and unlike the Copenhagen Accord, the Paris Agreement is a treaty within the meaning of international law, but not all its provisions establish legal obligations. Most importantly, parties do not have an obligation to achieve their nationally determined contributions (NDCs) to address climate change – thus, in that respect, NDCs are not legally binding.
The detail is in the fine print ;-)
https://legal.un.org/avl/ha/pa/pa.html#:~:text=Most%20importantly%2C%20….
And no doubt Rod Oram will be there too in yet another petrostate, spouting more drivel. He will tell us-as he never tires of doing-just how backward our farmers are and how wonderful companies like Nestle are. I will admit that they are past masters at Greenwashing.
What i find curious, among other things, is that as a financial journalist, he never puts a price on the very substantial emission reductions he says we must make Now. Like Rod Carr, the Climate Commissioner, he will wax eloquent on the long-term benefits of a zero carbon economy, but nothing on how rocky the path might be to get there.
As PDK would point out, the role of energy is just not in his 'analysis', which alone makes it worthless Now, climate change is real and as and when our customers demand it, our emissions must fall, but Kiwis need to be told what the economic costs might be. He will tell us that our emissions per person are high-totally irrelevant- but not that at under 0.20% of global emissions, we could shut down our entire economy tomorrow and the atmosphere would not notice. Meanwhile, the big players; the US, China, India, Russia S. Arabia and others, will do exactly what they see as suits their own interests-and that means using as much fossil fuel including coal, as they see fit.
Yep, hopefully this wokefest will slowly drift away. They have not agreed to much of anything like normal. What they did do was make a non-binding agreement to transition away from fossil fuels where there is a viable replacement, whilst also accepting that fossil fuels will be around for the foreseeable future and also doing it so that it does not impact on their populations. So, they have effectively agreed to do nothing.
Why must our emissions fall? We are already a net sink to the tune of 38 million tonnes of CO2 per annum.
Time to kick back and soak up all the predicted net zero trade deals.
"New Zealand was a net CO2 sink of −38.6 ± 13.4 TgC yr−1."
https://agupubs.onlinelibrary.wiley.com/cms/asset/6d821dff-05c7-4607-ba…
https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2023GB007845
I asked this very question only last week. If I interpret this correctly, Australia and NZ have been largely carbon neutral over the past decade?
As hard as I try, all roads point towards Net Zero as an economic rather than environmental initiative. That also explains why it's covered in the financial press.
You don't try hard, you don't listen when the answer doesn't suit you, and you interpret incorrectly.
Apart from that.... :)
Just go to a highway, watch the traffic. All that is imported carbon being burned. The bitumen represents carbon extracted and on the way to joining a couple of oxygen molecules, too. As does all the adjacent farming; 50% of food is via Haber-Bosch (ex fossil gas).
Yet you reckon a modified biosphere is somehow absorbing the stuff we are adding from underground, magically with no chemical alteration?
Anyone thinking that, is an oxymoron (they ain't thinking).
Could I suggest reading the paper before commenting? Make it a NY resolution!
"...(a) all major natural and anthropogenic carbon fluxes; (b) the complete components of the land-to-ocean aquatic continuum (LOAC) system (i.e., carbon fluxes from river and lakes, reservoirs, estuaries, mangroves, salt marshes, and seagrasses, and continental shelves); and (c) an assessment of the net CO2 balance for Australia and New Zealand based on global and regional inverse CO2-flux estimates, which rely on satellite-based CO2 remote sensing and in situ measurements.
In addition to the territorial carbon budget quantified using the bottom-up and top-down approaches, we estimated non-territorial emissions, which are the emissions associated with the net trade of fossil fuels, crop, wood, and livestock to and from other countries. Non-territorial emissions from these products occur in the country where they are consumed, and not in Australasia where they are extracted or produced and subsequently exported outside the country. These emissions are not considered under the UNFCCC reporting guidelines, which require countries to report on their territorial anthropogenic emissions only. However, non-territorial emission estimates provide insights into the territorial origins of carbon emitted elsewhere and support exploring additional climate policy options to reduce global anthropogenic emissions."
UN Food Agency’s chief economist Maximo Torero explained that livestock production should be intensified in nations with a record of efficient production, such as New Zealand and the Netherlands, to help feed the globe. Mr. Torero was concerned that cuts to production in developed nations would likely push production to other areas of the world where efficiency was poorer and emissions were likely to be greater per kilo.
"Food Systems’ Road Map to 1.5C," released at the COP28 summit in Dubai.
Looking at the actual text, the clause references on fossil fuels make some progress, but are so watered down and pushed back in time it would be incredibly difficult to hold a party accountable to them within a meaningful timeframe
https://unfccc.int/sites/default/files/resource/cma2023_L17_adv.pdf
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