Daily Briefing |
TODAY'S CLIMATE AND ENERGY HEADLINES
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Today's climate and energy headlines:
- UK: Boris Johnson to announce multi-billion pound support for cost of living crisis ‘within days’
- Energy firms warn against extending windfall tax to renewables
- China, US climate envoys meet in Davos amid tensions, signals room for cooperation
- EU’s Russian oil ban hangs by a thread as mood darkens in Brussels
- UK finance ‘faces £340bn in losses’ without action on climate change
- NOAA confirms US headed for up to 21 named storms in another intense hurricane year
- Germany: In an emergency, more electricity from coal
- Three arrested after climate protesters take over Shell shareholder meeting
- HSBC saga reveals how much climate and financial risk are misunderstood
- Do southern hemisphere tree rings record past volcanic events? A case study from New Zealand
In the next few days, UK prime minister Boris Johnson is expected to announce a package worth about £10bn to help households with the cost of living, the Times reports. The newspaper notes that 70-80% of the funding is expected to be targeted at the poorest households, with increases in the warm homes discount and winter fuel allowance expected, as well as cuts to council tax bills. It adds that the package will be partially funded by an announcement of a windfall tax on the excess profits of oil-and-gas companies that is likely to come into effect in the autumn. Notably, the story says that the windfall tax is “unlikely to be extended to electricity generators”, including renewable energy companies – something that has been floated in recent days (see below). According to the Independent, ministers believe that publication of the warm homes discount extension soon after the release of the “Partygate” report into lockdown parties in No 10 “could help cast a more positive light on the government’s activities”. It cites a Downing Street insider who said the announcement was being held back to give the prime minister a “soft landing”.
This all comes against the backdrop of comments by Jonathan Brearley – chief executive of energy regulator Ofgem – who according to Bloomberg said the energy price cap is likely to reach a record £2,800 in October. The news website says this will send about 12m households into fuel poverty “just as heating demand starts to pick up with the cold weather setting in”. This news, which appears in many outlets and across a range of front pages, means a typical household energy bill is set to rise by about £800 a year, BBC News reports. Sky News notes that Brearley made these remarks to the Business, Energy and Industrial Strategy Committee, attributed to rise to the impact of the war in Ukraine, describing it as “genuinely a once-in-a-generation event not seen since the oil crisis of the 1970s”.
Meanwhile, the Times reports that more than 50,000 of the poorest households “face long waits for home energy improvements” because of delays approving the energy company obligation scheme, which is meant to support such households in making energy efficiency improvements. The story is based on research by thintank the Energy and Climate Intelligence Unit.
There is extensive coverage of the response to the idea that the windfall tax could cover clean energy sources, as well as the oil-and-gas industry. Energy companies warned that an attempt to extend a windfall tax to renewable energy would “threaten the government’s entire energy strategy”, according to BBC News. It cites “industry sources” who say the move, which was reportedly being considered by the Treasury, would harm investor confidence ahead of key auctions for licences to develop new wind-and-solar projects. The latest development came after months of back-and-forth over the idea of a windfall levy, which was initially proposed as a way to tax the large additional profits made by oil-and-gas companies due to soaring gas prices. Meanwhile, the Press Association reports that Deirdre Michie, chief executive of oil and gas industry group Offshore Energies UK, has warned that the tax could harm the nation’s net-zero aims. ITV News political editor Robert Peston reports: “I understand the Treasury has ruled out broadening the windfall tax to the surplus profits of those generating electricity from wind farms or nuclear plants.”
In related news, according to the Financial Times shares in some of the UK’s biggest power companies “fell sharply” on Tuesday over concerns that the government would hit electricity generators as well as oil-and-gas companies with a windfall tax. The Times also has the story, noting that £2.5bn was wiped off the combined value of SSE, Drax and Centrica “as companies across the sector scrambled to lobby the government against imposing such a levy”. Alistair Osborne, the Times‘ chief business commentator, writes in his column that is is “hard to think of anything more counterproductive” than a windfall tax on green energy producers. Bryce Elder, Financial Times UK equities reporter, writes in the FT’s Alphaville column that “the view among analysts is unanimous that a proposed windfall tax on electricity generators would either be underpowered or unworkable and counterproductive”.
The Guardian reports that UK consumers will face higher energy bills than necessary next winter because of a government decision to limit the construction of new renewable energy generation, which has been described as a “missed opportunity” by the renewables industry. A Twitter thread from Carbon Brief’s Simon Evans includes analysis showing that the government’s decision: “passed up the chance to secure more cheap onshore wind and solar, which could have saved up to £1.4bn on annual bills”.
Separately, a piece in DeSmog covers a new report by thinktank InfluenceMap that examines how a “PR and lobbying blitz from fossil fuel companies in the early days of the Russian invasion that aimed at benefiting oil-and-gas interests”.
Xie Zhenhua, China’s special climate envoy, and his US counterpart John Kerry have met for a joint discussion at the Davos meeting of the World Economic Forum in Switzerland, according to the Global Times. The discussion was titled “safeguarding our planet and people”, and according to the news sources Chinese experts said that it highlighted the room for climate cooperation amid bilateral tensions, “while warning that the US’ inconsistency in global climate cooperation and tendency to politicise the issue call for vigilance”.
Caixin reports in an “exclusive” that the Chinese delegation, led by special climate envoy Xie Zhenhua, met with Fatih Birol – the executive director of the International Energy Agency – on Monday at the World Economic Forum in Davos, where they discussed the global energy transition and China’s green “push”. The Shanghai-based outlet writes that “Xie discussed China’s efforts and policy moves to respond to global climate change and promote renewable energy”, according to a person “in the Chinese delegation”. It was agreed that the IEA and China should “enhance communication and cooperation to jointly promote efforts to address climate change”, the piece notes. It adds that Xie is “expected to meet with his U.S. counterpart John Kerry” on Tuesday. Additionally, in an interview with the state news agency Xinhua, the IEA chief stressed China’s “leadership” in renewables. He is reported saying: “60% of the growth, globally, of solar energy came only from China…more than half of the electric cars produced in the world come from China today.”
Meanwhile, Bloomberg covers a new report by Global Energy Monitor, a US non-profit organisation, which says that China’s plans for “169 new and expanded coal projects” could “boost” global methane emissions from mines and “jeopardise” its own short-term climate targets. The report said that the projects under development would “nearly double China’s original targeted increase in domestic output”, the piece notes. The outlet adds that Chinese president Xi Jinping is “deepening China’s dependence on coal” as a way to mitigate the impact of “soaring energy prices and geopolitical instability created by Russia’s invasion of Ukraine”.
Separately, the Central Committee of the Communist Party of China (CPC) – the party’s highest organ of authority – and the State Council – the country’s state administrative agency – on Monday issued a plan that mentions the implementation of clean energy construction projects in China’s rural areas, Yicai reports. The plan asks to strengthen and enhance the electricity security in rural areas, as well as promote the construction of urban and rural electricity distribution networks, the Shanghai-based financial outlet notes. China Electric Power News – a state-run industry newspaper – also covers the plan.
Elsewhere, according to a Xinhua article titled, “China to take steps to stabilise economic activity, bring economy back to normal track”, energy security was stressed at a recent State Council’s executive meeting chaired by premier Li Keqiang. “Local governments must fulfil their responsibilities for maintaining coal output. The policy for approving higher production capacity of coal mines will be re-calibrated and procedures for designating coal mines especially important for energy supply will be accelerated”, the article notes, adding that “a number of new hydro-power and coal-fired power projects will start this year”.
EU countries are “desperately searching for a way” to salvage their plan to ban Russian oil imports, Politico reports, but “hopes of a breakthrough” are dwindling before a leaders’ gathering in Brussels on 30 May. According to the story, diplomats are working behind the scenes to “stop the package of sanctions falling apart completely as they confront the possibility that they may never reach a deal on banning Russian oil”, even as European Commission president Ursula von der Leyen told Politico on Tuesday that she did not want to raise “false expectations” that a deal would be agreed at the leaders’ summit.
Meanwhile, the Financial Times reports that Hungary’s prime minister Viktor Orbán has “ruled out” discussing the EU’s proposed oil embargo of Russia. In a letter seen by the FT, Orbán has written to EU Council’s president Charles Michel, saying that “[d]iscussing the sanctions package at the level of leaders in the absence of a consensus would be counterproductive”. The EU commission’s €210bn REPowerEU plan to “ditch” Russian fossil fuels by 2027 have failed to address Hungary’s concerns, Orbán wrote, because there “are no [funding] envelopes for the most concerned landlocked member states”. (For more on the REPowerEU strategy, see Carbon Brief‘s in-depth Q&A.)
At the World Economic Forum in Davos, von der Leyen remarked that “we should not replace old dependencies with new ones”, just as the US and China reported progress on a deal struck at COP26 in Glasgow for both countries to work toward quickly reducing greenhouse gas emissions, the Associated Press reports. (See entry above about the discussion between US climate envoy John Kerry and his Chinese counterpart Xie Zhenhua.) Reuters reports on other comments at Davos by Kerry. He said: “If we make the right choices here we can win all of these battles: we can do what we need to do with respect to Ukraine, we can do what we need to do with respect to the climate crisis.” Kerry also cautioning against any backsliding while pointing to a “6% rise in emissions and 9% increase in the use of coal”, the newswire reports. He added: “We cannot be seduced into believing that this suddenly is an open door to going back and doing what we were doing which created the crisis in the first place”.
The Bank of England has warned that UK banks and insurers will end up taking on nearly £340bn worth of climate-related losses by 2050, unless action is taken to address climate change, the Guardian reports. The numbers come from the Bank’s first climate stress tests on seven of the UK’s largest lenders, which found that without early action companies would suffer a surge in loan and mortgage defaults, investment losses and climate-related lawsuits. The Financial Times also covers the news, noting that banks and insurers that fail to manage the risks associated with climate change could suffer a 10-15% hit to their annual profits. The Daily Telegraph has a different take on the story, noting that the Bank has “came under fire from economists and MPs” who have urged it to focus on the basics of monetary economics” instead of climate change. It is worth noting that the only MP actually quoted in the piece is Steve Baker, a backbencher who is linked to climate sceptic groups.
In its coverage, BusinessGreen says it is “hard not to interpret it as a direct riposte” to the news of the HSBC executive who last week downplayed the threat posed by climate risks. DeSmog has a piece on HSBC executive Stuart Kirk’s remarks, noting that the bank has been accused of double standards after suspending him while “continuing to plough billions of pounds into fossil fuels”.
The Atlantic Ocean is set to see another above-average hurricane season this year, according to the US National Oceanic and Atmospheric Administration (NOAA), the Independent reports. The agency predicts there will be up to 21 named storms, with six to 10 of them becoming hurricanes, where wind speeds reach over 199 kph (74 mph), marking the seventh year in a row with a higher-than-average hurricane season, it continues. BBC News notes that this will also be the second consecutive winter when weather patterns are heavily influenced by the natural phenomenon known as La Niña. It adds that forecasters suggest there is a 70% chance of at least one major hurricane – category 3 or higher – hitting the continental US coastline.
Tagesschau reports that the German federal government is planning to throttle gas-fired power generation if Russian gas supply stops, with more coal-fired power plants to be kept in reserve for this purpose. The outlet adds that “hard coal and lignite power plants that are already in reserve should be able to be kept operational for longer and ramped up more quickly”. Frankfurter Allgemeine Zeitung adds that “the latest developments are a serious setback for Economics minister Robert Habeck (Greens) and his party”, which consider coal-fired power plants as “dirty slingshots”. The outlet notes that a draft law called the Replacement Power Plants Availability Act will be voted on by the federal ministries this Wednesday. It adds that bill’s goal is “to temporarily take gas power plants off the grid in the event of a gas shortage in order to use the gas saved in this way for purposes where it cannot be replaced, for example, in industry or for heat generation”. Time also covers a story, noting that according to the decree “we [German government] must complete the phase-out of coal in Germany by 2030. This is more important than ever in the current crisis…On the way there, we have to strengthen our precautions and keep coal-fired power plants in the reserves for longer in the short term”. The Daily Telegraph also has the story.
Meanwhile, RedaktionsNetzwerk Deutschland reports that German foreign minister Annalena Baerbock “wants to promote cooperation within the Baltic Sea region in the production of offshore wind energy”. It details that the federal government will use the forthcoming German presidency of the Council of the Baltic Sea States for this purpose. The article continues that Baerbock explained that “electricity from wind and other renewable energy sources, one frees oneself from Russian energy imports and combats global warming”.
Elsewhere, Politico reports that “the philanthropist George Soros laid the blame for Europe’s Russian gas addiction squarely on ex-German Chancellor Angela Merkel’s “special deals” with Moscow. In a speech on the sidelines of the World Economic Forum in Davos, Soros said: “She had made special deals with Russia for the supply of gas and made China Germany’s largest export market”.
Finally, Der Tagesspiegel reports that if all people consumed as much as the population in the EU and OECD countries, 3.3 Earths would be necessary to support them, conclude the scientists from the Unicef research centre Innocenti. It adds that in Germany the consumption of resources is too high: “2.9 Earths are needed for the way of life of the Germans.”
Shell’s annual shareholder meeting was disrupted when demonstrators took over proceedings, with several gluing themselves to chairs and forcing the event to pause for two hours, according to the Press Association. Three people were arrested in the protest, which focused on the oil company profiting from the products that contribute to climate change, the news service states. Bloomberg says that protesters chanted “Shell must fall”, accusing the company of being responsible for environmental damage and human rights violations. According to the Independent the protesters came from different groups, including Money Rebellion, Extinction Rebellion, Christian Climate Action, Fossil-Free London, Shell Must Fall and Stop Ecocide. The Financial Times notes that the protesters, who all had to be shareholders in the firm to gain access, sang “we will stop you” to the tune of the Queen’s 1977 hit We Will Rock You. It adds that the disruption came as shareholders at Europe’s largest oil-and-gas prepared to vote on its energy transition plan to become a net-zero emissions business by 2050.
Meanwhile, the Guardian reports that the high court in the US state of Massachusetts has ruled that the nation’s largest oil company, ExxonMobil, must face a trial over accusations that it lied about climate change and covered up the fossil fuel industry’s role. The piece says that Exxon stands accused of breaking the state’s consumer protection laws and deceiving investors with a “decades-long cover-up of what it knew about the impact on the climate of burning fossil fuels”. Associated Press says that ExxonMobil had attempted to dismiss the lawsuit, which was filed in 2019 by Massachusetts attorney general Maura Healey and compares the company’s actions to “the tobacco industry’s long denial campaign about the dangerous effects of cigarettes”. The Boston Globe also has the story.
Finally a piece in the Conversation states that some climate activists are likely to deploy increasingly radical tactics in the coming years, adding that “history shows that may be a good thing for the wider movement”.
Financial Times columnist Pilita Clark writes about the furore around the suspended HSBC banker and global head of responsible investing Stuart Kirk who last week downplayed the risk posed by climate change. Clark says that unintentionally he has “done the world of green finance a tremendous service. He has exposed widespread, muddled thinking about a central aspect of climate change: financial risk”. She lists some of the potential consequences of rising global temperatures such as heatwaves, floods and drought, then continues: “Kirk thinks such risks are too distant to imperil big banks such as HSBC, which he said had an average loan length of just six years. But his broader objection is rooted in a belief that humans are likely to withstand whatever global warming throws at them.” Clark says that ultimately “none of us know” exactly how bad the impacts will be, but says “it is impossible for Kirk to know that the financial risks are as small as he claims”. She concludes: “Addressing climate risk has nothing to do with hyperbole, greenwashing or nuttiness. It is, quite simply, needed.”
Columnist Paul Krugman writing in the New York Times also reflects on the events surrounding Kirk. He writes: “There are several forms of climate denialism. Kirk simply offered one version – still unforgivable from someone who’s supposed to be a risk manager – which goes, ‘Hey, what’s the big deal if the planet gets a degree or two warmer?’.”. Krugman says this is misguided, stating “thanks to human ingenuity, we’ll cope – until we can’t, because the scope of the crisis will exceed even modern society’s ability to adapt”.
A Daily Telegraph editorial takes a different approach, bemoaning “cowardly corporations [that] have been captured by a form of group-think” in its headline. “The suspension of a senior executive at HSBC for comments he made about climate change is the latest example of corporate cowardice in the face of pressure group criticism,” it declares.
“Much of our knowledge about the impacts of volcanic eruptions on climate comes from proxy records,” a new study says, but “little is known about their impact on the low to mid-latitudes of the southern hemisphere”. Analysing annual tree-ring series from eight New Zealand species, the researchers show that “most species are reliable recorders of volcanic cooling”. Developing several tree-ring-based summer temperature reconstructions, the researchers find that they are “remarkably consistent with studies based on instrumental temperature and the ensemble mean response of climate models, demonstrating that New Zealand ring widths are reliable indicators of regional volcanic climate response”. (For more on tree rings and other type of proxy data, see Carbon Brief’s interactive.)