Daily Briefing

There is continuing extensive coverage of BP announcing details of its new net-zero strategy, including a handful of pieces by the Times’ energy editor Emily Gosden. In the first piece, she notes that the crash in oil prices triggered by coronavirus resulted in a record $17.7bn (£13.5bn) quarterly loss for the oil major and prompted it to both halve its dividend and accelerate its decarbonisation plans. Another piece notes that despite this apparent setback, BP shares have surged by 6.5% following its pledge to increase low-carbon investment tenfold over the next decade. According to the Times, the commitment – which fleshes out a previous plan for the company to hit “net zero” emissions by 2050 – includes significant investment in renewable electricity generation, equivalent to the entire capacity installed in the UK to date. It also includes plans for its hydrogen and electric vehicles infrastructure, including 70,000 charging points, up from 7,500 today. The Guardian says the company’s plan to cut fossil-fuel output by 40% by 2030 from 2019 levels “won guarded praise from climate emergency campaigners and a hefty share price bounce bounce”. This is echoed in another Times piece which states “as a barometer of how much BP has changed since [company CEO] Bernard Looney took charge, one need only look at the reaction of Greenpeace”. A quote by Mel Evans, a campaigner for the green NGO, reads: “BP has woken up to the immediate need to cut carbon emissions this decade”. Evans goes on to say that cutting oil-and-gas production and investing in renewable energy sets as example for “Shell and the rest of the oil industry”. BusinessGreen has a summary of “five things we learnt from BP’s net zero strategy”. There is also coverage from the New York Times and the Washington Post, with the latter, in particular, focusing on how the pressure of climate change has driven the oil company to adopt this new strategy. Bloomberg considers how other oil majors, including US companies Chevron and Exxon, will respond to BP’s move. “Under their current CEOs, neither US major has the will to follow the Europeans down the green path,” the piece says.

In more fossil-fuel news, Reuters reports that Germany’s energy regulator has announced a bidding date for its first auction in which station operators can compete for compensation to close 4,000 megawatts of hard coal-fired power. The announcement is part of the country’s new strategy to stop coal mining and generation by 2038. The Los Angeles Times reports that California is being sued over its climate policy by the nation’s biggest gas utility, which argues it has failed to promote natural gas as required by state law.

Finally, the Financial Times reports that more than 70 pension funds and investment managers representing $16tn in assets have designed a “net zero” framework “to help strip out damaging carbon emissions across their portfolios by 2050”.

A new report by the Global Wind Energy Council (GWEC) concludes that the world’s offshore wind capacity could grow eightfold over the next 10 years, “powered by a clean energy surge led by China”, according to the Guardian. The UK currently holds the top spot for the largest offshore wind market with 9.7GW in operation at the end of last year, with China on 6.8GW. However, the newspaper reports that by 2030 the Asian superpower is likely to pull ahead to 52GW, a fifth of the world’s offshore turbines, while the UK climbs to 40.3GW. reNews also has the story, noting that while Europe is currently the leading region for offshore wind, the Asia-Pacific region as a whole, as well as the US market, are “quickly picking up the pace and will be regions of significant growth in the next decade”.

In the UK, the Yorkshire Post has an opinion piece written by the nation’s energy and clean growth minister Kwasi Kwarteng, describing how the northern region of Hull and Humber will power a “green energy revolution” in the country. He cites offshore wind projects, as well as developments in the region on carbon capture and storage (CCS) and hydrogen. Meanwhile, Reuters reports that National Grid is planning a £10m project in Cumbria to test how hydrogen could be used to heat homes and cut emissions.

In more UK news, the Times reports the identity of the “tycoon” behind a major energy infrastructure project, namely an undersea interconnector to France that “could supply up to 5% of Britain’s electricity”. The newspaper names Viktor Fedotov, a “secretive Russian-born tycoon whose company has donated almost £250,000 to the Conservative Party” as the owner of Aquind, the company behind the project.

In Australia, flooding in areas around Sydney will happen “almost every week” by the middle of this century because of sea level rise resulting from climate change, according to a study by the nation’s Bureau of Meteorology reported by the Guardian. The research found that flooding in some areas had already increased from less than two days per year in 1914 to around eight days per year in modern times, the article notes. Another Guardian piece quotes former Australian prime minister Julia Gillard from a webinar about the need to “build back better” following Covid-19. Gillard warns against the sentiment that policies to reduce greenhouse gases are “all too hard” and cites the carbon price legislated by her government as proof climate policy “can get done”, according to the newspaper.

An editorial in the Times considers BP’s proposals to move away from being a “traditional oil company” to embrace net-zero emissions and become an “integrated energy company” instead. It puts forward the view that recent events show the market economy is not only able to respond to climate change, but is also “the most practical means” of protecting the environment, thanks to a combination of regulation, investor pressure and the price mechanism. “Environmental protection is advanced by capitalism, not retarded by it,” it says, claiming that collectivist economies “are the worst polluters”. The editorial notes how investors have welcomed the change in tack by the oil giant: “A quoted company that halves its dividend payment after incurring a huge quarterly loss would not normally enjoy a 6% boost to its share price. Yet this happened yesterday to BP”. A separate comment piece by the newspaper’s chief business commentator Alistair Osborn considers the difficult task facing BP’s chief executive officer Bernard Looney.

There are various other commentaries on BP’s latest move, including the Financial Times’ Lex column which concludes that the company’s move to slash output by almost a quarter in the next five years “seems risky”, concluding: “The challenge for Mr Looney is to put his bold plan into practice. Big Oil has a long history of reneging on promises to save the planet.” In contrast, a comment piece in the Daily Telegraph by chief city commentator Ben Marlow suggests BP could be more ambitious with its plans: “Five billion dollars is undoubtedly a big jump from the paltry $500m BP currently spends a year on green projects, but it is only one third of the $14bn to $16bn it will still be forking out on oil and gas drilling in 10 years’ time.”

A letter signed by more than 100 economists published in the Guardian outlines how the “carbon economy” amplifies racial, social and economic inequities, and lays out a strategy for improving this situation. “From deep-rooted racism to the Covid-19 pandemic, from extreme inequality to ecological collapse, our world is facing dire and deeply interconnected emergencies. But as much as the present moment painfully underscores the weaknesses of our economic system, it also gives us the rare opportunity to reimagine it. As we seek to rebuild our world, we can and must end the carbon economy,” they write. The full list of signatories can be viewed here.

Meanwhile, a piece in the New York Times outlines how a hurricane on the east coast of the US and a wildfire in California, in combination with Covid-19, “expose the hard reality of climate change”. It adds: “Experts argue that the country must fundamentally rethink how it prepares for similar disasters as the effects of global warming accelerate.”

In Bangladesh, climate shocks can result in reduction in food consumption, erosion of assets, depletion of savings, increased debt, and debt default, a study finds. The research, conducted in in three villages in the Bagerhat and Chattogram districts of coastal Bangladesh, also provide qualitative evidence that at-risk people often use microcredit as a response to climate shocks. The authors say: “However, the case study only finds evidence that microcredit supports coping and incremental adaptation.”