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Daily Briefing

31.01.2020
Today's climate and energy headlines
DAILY BRIEFING Shell blames falling energy prices for plunge in profits
Shell blames falling energy prices for plunge in profits

News.

Shell blames falling energy prices for plunge in profits

Royal Dutch Shell has blamed weaker oil and gas markets after its profits halved in the final quarter of the year, the Guardian reports. It continues: “The Anglo-Dutch oil giant made a profit of $2.9bn (£2.23bn) in the last three months of 2019, down from $5.7bn in the final quarter of 2018, when fears of a slowdown in the global economy caused oil prices to slump.” The company blamed weaker oil and gas prices, the paper says, “which drifted down last year due to a well-stocked global market and concerns over worldwide economic growth that dampened demand for fossil fuels”. Shell has decided to slow the pace of its share buyback as a result, says the Times. The scheme – the world’s largest – will see the company buy back $1bn of shares over the next three months, down from $2.75bn in the preceding three months. The Times adds: “That means it is no longer on course to complete the remaining $10bn of its planned $25bn buyback programme this year.” Fears over the spread of the coronavirus from China could also suppress oil demand growth, Shell CEO Ben van Beurden told CNBC. He said: “I am absolutely convinced – and that is what we are seeing at the moment – that it will not help sentiment…At this point in time, sentiment in oil markets is not so much sentiment about supply, it is all sentiment in demand.” The Financial Times, and Daily Telegraph also have the story, while Reuters notes that the number of years of production left in Shell’s oil and gas reserves has fallen for the sixth year in a row in 2019 to below eight. “But,” it notes, “there was little reaction from investors to the steady decline in what was once considered a key metric for gauging the strength of the world’s major oil and gas companies”.

Elsewhere, the Guardian reports that thinktank Carbon Tracker has warned that the oil industry is at risk of a global market shock that could halve the value of fossil-fuel investments if governments delay setting policies to tackle the climate crisis. In a new report, Carbon Tracker warns that a “handbrake turn” in climate policy could have a “forceful, abrupt and disorderly” impact on the global oil industry by derailing fossil-fuel demand, the Guardian says. The report also says the longer nations put off setting more ambitious climate action strategies in place, the greater the risk of stranded assets, says BusinessGreen.

The Guardian Read Article
Australia aims to boost east coast gas supply, clean energy in $1.4bn deal

The Australian government has struck a deal to boost natural gas supply and renewable energy as part of a A$2bn ($1.4bn) deal with the state of New South Wales (NSW), reports Reuters, as it looks “to cut carbon emissions in the wake of devastating bushfires”. In a joint funding agreement with NSW, “Australia will upgrade parts of the east coast power grid, help pay for two new interstate transmission links and back emissions reduction projects”, says the newswire. Prime minister Scott Morrison has told reporters in Sydney that the deal is “about getting electricity prices down, getting emissions down, getting more power into the system, and getting the gas to make that happen”, Reuters adds. Morrison also said that the A$2bn could be spent on “clean technology”, including hydrogen research, energy efficiency measures, and “coal innovation to commercialise and employ technologies to reduce emissions from extraction, preparation and the use of coal”, reports the Guardian. It adds that NSW premier Gladys Berejiklian “told reporters the Narrabri gas project – to drill 900 coal seam gas wells, including within the Pilliga state forest – ‘may very well be’ the source of extra gas and ‘will meet’ the requirement, although she noted the project is still subject to final approval”. The deal is “not really a plan”, writes Guardian Australia’s political editor Katharine Murphy: “Morrison doesn’t yet have the courage for a plan. It’s a set of propositions that might hold together, or might pull in different directions.”

Meanwhile, Reuters reports that “Australian officials declared a state of emergency for the capital city of Canberra and surrounding regions on Friday, as soaring temperatures and strong winds threatened to propel a large bushfire beyond the control of firefighters”. The Guardian adds: “Melbourne and Canberra are predicted to reach highs of 43C and 41C on Friday and the weather is expected to worsen fire situations across two states and the capital territory.” The Sydney Morning Herald carries a comment piece by Innes Willox, chief executive of the Australian Industry Group, arguing that the government must “get down to the business of evolving Australia’s climate policy”, in particular its aversion to a carbon price.

Reuters Read Article
US environmental groups plan to sue Trump administration on airplane emissions

Reuters reports that environmental groups are planning to sue the US Environmental Protection Agency (EPA) for failing to regulate aircraft emissions after a 2016 agency determination that those emissions pose a danger to public health. It continues: “In 2010, environmental groups sued the EPA to force it to set greenhouse gas emissions standards for airplanes. A judge ruled the EPA was required to address aviation emissions.” The Center for Biological Diversity, along with Friends of the Earth, has filed a notice of intent to sue the EPA if the agency did not act within six months. An EPA spokeswoman said the agency “is working to address this issue in 2020” and agency documents say it intends to issue proposed rules in February, says Reuters, which also notes that “the EPA said last year it would release a proposed rule by September 2019, but failed to do so”.

Elsewhere, Reuters reports that the International Air Transport Association (IATA) is teaming up with a commodity exchange company to “develop a carbon exchange platform where airlines, and passengers, can purchase offsets aimed at reducing the impact of air travel on the environment”. And another Reuters piece says “Credit Suisse, BNP Paribas and French public investment bank Bpifrance are the latest lenders to join an initiative to link provision of shipping finance to cuts in carbon dioxide emissions”. The initiative – known as the “Poseidon Principles” – see financiers take account of efforts to cut CO2 emissions when providing loans to shipping companies, the newswire says.

Reuters Read Article
The business as usual climate scenario may be too pessimistic, researchers warn

There is continued coverage of the Nature commentary on the RCP8.5 emissions scenario, written by Glen Peters and Carbon Brief climate science contributor Zeke Hausfather. RCP8.5 is looking “increasingly unlikely”, the Washington Post says, but this has “stirred debate within the research community over whether a rare bit of good news about global warming has emerged or if, instead, the situation is far more complicated and still quite dire”. Hausfather and Peters “argue that a total warming of around 3C is where the world is probably headed. That’s severe – it would be three times the amount of change that the world has seen – but appreciably different from 4 to 5C” of RCP8.5, the Post says. RCP8.5 “is commonly referred to as a ‘baseline’ or ‘business as usual’ scenario, since it assumes nothing is done to mitigate climate change,” notes the Post, which “has often led it to being framed as the default”. However, it adds, researchers “generally pair the RCP 8.5 scenario with other scenarios that are less dire and involve more concerted climate change action. So it is not the only scenario used, and scientists have certainly not labelled it as a definite outcome.” The Post speaks to several scientists that warn “there are still ample reasons for concern”. Climate scientist Prof Katharine Hayhoe notes that even a scenario involving lower greenhouse gas emissions could bring the magnitude of global warming foreseen in RCP 8.5. She tells the Post: “The envelope of uncertainty surrounding the change that will result from a given amount of emissions is not symmetrical: it is weighted towards the ‘worse’ side of the spectrum.“ One key issues is climate feedbacks, the Post says, “or processes by which the Earth responds to warming by releasing more greenhouse gases. This may already be underway in the Arctic”. E&E News, via Scientific American, says that while the world might be on track for less warming than in RCP8.5, “this doesn’t mean that the models used by climate scientists are wrong or can’t be trusted”. It adds: “On the contrary, research suggests that climate models generally do a good job of predicting how the world will respond to given amounts of greenhouse gas emissions. If global carbon emissions really reached the levels implied by RCP8.5, the models probably do a good job of projecting how the earth system would respond. The [Nature] comment simply suggests that this particular emissions scenario – the assumptions fuelling the most extreme model projections – are probably no longer plausible.” BBC News has now corrected the headline for its story about the Nature commentary. The word “misleading” has been replaced with “exceedingly unlikely”. For more on RCP8.5, Carbon Brief has an in-depth explainer.

The Washington Post Read Article

Comment.

The year ahead: ‘2020 is an acid test of government’s climate credibility. What lies ahead cannot be delivered by any single department’

In a piece for Civil Service World, Committee on Climate Change (CCC) chief executive Chris Stark sets out what the government needs to do to in 2020 to reduce the risks of climate impacts. Last year saw “a remarkable spike in public awareness of climate change” as well as new “net zero” goal from the government, Stark says. But the general election “interrupted that much-needed strategic policy shift”. He continues: “To regain momentum, the election result must act as a solid basis for the next decade of action. The government’s strong majority in parliament can help to drive ambitious reforms. What will distinguish the next decade from the last, however, is the need for a truly cross-government effort.” The task ahead “cannot be delivered by any single department”, says Stark: “The policies to cut greenhouse gas emissions from buildings, transport, industry and agriculture must be owned across government. And cutting through these: the critical questions of better public engagement, skills provision, infrastructure and finance. It is a governance and coordination challenge like no other.”

Elsewhere, Thomson Reuters Foundation reporter Sonia Elks has a news feature on how Brexit could affect the country’s net-zero goal. Meeting the target “will require vast changes across energy policy, transport, infrastructure, land use and diets”, writes Elks, but “the country is not yet even on track to meet a lower target of cutting its emissions by 80% by 2050, with the CCC warning the government cannot afford to let Brexit elbow out climate action or result in climate pledges being watered down”. The government “faces the monumental task of simultaneously repositioning Britain’s global role and overseeing a massive green overhaul of the economy”, says Elks. This will include “striking agreements with other trading partners around the world, including the offer of a ‘massive deal with the US from president Donald Trump, a climate-change sceptic”, she says. Elks notes: “Despite the uncertainties stirred by Brexit, climate experts said Britain was serious about meeting its net-zero target and is positioning itself as a climate leader on the global stage, not least by hosting this year’s UN climate talks.” Britain’s role as host “will turn the spotlight on the government to lead the way by announcing new initiatives”, she adds.

Chris Stark, Civil Service World Read Article
Can the Dutch save the world from the danger of rising sea levels?

Financial Times life and arts columnist Simon Kuper, who grew up in the Netherlands, asks: “Can the Dutch — with their centuries of experience fighting the water — save the planet? Can they even save themselves?” He addsL “Increasingly, the world needs their expertise. The only question is how high the seas will rise. The UN’s Intergovernmental Panel on Climate Change predicts a rise of 84cm by 2100 if emissions continue on current trends, and adds that more than one metre isn’t unlikely. But the IPCC’s predictions have tended to prove over-optimistic; the phrase ‘faster than expected’ punctuates recent climate science.” Every country has an “existential incentive to protect itself from flooding”, Kuper writes, comparing the Dutch “poldermodel” co-operative approach to providing flood defences with the “structurally ill-equipped” US system. However, even the Netherlands will face a decision, says Kuper: “Broadly, the conundrum facing the Dutch can be distilled to a binary choice: should we stay or should we go? Staying would require large adjustments to the country’s land and water management. The sea will almost certainly rise by two metres and more, if not by 2100 then surely by 2300. Sealing off the rivers could put an end to Rotterdam’s status as a major harbour.”

Simon Kuper, Financial Times Read Article

Science.

To what extent can cirrus cloud seeding counteract global warming?

The idea of modifying cirrus clouds to directly counteract greenhouse gas warming has gained momentum in recent years, despite disputes over its physical feasibility. Previous studies that analyzed modifications of cirrus clouds by seeding of ice nucleating particles showed large uncertainties, ranging from no effect or even a small warming to a globally averaged cooling of about 2.5C. This study used two general circulation models and found that seeding counteracts about 70% of global warming in one model, but only 30% in the other. They found that seeding decreases the frequency of the most extreme precipitation globally, but extreme precipitation events occur more frequently in the Sahel and Central America.

Environmental Research Letters Read Article
Changing rapid weather variability increases influenza epidemic risk in a warming climate

The continuing change of the Earth’s climate may affect influenza viral activity and transmission in the coming decades. It was previously reported that the warmer winter can reduce influenza epidemic-caused mortality, but this relation cannot explain the deadly influenza epidemic in many countries over northern mid-latitudes in the winter of 2017-18, one of the warmest winters in recent decades. This study finds that the widely spread 2017-18 influenza epidemic can be attributed to the abnormally strong rapid weather variability. Large rapid weather variability in autumn can precondition the deadly influenza epidemic in the subsequent months in highly populated northern mid-latitudes. Rapid weather variability in autumn will continue to strengthen in some regions of northern mid-latitudes in a warming climate, implying that the risk of influenza epidemic may increase 20% to 50% in some highly populated regions in later 21st century.

Environmental Research Letters Read Article

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