USA/Global: Bad Days for Big Oil (except in the GOP)
AfricaFocus Bulletin
June 14, 2021 (2021-06-14)
(Reposted from sources cited below)
Editor's Note
“Fossil fuel companies are having a big reckoning with climate change this week. Shareholders for Exxon and Chevron voted for measures that could force them to take more responsibility for their emissions, while a Dutch court is forcing Shell to slash its pollution.” - The Verge, May 26, 2021
It is too early to tell the long-term impact, of course, but May 26, 2021 might just prove to be a turning point in the difficult and urgent fight to reduce greenhouse gas emissions enough to have a chance of avoiding a severe escalation of the climate crisis. Pressure on corporations is growing on many fronts, as illustrated also by the June 9 announcement that the Keystone XL pipeline has been definitely cancelled by the developer TC Energy.
Measured by the “production gap” calculated by the UN
Environment Programme with allied research agencies at the end of
last year, the immediate impact on actual emissions levels of these
recent victories is likely to be minimal. The stated commitments by
governments and corporations are falling far short of the minimum
necessary to avoid catastrophic consequences, and their actions are
even more limited.
Nevertheless, this is a signal that corporations themselves must
and can be held accountable. The same applied to governments, the
policies of which are still overwhelmingly biased towards fossil
fuels by inertia and by current fossil-fuel interests. In the United
States for example, Republican opposition and Democratic timidity
threatens to eviscerate the ambitious climate actions in the Biden
administration's infrastructure bill.
I know that is a lot to absorb in one 25K document, and I don't expect very many of you to read it all. But I hope you will skim some of it, save it for later reference, and share it. If you are reading this in email, to http://www.africafocus.org/docs21/clim2106.php to get a URL to share.
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For additional related news coverage and commentary see
For a powerful 3-minute video on the climate crisis by Archbishop Desmond Tutu, released in 2014 but still relevant almost 7 years later, see https://www.youtube.com/watch?v=rlh_ptOljkg
The strategy of Engine No. 1 hinged on getting votes from Exxon’s
three largest shareholders, BlackRock, Vanguard and State Street, on
its side, an uphill climb since such firms often side with
management.
Engine No. 1 held only 0.02 percent of Exxon’s shares, giving it a
similar portion of proxy votes, while those three institutional
investors together accounted for nearly 20 percent of the voting
shares.
. . .
Analysts say it’s hard to overstate the impact that Exxon’s defeat
will have on corporations across the country.
In 2018, BlackRock, Vanguard and State Street cast an average of
about 25 percent of the votes in elections for directors of all of
the companies in the S&P 500, according to academic research. The
mere threat that some of those votes are more likely to be cast
against management will force executives to think long and hard
about how to address their concerns, analysts say.
“You’ve seen that kind of shift dramatically overnight,” said Lyndon
Park, managing director at ICR, a firm that advises corporate boards
on investor relations issues.
Mr. Park, who formerly worked at BlackRock, added: “The days are
over where you could think, you know, these guys would give the
benefit of the doubt to management.”
Activist campaigns to force corporations and governments to shift resources away from unjust and destructive systems can make a difference, Donna Katzin contends in the essay “From Disinvestment to Reinvestment.” The essay was published on May 30 by the US-Africa Bridge Building Project, a Washington DC-based nonprofit geared toward fostering transnational solidarity primarily around economic justice. Katzin's essay cites evidence from the transnational anti-apartheid movement in the mid-20th century to later social justice movements, including the movement to shift from fossil fuels to renewable energy and the Black Lives Matter demands to shift resources from policing and incarceration to investment in underserved communities.
In her essay, Katzin notes that racism, poverty, climate change, and
pandemics know no borders. This makes it increasingly clear that the
rallying cry “An injury to one is an injury to all” applies to a
host of global as well as national issues.
Katzin recently retired as the founding executive director of Shared
Interest, which she led for 26 years. She previously directed the
South Africa and International Justice Programs of the Interfaith
Center on Corporate Responsibility from 1986 to 1994. Since 1994,
Shared Interest has benefited 2.3 million people by issuing $30
million in guarantees unlocking more than $125 million in credit to
South and Southern African borrowers who would otherwise be
considered “unbankable.”
The strength of her argument was strikingly confirmed just before
its publication in what news stories and leading climate justice
activist Bill McKibben called "A Bad, Bad Day for Big Oil." At the
Exxon Mobil board meeting on May 26, a dissident slate of candidates
for the board calling for action on the climate crisis won 3 out of
4 contested seats against the company's opposition.
On the same day, Chevron shareholders approved a resolution for
tighter limits on greenhouse gas emissions. And a court in the
Netherlands ruled that Shell Oil must drastically cut its emissions
over the next ten years.
When asked about this news, Katzin noted that such massive shifts
require mobilization over years and decades, and that it is too soon
to tell the impact of this development. But, she said, “The May 26
victories may be a turning point in the campaign to press Big Oil to
put the brakes on fossil fuels – before climate change becomes
irreversible. It mirrors the moment when captains of industry
recognized apartheid as a motor for crimes against humanity, and
underscores the lesson that reinvestment in solutions is not only
essential to our shared future – it is also possible.”
Similarly today’s activists can confront current challenges like
those arising from the COVID-19 pandemic through a combination of
boycott, divestment, sanctions, and reinvestment strategies.
“A global reinvestment coalition could coordinate campaigns to
pressure companies that use public funds for the development,
manufacturing, and production of vaccines, but fail to make their
vaccines accessible where they are needed most,” Katzin suggests.
“They could further require them to “reinvest” by pricing vaccines
affordably and delivering them equitably to low-income countries and
communities.”
Among the tactics deployed by transnational solidarity activists to
end apartheid, according to Katzin, campaigns to pressure
multinational corporations to withdraw their investments and sever
economic ties to South Africa proved especially effective. “These
campaigns for disinvestment of resources, mobilizing massive support
across the globe, set precedents and provide touchstones for today's
solidarity movements,” she writes.
Economic pressure through boycotts, divestments and sanctions have
been and remain powerful tools to change corporate and national
policies that harm and hinder social and economic mobility. However,
for these efforts to have a lasting impact, they must be paired with
strategies that reinvest resources in disadvantaged communities and
countries.
The same message comes through clearly from the Movement for Black
Lives and their allies. The message is clear. Organizing to defund
entities exploiting, threatening, and imprisoning Black, indigenous,
and communities of color. But reducing these destructive uses of
resources must be accompanied by positive reinvestment in
communities, including housing, education, health, and criminal
justice.
The fight against injustice can only succeed if it is linked with a
vision of justice. The reallocation of resources is both a means to
realize that vision and a measure of its success.
Katzin’s essay is the second original essay in a series of essays
for a Playbook for Transnational
Solidarity. The Project also published a companion essay on
May 30, reposted with permission from the Sierra Club magazine,
entitled "Redefining the Possible," by Varshini Prakash
of the Sunrise Movement.
Between 2020 and 2030, global coal, oil, and gas production would
have to decline annually by 11%, 4%, and 3%, respectively, to be
consistent with a 1.5°C pathway. But government plans and
projections indicate an average 2% annual increase for each fuel.
Key Findings
To follow a 1.5°C-consistent pathway, the world will need to
decrease fossil fuel production by roughly 6% per year between 2020
and 2030.
Countries are instead planning and projecting an average annual
increase of 2%, which by 2030 would result in more than double the
production consistent with the 1.5°C limit.
Pre-COVID plans and post-COVID stimulus measures point to a
continuation of the growing global fossil fuel production gap,
locking in severe climate disruption.
To date, governments have committed far more COVID-19 funds to
fossil fuels than to clean energy. Policymakers must reverse this
trend to meet climate goals.
Countries with lower dependence and higher financial and
institutional capacity can undertake a just and equitable transition
from fossil fuel production most rapidly, while those with higher
dependence and lower capacity will require greater international
support.
Policymakers can support a managed, just, and equitable wind-down of
fossil fuel production through six areas of action.
. . .
Six main areas of action for governments could help ensure a
managed, just, and equitable transition away from fossil fuels that
“builds back better” from the COVID-19 pandemic:
1. Ensure COVID-19 recovery packages and economic stimulus funds
support a sustainable recovery and avoid further carbon lock-in.
Many countries have begun to make investments in areas such as
renewable energy, energy efficiency, green hydrogen, and improved
pedestrian infrastructure. But if this is accompanied by
significant support for high-carbon industries, COVID-19 recovery
measures still risk locking in high-carbon energy systems and
development pathways for decades into the future. Governments that
choose to invest in high-carbon industries to boost economies and
safeguard livelihoods in the short term — perhaps because they see
few near-term alternatives — can nonetheless introduce conditions
to that investment to promote long-term alignment with climate
goals.
2. Provide local and international support to fossil-fuel dependent
communities and economies for diversification and just, equitable
transitions. Each country and region faces unique challenges in a
transition away from fossil fuels, depending on their dependence on
production and their capacity to transition. Inclusive planning is
essential, as is financial, technical, and capacity-building
support for communities with limited financial and institutional
capacity.
3. Reduce existing government support for fossil fuels. Many long-
standing forms of government support to fossil fuels — including
consumer subsidies, producer subsidies, and public finance
investment — stand in the way of a sustainable recovery to COVID-19
and need to be ended.
4. Introduce restrictions on fossil fuel production activities and
infrastructure. Restricting new fossil fuel production activities
and infrastructure can avoid locking in levels of fossil fuel
production higher than those consistent with climate goals. It can
also reduce the risk of stranded assets and communities.
5. Enhance transparency of current and future fossil fuel
production levels. A key barrier to aligning energy and climate
plans is the lack of clarity on levels of fossil fuel production
and planned or expected growth. To improve transparency, countries
could ensure that relevant production data are more readily and
publicly accessible. They can also provide information on how
their fossil fuel production plans align with climate goals, and on
their support for the production of fossil fuels. Governments can
also take steps to disclose their level of exposure to fossil fuel
asset stranding and associated systemic risk, and to require
companies within their jurisdiction to do so.
6. Mobilize and support a coordinated global response. Policies to
transition away from fossil fuels will be most effective if
supported by countries collectively, as this will send consistent,
directional signals to energy producers, consumers, and investors.
International cooperation, both through established channels and in
new forums, can support a just and equitable wind down of fossil
fuels. The Paris Agreement’s global stocktake, nationally
determined contributions (NDCs), and long-term low greenhouse gas
emission development strategies (LEDS) offer opportunities to
facilitate a transition away from fossil fuel production through
the UN climate change process. International financial institutions
can help shift financial support away from fossil fuel production
while scaling up support for low-carbon energy.
Ditching fossil fuels in favor of renewable energy in order to keep
warming below the 1.5ºC threshold is both "necessary and technically
feasible."
That's the conclusion of an analysis released Thursday entitled Fossil Fuel Exit
Strategy. Produced by the University of Technology Sydney's
Institute for Sustainable Futures in cooperation with the Fossil
Fuel Non-Proliferation Treaty Initiative, the report states clearly
that "there is no need for more fossil fuels" because the world is
overflowing with renewable energy capacity.
"The world has more than enough renewable energy resources that can
be scaled up rapidly enough to meet the energy demands of every
person in the world without any shortfall in global energy
generation." —Fossil Fuel Exit Strategy
Such a pathway, said Sanjay Vashist, director of Climate Action
Network South Asia, would avert a "criminal waste of money" that
would "have devastating climate and humanitarian consequences."
A key point in the analysis is that simply stopping the industry's
planned expansion of fossil fuel projects is insufficient to meet
the Paris climate agreement's temperature goal and would actually
"push warming well above 1.5ºC."
With this angle, the new analysis goes beyond the International Energy Agency's report last month calling for no oil and gas expansion in order to meet a goal of net zero carbon emissions by 2050. That's because even if there were no expansion, the report's projections show, the world would produce 35% more oil and 69% more coal than is consistent with meeting the 1.5°C target.
As such, Fossil Fuel Exit Strategy lays out a dirty energy phaseout
with an annual decline of 9.5% for coal, 8.5% for oil, 3.5% for gas
from 2021-2030.
A further difference between the new report's 1.5ºC scenario and the
IEA report is its rejection of carbon capture technology and
bioenergy as well as nuclear energy going forward.
Leaving those sources aside is no problem because expanding
efficiency measures will lower overall energy demands, even amid
increased electrification. That's because wind and solar
power—sectors that are accelerating
—are in a position to take over for fossil fuels.
"Our analysis shows that even applying a set of robust, conservative
estimates that take into account environmental safeguards, land
constraints, and technical feasibility, solar and wind energy could
power the world more than 50 times over," the report states. "This
is the case even for Africa and India with their growing energy
demand."
"With this report, it is even clearer to everyone that world leaders
have no excuse. We must act now." —Mitzi Jonelle Tan, Youth
Advocates Climate Action Philippines
The report points also to previous estimates showing Africa's
potential as a renewable "superpower" because "the solar and wind
potential across the continent far outstrip every other region of
the world."
There are also global financial benefits to be considered. The
report notes that renewable costs are becoming at least cost-
competitive with fossil fuels. What's more, investments in dirty
energy are becoming "stranded assets
."
The good news is that "the world has more than enough renewable
energy resources that can be scaled up rapidly enough to meet the
energy demands of every person in the world without any shortfall in
global energy generation," according to the report.
Rebecca Byrnes, deputy director for the Fossil Fuel Non-
Proliferation Treaty Initiative, welcomed the new publication as
providing evidence "that a practical pathway exists where there are
no new fossil fuel projects, existing projects are phased out,
emissions are kept within a 1.5°C budget, and energy access becomes
universal, all while using existing and increasingly cost-
competitive technologies."
"The hurdle is no longer economic nor technical; our biggest
challenges are political," she added. "A cleaner future is within
reach and, while international cooperation is essential for
innovation and investment, nation-states can and should act now to
regulate fossil fuel production decline."
Referencing the record number of extreme weather events that have
battered her home country, Mitzi Jonelle Tan of Youth Advocates for
Climate Action Philippines and Fridays For Future Philippines called
the "current level of warming... already hell for us in the Global
South."
Tan sharply criticized the possibility of further fossil fuel
expansion, saying it "will clearly put us past the 1.5°C limit [and]
is a death sentence to the most marginalized people."
"With this report," she added, "it is even clearer to everyone that
world leaders have no excuse. We must act now, the science and the
people are united in calling for justice."
HAYES: But when Senator Romney was asked yesterday about how the
Democrat`s climate agenda fits in the bill, he responded, "The
Democrats climate agenda is probably something they pursue by and
large outside of an infrastructure bill."
OK, here's the thing. An infrastructure bill that is not climate-
focused is quite literally not worth passing, probably worse than
nothing. Because climate is the central infrastructure challenge we
face obviously.
. . .
Senator Ed Markey, Democrat of Massachusetts who cosponsored the
resolution for Green New Deal told The New York Times, "The planet
cannot survive another successful Republican obstructionist
strategy. We have to have climate at the center of any
infrastructure package in order to have my vote. No climate, no
deal." And Senator Ed Markey joins me now.
SEN. ED MARKEY (D-MA): Well, it sounds to me that they have a
package which is climate denial masquerading as bipartisanship. We
can't have an infrastructure bill in 2021 that doesn't have climate
at its center. And any other bill that we are going to consider that
does not have aggressive solutions to the climate crisis will just
have that response which I`ve been giving which is no climate, no
deal. That's the only way in which we can respond.
This bill has to meet the magnitude of the challenges which the
climate crisis is presenting to our country and to the planet.
. . .
HAYES: Well, you tick through some of the things that are in the
sort of initial Biden American Rescue Plan proposal. You know,
there's money for battery storage and research on that. There's
money for electric vehicle charging stations. There`s some talk
about that moving to the surface transportation bill, although
that`s in the weeds. There's a lot of stuff for the electric grid.
There's some stuff on clean energy in terms of, you know, renewable
portfolio standards, if I understand.
Do you have a sense of what is or isn't out? It's just a weird thing
where these 10 senators in a room trading this stuff away. Like, do
you -- are you read in on what is in the package or not?
MARKEY: Well, I don't know what's in the package except what you
just read about Senator Romney`s commentary on it which is that this
package will not be dealing with the climate crisis in any
significant way. And, you know, the bottom line is, the GOP used to
stand for Grand Old Party, now it's -- GOP stands for the gas and
oil party.
We know that the fossil fuel industry is the largest single
contributor to this party. And so yes, we do need new highways, we
do need new bridges, but we also have to have an infrastructure
revolution for the energy sector so that we are the global leader,
so that the rest of the world says the United States is back and we
believe in science, and we know that we can solve this problem by
unleashing this revolution.
So that President Biden can go to Glasgow later on this year and
say, we`re back. We are no longer the laggard, we are the leader
again, and we must solve this problem for future generations. That
is what this bill must have so that President Biden will have the
credibility he needs meeting with the rest of the world later on
this year.
Beginning in May, I started adding an embedded short music video at
the end of each bulletin. When working on a bulletin, I find it
essential to take breaks to listen to such videos, because the
topics I cover often reflect more grim realities than hopes for
change. I choose videos that I like and I hope that you will also
enjoy them.
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