Climate carnage

Back in 2022, one of our favourite climate hysteria stars, the UN’s Antonio Guterres, called for money to be dispensed for climate adaptation to avoid what he called a “climate carnage” in poor countries. Loath as I am to plagiarise the inimitable climate crusade celebrity, there is no better term to describe some recent developments in the transition camp.

For starters, a climate think tank in Canada is mad at the oil sands industry, which has had the audacity to boost investments in new production instead of spending that money on emission reduction. I suspect a big reason for the anger is the fact that the tank’s climate sharks had to dig into companies’ financial statements to make their revelation — because oil producers are no longer talking about their transition work.

Remember when the Canadian parliament earlier this year passed a weird law against greenwashing, essentially banning any company from talking about its transition work unless this work was based on “adequate and proper substantiation in accordance with internationally recognized methodology?”

The thing is, no one knows what that internationally recognised methodology is. So, the Pathways Alliance, grouping all big oil sands operators, said that the new law set “a public disclosure standard that is so vague and that relies on undefined “internationally recognized methodologies”” that it “opens the door for frivolous litigation by private entities – something also enabled by the recent amendments to the Competition Act.”

In other words, they won’t talk about the transition because they’re afraid — rightly — they would get sued by whoever decides that they’re lying. Kind of like the hate speech laws in Scotland and Ireland. Guilt is in the eye of the offended beholder.

The Pembina Institute — that think tank — says that the new law “doesn’t preclude things like announcing final investment decisions on carbon capture projects or emissions reduction projects,” meaning a huge $16.5-billion carbon capture network that the Pathways Alliance is planning — but not investing enough in, which is absolutely outrageous, of course. Talk about a subtle hint with that FID reference.

Even more outrageous is the finding of a recent survey by ATB Capital Markets, an Alberta investment advisor, which, per Bloomberg, “found a sizable reduction in the willingness of energy companies to invest in environmental technologies based on an ESG mandate over the next year. Just 17 per cent of respondents noted intentions to invest, down from 34 per cent in the spring 2024 survey.” I mean, why bother when they’ll come after you anyway?

But Canadian think tanks are not the only unhappy climate crusaders. Ireland’s climate minister is also unhappy — with Big Tech. Ireland is, I gather, a highly desirable location for data centres, or at least it used to be, until three years ago the authorities banned new construction because of the surge in electricity demand, with data centres guzzling a fifth of the country’s total. So, minister Eamon Ryan is calling on Big Tech to “work within the climate limits” because that’s a thing now.

In fact, Ryan meant emission targets when he said climate limits, and urged the operators of data centres to be so good as to adjust their needs to electricity availability and those targets. Yet another case of want cake, want to eat it, too. First they invite data centre operators to set up shop in Ireland, then they complain about the centres being a drain on the grid.

All this is rather sad, of course, but if there was a scale of unhappiness, it would go from kittens playing with yarn to European carmakers. Said European carmakers have called on Brussels to reconsider tighter emission rules for next year. Because those rules are going to make them bleed, and bleed hard. Money, that is, not actual blood. Not yet.

In a news release yesterday, the European Automobile Manufacturers’ Association, or ACEA for short, said that the latest car sales data “confirms the electric car market is now on a continual downward trajectory,” leading to “the daunting prospect of either multi-billion-euro fines, which could otherwise be invested in the zero-emission transition, or unnecessary production cuts, job losses, and a weakened European supply and value chain at a time when we face fierce competition from other automaking regions.”

And what do these car sales figures show? Why, they show a 44% drop in new EV registrations across the bloc in August — that is forty-four percent down from August 2023, which, however you look at it is closer to half than a third, which doesn’t sound good, especially in light of bright-eyed expectations of continual growth.

One more twist in the wound comes from Germany, the EU’s biggest EV market, where sales of said vehicles dropped by — and I feel compelled to modify with “as much as” — so they dropped by as much as 68% from August last year. Bloomberg suggests that the higher sales last year were a direct result of the government’s plans to phase out EV subsidies at the end of the year.

So, ACEA is getting worried. It’s getting really worried it won’t make its EV quota, because that’s exactly what those emission regulations boil down to, and calling on the Brussels Sages to discuss what it calls short-term relief. We know it’s not going to be short-term. They know it’s not going to be short-term. But it sounds more palatable this way.

The FT cited a paper drafted by Renault as suggesting that if EVs’ market share remained unchanged next year — instead of growing — carmakers would be on the line for up to 16 billion euro in penalties under the new emission rules. Of course, there is a chance that EV sales will continue to decline, which will only make that figure higher. The ball’s in Brussels’ court and we can only hope the Sages would choose the easier way out of the whole EV mess and not the harder.

My favourite climate think tank, meanwhile, has released some great news about solar power —depending on perspective, of course. What’s good news for some is horrible news for others. Anyway, Ember informed us this week that Solar power continues to surge in 2024.

More than half of that surge came from China, big surprise, while the pace of additions slowed down in Europe, which is obviously unacceptable but Ember has refrained from criticism for now and probably just as well. Because as solar expands in Europe, negative prices become more frequent, reaching a record this year and I think I already mentioned it but it pleases me to see “reality hitting very hard now” as ACEA’s director-general described the EV situation to the FT, so I’m mentioning it again.

As a parting gift to you at the end of an intense week, here is a call for — you’d never guess — more government intervention in markets in order to bring businesses to heel with emission targets. The call, from the interim CEO of the University of Cambridge Institute for Sustainability Leadership, states that ESG in its current form has failed to deliver on its promise, which is of course a huge surprise, and then proceeds to attempt a reframing of the ESG narrative.

“We urgently need a change of mindset and a fundamental redesign of the markets that frame business decisions,” Lindsay Hooper writes, proposing what she calls “competitive sustainability”, which would eliminate the dilemma between profitability and sustainability.

“As long as the market rewards short-term gains over long-term resilience, businesses will harm the planet, and markets will destroy the foundations on which they depend,” and I don’t really think we need more quotes to see what Lindsay has in mind, which is, effectively, a government push to make businesses less interested in profitability and more interested in sustainability. She also proposes “a corporate mindset shift to view sustainability as a matter of competitiveness, not responsibility.”

How, you may wonder, can this shift be effected (as opposed to affected, which is an entirely different verb)? Well, apparently businesses need to stop asking themselves “How much sustainability can we afford?” and start asking themselves “How do we accelerate, navigate and benefit from the transition?” 

If you think she’s done, you’re wrong. A mindset change, assuming it is possible, would not be enough. No, Lindsay is promoting a comprehensive approach: “The market must be redesigned to eliminate the tension between profitability and sustainability,” and that’s because “the imperative for action on environmental issues is one not of morality or consumer sentiment but the laws of nature.”

So, to sum up, Lindsay suggests that business executives put the transition front and centre in their minds and corporate plans, following the example of the UK’s Foreign Secretary who said climate change will be at the heart of British foreign policy and as I write this, I brush an errant tear that is not even an ironic tear.

Governments, meanwhile, should interfere in how markets operate and change the way they operate so climate change is front and centre there as well. How? “Governments must create conditions that make it economically compelling to phase out damaging activities.” Sounds specific enough for me.

By the way, did you hear about Northvolt going under and BP selling its onshore wind business in the U.S.? It was truly a week of carnage.