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COP-WATCH: a historic but shaky draft agreement

  • Written by  Marco Magrini
  • Published in Climate
COP-WATCH: a historic but shaky draft agreement
10 Nov
2021
The first COP26 draft agreement has been released

The rather hollow draft agreement that came out this morning at 5:48am (the time revealing some night-long diplomatic struggles) carries with it a historic breakthrough: it mentions fossil fuels.

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 Just yesterday, Juan Pablo Osornio, Greenpeace’s delegation head at COP26, made the witty observation: ‘It is inconceivable that in the 27 years of COP talks there has never been a mention of fossil fuels in the text. It is like writing a book on weight loss without talking about food.’

Now, he's got his wish.

At paragraph 19, the tentative text put forward by COP president Alok Sharma states that the Conference of the Parties ‘calls upon Parties to accelerate the phasing out of coal and subsidies for fossil fuels.’

Some fossil fuel majors, such as Shell and BP, recently lamented how unwelcome they feel at COP26. But BP reportedly has seven people here, and is probably represented by at least some of the 503 lobbyists registered at the conference. ‘The fossil fuel industry,’ noted Pascoe Sabido today, a researcher with the Corporate Europe Observatory, ‘has more lobbyists at COP26 than any national government, completely dwarfing the delegations of the world's most climate vulnerable countries and Indigenous peoples.’

Environmental NGOs, observers and – most importantly – developing countries, have said that if we really are to stay within 1.5°C, paragraph 19 is missing a stringent timetable on this phase-out of coal and fossil-fuel subsidies. On the other hand, oil-producing nations, like Saudi Arabia, will most likely oppose the mention of fossil fuels at all during the ongoing deliberations. No one can promise that those two words will survive in the final text expected on Friday (or maybe Saturday or Sunday, as COPs running into overtime are a classic feature).

Following an agreement by a few countries to stop financing coal abroad (but not at home), and another one to it phase out entirely (shunned by the biggest producers), one more is expected tomorrow. The Beyond Oil and Gas Alliance, promoted by renewables’ champions Denmark and Costa Rica, is set to reveal that a dozen member countries are prepared to set a proper schedule to full decarbonisation. In order to secure the famed temperature goal, it really should be 197 members – all the countries seated at COP’s table.

The draft decision (which is due to be updated again overnight) recommends a progressive adieu to fossil-fuel subsidies – probably the most outrageous, illogical contradiction in the whole climate-saving endeavour: while the world spends money to incentivise, develop and install clean energy sources with one hand, it keeps on helping fossil fuels and their consumption with the other. And I am not talking peanuts. According to a recent International Monetary Fund study, global fossil-fuel subsidies were $5.9 trillion or 6.8% of GDP in 2020. They are expected to increase to 7.4% of GDP in 2025 ‘as the share of fuel consumption in emerging markets continues to climb.’

It is the highest estimate ever, because it takes hidden subsidies into account. ‘Just 8% [of the total sum] reflects undercharging for supply costs (explicit subsidies)' – the report reads – 'and 92% for undercharging for environmental costs and foregone consumption taxes (implicit subsidies).’

The International Energy Agency’s estimates, which don’t take environmental costs into account, are ‘just over $180 billion’ in 2020, ‘some 40% down from 2019 levels’ because of (then) falling energy prices. In any case, the total is still higher than subsidies directed to clean energy sources.

Contradictions abound. Let’s take the case of the United Kingdom. While it hosts and leads the Glasgow climate conference, it is also on track to give the green light to the Cambo oil field, west of the Shetland Islands, under waters more than a kilometre deep. Shell and Siccar Point Energy have applied for permission to start pumping an estimated 800 million barrels of crude oil.

Last night I saw a debate on a Scottish TV channel, in which Alex Salmond, former Scottish prime minister, confirmed his support for Cambo. He gave three reasons: the many jobs involved, the expected tax windfall and the carbon capture technology that may be adopted to lessen the oil platform’s carbon footprint.

Unfortunately, Siccar has already stated that it is not due to pay tax ’for many years (…) due to the UK's attractive tax regime’. And, that (unproven) capture technology may one day be applied to an electricity generation plant, but not to an oil extraction platform. Only the jobs remain, but they are still notoriously scarcer than in renewable energy operations.

Tomorrow, an amended text will appear. Let’s see if that simple mention of fossil fuels, long overdue, will resist the attacks of this shaky climate diplomacy.

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