Week 15: Fossil fuels, yes. Climate refugees, no.

In this issue: ▸ A world of coal, oil and gas ▸ A tragic u-turn on fossil fuels ▸ How climate friendly is LNG? ▸ Europe is displacing the displaced ▸ Executives admit own greenwashing ▸ And more...

Apr 17, 2022

Dear all,

“Those who control the present, control the past and those who control the past control the future.”

George Orwell’s famous quote from his book 1984 applied in the current state of the world outlines pretty much some of the developments we are witnessing.

Despite the dire messages from the latest IPCC report and a number of “now or never” prophecies, the current economic model we run in the world controls the narrative and as such controls the rains of the past and the horizon of the future.

The chart below is self-explanatory. Our world is a world of coal, oil and gas.

*Source: https://ourworldindata.org/energy-mix*

We are simply not there, and we are far from being there. You have to mind the optics as some people would say. Given that we base our economic model on perpetual growth and consumption everything is and will be about one thing and one thing only. Energy.

Our inability to respond to and stop the war waging in Ukraine and some other places in the world, like Yemen, lies in our dependency on energy produced by authoritarian regimes across the world.

We knew this, we know this, and we keep telling ourselves that “soon, very soon” things will change.

The hard truth is they won’t, unless some radical actions are taken.

But who will take them? The people running and benefiting from the current economic model? Well, you get the optics.

A tragic u-turn on fossil fuels

Just over a year into Biden’s presidency, as Russia’s invasion of Ukraine deepens fears of global oil and gas shortages and western governments scramble for new supplies, the outlook for American fossil fuels and how the White House views them are undergoing their own transition.

Desperate to wean itself from Russian oil and gas and wilting under soaring energy prices, Europe has rediscovered its thirst for American LNG. Engie has already signed up for more shipments.

In March, Biden announced a deal with Ursula von der Leyen, the European Commission president, guaranteeing new long-term demand for American fossil fuels “until at least” 2030.

Petrol prices have risen more than 70 percent since Biden entered office, creating a big headache for the Democrats in the run-up to November’s congressional elections.

As a result, an administration that promised to prioritise the climate fight is now waging a short-term battle to make it cheaper to keep burning fossil fuels.

The result is what analysts describe as a series of policy contortions. The administration, which scrapped the Keystone XL heavy oil pipeline from Canada within hours of entering office last year, now seeks more crude from Venezuela’s sanctioned authoritarian regime.

The president, who in his campaign pledged to eliminate fracking on federal lands, now calls for more drilling and wants to fine companies that don’t quickly produce from their federal leases.

The administration, which wants people to buy electric vehicles, has repeatedly released oil from emergency stockpiles to make American petrol, still cheaper than elsewhere in the developed world, even less costly.

It just does not make sense. It is an up and down world, and it clearly shows how poorly we are prepared for the transition to a more sustainable future.

How climate friendly is LNG?

So now natural gas is suddenly back in the White House’s favour.

In March, after the EU had announced plans to cut imports of Russian gas, Amos Hochstein, the White House Senior Advisor for Energy Security, and other officials were scrambling to persuade allies such as Qatar, a big LNG producer, and Japan, a big LNG importer, to free up more supply for Europe.

Biden’s deal with von der Leyen to guarantee longer-term demand followed.

But how climate friendly is LNG? Liquefying natural gas is energy and carbon intensive unless the plants capture the emissions. And the pipe joints and vessels can leak methane, a potent greenhouse gas.

Nevertheless, the new LNG infrastructure, both the new export plants in the US and the import facilities in Europe, would embed the fossil fuel in the economy for decades.

The greenhouse gas (GHG) emissions from the extraction, transport, liquefaction, and re-gasification of LNG can be almost equal to the emissions produced from the actual burning of the gas, effectively doubling the climate impact of each unit of energy created from gas transported overseas.

The liquefaction, tanker transport, and re-gasification steps required for overseas export can account for up to 21 percent of total life-cycle emissions for LNG.

Leaks and intentional releases of methane, a potent GHG, during the extraction and transport of the LNG can constitute up to 14 percent of LNG’s life-cycle emissions.

The GHG footprint of U.S. LNG is, at best, only modestly smaller than that of other fossil fuels. In fact, U.S. LNG can actually have a larger climate footprint than other sources of LNG for many importing countries.

Compared with clean, renewable energy sources, LNG falls far short. Life-cycle GHG emissions for solar power are less than 7 percent of LNG emissions; emissions for wind power are even lower, less than 2 percent of LNG emissions.

If U.S. LNG exports increase as projected, this industry alone will generate 130 to 213 million metric tons of new GHG emissions in the United States by 2030, equal to the annual emissions of 28 to 45 million fossil fuel-powered cars and enough to reverse the 1 percent per year decline in total U.S. GHG emissions measured during the past decade.

International GHG accounting rules require countries to count only emissions generated within their borders. This means that the U.S. emissions ledger will show a substantial increase in emissions due to its LNG exports while importing countries will artificially lower their “emissions cost” of using this fuel, underestimating its true climate impact by at least 31 percent.

The social cost of LNG

The estimated social cost for the climate-driven human harm and environmental damage, a cost borne by the public, from U.S. LNG exports was $8.1 billion in 2019.

By 2030, when U.S. LNG exports are projected to be three times higher, the total social cost will be $30.5 billion per year.

Let’s look a bit deeper into the social cost and who will bear the brunt of it?

The latest IPCC report projects that by 2030, about 250 million people may experience high water stress in Africa. And, even worse, drought will displace 700 million in Africa – a continent that is responsible for less than 4% of global emissions.

700 million people… For context, the entire population of Africa is 1.4 billion.

In other words, by 2030 half the continent of Africa could be displaced as a result of climate change!

This dire warning of displacement comes at a time when many African nations are already witnessing record breaking droughts even today.

The south-western provinces of Angola are currently in their fifth consecutive year of a devastating drought. A drought which the World Food Programme has identified as the worst to hit the country in 40 years. Among those most impacted are rural communities relying on subsistence agriculture for their survival.

The Horn of Africa, a region in eastern Africa containing Somalia, Ethiopia, and Kenya is also facing its worst drought in 40 years with 13 million people facing severe hunger.

The current drought as well as previous ones in the region have displaced hundreds of thousands.

The numbers from drought related displacement in Somalia are astounding.

Europe is displacing the displaced

So what is Europe’s response to this? Well, it is a rather brutal one.

For example, in 2021 Danish lawmakers approved the establishment of a refugee reception centre outside the country’s borders. Lawmakers voted 70-24 to authorize the transfer of asylum-seekers to a third country for processing.

The law would force asylum-seekers to apply in person at the Danish border and then be flown outside Europe for processing by a third country.

If their application is successful, they would be granted refugee status and be allowed to live in the host country, but not in Denmark. If they are rejected, they would have to leave the host country.

The Danish government has also signed a non-binding memorandum of understanding with Rwanda. According to Danish media, the government has also been negotiating with Tunisia, Ethiopia, Egypt and possibly Eritrea.

And now, UK has also signed a deal to send asylum seekers to Rwanda for processing.

So in simple words: We are responsible for the climate crises. People in Africa will be mostly affected and displaced. But we are closing our borders for them and we will build refugee centres in Africa to keep them there and stop them from crossing over to Europe.

Meanwhile, we talk about the importance of human rights, importance of democracy, free movement of capital and people, and we talk about our deeply rooted democratic values.

This disgraceful world of ours, this disgraceful time we live in.

This is our mantra, our religion: Wealthy individuals contribute disproportionately to higher emissions but they have a high potential for emissions reductions, whilst maintaining high levels of well-being and a decent living standard.

This is how we like it, this is what we are fighting for. This is what democracy is about for us, this is what human rights are for us.

(For perspective, you can educate yourself on the topic of global carbon inequality here.)

Criminal cases against cpmpanies for human rights abuses

Under certain circumstances, a corporation can be held criminally liable for the illegal acts of its directors, employees or other individuals acting on its behalf.

Efforts to hold corporations accountable under criminal law for illegal acts that result in human rights harm (corporate criminal liability) have gained traction since the United Nations Guiding Principles on Business and Human Rights (UNGPs) were released in 2011.

The UNGPs require States to regulate rights respecting business behaviour not only in civil and administrative law, but also through “criminal regimes that allow for prosecutions based on the nationality of the perpetrator no matter where the offence occurs.”

Illegal acts may be criminalised in international humanitarian law, anti-trafficking legislation, environmental laws, consumer safety legislation or workplace safety laws, among others.

There are many barriers to corporate criminal liability, including evidentiary burdens (the standard of proof required in criminal law is much higher than in civil law), and jurisdictional limitations (some jurisdictions only allow for the criminal liability of individuals, not corporations, and or do not allow prosecutions for extraterritorial harm).

As a result, criminal law prosecutions for corporate human rights abuses remain few and far between. This resource hub provides analysis, commentaries and examples of criminal cases brought against companies to redress human rights abuses.

There are some very interesting company names on the list…

China is expanding influence, violating basic rights

Since the “Going Out Policy” was initiated in 1999 by the Chinese Government to promote Chinese investments abroad, the footprint of Chinese enterprises has expanded considerably.

This has been further accelerated by President Xi Jinping’s launch of China’s Belt and Road Initiative (BRI) in 2013, after which China committed to work “together with other countries to foster the environmentally-friendly and sound development of the Belt and Road, featuring peace and the exchange of wisdom, and to build a global economy more vibrant, open, inclusive, stable and sustainable.”

As Chinese businesses – particularly energy, construction, and mining and metals companies – continue to venture abroad, civil society and the media have reported an unfortunate increase in social, environmental and human rights violations, particularly in Asia, Africa and Latin America.

Between 2013 and 2020, 679 human rights abuse allegations linked to Chinese business conduct abroad were recorded. Myanmar had the highest number of recorded allegations (97), followed by Peru (60), Ecuador (39), Laos (39), Cambodia (34) and Indonesia (25). China is a major investor or trading partner in all these countries.

Data showed human rights risks are particularly high in metals and mining (35% or 236 allegations), construction (22% or 152 allegations) and fossil fuel energy (17% or 118 allegations). Chinese renewable energy investments overseas have gained momentum because of China’s pledge to meet targets under the Paris Agreement and to build a green BRI.

However, human rights risks in the sector are also prominent, with 87 allegations (13%) recorded.

Money is the oxygen on which the fire of dysfunctionality burns.

Executives suspect greenwashing

Global executives suspect their own companies of greenwashing, as reported here.

How and whether large companies meet their greenhouse gas emissions targets will help determine the fate of the Paris Agreement’s temperature targets. So it’s interesting to learn about about a recent poll of executives about their company’s sustainability efforts.

Here are the highlights:

80% of executives polled rated their company above average for their sustainability work, particularly in the financial services and tech sectors. Are we surprised?
Just 36% of respondents said their organizations have measurement tools in place that allow them to track their progress in detail.
58% of respondents said their organization is guilty of greenwashing. This finding was especially high in North America, where 72% of respondents said their organization has done this.
The poll shows executives put their faith in technological innovation, including computing and satellite data, to help advance sustainable solutions.

The ridiculous idea of embracing arms stocks

There’s a group of fund managers overseeing ESG investments who worry their field is facing another blow to its credibility.

Since the arrival of war in Europe, arms lobbyists, financial analysts and some bankers have been discussing the merits of treating weapons as ESG assets (which I wrote about here). And with lawmakers in Europe now facing pressure to add defense companies to the bloc’s ESG rulebook, critics are asking whether the label risks losing all meaning.

ESG on a Sunday