Key research project proposal appears to put world on course for 4˚C of warming

LONDON/NEW YORK, 28 September 2015 – The new Shell-funded Energy Transitions Commission (ETC) to be unveiled on Monday lacks credibility and does not appear to be serious about limiting climate change to the UN 2˚C target, the London-based Carbon Tracker Initiative said today.

One of the Commission’s first proposed projects, to study how to fuel only half the power sector with “zero-carbon energy” by 2050, would put the world on course for 4˚C of warming, according to analysis by the International Energy Agency (IEA).

The ETC lists the following as one of its initial areas of research in the next year: “How to take zero-carbon energy sources to scale in the power sector? What would it really take for these sources to achieve 50% by 2050?”

If we take zero-carbon to mean non-fossil fuels, then this level of ambition fits precisely with the trajectory of the IEA’s 4˚C pathway in its Energy Technology Pathways (ETP). A 2˚C power pathway, according to the IEA, would mean that fossil fuels would need to be reduced from 68% in 2012 to 50% by 2027 and to 20% by 2050.

Anthony Hobley, CEO of Carbon Tracker, said: “We question the credibility and independence of an Energy Transitions Commission funded by fossil fuel incumbents. Shell’s track record on climate change does not inspire us with confidence and plans that would see half our power generated by fossil fuels in 2050 risk seeing us go way over the UN’s 2˚C climate change target.

“The time for talking is past. Now is the time for action, based on genuinely independent quantitative analysis. Unless we start the radical transformation needed we are not going to achieve a climate-secure energy system in time. The proliferation of talking shops increases the risk that we continue to procrastinate by kicking the can down the road.

“Carbon Tracker will be watching and will provide independent oversight to hold the incumbents to a clear 2˚C benchmark backed up with quantitative analysis.”

The Commission, whose sponsors include Shell and BHP Billiton, has been set up to provide analysis on energy transitions, according to its website www.energy-transitions.org. Shell’s Chairman Chad Holliday and BHP’s Chief Commercial Officer Dean Dalla Valle are among the commissioners appointed and other energy incumbents have also been approached.

The Commission states that one of its aims is “to limit climate change to the 2°C threshold agreed by the international community”. However, Shell has stated that “there is a high degree of confidence that global warming will exceed 2°C by the end of the 21st century.”

Fossil fuel companies are sitting on huge resources of coal, oil and gas that cannot be burned without breaching the UN commitment of limiting climate change to 2°C. This gives them a vested interest in arguing for business as usual.

James Leaton, Carbon Tracker’s Research Director, said:

“The incumbents need to entertain a world where in a growing number of markets renewables are better and cheaper than fossil fuel options, resulting in demand destruction for their product. Analysis shows that this future is also better for our economies, meaning it is a false choice being offered between economic growth and tackling climate change.”

Time for Action, New Voices and New Thinking

An Energy Transitions Commission, funded by the energy industry, lacks independence and credibility. There is a question of trust if we are asked to rely on data, analysis and views from a self-appointed, industry-backed group.

Incumbents seldom see the technological disruptions coming and neither do they see the consequences in climate terms. We should be wary of calls for an oil-and-gas-rich transition that may eventually end in low carbon industries but with a world well above two degrees.

Shell has been producing scenarios for decades and has had the knowledge and capital to drive an energy transition, but has never delivered. It continues to cycle capital back into ever more expensive and carbon intensive hydrocarbon options.

The 2⁰C UN target threatens business as usual for fossil fuel companies because they cannot explain how decarbonisation of the energy system fits with growing their businesses for decades to come.

The G7 committed this year to cutting global greenhouse gas emissions by 40% to 70% by 2050. At the December 2014 Lima Climate Summit around 100 governments called for a zero net carbon target by 2050.

Citibank recently published its Energy Darwinism II report, which concluded it is cheaper for the world to align with 2⁰C than continue business as usual. The Track0 initiative supported by a range of countries and companies, which has produced Deep Decarbonisation Pathways, as has Stanford University’s Solutions Project.

Given the increasing levels of response by the energy sector to the issues of ‘unburnable carbon’ and stranded assets, it’s critical that independent groups like Carbon Tracker continue to assess alignment with staying within the carbon budget.

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