(Image: David Ryder/Getty)

The oil giant Shell is betting on a world that will be 4 °C warmer by 2100, according to this week’s media reports . Their justification? “We do not see governments taking steps now that are consistent with 2 °C scenario,” says an internal planning document seen by The Guardian newspaper.

It should be no surprise that oil companies like Shell, which publicly talk about the need to limit warming, privately assume this will not happen. Oil companies’ value depends on their reserves, and only a fraction of existing reserves can be burned if we are to stay below the 2 °C warming target. If the firms were stopped from fully exploiting their reserves, their value would plummet, leading to a huge stock market crash. This is one reason behind campaigns to persuade large investors to withdraw from fossil fuel.

But most investors and oil companies are betting on business as usual, with Shell still trying to find new fossil fuel reserves. The green light it got to explore the Arctic sparked protests in Seattle this week.


And it is true that governments are not taking the steps necessary to limit warming to 2 °C. Just this week an International Monetary Fund report revealed that they are subsidising fossil fuel companies to the tune of $5.3 trillion a year – equivalent to 6.5 per cent of global GDP.

And so far it seems that the global deal to rein in further emissions, expected at the summit in Paris in December, will not go far enough to change this.