Sacred Headwaters #40: Supply Side of Climate Change

Fossil fuels cause climate change. The world ostensibly wants to mitigate climate change. But countries are planning to produce more than twice as much fossil fuel in 2030 as is compatible with 1.5C.

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Issue #40: Supply Side of Climate Change

Burning fossil fuels causes climate change. This may be redundant, but it should be said as often as possible: scientists at ExxonMobil understood that link clearly as early as 1957. Scientists at Ford knew it in the 1950s too, and at GM by the 1960s. The greenhouse effect itself was first theorized in the early 19th century. The first estimate of climate sensitivity — how much warming would a given change in atmospheric CO2 cause? — was put forth in 1896 by Svante Arrhenius.

The process of extracting fossil fuels from the ground also causes climate change, an issue that is increasingly coming to the fore as certain countries — ahem, Canada, following closely in the footsteps of Obama’s USA — aggressively pursue fossil (“natural”) gas expansion. And governments like Canada’s are attempting to make extraction emissions the entire policy focus: both regional and federal governments here have recently proposed oil and gas sector “emissions caps” (sounds like a good thing, right?!) while simultaneously planning to double fracked gas production and expand tar sands oil production through mid-century.

Cutting extraction emissions — especially methane emissions — is genuinely important in the short term. But it ought to be obvious that the fossil fuel extraction itself (and inevitable subsequent consumption) is the core problem. Extract less fossil fuel, warm the world less.

There is no shortage of research linking production levels with warming and comparing “carbon budgets” — how much greenhouse gas can be emitted without exceeding a temperature threshold — and extraction plans. The first report along these lines that I’m aware of was published in 1997; it found that burning all estimated fossil fuel reserves at that time would warm the world roughly 5C. Carbon Tracker has written multiple reports along these lines; the Australian Climate Council has weighed in; and the UN Environment Programme publishes a periodic report called the Production Gap Report, arguably the strongest indicator of whether countries have any intention of meeting their stated climate goals (we’ll look at the latest one below).

If you were paying attention in September, you would’ve also seen a brief news cycle covering a new Nature paper arguing that the majority of fossil fuels must be left in the ground to retain even a 50% chance of limiting warming to 1.5C. That paper joined a number of others including a high-profile one in 2019 that set off a similar news cycle by arguing that “committed emissions” from existing and planned energy infrastructure already exceeded the carbon budget for 1.5C.

All this is to say: the link between fossil fuel production and emissions is clear. It’s been clear for decades. But it’s entirely missing in political negotiations and, as I wrote in the last issue, beginning to change that is one of the biggest (ongoing) successes of the growing divestment movement.

In this issue, we’re going to read about how far off production plans are from even stated climate policies, let alone goals like 1.5C and about attempts to build on divestment’s work and drive supply-side restriction of fossil fuel production.

This introduction is getting a bit long, but I want to raise the question, “why has supply restriction been so absent?” There are some obvious answers and some more subtle ones. The United States is the largest producer of fossil fuel in the world (“thanks Obama” applies quite directly here). Canada is fourth. Australia, China, and Russia are also in the top ten. In other words, many of the strongest powers are also the largest oil producers, which makes it a tough topic for power-imbalanced international negotiations and an even tougher one for consensus.

More subtly, though, the lack of focus on the supply of fossil fuels is born from the market fundamentalist worldview that underpins most political decision-making in this neoliberal era. It’s rooted in this idea that “demand” is some kind of exogenous product of consumer wishes that emerge organically, from nothing. If we reduce demand, we’ll reduce supply! It makes wonderfully simple sense in the context of a highschool microeconomics class and completely overlooks the rather large roles of market power, infrastructure (physical, socioeconomic, and cultural), and advertising. Automobiles didn’t take over North America by being the best, most efficient and convenient form of transport that everyone suddenly wanted. The automobile industry leveraged political power to push through infrastructure decisions that made it impossible to live without a car. Now, “demand” for cars is high and rising. This pattern repeats itself over and over again, with tobacco, with fossil fuels, with social media, and more. “Demand” as some kind of intrinsic property of a monolithic “public” (also a problematic concept) does not exist. As such, attempts to resolve the climate crisis without addressing the political and market power of the companies causing it — in other words, without addressing their ability to create and manipulate demand — are doomed to the exact kind of failure we’ve seen over the last four decades and are continuing to see today as we enter COP26.

The Production Gap Executive Summary (10 minutes)

UN Environment Programme, 2021

The first Production Gap report was published in 2019. The findings were grim. This one, published last month, is equally grim. As they put it:

Governments plan to produce more than twice the amount of fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C. The production gap has remained largely unchanged since our first analysis in 2019.

The report speaks for itself and is, in my opinion, the strongest (and scariest) indicator of the utter failure of international climate policy. It explicitly, although somewhat gently, points out the incompatibility of stated net-zero targets with production plans. It points out the absurd disparity between the amount of money Global North countries spend on fossil fuels and how much they invest in clean energy. And it prescribes a path for governments, calling for restrictions on fossil fuel exploration and extraction; ending fossil fuel subsidies; requiring fossil fuel production disclosures both at the international/Paris Agreement level and at the corporate level; and ensuring that the required managed decline in fossil fuel production is done in a way that supports those producer countries with “limited financial and institutional capacity.” Notably for the country where I live, the report splits coal, oil, and gas. Canada’s oil and gas production plans are both substantially out of line with climate targets and have both increased since the 2019 edition of the report.

Towards a fossil fuel non-proliferation treaty (35 minutes)

Peter Newell and Andrew Simms, Climate Policy, 2019

This paper introduces the idea of a “non-proliferation treaty” for fossil fuels — in other words, a binding international agreement to stop expanding the arsenal that is burning our (only) home planet. For those of us born after the end of the nuclear imaginary that dominated the Cold War period, the concept is drawn from the original nuclear non-proliferation treaty agreed to in the 1960s. The authors assess the increasing need for and movement calling for supply-side restriction of fossil fuels (including pointing to divestment and the development of “anti-fossil fuel norms” — a term coined in another interesting paper) then make the case for an international treaty built on three pillars analogous to the original NPT: “non-proliferation, disarmament, and peaceful use.” The treaty would put an immediate end to new fossil fuel development; it would allow for international coordination of the drawdown of existing infrastructure; and it would, crucially, create a framework for the frequently-promised-but-never-delivered aid to the Global South that would allow countries to “leapfrog” fossil fuel industrialization.

Of note is the paper’s emphasis on “burden-sharing principles.” The recent Nature paper quantifying how much of each country’s proven reserves must remain in the ground to keep 1.5C on the table entirely ignored any type of “fair share” or historical contribution analysis. Instead, it focused on cost and carbon efficiency — some fossil fuel sources are expensive or require burning large amounts of energy to extract, or both (like Canada’s tar sands). This paper, in line with calls from the Global South during these opening days of COP26, makes the case that the allocation of the remaining allowable fossil fuel extraction must account for historical responsibility and national wealth. Producers like the US, Canada, Norway, and Australia must be the first to go.

Note: this paper kicked off an advocacy campaign, as it was intended to do, and there is now a global initiative calling for a Fossil Fuel Non-Proliferation Treaty. Get your local government or organization to endorse it! I have failed to get any traction with mine, so far.

COP26 climate change summit: Countries must move beyond oil and gas production by setting an end-date – Costa Rica and Denmark (5 minutes)

Dan Jørgensen and Andrea Meza, The Scotsman, October 28th, 2021.

This short piece, written by the Danish minister for climate and the Costa Rican minister of environment, was published just before COP26 and calls on world leaders to join the Beyond Oil and Gas Alliance, an initiative led by Denmark and Costa Rica to bring together countries calling for an end to oil and gas production. As these ministers put it:

…we must swiftly adopt bold and tangible efforts to deliver on the pledge we made in Paris six years ago. One approach is inherently intuitive, but has consistently been overlooked in both national policies and global climate diplomacy: the need to embark on a just transition away from oil and gas production.

BOGA is particularly interesting in the context established in both the FF-NPT paper and Fergus Green’s AFFN paper. While it’s tempting to see international policy as primarily driven by the interests of the wealthy — and of course, in many ways it is — international socialization and pressure are real and can make a difference. That kind of work, led by the Global South, is why we’re even talking about 1.5C today, and initiatives like this and the fossil fuel NPT, in close coordination with domestic mobilization in wealthy countries, have real potential to drive transformative international commitments.

Alberta’s tar sands oil is among the most expensive, most carbon intensive, and most destructive in the world. Canada’s “fair share” and Canada’s “efficient share” aren’t too far off; the 2021 Nature paper on unextractable fossil fuels found that 83% of all Canadian fossil fuel resources must remain in the ground. Photo by Garth Lenz.

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