Expert’s Pick: Fossil fuel companies and climate action

It could seem naive to expect some of the greatest emitters – oil and gas companies – to act in the name of climate action. Yet, many of these corporations have loudly declared pledges to the public to reduce emissions and invest in “green” technology. How effective are these pledges? Are they just “greenwashing”?

British newspaper The Guardian’s article,Royal Dutch Shell may fail to reach green energy targets’ sheds light on recent spending by oil companies on renewable energy. We see that oil companies have shown limited spending on renewables, and “are not moving fast enough to help tackle the climate crisis.”

Oil companies like Shell say they’ll invest in “clean” and “green” technologies. The amount of investment in these technologies remains a minor fraction of their annual spending.

Norwegian consultancy Rystad Energy has revealed “that Europe’s five largest oil companies – Shell, BP, Total, Eni and Equinor – together spent a total of $5.5bn on renewable energy projects to date, compared with a combined total budget of almost $90bn last year alone.”

The article quotes Stephen Kretzmann, the executive director of Oil Change International, an organisation dedicated to ending the use of fossil fuels: “The executives that run the carbon companies definitely do not get the part about the need for them to make less of the thing that is driving climate disaster. The big problem isn’t too little investment in renewables – it’s too much investment in, and government support for, fossil fuels.”

Whatever the reason, it’s clear fossil fuel companies aren’t doing enough to act. So, what needs to happen? And who needs to act? What main changes need to occur in order to have real impact?

According to our Project Manager & Analyst Duncan Gibb, fossil fuel companies’ ineffectiveness in combating emissions isn’t surprising at all. “We can’t rely on these energy companies to pave the way. They’re falling short of even their own goals, which weren’t significant to begin with.”

Instead, Gibb says that we can take oil companies’ recent spending records as evidence that political action is crucial. The cost of renewables, particularly solar PV and wind, continue to fall, so cost is not the problem.

“What we really lack are regulatory frameworks that make renewables economically attractive even for the largest polluting companies. Politicians need to create market conditions where businesses have no choice but to allot more of their spending on renewables,” says Gibb.

Where to start? Removing fossil fuel subsidies and carbon pricing policies are key tools. Along with effective energy policies, citizen involvement is a major lever to pressure politicians to create the right regulatory frameworks to support renewable energy. This is being reflected by this year’s Renewables Global Status Report (GSR 2020), whose feature chapter will discuss citizen involvement.

We are already writing and reviewing GSR2020. Our peer review period begins Monday, 13 January and we welcome your contributions! The final product will be published this June – stay tuned.