Friday, September 11, 2015
Why We Must Divest from Fossil Fuels
In addition to being the leading cause of climate change fossil fuel spills have wreaked environmental devastation all around the world. For more information on oil spills click here.
The Science of climate change
Climate change is one of the most studied phenomenon in human history. More than 97 percent of scientists agree that global warming is real and it is caused by human activity and we further know that fossil fuels are the leading cause. Rarely in the history of science have we achieved this kind of consensus. For a review of climate science click here.
The 2 degrees Celsius threshold
We know that to stave off the worst impacts of climate change we must keep global temperatures from rising more than 2 degrees Celsius above pre-industrial times. This is the heart of the Durban Platform for Enhanced Action globally agreed upon at UN climate talks in 2011.
The UN defines the carbon budget as the estimated amount of carbon dioxide the world can emit while still having a likely chance of limiting global temperature rise to 2 degree Celsius above pre-industrial levels. This has a direct bearing on the amount of fossil fuels we can burn. For example we cannot afford to burn 80 percent of the known coal reserves if we are to stay within our carbon budget. Most of the known fossil fuel reserves must stay underground if we are to have a chance of staying within our carbon budget. As stated by the UN: "If emissions continue unabated, the world is on track to exceed this budget in only about 30 years—exposing communities to increasingly dangerous forest fires, extreme weather, drought, and other climate impacts." For more information on the earth's carbon budget click here.
Our emissions continue to rise but if we are to stave off the worst impacts of climate change we must carefully plan ahead. According to the UN, to best enable us to limit warming to 2 degrees Celsius our global emissions must peak by the year 2020 and then they must be sharply reduced thereafter. To see a UN infographic on peak emissions click here.
Failure to act could abruptly push us past irreversible tipping points. We must act quickly because we are on the cusp of these tipping points from which we will not be able to recover. There are complex feedback loops that could augur warming of 11 degrees or more. This includes things like unlocking the methane and carbon trapped in the permafrost on land and on the ocean floor of the far north. This would herald the kind of runaway climate change which no amount of human mitigation could counter. To see a summary of tipping points click here.
Unchecked climate change
If left unchecked climate change would unleash a veritable hell on earth. PwC has called the impacts of climate change a "catastrophe." Global warming is not some distant reality advances in attribution science tell us that climate impacts like extreme weather are already here. We have seen global average temperatures consistently above average for more than 30 years. We need only watch the daily news to notice that we are experiencing increased incidence of drought, wildfires and extreme weather. In fact climate change is already killing people today, making them sick and undermining their quality of life. The situation is destined to get far worse if we continue with business as usual.
1. Flooding: Sea level rise from melting ice in both the Antarctic and the Arctic will flood coastlines where economic activity is concentrated and most of the world's population live. It will also inundate tiny island states like the Maldives.
2. Extreme Weather: Storm surges, heat waves, drought, hurricanes and typhoons.
3. Other consequences: Catastrophic health impacts, crop failures will increase food scarcity and contribute to undernourishment and famine. We can also expect more pestilence and disease. A number of studies show that climate change also contributes to social tensions, conflicts and war. It also increases the number of refugees.
Another argument put forward is that we have no alternatives to fossil fuel as our primary source of energy. However, this argument is being increasingly exposed as a myth. There are a number of studies which indicate that we can power our future with emissions free renewable energy. All around the world there are examples that show we can power our economies with renewables. This is true in economic powerhouses like Germany, but it is also true in poor rural areas in the developing world where local renewable energy projects are bringing electricity to rural villages for the first time without the need for an expensive power grid. This is called leapfrogging and it is helping to lift disadvantaged people out of poverty. We are already seeing that renewable energy is rapidly becoming price competitive with fossil fuels. Very importantly we are seeing that as the stock valuations of fossil fuels decline, investments in renewable energy and cleantech continue to improve. To review the growth of renewable energy click here. To review the value of investing in clean energy click here.
One of the arguments used to resist climate action is cost. However, a vast number of economic reports show that the cost of combating climate change is far less costly than allowing it to go unchecked. There are even a number of reports that show there is an economic boon from the growth of green technologies. We are already seeing evidence of the employment and economic benefits from green technologies. As these technologies scale they can be expected to provide far greater benefits. To review the costs of inaction and the benefits of acting on climate change click here.
Fossil fuels are a bad investment
As the price of fossil fuels decline, stock valuations decline in lock step. We can plot this on a graph and see that oil's glory days are behind us. This is clearly apparent with coal. The future of fossil fuels looks grim indeed. The combination of energy efficiency and renewables will continue to apply downward pressure on demand and this will continue to decrease stock valuations.
Carbon bubble and stranded assets
As we move into the future, a more stringent regulatory environment and slowing demand suggests that fossil fuel prices will keep falling. We are sitting atop a carbon bubble that is destined to burst. At the end of the day these assets will ultimately be stranded as they will become valueless over time. For video explaining the concept of a carbon bubble click here. For a more detailed explanation of stranded fossil fuel assets click here.
The world is coming together to combat climate change. We are seeing signs that we will succeed in brokering a global climate deal at the UN sponsored Conference of the Parties later this year in Paris. The recent Bonn climate talks a forerunner to the Paris talks have produced promising results that are buoying widespread optimism divesting
Growing divestment movement
The number of investors, organizations, businesses, universities and citizens that are divesting from fossil fuels is unprecedented and growing every day. The divestment movement is fueled by pragmatic bottom line concerns alongside the issue of our moral responsibility to try and tackle climate change. To review the impacts of fossil fuels, as well as a summary of those who are divesting and why they are divesting click here.
Independent of our efforts to combat climate change we are moved to divest if for no other reason than the need to reduce the amount of pollution in our atmosphere. The pollution caused by the burning of fossil fuels is deadly and makes people sick.
Now is the time
This is the year we tackle climate change. We have dithered on the issue of climate change for decades. Last year we saw the historic climate march where millions of people around the world called for action on climate change. A critical mass is has formed and the world appears poised to act. Recent headlines indicate that 2015 will be recorded by history as the year that we will finally respond to the climate crisis in a serious way. The end of oil is becoming increasingly obvious. To illustrate the point the G7 pledged to phase out fossil fuels earlier this year.
Scientists tell us that we have a rapidly closing window of opportunity. As explained in a PwC report we are running out of time to avert a catastrophe. Failure to act is unconscionable, in fact it amounts to collective suicide. We must act not just as people of faith, but as sensible people who purport to care about each other. For our sake, for the sake of our children and for the sake of future generations we are called to act and we must act now before it is too late.
Posted by Richard Matthews