If we have not been warned of the dangers of climate change this summer, we never will be. Extreme heat, forest fires and floods have been all over news reports. Yet the oil and gas industry remains largely in denial.
The International Energy Agency (IEA) says steep cuts in oil and gas production are necessary to reach the Paris (COP 21) goal of keeping global warming at 1.5℃. However, only a tiny fraction of the industry, accounting for less than 5% of oil and gas output, has targets aligned with the IEA’s “net zero” requirements.
The current secretary general of production cartel Opec, Haitham al-Ghais, expects global oil demand to rise by about 10% to 110 million barrels a day by 2045, a volume incompatible with the Paris goals. The UK government has just offered a helping hand, granting around 100 new North Sea licences. What are we to make of this mismatch?
The new denialism
Typical of the new breed of climate denialism is a recent report by the Energy Policy Research Foundation (ERPF), a body funded by the US government and various undisclosed corporate interests and foundations. It sees the IEA’s requirements as a “seal of approval … to block investment in oil and gas production by western companies”. The report views meeting the targets as too costly, too harsh on poor countries and too bad for the energy security of the west.
In fact, it is wrong on each account. Many eminent economists and scientists use the concept of the social cost of carbon (SCC), which is defined as the cost to society of releasing an additional tonne of CO₂. Expert estimates from 2019 put this at between US$171 and US$310 (£133 to £241). If we go with, say, US$240 per tonne, the social cost of continued carbon equivalent emissions comes out at almost US$8.5 trillion every year.
A recent study has factored into the calculation climate feedback loops. This is where one problem caused by global warming leads to others, such as melting permafrost unleashing stores of methane.
When the study estimated the economic damage that this could cause, it produced an SCC in excess of US$5,000. That implies annual costs of more like US$170 trillion a year, which makes the US$4 trillion investment into clean energy that the IEA thinks necessary to meet the Paris climate goals look like a drop in the ocean.
It may help to break this down to one barrel of oil. A special IEA report for COP28 estimates that on average, each barrel of oil emits 0.53 tonnes of CO₂ equivalent in greenhouse gas across its life cycle, 20% of which comes from production.
Going back to our average SSC per tonne of US$240, that points to a social cost of US$126 per barrel. With oil currently at US$85 per barrel, the societal damage from producing, transporting, refining and consuming it is far greater – and that’s before including climate feedbacks.
Meanwhile, the arguments by the EPRF and like-minded supporters about energy security are laughable. The history of the oil and gas industry is a history of wars and geopolitical tensions. Transitioning to cleaner fuels can only increase our energy security and reduce the need to police remote autocracies.
The argument that poor countries need to continue burning carbon for development reasons is no better. In its latest report from 2022, the Intergovernmental Panel on Climate Change (IPCC) said climate change would probably see an increase in “losses and damages, strongly concentrated among the poorest vulnerable populations”.
Equally, the World Health Organization estimates that: “Between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year from malnutrition, malaria, diarrhoea and heat stress.”
How to respond
The denialists offer no alternatives to cutting carbon emissions, and often simply ignore climate change altogether. The recent ERPF report mentions climate change only four times. It is as if heatwaves, forest fires, flooding, rising sea levels and the demise of natural habitat caused by climate inaction were happening on another planet.
We still have time to limit global warming below 1.5℃. It is true that we will need oil and gas for many years, and that there are currently no alternatives for certain sectors such as air travel, shipping and some industries. Nonetheless, there is still much that can be done now to make a substantial difference.
To incentivise the transition to cleaner energy, governments need to end fossil fuel subsidies, which the IMF estimates amounted to US$5.9 trillion in 2020 alone. We also need to put a proper price on carbon – only 40 countries have attempted this so far, and none has it anywhere near the estimated social cost of emitting carbon.
Countries that resist charging their own polluters should face a carbon border adjustment mechanism, which is a tariff that effectively puts the polluter on the same footing as local players. If all the actors in the fossil fuel supply chain had to face the cost of the damage they cause, the need to phase out long-term investments in fossil fuels would become more obvious.
The IEA requirements for “net zero” are just one of the pathways towards meeting the Paris goal of 1.5℃ warming. Others are explored by some of the more credible actors in the petroleum industry, such as Shell, BP and Norway’s Equinor, but all require a substantial decline in oil demand and production by 2050.
Required production cuts
I left the IEA’s scenario off the graph because it published so few datapoints, but it is broadly in line with the others. Meanwhile, the Opec data is for reference and not a net zero scenario. BP, Shell, Equinor and Opec
Instead of criticising efforts to slow climate change and sponsoring ridiculous reports calling for more fossil fuels, the oil industry should eliminate leakages, venting and flaring of methane, and electrify as many processes as possible using renewable power. It should also employ carbon capture, usage and storage technologies over the next ten years – yes this will increase the price of fossil fuels, but that is exactly what we need to make clean sources of energy competitive across the board and speed up the energy transition.
The sooner the industry starts facing up to the realities of climate change, the more chance it has to survive. The companies and even countries that produce fossil fuels will have to face and pay the cost for the damage they cause. Those costs are already massive and will grow. Those that survive will do so only as a provider of clean and sustainable energy.
Don’t have time to read about climate change as much as you’d like?
Two billion people, including many Australians, will find themselves living in dangerously hot places this century if global warming reaches 2.7℃, research released today reveals.
The authors calculated how many people would be left outside the “human climate niche” by 2100. The niche is defined as places with an average temperature of about 13℃, or about 27℃ in the tropics. Human population has historically peaked in these areas.
The world is on track for 2.7℃ of warming by 2100. This would push a third of people on Earth outside the human climate niche. This includes people in parts of northwest Australia such as Darwin, Broome and Port Hedland. It also includes parts of Southeast Asia, India, Africa and South America.
Limiting warming to 1.5℃ would substantially reduce the number of people exposed, including most of those affected in northwest Australia.
We were not involved in the research, which was conducted by researchers in the United Kingdom, China, Europe and United States. We are Australian experts in the health implications of global warming. Below, we discuss the broader implications of these globally significant findings.
What is the human cost of global warming?
The research calculated the number of people outside the “human climate niche” under different demographic scenarios and levels of warming. Exposure to unprecedented heat was the main factor pushing people out of the niche.
This includes an average temperature greater than or equal to 29℃, as well as a high number of days with a maximum temperature above 40℃ or in humid places, with a wet-bulb temperature greater than 28℃. The wet-bulb temperature (as opposed to the standard dry-bulb temperature) reflects humidity and is a method used to measure heat stress. That’s because it’s the point at which sweating is no longer effective as a means of cooling.
The study says a wet-bulb temperature of 35 ℃ can be fatal, especially for vulnerable people, because the body can no longer cool itself.
Above the present level of about 1.2 ℃ global warming, the authors found exposure to unprecedented average temperatures increased markedly, along with increased exposure to temperature extremes.
But 2.7 ℃ of warming threatens a third of the world’s population. The below map shows where in the world people will suffer the worst heat. Almost the entire area of some countries, such as Burkina Faso and Mali in West Africa, would be exposed to unprecedented heat.
Just last week, the World Meteorological Organization predicted global surface temperatures would rise to record levels within the next five years. The temperature is also likely to temporarily climb 1.5℃ above pre-industrial levels.
This spells trouble for human health. Even incremental warming increases exposure to health hazards including potentially deadly heatwaves, infectious diseases and diet-related health issues.
Let’s be clear. A 1.5℃ world will result in injury and death, particularly for people in Asia and Africa. Importantly, the people most at risk will be the least capable of protecting themselves: children, the elderly and those with existing health conditions.
While populations closer to the equator are more likely to experience heat-related harm, Australians are by no means immune.
For example, a 2019 study found heat-related health issues in Australia have been grossly underestimated. It found more than 36,000 deaths between 2006 and 2017 were attributable to heat.
And experts predict Darwin could experience an average 265 days a year above 35℃ in a 3℃ warmer world.
The risks to Australia of a 3℃ warmer world (Australian Academy of Science)
To date, the Earth’s average surface temperature has warmed 1.2℃ above pre-industrial levels. We must enact ambitious climate policies now if we are to change our dangerous trajectory.
Historically health has rarely been included in these economic assessments, much less ethical considerations. Emissions reduction policies need to consider health and equity issues, and in doing so can provide governments with a strategic rationale to act.
There are physiological limits to adaptation, particularly to heat. These limits can have negative consequences for labour productivity, especially for outdoor workers, and for health service demand, leading to increased hospital admissions, emergency department visits, and ambulance calls.
Pursuing adaptation measures in an effort to reduce the harmful effects of existing climate change is vital, but to protect the health of all, it is critical that we pursue strong emissions reduction measures.
A commitment to develop and implement a National Health and Climate Strategy and establish a National Sustainability and Climate Unit are promising initiatives. This will help to address our woeful performance in a recent assessment showing how national climate commitments don’t link with health.
Last week, the Victorian Government committed to reducing emissions by 75-80% compared with 2005 levels by 2035. Their analysis indicates it will lead to A$5.7 billion in health benefits from improved air quality between 2035 and 2045.
As today’s new research states, the findings highlight the need for “more decisive policy action to limit the human costs and inequities of climate change”. Australia, in particular, must protect children, the elderly and the broader population from the harms they face in a warmer world.
Annabelle Workman, Research Fellow, Melbourne Climate Futures and Melbourne School of Population and Global Health, The University of Melbourne and Kathryn Bowen, Professor – Environment, Climate and Global Health at Melbourne Climate Futures and Melbourne School of Population and Global Health, University of Melbourne, The University of Melbourne
