Simon Bullock, senior campaigner at Friends of the Earth, asks: How should governments react to the drop in oilย price?
This month, a powerful article in Nature highlighted yet again that most of the worldโs oil, coal and gas needs to stay in the ground, if we want to prevent dangerous climate change. This is the โunburnable carbonโ analysis that President Obama and Bank of England Governor Mark Carney have both made mainstream in recentย months.
Related, over the last 6 months the world oil price has crashed, catching almost all economists and analysts by surprise. As well as profound economic effects, this crash affects โunburnable carbonโ in two broad and opposite ways.
It is leading to cancellations of potential fossil fuel projects, as they become less or non-profitable. Great for stopping colossally dirty projects like Arctic oil and Canadian tar sands. And in the opposite direction, it makes oil cheaper, meaning people use it more. Bad for climate, though good for peopleโsย pockets.
How should Governments react to this? A Government who genuinely thought climate change was a global priority would not sit passively by and let these conflicting effects of the oil price crash on climate sweep over us. It would act.ย Government surveys show the British public want more action on climate change.
Taxย Cuts
Despite this, the sole response to the oil price crash from the UK Government is do the opposite –ย last week it announced detailed plans for tax cuts for oil companies to drill another 11-21 billion barrels of oil from the ground. Thatโs way more than even the three billion barrels in the Governmentโs Wood Review on offshore oil and gas. Climate change impacts got one sentence of dismissal. And yesterday, it drove through a clause in the Infrastructure Bill – with almost no debate – requiring the UK to โmaximise economic recoveryโ of North Seaย oil.
These are crystal-clear examples of how Governments do not yet grasp that climate change requires a comprehensive plan. We canโt just do a little bit on renewable energy and energy efficiency, and think that this means we donโt need to do anything about fossilย fuels.
And yet, for every announcement of a new wind-farm, or homes insulated, or rail investment, there is a corresponding โ and often larger โ Government announcement which makes climate change worse: ยฃ15 billion for new roads; whopping cuts in taxes on profits for North Sea oil drillers; consultations on which new airport to open; tax breaks for new fracking industries. High-carbon infrastructure has recently over-taken low-carbon infrastructure in the Governmentโs โinfrastructureย pipelineโ.
After decades of subsidy, high-carbon industry shouldnโt need any more help. Colossally rich oil corporations know the global oil price yo-yos โ they should have saved for this moment in the years when oil prices were over $100 a barrel and their profits were sky-high. But like the banks, they want their bail-out, and they know they will getย it.
An Opportunity toย Act
Itโs shameful โ that we have leaders who say climate change is desperately urgent, who call for more ambition, and yet who are still so deep in the pockets of fossil fuel companies they will not act and treat climate change as the emergency it is.ย They areย up-front about it too โ the Government’sย North Sea oil tax cut consultation is clear on three things- itโs derived in discussion with the oil barons; itโs being fast-tracked at their request; and the consultation primarily wants to hear from them. They’re also not so up-front about it – you can see just how deeply theย fracking industry is embedded in Government in this leaked-letter fromย George Osborneย here.
Instead, a Government genuinely committed to action on climate change would treat the oil price crash as an opportunity to act โ in a way that protects the climate as well as helping consumers and protectingย jobs.
It wouldย say:
-
We need a โjust transitionโ plan to get jobs and growth and industry out of North Sea Oil, and into North Sea Renewables like off-shore wind. There will be no economic devastation as when the coal mines closed. But we need to move away from oil, not prop it up. We will do all we can to help people and businesses build new, clean industries in the Northย Sea.
-
We will put in place a plan to keep demand for oil low, to help keep prices low, and ensure undrilled oil stays in the ground. Weโll put in place a proper strategy to make public transport, walking and cycling decent alternatives to motoring. Weโll drive far stronger standards on car and lorry energy efficiency. Weโll invest in a national electric vehicle network. Weโll act at EU and International level to persuade our fellow nations to do theย same.
-
We will make sure the oil and gas price falls donโt damage the growing renewables industry. Weโll reassure investors by setting a clear 2030 power decarbonisation target, with policies to ensure we meetย it.
-
We will reverse our fossil-fuel strategy to โmaximise recoveryโ and focus instead on โminimising demandโ โ in every part of theย economy.
-
We will treat climate change as an emergency, and make tackling it a priority across all departments ofย Government.
People want more action from Government on climate change. Not less. Not a botched half-plan, and half-truths about their commitment to action.ย The inadequate, partial, feeble responses on climate change are yet another expression of why so many people feel alienated from Westminster Governments โ they do not act on their promises, or sufficiently in the publicย interest.
Itโs election time soon. Which parties will put peopleโs interests ahead of propping up fossil fuel companies, and put in place a proper plan to tackle climateย change?
In short, who will step up and show they are a party worth votingย for?
This post originally appeared on Friends of the Earthย blog
Photo: klem@s viaย Flickr
Subscribe to our newsletter
Stay up to date with DeSmog news and alerts
