During a London Climate Week event at Chatham House* last week an audience member asked the panel of which I was a member “How are we going to make people pay for climate action?” Given that the questioner had introduced herself as representing the oil company, Shell, my flippant response was that I knew where to start – by taxing those who have done the most to cause a climate crisis, namely fossil fuel companies like Shell. In fact we should tax them out of business, because companies that continue to put short term profit before the continued existence of the human race don’t have a place in a climate-safe world.
It didn’t go down well with my questioner and drew a titter of laughter from the audience. Later, a fellow panellist, Andrew Steer (President of the World Resources Institute) gave a much more sophisticated answer, citing New Climate Economy analysis that no-one needs to “pay” because low carbon development will be much cheaper than incurring the horrendous costs of increasing climate breakdown. We still need carbon taxes, but to pay for adaptation to the climate impacts that are already inevitable, rather than to cut emissions.
Afterwards a number of people quietly told me they agreed with what I had said, although a few also argued that it had been unfair to attack Shell when the company is one of the relative good guys, having announced a shift to clean energy.
This intrigued me enough to do a little background research. It turns out that Shell has, indeed, just announced a “net carbon footprint ambition”, along with a $300m fund for “investing in natural ecosystems”, and it now links its executives’ pay to progress in reducing emissions across its operations. The company’s website gives considerable prominence to the idea that Shell is part of the solution to climate change, including a heavily promoted ‘Road to Decarbonisation’ speech by its chief executive.
It didn’t take much digging, however, to discover a less palatable reality: Shell fully intends to continue being primarily a fossil fuel company the foreseeable future. I don’t mean gradually winding down its oil and gas assets, but continuing to expand them as the overwhelmingly dominant core of its business. Thus, according to the Economist, for the next five years Shell will continue to earmark “most of its $30bn annual capital-expenditure budget..for fossil-fuel related projects”.
How does that square with a “net carbon footprint ambition”? Well, the target is only to reduce carbon emissions per unit of energy Shell produces, rather than cut the total quantity of emissions for which it is responsible. So Shell can happily carry on prospecting for new oil and gas and increasing production, as long as it can find a way to make it a little bit less carbon intensive per barrel.
Shell’s CEO, Ben van Beurden, justifies this apparent green-wash by passing the buck. Investors aren’t ready to back big investment in renewable energy when there are 10%+ returns to be made on discovering and exploiting new oil and gas fields. If all the private fossil fuel companies in the world stopped production tomorrow it would only cut oil and gas supply by 10%, a slack that state owned companies would most likely take up. Everyone consumes fossil-fuel based products and so we all have a responsibility to cut emissions.
I shall leave it to the reader to make up their own mind, but on encountering the same arguments recently the British environmentalist, George Monbiot, wrote a column in the Guardian entitled ‘Shell is not a green saviour. It’s a planetary death machine’. I wish I’d thought of that..
*Despite the location we weren’t under ‘Chatham House’ rules, so I am not breaking any confidences by revealing the discussion, indeed you can see the live stream of the event here.The relevant question is asked at 43.15 and the responses start at 48.40