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The argument for divesting from fossil fuels is becoming overwhelming

The argument for divesting from fossil fuels is becoming overwhelming


Powered by Guardian.co.ukThis article titled “The argument for divesting from fossil fuels is becoming overwhelming” was written by Alan Rusbridger, for theguardian.com on Monday 16th March 2015 13.06 UTC

The world has much more coal, oil and gas in the ground than it can safely burn. That much is physics.

Anyone studying the question with an open mind will almost certainly come to a similar conclusion: if we and our children are to have a reasonable chance of living stable and secure lives 30 or so years from now, according to one recent study 80% of the known coal reserves will have to stay underground, along with half the gas and a third of the oil reserves.

If only science were enough.

If not science, then politics? MPs, presidents, prime ministers and members of congress are always telling us (often suggesting a surrender of civil liberties in return) that their first duty is the protection of the public.

But politics sometimes struggles with physics. Science is, at its best, long term and gives the best possible projection of future risk. Which is not always how politics works, even when it comes to our security. Politicians prefer certainty and find it difficult to make serious prudent planning on high probabilities.

Climate change petition

On climate change, the public clamour is in inverse proportion to the enormity of the long-term threat. If only it were the other way round. And so, year after year, the people who represent us around the UN negotiating tables have moved inches, not miles.

When, as Guardian colleagues, we first started discussing this climate change series, there were advocates for focusing the main attention on governments. States own much of the fossil fuels that can never be allowed to be dug up. Only states, it was argued, can forge the treaties that count. In the end the politicians will have to save us through regulation – either by limiting the amount of stuff that is extracted, or else by taxing, pricing and limiting the carbon that’s burned.

If journalism has so far failed to animate the public to exert sufficient pressure on politics through reporting and analysis, it seemed doubtful whether many people would be motivated by the idea of campaigning for a paragraph to be inserted into the negotiating text at the UN climate talks in Paris this December. So we turned to an area where campaigners have recently begun to have marked successes: divestment.

There are two arguments in favour of moving money out of the biggest and most aggressive fossil fuel companies – one moral, the other financial.

The moral crusaders – among them Archbishop Desmond Tutu – see divestment from fossil fuels in much the same light as earlier campaigners saw the push to pull money out of tobacco, arms, apartheid South Africa – or even slavery. Most fossil fuel companies, they argue, have little concern for future generations. Of course, the companies are run by sentient men and women with children and grandchildren of their own. But the market pressures and fiduciary duties involved in running public companies compel behaviour that is overwhelmingly driven by short-term returns.

So – the argument goes – the directors will meanwhile carry on business as usual, no matter how incredible it may seem that they will be allowed to dig up all the climate-warming assets they own. And, by and large – and discounting recent drops in the price of oil – they continue to be reasonably good short-term businesses, benefiting from enormous subsidies as they search for even more reserves that can never be used.

What is fossil fuel divestment and why does it matter?

The pragmatists argue the case on different grounds. It is simply this: that finance will eventually have to surrender to physics.

If – eventually – the companies cannot, for the sake of the human race, be allowed to extract a great many of the assets they own, then many of those assets will in time become valueless. So people with other kinds of fiduciary duty – people, say, managing endowments, pension funds and investment portfolios – will want to get their money out of these companies before the bubble bursts.

Alan Rusbridger in London, for the launch of the Guardian's climate change campaign.
Alan Rusbridger in London, for the launch of the Guardian’s climate change campaign. Photograph: David Levene

Of course, the financial risk comes not simply from the threat of regulation, but could also be hastened by the march of alternative clean energy. Global investment in clean energy jumped 16% in 2014 to £205bn, but because of the rapid drop in the price of that energy (the cost of solar has dropped by two-thirds in 6 years), the money invested last year bought almost double the amount of electricity capacity as in 2011.

So there’s a risk calculation to be done by anyone invested in fossil fuels – which, one way or another, is probably most of us. Get out too early and you might forgo the reasonable returns based on current performance and the book value of the assets that are notionally exploitable.

But what of the risk of being a late exiter? Do you wait and judge when the politicians could finally summon the will to start making regulatory and market interventions … and then get out? And at the same time as everyone else is trying to do the same?

This is why the divestment movement has changed from being a fringe campaign to something every responsible fund manager can no longer ignore. How could they, when even the governor of the Bank of England, Mark Carney, has warned that the “vast majority of reserves are unburnable” and the bank itself is conducting an inquiry into the risk that inflated fossil fuel assets pose to the stability of the financial system?

When the president of the World Bank, Jim Yong Kim, urges: “Be the first mover. Use smart due diligence. Rethink what fiduciary responsibility means in this changing world. It’s simple self-interest. Every company, investor and bank that screens new and existing investments for climate risk is simply being pragmatic”?

When the Bank of England’s deputy head of supervision for banks and insurance companies, Paul Fisher, warns, as he did this month: “As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in fossil fuels – a growing financial market in recent decades – may take a huge hit”?

Or listen to Hank Paulson, no bleeding liberal, but secretary of the Treasury under Bush and former CEO of Goldman Sachs: “Each of us must recognise that the risks are personal. We’ve seen and felt the costs of underestimating the financial bubble. Let’s not ignore the climate bubble.”

President Obama puts it most pithily: “We’re not going to be able to burn it all.”

So the argument for a campaign to divest from the world’s most polluting companies is becoming an overwhelming one, on both moral and pragmatic grounds. But the divestment movement is sometimes misunderstood. The intention is not to bankrupt the companies, nor to promote overnight withdrawal from fossil fuels – that would not be possible or desirable.

Divestment serves to delegitimise the business models of companies that are using investors’ money to search for yet more coal, oil and gas that can’t safely be burned. It is a small but crucial step in the economic transition away from a global economy run on fossil fuels.

The usual rule of newspaper campaigns is that you don’t start one unless you know you’re going to win it. This one will almost certainly be won in time: the physics is unarguable. But we are launching our campaign today in the firm belief that it will force the issue now into the boardrooms and inboxes of people who have billions of dollars at their disposal.

It’s clear, from our researches over the past few weeks, that many company directors and fund managers have had a nagging feeling that this is something coming up the agenda that – one day – they will have to think about. As the Guardian’s campaign mounts, we hope they will appreciate that there is some urgency about the choices they make.

Who will take the lead? Some huge endowments and investment funds have already announced that they will be decarbonising their portfolios, exiting fossil fuels altogether and/or investing in cleaner alternatives.

They include the Rockefeller Brothers Fund; Stanford, Glasgow and Australian National Universities; the British Medical Association; Norway’s Government Pension Fund Global, which has sold off 32 coal companies on climate and environmental grounds; AP4, the giant Swedish pension fund; and many other faith groups, local councils and asset managers. The World Council of Churches has committed not to invest.

Our own campaign will give readers the information they need to make their own investment decisions and to apply pressure on the workplaces, unions, schools, colleges, churches, NGOs, pension advisers and charities in their lives. But we also want to try to change minds at one or two institutions that have demonstrated inspiring thought leadership in other spheres of life.

Professor Jeremy Farrar, director of the Wellcome Trust.
Professor Jeremy Farrar, director of the Wellcome Trust. Photograph: James Drew Turner/Guardian

The Wellcome Trust handles a portfolio of more than £18bn and invests around £700m a year in science, the humanities, social science education and medical research. The Bill and Melinda Gates Foundation has an endowment of .5bn. Last year it gave away .9bn in grants towards health and sustainable development.

In 2014 the Wellcome Trust had £564m invested in Shell, BP, Schlumberger, Rio Tinto and BHP Billiton alone. The Gates Foundation has a financial stake of over bn in fossil fuel companies.

Bill and Melinda Gates.
Bill and Melinda Gates. Photograph: Oli Scarff/Getty Images

By most standards, these are huge sums of money, helping to fund the extraction of unusable oil gas and coal on a massive scale. But, as a proportion of the foundations’ own endowments, they are relatively small – just a few percent for the fossil fuel investments we know about. So they could, we think, be divested without damaging overall returns. Indeed, we think they could achieve higher and, over time, safer returns by putting their money into other investments with real opportunities for growth in a world tackling climate change

Because both foundations are a) so progressive in their aims and actions and b) have human health and science at the heart of everything they do, we hope they, of all institutions, will see the force of the call for them to move their money out of a sector whose actions, if unchecked, could cause the most devastating harm to the health of billions. A landmark report by the Lancet and University College London concluded in 2009: “Climate change is the biggest global health threat of the 21st century.”

The ask of them is, we think, both modest and simple. We understand that fund managers do not like to make sudden changes to their portfolios. So we ask that the Gates Foundation and Wellcome Trust commit now to divesting from the top 200 fossil fuel companies within five years. And that they immediately freeze any new investment in the same companies.

We will, of course, suggest that the Guardian Media Group does the same, and keeps you informed about its own deliberations and decisions.

Please sign, retweet and generally spread news about the petition. In everything we say to these foundations, we will emphasise that we come in admiration for what they have done, and continue to do for human health and wellbeing. They aren’t the “bad guys”. But they could certainly show themselves to be the good guys in this matter of life and death.

Petition sign-up

One final thing. This campaign is going to be backed up by much reporting and analysis. We would be very pleased to hear from anyone working in the fossil fuel industries at a senior level, either currently or recently. We are interested, for instance, to learn about internal discussions and papers about the state of knowledge and debate about the environmental harm caused by the extractive industries. You can email me confidentially at alan.rusbridger@theguardian.com; see my PGP key on @arusbridger on Twitter; or use the Guardian’s encrypted securedrop platform, which enables anyone to send us documents without being traced.

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Shale gas should be at centre of next government’s energy policy – Tim Yeo

Shale gas should be at centre of next government’s energy policy – Tim Yeo


Powered by Guardian.co.ukThis article titled “Shale gas should be at centre of next government’s energy policy – Tim Yeo” was written by Fiona Harvey, for theguardian.com on Thursday 12th March 2015 06.01 UTC

Shale gas exploration can be environmentally sound, and should be the centrepiece of the next government’s energy policy, the Conservative’s most senior green-leaning MP has urged.

Tim Yeo, the Tory former minister, and chairman of parliament’s energy and climate committee, said the time had come to make the “green” case in favour of fracking, and that the incoming government after the general election must seize on the technology for the good of the UK’s environment and economy.

“There is an opportunity now, and it might not exist in a few years [when other European countries have developed fracking],” he told the Guardian. “People who think fracking is an environmental problem are mistaken.”

He said that the regulations governing fracking in this country were sound, and that related problems such as tremors were very small, and there would be no danger to the water supply here, as there has been in some places in the US. “Once people see that horizontal drilling is not causing earthquakes or poisoning the water they will be satisfied,” he said.

While warning that shale gas would not be the “transformational” industry it has been in the US, where the widespread exploitation of fracking technology has sent gas and oil prices tumbling, Yeo said it would be cheaper for the UK and have less impact on the climate than importing gas.

Fracking involves blasting water, sand and chemicals at dense rock to release tiny bubbles of gas trapped within, but the technology has been slow to be adopted in the UK after a series of hitches in the first targeted sites.

At the general election, Yeo will leave parliament after 32 years, having been de-selected by his constituency party, apparently for spending more time on national than local issues. A former environment minister and shadow environment secretary, he is one of the longest-standing and most influential champions of green issues among the ranks of Tory MPs, and chairs the influential parliamentary cross-party select committee on energy and climate change.

He makes his last major speech on energy and the environment on Thursday, at a conference that will highlight some of the committee’s progress on making policy recommendations in the current parliament.

He has chosen to make the green case for shale gas as his parting shot, because he believes the coalition has been too timid in persuading the public of the value of shale. Yeo has no current financial interest in shale and does not intend to take up any such interests on leaving parliament.

He will also use Thursday’s speech to argue strongly in favour of onshore wind turbines, which he will say are a cheap and reliable form of low-carbon energy. David Cameron has vowed to end subsidies for onshore wind, despite polls showing most people are in favour of the turbines.

Yeo said that reducing the UK’s greenhouse gas emissions would still leave the country reliant on gas for years to come, and that fulfilling heating and power needs using domestic sources of gas would be both lower in emissions and cheaper than importing liquefied natural gas from overseas.

“I yield to no one in my desire to [tackle climate change] but the fact is we will not get by without consuming a lot of gas between now and the 2030s, so better to have a domestic source than to import it,” he said. “I do not think that a single extra cubic metre of gas will be consumed in the UK because of a domestic fracking industry.”

He said many green groups were opposing fracking because of a “visceral reaction to anything involving fossil fuels”, but he said the UK could meet its commitments on carbon reduction while producing gas from shale.

He will tell the conference: “The next government must stand up to the fuzzy-headed ideological fringes that oppose fracking. The greens opposed to fracking do not have evidence on their side.”

He will add: “Too many of us take the ready availability of energy, and the prosperity it makes possible, for granted. We expect electricity and gas to be constantly available – but we won’t accept the energy infrastructure on which that availability depends.”

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Keep fossil fuels in the ground to stop climate change

Keep fossil fuels in the ground to stop climate change


Powered by Guardian.co.ukThis article titled “Keep fossil fuels in the ground to stop climate change” was written by George Monbiot, for The Guardian on Tuesday 10th March 2015 12.00 UTC

If you visit the website of the UN body that oversees the world’s climate negotiations, you will find dozens of pictures, taken across 20 years, of people clapping. These photos should be of interest to anthropologists and psychologists. For they show hundreds of intelligent, educated, well-paid and elegantly-dressed people wasting their lives.

The celebratory nature of the images testifies to the world of make-believe these people inhabit. They are surrounded by objectives, principles, commitments, instruments and protocols, which create a reassuring phantasm of progress while the ship on which they travel slowly founders. Leafing through these photos, I imagine I can almost hear what the delegates are saying through their expensive dentistry. “Darling you’ve re-arranged the deckchairs beautifully. It’s a breakthrough! We’ll have to invent a mechanism for holding them in place, as the deck has developed a bit of a tilt, but we’ll do that at the next conference.”

This process is futile because they have addressed the problem only from one end, and it happens to be the wrong end. They have sought to prevent climate breakdown by limiting the amount of greenhouse gases that are released; in other words, by constraining the consumption of fossil fuels. But, throughout the 23 years since the world’s governments decided to begin this process, the delegates have uttered not one coherent word about constraining production.

Compare this to any other treaty-making process. Imagine, for example, that the Biological Weapons Convention made no attempt to restrain the production or possession of weaponised smallpox and anthrax, but only to prohibit their use. How effective do you reckon it would be? (You don’t have to guess: look at the US gun laws, which prohibit the lethal use of guns but not their sale and carriage. You can see the results on the news every week.) Imagine trying to protect elephants and rhinos only by banning the purchase of their tusks and horns, without limiting killing, export or sale. Imagine trying to bring slavery to an end not by stopping the transatlantic trade, but by seeking only to discourage people from buying slaves once they had arrived in the Americas. If you want to discourage a harmful trade, you must address it at both ends: production and consumption. Of the two, production is the most important.

Climate signup new

The extraction of fossil fuels is a hard fact. The rules governments have developed to prevent their use are weak, inconsistent and negotiable. In other words, when coal, oil and gas are produced, they will be used. Continued production will overwhelm attempts to restrict consumption. Even if efforts to restrict consumption temporarily succeed, they are likely to be self-defeating. A reduction in demand when supply is unconstrained lowers the price, favouring carbon-intensive industry.

You can search through the UN’s website for any recognition of this issue, but you would be wasting your time. In its gushing catalogue of self-congratulation, at Kyoto, Doha, Bali, Copenhagen, Cancún, Durban, Lima and all stops en route, the phrase “fossil fuel” does not occur once. Nor do the words coal or oil. But gas: oh yes, there are plenty of mentions of gas. Not natural gas, of course, but of greenhouse gases, the sole topic of official interest.

The closest any of the 20 international conferences convened so far have come to acknowledging the problem is in the resolution adopted in Lima in December last year. It pledged “cooperation” in “the phasing down of high-carbon investments and fossil fuel subsidies”, but proposed no budget, timetable or any instrument or mechanism required to make it happen. It’s progress of a sort, I suppose, and perhaps, after just 23 years, we should be grateful.

There is nothing random about the pattern of silence that surrounds our lives. Silences occur where powerful interests are at risk of exposure. They protect these interests from democratic scrutiny. I’m not suggesting that the negotiators decided not to talk about fossil fuels, or signed a common accord to waste their lives. Far from it: they have gone to great lengths to invest their efforts with the appearance of meaning and purpose. Creating a silence requires only an instinct for avoiding conflict. It is a conditioned and unconscious reflex; part of the package of social skills that secures our survival. Don’t name the Devil for fear that you’ll summon him.

Breaking such silences requires a conscious and painful effort. I remember as if it were yesterday how I felt when I first raised this issue in the media. I had been working with a group of young activists in Wales, campaigning against opencast coal mines. Talking it over with them, it seemed so obvious, so overwhelming, that I couldn’t understand why it wasn’t on everyone’s lips. Before writing about it, I circled the topic like a dog investigating a suspicious carcass. Why, I wondered, is no one touching this? Is it toxic?

Ice sculptures in the shape of humans are placed on the steps of the music hall in Gendarmenmarkt  public square in Berlin September 2, 2009. Hosted by the German World Wide Fund for Nature (WWF), 1,000 ice sculptures made by Brazilian artist Nele Azevedo were positioned on the steps in the German capital at noon, to highlight climate change in the arctic region. REUTERS/Tobias Schwarz
Brazilian artist Nele Azevedo’s ice sculptures in the shape of humans are placed in public places to highlight climate change. Photograph: Tobias Schwarz / Reuters/REUTERS

You cannot solve a problem without naming it. The absence of official recognition of the role of fossil fuel production in causing climate change – blitheringly obvious as it is – permits governments to pursue directly contradictory policies. While almost all governments claim to support the aim of preventing more than 2C of global warming, they also seek to “maximise economic recovery” of their fossil fuel reserves. (Then they cross their fingers, walk three times widdershins around the office and pray that no one burns it.) But few governments go as far as the UK has gone.

In the Infrastructure Act that received royal assent last month, maximising the economic recovery of petroleum from the UK’s continental shelf became a statutory duty. Future governments are now legally bound to squeeze every possible drop out of the ground.

Timeline

The idea came from a government review conducted by Sir Ian Wood, the billionaire owner of an inherited company – the Wood Group – that provides services to the oil and gas industry. While Sir Ian says his recommendations “received overwhelming industry support”, his team interviewed no one outside either the oil business or government. It contains no sign that I can detect of any feedback from environment groups or scientists.

His review demanded government powers to enhance both the exploration of new reserves and the exploitation of existing ones. This, it insisted, “will help take us closer to the 24bn [barrel] prize potentially still to come”. The government promised to implement his recommendations in full and without delay. In fact it went some way beyond them. It is prepared to be ruthlessly interventionist when promoting climate change, but not when restraining it.

During December’s climate talks in Lima, the UK’s energy secretary, Ed Davey, did something unwise. He broke the silence. He warned that if climate change policies meant that fossil fuel reserves could no longer be exploited, pension funds could be investing in “the sub-prime assets of the future”. Echoing the Bank of England and financial analysts such as the Carbon Tracker Initiative, Davey suggested that if governments were serious about preventing climate breakdown, fossil fuel could become a stranded asset.

This provoked a furious response from the industry. The head of Oil and Gas UK Malcolm Webb wrote to express his confusion, pointing out that Davey’s statements came “at a time when you, your Department and the Treasury are putting great effort into [making] the UK North Sea more attractive to investors in oil and gas, not less. I’m intrigued to understand how such opposing viewpoints can be reconciled.” He’s not the only one. Ed Davey quickly explained that his comments were not to be taken seriously, as “I did not offer any suggestions on what investors should choose to do.”

Barack Obama has the same problem. During a television interview last year, he confessed that “We’re not going to be able to burn it all.” So why, he was asked, has his government been encouraging ever more exploration and extraction of fossil fuels? His administration has opened up marine oil exploration from Florida to Delaware – in waters that were formally off-limits. It has increased the number of leases sold for drilling on federal lands and, most incongruously, rushed through the process that might, by the end of this month, enable Shell to prospect in the highly vulnerable Arctic waters of the Chukchi Sea.

Similar contradictions beset most governments with environmental pretensions. Norway, for example, intends to be “carbon neutral” by 2030. Perhaps it hopes to export its entire oil and gas output, while relying on wind farms at home. A motion put to the Norwegian parliament last year to halt new drilling because it is incompatible with Norway’s climate change policies was defeated by 95 votes to three.

Ice sculptures in the shape of humans are placed on the steps of the music hall in Gendarmenmarkt  public square in Berlin September 2, 2009. Hosted by the German World Wide Fund for Nature (WWF), 1,000 ice sculptures made by Brazilian artist Nele Azevedo were positioned on the steps in the German capital at noon, to highlight climate change in the arctic region.
Brazilian artist Nele Azevedo’s ice sculptures in Berlin, September 2009. Photograph: Tobias Schwarz / Reuters/REUTERS

Obama explained that “I don’t always lead with the climate change issue because if you, right now, are worried about whether you’ve got a job or if you can pay the bills, the first thing you want to hear is how do I meet the immediate problem?”

Money is certainly a problem, but not necessarily for the reasons Obama suggested. The bigger issue is the bankrolling of politics by big oil and big coal, and the tremendous lobbying power they purchase. These companies have, in the past, financed wars to protect their position; they will not surrender the bulk of their reserves without a monumental fight. This fight would test the very limits of state power; I wonder whether our nominal democracies would survive it. Fossil fuel companies have become glutted on silence: their power has grown as a result of numberless failures to challenge and expose them. It’s no wonder that the manicured negotiators at the UN conferences, so careful never to break a nail, have spent so long avoiding the issue.

I believe there are ways of resolving this problem, ways that might recruit other powerful interests against these corporations. For example, a global auction in pollution permits would mean that governments had to regulate just a few thousand oil refineries, coal washeries, gas pipelines and cement and fertiliser factories, rather than the activities of seven billion people. It would create a fund from the sale of permits that’s likely to run into trillions: money that could be used for anything from renewable energy to healthcare. By reducing fluctuations in the supply of energy, it would deliver more predictable prices, that many businesses would welcome. Most importantly, unlike the current framework for negotiations, it could work, producing a real possibility of averting climate breakdown.

About the artist

Left to themselves, the negotiators will continue to avoid this issue until they have wasted everyone else’s lives as well as their own. They keep telling us that the conference in Paris in December is the make or break meeting (presumably they intend to unveil a radical new deckchair design). We should take them at their word, and demand that they start confronting the real problem.

With the help of George Marshall at the Climate Outreach and Information Network, I’ve drafted a paragraph of the kind that the Paris agreement should contain. It’s far from perfect, and I would love to see other people refining it. But, I hope, it’s a start:

“Scientific assessments of the carbon contained in existing fossil fuel reserves suggest that full exploitation of these reserves is incompatible with the agreed target of no more than 2C of global warming. The unrestricted extraction of these reserves undermines attempts to limit greenhouse gas emissions. We will start negotiating a global budget for the extraction of fossil fuels from existing reserves, as well as a date for a moratorium on the exploration and development of new reserves. In line with the quantification of the fossil carbon that can be extracted without a high chance of exceeding 2C of global warming, we will develop a timetable for annual reductions towards that budget. We will develop mechanisms for allocating production within this budget and for enforcement and monitoring.”

If something of that kind were to emerge from Paris, it will not have been a total waste of time, and the delegates would be able to congratulate themselves on a real achievement rather than yet another false one. Then, for once, they would deserve their own applause.

• Twitter: @georgemonbiot. A fully referenced version of this article can be found at Monbiot.com

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10 myths about fossil fuel divestment put to the sword

10 myths about fossil fuel divestment put to the sword


Powered by Guardian.co.ukThis article titled “10 myths about fossil fuel divestment put to the sword” was written by Damian Carrington, for theguardian.com on Monday 9th March 2015 16.00 UTC

1. Divestment from fossil fuels will result in the end of modern civilisation

It is true that most of today’s energy, and many useful things such as plastics and fertilisers, come from fossil fuels. But the divestment campaign is not arguing for an end of all fossil fuel use starting tomorrow, with everyone heading back to caves to light a campfire. Instead it is arguing that the burning of fossil fuels at increasing rates is driving global warming, which is the actual threat to modern civilisation. Despite already having at least three times more proven reserves than the world’s governments agree can be safely burned, fossil fuel companies are spending huge sums exploring for more. Looked at in that way, pulling investments from companies committed to throwing more fuel on the climate change fire makes sense.

2. We all use fossil fuels everyday, so divestment is hypocritical

Again, no-one is arguing for an overnight end of all fossil fuel use. Instead, the 350.org group which is leading the divestment campaign calls for investors to commit to selling off their coal, oil and gas investments over five years. Fossil fuel burning will continue after that too, but the point is to reverse today’s upward trend of ever more carbon emissions into a downward trend of ever less carbon emissions. Furthermore, some of those backing a “divest-invest” strategy move money into the clean energy and energy efficiency sectors which have already begun driving the transition to a low-carbon world.

3. Divestment is not meaningful action – it’s just gesture politics

The dumping of a few fossil few stocks makes no immediate difference at all to the amount of carbon dioxide entering the atmosphere. But this entirely misses the point of divestment, which aims to remove the legitimacy of a fossil fuel industry whose current business model will lead to “severe, widespread and irreversible” impacts on people. Divestment works by stigmatising, as pointed out in a report from Oxford University: “The outcome of the stigmatisation process poses the most far-reaching threat to fossil fuel companies. Any direct impacts pale in comparison.”

The “gesture politics” criticism also ignores the political power of the fossil fuel industry, which spent over 0m (£265m) on lobbying and political donations in 2012 in the US alone. Undercutting that lobbying makes it easier for politicians to take action and the Oxford study showed that previous divestment campaigns – against apartheid South Africa, tobacco and Darfur – were all followed by restrictive new laws.

Those comparisons also highlight the moral dimension at the heart of the divestment campaign. Another dimension is warning investors that their fossil fuel assets may lose their value, if climate change is tackled. Lastly, backing divestment does not mean giving up putting direct pressure on politicians to act or any other climate change campaign.

A cardboard version of the Statue of Liberty stands in the ocean at the Gaviota Azul beach in Cancun December 8, 2010. Greenpeace staged a performance sinking the world's best known landmarks in the ocean as climate talks take place in the beach resort.
A cardboard version of the Statue of Liberty stands in the ocean at the Gaviota Azul beach in Cancun, Mexico. Photograph: Stringer/Reuters

4. Divestment is pointless – it can’t bankrupt the coal, oil and gas companies

More organisations are divesting all the time, from Oslo city council to Stanford University to the Rockefeller Brothers Fund, but the sums are indeed relatively small when compared to the huge value of the fossil fuel companies. But the aim of divestment is not to bankrupt fossil fuel companies financially but to bankrupt them morally. This undermines their influence and helps create the political space for strong carbon-cutting policies – and that could have financial consequences.

Investors are already starting to question the future value of the fossil fuel companies’ assets and, for example, it is notable that no major bank is willing to fund the massive Galilee basin coal project in Australia. This myth can also be turned on its head by considering the risk of fossil fuel companies bankrupting their investors. Many authoritative voices, such as the heads of the World Bank, Jim Yong Kim, and the Bank of England, Mark Carney, have warned that many fossil fuel reserves could be left worthless by action on climate change. If the retreat from fossil fuels does not happen in a gradual and planned way investors could lose trillions of dollars as the “carbon bubble” bursts.

5. Divestment means stocks will be picked up cheaply by investors who don’t care about climate change at all

To sell a stock you have to have a buyer. But the amounts being divested are too small to flood the market and cut share prices, so they won’t be going cheap. Also, the buyers of the stock are taking on the risk that the fossil fuel stocks may tank in the future, if the world’s nations fulfil their pledge to keep global warming below 2C by sharply cutting carbon emissions. If these stocks are risky, then the public and value-based institutions primarily targeted by the divestment movement should not be holding them. The argument that owning a stock gives you influence over a company leads us neatly into the next divestment myth.

Guardian journalists explain the ‘keep it in the ground’ theory in easy to understand terms

6. Shareholder engagement with fossil fuel companies is the best way to drive change

This argument would have merit if there was much evidence to support it. When, for example, the Guardian asked the Wellcome Trust to give instances where engagement had produced change, it could not. And as campaigner Bill McKibben has pointed out, engagement is unlikely to persuade a company to commit to eventually putting itself out of business. In fact some market regulators, such as in the US, do not allow this kind of engagement.

The leading environmentalist Jonathon Porritt spent years engaging with fossil fuel companies only to conclude recently that such efforts were futile. Nonetheless, serious engagement could drive some change and 2015 has seen both BP and Shell having to support such shareholder resolutions. But such resolutions need specific changes and deadlines to be effective. Whatever your view, remember this is not an either/or situation. Many campaigners view divestment as the stick and engagement as the carrot, with both aiming for the same ultimate goal.

Traders work in the crude oil options pit at the New York Mercantile Exchange in New York, U.S., on  February 23, 2011. Oil surged to 0 a barrel in New York for the first time in two years as Libya's violent uprising threatened to disrupt exports from Africa's third-biggest supplier and spread to other Middle East oil producers.
Traders work in the crude oil options pit at the New York Mercantile Exchange in New York, US. Photograph: Michael Nagle/Getty Images

7. Divestment means investors will lose money

Many of those who have divested so far are philanthropic organisations, universities and faith groups who use their endowments to fund their good works. Selling out of fossil fuels would cut their income, say critics, as those companies have been very profitable investments over the last few decades.

The first response to this is money does not trump morality for many of these groups. But the second is that when it comes to investments, the past is no guide to the future. Coal stocks have plummeted in value in recent years, as has the oil price in recent months, meaning recently divested funds have actually avoided losses. Furthermore, a series of analyses have suggested divestment need not dent profits.

Of course, oil prices might rebound, possibly even coal prices. But such volatility is unwelcome for investors looking for steady incomes. And for long-term investors, major financial institutions including HSBC, Citi, Goldman Sachs and Standard and Poor’s have all warned of the risks posed by fossil fuel investments, particularly coal.

Perhaps the best response to this myth is that the proof of the pudding is in the eating: over 180 organisations have already asked themselves if divestment would help or hinder their missions and then gone ahead and done it. The most notable is the Rockefeller Brothers Fund, founded on a famous oil fortune. Valerie Rockefeller Wayne noted that funding companies that cause the problems being tackled by their programmes is pretty dumb: “We had investments that were undermining our grants.”

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8. Fossil fuels are essential to ending world poverty

Fossil fuel supporters often argue that coal, oil and gas made the modern world and is vital to improving the lives of the world’s poorest citizens. It is an emotive argument. But the most recent report from the UN’s Intergovernmental Panel on Climate Change, written and reviewed by thousands of the world’s foremost experts and approved by 195 of the world’s nations, concluded the exact opposite. Climate change, driven by unchecked fossil fuel burning, “is a threat to sustainable development,” the IPCC concluded.

It warned that global warming is set to inflict severe and irreversible impacts on people and that “limiting its effects is necessary to achieve sustainable development and equity, including poverty eradication”. The IPCC went even further, stating that climate change impacts are projected “to prolong existing and create new poverty traps”.

That could not really be clearer. The challenge is to ensure poverty is ended by the large-scale deployment of clean technology, and shifting money out of fossil fuels by divesting could help that.

An airplane flies past the Canton Tower (L), or Guangzhou TV Tower, during a hazy day in Guangzhou, Guangdong province January 21, 2015.
Smog in China: an airplane flies past the Canton Tower, better known as Guangzhou TV Tower, on a hazy day in Guangzhou, Guangdong province, China. Photograph: China Stringer Network/Reuters

9. Most fossil fuels are owned by state-controlled companies, not the publicly traded companies targeted by divestment

This is true. The International Energy Agency estimates that 74% of all coal, oil and gas reserves are owned by state-controlled companies. The most straightforward response to this is that divestment is just one of many ways of trying to curb carbon emissions and that international action at state level will of course be essential. But there are reasons why divestment could help. The listed fossil fuel companies have huge influence and undermining their power could embolden politicians in leading nations to deliver ambitious international climate action.

In any case, many of the biggest state-controlled companies float some of their stock, while also contracting the publicly traded companies to help extract their reserves. Furthermore, the state-controlled reserves tend to be the ones that are easiest and cheapest to extract and are therefore the most sensible to use in filling up the last of the atmosphere’s carbon budget, the trillion tonnes or so of carbon that scientists say is the limit before dangerous climate change kicks in. Last, the extreme and expensive hydrocarbons that really must stay in the ground – such as tar sands, the Arctic and ultra deep water reserves – are the near exclusive preserve of listed companies.

10. It’s none of your business how other people invest their money

First, some divestment campaigners target their own pensions funds – it is their money. But even if it is not, the impacts of fossil fuel investments are not limited to the stock owners themselves. The carbon emissions from fossil fuel burning are causing climate change that affects everyone on Earth. Furthermore, the “none of your business” argument would imply no divestment campaign was legitimate, meaning the harm caused by tobacco and apartheid South Africa would have gone on longer.

More information:

350.org’s Fossil Free campaign

Carbon Tracker Initiative

The Burning Question, by Mike Berners-Lee and Duncan Clark

The geographical distribution of fossil fuels unused when limiting global warming to 2C, by Christophe McGlade and Paul Ekins (Nature, 2015)

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Would a Labour or Tory government be better for the environment?

Would a Labour or Tory government be better for the environment?

 


Powered by Guardian.co.ukThis article titled “Would a Labour or Tory government be better for the environment?” was written by Karl Mathiesen, for theguardian.com on Tuesday 3rd March 2015 07.00 UTC

After five years of a government that aspired to being the greenest ever, what can we expect from the next parliament?

Here’s how the two big parties stand on some of the key upcoming environmental issues, from crunch UN climate negotiations and how and whether the UK should frack, to what to do about the country’s energy inefficient homes and whether the government should keep killing badgers.

Climate change

David Cameron, Ed Miliband and Nick Clegg have signed a cross-party pledge on climate action, but the issue is still approached differently by the parties.

Labour leader Miliband has been forthright in placing climate change on the party’s agenda. In an op-ed in the Observer last week, he said climate change was a key economic issue for the UK and attacked Tory MPs who he said “flirt with climate change denial”.

Miliband’s shadow energy and climate change minister Jonathan Reynolds told an audience in London last week: “I look at the Conservative party front bench and I do not see anyone coming through who takes this agenda seriously, who wants to develop ideas on it … To me, the Conservative party, having had that phase where it looked like it was going to embrace this agenda, has fundamentally moved away from it and that is a great shame indeed.”

But Greg Barker, Cameron’s climate envoy who was also on the panel, disagreed: “There are lots of green Tories.”

When pressed for names Barker was able to cite just one example – Matt Hancock a minister for business, enterprise and energy – before saying:

“The most important green Tory is David Cameron and he has consistently been my greatest ally in government.”

But Cameron’s rhetoric on climate change has been undermined by his elevation of prominent climate sceptics to influential positions within the government’s environmental departments. The nadir was the much-lambasted and summarily-ended tenure of Owen Paterson as environment secretary, who has called climate science “consistently and widely exaggerated”. Michael Fallon who was a minister for climate change has also questioned climate science. These appointments represent an undercurrent of scepticism in the Conservative party. Last year a poll found just 30% of Tory MPs accepted it was “now an established scientific fact that climate change is largely man-made”.

The election will also decide who represents the UK at the defining climate conference in Paris this December. Labour has employed former deputy PM John Prescott, who led the UK’s delegation on the Kyoto protocol, and it can be expected that he would take a lead role in any negotiations. Liberal Democrat secretary of energy and climate change Ed Davey, who has been the UK’s lead in climate talks, will need a hung parliament and a new coalition deal to see the job through to Paris. Should the Tories win government outright, Barker, may retain an active role despite his imminent retirement from politics.

Carbon budgets

More contentious than the need for action, will be the question of how Britain achieves decarbonisation. In order to chart a way to its goal of 80% emissions reductions from 1990 levels by 2050, the UK has defined how much carbon it can burn in five yearly periods from 2008 until 2028. These are known as the carbon budgets.

In December 2015, the Committee on Climate Change (CCC) will advise on Britain’s emissions reductions between 2028 and 2032 – the fifth carbon budget. Under the law, the sitting government must accept this advice and implement policies to achieve the reductions.

All parties agree unabated coal power must be eradicated and have committed to phasing it out – although any new parliament will not have to do much to make this happen as anti-pollution laws and carbon pricing will see all stations closed by 2027.

Chairman of the CCC John Gummer says, with coal heading for oblivion by the time its term begins, the fifth carbon budget will be the toughest to legislate. “Whoever is in power, there will be tough discussion about how we do that because the fifth carbon budget is going to be very difficult indeed in the sense that we’ll have picked off a lot of the low hanging fruit.”

Clean energy: onshore wind and nuclear

Labour and the Conservatives largely agree that Britain’s low-carbon future involves a broad suite of energy sources, including renewable technologies, nuclear and potentially domestic shale gas. But how much of each and their enthusiasm for certain technologies varies significantly.

“No doubt there is greater appetite for the nuclear component and a lesser appetite for onshore wind among Conservatives and a smaller appetite for the nuclear component in the Labour party,” says Gummer.

The Tories are openly hostile to onshore wind and various MPs have fanned the flames of public nimbyism by calling it a “blight” on landscapes and consistently rejecting planning applications. If it wins in May, the party has committed to cutting subsidies to the sector – Britain’s largest source of renewable energy – a move renewables groups say would “kill the industry dead”. This is despite onshore wind’s increasing affordability, reflected in the prices offered in Thursday’s government auction for new project contracts.

Jim Watson, research director of the UK Energy Research Centre, says the Tories’ opposition to certain forms of renewables runs counter to the interests of taxpayers. “If we want to reduce the costs of meeting our climate targets we ought to be enabling the lower cost technologies to come through and be built to save people money. It seems odd to me that a politician of whatever party would want to stand in the way of a technology that lowers the cost of meeting our climate targets for consumers.”

Financial support for the £25bn nuclear behemoth at Hinkley Point C, which was born of a pro-nuclear policy under the last Labour government, was announced by the current administration in 2013. This is a key plank of the Conservative’s decarbonisation plan and the defining infrastructure announcement of Davey’s term as energy and climate change secretary. But it looks likely to be delayed by shareholder setbacks and legal challenges to its generous subsidy regime.

Labour has offered its support for the Hinkley project.

“It will be interesting how much [Labour] pursue a pro-renewables versus a pro-all-of-the-above strategy,” says Green Alliance’s head of politics Alastair Harper.

Miliband has expressed tentative support for onshore wind. But Harper says the issue could be politically divisive.

“Are they going to go all out and say onshore wind has a real future in the UK if you vote for us? They haven’t quite done that yet and it’d be an interesting binary moment for them to go for.”

By the time the fifth carbon budget is announced in December, says Gummer, whichever party (or parties) is in government may have had the argument settled for them. “The price of renewables is falling much more sharply than even the most optimistic would have said and the situation of nuclear is of course still not certain with the delay on the next stage of Hinkley [Point C nuclear power station]”.

Fracking

The issue of shale gas exploration, or fracking, will be another key decision during the planning of the fifth carbon budget, says Watson.

“How much gas we can burn in the context of our targets and what is the role of shale gas within that will certainly come up, for whatever government is in power,” he says.

Both the Conservatives and Labour have expressed enthusiasm for fracking and claim credit for creating a safe, attractive legal platform for the industry – although there is a distinct difference in their approach. The Tories have aggressively pursued an agenda that removes regulatory hurdles. Some of which Labour has opposed, including fracking beneath national parks and beside aquifers.

“You’re really talking about difference of emphasis,” says Watson. “But there really isn’t a clear difference of one party is really for it and one party is really against it. I just detect a more cautious approach from Labour. There isn’t the same sort of rhetoric that there is from some government ministers.”

Watson says some less-straightforward electoral outcomes could influence the politics of fracking during the next term. Scotland has implemented a moratorium on fracking. Watson raises the possibility that a Labour-Scottish National party coalition (a possibility being hawked by the Tories) may have a more adversarial attitude towards shale gas.

The Welsh government is investigating its legal options to implement such a ban. The national Labour party has committed to devolving powers to Wales to allow them to ban fracking.

Animal welfare

Badgers and foxes are perhaps the only environmental issues where daylight exists between the Tories and Labour. Should the Conservatives win in May, they will allow a free vote on repealing the Hunting Act, which bans hunting with dogs. They will also continue and expand the badger cull. Labour stands opposed to both these policies.

There is massive public opposition to both the badger cull (42% against, 36% for) and fox hunting (80% against). So why are the Tories swimming against the flow? These debates hark back to the days before the UK’s politics became a bland amble to the centre. They are based on ancient rivalries between the country and the city, a small group of landowning toffs versus the renting class.

But most importantly, they are politically irrelevant. “It’s very easy for the parties to hold those different positions because they speak to different audiences that don’t really cross over … It’s very easy to get off the fence both ways,” says Harper. Few people will decide their vote on animal welfare issues. The Tories might grab a few votes from Ukip in rural areas and Labour from the Greens, but the floating centre has more pressing concerns.

Energy efficiency

The coalition government’s flagship energy efficiency scheme, the green deal, has become a traumatic experience for its architects. Despite recent successes in some aspects of the grants-for-home-improvements scheme, the overall take-up has been disappointing. This has left the UK’s desperately needed drive for household energy efficiency languishing.

The Conservatives are yet to outline exactly how they will approach this tainted issue in the next parliament. Harper suggests it is a case of once bitten, twice shy.

“I think the Tories feel burnt by the green deal and they haven’t really come up with how they’d deal with it. I’d be interested to see what’s in the manifesto on that. At the moment it just feels like they are still amazed that it didn’t work,” he says.

Labour on the other hand, smelling electoral blood in the water, has pre-emptively announced an interest-free loan scheme that will replace the green deal grants. As part of a five-part efficiency strategy, Labour says the loans will improve up to one million homes during the next parliament. But the Green Building Council has warned that Labour may have to further sweeten the deal in order to motivate homeowners.

Nature

Nature is the thorn in the free market’s side, that pesky “externality” that the UK’s major parties don’t really know what to do about. So on the whole, they ignore it.

“The thing that is absent from the narrative of both parties right now is a real vision for what they are going to do about nature. And how we’re going to stop the losing battle of our habitats and our local environment getting worse and worse with every passing year and for the last 50 years,” says Harper.

“That conversation, that ambition hasn’t really been owned by either of the main parties. Their manifestos will have to address it in some way and I think what you’ll see is a lot of the big natural environment organisations, like the RSPB and the Wildlife Trusts and so on, will be pushing for … clear legislative plans to restore nature at a national level.”

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World’s biggest offshore windfarm approved for Yorkshire coast

World’s biggest offshore windfarm approved for Yorkshire coast


Powered by Guardian.co.ukThis article titled “World’s biggest offshore windfarm approved for Yorkshire coast” was written by Fiona Harvey, environment correspondent, for The Guardian on Tuesday 17th February 2015 18.37 UTC

Plans for the world’s biggest offshore windfarm have been given the green light by the energy secretary, with planning permission for an array of up to 400 turbines 80 miles off the Yorkshire coast on the Dogger Bank.

The project, more than twice the size of the UK’s current biggest offshore windfarm, is expected to cost £6bn to £8bn and could fulfil 2.5% of the UK’s electricity needs.

Covering about 430 sq miles, the Dogger Bank Creyke Beck project will – if fully constructed – generate enough electricity to power nearly 2m homes, and could support an estimated 900 jobs in Yorkshire and Humberside, according to the government.

Ed Davey, the Liberal Democrat energy and climate change secretary, said: “Making the most of Britain’s home-grown energy is creating jobs and businesses in the UK, getting the best deal for consumers and reducing our reliance on foreign imports. Wind power is vital to this plan, with £14.5bn invested since 2010 into an industry which supports 35,400 jobs.”

Although the UK does not manufacture large wind turbines, the Department of Energy and Climate Change says half of the costs associated with building and operating a windfarm are spent buying services and products from UK businesses.

Dogger has long been mooted as a possible location for offshore windfarms, because the shallow seabed, only about 30 metres deep, should make it easier to lay foundations and construct large turbines there, but no company has yet ventured into the area.

If built, the Creyke Beck turbines would be the furthest offshore that have ever been attempted. They would be the first stage of a project that could eventually be three times the size, if further tranches are also constructed.

Nick Medic, director of offshore renewables at RenewableUK, the wind industry association, said: “This is an awesome project and will surely be considered as one of the most significant infrastructure projects ever undertaken by the wind industry. Dogger Bank demonstrates the sheer potential of offshore technology to turn our vast ocean and wind resources into green energy.

“It is a project that pushes the offshore engineering envelope, demonstrating how far this technology has evolved in the 10 short years since the first major offshore windfarm was installed in North Hoyle just five miles from shore.”

Construction of the first turbines could still be years away, however. The Forewind consortium which is behind the 2400MW capacity project has yet to make a final investment decision. The consortium comprises Scottish and Southern Energy, Germany’s RWE, and Norway’s Statoil and Statkraft, the former the country’s majority state-owned oil business and the latter its state-owned electricity company.

Though the granting of planning permission may encourage a positive decision, the falling oil price and uncertainty over what may happen to wind energy subsidies after the general election make long-term investments in the sector more fraught.

About £60m has been spent by the companies so far on surveys alone.

“Achieving consent for what is currently the world’s largest offshore wind project in development is a major achievement and will help confirm the UK’s position as the world leader in the industry,” said Tarald Gjerde, general manager for Forewind.

The consortium said the Creyke Beck project could create up to 4,750 new direct and indirect full-time equivalent jobs and generate more than £1.5bn for the UK economy, especially in Yorkshire and Humberside owing to their “historic strengths, existing skills in large-scale production activities and a marine support legacy”.

The UK’s last biggest offshore wind site, the London Array, ran into difficulties soon after gaining the government’s green light in a long drawn-out process from 2005 to 2007. Costs spiralled, investors withdrew backing and the future of the project for long periods hung in the balance. However, the windfarm, with 175 turbines, was inaugurated in 2013.

The UK currently has about 1,200 offshore wind turbines, with a total generating capacity of about 4GW.

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Biofuel from trash could create green jobs bonanza, says report

Biofuel from trash could create green jobs bonanza, says report


Powered by Guardian.co.ukThis article titled “Biofuel from trash could create green jobs bonanza, says report” was written by Arthur Neslen in Brussels, for theguardian.com on Tuesday 17th February 2015 10.26 UTC

Creating biofuels from waste produced by industry, farms, and households could generate 36,000 jobs in the UK and save around 37m tonnes of oil use annually by 2030, according to a new report.

Across Europe, hundreds of thousands of new jobs could be created by using these ‘advanced biofuels’, which could replace 16% of the continent’s road transport fuel by the same year, the International Council on Clean Transportation (ICCT) study said. But the gains will not come without ambitious policy to promote advanced biofuels, it warned.

“Alternative fuels from wastes and residues offer real and substantial carbon savings, even when taking account of possible indirect emissions,” said Chris Malins who led the analysis for ICCT . “The resource is available, and the technology exists – the challenge now is for Europe to put a policy framework in place that allows rapid investment.”

However, a key vote in the European Parliament’s environment committee next week could stop this potential being realised, as a centre-right grouping of MEPs has signalled that it will oppose a biofuels reform package considered crucial to the fledgling industry.

The committee will vote next Tuesday on a compromise biofuels reform bill that would mandate a goal of advanced biofuels providing 1.25% of Europe’s transport fuel by 2020.

This advanced fuel could come from woody crops, agricultural residues, algae or household and industrial waste. It is seen as less environmentally damaging than first generation biofuels produced by growing crops such as rapeseed, which have been criticised for displacing food crops and raising commodity prices.

Malins said that a mandatory advanced biofuels goal was “absolutely crucial” to realising the sector’s potential, as it would bring market certainty and long-term signals for investors.

But sources at the centre-right European People’s Party (EPP) told the Guardian that they were unlikely to back such a package. “We think it is unrealistically ambitious,” a source said. “We are not going to support the compromise proposal.”

The bill would also introduce criteria for assessing biofuels’ sustainability and set a 6% cap for the amount that first generation biofuel could contribute to the EU’s 2020 target of providing 10% of road transport fuel from low carbon sources.

Marko Janhunen, the vice-president of UPM Biorefining in Finland, said that parliamentary manoeuvring could risk the advanced sector’s potential for hi-tech job creation in rural areas.

“This is a critical moment for the advanced biofuels sector and this discussion is very frustrating,” he told the Guardian. “We want to see incentives and reasons to invest. We want to get rid of the regulatory uncertainty that has been surrounding the discussion.”

UPM recently opened a €175m renewable waste biorefinery that transforms residues from pulp into renewable diesel that can be used by cars – or potentially, one day, by planes. British Airways is one of several members of a Leaders of Sustainable Biofuels group that Janhunen also chairs.

“The EU has spent hundreds of millions in projects supporting the uptake of these technologies,” Janhunen added. “Now they are here, it is very important to set policies in place that enable them to be brought into the market.”

The current proposal has faced a tortuous journey and campaigners fear that even a narrow victory now will embolden east European states to finally bury it in the European Council.

“If the EPP votes against the compromise, there is a massive risk that the whole package could fall into a conciliation process, or even no conclusion at all,” said Nusa Urbancic, a clean energy programme manager at the Transport and Environment group. “This will mean continued negative impacts on deforestation and food prices, as well as leading the EU away from our climate objectives.”

The European ethanol industry association (ePURE) has thrown its weight behind the biofuels bill. Its secretary-general, Robert Wright, told the Guardian that “only a binding target will send a clear signal to investors that there will be a future market for advanced biofuels.”

But other industry figures were sceptical about the likelihood of meaningful regulation at the EU level, and about the ICCT’s analysis more generally.

“Studies like this have rosy assumptions that feed into rosy conclusions,” said Eric Sievers, the CEO of Ethanol Europe Renewables. “You don’t make a large capital investment in a regulatory regime that expires in 2020, so the potential and reality are at odds. Nothing prevents this stuff from being imported from the US or Brazil so the whole jobs argument goes down the tubes.”

In the absence of EU renewable targets for 2030, however, Malins said that the cleaner fuel process in Europe could still be continued with carbon intensity fuel standards similar to those in California, an extension of the bloc’s Fuel Quality Directive, or fiscal measures by European states.

Urbancic said that the US already had advanced biofuels targets which would likely deter its small industry from importing to the EU, while Brazil was likely to focus its industry on aviation.

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