The overshoot myth: you can’t keep burning fossil fuels and expect scientists of the future to get us back to 1.5°C

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Melting Antarctic glacier. Shutterstock/Bernhard Staehli

James Dyke, University of Exeter; Robert Watson, University of East Anglia, and Wolfgang Knorr, Lund University

Record breaking fossil fuel production, all time high greenhouse gas emissions and extreme temperatures. Like the proverbial frog in the heating pan of water, we refuse to respond to the climate and ecological crisis with any sense of urgency. Under such circumstances, claims from some that global warming can still be limited to no more than 1.5°C take on a surreal quality.

For example, at the start of 2023’s international climate negotiations in Dubai, conference president, Sultan Al Jaber, boldly stated that 1.5°C was his goal and that his presidency would be guided by a “deep sense of urgency” to limit global temperatures to 1.5°C. He made such lofty promises while planning a massive increase in oil and gas production as CEO of the Abu Dhabi National Oil Company.

We should not be surprised to see such behaviour from the head of a fossil fuel company. But Al Jaber is not an outlier. Scratch at the surface of almost any net zero pledge or policy that claims to be aligned with the 1.5°C goal of the landmark 2015 Paris agreement and you will reveal the same sort of reasoning: we can avoid dangerous climate change without actually doing what this demands – which is to rapidly reduce greenhouse gas emissions from industry, transport, energy (70% of total) and food systems (30% of total), while ramping up energy efficiency.

A particularly instructive example is Amazon. In 2019 the company established a 2040 net zero target which was then verified by the UN Science Based Targets initiative (SBTi) which has been leading the charge in getting companies to establish climate targets compatible with the Paris agreement. But over the next four years Amazon’s emissions went up by 40%. Given this dismal performance, the SBTi was forced to act and removed Amazon and over 200 companies from its Corporate Net Zero Standard.

This is also not surprising given that net zero and even the Paris agreement have been built around the perceived need to keep burning fossil fuels, at least in the short term. Not do so would threaten economic growth, given that fossil fuels still supply over 80% of total global energy. The trillions of dollars of fossil fuel assets at risk with rapid decarbonisation have also served as powerful brakes on climate action.

Overshoot

The way to understand this doublethink: that we can avoid dangerous climate change while continuing to burn fossil fuels – is that it relies on the concept of overshoot. The promise is that we can overshoot past any amount of warming, with the deployment of planetary-scale carbon dioxide removal dragging temperatures back down by the end of the century.

This not only cripples any attempt to limit warming to 1.5°C, but risks catastrophic levels of climate change as it locks us in to energy and material-intensive solutions which for the most part exist only on paper.

To argue that we can safely overshoot 1.5°C, or any amount of warming, is saying the quiet bit out loud: we simply don’t care about the increasing amount of suffering and deaths that will be caused while the recovery is worked on.


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A key element of overshoot is carbon dioxide removal. This is essentially a time machine – we are told we can turn back the clock of decades of delay by sucking carbon dioxide directly out of the atmosphere. We don’t need rapid decarbonisation now, because in the future we will be able to take back those carbon emissions. If or when that doesn’t work, we are led to believe that even more outlandish geoengineering approaches such as spraying sulphurous compounds into the high atmosphere in an attempt to block out sunlight – which amounts to planetary refrigeration – will save us.

The 2015 Paris agreement was an astonishing accomplishment. The establishment of 1.5°C as being the internationally agreed ceiling for warming was a success for those people and nations most exposed to climate change hazards. We know that every fraction of a degree matters. But at the time, believing warming could really be limited to well below 2°C required a leap of faith when it came to nations and companies putting their shoulder to the wheel of decarbonisation. What has happened instead is that the net zero approach of Paris is becoming detached from reality as it is increasingly relying on science fiction levels of speculative technology.

There is arguably an even bigger problem with the Paris agreement. By framing climate change in terms of temperature, it focuses on the symptoms, not the cause. 1.5°C or any amount of warming is the result of humans changing the energy balance of the climate by increasing the amount of carbon dioxide in the atmosphere. This traps more heat. Changes in the global average temperature is the established way of measuring this increase in heat, but no one experiences this average.

Climate change is dangerous because of weather that affects particular places at particular times. Simply put, this extra heat is making weather more unstable. Unfortunately, having temperature targets makes solar geoengineering seem like a sensible approach because it may lower temperatures. But it does this by not reducing, but increasing our interference in the climate system. Trying to block out the sun in response to increasing carbon emissions is like turning on the air conditioning in response to a house fire.

In 2021 we argued that net zero was a dangerous trap. Three years on and we can see the jaws of this trap beginning to close, with climate policy being increasingly framed in terms of overshoot. The resulting impacts on food and water security, poverty, human health, the destruction of biodiversity and ecosystems will produce intolerable suffering.

The situation demands honesty, and a change of course. If this does not materialise then things are likely to deteriorate, potentially rapidly and in ways that may be impossible to control.

Au revoir Paris

The time has come to accept that climate policy has failed, and that the 2015 landmark Paris agreement is dead. We let it die by pretending that we could both continue to burn fossil fuels and avoid dangerous climate change at the same time. Rather than demand the immediate phase out of fossil fuels, the Paris agreement proposed 22nd-century temperature targets which could be met by balancing the sources and sinks of carbon. Within that ambiguity net zero flourished. And yet apart from the COVID economic shock in 2020, emissions have increased every year since 2015, reaching an all time high in 2023.

Despite there being abundant evidence that climate action makes good economic sense (the cost of inaction vastly exceeds the cost of action), no country strengthened their pledges at the last three COPs (the annual UN international meetings) even though it was clear that the world was on course to sail past 2°C, let alone 1.5°C. The Paris agreement should be producing a 50% reduction in greenhouse gas emissions by 2030, but current policies mean that they are on track to be higher than they are today.

Greenhouse gas emissions continue to rise. Catazul/Pixabay, CC BY

We do not deny that significant progress has been made with renewable technologies. Rates of deployment of wind and solar have increased each year for the past 22 years and carbon emissions are going down in some of the richest nations, including the UK and the US. But this is not happening fast enough. A central element of the Paris agreement is that richer nations need to lead decarbonisation efforts to give lower income nations more time to transition away from fossil fuels. Despite some claims to the contrary, the global energy transition is not in full swing. In fact, it hasn’t actually begun because the transition demands a reduction in fossil fuel use. Instead it continues to increase year-on-year.

And so policymakers are turning to overshoot in an attempt to claim that they have a plan to avoid dangerous climate change. A central plank of this approach is that the climate system in the future will continue to function as it does today. This is a reckless assumption.

2023’s warning signs

At the start of 2023, Berkeley Earth, NASA, the UK Met Office, and Carbon Brief predicted that 2023 would be slightly warmer than the previous year but unlikely to set any records. Twelve months later and all four organisations concluded that 2023 was by some distance the warmest year ever recorded. In fact, between February 2023 and February 2024 the global average temperature warming exceeded the Paris target of 1.5°C.

The extreme weather events of 2023 give us a glimpse of the suffering that further global warming will produce. A 2024 report from the World Economic Forum concluded that by 2050 climate change may have caused over 14 million deaths and US$12.5 trillion in loss and damages.

Currently we cannot fully explain why global temperatures have been so high for the past 18 months. Changes in dust, soot and other aerosols are important, and there are natural processes such as El Niño that will be having an effect.

But it appears that there is still something missing in our current understanding of how the climate is responding to human impacts. This includes changes in the Earth’s vital natural carbon cycle.

Around half of all the carbon dioxide humans have put into the atmosphere over the whole of human history has gone into “carbon sinks” on land and the oceans. We get this carbon removal “for free”, and without it, warming would be much higher. Carbon dioxide from the air dissolves in the oceans (making them more acidic which threatens marine ecosystems). At the same time, increasing carbon dioxide promotes the growth of plants and trees which locks up carbon in their leaves, roots, trunks.

All climate policies and scenarios assume that these natural carbon sinks will continue to remove tens of billions of tons of carbon from the atmosphere each year. There is evidence that land-based carbon sinks, such as forests, removed significantly less carbon in 2023. If natural sinks begin to fail – something they may well do in a warmer world – then the task of lowering global temperatures becomes even harder. The only credible way of limiting warming to any amount, is to stop putting greenhouse gasses into the atmosphere in the first place.

Science fiction solutions

It’s clear that the commitments countries have made to date as part of the Paris agreement will not keep humanity safe while carbon emissions and temperatures continue to break records. Indeed, proposing to spend trillions of dollars over this century to suck carbon dioxide out of the air, or the myriad other ways to hack the climate is an acknowledgement that the world’s largest polluters are not going to curb the burning of fossil fuels.

Direct Air Capture (DAC), Bio Energy Carbon Capture and Storage (BECCS), enhanced ocean alkalinity, biochar, sulphate aerosol injection, cirrus cloud thinning – the entire wacky races of carbon dioxide removal and geoengineering only makes sense in a world of failed climate policy.

Clouds in the sky.
Is ‘cloud thinning’ really a possibility? HarmonyCenter/Pixabay, CC BY

Over the following years we are going to see climate impacts increase. Lethal heatwaves are going to become more common. Storms and floods are going to become increasingly destructive. More people are going to be displaced from their homes. National and regional harvests will fail. Vast sums of money will need to be spent on efforts to adapt to climate change, and perhaps even more compensating those who are most affected. We are expected to believe that while all this and more unfolds, new technologies that will directly modify the Earth’s atmosphere and energy balance will be successfully deployed.

What’s more, some of these technologies may need to operate for three hundred years in order for the consequences of overshoot to be avoided. Rather than quickly slow down carbon polluting activities and increasing the chances that the Earth system will recover, we are instead going all in on net zero and overshoot in an increasingly desperate hope that untested science fiction solutions will save us from climate breakdown.

We can see the cliff edge rapidly approaching. Rather than slam on the brakes, some people are instead pushing their foot down harder on the accelerator. Their justification for this insanity is that we need to go faster in order to be able to make the jump and land safely on the other side.

We believe that many who advocate for carbon dioxide removal and geoengineering do so in good faith. But they include proposals to refreeze the Arctic by pumping up sea water onto ice sheets to form new layers of ice and snow. These are interesting ideas to research, but there is very little evidence this will have any effect on the Arctic let alone global climate. These are the sorts of knots that people tie themselves up in when they acknowledge the failure of climate policy, but refuse to challenge the fundamental forces behind such failure. They are unwittingly slowing down the only effective action of rapidly phasing out fossil fuels.

That’s because proposals to remove carbon dioxide from the air or geoengineer the climate promise a recovery from overshoot, a recovery that will be delivered by innovation, driven by growth. That this growth is powered by the same fossil fuels that are causing the problem in the first place doesn’t feature in their analysis.

The bottom line here is that the climate system is utterly indifferent to our pledges and promises. It doesn’t care about economic growth. And if we carry on burning fossil fuels then it will not stop changing until the energy balance is restored. By which time millions of people could be dead, with many more facing intolerable suffering.

Major climate tipping points

Even if we assume that carbon removal and even geoengineering technologies can be deployed in time, there is a very large problem with the plan to overshoot 1.5°C and then lower temperatures later: tipping points.

The science of tipping points is rapidly advancing. Late last year one of us (James Dyke) along with over 200 academics from around the world was involved in the production of the Global Tipping Points Report. This was a review of the latest science about where tipping points in the climate system may be, as well as exploring how social systems can undertake rapid change (in the direction that we want) thereby producing positive tipping points. Within the report’s 350 pages is abundant evidence that the overshoot approach is an extraordinarily dangerous gamble with the future of humanity. Some tipping points have the potential to cause global havoc.

The melt of permafrost could release billions of tons of greenhouse gasses into the atmosphere and supercharge human-caused climate change. Fortunately, this seems unlikely under the current warming. Unfortunately, the chance that ocean currents in the North Atlantic could collapse may be much higher than previously thought. If that were to materialise, weather systems across the world, but in particular in Europe and North America, would be thrown into chaos. Beyond 1.5°C, warm water coral reefs are heading towards annihilation. The latest science concludes that by 2°C global reefs would be reduced by 99%. The devastating bleaching event unfolding across the Great Barrier Reef follows multiple mass mortality events. To say we are witnessing one of the world’s greatest biological wonders die is insufficient. We are knowingly killing it.

We may have even already passed some major climate tipping points. The Earth has two great ice sheets, Antarctica, and Greenland. Both are disappearing as a consequence of climate change. Between 2016 and 2020, the Greenland ice sheet lost on average 372 billion tons of ice a year. The current best assessment of when a tipping point could be reached for the Greenland ice sheet is around 1.5°C.

This does not mean that the Greenland ice sheet will suddenly collapse if warming exceeds that level. There is so much ice (some 2,800 trillion tons) that it would take centuries for all of it to melt over which time sea levels would rise seven metres. If global temperatures could be brought back down after a tipping point, then maybe the ice sheet could be stabilised. We just cannot say with any certainty that such a recovery would be possible. While we struggle with the science, 30 million tons of ice is melting across Greenland every hour on average.

Melting ice flows.
Ice sheets in Greenland and Antarctica are being affected by global warming. Pexels from Pixabay, CC BY

The take home message from research on these and other tipping points is that further warming accelerates us towards catastrophe. Important science, but is anyone listening?

It’s five minutes to midnight…again

We know we must urgently act on climate change because we are repeatedly told that time is running out. In 2015, Professor Jeffrey Sachs, the UN special adviser and director of The Earth Institute, declared:

The time has finally arrived – we’ve been talking about these six months for many years but we’re now here. This is certainly our generation’s best chance to get on track.

In 2019 (then) Prince Charles gave a speech in which he said: “I am firmly of the view that the next 18 months will decide our ability to keep climate change to survivable levels and to restore nature to the equilibrium we need for our survival.”

“We have six months to save the planet,” exhorted International Energy Agency head Fatih Birol – one year later in 2020. In April 2024, Simon Stiell, executive secretary of the United Nations Framework Convention on Climate Change said the next two years are “essential in saving our planet”.

Either the climate crisis has a very fortunate feature that allows the countdown to catastrophe to be continually reset, or we are deluding ourselves with endless declarations that time has not quite run out. If you can repeatedly hit snooze on your alarm clock and roll over back to sleep, then your alarm clock is not working.

Or there is another possibility. Stressing that we have very little time to act is intended to focus attention on climate negotiations. It’s part of a wider attempt to not just wake people up to the impending crisis, but generate effective action. This is sometimes used to explain how the 1.5°C threshold of warming came to be agreed. Rather than a specific target, it should be understood as a stretch goal. We may very well fail, but in reaching for it we move much faster than we would have done with a higher target, such as 2°C. For example, consider this statement made in 2018:

Stretching the goal to 1.5 degrees celsius isn’t simply about speeding up. Rather, something else must happen and society needs to find another lever to pull on a global scale.

What could this lever be? New thinking about economics that goes beyond GDP? Serious consideration of how rich industrialised nations could financially and materially help poorer nations to leapfrog fossil fuel infrastructure? Participatory democracy approaches that could help birth the radical new politics needed for the restructuring of our fossil fuel powered societies? None of these.

The lever in question is Carbon Capture and Storage (CCS) because the above quote comes from an article written by Shell in 2018. In this advertorial Shell argues that we will need fossil fuels for many decades to come. CCS allows the promise that we can continue to burn fossil fuels and avoid carbon dioxide pollution by trapping the gas before it leaves the chimney. Back in 2018, Shell was promoting its carbon removal and offsets heavy Sky Scenario, an approach described as “a dangerous fantasy” by leading climate change academics as it assumed massive carbon emissions could be offset by tree planting.

Since then Shell has further funded carbon removal research within UK universities presumably in efforts to burnish its arguments that it must be able to continue to extract vast amounts of oil and gas.

Shell is far from alone in waving carbon capture magic wands. Exxon is making great claims for CCS as a way to produce net zero hydrogen from fossil gas – claims that have been subject to pointed criticism from academics with recent reporting exposing industry wide greenwashing around CCS.

But the rot goes much deeper. All climate policy scenarios that propose to limit warming to near 1.5°C rely on the largely unproven technologies of CCS and BECCS. BECCS sounds like a good idea in theory. Rather than burn coal in a power station, burn biomass such as wood chips. This would initially be a carbon neutral way of generating electricity if you grew as many trees as you cut down and burnt. If you then add scrubbers to the power station chimneys to capture the carbon dioxide, and then bury that carbon deep underground, then you would be able to generate power at the same time as reducing concentrations of carbon dioxide in the atmosphere.

Unfortunately, there is now clear evidence that in practice, large-scale BECCS would have very adverse effects on biodiversity, and food and water security given the large amounts of land that would be given over to fast growing monoculture tree plantations. The burning of biomass may even be increasing carbon dioxide emissions. Drax, the UK’s largest biomass power station now produces four times as much carbon dioxide as the UK’s largest coal-fired power station.

Five minutes to midnight messages may be motivated to try to galvanise action, to stress the urgency of the situation and that we still (just) have time. But time for what? Climate policy only ever offers gradual change, certainly nothing that would threaten economic growth, or the redistribution of wealth and resources.

Despite the mounting evidence that globalised, industrialised capitalism is propelling humanity towards disaster, five minutes to midnight does not allow time and space to seriously consider alternatives. Instead, the solutions on offer are techno fixes that prop up the status quo and insists that fossil fuel companies such as Shell must be part of the solution.

That is not to say there are no good faith arguments for 1.5°C. But being well motivated does not alter reality. And the reality is that warming will soon pass 1.5°C, and that the Paris agreement has failed. In the light of that, repeatedly asking people to not give up hope, that we can avoid a now unavoidable outcome risks becoming counterproductive. Because if you insist on the impossible (burning fossil fuels and avoiding dangerous climate change), then you must invoke miracles. And there is an entire fossil fuel industry quite desperate to sell such miracles in the form of CCS.

Four suggestions

Humanity has enough problems right now, what we need are solutions. This is the response we sometimes get when we argue that there are fundamental problems with the net zero concept and the Paris agreement. It can be summed up with the simple question: so what’s your suggestion? Below we offer four.

1. Leave fossil fuels in the ground

The unavoidable reality is that we need to rapidly stop burning fossil fuels. The only way we can be sure of that is by leaving them in the ground. We have to stop exploring for new fossil fuel reserves and the exploitation of existing ones. That could be done by stopping fossil fuel financing.

At the same time we must transform the food system, especially the livestock sector, given that it is responsible for nearly two thirds of agricultural emissions. Start there and then work out how best the goods and services of economies can be distributed. Let’s have arguments about that based on reality not wishful thinking.

2. Ditch net zero crystal ball gazing targets

The entire framing of mid and end-century net zero targets should be binned. We are already in the danger zone. The situation demands immediate action, not promises of balancing carbon budgets decades into the future. The SBTi should focus on near-term emissions reductions. By 2030, global emissions need to be half of what they are today for any chance of limiting warming to no more than 2°C.

It is the responsibility of those who hold most power – politicians and business leaders – to act now. To that end we must demand twin targets – all net zero plans should include a separate target for actual reductions in greenhouse gas emissions. We must stop hiding inaction behind promises of future removals. It’s our children and future generations that will need to pay back the overshoot debt.

3. Base policy on credible science and engineering

All climate policies must be based on what can be done in the real world now, or in the very near future. If it is established that a credible amount of carbon can be removed by a proposed approach – which includes capture and its safe permanent storage – then and only then can this be included in net zero plans. The same applies to solar geoengineering.

Speculative technologies must be removed from all policies, pledges and scenarios until we are sure of how they will work, how they will be monitored, reported and validated, and what they will do to not just the climate but the Earth system as a whole. This would probably require a very large increase in research. As academics we like doing research. But academics need to be wary that concluding “needs more research” is not interpreted as “with a bit more funding this could work”.

4. Get real

Finally, around the world there are thousands of groups, projects, initiatives, and collectives that are working towards climate justice. But while there is a Climate Majority Project, and a Climate Reality Project, there is no Climate Honesty Project (although People Get Real does come close). In 2018 Extinction Rebellion was formed and demanded that governments tell the truth about the climate crisis and act accordingly. We can now see that when politicians were making their net zero promises they were also crossing their fingers behind their backs.

We need to acknowledge that net zero and now overshoot are becoming used to argue that nothing fundamental needs to change in our energy intensive societies. We must be honest about our current situation, and where we are heading. Difficult truths need to be told. This includes highlighting the vast inequalities of wealth, carbon emissions, and vulnerability to climate change.

The time for action is now

We rightly blame politicians for failing to act. But in some respects we get the politicians we deserve. Most people, even those that care about climate change, continue to demand cheap energy and food, and a constant supply of consumer products. Reducing demand by just making things more expensive risks plunging people into food and energy poverty and so policies to reduce emissions from consumption need to go beyond market-based approaches. The cost of living crisis is not separate from the climate and ecological crisis. They demand that we radically rethink how our economies and societies function, and whose interests they serve.

To return to the boiling frog predicament at the start, it’s high time for us to jump out of the pot. You have to wonder why we did not start decades ago. It’s here that the analogy offers valuable insights into net zero and the Paris agreement. Because the boiling frog story as typically told misses out a crucial fact. Regular frogs are not stupid. While they will happily sit in slowly warming water, they will attempt to escape once it becomes uncomfortable. The parable as told today is based on experiments at the end of the 19th century that involved frogs that had been “pithed” – a metal rod had been inserted into their skulls that destroyed their higher brain functioning. These radically lobotomised frogs would indeed float inert in water that was cooking them alive.

Promises of net zero and recovery from overshoot are keeping us from struggling to safety. They assure us nothing too drastic needs to happen just yet. Be patient, relax. Meanwhile the planet burns and we see any sort of sustainable future go up in smoke.

Owning up to the failures of climate change policy doesn’t mean giving up. It means accepting the consequences of getting things wrong, and not making the same mistakes. We must plan routes to safe and just futures from where we are, rather where we would wish to be. The time has come to leap.


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James Dyke, Associate Professor in Earth System Science, University of Exeter; Robert Watson, Emeritus Professor in Environmental Sciences, University of East Anglia, and Wolfgang Knorr, Senior Research Scientist, Physical Geography and Ecosystem Science, Lund University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Continue ReadingThe overshoot myth: you can’t keep burning fossil fuels and expect scientists of the future to get us back to 1.5°C

HSBC helped oil and gas industry raise $47bn despite net-zero pledge

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Original article by Josephine Moulds republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

The bank’s work for businesses expanding production of fossil fuels is a stark contrast to its climate change promises

Every year business and world leaders jet into Davos to discuss climate change and other global issues at the World Economic Forum. And every year they are met with vigorous accusations of hypocrisy. Those accusations may well be levelled at the executives from HSBC – one of the world’s top funders of fossil fuel expansion – as they mingled with their peers in the pretty Swiss ski town this week, discussing how to develop a long-term strategy for climate, nature and energy.

HSBC says delivering a net-zero global economy is “a pillar of our strategy as a business”. In December 2022, the bank made the shock announcement that it would stop financing new oil and gas fields. Environmental campaigners celebrated, with the responsible investment charity ShareAction saying the decision set “a new minimum ambition for all banks committed to net zero”.

But on the same day, HSBC bankers started selling shares in the refining business of Saudi Aramco, one of the most aggressive expanders of oil and gas. An investor in HSBC told the Bureau of Investigative Journalism that the bank’s policy has been cleverly worded to allow it to fund some of the world’s biggest polluters while boasting about its green credentials.

An analysis of Refinitiv data by TBIJ has found that in the year since HSBC’s new policy was announced, the bank has helped raise more than $47bn (£37bn) for companies that are expanding the production of oil and gas, despite dire warnings from scientists that this will push the world beyond its survivable limits.

Fatih Birol, executive director of the International Energy Agency, told ITV News: “In the world, if we make large scale oil, gas and coal development, we cannot reach our 1.5 degrees target, full stop.” He said if a bank is serious about aligning its business with net zero, it cannot continue to fund companies developing new oil and gas fields.

Andrew Harper, chief responsibility officer at Epworth, an investment manager that holds HSBC shares, said: “[HSBC’s] policy, which is supposed to act as a safety net for the climate, is by design letting the bank circumvent its pledges by allowing them to adhere to the letter rather than the spirit of what they’re claiming.

“As investors, we’re not going to be fooled by the marketing, by the pledges, by these policies. We want to see real change and for them to seriously end new fossil fuel financing, no loopholes. Anything short of that is the bank trying to dupe its key stakeholders.”

HSBC said its policy allows the bank to continue providing finance “at a corporate level” and its approach “is based on the latest science for achieving net zero and follows the UN-backed approach for climate target setting and net zero alignment for banks”.

New projects, no problem

In its feted policy, HSBC notes that global demand for oil and gas to 2050 is “more than met by existing [oil and gas] fields”. It says the bank will therefore no longer provide finance for “new oil and gas fields and related infrastructure whose primary use is in conjunction with new fields”.

However, that has not stopped HSBC from funding companies that are exploiting new oil and gas fields, and providing the necessary infrastructure to do so.

In the first half of last year, HSBC, with other banks, helped the UAE’s state oil and gas company, Adnoc, raise $3.2bn from selling shares in its gas and logistics businesses. Adnoc will receive a further cash boost of $3bn in hefty dividends from Adnoc Gas.

Separately, HSBC helped arrange a $3.2bn loan for Borouge 4, a petrochemicals plant that will be a key customer for Adnoc’s gas, and was described by its project director as “an enabler of Adnoc’s growth strategy”.

Scientists agree that we cannot develop any new oil and gas fields if we are to limit global heating to 1.5C. Adnoc plans to increase oil production by 25% between 2023 and 2027, however, which would dramatically overshoot these limits.

Last year, Adnoc rubber stamped the exploitation of a vast new gas field off the UAE coast, which threatens a vital habitat for sea cows. Burning the gas Adnoc plans to extract from this field would produce 30m tonnes of carbon dioxide per year – more than Denmark’s annual emissions.

HSBC has similarly close ties with Saudi Arabia’s national oil company. The share sale for Saudi Aramco’s refining business, Luberef – which HSBC bankers were working on as it unveiled its new oil and gas policy – raised $1.3bn. After the share sale, Saudi Aramco remains a 70% shareholder of Luberef and has management control of the business.

A couple of months later HSBC bankers helped raise $3bn in bonds for Greensaif, a company set up for the sole purpose of taking a stake in Saudi Aramco’s gas pipelines business, alongside Saudi Aramco, which retained the controlling stake.

And in another wildly successful share offering, HSBC helped raise $1.2bn for Ades Holding, which provides oil drilling rigs primarily to Saudi Aramco, among other oil and gas expanders in the region. Adnoc and Saudi Aramco declined to comment.

Adnoc is investing heavily in offshore expansion in the United Arab Emirates Giuseppe Cacace/AFP via Getty Images

HSBC rejected the suggestion that its policies allow for financing that is at odds with a net zero transition. “Net zero-aligned scenarios require continued, though declining, financing of fossil fuel supplies to meet energy demand, security, and affordability during the transition.”

The bank said its policy makes clear that it will continue to provide finance for companies with transition plans that align with its climate commitments. “HSBC’s approach is to engage with our major oil and gas clients on their targets and transition plans, and to align our oil and gas financing portfolio to a 2030 net zero aligned financed emissions target.”

Transition plans

Saudi Aramco, the world’s biggest polluter, does not appear to be preparing for a transition away from fossil fuels. The company expects to grow oil production by 8% by 2027, and increase gas production by up to 60% by 2030. Last year UN experts sent a letter of concern to Aramco – and its banks, including HSBC – saying its ongoing expansion of fossil fuel production threatens human rights by worsening climate change.

HSBC has chased business in the oil-rich Middle East and was last year named the region’s best bank for financing by Euromoney. Julian Wentzel, HSBC’s head of global banking in the region, told the magazine: “We have been at the nucleus of every major deal in the region, providing the full suite of banking services to our valued partners.”

Ed Matthew, campaigns director of think tank E3G, told TBIJ: “There’s a complete conflict between [HSBC’s] ambition to be at the heart of Middle Eastern oil and gas development and their commitment to start to pull out of fossil fuel financing globally.

“They can’t have their cake and eat it. Either they’re serious about delivering on the Paris Agreement or they’re not. At the moment, they’re putting short-term profits ahead of a habitable planet.”

Aggressive fossil fuel expansion

HSBC also funded oil and gas businesses far beyond the Middle East. In December, the bank helped arrange a $5bn loan for TransCanada Pipelines, which is among the top companies in the world expanding infrastructure for oil and gas, according to the Rainforest Action Network. (TC Energy, which owns TransCanada Pipelines, said: “Sustainability is foundational in everything we do.”) A few weeks later, the bank helped secure a $4.7bn loan for Occidental Petroleum, which is buying a Texas oil driller to expand its operations in the biggest shale field in the US.

In Europe, HSBC was among the banks that arranged a $3.3bn loan for Eni, the Italian oil and gas expander. Eni announced last year that it plans to increase its oil and gas extraction by 3-4% a year until 2027.

Experts have praised HSBC’s oil and gas policy for prohibiting funding for infrastructure linked to new oil and gas fields, in addition to the projects themselves. But the bank has continued to raise money for companies involved in the frantic building of export terminals for natural gas on the US southern coast.

The expansion of gas drilling and export in the region has been described as a “carbon bomb” – if all the planned projects are built, the associated annual emissions would outstrip those of Russia. Last year, HSBC, together with a slew of other banks, helped arrange loans worth $14.3bn for two of the companies building gas export hubs in the region.

HSBC was also among a group of banks to arrange loans worth $6bn for Baker Hughes, which provides oilfield services and equipment to oil and gas companies around the world. It helped raise a further $790m in share sales for oil drilling services companies Saipem and Nabors during the year.

At Davos there has been plenty of debate about how to limit global heating to 1.5C but campaigners fear it will remain just that. “Davos has always been a lot of talk and not much action,” said E3G’s Matthew. He would like to see stricter regulation of fossil fuel funding. “We can’t just leave it in the hands of banks, we need stronger action by governments and central banks to help prevent these investments. They need to introduce penalties for banks which are continuing to finance fossil fuel expansion.”

Header image: A liquified natural gas terminal on the Texas Louisiana border in the United States. Credit: The Washington Post via Getty Images.

Reporters: Josephine Moulds
Environment editor: Robert Soutar
Impact producer: Grace Murray
Deputy editor: Chrissie Giles
Editor: Franz Wild
Production editor: Frankie Goodway
Fact checker: Alice Milliken

This reporting is funded by the Sunrise Project. None of our funders have any influence over our editorial decisions or output.

Original article by Josephine Moulds republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue ReadingHSBC helped oil and gas industry raise $47bn despite net-zero pledge

Argentina’s far-right libertarian president warns in Davos, “the West is in danger”

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[While a serious issue, there are some amusing parts to this article.]

Original article by ARG Medios at peoples dispatch republished under a Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) license.

On the morning of January 17, Argentine President Javier Milei gave his first speech at the World Economic Forum in Davos, Switzerland. The far-right libertarian was sworn in on December 10, 2023 and since then has launched all-out attacks on the working class through presidential decrees and omnibus laws, all of which have been vehemently opposed on the streets.

Milei began his speech at Davos by telling those present: “I am here to tell you that the West is in danger. All over the world, leaders who must defend the values of capitalism assume a vision that leads to socialism and poverty. “The main leaders of the world have abandoned freedom for so-called collectivism, which is the cause of the problems.”

The strongest argument of his speech was going to be that capitalism is the only tool to end hunger and poverty in the world, although he added: “the leftist thinking attacks capitalism for being, according to them, unjust. They say it is bad because it is individualistic and they fight for social justice. This concept has become fashionable around the world, but social justice is an unfair, violent idea, because taxes are coercively collected. Nobody pays taxes voluntarily. The State is financed through coercion. If a company generates a good product it will do well, if the State punishes the capitalist for being successful it destroys their incentives, and the cake will be smaller. Collectivism ties the entrepreneur’s hands.”

He also spoke of enemies, who for him are those who use the State as a tool: “everyone. There are no substantive differences. Socialists, conservatives, communists, fascists, Nazis, social democrats, centrists. They are all the same.”

In this same sense, Milei attacked two of the most important agendas at the Davos Forum, gender inequality and climate change: “The first of these new battles was the ridiculous and unnatural fight between men and women. Libertarianism already establishes equality between the sexes. The founding stone of our creed says that all men are created equal, that we all have the same inalienable rights granted by the creator, among which are life, liberty and property,” he maintained.

He went further and said: “the only thing that became of this agenda of radical feminism is greater intervention by the state to hinder the economic process, giving work to bureaucrats who do not contribute anything to society, be it in the format of women’s ministries or international organizations dedicated to promoting this agenda.”

In the same sense, he denied human responsibility for climate change: “another one of the conflicts that socialists raise is that of man against nature. They maintain that human beings damage the planet and that it must be protected at all costs, even going so far as to advocate for population control mechanisms or the bloody agenda of abortion.”

Finally, the only praise in Javier Milei’s speech was for the businessmen, whom he treated as heroes and also told them: “do not let yourself be intimidated by the political caste that wants to remain in power. You are heroes, you are benefactors, let no one tell you that your ambition is immoral, do not give in to the advance of the State, The state is the problem itself, you are the protagonists of history. Long live fucking freedom!

The president returned to Argentina on Wednesday on a commercial flight, after a couple of meetings and a bold speech that was not very widely accepted in Davos. He will face a massive national strike on January 24, called for by all the major trade unions and confederations in Argentina in opposition to his pro-capitalist, pro-businessman policies.

This article was first published in Spanish on ARG Medios.

Original article by ARG Medios at peoples dispatch republished under a Creative Commons Attribution-ShareAlike 4.0 (CC BY-SA) license.

Continue ReadingArgentina’s far-right libertarian president warns in Davos, “the West is in danger”

Global Cooperation Key to Preventing ‘Runaway’ Climate and AI Chaos: UN Chief

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Original article by JULIA CONLEY republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

United Nations Secretary-General António Guterres speaks at the U.N. headquarters on February 22, 2023.  (Photo: Lev Radin/Pacific Press/LightRocket via Getty Images)

“Geopolitical divides are preventing us from coming together around global solutions for global challenges,” said United Nations Secretary-General António Guterres.

At the World Economic Forum in Davos, Switzerland on Wednesday, United Nations Secretary-General António Guterres warned that multilateralism that includes often overlooked governments in the Global South is the only solution to the rapidly developing crises posed by the climate emergency and artificial intelligence—both of which are worsening “the global crisis in trust.”

“In the face of the serious, even existential threats posed by runaway climate chaos,” said Guterres, “and the runaway development of artificial intelligence without guardrails, we seem powerless to act together.”

While “droughtsstormsfires, and floods are pummeling countries and communities,” particularly in nations that have contributed the least planet-heating fossil fuel pollution, Guterres told the political and business elite assembled in Davos, “countries remain hellbent on raising emissions.”

He reserved particular scorn for the United States fossil fuel industry, which—amid the Biden administration’s approval of pollution-causing infrastructure including the Willow oil project and the Mountain Valley Pipelinedeceives the public with false climate solutions, misinformation, and greenwashing campaigns “to kneecap progress and keep the oil and gas flowing indefinitely.”

As suffering intensifies in communities that are most vulnerable to drought, damage from extreme weather, and other climate catastrophes, Guterres said, fossil fuel giants and powerful governments are risking lives to only delay an “inevitable” shift to renewable energy.

“The phaseout of fossil fuels is essential,” said the secretary-general. “No amount of spin or scare tactics will change that. Let’s hope it doesn’t come too late.”

As trust between the Global South and wealthy governments is frayed by fossil fuel-producing countries’ refusal to leave oil, gas, and coal behind, Guterres warned that the separate threat of “unintended consequences” of artificial intelligence evolution also looms—for people in rich economies as well as developing countries.

“This technology has enormous potential for sustainable development,” said the U.N. chief, while noting that “some powerful tech companies are already pursuing profits with a clear disregard for human rights, personal privacy, and social impact.”

Guterres’ comments came days after the International Monetary Fund (IMF) released a new analysis of AI’s expected impact on the global economy and workers, with nearly 40% of the labor market expected to be “exposed” to AI.

In wealthy countries, about 60% of jobs are projected to be impacted by AI, and about half of those workers are likely to see at least some of their primary tasks being completed by AI tools like ChatGPT or similar technology, “which could lower labor demand, leading to lower wages, and reduced hiring,” according to the IMF. “In the most extreme cases, some of these jobs may disappear.”

The analysis released Sunday noted that the rapidly changing field could worsen inequality within countries, as some higher earners may be able to “harness AI” and leverage its use for increases in their productivity and pay while those who can’t fall behind.

“In most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions,” said the IMF. “It is crucial for countries to establish comprehensive social safety nets and offer retraining programs for vulnerable workers.”

Guterres called on policymakers to work closely with the private sector—currently “in the lead on AI expertise and resources”—to “develop a governance model” for AI that is focused on “monitoring and mitigating future harms.”

A systematic effort is also needed, said the secretary-general, “to increase access to AI so that developing economies can benefit from its enormous potential.”

Along with the IMF and Guterres, global human rights group Amnesty International this week raised alarm about AI and the “urgent but difficult task” of regulating the technology, noting that in addition to changing how people and companies work, AI has the potential to be “used as a means of societal control, mass surveillance, and discrimination.”

Police agencies in several countries have begun using AI for so-called “predictive policing,” attempting to prevent crimes before they’re committed, while officials have also deployed automated systems to detect fraud, determine who can and can’t access healthcare and social assistance, as well as to monitor migrants’ and refugees’ movement.

Amnesty credited the European Union with making headway in regulating AI in 2023, closing out the year by reaching a landmark agreement on the AI Act, which would take steps to protect Europeans from the automation of jobs, the spread of misinformation, and national security threats.

The AI Act, however, has been criticized by rights groups over its failure to ban mass surveillance via live facial recognition tools.

“Others must learn from the E.U. process and ensure there are not loopholes for public and private sector players to circumvent regulatory obligations, and removing any exemptions for AI used within national security or law enforcement is critical to achieving this,” said Amnesty.

In Davos on Wednesday, Guterres expressed hope that policymakers will agree on climate, AI, and other solutions that center human rights in the coming year, including at the U.N.’s Summit of the Future, planned for September.

“These two issues—climate and AI—are exhaustively discussed by governments, by the media, and by leaders here in Davos,” said Guterres. “And yet, we have not yet an effective global strategy to deal with either. And the reason is simple. Geopolitical divides are preventing us from coming together around global solutions for global challenges.”

“The only way to manage this complexity and avoid a slide into chaos,” he said, “is through a reformed, inclusive, networked multilateralism.”

Original article by JULIA CONLEY republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

Continue ReadingGlobal Cooperation Key to Preventing ‘Runaway’ Climate and AI Chaos: UN Chief

Labour figures took £10,000 gifts from Google and YouTube ahead of tax U-turn

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Keir Starmer sucking up to the rich and powerful at World Economic Forum, Davos.
Keir Starmer sucking up to the rich and powerful at World Economic Forum, Davos.

Original article by Adam Ramsay republished from Open Democracy under  Creative Commons Attribution-NonCommercial 4.0 International licence.

Senior Labour figures accepted valuable gifts from Google in the days before abandoning a plan to tax digital giants more, openDemocracy can reveal.

Labour’s shadow business secretary Jonathan Reynolds, his senior parliamentary assistant (who is his wife), and Keir Starmer’s political director all attended Glastonbury festival in June as guests of YouTube, which is owned by Google. Including accommodation and ‘hospitality’, Reynolds estimates his Glastonbury package for two was worth £3,377 – significantly more than the cost of two regular tickets, which were £335 each.

The next day, reports emerged that Labour had ditched its proposal to hike tax on digital businesses like Google.

The Digital Services Tax, introduced in 2020, is a 2% levy on the UK income of online companies like search engines and social media platforms. In August last year, Reynolds and his shadow chancellor colleague Rachel Reeves had called for an increase in the tax to 10%, saying the income would be used to fund a slash in tax for small businesses.

As recently as 5 June, Reynolds was still talking about the policy. Yet on 26 June this year, the day after Glastonbury ended, The Times reported that the policy had been ditched, with Labour saying it had “no plans” to raise the digital service tax when in government. Reynolds declined to comment.

It was not the only time senior figures in Starmer’s team accepted luxury gifts from Google in the months before the party’s U-turn. Shadow culture secretary Lucy Powell’s political adviser, Labour’s executive director of policy, and the party’s head of domestic policy all accepted tickets and transport to, and ‘hospitality’ at, the Brit Awards in February from the digital giant. Powell’s register of interests estimates that the adviser’s ticket was worth £1,170.

Starmer’s political director also accepted transport to and ‘hospitality’ ahead of the event from Google, though his ticket, along with that of Starmer’s private secretary, was covered by Universal Music.

YouTube will sponsor an event at Labour’s annual conference next month with the chair of the business and trade select committee, Darren Jones. The talk, hosted by the New Statesman Media Group, will be on “harnessing tech for growth”.

Last week, openDemocracy revealed that Starmer had accepted a £380 dinner from Google for him and one staff member during the World Economic Forum in January.

In total, openDemocracy estimates that Labour shadow cabinet members and their staff accepted luxury gifts from Google worth nearly £10,000 over the months before they announced their policy U-turn. By contrast, the value to the British public of the policy Labour appears to have ditched is estimated at around £3bn.

Nick Dearden, director of Global Justice Now, said: “This is a really very worrying set of events which suggests that big business has far too much access to senior opposition politicians.

“But this isn’t simply about foolish behaviour on the part of the individuals concerned. In office, Labour needs to radically restructure our economy if it’s to have any hope of creating a more sustainable and equal society, and undoing the damage of recent governments. To do that, they must take on vested interests, like the Big Tech monopolies, which have far too much wealth and power.”

Staff for other Labour shadow cabinet members have also accepted valuable gifts from controversial companies. A political adviser to the shadow chancellor Rachel Reeves, accepted two ‘box’ tickets to a Harry Styles concert worth £250 each from BT. In the 2019 Labour manifesto, the party committed to nationalising BT, a measure the company opposed. It’s not clear whether the party maintains this policy, but Reeves has distanced herself from other nationalisation plans.

In April this year, BT announced a 14.4% average increase in its prices, and £1.7bn in profit. An Openreach spokesperson said: “As you’d expect from any major employer investing billions into the UK, we engage regularly with a range of stakeholders to support the interests of our people, our customers and our business. Any hospitality is consistent with the rules, fully declared and transparent.”

Updated 31 August 2023: The original version of this article incorrectly stated that the value of the Harry Styles box tickets was £700 each. They were in fact £250 each.

Original article by Adam Ramsay republished from Open Democracy under  Creative Commons Attribution-NonCommercial 4.0 International licence.

Continue ReadingLabour figures took £10,000 gifts from Google and YouTube ahead of tax U-turn