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Energy day at COP26: Voices call out for an end to use of coal, gas and oil

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Fittingly, the sun broke through the clouds over Glasgow on Thursday as delegations and participants prepared for ‘energy day’ at COP26, one of the key thematic sessions taking place during the UN climate summit.

Traveling from the city centre in the special electric bus provided by the organizers, the UN News team arrived at the venue to find activists outside the gates urging countries to end their dependence on coal, gas and oil. 

Some of the activists dressed as Pikachu, the short, chubby rodent mascot of the Japanese anime Pokémon, which in the series, is capable to organically launch strikes of electricity. Others armed with picket signs in different languages, turning on their megaphones to shout a call for climate justice: “No more fossil fuels”. 

Commitments on coal 

Inside the Scottish Event Campus, the main meeting of the day started with the COP26, co-hosts echoing the words of the UN Secretary-General António Guterres: “consign coal to history”.

President of the Conference Alok Sharma announced the new Global Clean Power Transition Statement, a commitment to end coal investments, scale up clean power, make a just transition, and phase out coal by the 2030´s in major economies, and in the 2040´s elsewhere. 

The pledge has 77 signatories, including 46 countries such as Poland, Vietnam and Chile, 23 of which are making commitments on ending coal for the first time, he explained.  

“All this helps to power the world to net-zero. We know that there is more to be done, it’s up to all of us governments, business, financial institutions and civil society and we must continue building the moment though alliances and coalitions. I do believe that the end of coal is in sight. I believe that we are getting to a point where we consign coal power to history”, he told the plenary room. 

Unfortunately, the statement leaves out the biggest coal financers China, Japan and Republic of Korea, which however, committed last year to end overseas finance for coal generation by the end of 2021.

Meanwhile, the Powering Past Coal Alliance, which aims to achieve coal phase-out in a sustainable and economically inclusive way, welcomed new members today that include seven countries and 14 financial institutions.  

Yesterday, the governments of South Africa, France, Germany, the United Kingdom and the US, along with the European Union, announced a new ambitious, long-term Just Energy Transition Partnership to support South Africa’s decarbonization efforts. US President Joe Biden and EU Commissioner Ursula Von de-Leyen appeared virtually to officially present it duringThursday’s event at COP26.

‘Not enough’ 

While saying that the commitments were somewhat encouraging, civil society organizations were ‘not having it’ outside the plenary room. 

In separate press conferences, the German NGO Urgewald and the Climate Action Network expressed their despair regarding the current energy crisis.  

“The last two years we have seen a surge in coal policies but hardly anything substantial on oil and gas. The reason for that is that financial institutions who want to walk away from fossil fuels face a major problem which is a lack of information”, said the finance campaigner of Urgewald. 

The human rights and environmental organization published their latest Global Oil and Gas Exit List, which argues that 506 upstream oil and gas producers are planning to add 190 billion of barrels of oil equivalent to their production portfolios within the next 1 to 7 years.  

“At least 96 per cent of gas and oil producers are looking to expand their assets”, added the Urgewald representative. “The industry is on a reckless expansion course with dirtiest production forms making up 50 per cent of new projects”. 

Meanwhile, Jing Zhu, director of the energy justice programme at the Center for Biological Diversity in the United States stressed that: “We no longer have time for fossil fuels”.  

“We have seen the G20 go the opposite direction. Between 2018 and 2020, G20 countries have committed 188 billion dollars to fossil fuels. That’s 2.5 times the amount that they have put for renewables, that’s absolutely atrocious”, she said. 

A new commitment 

Ms. Zhu, however, cautiously announced good news during the press conference. A group of governments and public finance institutions across the world, including in the US, European Union, Canada and UK, have pledged to end direct support for the ‘unabated’ fossil fuel energy sector by the end of 2022.  

The joint announcement made this morning promises an end to direct support for international fossil fuel projects “except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement”.  

“This is the first political commitment to phase out oil and gas finance as well, not only coal. If implemented this will shift 18 billion dollars a year from fossil fuels to renewable energy”, Ms. Zhu, also member of the Climate Action Network, explained.  

The commitment, while historic, it’s not sufficient, she said, asking China, Japan and Republic of Korea to join it as well.  

“We are dealing with our fossil addiction. We urge the end of fossil fuel development around the world, domestically and internationally”. 

Answering to questions from journalists, the expert explained what ‘unabated fossils fuel projects’ mean while sending tough words to world leaders. 

“Carbon capture and storage and other fossil fuel projects that have some sort of technical fix are still allowed, is very similar to the false net zero promises of 2050. It is consistent with the lack of leadership of courage. At the same time, if we want to give them the benefit the doubt, there is a pledge for clean energy especially clean energy manufacture from a lot of this countries as well. They view domestic investments as potential boons for their own economies. The US for example have their own plans for exporting that renewal energy”, Ms. Zhu added. 

The energy problem 

Damilola Ogunbiyi, Special Representative of the UN Secretary-General for Sustainable Energy for All, also made a call for action during Thursday’s main event, reminding that the energy sector accounts for 2/3 of greenhouse gas emissions. 

“759 million people in this world still lacks access to basic electricity, and over 2.6 billion don’t have access to clean cooking solutions”, she underscored.  

The Special Representative cited the UN Environmental Programme’s recent Emissions Gap Report, which indicates that we are on a path of a dangerous 2.7-degree global temperature raise by the end of the century that would threaten life as we know it.   

“We need to radically rethink how we deliver energy services; we must answer the call of the UN Secretary General to consign coal into history… After 2021 no new coal plants should be in the pipeline”, Ms. Ogunbiyu urged. 

According to the UN Development Programme (UNDP), an average of $423 billion dollars of public funds are spent every year on fossil fuel subsidies, and despite international commitments, subsidies are not being phased out but are increasing. 

These subsidies are a major obstacle to achieving climate and sustainable development goals because they encourage investment in pollution and discourage renewable energy. 

“We are running out of time, and we have no choice but to be decisive and we commit to the collaboration and financing necessary to make a just equitable and inclusive energy transition possible for those who have contributed less to climate change”, the Special Representative highlighted. 

Phasing out fossil fuels and taxing carbon will spur growth and innovation. UNDP studies show that the move could provide for up to 10 years of spending on green innovation and infrastructure which would bring growth and new, safer jobs. 

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Quiet panic: “We don’t know how oil market is going to function after a certain date”

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“How will the market react to the attempts by politicians to rig supply and price?” asks “The Financial Times” in an article “The week that could unravel the global oil market”. West countries came up with the idea of limiting the price of Russian oil, and now they themselves are afraid of terrible consequences.

Moscow has weaponised its natural gas supplies to Europe for months and is now actively trying to disable Ukraine’s electricity network. Consumer countries have become competitors as they race to secure scarce energy supplies. Fractures are visible in the decades-old Saudi-US oil relationship. Even in clean energy, leaders such as Joe Biden talk of a new battle to dominate supply chains.

The potential unraveling of the old order in the global oil market will reach a defining moment over the next week when Europe starts to block Russian seaborne crude from the continent. No one can say how disruptive these measures will be.

For energy industry veterans, the coming days mark a moment of deep peril for the oil market — and a global economy that still depends heavily on the commodity. Established geopolitical norms have been eroded in the past year, they say, and supply chains that have existed for decades are now being upended.

Russia’s willingness to torch its gas customer base in Europe and Saudi Arabia’s decision last month to slash oil supply — despite fierce opposition from the White House, who accused its Middle Eastern ally of aligning with Moscow — were just two examples.

 “These are tectonic shifts. Global markets were built on these trunk lines, of [natural gas] supply going between Russia and Europe, and both oil and gas between the Middle East and Asia,” says Roger Diwan, a veteran oil analyst at S&P Global Commodity Insights in Washington. “We don’t know how this market is going to function after a certain date. The adjustment will be dramatic.”

The price cap idea for Russian oil first promoted by the US Treasury department, is the most important and controversial initiative. The White House has worked for months to hold back prices, releasing unprecedented volumes of oil from its own emergency stockpile, while maintaining constant — if so far fruitless — pressure on Saudi Arabia and other producers to keep increasing supply.

For the Biden administration, it is a method to curb the Kremlin’s revenue while preserving the flow of Russian oil to the market in order to keep more oil price inflation at bay.

The plan is actually partly designed to offset much tougher restrictions put in place under EU sanctions on Russia.

The Kremlin has already said it will withhold supplies to countries co-operating with the price cap. “They said they would shut off gas supplies to anyone who doesn’t pay in roubles — and that happened,” says Martijn Rats, chief commodity strategist at Morgan Stanley. “You have to take into account the possibility that [cuts to oil exports] might actually happen.”

Vitol, the world’s largest independent oil trader, estimates Russian exports could drop by as much as a 1mn b/d, around 20 per cent of the volume it ships by sea. “I think the Russians likely have every intention to make this winter as miserable as possible for the west to make us reconsider our support for Ukraine,” says Croft at RBC. “We have made it very clear our pain point is energy.”

The OPEC Gulf states such as Saudi Arabia and the UAE chafe against the price cap believing it could one day be turned against them.

They also point to what they see as the hypocrisy of the West: demanding higher production while also seeking lower prices, which the industry argues has stymied investment and left the market ill-prepared for this crisis and what might come next.

…It’s clear that Western countries are entangled in sanctions against Russia. But this time the restrictions on the price of Russian oil will be very painful for the West itself.

International Affairs

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Best Practice: Why Going Green Is Best for Business

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Why Going Green is Best for Business

Over recent years, more companies have turned their attention to becoming greener and more environmentally friendly. But once the pandemic hit, companies shifted their focus away from initiatives, choosing to prioritize recouping their losses and staying afloat. However, dropping their environmental goals to protect their growth can be seen as short-sighted.

According to research data collected from over 35 countries, businesses, on average, perform better when employing green practices for multiple reasons. And while it might be difficult for some to make the changes needed to see this increased performance, companies like Signet in Australia understand the importance of staying committed to their eco-friendly ventures.

Tap into Emerging Niche Markets

A company can open itself to untapped niche markets and emerging trends by offering new green products and services, which is a great way to differentiate the company from its competitors. In some cases, companies committed to reducing their carbon footprint and boosting their green initiatives received millions in investment during the pandemic when most others struggled to keep their doors open. And as the world continues to struggle post-pandemic, these investments become invaluable.

D’light, a company dedicated to lighting solutions for those without access to any electricity, was able to help over 100 million people in 70 countries with their green products, simultaneously acquiring US$ 197 million in investment. In addition, Danish energy supplier, Ørsted, was named the most sustainable company in the world. Their success came from transforming themselves into green energy suppliers, and as a result, they have seen accelerated profits on their books.

Catering to these niche markets makes businesses the leaders of their sectors, allowing them to expand rapidly into international markets. And while such environments may only be realistic for some, it is possible to reexamine working practices and processes to make them more accessible.

Increased Efficiency

By making processes greener, companies can benefit from efficiency gains in the form of lower energy costs, securing green tax credits, and improving overall operational efficiency, to name a few. Moreover, these types of gains directly lead to commercial benefits. They can be as simple as printing fewer documents, reducing electrical usage in offices, and employing reusable or refillable items where possible.

In the UK, 78% of businesses investing in green technologies have benefited tremendously. And for large companies, like Procter & Gamble, this can translate into billions. On the other end of the spectrum, however, those causing environmental harm should be prepared to face ever-increasing costs and negative impacts within their business spheres.

Improved Employee Motivation

As eco-friendly business practices become the way of the future, job seekers are showing more interest and desire to work for companies committed to this cause. It is a common belief that if an employer cares for the environment and sustainability, they will care for their employees, which ultimately leads to higher job satisfaction.

These work environments facilitate an increased feeling of purpose, which in turn, makes work feel more meaningful. In addition, a recent poll indicates that millennials and Gen Z’s have far higher levels of concern for the environment. And considering these are the generations currently breaking into the job market, it is more logical to cater to this consideration.

By some estimates, there could be as much as a 16% boost to employee productivity in companies following greener trajectories.

Increased Engagement

Nearly all consumers worry about at least one environmental issue, with roughly half going as far as boycotting companies they deem too harmful. Ultimately, they want to make more responsible purchases, which should be viewed as an opportunity, not an obstacle. Making it easier for people to access clear recycling and sustainability information on packaging can help them make better choices and build loyalty to certain brands.

Along with more customers, green initiatives are appealing to stakeholders and investors. According to research focusing on American companies from 1993-2009, those with high sustainability had far superior stock market performances, leading to more lucrative investments. Additionally, investors have started to expect a lot more regarding these practices, made evident by the increase of global sustainability investments to US$30.7 trillion by April 2019.

Polysolar, which specializes in glazed windows that generate electricity, raised more than double the investment amount it was after through crowdfunding alone. Likewise, Unilever, attempting to rectify a poor history of exploitation, has already received increased engagement and loyalty thanks to the changes it is making.

Going green is not a simple process or quick fix. Business spheres differ and require different approaches to achieve a more eco-friendly impact. It takes effort and commitment to sustain for businesses and consumers alike. But, regardless of which side of the spectrum you fall on, this is the global industry’s future. To be connected and supported, making the necessary changes as early as possible is crucial to set companies on steady roads moving forward.

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Accelerating private sector investment in large-scale Renewable Energy

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Following its 2020 edition, the Economic Policy Dialogue series (EPD) is back with six new sessions that will run until June 2023. Organized by the United Nations Development Programme (UNDP) and the World Bank Group in Tunisia through TERI Trust Fund, these monthly meetings aim to bring together relevant key stakeholders to create a space for constructive, inclusive, and transparent debate, allowing to collectively address the challenges of economic and social reforms facing the country.

The six EPD sessions are organized to foster dialogue on structural reforms and collectively identify practical and operational solutions to facilitate the implementation of reforms needed to address economic and social challenges as well as economic and development priorities.

The first session will be held on Thursday, 24 November 2022, and will focus on “Accelerating private sector investment in large-scale renewable energy.” Through a frank and direct debate, this dialogue session will aim to propose solutions to accelerate the realization of large-scale renewable energy projects, find ways to overcome the identified barriers and propose innovative mechanisms for a win-win partnership to regain investor confidence and catalyze the development of these projects. Accelerating the implementation of these projects is the only way to reduce the energy deficit and contribute to achieving energy transition objectives: energy security, economic competitiveness, social equity, and climate action.

Tunisia’s interests in the energy transition are evident given the country’s increasing energy demand (1.5% per year) and the worsening of the energy deficit. All the while, the country remains, despite the adoption of several forward-looking laws, far from the objectives it had set itself – namely, 30% of renewable energy in the energy mix in 2030.

At the end of each session, proposed in a participatory format, recommendations will be formulated to initiate and fuel reflection on possible national socio-economic reforms. These reforms aim to improve access to regional development, youth employability, and economic and financial inclusion within the Sustainable Development Goals (SDGs) framework.

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