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| no, not that Kraken... |
A while ago I wrote about the effect that
financialisation is having on private sector investment. The recent approval of
EnQuest’s development of the Kraken oil field, however, suggests that the
private sector is willing to invest – just in the wrong type of energy!
Compared to the £5.55bn that was invested in renewables in the UK in 2012 (Frankfurt School UNEP Centre and BNEF 2013),
EnQuest’s £4bn project is startling: how can a single fossil fuel project
amount to over 70% of total renewable investment?
The Kraken news story reminded me of a
report published earlier this year that
highlights the magnitude of the financial resources that are being devoted to
fossil fuel exploitation (Leaton et al 2013). The report emphasises that burning already known
fossil fuels reserves would generate carbon emissions large enough to warm the
planet by more than the 2°C that the Copenhagen Accord states should be the upper bound of climate policy targets. The authors argue that further investment in fossil fuels is therefore a waste of scarce financial resources but estimate that, despite this, the top 200 global oil, gas and coal mining
companies spent $674bn in 2012 to find and develop new fossil fuel sources.
Ironically, this figure is approximately 1% of global GDP, which what the Stern Review (2006) concluded would be
necessary to stable atmospheric carbon dioxide levels at 500-550ppm by 2050.
Because of the private sector’s apparent
aversion to green investment, it seems that the public sector will have to step
up as the national green financier. I’ll be posting later this week about whether it’s possible for
government to spearhead a surge in green investment, so make
sure you check it out. Until then, how about some music that seems to reflect
the private-sector attitude…
It’s interesting that investments in renewable energies are still so marginal relative to investments in fossil fuels! The market seems determined to use them beyond limits that are considered safe! Although, drawing on the paper by Leaton et al (2013), which argues against further investment in fossil fuels, could there be the possibility that investments may be able to also lower concentrations of greenhouse gases in the atmosphere or more specifically find ways of releasing less greenhouse gasses into the atmosphere from burning fossil fuels meaning a larger amount of fossil fuels could still be burned without exceeding the limits?
ReplyDeleteI am looking forward to reading about public policy’s role in increasing green investment! I’ve been looking into this myself, considering the role played by the government of Abu Dhabi in promoting economic transition away from oil-based technologies in reference to Masdar City; you might find this article interesting - http://onlinelibrary.wiley.com/doi/10.1111/1468-2427.12049/abstract
Yes, I think that technologies such as carbon capture and storage which reduce the atmospheric impact of fossil fuels are also important however I fear that investment in these areas will merely 'crowd out' investment in renewables. Interestingly, it seems that the UK government is being pretty proactive in promoting ccs investment (see here https://www.gov.uk/government/policies/increasing-the-use-of-low-carbon-technologies/supporting-pages/carbon-capture-and-storage-ccs ) in comparison with their flip-flopping over support for renewables.
DeleteI'm not really au fait with sustainable architecture theory (terms like urban thermal metabolism and political-ecology of scale baffle me a bit), but the idea of eco-city master planning certainly seems interesting. I wonder in what ways traditional critiques of urban master-planning such as that of Jane Jacobs will remain relevant to eco-city planning.