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Oil and gas companies in North America less green than those in EU.
ExxonMobil and Chevron among worst in terms of CO2 emissions and investment in renewables, according to research.
Oil and gas companies in North America are lagging behind their European counterparts in cleaning up their operations, new research has found, with higher greenhouse gas emissions and less investment in clean alternatives.
ExxonMobil and Chevron of the US, alongside Canada’s Suncor, ranked lowest in a review conducted by the Carbon Disclosure Project (CDP) of 11 of the world’s biggest oil and gas companies. At the top of the table came Statoil of Norway, Italy’s Eni and the French company Total.
Companies were rated on criteria including their greenhouse gas emissions and their asset mix, which is determined by the hydrocarbons they extract, and the methods used; their climate-related goals, such as investments in renewables and other forms of low-carbon energy, if any; whether they make efforts to capture and use methane, or flare it; their use of water, and whether they are likely to be affected by water shortages; and the efficiency of their operations.
The North American companies ranked so low in part because of their exposure to tar sands, particularly in Canada, and their lack of investment in conventional gas. This is in part explained by the history and geography of the different companies involved: Suncor, for instance, from its headquarters in Montreal, set up the first commercial operation to exploit the Canadian oil sands in the 1960s; while Statoil, with its history of exploration in the North Sea, has had a longer focus on conventional gas.
However, factors such as investment in alternatives to fossil fuels, and efforts to reduce emissions from their operations, are matters that are within each company’s control. European companies also face more pressure from governments and activists to become cleaner and reduce emissions, while such pressure is likely to abate further in the US in the next few years under the presidency of Donald Trump and a Republican-dominated Congress.
Three major companies – Saudi Aramco, Russia’s Rosneft and PetroChina – were unranked in the CDP report, entitled In the Pipeline and published on Tuesday, because they refused to respond to the organisation’s questions.
The Bank of England is also pursuing greater disclosure on climate change issues from the oil and gas sector, with a view to assisting investors. Mark Carney, the governor, has asked a taskforce on climate-related financial disclosure to report to him in December, giving information that would be useful for investors to judge the climate strategies of fossil fuel companies.
Paul Simpson, chief executive of the CDP, said: “There are reasons to be optimistic. Some oil and gas majors have the balance sheets to transition to much lower carbon business models, and play a key role in implementing the goals of the Paris agreement.”
Tarek Soliman, senior analyst for investor research at the CDP, said: “On both sides of the Atlantic, international oil and gas majors need to look at how they fit into an energy system which achieves the goals laid out in the Paris agreement. Our research shows that European companies have been more active in developing transition strategies for the coming decade, which is expected to feature peak oil demand, and are starting to implement these. But more needs to be done across the board.”
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Canada gives $3.3bn subsidies to fossil fuel producers despite climate pledge.
Canada’s attempt to act on climate change is being undermined by $3.3bn in government subsidies flowing to oil and gas producers in the country a year, a new report has warned.
Canada’s attempt to act on climate change is being undermined by $3.3bn in government subsidies flowing to oil and gas producers in the country a year, a new report has warned.
The prime minister, Justin Trudeau, has vowed to place a national price on carbon dioxide emissions by 2018. Last week, Trudeau said he would not be deterred by the election as US president of Donald Trump, who has called climate change a “hoax”, and would forge ahead with the plan to “show leadership that quite frankly the entire world is looking for”.
But a study by four major Canadian environmental groups has shown that carbon pricing risks being undermined by billions of dollars in subsidies to fossil fuel interests, from both federal and provincial governments.
The $3.3bn annual subsidy, made up of extraction incentives and research and development, amounts to paying polluters $19 for each tonne of carbon dioxide they emit, according to the green groups. This would conflict, they say, with the planned carbon price, which will ramp up to $50 a tonne by 2022.
“This system is like taxing consumers when they buy cigarettes while giving massive tax breaks to tobacco companies that encourage them to produce more cigarettes. It doesn’t make sense,” said Alex Doukas of Oil Change International.
Dale Marshall of Environmental Defense added: “Unless Canada phases out massive subsidies to oil and gas companies, Trudeau’s carbon price will do little to encourage polluters to cut carbon emissions. The $3bn in annual subsidies could be put to much better use by investing in climate action, healthcare or other initiatives.”
G20 countries, including Canada, agreed to phase out fossil fuel subsidies in 2009. However, the burning of oil, gas and coal is still supported across the world by subsidies amounting to $5.3tn a year, equivalent to $10m a minute every day, according to the International Monetary Fund.
This huge sum, greater than the total health spending of all the world’s governments, comprises direct subsidies and financial support as well as the externalized cost that people pay for fossil fuels in terms of air pollution and extreme weather driven by climate change.
Trudeau has emerged as a vocal proponent of action on climate change and found significant common ground on the issue with Barack Obama. He has said that Canada’s efforts to stave off the worst effects of climate change “will not cease”.
However, he has been attacked by environmentalists for not raising Canada’s emissions reduction goal and for approving a controversial $27bn liquified natural gas project in British Columbia. The opposition Conservatives, meanwhile, have called a national carbon price plan “complete insanity” and a “sledgehammer” to the Canadian economy.
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Fuel economy: Just two cars deliver advertised mileage, tests show.
Just two cars deliver their advertised fuel economy when on the road, with the thousands of other models 30% worse on average in the real world, according to comprehensive new data.
Just two cars deliver their advertised fuel economy when on the road, with the thousands of other models 30% worse on average in the real world, according to comprehensive new data.
Some cars, such as the Fiat 500 and Ford Fiesta, gave barely half the mileage advertised.
The result is that drivers are being misled and paying far more to drive, say experts, who warn that a stricter official test coming in 2017 will only close about half the gap between official and real fuel efficiency.
The data from leading testing company Emissions Analytics covers 60,000 models and was published on Thursday, the first such database available to the public. It uses onboard equipment to measure mileage over four hours of real-world driving. In contrast, the official regulatory test is a gentle lab-based exercise.
The worst gap between official miles per gallon (MPG) and real-world performance was for the Fiat 500, which is rated at 70.6MPG, but only delivered 39MPG on the road, a 45% drop. Other popular petrol cars performing at least 40% worse on the road include the UK’s most popular car, the Ford Fiesta, as well as the Ford Focus, Toyota Yaris and Mini Hatch. Some diesels, which generally have better fuel efficiency, also had 40% gaps, such as the VW Golf and Peugeot 308.
The only cars to produce better fuel efficiency on the road were the 4.7-litre engine Aston Martin Vantage, which gave 21.5MPG in the real world, 5% higher than in the lab, and the 3.7l Nissan 370Z, which was 1% better on the road at 26.8MPG.
The best on-the-road mileage was produced by the Honda Civic, which did 61.8MPG in the real world, though this was still 21% lower than its official mileage of 78.5MPG. The Citroen C3 was next best, with 60.3MPG, 28% lower than its official rating. The worst actual fuel economy came from the BMW X5, with just 16.2MPG, the Range Rover Sport (17.5MPG) and the Porsche Cayenne (17.8MPG), all well below official ratings.
From 2017, a new official test comes into force, which is more strenuous on the car’s engine but is still lab-based. “Drivers have been misled by the official numbers, but even when the new system comes in next September, it won’t solve the problem,” said Nick Molden, CEO of Emissions Analytics. “Currently the real-world performance of cars is on average 29% worse than the official test. Our estimate is that this gap will close by about half, meaning a 10-15% gap will still exist.”
“It is still a lab test, with no hills, cornering or operating air conditioning,” he said. “You have to test on real roads to know what cars really do in normal driving.” This happens in the US, where road tests are used to police the system.
Julia Poliscanova, clean vehicles manager at campaign group Transport & Environment, said: “The fuel consumption gap has become a vast chasm. Carmakers’ manipulation of the weak, outdated lab test is widespread, affecting diesel and petrol cars. This means a total waste of motorists’ money and an increase in global warming emissions.”
“National regulators have been turning a blind to this evidence,” she said. “So Europe now needs to cross this chasm and introduce on-road testing. The equipment to do this has been widely available for years, but the political will, as Dieselgate has shown, is sorely lacking.”
Mike Hawes, chief executive of UK trade body, the Society of Motor Manufacturers and Traders (SMMT) said: “The current test for fuel consumption is outdated and a new, more stringent lab test from later next year is welcome.”
“This will be much more representative of on-road driving and provide the necessary repeatability to allow consumers to compare accurately individual model performance,” he said. “No single lab test can ever replicate exactly real-world conditions, given infinite variations in temperature, load, speed, maintenance, gradients, and traffic, but industry will continue to invest in new technologies to deliver ever greater fuel economy.”
Overall, the Emissions Analytics data showed that cars with small engines had the biggest gap between official fuel economy and actual performance, and those with the biggest engines had the smallest gaps.
“The official test cycle is too gentle, so it encouraged the downsizing of engines to go too far,” explained Molden. “A little one litre engine will do very well, often 80MPG, on the official test, but that has no hills, no passengers, no operating air conditioning. So they suffer disproportionately when you put some weight in the boot and take it up a hill - it is basically underpowered.”
“The Aston Martin Vantage is the opposite: it is overpowered,” said Molden. “It does badly in the lab test and on the road it doesn’t do any worse. It has just got more power than you could possibly need for normal driving.”
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Investing in off-grid renewables in the developing world: What you need to know.
Renewables are getting cheaper but there’s still a huge investment gap. Here’s what our expert panel said in a recent debate on clean energy.
At the Paris climate talks last December, governments agreed to work towards limiting global warming to 1.5C above pre-industrial levels. But the topic of financing developing countries to help them adapt to climate change and transition to clean energy became a sticking point during the negotiations.
We recently brought together a panel of experts to debate how developing countries can reach 100% renewables. Here’s what we learned:
1 Off-grid renewables are becoming more accessible
The falling cost of technologies such as solar PV means renewables have become cost-effective in many parts of the developing world, said Henning Wuester, director of the International Renewable Energy Agency’s Knowledge, Policy and Finance Centre. This is particularly the case in rural areas away from the electricity grid, where people are otherwise using relatively expensive, inefficient diesel generators and kerosene lamps.
Despite this, the upfront cost of small-scale solar systems to power a few lights or charge a mobile phone can present a significant barrier to widespread adoption, said Aly-Khan Jamal, a partner at Dalberg Global Development Advisors. However, he said there have been “exciting breakthroughs” in addressing such challenges:
Businesses providing these systems are using pay-as-you-go approaches that allow households and businesses to pay a small amount each month. Some allow you to eventually buy and fully own the system; others have a ‘perpetual lease’ where it is somewhat like paying for a utility.
2 Mobile money is critical ...
Mobile money payment systems make these pay-as-you-go models feasible, said Jamal, as they give businesses the ability to monitor and control electricity provision remotely, and make collecting payments very efficient – in turn significantly reducing costs.
Wuester added:
Mobile payment schemes have been critical in driving the roll-out of off-grid solutions. This has enabled more than 300,000 households [across East Africa] to get access to electricity, including about 30% of the Kenyan population, 40,000 in Uganda and 20,000 in Tanzania. These numbers are growing rapidly.
Maite Pina, renewable energy specialist at social investor Oikocredit International, gave the example of M-Pesa, a mobile money transfer system introduced in Kenya in 2007. Seven in 10 adults in Kenya now use the cash alternative, making 9m transactions daily. Pina said that Oikocredit – together with London-based solar systems provider BBoxx – uses M-Pesa to collect monthly payments from solar system users in sub-Saharan Africa.
3 ... but it has limits
Jamal pointed out, however, that mobile money penetration isn’t even across all countries, so different approaches need to be used depending on the market. What’s more, he added:
In the most remote and low income communities, mobile networks don’t invest in telecoms infrastructure (it’s not worth it for them) so relying on mobile money to reach these really challenging communities may not be sufficient.
4 Pay-as-you-go could trap the poorest in debt
Social entrepreneur and investor Jamie Hartzell put the following question to the panel:
The boom in pay-as-you-go household solar in East Africa is very exciting. But it is all based on credit, and the companies have a view to selling other products like TVs. How big is the risk that boom will turn to bust and push the poorest of the poor into unpayable debt?
Nico Tyabji, director of strategic partnerships at solar financier SunFunder, replied that while users might have a legally enforceable contract, “the reality is no one’s going to come knocking” – they just don’t get the service any more.
Tyabji said that since cutting off access isn’t in the companies’ interest, they spend time thinking about how to make the process work best, for example by setting up payment models around harvest season so that users can pay when they have access to money rather than having to stick to a regular payment schedule. However, he added that as products and services get bigger and pricier, Hartzell’s concerns could become an issue.
5 Credit must be responsible
Edward Hanrahan, CEO of ClimateCare, reiterated the need for caution in what he described as the “massive rush to [...] provide credit at levels unseen before to the lowest income populace”.
He cited the example of Pamoja Life, one of ClimateCare’s investment projects in east Africa, which ensures that the overall monthly or weekly cost of the goods provided is lower than the goods it is displacing (for example, a solar unit costs less than equivalent kerosene). This means monthly outgoings are reduced rather than increased.
Hanrahan added:
Of course, we are all now looking at providing ‘add-on’ products – fridges, internet access, TVs. It is crucial that we manage the ladder of credit in a very responsible manner
6 There’s a big investment gap
“The world is not investing enough in renewables as a whole, not just off-grid solar, given the imperatives of climate change and sustainable development goals,” said Jeremy Leggett, founder of Solarcentury and SolarAid, and chairman of Carbon Tracker.
While investment in large, centralised energy systems is driven mainly by multilateral agencies and large developers who rely on long term power purchase agreements, there is still a funding gap for decentralised systems where the requirements are smaller and the risks are higher, said Pina. Despite a growing interest in off-grid developments and new debt structures, Pina believes there is still a need to develop new guarantee structures to attract investors.
Tyabji said organisations such as SunFunder came into being to plug part of that investment gap:
With a few exceptions, we haven’t yet seen the levels of investment from development banks (let alone commercial banks) that other kinds of energy and infrastructure projects get. So it’s still down to niche players like us.
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Carbon-free banking: Where to save, invest and borrow.
If you are worried about climate change, it has never been easier to move your money away from companies connected to fossil fuels, with plenty of carbon-free banking and investment options available.
If you are worried about climate change, it has never been easier to move your money away from companies connected to fossil fuels, with plenty of carbon-free banking and investment options available. So says the editor of Ethical Consumer, which describes itself as the UK’s leading alternative consumer magazine, and which has this month published a personal finance guide to carbon divestment that recommends a number of best-buy products in banking, savings, mortgages and investment.
Tim Hunt says the global carbon divestment campaign has been incredibly successful in getting a wide range of institutions to dump billions of pounds of shares in carbon-intensive industries. And it’s not just the likes of universities, pension funds and charitable foundations – many individuals have followed suit or are considering doing so.
Among those who have thrown their weight behind the campaign is the actor Leonardo DiCaprio, who has said that “now is the time to divest and invest [in climate solutions] to let our world leaders know that we, as individuals and institutions, are taking action to address climate change, and we expect them to do their part”.
But are there really fossil-free alternatives for those looking to move their money? The answer is yes – but it may mean signing up with a small and/or niche player. Not all their products will be suitable for everyone, and you won’t get rich with some of the interest rates on offer.
The global campaign has resulted in more than $3tn (£2.25tn) having been divested from the fossil fuel around the world
Divestment is basically the opposite of investment – it is the removal of your investment capital from shares/bonds/funds etc. In this case it’s all about encouraging institutions and individuals to move their money out of oil, gas and coal companies. As of May 2016 the global campaign had resulted in more than $3tn (£2.25tn) having been divested from the fossil fuel industry by hundreds of institutions around the world. The Guardian has been running its own campaign called Keep it in the ground.
Most people in Britain do not directly own shares, but almost all of us have bank accounts, and if yours is with one of the big five – Lloyds, Barclays, HSBC, RBS/NatWest or Santander – campaigners say you are helping to support the tens of billions of pounds they have lent to companies around the world engaged in oil, gas and coal extraction. An analysis of Europe’s 20 largest banks in 2014 found that Barclays had the biggest volume of “high carbon” loans, as a proportion of its total lending, of any of the banks, while Lloyds had the largest amount invested in high-carbon equities.
Switching your current account is now (usually) pain free, and if this is an area where you feel strongly enough to make a move, Ethical Consumer has surveyed the market and is suggesting some best buys. It says that “for a high street bank with a positive stance in favour of renewables and against fossil fuels, we recommend the Co-operative Bank and their online bank, Smile”. It adds that the Nationwide and Norwich & Peterborough building societies also offer “excellent” current accounts and, as mutuals, avoid investing people’s money in the most controversial business areas.
The Co-op Bank is running a promotion whereby it is giving £150 to people who move to its no-monthly-fee current account, provided they use the industry’s switching service (which involves the closure of your old account) and move over at least four active direct debits.
On the savings front, three names come out on top: Ecology building society, Charity Bank and Triodos Bank. With the Ecology, your savings cash will help to support sustainable development across the UK. Its accounts include an easy access one, which pays a variable 1%, and a regular saver, which pays a variable 1.75%. Both can be opened with a minimum of £25, while the latter has a maximum investment of £3,000 per calendar year. These are postal accounts, though there is an online facility called Interactive.
Charity Bank is owned by charitable foundations, trusts and social purpose organisations, and its best-paying offering is the Small Steps account for under-16s, which can be opened with just £10 and currently pays 2%. You can add to your child’s savings at any time or set up a direct debit, and, according to the bank, their money will be used to support charities and social enterprises while earning a fair return. However, this is a fixed-term account – you can choose from one, three or five years – so you will only have access to the money when the account matures.
Charity Bank’s other accounts include a savings account paying 0.5%, 0.6% or 0.7% depending on the notice period you agree to – 33, 93 or 365 days respectively; the community account, which pays 0.7% over one year or 1% over three years; and the ethical Isa, which has a 33-day notice period and pays 1% on a minimum deposit of £250. The first two of these three pay higher rates on balances in excess of £25,000. However, be aware that all the accounts are operated by post.
Triodos Bank says it only lends to, and invests in, “organisations that benefit people and [the] environment”. It has a range of savings accounts including the ethical junior cash Isa which pays 2% (2.01% AER); the five-year ethical savings bond paying a fixed 1.75%; and the easy-access online saver plus paying 1%.
When it comes to mortgages, Ethical Consumer says the clear best buy is the Ecology building society. “It tops the table and only invests in lower-impact buildings and projects. Because of this, their mortgages may not be appropriate for everyone.” The Coventry, Cumberland, Leeds, Newcastle, Principality and West Bromwich building societies all score well, too, though a good, more widely available option is the Nationwide.
The top-scoring ethical investment fund was the FP WHEB Sustainability Fund, a £104m fund launched in 2009 that “invests exclusively in companies providing solutions to sustainability challenges”.
Harnessing the energy
A number of community energy projects have been launched in recent months, ranging from solar schemes to wind turbines.
Jon Halle, the director of Sharenergy – a not-for-profit organisation which helps communities find, build and own renewable energy schemes – says the Brexit vote “showed that huge numbers of people are unhappy with established structures”. He adds: “Supporting and joining community energy co-operatives is a genuinely democratic way to harness some of that anti-authoritarianism for good.”
Projects currently being promoted by Sharenergy include the Small Wind Co-op, which is looking to raise funds for three medium-scale wind turbines on two farms in Scotland and Wales. People can invest a minimum of £100 and will get a “fair” return on their investment: from 4.5% to 6.5% depending on whether they choose to invest in its bonds or shares. It intends to sell all its electricity to Co-operative Energy.
Another venture being promoted on the site is Oldham Community Power, which is aiming to raise £658,900 to install solar panels on council-owned and community buildings. People can subscribe to its share offer for as little as £100, and the anticipated rate of return for members is 4%.
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