Read more: 鈥�Climate report 2013: Your guide to the big questions鈥�
Hundreds of thousands of words will be written about the latest report from the UN鈥檚 Intergovernmental Panel on Climate Change. Here, in 10 words, is the bottom line: we have to leave most fossil fuels in the ground. It really is that simple.
To get a sense of how we鈥檙e doing, let鈥檚 take a look at Norway. On the face of it, Norway is doing much more than most countries to tackle climate change. It already gets almost all its electricity and nearly 60 per of all the energy it consumes from renewable sources, and aims to increase this proportion to 67 per cent by 2020. In 2007, Norway announced plans go carbon neutral by as early as 2030.
Advertisement
Sounds impressive, doesn鈥檛 it? But Norway is one of the biggest oil and gas exporters in the world. Besides exploiting its own reserves, the government also owns 67 per cent of the energy company Statoil, which is investing in Canadian tar sands, among other projects.
In reality, as well as contributing to global emissions thanks to its exports, . Its plan for going carbon neutral largely relies on buying in carbon credits rather than reducing its actual emissions to zero. Norway was also banking on carbon capture and storage to help, but this week it .
Every last bit
The story is much the same across the world: no country with fossil fuels has any intention of leaving them untouched. On the contrary, these countries are not only scrabbling to extract every bit of conventional coal, oil and gas they can get their hands on, they鈥檙e also tapping or planning to tap all kinds of unconventional resources, from tar sands to methane hydrates.
The only serious attempt to do anything different was made by Ecuador. In 2007, it offered to leave the oil beneath a national park untouched if the world paid it half the oil鈥檚 value. Last month it abandoned the plan after other countries failed to stump up the cash. 鈥淭he key factor in this failure is the world鈥檚 great hypocrisy,鈥� President Rafael Correa .
Merely reducing emissions is not enough. It will slow climate change, but in the end how much the planet warms depends on the overall amount of CO2 we pump out. To have any chance of limiting the global temperature rise to 2聽掳C, we have to limit future emissions to about 500 gigatonnes of CO2. Burning known fossil fuel reserves would release nearly 3000 gigatonnes, and energy companies are currently spending $600 billion trying to find more.
The implications of the numbers are staggering. The value of these companies depends on their reserves. If at some point in the future the world gets serious about tackling climate change, these reserves will become worthless. About $4 trillion worth of shares would be wiped out, according to the non-profit . For most of us, that鈥檚 our pension funds at risk.
Financial crisis
So the big picture is pretty grim. It is hard to see countries leaving black gold worth billions in the ground 鈥� and if they did all agree to do this, it could trigger another global financial crisis.
But there are a few glimmers of hope.
Renewable energy is getting ever cheaper and could soon become competitive with conventional fuels. Meanwhile, a handful of investors are waking up to the fact that fossil fuel companies are a risky bet. In July, a major Norwegian pension fund, .
A key decision to look out for is whether Obama says no to the Keystone XL pipeline, intended to carry oil from Canada鈥檚 tar sands to the US. If it is built, tar sands production would soar. Rejecting it could mark a turning point, sending a clear signal that it is not going to be business as usual.
A decision is .
