Two weeks before the UN Climate Change Conference (COP26) in Glasgow, coal, the natural fossil fuel most contributing to global warming, is on the front pages. The rapidly recovering economies of China and India are in dire need of this fuel, which, according to their commitments, they must first give up. Events are developing rapidly: in September, Chinese President Xi Jinping promised to stop investing in coal projects abroad, and in October the Chinese authorities ordered to increase production at their mines in Inner Mongolia. India is also increasing production. Coal is returned not only in Asia: the nuclear power plant on it has re-launched Great Britain, which is going to get rid of hydrocarbon fuels by 2035, and directly from coal … in just three years.
The increased interest of the world economy in traditional energy sources has several reasons that came together in the fall of 2021. One of them is the dangerous instability of new green technologies, which are highly dependent on the variability of the weather. The summer months of this year turned out to be sparse in wind and solar energy, which proved impossible to stock up in adequate quantities. The developed countries have to compensate for the resulting deficit by purchasing hydrocarbons.
Another reason does not lie on the surface, but is closely related to the stressful impact of the pandemic. The fear of getting infected on public transport makes the local car boom clear. Sociologists record an increase in mass demand for individual vehicles that allow one to isolate oneself from COVID-19. The increase in the number of cars on the road is doomed to increase the need for gasoline, as the market share of electric vehicles is still small.
But the main reason for the growth of rates on the hydrocarbon market was the faster than forecasted recovery of the world economy. The recovery that began in China last year in the first months of 2021 covered most of the Pacific region. The changes for the better in Europe began later. And it is for this reason that the Old World, which did not insure itself with long-term contracts, faced a shortage of gas, which was sent instead to consumers in Asia.
Climate of discontent
The return of hydrocarbons, including coal, is baffling the climate change movement, undermining its vision of the future. One of its foundations is the rapid concentration of all possible resources on the development of renewable energy sources. In line with this goal, the European economic recovery plan presents the enterprises of the Old World with a fact: those of them can count on monetary subsidies that will ensure that production meets environmental standards. The reverse side of this strategy is not so attractive: the withdrawal of funds from the extraction of traditional energy resources. And it is risky, because, as the market conditions show, humanity cannot get rid of the need for them overnight.
“The increase in oil and gas reserves in recent years has been at historic lows, and a certain shortage of resources is already visible. <…> The world is at risk of facing an acute shortage of oil and gas,” the director said at the St. Petersburg International Economic Forum in June Rosneft Igor Sechin. “I am extremely concerned that the demand for hydrocarbons is not decreasing at the rate of investment in their production,” reflects Jason Burdoff, who dealt with energy issues in the Barack Obama administration. Calculated: to maintain the level of oil production that existed in 2020 year, the next 20 years will need $ 17 trillion in investment. Attraction of these funds is impeded by the position of the International Energy Agency, calling for the abandonment of investments in hydrocarbon fuels. And the point of view of countries such as France and Denmark, which have officially banned the exploration of new oil and gas fields.
In a short time frame, hydrocarbons are still defeating fear of climate change. In the fall of 2021, the United States called on OPEC to increase oil production, and the International Energy Agency asked Russia to increase gas supplies. However, no one in the West is ready to agree with the result obtained: from 2022 they expect record-high emissions of harmful substances into the atmosphere.
Some are hot, others are cold
Sharp changes in the global energy market send a signal to two opposing camps simultaneously: both the “green” supporters of the transition to a new economy in a short time, and their opponents – the conservative residents of the provinces who need cars every day. The “greens” were the first to react: in Germany, they put up a live screen of coal miners, protestingagainst the temporary expansion of mines due to the lack of energy. In North Rhine-Westphalia, the action of environmentalists acquired all the features of a performance: hindering the miners, the “greens” chained themselves to the excavators. The resumption of work required the intervention of law enforcement officers. It is paradoxical that the state and the “greens” find themselves on opposite sides of the barricades, while Berlin’s environmental plans are one of the most radical in Europe. Germany expects to completely abandon hydrocarbons by 2045, and from coal by 2038.
In France, they are looking for a way out in stimulating nuclear energy. On October 12, President Macron, presenting a financial plan for the next decade, proposed investing € 1 billion in a new type of nuclear power plant with a lower capacity and expressed hope that his country would be able to develop an innovative technology for the disposal of nuclear waste. It is in France that energy price volatility is considered a particularly sensitive issue. Indeed, in 2018, inspired by the environmental agenda, the authorities of the Fifth Republic tried to introduce a “green” tax on gasoline, but only a protest wave of “yellow vests” came to life. Paris seriously fears the return of this movement, especially if the current energy crisis is really for a long time.
Unexpected increases in energy prices could affect vacillating voters. Just as the extremely hot summer of 2019 swung the sympathy of the Western world towards the green, a cold (or simply unfuel) winter could deprive them of the support of the initiative and thus change the pace of the green transition, the possible price of which is not yet possible in the United States. and in Europe did not have time to feel it.
Against this background, preparations for the Glasgow conference (which will take place from October 31 to November 1) are like a game of nerves. In September, UN Secretary General António Guterres announced that without an urgent transfer of the world economy to “green” rails, mankind is in danger of a planetary disaster: “The world is heading for a catastrophe – warming by 2.7 degrees instead of 1.5 degrees <…> Science says that Any warming above 1.5 degrees will be a disaster. To limit the temperature rise to 1.5 degrees, we need to reduce emissions by 45% by 2030, then we will be able to achieve carbon neutrality by mid-century, ” says the international official.
By 2050, the profile committee of the European Parliament called for carbon neutrality for all G20 countries, including Russia, which prepared its own resolution for the Glasgow conference. The MPs recognized the goals approved at the 2015 Paris Climate Conference as insufficiently ambitious and asked to be revised upward. And yet, it remains unclear from their circulation how to reconcile the new guidelines with the well-functioning and consistent work of the economy.