A record-breaking number of participants at COP 28 wrestle over how much money the United States and other wealthy countries will hand over to convince them to reject reliable and affordable fossil fuels for “clean energy,” despite increasing prices and rampant inflation driven by governments’ over-spending.
Deals struck by Biden since 2021 for South Africa and Indonesia are already falling apart as some countries receiving loans and grants to close coal plants have reversed course.
The presiding officer of the summit is arguing that there is “no science” behind the catastrophic scenarios painted by the U.N. and the International Energy Agency.
The United States released the strictest methane regulations in the world, which will hurt the oil and natural gas industry in the United States.
Sultan Ahmed al Jaber, the oil executive and Emirati politician presiding over the 28th Conference of the Parties (COP28) climate summit, said, there is no science that the phase out of fossil fuels is going to achieve 1.5 Degrees C—the goal of the Paris accord and these meetings. John Kerry, the U.S. climate envoy, dismissed his statement as out of touch with the latest scientific research, despite little evidence to the contrary. COP 28 started on November 30 and will continue through December 12 with 70,000 attendees from 200 countries in Dubai, United Arab Emirates.
Major COP 28 headlines include:
- Fifty oil companies, representing 40 percent of global oil production, pledged to cap methane emissions from oil and gas operations. They agreed to end routine flaring and achieve net-zero scope 1 and 2 methane emissions by 2050 and near-zero carbon emissions by 2030 as part of the Oil and Gas Decarbonization Charter, an initiative led by COP President Sultan al-Jaber.
- The Biden Administration announced regulations that will require energy companies to detect and fix methane leaks from their operations—requirements that are the strictest in the world.
- 118 governments, including the United States and the European Union, committed to tripling the world’s renewable energy capacity by 2030 despite its higher cost from inflation, high interest rates and supply chain issues, including market dominance by China. China and India, however, did not sign the pledge.
- More than 20 countries, including the United States, Britain and South Korea, pledged to triple nuclear energy capacity by 2050, calling it important to reducing carbon emissions. The cost of building nuclear power plants has increased because of high interest rates and inflation, forcing some developers to pull out of proposed projects.
- Artificial intelligence is playing a prominent role at COP28, with providers marketing their technology as ways to help countries achieve their emissions goals, despite A.I.’s potential to consume large amounts of energy.
- John Kerry said that coal-fired power plants should no longer be permitted, and committed the United States to phasing out existing coal plants. China is approving new coal power plants at a rapid rate, as is India.
The Folly of COP 28
Wealthy nations are sending tens of billions of dollars to poorer countries for “clean” energy and the phasing out of coal plants. But in two cases, in South Africa and Indonesia, there is a major risk of the project unraveling. South Africa and Indonesia are backtracking on commitments they made to burn less of the fuel under agreements known as Just Energy Transition Partnerships (JETPs), which offered them $28.5 billion from the United States and other wealthy nations. Officials are working to prevent the agreements from falling apart as governments convene in Dubai for COP 28. Since last year’s conference, Vietnam and Senegal have also signed JETPs, valued at $15.5 billion and $2.7 billion, respectively.
The agreements are being jeopardized by resistance from pro-coal politicians listening to their constituents and fears about the economic and technical viability of replacing the fuel quickly. These countries rely on coal not only to generate electricity but also to provide jobs for tens of thousands of miners and to facilitate economic development. Coal supports local economies and industries. The countries are wary of ditching a reliable fuel source for new technologies that are not widely used yet, even in wealthy countries. Furthermore, their foray into renewable energy has been riddled with brownouts and blackouts as wind and solar are weather-dependent and unreliable. Rolling power outages can last for up to 11½ hours a day. And, the money coming from wealthy countries is mostly from loans, not grants, which will put the countries in more debt.
President Biden and other leaders unveiled South Africa’s program, the first JETP, in 2021 at the U.N. climate conference in Glasgow. The United States, France, the United Kingdom, Germany and the European Union promised $8.5 billion in loans, investments and grants in the next five years to help South Africa move away from coal faster. Nearly a year later, Indonesia was promised $20 billion under its JETP. Both countries have enormous supplies of coal.
South Africa’s near-bankrupt state utility Eskom had planned to shut down more than 6,000 megawatts of coal generation capacity, representing about 14 percent of installed coal capacity, by the end of 2028. But, in its outlook report released in October, the utility “assumes that no coal power plant will be shut down” during the next five years. A previous coal plant retirement last October did not go well. The plan, funded with $500 million from the World Bank, was meant to show the viability of retiring coal plants early, but it began creating new jobs for the workers just five months before the closure of the plant.
Coal is integral to South Africa, which gets more than 80 percent of its electricity and nearly one-fifth of its liquid fuel from coal. It is a top-10 global coal producer with coal mining accounting for more than 90,000 jobs in a country that has an unemployment rate of over 30 percent. Delaying the retirement of coal plants means South Africa is breaking its climate promises, which include reducing carbon emissions by between 5 percent and 21 percent by 2030, from 2020 levels.
Indonesia is unlikely to meet a cap for power-sector emissions negotiated under its program because of thousands of megawatts of coal-fired power plants that were not previously accounted for–plants built for metal smelters and other factories in remote areas that are not connected to the grid. Indonesia is planning for companies to build more of them despite the country’s JETP commitments as they are part of its national strategy to become a major smelter of nickel and cobalt used to make electric-vehicle batteries. When the agreement was first announced, U.S. officials were assuming that Indonesia would have 9,000 megawatts’ worth of off-grid power plants installed by 2030. Since then, Indonesian officials have disclosed that there are already around 14,000 megawatts around the country. Indonesian companies plan to build an additional 20,000 megawatts in their quest for abundant and affordable energy.
Officials are seeking ways to keep South Africa’s emissions in line with its JETP, despite the delays to coal-plant retirements. And, they plan to conduct a study with Indonesia to find replacements for coal in the country’s smelting industry. The United States is offering more grant financing in response to the countries’ concerns, in yet another Biden commitment using borrowed money.
COP 28 is rolling on for another week to get countries to commit to not using fossil fuels and replacing them with “clean energy.” But, despite wealthy countries providing loans and grants to poorer countries, global emissions are increasing, not decreasing. The world needs to be spending a lot more money on clean energy. Investment in it must exceed $4 trillion annually by 2030 to limit warming to 1.5 degrees centigrade, according to the International Energy Agency, compared with just $1.1 trillion spent last year. But according to Majid Jafar, CEO of Crescent Petroleum, the largest private oil producer in the Middle East, we’ll need “100 times more” renewables to fight climate change and offset growing energy demand. Is the world going to fork up the money? Is it even capable of doing so?