Category: Climate change

One of the significant failures of energy regulation in recent years has been the failure to deter or reduce greenwashing by large corporations. Part of the problem has been a lack of focus on embodied greenhouse gas (GHG) emissions associated with building, materials and infrastructure, but probably a bigger issue still is how emissions are attributed. Perhaps this is best understood in terms of cake …

An analogy

It’s your child’s birthday party. (S)he has invited a bunch of friends, all of whom like cake. The majority like two flavours of cake – green and brown – in equal measure. A fussy few only eat green cake.

A public body has kindly sponsored green cake, so you have bought a large one, knowing that it will certainly meet the appetites of the fussy few, with some left over. You have also bought a large brown cake. Overall, there is plenty of cake!

On the day itself, you serve the fussy few first in order to ensure they get green cake. Everyone else then gets either green or brown cake. Of course, they are more likely to eat brown cake as some of the green one has already been served.

To push the analogy a little further, imagine that the day before the party your son or daughter remembers a friend they forgot to invite; and you issue an eleventh-hour invitation, which is accepted. This last-minute friend is another fussy only-green-cake eater. Does the inclusion of this last-minute friend change the size of the green cake? No, because it’s already easily big enough to meet the green-only demand. All it means is that all the non-fussy friends are now a little more likely than they were to end up with brown cake.

… and its application

In just the same way … when someone signs up to a green energy tariff, the impact on the overall supply of green electricity is zero. At least to first order. There may be minor second-order effects: perhaps the new customer influences his or her friends, for instance, or perhaps the supplier is able to advertise an increase in demand for green power and thereby influence other customers … and by some nebulous sequence of events and impact on public attitudes the sales of solar panels or EVs, say, rise as a result. But such effects are certainly minor and very hard, if not impossible, to measure.

Which doesn’t mean it’s a bad thing to sign up to a renewable tariff – but it’s hardly saving the planet! When individuals (like me) sign up to green tariffs for their domestic energy supplies, they are not providing the catalyst that makes those green projects go ahead. Rather the projects are agreed and then the energy supplier, who’s signed an offtake agreement with the generator, finds matching sales, through contracts that customers can end with little notice, providing no ultimate security to the project. This isn’t so difficult for the supplier when the projects are competitively priced due to support mechanisms.

Companies and individuals have been allowed to take credit for signing up to green energy deals – when the renewable energy behind those deals is supported by government-initiated mechanisms (e.g. FiTs, ROCs or more recently Contracts for Difference, CfDs, in the UK), is consequently viable in the marketplace, and either already exists or would most likely be developed anyway. It matters because it confuses what is apparently green with what is really green – and leads to wrong priorities such as ‘green’ build instead of reducing energy demand. The problem is magnified when the opportunity costs of developments are taken into account. Instances include inter alia the development of ‘green’ data centres in places like Ireland and Iceland. In a better world, the limited wind and geothermal resources would be prioritised for things we really need (green steel?), rather than masses of data that we don’t.

In 2022, the Science Based Targets Initiative (SBTi) was alerted by an article in Nature (Bjorn et al, 9 June 2022) to the problem of allowing companies to use renewable energy credits when they calculated their Scope 2 (electricity) emissions. The Nature article recommended using locational grid carbon coefficients. This doesn’t really work either (think Switzerland, where the local coefficient is close to zero but the hydro generates regardless …). I don’t think SBTi has solved the conundrum: my understanding is that it has rather fudged the issue by asking for both ‘locational’ and ‘market’ coefficients to be used.

The Nature article did excuse renewable Power Purchase Agreements (PPAs), maintaining that they at least were green as they support new projects. This seems naive and disproportionate to me. In general, a renewable PPA is but one element supporting a new project – what about the CfD support, say, or policies that support planning and development? Why should the PPA provider be credited with all of the green benefit (i.e. the reduction in carbon emissions vs those from an equivalent amount of grid electricity) – shouldn’t some of it be socialised due to government support (i.e. attributed to consumers in general), and some to the turbine manufacturer or steel producer, say?

PPAs tend to be different in different countries. In the UK and Ireland, the norm is for the price in the PPA to be the variable market price, whereas on the Continent the norm is for the price to be fixed. In the UK and Ireland, the generation project nowadays is likely to have its sales price fixed via a CfD – and the total capacity in CfD auctions is determined by government. PPAs in the UK used to be primarily for existing renewable schemes; now they are usually for new schemes, as they are on the Continent – but if Company A (electricity supplier or corporate) doesn’t come along to sign a PPA for the long-term offtake, it’s highly likely that Company B will … especially when the prices are at market levels without the Company having to pay a premium. One might say “OK, but Company A still got in there first …” but even if this way of thinking is adopted there’s still the point made above that the PPA is just one of several supporting pillars for the new wind or solar farm.

We need to get into the habit of asking this question: how much renewable electricity would be generated if the company/individual taking credit for it didn’t exist, or just took normal power from the grid? In most cases, the answer is: the same amount.

My view is this – at least until someone manages to explain to me where I’m going wrong: When a company calculates its carbon footprint, no credit should be given for renewable power projects, in which it has any sort of involvement, that passed their Completion Dates before the company’s involvement. (Even if an existing project is threatened with bankruptcy, it will probably continue to generate renewable energy as long as physical conditions allow; it would clearly be in the interests of new owners to carry on generating.) For new projects, the onus should be on the company wanting to take credit to demonstrate that the project would not have existed otherwise – i.e. that it is truly additional. The fallback or base case assumption, if such demonstration proves difficult, should be that the carbon coefficient that applies to the company’s energy demand is regional, not local, and generic (e.g. European average carbon coefficient for electricity if the company’s activities are in Europe). If the company makes a persuasive case, perhaps some – but probably not all – of the carbon emissions savings should be attributed to it.

I think these principles should be followed by the likes of SBTi and by companies when they measure their environmental impact. Whether or not it would have any impact on the volume of renewables, adoption of these principles would at least clear from the air some of the fog of greenwashing.

In early 2024, two trends are apparent. First, emerging evidence of the magnitude of global warming and its disastrous effects is increasingly grim. Second, Western politicians and the general public seem to be increasingly disinclined to act upon it.

In the UK, there is a legislative crackdown on climate protests – with a trial starting today, 19th February, of five climate activists alleged to have vandalised JPMorgan’s London office, that is likely to be an important test case. Tabloid newspapers find room on their front pages for headlines that eco-warriors are threatening our democracy. The government is back-tracking on its green targets. EV sales are falling as a percentage of new car sales (down in 2023 versus 2022). The Labour Party, almost certain to form the next government, has abandoned its pledge to spend £28 billion per annum – a little over 1% of the UK’s GDP – on investment in the green economy, on the basis that it might be unaffordable.

Really? 1%? This is not about sophisticated economic analysis; it is about basic priorities. Like the state of life on Earth.

Elsewhere, the EU (in common with the UK) has reduced funding for the environment on the basis that more needs to be spent on defence. The irony is that there are likely to be more conflicts in future for access to increasingly scarce resources, such as water and agricultural land, due to deterioration caused by climate change. So the EU’s actions are precipitating the very requirement for that military hardware that they’re meant to forestall.

And in the US, the front-runner to be the incoming President (again) is a man who thinks we shouldn’t be worried about global warming.

Give up?

So should we just give up on the basis that we are already stuffed? No, because there is a world of difference between bad and very bad. It may be that the future is inevitably hard, but better a hard one than none at all. In fact, the incremental impact of our actions, the impact of those few extra tonnes of CO2 equivalent that we can influence, is greater – not lesser – now than it was a decade ago when the atmospheric concentration of greenhouse gases was lower and the climate less sensitive.

CAR

Individually and collectively, we need to do whatever we can, in three ways: communication, action and reflection – CAR for short. We have not to be afraid to communicate with family and friends, work colleagues and politicians. We need to take whatever action we can to reduce emissions directly. And we need to reflect on what we’re doing, to learn constantly as new evidence comes to light; and also to think about whether our communications and actions are having the desired effect; and if not, how we should change them.

For it to work, CAR is indivisible; none of its three strands can be omitted. Consider, for instance:

Communication without action

Many people take the view that it’s entirely up to politicians and oil company CEOs to act: that ordinary people have no direct influence. This viewpoint conflates none with very little: hundreds of millions of ordinary people who each do a little can together achieve a lot. Our direct impact aside, if we act as if we have none then politicians in government might assume – with some justification – that the climate is hardly top of our agenda and there are higher priorities for them to worry about.

Added to which, when people join marches and protest outside Parliament, they lend themselves open to charges of hypocrisy if their own lifestyle has a high carbon footprint. Hypocrisy fosters cynicism in the minds of people in power.

Action or communication without reflection

We probably all know someone who thinks it’s important to recycle bottles “for the good of the environment” but takes frequent foreign holidays without a second’s pause to consider and compare the relative impact of these two things. Sadly, for whatever reason, we don’t seem to be very good at cultivating a sense of proportion. (To-do lists may be part of the problem, as in “here are [100, or whatever number] tips for saving the planet …” One of these in particular, published by a well-meaning charity, is vivid in my memory – the very first, and by implication most important, action mentioned was to buy a bamboo toothbrush.)

And when we feel strongly, it’s all to easy to form an entrenched or knee-jerk perspective. I was guilty of this recently when the government announced it was giving licences for more oil and gas drilling in the North Sea. My initial thought was “That’s outrageous!” … until I remembered that there are pros and cons (reduced emissions from production and transportation versus a greater overall supply of fossil fuels internationally), and that even the Committee on Climate Change recently admitted to not knowing whether it was in the round beneficial or detrimental to allow further North Sea O&G development.

Those who join marches are often very brave people, with considerable integrity. Sometimes though, they are unhelpfully pig-headed. It seems worthwhile to ask the question: is this march going to be effectual? Are there enough people to change the government’s actions? Will the main impact be to antagonize the general public and actually harm rather than help the environmental cause?

Those (me included) who sign up to renewable energy tariffs should ask – and, in fairness, power companies and Ofgem should be more helpful in this respect! – does my signing up actually have any impact at all on how much renewable energy is generated? Almost always, the answer is No, the renewable energy is being generated anyway, whether it’s attributed to my account or not. That doesn’t mean it’s bad to have a renewable tariff – more likely than not, it’s a good idea – just that it’s a much smaller environmental benefit than we might think. It goes a very small way indeed towards obviating the need for other and bigger things we can do.

Reflection without communication

At the opposite end of the spectrum from the political activist with a high-carbon lifestyle is the quiet thinker who is vegan and never gets on an airplane, but also never interrupts anyone else and is hardly noticed. Displaying integrity is all very well, but has limited oomph if there isn’t much of a display.

Doing what we can, just not equally

If everyone, and every organisation, does what they can – subject to the occasional lapse because we’re human – through CAR in its undivided entirety, humanity can probably avoid the worst scenarios for climate change.

Occasionally, I’m met with scepticism when I suggest this. What, for instance, is a poor person in Rwanda meant to do? But that’s the whole point. Indeed they can’t do much, but there will almost certainly be something small …

Shakespeare wrote words to this effect in one of his plays, but then he could get away with it. Today’s middle-class westerners are on safer ground talking about what today’s middle-class westerners can do. Eat less red meat? Go on fewer long-haul flights? Stop shopping for clothes? Don’t drive an SUV in an urban setting? Talk to one’s friends or colleagues? Communicate with one’s MP? Stop pretending it’s about global population when the world’s richest billion cause most of the damage? There’s unlikely to be a shortage of worthwhile things to be getting on with.

At the corporate level, companies could be much more honest about their genuine carbon footprint for a start, rather than attributing their emissions to someone else, somewhere else, in the disingenuous rush towards Net Zero. There’s on-site energy efficiency, greener offices, less business travel, greener purchasing of upstream supplies, an emphasis on making greener products or delivering greener services, even if they appear to be less profitable according to an economic system that still largely treats the environment as an ‘externality’ …

The government (and many economists) could tackle its unhealthy obsession with GDP. And its tendency to pander to short-term popularity and perceived selfishness in the electorate when it comes to policy-making. Many would say that’s simply naïve: that it goes against the grain of human nature. Perhaps. But perhaps it’s also true that most people have at least some better instincts than those to which politicians pander. And are adaptable when they have to be, as the Covid pandemic illustrated.

Some historians might say: “Oh well, humanity has survived before so will survive in the future.” Alas, we may need to ditch our love affair with historical precedent and tradition. In a world of exponential change, tradition is not our friend.