‘The Drop in Oil Price Means We Need More Action on Climate Change Not Less’
This month, a powerful article in Nature highlighted yet again that most of the world’s oil, coal and gas needs to stay in the ground, if we want to prevent dangerous climate change. This is the “unburnable carbon” analysis that President Obama and Bank of England Governor Mark Carney have both made mainstream in recent months.
Related, over the last 6 months the world oil price has crashed, catching almost all economists and analysts by surprise. As well as profound economic effects, this crash affects “unburnable carbon” in two broad and opposite ways.
It is leading to cancellations of potential fossil fuel projects, as they become less or non-profitable. Great for stopping colossally dirty projects like Arctic oil and Canadian tar sands. And in the opposite direction, it makes oil cheaper, meaning people use it more. Bad for climate, though good for people’s pockets.
How should Governments react to this? A Government who genuinely thought climate change was a global priority would not sit passively by and let these conflicting effects of the oil price crash on climate sweep over us. It would act. Government surveys show the British public want more action on climate change.
Tax Cuts
Despite this, the sole response to the oil price crash from the UK Government is do the opposite – last week it announced detailed plans for tax cuts for oil companies to drill another 11-21 billion barrels of oil from the ground. That’s way more than even the three billion barrels in the Government’s Wood Review on offshore oil and gas. Climate change impacts got one sentence of dismissal. And yesterday, it drove through a clause in the Infrastructure Bill – with almost no debate – requiring the UK to “maximise economic recovery” of North Sea oil.
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