Fossil Fuels vs Renewables in Net Zero
Fossil Fuels – The United Nations declares that the race to develop a Net Zero economy—one in which greenhouse gas emissions are equal to those produced—is on. In order to achieve Net Zero carbon emissions and decrease the rate of climate change, the UN climate change programme provides a roadmap with targets for over 20 important economic sectors, from aviation to steel industry.
Public discussions on Net Zero typically centre on “fossil fuels vs. renewables” and how each group affects global warming. Less reliance on conventional fossil fuels and the need for more renewable energy sources will enable the world’s states to get closer to achieving the commitments made by almost 200 sovereign governments at the Conference of the Parties (COP) meeting in 2015.
Public, corporate, and social sectors all face formidable obstacles in getting there. The finance markets are a key arena for conflicts between supporters of fossil fuels and renewable energy sources. Which fuel sources—traditional or alternative—are being funded? Consider the finance provided by major banks in the framework of the Paris Agreement.
Capital Monitor investigated the financing of the energy sector by looking at 10 significant international banks. In addition to fees from green and fossil fuel bond agreements evaluated against fossil fuel policy scores, the volume of fossil fuel finance vs. sustainable lending was examined, revealing surprising conclusions.
Some of the banks’ funding ratios for alternative fuels compared to fossil fuels were as high as 16-to-1, while fees for renewable energy were as low as 50%. One of the conclusions was that banks with greater fees in their funding of renewable energy had “more robust” methods for constructing their own corporate sustainability profiles. They lived out what they preached, according to Capital Monitor.
According to Guterres, the combined profits of the biggest energy companies in the first quarter of this year were close to US $100 billion. As a result, he predicts that high energy prices and increased emissions from fossil fuels will become the norm for too many countries. He urged countries to tax these obscene profits and use the proceeds to help the most helpless citizens get through these trying times.
Governments are urged to identify the most efficient methods of financing energy solutions by the Secretary General’s Global Crisis Response Group (GCRG) on Food, Energy, and Finance. They recommend using public funds from windfall taxes on the biggest oil and gas companies to fund cash transfers and rebate programmes to safeguard all vulnerable communities.
The airline and Microsoft entered into a new agreement to deliver SAF credits to Microsoft in order to reduce the emissions caused by staff travel. Through the purchase of SAF credits, Alaska Airline’s new programme aims to “enable its corporate customers to minimize business travel emissions and to increase education and awareness about options to improve business travel sustainability.”
In this week’s “Top Stories,” we have fascinating insights regarding the problems with climate change caused by various energy sources and the difficulties facing the public and private sectors as we transition to a Net Zero economy.