Thursday, February 19, 2015

BP's Two-Word Fix for Global Climate Change

Steam rises from the stacks of the coal-fired Jim Bridger Power Plant outside Point of the Rocks, Wyoming. (Credit: Jim Urquhart/Reuters/File) Click to Enlarge.
One of the world's largest energy companies is warning about rising carbon emissions.  And it's endorsing a surprisingly simple solution.

Global carbon emissions will continue to rise roughly 1 percent each year through 2035, according to a report released Tuesday by London-based BP, one of the world's six oil-and-gas supermajors.  That puts emissions growth on a path that would be "materially higher" than what most scientists say is necessary to keep global warming within 2 degrees C.  In other words, if the world continues to burn fossil fuels at its current rate, Earth's average temperature will rise higher than what most scientists regard as safe levels.

In its report, BP lays out a variety of ways policymakers and businesses could prevent that from happening, including boosting renewable energy production, limiting carbon-heavy coal use, and making energy systems more efficient.  It concludes that no one approach will be enough to meet emissions reductions goals, but offers a simple idea that would help guide efforts: carbon pricing.
Why, then, would a company that profits from fuels partly responsible for rising emissions support an added cost to the consumption of those fuels?

Part of it is that the energy industry values predictability and stability, particularly when it comes at the international level.  It is likely that governments across the globe will continue to place limits on carbon emissions, and multinational companies like BP would prefer those limits to be as uniform and as transparent as possible.  A widely agreed-upon global price on carbon would allow BP to continue operating in a variety of countries while minimizing the need to tailor each of its projects to local rules and restrictions.  Carbon pricing is also generally regarded as a more economically efficient way to incentivize cleaner energy than subsidizing or mandating the construction of specific technologies.

"A meaningful global carbon price would provide the right incentives for the most cost-effective decisions and investments to be made," BP's report reads.

Read more at BP's Two-Word Fix for Global Climate Change

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